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<s>[INST] Summarize the judgement: Civil Appeal No. 38 of 1960. Appeal by special leave from the judgment and order dated October 6, 1958, of the Punjab High Court in Letters Patent Appeal No. 52 of 1954, arising out of the judgment and order dated June 15, 1954, of the said High Court in First Appeal from Order No. 149 of 1953. Y. Kumar, for the appellant. Bakshi Man Singh and Sardar Singh, for the respondents. April 20. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal by special leave against the judgment of the Punjab High Court. The brief facts necessary for present purposes are these. The appellant had executed two usufructuary mortgages with respect to two properties situate in Ferozepore city in favour of the respondents in 1946. She also took both properties on lease on the same date. An application was filed by the respondents under section 13 of the Displaced Persons (Debts Adjustment) Act, No. LXX of 1951 (hereinafter called the Act), for recovery of the principal sum due as well as the rent which was said to be in arrears. The application was resisted by the appellant on various grounds, one of which was that no such application lay as the liability was not a debt under the Act. The tribunal negatived the contention of the appellant and passed a preliminary decree for sale. Six months ' time was allowed to the appellant to pay the decretal amount, failing which the respondents were at liberty to get a final decree prepared and bring the properties to sale. The appellant went in appeal to the High Court but the appeal was dismissed. Then there was a Letters Patent Appeal, which was also dismissed. The appel lant then applied for and was granted special leave by this Court, and that is how the matter has come up before us. The only point for our consideration is whether the liability created under a mortgage is a debt within 572 the meaning of section 2(6) of the Act. The relevant part of that provision runs as follows: " 'Debt ' means any pecuniary liability, whether payable presently or in future, or under a decree or order of civil or revenue court or otherwise, or whether ascertained or to be ascertained, which (a) in the case of a displaced person who has left or been displaced from his place of residence in any area now forming part of West Pakistan, was incurred before he came to reside in any area, now forming part of India; (b)in the case of a displaced person who, before and after the 15th day of August, 1947, has been residing in any area now forming part of India, was incurred before the said date on the security of any immovable property situate in the territories now forming part of West Pakistan : Provided that where any such liability was incurred on the security of immovable properties situate both in India and in West Pakistan, the liability shall be so apportioned between the said properties that the liability in relation to each of the said properties bears the same proportion to the total amount of the debts as the value of each of the properties as at the date of the transaction bears to the total value of the properties furnished as security, and the liability, for the purposes of this clause, shall be the liability which is relatable to the property in West Pakistan; (c)is due to a displaced person from any other person (whether a displaced person or not) ordinarily residing in the territories to which this Act extends; x x x x The contention on behalf of the appellant is that the liability under a mortgage is not a pecuniary liability and therefore section 2(6) will not apply to a mortgage debt. It is further urged that the scheme of the Act shows that mortgages in relation to properties situate in what is now India are not covered by the Act at all. 573 Debt is defined in section 2(6) as meaning any pecuniary liability and has been restricted by the three subclauses in the sub section with reference to the person who might be owing the debt or to whom the debt might be owed. Sub cls. (a) and (b) refer to the debts owed by a displaced person as defined in the Act while sub cl. (c) refers to a debt due to a displaced person. Sub cl. (c) has therefore to be taken independently of sub cls. (a) and (b), for it refers to a creditor who is a displaced person while the other two sub clauses refer to a debtor who is a displaced person. Under subcl. (c) a displaced person who is a creditor can recover the debt due to him from any other person, whether a displaced person or not, who is residing in the territories to which the Act extends. The main contention of the appellant in this connection is that a mortgage debt is not a pecuniary liability and therefore does not fall within the definition of debt at all. We are of opinion that there is no force in this contention. The words " pecuniary liability " will cover any liability which is of a monetary nature. Now the definition of a mortgage in section 58 of the Transfer of Property Act, No. 4 of 1882, shows that though it is the transfer of an interest in specific immovable property, the purpose of the transfer is to secure the payment of money advanced or to be advanced by way of loan or to secure an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability. The money advanced by way of loan, for example, which is secured by a mortgage, obviously creates a pecuniary liability. It is true that a mortgage in addition to creating the pecuniary liability also transfers interest in the specific immovable property to secure that liability ; none the less the loan or debt to secure which the mortgage is created will remain a pecuniary liability of the person creating the mortgage. Therefore a mortgage debt would create a pecuniary liability upon the mortgagor and would be covered by the definition of the word "debt" in section 2(6). We may in this connection refer to the Displaced Persons (Institution of Suits) Act, No. XLVII of 1948, which has been practically repealed by the 75 574 Act. In that law, suits relating to immovable property were specially excepted under section 4, but there is no such provision in the Act. Again section 6 of the Displaced Persons (Legal Proceedings) Act, No. XXV of 1949, which has also been repealed by the Act mentions decrees or orders for payment of money while in section 15 of the Act which deals with the same matter those words are omitted and the words " proceedings in respect of any debt " are used instead. There can be no doubt in consequence that the Act is a comprehensive law dealing with all kinds of pecuniary liability. We are therefore of opinion that section 2(6) clearly includes a mortgage debt and under sub el. (c) thereof a displaced person to whom such a debt is due from any other person, whether a displaced person or not, ordinarily residing in the territories to which the Act extends can take the benefit of this Act. Let us now see whether there is anything in the scheme of the Act which in any way militates against the plain words of section 2(6). Learned counsel for the appellant in the first place refers to sub el. (b) of section 2 (6) in this connection and points out that that subclause specifically deals with mortgage debts secured on any immovable property situate in the territories forming part of West Pakistan. It is urged that there was a specific provision with respect to mortgage debts in relation to immovable properties in West Pakistan and that if it were intended that mortgage of immovable properties situate in what is now India would also be dealt with under the Act there would have been a similar specific provision in the Act. Further it is pointed out that the proviso to subel. (b) to section 2(6) provides for apportioning the mortgage debt in cases where the property on which the debt is secured is both in West Pakistan and in India and restricts the application of sub cl. (b) only to that part of the debt which was secured on the property in West Pakistan and thus excludes from the operation of sub el. (b) that part of the debt which is secured on property in India. That is undoubtedly so. The reason however for this special provision is to be found in the later provision contained in section 16 by which a charge was created on compensation to be given to a 575 displaced person with respect to the mortgage debt secured on immovable property in Pakistan or in the alternative a charge was created on property given in exchange for the property in Pakistan on which the debt was charged. The special provision there ,. fore in sub cl. (b) of section 2(6) would not in these circumstances cut down the plain meaning of the words used in sub cl. (c) or restrict the wide words " pecuniary liability " to liability other than that secured by a mortgage. Incidentally we may mention that subcl. (b) itself shows that pecuniary liability includes a mortgage debt, for it shows that any liability which was incurred on the security of any immovable property situate in West Pakistan would be a debt within the meaning of section 2 (6) and therefore a pecuniary liability. It is next urged that when the legislature excepted the property in India which was encumbered from being dealt with under sub el. (b) so far as displaced debtors were concerned, there is no reason why it should allow the displaced creditors to proceed under the Act with respect to mortgage debts. This argument, however, overlooks the provision in sub cl. (a) under which a displaced debtor can take the benefit of the Act, once it is held that the words " pecuniary liability " also include mortgage debt. As we have said before sub cl. (b) was dealing with a special situation which was worked out in section 16 of the Act and the general right of a displaced debtor to take advantage of the Act is to be found in sub cl. (a) and that subclause will cover a mortgage debt as it is a pecuniary liability. Reliance was then placed on section 16 (5), which gives a right to the creditor to elect to be treated as an unsecured creditor in relation to the debt, in which case the provisions of the Act would apply accordingly. It was urged that this sub section requires that a creditor must make an election before he can take the benefit of this Act. We are of opinion that this argument has no force, for sub section (5) of section 16 only deals with a situation which arises where the mortgage, charge or lien was on immovable property situate in West Pakistan. It does not deal at all with cases 576 where the mortgage, charge or lien is on immovable property situate outside West Pakistan. Reference was then made to section 17 of the Act. It deals with debts secured on movable properties. That section is again concerned with displaced debtors and provides how equities will be worked out between a displaced debtor and his creditor with respect to debts secured on movable property. We see nothing in this section which can cut down the amplitude of the words used in section 2 (6)(c). Reference was then made to section 21 which provides for scaling down debts. That is however a general provision dealing with debts of all kinds and there is nothing in that section which shows that the word " debt " as defined in section 2(6) refers only to claims for money and does not include a mortgage debt. Thus we see nothing in any provision of the Act or in its scheme which would cut down the meaning we have given to the words " pecuniary liability " as used in section 2 (6) read with sub cl. (c) thereof. It was also urged that if mortgage debts on property situate in India were covered by the Act, there is no machinery (like section 16) for enforcement of the creditors ' rights in respect thereof. This is not correct. Section 10 provides for the claim of a displaced creditor against a displaced debtor and section 13 provides for the claim of a displaced creditor against any other person who is not a displaced debtor. Section 11 then provides how an application under section 10 A ill be dealt with and under sub section (2) thereof a decree can be passed under certain circumstances against the displaced debtor. Similarly under section 14 (2) a tribunal can pass such decree in relation to an application under section 13 as it thinks fit. These decrees are executable under section 28 of the Act. Therefore even when the debt is a mortgage debt there is provision in the Act for enforcement of that debt, though of course this provision is different from the provision contained in section 16, which was dealing with the special situation of properties under ,mortgage situate in West Pakistan. We may also refer to section 3 of the Act which lays down that the provisions of the Act and of the Rules 577 and Orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. The effect of this overriding provision is to make a suit like the present maintainable in spite of the provisions applying to such suits in other laws. The last contention on behalf of the appellant is that if section 2 (6) (c) empowers a displaced creditor to make an application under section 13 even with respect to a mortgage debt, there will be hardship to prior mortgagees or subsequent mortgagees inasmuch as these persons cannot be dealt with under the Act. Section 13 empowers a displaced person claiming a debt from any other person who is not a displaced person to apply within one year of the coming into force of the Act in any local area to the tribunal having jurisdiction in the matter. The provision is obviously enacted to give relief for a short period only. Section 25 of the Act provides for the regulation of all proceedings under the Act by the provisions contained in the Code of Civil Procedure save as expressly provided in the Act or in any rules made thereunder. But assuming that in spite of this provision, 0. XXXIV, r. 1 of the Code of Civil Procedure will not apply to proceedings under the Act and all those having an interest in the mortgage security cannot be joined as parties as required by 0. XXXIV, r. 1, the interest of prior or puisne mortgagees cannot in any case be affected by the decree passed under the Act. The Explanation to 0. XXXIV, r. 1, shows that a prior mortgagee need not be made a party to a suit for sale by a puisne mortgagee. So far therefore as a prior mortgagee is con cerned, his rights will not be affected by the decree passed under section 13 of the Act, just as his rights are not affected by the decree passed under 0. XXXIV. So far as mortgagees subsequent to the displaced creditor who applies under section 13 are concerned, their interests will also not be jeopardized by the decree which may be passed under section 13. Even under 0. XXXIV, which requires puisne or subsequent mortgagees to be joined as parties in a suit for sale, a decree obtained in a suit to which the subsequent mortgagee was not joined as a party does not affect his rights and the 578 proceedings in such a suit are not binding on him so as to affect his rights under the second mortgage. He can thus follow the property by suing his mortgagor, even though it may have been sold under the decree of an earlier mortgagee in a suit to which he was not a party. Therefore, the interest of the prior mortgagee or the subsequent mortgagee, if any, would not be affected by a decree passed on an application under section 13 and there is no reason therefore to cut down the plain meaning of the words used in section 2 (6) (c) on the ground that the proceedings under the Act would prejudicially affect the rights of prior or puisne mortgagees. There is therefore no force in this appeal and it is hereby dismissed with costs. Appeal dismissed. [/INST]In 1900 the then proprietor of the Dhalbhum estate who was the predecessor in interest of the first respondent granted a permanent lease of the mining rights for certain metals and minerals in the estate to one Prince Mohammad Bakhtyar Shah. During the lifetime of the said proprietor the management of the estate was taken over by the Deputy Commission of Singhbhum under the Chotanagpur Encumbered Estates Act and after the former 's death the manager of the Estate granted to the Official Receiver to the estate of Prince Mohammad Bakhtyar Shah another lease in respect of mining rights in the same area in 1919. The first respondent commenced the present litigation for the purpose of recovering rents and royalties on the basis of the second lease from the heirs and representatives of the estate of Prince Mohammad Bakhtyar Shah and also from the appellant as the Receiver to that Estate. The decision of the case depended upon the construction of the two leases of 1900 and 1919 and the Trial Court and the High Court decided the case in favour of the plaintiff respondents. On appeal by the contesting defendant appellant on a certificate granted by the High Court : Held, that the intention of the parties to a dispositive document must be gathered from the words used by the parties themselves and they must be presumed to have used the words in their strict grammatical sense. If the statements made in the earlier part of the document were irreconcilable with those made in the later part, the earlier part must prevail. In cases of ambiguity the court should look at all the parts of the document to ascertain the intention of the parties. If ambiguity still remains, the Court should interpret the document strictly against the grantor and in favour of the grantee. Under Exp. 11 of section 19 of the Limitation Act the words duly authorised " would include duly authorised either by the action of the party indebted or by force of law or order of the court. Annapagonda vs Sangadiappa, , Rashbehari vs Anand Ram, , Ramcharan Das vs Gaya Prasad, 30 All. 422, Lakshumanan vs Sadayappa, A.I.R. 1919 Mad. 816 and Thankamma vs Kunhamma, A.I.R. 1919 Mad. 370, approved. 605 Currimbhai vs Ahmedali, and Lakshmanan Chetty vs Sadayappa Chetty, 35 M.L.J. 571, considered. </s>
<s>[INST] Summarize the judgementivil Appeal No. 3154 of 1982. From the Judgment and Order dated 28.9.1981 of the Allahabad High Court in S.A. No. 1874 of 1970. Satish Chandra, S.N. Singh, T.N. Singh, H.L. Srivastava and Sudama Ojha for the Appellants. U.R. Lalit and R.D. Upadhyaya for the Respondents. The Judgment of the Court was delivered by FATHIMA BEEVI, J. This appeal is directed against the judgment dated 28 9 1981 of the High Court of Allahabad in Second Appeal No. 1874 of 1970. 167 The plaintiff respondent filed the suit alleging inter alia that before enforcement of the U.P. Zamindari Abolition and Land Reforms Act, 1950, hereinafter referred to as "Zamindari Abolition Act", defendants Nos. 3 to 25 were the tenants in chief of the plots in suit and his father Munni Lal was their sub tenant; that Munni Lal died in 1951 leav ing behind four sons including the plaintiff respondent; that remaining three brothers of the plaintiff had separated and consequently the plaintiff became sole tenant; that Munni Lal was recorded occupant in Khasra 1356 Fasli and in cultivatory possession in Khasra 1359 Fasli and consequen tially he acquired adhivasi rights and then sirdari rights, the rights of defendants 3 to 25 extinguished under section 240 A of the Zamindari Abolition Act; that in 1968, however, defendants Nos. 1 and 2 obtained fictitious sale deed from defendants Nos. 3 to 25 in respect of the plots in suit. They had started interfering with the plaintiff 's possession and, hence, the plaintiff respondent filed the suit for permanent injunction. Defendants Nos. 1 to 3, 5 to 7, 13 and 14 contested the suit. They denied the plaintiff 's claim and disputed that the plaintiff 's father, Munni Lal, was the sub tenant or that he acquired adhivasi rights or sirdari rights. It was further pleaded that the plaintiff or his father was never in possession of the plots in suit. The suit for permanent injunction was dismissed. Against the judgment of the trial court, the plaintiff respondent preferred Appeal No. 321 of 1969 which was dis missed by the first appellate court. The Second Appeal No. 1874 of 1970, filed before the High Court of Allahabad against the judgment of the first appellate court, was allowed on 28 9 1981. The respondent based his title on three grounds, namely, (i) that his father Munni Lal was recorded occupant in Khasra 1356 Fasli (be ginning from 1.7.1948 and ending with 30.6.1949) and became adhivas under section 20(b)(i) of the Zamindari Abolition Act; (2) that his father Munni Lal was in cultivatory possession of the disputed land it Khasra 1359 Fasli (beginning from 1.7.1951 and ending with 30.6.1952 and consequently he became adhivasi under section 3 of the U.P. Land Reforms (Supplementary) Act, (U.P. Act No. 31 of 1952);and (3) that his father Munni Lal was sub tenant over the disputed land and, there fore, he became an adhivasi and consequently the sirdar under the provisions of the zamindari Abolition Act. The trial court and the first appellate court recorded finding of 168 facts to the effect that the plaintiff 's father Munni Lal was not in cultivatory possession of 1359 Fasli and there fore he could not get adhivasi right under section 3 of the U.P. Land Reforms (Supplementary) Act, 1952. Both the courts further observed that the plaintiff 's father was not a recorded occupant within the meaning of section 20(b)(i) of the Zamindari Abolition Act, as the entry of his name in column 6 of the Khasra 1356 Fasli was suspicious, not being supported by Khatauni entry. It was further held that as his father died in 1951 before the date of vesting i.e. 1.7.1952 (when the zamindari was abolished in U.P. under the provi sions of Zamindari Abolition Act), the plaintiff is not entitled to the benefit of becoming adhivasi under section 20(b)(i) of the Zamindari Abolition Act. The trial court and the first appellate court also found that no contract or sub tenancy between Munni Lal and the proforma defendants was proved. The High Court held the view that the approach made by the courts below was wrong. The question that arose for decision in the suit was whether the appellant 's father was a sub tenant? The learned Single Judge noticed that if Munni Lal was a sub tenant, his heir being the adhivasi and the appellant must, therefore, suc ceed. The evidence relating to the sub tenancy and conse quent possession was therefore, considered in detail and the learned Judge concluded that Munni Lal was in cultivatory possession of the land in 1356 Fasli as a sub tenant. His rights as sub tenant devolved on the appellant who continued in possession as such and became adhivasi and rights of defendants 3 to 14 were extinguished under the Zamindari Abolition Act and defendants could not interfere with appel lants possession. In this view the appellant was granted a decree reversing the decision of the lower courts. The main contention advanced on behalf of the appellants before us is that the decision having been rendered by the trial court and the first appellate court on the basis of the finding of fact regarding the right claimed and the possession alleged, in the absence of any substantial ques tion of law, there was no jurisdiction of the High Court under section 100 C.P.C. to disturb the finding of a concur rent nature and upset the decision. The High Court, while exercising its power under section 100 C.P.C., has no juris diction to interfere with the finding of fact recorded by the first appellate court. Reliance was placed on V. Rarna chandra Ayyar & Anr. vs Ramalingam Chettiar & Anr., AIR 1963 SC 302. Section 100(1)(c) refers to a substantial error or defect in the procedure. The error or defect in the proce dure to which the clause refers is not an error or defect in the appreciation of 169 evidence adduced by the parties on the merits. Even if the appreciation of evidence made is patently erroneous and the finding of fact recorded in consequence is grossly errone ous, that cannot be said to introduce a substantial error or defect in the procedure. If in dealing with a question of fact the lower appellate court has placed the onus on wrong party and its finding of fact is the result substantially of this wrong approach that may be regarded as a defect in procedure. When the first appellate court discarded the evidence as inadmissible and the High Court is satisfied that the evidence was admissible that may introduce an error or defect in procedure. So also in a case where the court below ignored the weight of evidence and allowed the judg ment to be influenced by inconsequential matters, the High Court would be justified in reappreciating the evidence and coming to its own independent decision as held in Madan Lal vs Gopi, ; The substantial issue in the present suit was whether the respondent was in possession of the disputed land. The respondent claimed possession under his father as sub tenant and thereafter as sirdar. In support of his claim respondent relied on the entries in the revenue records and the re ceipts for payment of rent. The effect of these documents had been wholly ignored by the lower courts on the assump tion that these were fabricated. The U.P. Zamindari Aboli tion Act came into force on July 1, 1952. Section 20(b)(i) of the Act provided that every person, recorded as occupant of a land in the Khasra or Khatauni of 1356 Fasli prepared under sections 28 and 33 of the U.P. Land Revenue Act 190 1, be called the adhivasi of the land. This Court in Amba Prasad vs Abdul Noor Khan & Ors., ; examined the scheme of the section and held that the title to posses sion as adhivasi depends on the entry in the Khasra of 1356 Fasli. The section eliminates enquiries into possession in accepting the record in the Khasra. The Court observed at page 808: "The word 'occupant ' is not defined in the Act. Since khasra records possession and enjoyment the word 'occupant ' must mean a person holding the land in possession or actual enjoyment. The khasra, however, ma mention the proprietor, the tenant, the sub tenant and other person in actual pos session, as the case may be. by occupant is meant the person in actual possession it clear that between a proprietor and a tenant the tenant and between a tenant and the sub tenant the latter and 170 between him and a person recorded in the remarks column as "Dawedar qabiz" the dawedar qabiz are the occupants. ' ' In Nath Singh & Ors. vs The Board of Revenue & Ors., ; in answering the contention that the cor rectness of the entry in the record of Khasra of 1356 Fasli could be gone into and where the respondents are recorded only as sub tenant and not as occupant, they could not get the benefit of section 20(b)(i) of the Act, this Court held as under: "The record of rights for the year 1356F. had not been corrected afterwards. We have to go by the entry in the record of rights and no enquiry need be made as to when the respondents became sub tenants after the decision in favour of the landlord, Ram Dhani Singh. The last decision of this Court also shows that as between the tenant and the sub tenant the entry in the record of rights in favour of the sub tenant makes him the occupant entitled to the adhivasi rights under section 20 of the Act. " In this case the Khasra entry for 1356 Fasli Ex 4 showed that the respondent 's father Munni Lal was sub tenant. As rightly stated by the High Court, it is not for the plain tiff to prove that this entry is correct. It was for the defendants to show that the entry had been introduced sur reptitiously out of ill will or hostility. In the absence of such proof, the genuineness has to be presumed and the entry accepted as evidence of the sub tenancy in favour of the respondent 's father. The Khasra entry of 1371 Fasli and 1372 show the respondent 's name as person in possession. It is clear indication that possession of the subtenant continued with the respondent. The rent receipts of the year 1929 and subsequent years are not required to be proved by the re spondent as pointed out by the learned Judge. These furnish evidence of possession as sub tenant. We agree that the lower appellate court was not justified in ignoring these documents. The High Court was, therefore, well within its powers in appreciating the evidence and arriving at its own conclusion. The contention that the second appeal abated on account of non filing of substitution application after the death of defendants Nos. 6, 10 and 11 had been reiterated before us. These defendants were only proforma parties and the High Court was right in holding hat appeal did not abate. We may refer to The State of Punjab vs 171 Nathu Ram; , where it is held "that ordinari ly the considerations which weigh with the Court in deciding upon this question are whether the appeal between the appel lants and the respondents other than the deceased can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the Court. " The Civil Court had jurisdiction to try the suit for injunction when the question of title arose only incidentally. The objection to jurisdiction of the Civil Court to try the suit on the ground that revenue court had exclusive jurisdiction is not sustainable the suit being one for permanent injunction and the question of title arises only incidentally. We find no merit in the appeal which is accordingly dismissed. No order as to costs. G.N. Appeal dis missed. [/INST]The plaintiff respondent claimed that before the U.P. Zamindari Abolition and Land Reforms Act, 1950 came into force, his father was a sub tenant under defendants 3 to 25 and after his father 's death, the other 3 sons separated from the plaintiff and consequently he has become the sole tenant. According to him, his father was recorded occupant of Khasra 1356 Fasli (1.7.1948 to 30.6.1949) and was in cultivatory possession in Khasra 1359 Fasli (1.7.1951 to 30.6.1952) as a result of which he had acquired adhivasi rights and sirdari rights, and the rights of defendants 3 to 25 extinguished under section 240 A of the said Act. He alleged that in 1968, defendants I and 2 obtained fictitious sale deed from defendants Nos. 3 to 25 in respect of the said land and started interfering with his possession. He, therefore, filed a suit for permanent injunction. The suit was contested by some of the defendants who pleaded that neither the plaintiff nor his father was in possession of the said land at any point of time and there was no question of sub tenancy or acquiring of adhivasi/sirdari rights. The trial court dismissed the suit. The appeal preferred by the plaintiff respondent was dismissed by the first appellant court. The trial court as also the first appellate court held that the respondent was not entitled to become an adhivasi under section 20(b)(i) of the Act since his father died in 1951 before the date of vesting i.e. 1.7.1952. Both the courts also held that his father was not in cultivatory possession of Khasra 1359 Fasli and, therefore, he could not get adhivasi rights under section 3 of the U.P. Land Reforms (Supple 165 mentary) Act, 1952. It was also held that there was no contract or sub tenancy in the name of his father. The plaintiff respondent preferred an appeal before the High Court which allowed the appeal and granted a decree reversing the decision of the courts below. Aggrieved, the appellants have flied the present appeal contending inter alia that since there were concurrent findings of facts by the trial court and the first appellate court, and in the absence of any substantial question of law, the High Court had no jurisdiction under section 100 C.P.C. to disturb the concurrent findings of facts. Dismissing the appeal, this Court, HELD: 1. Section 100(1)(c) of the Code of Civil Proce dure refers to a substantial error or defect in the proce dure. The error or defect In the procedure to which the clause refers is not an error or defect in the appreciation of evidence adduced by the parties on the merits. Even if the appreciation of evidence made is patently erroneous and the finding of fact recorded inconsequence is grossly erro neous, that cannot be said to introduce a substantial error or defect in the procedure. If in dealing with a question of fact the lower appellate court has placed the onus on wrong party and its finding of fact is the result substantially of this wrong approach that may be regarded as a defect in procedure. When the first appellate court discarded the evidence as inadmissible and the High Court is satisfied that the evidence was admissible that may introduce an error or defect in procedure. So also in a case where the court below ignored the weight of evidence and allowed the judg ment to be influenced by inconsequent matters, the High Court would be justified in reappreciating the evidence and coming to its own independent decision. [168H; 169A C] Madan Lal vs Gopi, ; relied on. V. Ramachandra Ayyar & Anr. vs Ramalingam Chettiar & Anr., AIR 1963 SC 302 referred to. Section 20(b)(1) of the Act eliminates enquiries into possession in accepting the record in the Khasra. In the instant case the Khasra entry for 1356 Fasli showed that the appellant 's father was the subtenant. It is not for the appellant to prove that this entry Is incorrect. It was for the defendants to show that the entry had been introduced 166 surreptitiously out of ill will of hostility. In the absence of such proof, the genuineness has to be presumed and the entry accepted as evidence of the sub tenancy in favour of the appellant 's father. The Khasra entry of 1371 Fasli and 1372 show the appellant 's name as person in possession. It is clear indication that possession of the sub tenant con tinued with the appellant. The rent receipts of the year 1929 and subsequent years are not required to be proved by the appellant as pointed out by the learned Judge. These furnish evidence of possession as sub tenant. The lower appellate court was not justified in ignoring these docu ments. The High Court was, therefore, well within its power in appreciating the evidence and arriving at its own conclu sion. [170B, E G] Amba Prasad vs Abdul Noor Khan & Ors., ; and Nath Singh & Ors. vs The Board of Revenue & Ors., ; relied on. Though the revenue courts had exclusive jurisdiction, the civil court had jurisdiction to try the suit for injunc tion when the question of title arose only incidentally. [171B] 4. The High Court was right in holding that the appeal did not abate on account of non filing of substitution application after the death of certain defendants. [170H] The State of Punjab vs Nathu Ram, ; relied on. </s>
<s>[INST] Summarize the judgementCivil Appeal No. 531 of 1979. Appeal by Certificate from the Judgment and Order dated the 23 10 1969 of the Bombay High Court in S.C.A. No. 1596 of 1965. D. V. Patel, N. N. Keshwani and R. N. Keshwani for the Appellant. J. Sorabjee, R. Daruwala, P. G. Gokhale and J. R. Gagarat for the Respondent. The Judgment of the Court was delivered by KAILASAM, J. This appeal is by the defendant tenant by certificate granted by the High Court of Judicature at Bombay against its judgment dated 21 1 69 is Special Civil Application No. 1596 of 1965 granting a decree directing that the defendant shall vacate and deliver peaceful possession not only of the land demised to him under the lease in the suit but also of the three buildings which have been constructed on the demised land. By a lease deed dated 14th December, 1948 the plaintiff gave to the defendant on lease two plots Nos. 12 and 13 situated at Sitaladevi 1018 Temple Road, Mahim for a period of 15 years commencing from 1st December, 1948 at the yearly rent of Rs. 10,200/ payable in equal quarterly instalments of Rs. 2,550/ in advance. The lease deed provided that the defendant was at liberty to erect building and structures on the two plots of land. The defendant agreed to pay and discharge all taxes and outgoings imposed on the above two plots as also on the buildings to be created by the defendant. On the expiration of the term of 15 years or sooner termination of the lease the defendant agreed to deliver back the possession of the two plots to the plaintiff ' free of all buildings, erections and structures and levelled and put in good order and condition to the satisfaction of the plaintiff '. Clause IV of the lease provided for determination and forfeiture of the lease in the event of the rents having been allowed to be in arrears for more than 30 days or upon breach of conditions of the lease. The forfeiture clause also provided that upon forfeiture the plaintiff would be entitled to re enter upon not only the two plots of land but also the structures standing thereon. The defendant defaulted not only in payment of rent but also in payment of taxes due in respect of lands and buildings which he erected. The plaintiff filed a suit in 1951 for ejectment. The defendant filed an application for the fixation of standard rent and the standard rent was fixed at Rs. 435/ per month from September 1, 1950. A compromise was entered into between the parties in the suit on 5th March, 1954 by which the parties agreed on a rent of Rs. 435/ per month from September, 1950 to February, 1954. An appeal against the fixation of standard rent of Rs. 435/ per mensem was disposed of on 28th June, 1955 whereby standard rent was fixed at Rs. 620/ per month from 1st September, 1950. The defendant again defaulted in payment of rent and taxes. The arrears of rent amounted to Rs. 11,472.30 and taxes to the extent of Rs. 1,12,053.60 for the period ending 30th September, 1960. The plaintiff by a notice determined and forfeited the lease and called upon the defendant to deliver possession of the lands alongwith structures thereupon. The notice also specified that the notice was not only a notice of forfeiture but also notice under section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the Bombay Rent Act). On 1st December, 1961 as the defendant failed to pay the arrears of rent and the taxes, the plaintiff filed the present suit and prayed for a decree for ejectment against the defendant in respect of two plots of land and also the buildings and structures standing thereon, and claimed arrears of rent of Rs. 11,472.30 and mesne profits at the rate of Rs. 620/ 1019 per month. The defendant filed written statement and denied the allegations made in the plaint. The defendant in order to get the benefit of the provisions of Section 12(3) (b) of the Bombay Rents Act applied for time for making deposit of arrears of rent. The application was taken on the 20th June, 1962 and further time was granted to enable the defendant to make the deposits. Time was extended on several occasions and finally on 6th August, 1962, the defendant informed the court that he was not in a position to make any deposit at all. After the issues were framed and the suit was taken up for trial, the defendant once again applied for relief under section 12(3)(b) of the Act and prayed that he may be allowed to deposit the arrears of rent and cost. The deposit was accepted by the Court after making an endorsement, "accept without prejudice". Subsequently, on 11th November, 1964, the trial Court passed a decree for ejectment in respect of plots and the buildings in favour of the plaintiff. A decree was granted regarding arrears of rent and for mesne profits. Both the plaintiff and the defendant preferred appeals and the Bench of two Judges of the Court of Small Causes by a common judgment disposed of both the appeal on 4th April, 1965. The appellate Court held that it had no jurisdiction to give a decree for ejectment in respect of the two buildings constructed on Plot No. 12 by the defendant. It held that clause IV of the lease which permitted forfeiture was in the nature of penalty and the defendant was entitled to be relieved from the liability to deliver possession of the buildings constructed by him upon forfeiture by the plaintiff. It also found that the defendant was entitled to be relieved from the penalty of forfeiture of the lease under Ss. 114 and 114A of the Transfer of Property Act. It rejected the plea of the defendant that he was always ready and willing to pay all arrears of rents and found that because of repeated defaults the defendant was not entitled for relief from ejectment under section 12(3) (b) of the Bombay Rent Act. The plaintiff filed a revision petition against the order of the appellate Court declining to direct possession of the two buildings and the defendant/tenant filed an appeal against the order of the appellate Court directing ejectment of the defendant from the two plots of lands mentioned in the plaint. The High Court disposed of both the revisions by the plaintiff and the appeal by the defendant by a common judgment whereby it allowed the revisions filed by the plaintiff and dismissed the appeal of the defendant and decreed the suit of the plaintiff directing the defendant to deliver peaceful possession of the land demised to him and also buildings which have been constructed by the defendant on the demised 1020 lands. It also confirmed the decree regarding arrears of rents and mesne profits. On behalf of the defendant it was submitted that the Court 's jurisdiction is limited only to adjudicate on leased premises under the Bombay Rent Act and therefore it had no jurisdiction to try the suit regarding possession of the structures put upon the leased lands. It was pleaded that a relief regarding the superstructures will not be one under the provisions of the Bombay Rent Act. It was contended that as the suit is for a composite relief namely for the possession of the leased land and for the superstructures it is beyond the jurisdiction of the court and the suit as a whole should have been dismissed. It was submitted that in any event as clause IV in the lease deed is in the nature of penalty providing for the forfeiture of the structure which did not form part of the lease, the decree for possession of the structures is not maintainable. In any event it was submitted that there could be no forfeiture of the structures on the ground that the municipal taxes were not paid and that the term as to payment of arrears of taxes cannot be considered as a clause in the lease deed and the defendant should be relieved against the penal clause. Lastly, it was submitted that the Courts below were wrong in not granting relief under section 12(3) (b) of the Bombay Rent Act. Before considering the several contentions raised by the learned counsel for the appellant it will be useful to refer to the relevant clauses of the lease deed and the relief prayed for in the plaint. The lease deed dated 14th December, 1948 executed by the plaintiff in favour of the defendant was a lease of two plots of land, plot Nos. 12 and 13 situated at Sitladevi Temple Road, Mahim for a period of 15 years at an yearly rent of Rs. 10,200/ payable in equal quarterly instalments of Rs. 2,550/ in advance. Subsequently standard rent was fixed by the trial Court at Rs. 435/ which was raised by the appellate court to Rs. 620/ per mensem. The lease permitted the defendant to erect buildings and structures in the two plots of land. The buildings were erected in only plot No. 12 and not in plot No. 13 which remains unbuilt and vacant. The defendant agreed to pay and discharge all taxes and outgoings imposed on the above two plots as also to the buildings to be erected by the defendant. The defendant also undertook to deliver possession of the two plots to the plaintiff "free of all buildings, erections and structures" on the expiration of the lease. Clause IV empowered the lessor to terminate the lease and provided that the lessor will be at liberty to re enter not only upon the two plots of the lands but also on the structures standing thereon. In the plaint it was stated that as the defendant had failed to pay rents and taxes and 1021 committed breach of conditions the plaintiff forfeited the lease and called upon the defendant to pay arrears of rent and taxes. The suit was based not only on the forfeiture of the lease but also for possession of the leased plots under section 12 of the Bombay Rents Act. In paragraph 9 of the plaint it is alleged "the plaintiff say that in the event of the defendant contending that he has become a statutory tenant of the said land, after the tenancy had been duly and validly terminated, the plaintiff would submit that the defendant had failed and neglected to pay the arrears of standard rent amounting to Rs. 11,472.30 upto 31st August, 1961 and does not observe and perform condition 11(b) of his lease, and so he is not entitled to the protection of the Bombay Rent Control Act. " In paragraphs 10 and 11 of the Plaint, it is alleged that the provisions of the Bombay Rents Act 47 of 1947 apply to the said land and the Court has jurisdiction to entertain and try the suit. The reliefs asked for by the plaintiff in paragraph 13(a) is that the defendant may be directed to hand over peaceful possession of the lands to the plaintiff together with the buildings and structures standing thereon. Thus it would be seen that the plaint is based on the terms of the lease deed after forfeiting the lease and for the possession of the leased lands according to the terms of the Bombay Rent Act. The main defence which was raised by the tenant in the Courts below as well as before us is that the suit is not triable under section 28 of the Bombay Rents Act and in any event relief regarding possession of the structures would be beyond the scope of the relief contemplated in the Bombay Rent Act. Section 28 of the Bombay Rent Act runs as follows: "28 (1). Notwithstanding anything contained in any law and notwithstanding that by reason of the amount of the claim or for any other reason, the suit or proceeding would not, but for the provision, be within its jurisdiction, in Greater Bombay, the Court of Small Causes Bombay. (a) X X X X X X X X X (b) X X X X X X X X X shall have jurisdiction to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of this part apply and to decide any application made under this Act and to deal with any claim or question arising out of this Act or any of its provisions 1022 and subject to the provisions of sub section (2), no other court shall have jurisdiction to entertain any such claim or question. " The Section confers jurisdiction on the Court of Small Causes Bombay to entertain and try any suit or proceedings between a landlord and tenant relating to recovery of rents or possession of any premises to which any of the provisions of this part apply. The jurisdiction thus conferred enables the Court to try any suit between the landlord and the tenant relating to recovery of possession of the premises. It is admitted that the premises is the two plots of land only and not the superstructure. The plea of the plaintiff is that the relief for recovery of possession of the plot which is the subject matter of the lease, would also include relief relating to the superstructure as being related to relief of recovery of possession of the leased premises namely the plots and land. The submission on behalf of the plaintiff is that as the jurisdiction of Civil Courts have been specifically excluded, and the matters relating to possession of the leased premises, it would imply that not only relief of the possession of the leased lands but also matters relating to it would be beyond the jurisdiction of other courts and therefore the plaintiff has no other option than to file the suit for relief as to the structure being only ancillary and incidental to the relief of possession of the leased lands. Before we proceed to consider this plea, we might note that Mr. Soli J. Sorabjee, learned counsel for the plaintiff submitted that though it might be open to him to contend that the reliefs relating to the structures based on the terms of the contract would also be decisive on an application made under the act as being related to the recovery of the possession of the leased premises, he would content himself with the plea that the relief as to structures is so closely and inextricably related to possession of the land that no effective relief of possession of the leased lands could be given without giving relief in respect of structures. Relief as to structures also should inevitably follow. If this submission is accepted it would be unnecessary for us to consider the other limb of the arguments on behalf of the appellants that the relief claimed as a result of the forfeiture is not enforceable by a Court administering Bombay Rent Act or that the plaintiff cannot enforce terms of forfeiture which did not relate to leased plots or that the defendant would be entitled to relief against forfeiture under Ss.114 and 114A of the Transfer of Property Act. All the Courts below have found that the defendant is not entitled to any relief under section 12(3)(b) of the Act and that so far as the leased plots are concerned, the plaintiff is entitled to possession under the Bombay Rent Act. After filing of the suit it is seen that the 1023 defendant asked for time for payment of arrears of rents and the matter came up before the Court on the 28th June, 5th July and 6th August, 1962 for payment of arrears. On the last date the appellant 's advocate informed the Court that the appellant was not in a position to pay the arrears. It is only two years later on 18th September, 1964 the defendant obtained Court 's permission to deposit balance of arrears of Rs. 12,800/ and deposited the amount under protest by the plaintiff. The Trial Court after considering all the facts found that there was intention of default and neglect in payment of rent. The conduct of the defendant was wilfully not ready and willing to pay the rent. It again found that the payment of arrears was not made diligently and the defendant had flouted the orders of the Court to deposit the arrears of rent and the discretion cannot be exercised in his favour when he persisted in not paying the taxes for about 12 or 13 years and was constantly in arrears of rent for about 14 months at the time of the notice. The appellate Court also came to the same conclusion holding that it is not a case where discretion of the Court under S.12 (3) (b) should be exercised in favour of the tenant. The High Court also confirmed the findings of the Court below that the defendant was not entitled to relief under Section 12(3)(b) of the Act. On the facts we are also in agreement with the findings of the three courts below that the persistent default of the defendant on various occasions and his clear statement that he was not in a position to pay the arrears, would exclude any relief under section 12(3) (b). In a recent decision of this Court reported in Ganpat Ladha vs Sashikant Vishnu Shinde, it has been held that when the tenant does not fulfil the conditions as required under section 12(3)(b), he could not claim protection under section 12(3)(b). This Court observed that it is difficult to see how judicial discretion exercisable in favour of the tenant can be found under section 12(3)(b) even where conditions laid down by it were not satisfied. This Court overruled the decision of the case of Bombay High Court in Kalidas vs Bhavan Bhagwandas. The conditions specified in section 12(3) (b) will have to be strictly observed by the tenant if he wants to avail himself of the benefits provided under the Section. On the facts therefore we find that the plaintiff is entitled to a decree for possession of the two plots under the provisions of the Bombay Rent Act. As plot No. 13 has not been built upon and is vacant there could be no difficulty in confirming the decree for possession in favour of the plaintiff regarding plot No. 13. 1024 In Importers and Manufacturers Ltd. vs Pheroze Framroze Taraporewala and Ors, this Court held that the claim for compensation was merely an incidental claim for possession under the Act. "Section 28 had conferred jurisdiction on the Court of Small Causes not only to entertain and try any suit or proceeding between a landlord and tenant for recovery of rent or possession but also to deal with any claim or question arising out of this Act or any of its provisions and section 28 was thus wide enough to cover the question raised as between the plaintiff and the sub lessee". It will be seen that the plea that a suit against a sub lessee is not within the jurisdiction of the Small Causes Court, was negatived by this Court and it was held that section was wide enough to cover the questions raised between the plaintiff and the sub lessee. In Babulal Bhuramal and Anr. vs Nandram Shivram and Ors. related to sub lessee of the premises. The suit was filed for ejectment of the tenant and the sub tenant in the Court of Small Causes. The tenant and the sub tenants later filed a suit before the Bombay City Civil Court for declaration that the lessee was a tenant and was protected from eviction by the provisions of the Bombay Rents Act and that as B and C were lawful sub tenants, were also entitled to possession. This Court agreed with the view taken by the High Court that section 28 of the Act barred the City Civil Court from entertaining the suit filed by the lessees and the sub lessees as section 28 conferred the right on the Small causes to entertain a suit between a landlord and a tenant in respect of a claim which arose out of the Act or any of its provisions. Thus it prohibits a suit from being entertained by the City Civil Court at the instance of the tenant. In Raizada Topandas and Anr. vs M/s. Gorakhram Gokalchand it was held that if a suit is framed by a landlord or a tenant and relief asked for is in the nature of a claim which arises out of Act or any of the provisions then only and not otherwise will be covered by section 28 and as there were no such claim the City Civil Court has jurisdiction to entertain the suit. The plaint in the case proceeded on the footing that during the period of agreement the appellants were mere licensees and after the expiry of the agreement they were trespassers. As the plaint in terms negatived the relationship of the landlord and tenant, it was held that the Rent Court had no jurisdiction. This decision cannot be of any help to the appellant. 1025 In Sushila Kashinath Dhonde and Ors. vs Harilal Govindji Bhogani and Ors. , this Court held that it is not necessary that there should be relationship of landlord and tenant in respect of all the matters covered by section 28(1) of the Act so as to give jurisdiction to the Court of Small Causes. It further held that in respect of other matters dealt with sub section, it is not necessary that the relationship of landlord and tenant should exist between the parties before the Court. The Court repelled the contention that a charge created by the deed executed between the parties did not give rise to any claims or questions arising out of the Bombay Rents Act or its provisions and held that nature of reliefs to be granted to the plaintiff are all claims or questions arising out of the Act and can be dealt with only by the special court constituted under section 28 of the Act. No doubt, the deed of charge furnished a cause of action, but its legality, validity and binding nature and other incidental matters connected therewith are all questions arising out of the Act and the plea on behalf of the appellants that the rights of the plaintiff did not flow from the Act or any of its provisions but from the contract, could not be accepted. The decisions referred to above will show that the plaintiff/ landlord of the land is entitled to claim the relief for possession of his land and in effect the decree for possession of the land would mean that the land should be delivered to him without the structures. Apart from the relief under the lease deed, the plaintiff is entitled to succeed as he has established that there was default of payment under the provisions of the Bombay Rents Act. The jurisdiction of the Small Causes Court to grant an effective decree for possession of the land cannot be denied. Equally untenable is the contention of the respondent that as the plaintiff has sought two reliefs one under the Bombay Rent Act and another under the Contract, the entire plaint must be rejected. As we have already observed so far as the relief of possession of the premises, i.e the land is concerned, it is exclusively within the jurisdiction of the Small Causes Court. In asking for the relief for possession of the land, the plaintiff is entitled to incidental and consequential reliefs such as for effectively taking possession of the plot without the structures. The prayer in the plaint asking for possession of the land including the structures would not take the suit out of the competence of the Small Causes Court. In this view it is not necessary for us to go into the question as to whether the terms in the contract regarding the forfeiture can be enforced by the Small Causes Court. It is sufficient for the purpose of this Suit to hold that the plaintiff is entitled to seek for 1026 possession of the land which is the premises in the suit, and in getting possession of the land he is entitled to ask for possession of the land without any superstructures. In this connection reference may be made to the nature of the relief which the plaintiff is entitled to. In Ramchandra Raghunath Shirgaonkar vs Vishnu Balaji Hindalakar, it was held that the ordinary rule of law is that the tenant must give up vacant possession of the land demised at the end of the term and that if he builds on the land of the tenancy he builds at his own risk. At the end of the term he can take away his building but if he leaves it there, it becomes the landlord 's property. The Court further held that the tenant who had been in possession of land for a large number of years and built a costly and substantial house on the land of the tenancy with the knowledge of the landlord, is entitled to some compensation In K. Arumugham Naicker and Anr. vs Tiruvalluva Nainar Temple that after the determination of the lease, lessees were required to deliver over possession of the demised premises to the lessor and the lessees were entitled to remove the structures which they might have erected during the continuance of the tenancy. The lessees, however, failed to remove the structures on the date of the determination of the tenancy and on the next date the premises were occupied by other lessees, it was held the lessees could remove the structures on and not after determination of the tenancy and having failed to remove the same on the determination of the tenancy they lost not only their right to remove the structures after the determination of the tenancy but also all right, title and interest in those structures In K. Arumugham Naicker and Anr. vs Tiruvalluva Naickar Temple by its Trustee, it was held that where a court directs by a decree or order vacant possession of land, that decree could be made effective by directing its own officers to remove the super structures in the property and deliver vacant possession of the properties to the decree holder. It is unnecessary to have any specific power in that behalf. The power to remove the superstructures is an incidental necessary and ancillary power to the power to deliver possession of the property. We are satisfied that the Small Causes Court had jurisdiction to entertain the suit of the plaintiff not only for possession of the land which is the premises under the Act but also for other reliefs to make the decree for possession effective. In this connection the plaintiff is entitled to ask for relief regarding the superstructures. This incidental or ancillary relief would not take out the suit beyond 1027 the jurisdiction of the Small Causes Court. The plea that the composite relief had been asked for and that the entire plaint ought to be rejected is also unsustainable. In the result, we agree with the contentions of the plaintiff that in asking for relief as to possession of the land, he is entitled to ask for the demolition of the structures and for grant of vacant possession of the plots. So far as the plot No. 13 is concerned, there is no difficulty. The plot is not built upon and is vacant and therefore we have no hesitation in confirming the decree for possession so far as the plot No. 13 is concerned. Plot No. 12 has been built upon. There are about three storeys consisting of about 72 flats, shops with carpet area of 13,000 square ft. and the cost of building with superstructures in 1949 was about Rs. 6,00,000/ . We may in this connection note that from the date of the decree passed by the High Court on 23rd October 1969, the defendant has not paid arrears of rents or the taxes due on the buildings. He is in law bound to pay the arrears of rent and the municipal charges which he has undertaken. On a consideration of the facts of the case, we feel that there are no grounds for interfering with the decree passed by the High Court for possession not only of the vacant plot but also of the superstructure and mesne profits and arrears of rent. The law provides for the tenant to remove the superstructure on the termination of the tenancy. If it is not thus removed the tenant loses all his rights to the superstructure and the landlord becomes entitled to it. But in a case where there is a substantial building, it is only reasonable that the court should explore the possibility of payment of some compensation to the tenant who had put up this structure. But in this connection we are reminded that for several years neither the arrears of rent nor the taxes amounting to several lacs of rupees had been paid by the tenant. Not only the tenant but several persons who have put up flats at their own costs may press their claim for compensation and it will be difficult to determine as to who are entitled to compensation and the proportion of the compensation to which they will be entitled to. We enquired of the parties at the conclusion of the arguments if it was possible to come to some arrangement regarding the superstructure but to our regret the parties informed us that they could not arrive at any settlement. In the circumstances, we have no alternative except to confirm the judgment and decree passed by the High Court. We, therefore, dismiss the appeal, but in the special circumstances of this case we make no order as to costs in this Court. S.R. Appeal dismissed. [/INST]By a lease dated 14th December 1948, the respondent plaintiff gave to the appellant defendant on lease two plots Nos. 12 and 13 situated at Sitaladevi Temple Road, Mahim for a period of 15 years commencing from 1st December 1948 at the yearly rent of Rs. 10,200/ payable in equal quarterly instalments of Rs. 2,550/ in advance. The lease deed provided that the appellant was at liberty to erect building and structures on the two plots of land. The appellant agreed to pay and discharge all taxes and outgoings imposed on the above two plots as also on the buildings to be erected by the defendant. On the expiration of the term of the lease, the appellant agreed to deliver back the possession of two plots to the respondent `free of all buildings, erections and structures and levelled and put in good order and condition to the satisfaction of the respondent '. Clause IV of the lease provided for determination and forfeiture of the lease in the event of the rents having been allowed to be in arrears for more than 30 days or upon breach of conditions of the lease. The forfeiture clause also provided that upon forfeiture the respondent would be entitled to re enter upon not only the two plots of land but also the structure standing thereon. The appellant constructed on plot No. 12 a three storied building consisting of about 72 flats, shops with carpet area of 13,000 square feet and the cost of the building with superstructures in 1949 was about Rs. 6,00,000/ . Since the appellant defaulted not only in payment of rent but also in payment of dues in respect of lands and buildings which he erected, the respondent filed a suit in 1951 for ejectment. The appellant filed an application for the fixation of standard rent and the standard rent was fixed at Rs. 435/ per month from September 1, 1950. A compromise was entered into between the parties in the suit on 5th March, 1954, by which they agreed on a rent of Rs. 435/ per month from September 1950 to February 1954. An appeal against the fixation of standard rent of Rs. 435/ per month was disposed of on 28th June, 1955 whereby standard rent was refixed at Rs. 620/ p.m. from 1st September 1950. The appellant again defaulted in payment of rent and taxes. The arrears of rent amounted to Rs. 11,472.30 and taxes to the extent of Rs. 1,12,053.60 for the period ending 30th September 1960. The respondent by a notice determined and forfeited the lease and called upon the appellant to deliver possession of the lands alongwith structures thereupon. The notice also specified that the notice was not only a notice of forfeiture, but also notice under section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. On 1st 1016 December 1961, as the appellant failed to pay the arrears of rent and the taxes, the respondent filed the suit for ejectment and prayed for a decree for ejectment against the appellant in respect of two plots of land Nos. 12 and 13 and also the buildings and structures standing thereon, and claimed arrears of rent of Rs. 11,472.50 and mesne profits at the rate of Rs.620/ p.m. The appellant in order to get the benefit of section 12(3)(b) of the Rent Control Act, 1947, applied for time for making deposit of arrears of rent. The appellant could not make the payment within the extended time allowed, but after the issues were framed and the suit was taken up for trial, he deposited the arrears of rent and cost in the Court after the Court made an endorsement "accept without prejudice". Subsequently, on 11th November, 1964 the Trial Court passed a decree for ejectment in respect of plots and the buildings in favour of the respondent. A decree was granted regarding arrears of rent and for mesno profits. Both the appellant and the respondent preferred appeals and the Bench of two Judges of the Court of Small Causes by a common judgment disposed of both the appeals on 4th April 1965. The Appellate Court held that it had no jurisdiction to give a decree for ejectment in respect of the two buildings constructed on plot No. 12 by the appellant. It held that clause IV of the lease which permitted forfeiture was in the nature of penalty and the appellant was entitled to be relieved from the liability to deliver possession of the buildings constructed by him upon forfeiture by the respondent. It also found that the appellant was entitled to be relieved from the penalty of forfeiture of the lease under section 114 and 114A of the Transfer of Property Act. It rejected the plea of the appellant that he was always ready and willing to pay arrears of rents and found that because of repeated defaults the appellant was not entitled for relief from ejectment under section 12(3)(b) of the Bombay Rent Act. The respondent filed a revision petition against the order of the appellate Court declining to direct possession of the two buildings and the appellant tenant filed an appeal against the order of appellate Court directing his ejectment from the two plots of lands Nos. 12 and 13. The High Court disposed of both the revision petition and the cross appeal by a common judgment whereby it allowed the revision petition of the respondent/landlord and dismissed the appeal of the appellant/tenant and decreed the suit of the respondent directing the appellant to deliver peaceful possession of the land demised to him and also buildings which have been constructed by the appellant on the demised lands. It also confirmed the decree regarding arrears of rents and mesne profits. Hence the appeal by certificate. Dismissing the appeal, the Court. ^ HELD: 1. Section 28 of the Bombay Rent Act, 1947 confers jurisdiction on the Court of Small Cause. Bombay to entertain try any suit for proceedings between a landlord and tenant relating to recovery of rents or possession of any premises to which any of the provisions of that part applied. The Jurisdiction thus conferred enables the Court to try any Suit between the landlord and the tenant relating to recovery of possession of the premises. [1022 A B] Importers and Manufacturers Ltd. vs Pheroze Framroze Taraporewala and Ors. ; Babulal Bhura Mal and Anr. vs Nandram Shivram and Ors., ; ; followed. 1017 Raizada Tapen Das and Anr. vs M/s Gorakhram Gokalchand ; ; Sushila Kashinath Dhonde and Ors. vs Harilal Govinji Bhogani and Ors., ; explained and distinguished. The conditions specified in section 12(3)(b) of the Bombay Rent Act, 1947 will have to be strictly observed by the tenant if he wants to avail himself of the benefits provided under the section. In the instant case, the persistent default of the appellant tenant on various occasions and his clear statement that he was not in a position to pay the arrears would exclude any relief under section 12(3) (b) of the Act. The respondent plaintiff would be entitled to a decree for possession of the plots under the provisions of the Bombay Rent Act and in effect the decree for possession of the land would mean that the land should be delivered to him without the structures. [1023 D G, 1025 D E] Ganpat Lodha vs Sachikant Vishnu Shivale. ; ; applied. 3. To contend that as the respondent plaintiff has sought two reliefs one under the Bombay Rent Act and another under the contract, the entire plaint must be rejected is wrong. In asking for the relief for possession of the land. the respondent plaintiff is entitled to incidental and consequential reliefs such as for effectively taking possession of the plot without the structure, that is he is entitled to ask for the demolition of the superstructure. The prayer in the plaint asking for possession of the land including the structures would not take the suit out of the competence of the Small Causes Court. [1025 E. F G] Ramachandra Raghunath Shirgaonkar vs Vishnu Balaji Hindalekar. ; Khimjee Thakorsee vs Pioneer Fibre Co. Ltd., AIR 1941 Bom. 337 and K Arumugham Naicker and Anr. vs Tiruvalluva Nainar Temple by its Trustee. AIR 1954 Mad. 985; approved. </s>
<s>[INST] Summarize the judgementCivil Appeal No. 533 of 1979. From the judgment and order dated 2nd January, 1979 of the High Court of Kerala in original Petition No. 4935 of 1974 D. and Special Leave Petition No. 81 OF 1971. From the judgment and order dated the 27th July, 1971 of the Kerala High Court in O.P. No. 4706 of 1969. T.S. Krishnamoorthy Iyer, C.J. Balakrishnan, K Prabhakaran, P. Parameswaran and A.S. Nambiar for the appellant in C.A. No. 533/79. P. Govindan Nair, Mrs. Baby Krishnan, K.R. Nambiar and K.M.K Nair for the respondent in C.A. No. 533/79. S.B. Sahariya and V.B. Sahariya for the petitioner in S.L.P. No. 81/72. The Judgment of the Court was delivered by SEN, J. This appeal. by special leave, is directed against a judgment of the Kerala High Court by which the High Court dismissed the writ petition of the appellants who are manufacturers of medicinal and toilet preparations containing alcohol and upholding the constitutional validity of sections 12A, 12B, 14(e) and (f) and 68A of the Abkari Act, 1077 (1 of 1077) (hereinafter called 'the Act '), introduced by the Abkari (Amendment) Act, 1967 (10 of 1967), and rr. 13 and 16 of the Kerala Rectified Spirit Rules, 1972. The main question in the appeal is as to the legislative competence of the State to enact a law relating to medicinal and toilet preparations containing alcohol under Entry 8, List II of the Seventh Schedule to the Constitution. The appellants, by virtue of a licence in Form 25 granted under the and a licence in Form Ll granted under the (hereinafter referred to as 'the Central Act ') are entitled to manufacture the drugs specified therein. They filed a writ petition in the High Court complaining that they were entitled to the supply of alcohol free of duty for the manufacture of their medicinal and toilet 525 preparations under r. 21 of the Medicinal and Toilet Preparations A (Excise Duties) Rules, 1956 (hereinafter referred to as 'the Central Rules '), and r. 8 of the Kerala Rectified Spirit Rules, 1972, and challenged the validity of the impugned provisions mainly on the ground that the State Legislature has no power to enact the law relating to medicinal and toilet preparations as the topic of legislation is within the exclusive domain of Parliament under Entry 84, List I of the Seventh Schedule to the Constitution. The High Court held that there was no conflict between the impugned provisions and the Central law as they dealt with different subjects. The impugned provisions, as introduced by the Abkari Amendment) Act, 1967, in so far as they are relevant, are as follows: Section 12A reads: 12A. No preparation to which liquor or intoxicating drug is added during the process of its manufacture or in which alcohol is self generated during such process shall be manufactured in excess of the quantity specified by the Commissioner: Provided that in specifying the quantity of a medicinal preparation, the Commissioner shall have due regard to the total requirement of that preparation for consumption or use in the State. Section 12B provides: 12B. (1) No person shall utilise liquor or intoxicating drug in the manufacture of any preparation, in excess of the quantity specified by the Commissioner and except under and in accordance with the terms and conditions of a licence granted by the Commissioner in that behalf: G Provided that where such preparation is a medicinal preparation, Commissioner shall, in specifying the quantity of liquor or intoxicating drug have due regard to the total requirement of such medicinal preparation for consumption or use in the State. 526 Section 14 provides: 14. The Commissioner may, with the previous approval of the Government . . . (d) prescribe the mode of supervision that may be necessary in a . manufactory where preparations containing liquor or intoxicating drugs are manufactured, to ensure the proper collection of duties, taxes and other dues payable under this Act or the proper utilisation of liquor or intoxicating drugs; (e) prescribe the size and nature of the establishment necessary for such supervision and the cost of the establishment and other incidental charges in connection with such supervision to be realised from the licensees: and (f) prescribe the allowance for wastage of alcohol that may occur in (i) . . (ii) the process of manufacture of any preparation containing alcohol; and (iii) . . Section 68A provides that the Government shall appoint an Expert Committee consisting of the Drugs Controller, the Chemical Examiner to the Government, two representatives each one of them shall be a non official, of the Allopathic, Indigenous and Homoeopathic systems of medicine appointed by the Government, and an officer of the Excise Department not below the rank of Deputy Commissioner; and the Committee shall advise the Commissioner (a) as to whether a medicinal preparation is a bona fide medical preparation or not; and (b) as to the total requirements of medicinal preparations containing liquor or intoxicating drugs or in which alcohol is self generated during the process of their manufacture, for the whole of the State during one year. Before this Court the constitutional validity of the impugned provisions was mainly challenged on these grounds, namely: (I) The State Legislature had no legislative competence to enact the impugned 527 provisions because the field was occupied by the provisions of the A (the Central Act) and the Medicinal and Toilet Preparations (Excise Duties ) Rules, 1956 (the Central Rules), and alternatively, the impugned provisions are violative of the fundamental right guaranteed in article 19(1) (g) of the Constitution. (2) The Parliament having made a declaration in section 2 of the Industries (Development and Regulation) Act, 1951, declaring "Drugs and Pharmaceuticals" to be a scheduled industry, being item 22 of the First Schedule thereof, the power of the State Legislature to make a law in respect of medicinal and toilet preparations containing alcohol is taken away. (3) The provisions made in section 14(e) of the Act for the collection of supervisory charges was clearly invalid in as much as (a) they are in conflict with r. 45 of the Central Rules, and (b) they could not be sustained as a fee as there was no quid pro quo. (4) Rule 13 of the Kerala Rectified Spirit Rules, 1972, providing for the levy of excise duty as excess wastage of alcohol in the manufacture of medicinal and toilet preparations cannot be supported in terms of the charging provision contained in section 17 of the Act. We cannot accept any of these contentions With regard to the first ground, it was submitted that the conferral of power on the Commissioner under section 12A of the Act to restrict the quantity of medicinal and toilet preparations to which liquor or intoxicating drug is added during the process of its manufacture with the requirement that the Commissioner shall, in specifying such quantity, have due regard to the total requirements of consumption or use in the State, the prohibition contained in section 12B of the Act that no person shall utilise liquor or intoxicating drug in the manufacture of any preparation, in excess of the quantity so specified by the Commissioner and the condition that no person shall manufacture any such preparations except under and in accordance with the terms and conditions of a licence granted by him, is clearly contrary to the general scheme of the Central law and in particular, rr. 18 and 21 of the Central Rules. In this respect, it was said that under r. 18 of the Central Rules, rectified spirit ordinarily had to be supplied to a manufacturer from a distillery or a spirit warehouse of the State in which the manufactory is situate, and the manufacturer was not precluded from obtaining his requirements of rectified spirit from sources outside the State. Under r. 21, rectified spirit had to be issued without previous payment of duty for the manufacture of medicinal and toilet preparations containing alcohol subject to the condition that 528 manufacturer enters into a bond in Form Bl with sufficient security as laid down in r. 96, towards due payment of duty and observance of the rules. It is submitted that the State Legislature has no power to make any such law imposing restrictions on a person carrying on the business of manufacture and sale of medicinal and toilet preparations containing alcohol in as much as the matter relates to an occupied field. There is no merit in these contentions. The enactment of the by Parliament under Entry 84, List I of the Seventh Schedule of the Constitution, or the framing of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 by the Central Government in exercise of their rule making power under section 19 of the Act, for the purpose of levying duties of excise on medicinal and toilet preparations containing alcohol etc., do not prevent the State Legislature from making a law under Entry 8, List II of the Seventh Schedule to the Constitution with respect to 'intoxicating liquors ', or a law under Entry 51, List II for levying excise duties on alcoholic liquor for human consumption. In order to appreciate the contention regarding the applicability of the doctrine of 'occupied field ', it is necessary to examine the scheme of both the enactments. The scheme of the Act, as reflected in the preamble, is that it is an Act "to consolidate and amend the law relating to the import, export, transport, manufacture, sale and possession of intoxicating liquor and all intoxicating drugs in the State of Kerala". It is not necessary to set out all the provisions of the Act in question, but reference may be made to the definitions of expressions 'spirit ', 'liquor ', 'country liquor ', 'foreign liquor and 'intoxicating liquor ' defined in sections 3(9), (10), (12), (13) and (14). The expression 'liquor ' as defined in section 3(10) reads: 3(10). 'Liquor ' includes spirits of wine, methylated spirits, spirits, wine, toddy, beer, and all liquid consisting of or containing alcohol. Section 12(1) provides: 12(1). No liquor or intoxicating drug shall be manufactured. except under the authority and subject to the terms and conditions of licence granted by the Commissioner in that behalf, or under the provisions of section 21, 529 Section 15 provides: 15(1). No liquor or intoxicating drug shall be sold with out a licence from the Commissioner, provided that a person having the right to the toddy drawn from any tree may sell the same without a licence to a person licensed to manufacture or sell toddy under this Act. B Section 17 provides: 17. A duty of excise or luxury tax or both shall, if the Government so direct, be levied on all liquor and intoxicating drugs: . . . (f) issued from a distillery, brewery, winery or other manufactory or warehouse licensed or established under section 21 or section 14; or The Act is clearly relatable to the State 's power to make a law on the topics of legislation covered by Entries 8 and 51, List II of the Seventh Schedule to the Constitution which read as under: 8. Intoxicating liquors, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors. Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India: (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics; but not including medicinal and toilet preparations containing alcohol or any substance included in sub paragraph (b) of this entry. The legislative history of the Central Act is well known. Under Entry 40, List II of the Seventh Schedule to the Government of 530 India Act, 1935, medicinal and toilet preparations containing alcohol etc., were subjected to Provincial excise duties. Under the Constitution, the entry relating to the excise duty on medicinal and toilet preparations containing alcohol was transferred to the Union List. In the light of experience gained, there was necessity to achieve a synthesis from a vast body of existing rules and regulations in force in the States having regard to the sole object of the measure, namely, to bring about uniform treatment in excise matters. This was a highly complicated subject because, firstly, the excise duty was to be collected and retained by the State Governments, and, secondly, a certain amount of flexibility in statutory operations was necessary if spurious medicines were not to defeat the policy of prohibition which is one of the Directive Principles of State Policy under article 47 of the Constitution. Some of the provisions of the Central Act are so designed as to lay down only broad principles. Matters of detail, such as classification of the preparations as capable or not capable of being used as ordinary alcoholic beverages, regulation for the purpose of the Act, of production, storage and movement, were left to be regulated by rules. Parliament accordingly enacted the , to provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol. The Act is relatable to Entry 84, List I of the Seventh Schedule to the Constitution, which reads: 84. Duties of excise on tobacco and other goods manufactured or produced in India except (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance included in sub paragraph (b) of this entry. The scheme of the Central Act is to provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol etc. The Act is entitled as "An Act to provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol, opium. Indian hemp or other narcotic drug or narcotic". Section 2 is the definition Section and 531 the expression 'dutiable goods ' as defined in section 2(c) takes in medicinal and toilet preparations specified in the Schedule. The expression 'medicinal preparation ' is defined in section 2(g) as: 2(g). 'medicinal preparation ' includes all drugs which are a remedy or prescription prepared for internal or external use of human beings or animals and all substances intended to be used for or in the treatment, mitigation or prevention of disease in human beings or animals; It is not necessary to refer to the definition of toilet ' preparation in section 2(k) as it is not relevant for the present purpose. Section 3 is the charging section which levies duties of excise on all 'dutiable goods ' manufactured in India and also lays down the mode of collection of the said duties. Section 3 (1) reads: 3(1). There shall be levied duties of excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India. Section 6 prohibits any person from engaging in the production or manufacture of any dutiable goods etc., except under the authority and in accordance with the terms and conditions of the licence granted under the Central Act. Section 19 (1) empowers the Central Government to make rules to carry out the purposes of the Act, and sub section (2) thereof specifies the various matters in respect of which such rules may be made. Section 21 provides for the repeal and savings. The Schedule to the Act contains a description of 'dutiable goods ' and the rates of duty payable thereon. In exercise of the powers conferred by section 19 (1) of the Central Act, the central Government framed the Central Rules which practically deal with all the facets of manufacture and production of medicinal and toilet preparations, as required in cls. (i) to (xxi) of sub section (2) thereof, with the ultimate object of providing a machinery for collection of duty on the said preparations. Chapter IV of the Central Rules deals with 'Manufacture '. Rule 18 in Chapter IV provides that rectified spirit shall ordinarily be supplied to a manufacturer from a distillery. Of the State in which the manufactory is situated. It further provides that the manufacturer is not precluded from obtaining his requirements of rectified spirit from sources outside the State. Rule 21 provides that rectified spirit H shall be issued without previous payment of duty to a manufacturer of medicinal and toilet preparations containing alcohol. Rule 33 532 provides for taking of samples of the manufactured product for analysis for determining the strength of alcohol and medicaments. Rule 38 provides for wastage in manufacture. Rule 45(1) enjoins that the officer in charge shall exercise such supervision as is required to ensure that alcohol issued for a certain preparation is added to the materials which go to make that preparation and that no portion of such alcohol is diverted to other purposes. These rules are intended and meant to carry out the main object of the Central Act, i.e. to levy and collect duties of excise on medicinal and toilet preparations containing alcohol etc. It is the charging section which gives the true index to the a real character of a tax. The nature of the machinery by which the tax is to be assessed is not of assistance, except in so far as it may throw light on the general character of the tax. The charging section in section 3 of the Central Act clearly shows that it does not seek to levy a duty of excise on alcoholic liquor for human consumption falling within Entry 51, List II of the Seventh Schedule, but to levy a duty of excise on medicinal and toilet preparations containing alcohol etc. The topic of legislation under Entry 84, List I of the Seventh Schedule is not 'duties of excise on alcoholic liquors for human consumption ' but 'duties of excise on medicinal and toilet preparations containing alcohol etc '. There can be little doubt that the Central Act must, in pith and substance, be attributed to Entry 84, List I. In determining whether an enactment is a legislation 'with respect to ' a given power, what is relevant is not the consequences of the enactment on the subject matter or whether it affects it, but whether, in its pith and substance, it is a law upon the subject matter in question. The Central and the State Legislations operate on two different and distinct fields. The Central Rules, to some extent, trench upon the field reserved to the State Legislature, but that is merely incidental to the main purpose, that is, to levy duties of excise on medicinal and toilet preparations containing alcohol. Similarly, some of the impugned provisions may be almost similar to some of the provisions of the Central Rules, but that that does not imply that the State Legislature had no competence to enact the provisions. It is sufficient to say upon the first ground that the impugned legislation is confined to 'intoxicating liquor ', that is, to ensure proper utilisation of rectified spirit in the manufacture of medicinal and toilet preparations and, therefore, within the powers granted 533 to the State Legislature under Entry 8, List II. It further seeks to regulate the manufacture of bona fide medicinal preparations and prevent misuse of rectified spirit in the manufacture of spurious medicinal and toilet preparations containing alcohol capable of being used as ordinary alcoholic beverages. It was suggested that the provisions are identical with the provisions contained in the Central Rules and, in particular, to rule 45(1) and, therefore, the legislation is in the occupied field. The answer is that the enumeration of 'intoxicating liquor ' in Entry 8, List II, confers exclusive power to the State to legislate in respect of medicinal and toilet preparations containing alcohol. In Prafulla Kumar Mukherjee and Ors. vs Bank of Commerce Ltd., Khulna(1) the Privy Council in dealing with the question or distribution of powers laid down the tests that in order to see whether an Act is in respect of a particular subject, one must look to "its true nature and character"; "its pith and substance". Lord Porter, in delivering the judgment of the Judicial Committee, observed: "As Sir Maurice Gwyer, C.J. said in the Subramanyam Chettiar Case: ' It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely inter twined that blind observance to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee, whereby the impugned statute is examined to ascertain its 'pith and substance ', or 'its true nature and character ', for the purpose of determining whether it is legislation with respect to matters in this list or in that" . The doctrine of 'pith and substance ' evolved by the Privy Council has been followed by this Court throughout. Thus, in State of Bombay vs F. N. Balsara(2) Fazl Ali, J., followed the decision of the Judicial Committee, reiterated: 534 "If the Act, when so viewed, substantially falls within the powers expressly conferred upon the Legislature which enacted it, then it cannot be held to be invalid, merely because it incidentally encroaches on matters which have been assigned to another Legislature. " In such matters of seeming conflict or encroachment of jurisdictions, what is more important is the true nature and character of the legislation. A necessary corollary of the doctrine of pith and substance is that once it is found that in pith and substance the impugned Act is a law on a permitted field, any incidental encroachment on a forbidden field does not affect the competence of the legislature to enact the law. The main thrust of the argument is the decision of this Court in Hyderabad Chemical and Pharmaceutical Works Ltd. vs State of n Andhra Pradesh and Ors(1) which, we are afraid, is clearly distinguishable. There the Court was concerned with the question whether r. 36 of the Medical Preparations and Spirituous Rules, 1345 Fasli, framed under the Hyderabad Abkari Act, 136 Fasli which provided that "the expenses of the establishment for the supervision of the work shall be borne by the pharmaceutical laboratory (licensee) as per the decision of the Commissioner of Excise", was still enforceable having regard to section 21 of the Central Act and r. 143 of the Central Rules. It was held that the effect of section 21 of the Central Act was that so far as the Hyderabad Act applied to the use of alcohol in the manufacture of medicinal and toilet preparations, the Act must be deemed to have been repealed and, therefore, r. 36 could not survive. In that case, the Court was concerned with the levy of supervisory charge at the stage of manufacture of medicinal and toilet preparations, and not with the levy of supervisory charges at the stage of the supply and utilisation of rectified spirit in the manufacture of medicinal and toilet preparations. This is clear from an observation at p. 380 of the Report to the effect: The supervisory staff which has to be paid for under r. 36 therefore is meant for the supervision of the manufacture of medicinal preparations and it is for that purpose only that expenses have to borne by the laboratory con 535 cerned. The purpose of the rule therefore is clearly covered by the Act and the Rules framed thereunder and it cannot survive the Act and the rules in view of section 21 of the Act and r 143 of the 1956 Rules, and the proviso to s 21 cannot be availed of by the State. While repelling the contention that r. 36 could still be good law as it was meant to carry out the general law relating to alcohol and intoxicating drugs, the Court pointed out that the Central Rules make no provision for recovery of supervisory charges, the intention being that the duty under the Act would cover all expenses for enforcing it and observed (1) We are of opinion that there is no force hl this contention either. In the first place, as we have already indicated, the main object of the supervisory staff mentioned in r. 36 is to supervise the manufacture of medicinal preparations. In that connection the supervisory staff will certainly see that the alcohol supplied is used for the purpose for which it is supplied and it is not used in any other manner. Rule 36 is only concerned with seeing that the manufacture of medicinal preparations is made properly and is done under the supervision of the establishment attached to each laboratory; and it is only incidentally that in that connection the establishment is also to see that the alcohol supplied is not used otherwise than for the purpose of manufacture. Further, the Central Act, which the Court was considering, was a fiscal measure. The whole object and purpose of that Act is to levy a duty of excise on medicinal and toilet preparations containing alcohol. The Central Rules have mainly been framed to achieve this object. Rule 45(1) on which reliance was placed, reads: 45(1). The officer in charge shall exercise such supervision as is required to ensure that alcohol issued for a certain preparation is added to the materials which go to make that preparation and that no portion of such alcohol is diverted to other purposes. The provision is merely incidental to the main purpose, i.e., collection of excise duty on medicinal and toilet preparations containing alcohol. 536 There can be no doubt that the impugned Act is relatable to Entry 8, List II of the Seventh Schedule. In Balsara 's case(1) the Court held that the expression 'liquor ' in Entry 31, List II of the Seventh Schedule to the Government of India Act, 1935, took within its sweep all liquids containing alcohol. In dealing with the question, Fazal Ali, J. Observed: The framers of the Government of India Act, 1935, could not have been entirely ignorant of the accepted sense in which the word 'liquor ' has been used in the various excise Acts of this country and, accordingly I consider the appropriate conclusion to be that the word 'liquor ' covers not only those alcoholic liquids which are generally used for beverage purposes and produce intoxication, but also all liquids containing alcohol. It may be that the latter meaning is not the meaning which is attributed to the word 'liquor ' in common parlance especially when that word is prefixed by the qualifying word 'intoxicating ', but in my opinion having regard to the numerous statutory definitions of that word, such a meaning could not have been intended to be excluded from the scope of the term 'intoxicating liquor ' as used in entry 31 of List II. It is not disputed by the appellants that the impugned Act does not levy a duty of excise on medicinal and toilet preparations containing alcohol, but they contend that, whatever be the intention, the State Legislature had, in fact, encroached upon an occupied field. The contention is, in our opinion, wholly misconceived. The main purpose of the impugned Act is to consolidate the law relating to manufacture, sale and possession of intoxicating liquor and intoxicating drugs which squarely falls under Entry 8, List II of the Seventh Schedule, while the main object of the Central Act is to provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol falling under Entry 84, List I of the Seventh Schedule. When the frame work of the two enactments is examined, it would be apparent that the Central and the State Legislations operate in two different and distinct fields. In the matter of making rules or detailed provisions to achieve the object and purpose of a legislation, there may be some provisions seemingly overlapping or encroaching upon the forbidden field, but 537 that does not warrant the striking down the impugned Act as ultra virus the State Legislature. The alternative contention that the impugned provisions are violative of article 19(1)(g) of the Constitution, is wholly devoid of any merit. No citizen has any fundamental right guaranteed under article 19(1)(g) of the Constitution to carry on trade in any noxious and dangerous goods like intoxicating drugs or intoxicating liquors. The power to legislate with regard to intoxicating liquor carries with it the power to regulate the manufacture, sale aud possession of medicinal and toilet preparations containing alcohol, not for the purpose of interfering with the right of citizens in the matter of consumption or use for bona fide medicinal and toilet preparations, but for preventing intoxicating liquors from being passed on under the guise of medicinal and toilet preparations. It was within the competence of the State Legislature to prevent the noxious use of such preparations, i.e. their use as a substitute for alcoholic beverages. The general test for determining what medicinal preparations containing alcohol are capable of being misused and, therefore, must be considered intoxicating within the meaning of the term 'intoxicating liquor ', is the capability of the article in question tor use as a beverage. The impugned provisions have been enacted to ensure that rectified spirit is not misused under the pretext of being used for medicinal and toilet preparations containing alcohol. Such regulation is a necessary concomitant of the police power of the State to regulate such trade or business which is inherently dangerous to public health. Section 12A of the Act provides that no preparation to which liquor or intoxicating drug is added during the process of its manufacture or in which alcohol is self generated during such process shall be manufactured in excess of the quantity specified by the Commissioner: Provided that in specifying the quantity of a medicinal preparation, the Commissioner shall have due regard to the total requirement of that preparation for consumption or use in the State. Section 12 provides that no person shall utilise liquor or intoxicating drug in the manufacture of any preparation, in excess of the quantity specified by the Commissioner and except under and in accordance with the terms and conditions of a licence granted by the Commissioner in that behalf: Provided that where such preparation is a medicinal preparation, the Commissioner shall, in 538 specifying the quantity of liquor or intoxicating drug, have due regard to the total requirement of such medicinal preparation for consumption or use in the State. Now, section 68A provides for the Government to appoint an Expert Committee to advise the Commissioner as to whether a medicinal preparation is a bona fide medicinal preparation or not and as to the total requirement of the medicinal preparations containing alcohol or intoxicating drug or in which alcohol is self generated during the process of their manufacture for the whole of the State during one year. The challenge to the validity of sections 12A and of the Act is mainly based on the words "shall have due regard to the total requirement of such medicinal preparations for consumption or use in the State "occurring in the provisions thereof. The submission is that the quantity of medicinal preparations manufactured by the appellants would be restricted looking to the total requirements of such preparations for consumption or use in the State. The medicines are in demand not only in the State, but throughout the country and to limit consideration by the Commissioner in granting a licence only to the requirements of preparations for consumption or use in the State, would be an unreasonable restriction on the fundamental right guaranteed under article 19(1) (g) of the Constitution. We do not think that the impugned provisions contained in sections 12A and 12B have that effect. All that the provisions ordain is that the Commissioner shall 'have regard to the total requirements for use and consumption within the State '. The expression 'shall have regard to ' had been subject to judicial interpretation in Ryots of Garabandho and other villages vs Zamindar of Parlakimidi and Anr.(1) It only means 'take into consideration '. Understood in the light of this judicial exposition, the Commissioner only has to take into account the total requirements within the State as an element which should enter the assessment and no more. As a necessary corollary, it follows that in fixing the quantity of medicinal and toilet preparations to which alcohol is added or in which it is self generated, normally the Commissioner shall have regard to larger requirements of the manufacturer, if the manufactured product has a market outside the State. As a corollary, it must result in the consequence that in the case of medicinal and toilet preparations which are capable of being misused as alcoholic beverages, or which are not bona fide medicinal preparations in the opinion of the Expert Committee, the Commissioner may totally prohibit the manufacture of such pre 539 parations. The restrictions imposed by section 12B as to the alcoholic content of medicinal and toilet preparations and the requirement that they shall not be manufactured except and in accordance with the terms and conditions of a licence granted by him, are nothing but reasonable restrictions within the meaning of article 19(6). The impugned provisions, therefore, cannot be struck down as offending article (1) (g) of the Constitution. As regards the second ground, the contention that Parliament having made the requisite declaration in section 2 of the Industries (Development and Regulation) Act, 1951 declaring "drugs and pharmaceuticals" to be a scheduled industry, being item 22 of Schedule I thereof, the State Legislature was denuded of its competence to enact the impugned provisions under Entry 8, List II, cannot be accepted. In Ishwari Khetan Sugar Mills (P) Ltd. vs State of Uttar Pradesh(1), this Court held that the legislative power of the States under Entry 24, List II is eroded only to the extent of control assumed by the Union by reason of a declaration made by Parliament in respect of a 'declared industry ' as spelt out by a legislative enactment under Entry 52, List I, and the field occupied by such enactments is the measure of erosion. But subject to such erosion, on the remainder the State Legislature will still have power to legislate in respect of a declared industry without, in any way, trenching upon the occupied field. Now, the impugned Act, in pith and substance, is not a legislation under Entry 24, List II and, therefore, the question really does not arise. The third ground that the levy of supervisory charges under s.14(e) of the Act and r.16(4) of the Kerala Rectified Spirit Rules, 1972 being in conflict with r. 45(1) of the Central Rules, is constitutionally impermissible, cannot be accepted. The submission rests on a misconception as to the scope and effect of the decision of this Court in the Hyderabad Chemicals and Pharmaceutical 's case (supra). As we have already explained, the Court in that case was concerned with the levy of supervisory charges at the stage of manufacture of medicinal and toilet preparations and not with the levy of supervisory charges at the stage of supply and utilisation of rectified spirit in the manufacture of medicinal and toilet preparations. There can be supervision at both the stages. Merely because the Central Rules made no provision for realisation of supervisory charges at the stage of manufacture of medicinal and toilet preparations, does not imply 540 that the State has no power to prescribe the mode of supervision in a manufactory where preparations containing intoxicating liquor or intoxicating drugs are manufactured, or to ensure proper collection of duties, taxes and other dues payable under the Act, or to the proper utilisation of liquor or intoxicating drug. The provision contained in section 14(e) of the Act is clearly relatable to the State 's power to make a law under entry 8, read with Entry 51(a), List II of the Seventh Schedule. It necessarily follows that section 14(e) of the Act is valid in so far as it provides that the Commissioner may prescribe the size and nature of the establishment for such supervision and the cost of establishment and other incidental charges in connection with such supervision to be realised from the licensee. There is no f ' warrant for the submission that the framing of such an incidental provision like r. 45(1) of the Central Rules takes away the State 's power to recover supervisory charges from the licensee. There still remains the question whether the levy of supervisory charges must be regarded as a fee and, therefore, cannot be sustained, there being no quid pro quo. In support of the contention, reliance is placed on the decision in Indian Mica Micanite Industries vs The State of Bihar and Ors.(1) The distinction between a 'tax ' and a 'fee ' is well settled. The question came up for consideration for the first time in this Court in the Commissioner, H.R.E. Madras vs Lakshmindra Thirtha Swamiar of Shirur Mutt.(2) Therein, the Court speaking through Mukherjee, J. quoted with approval the definition of 'tax ' given by Latham, C.J. in Matthews vs Chickoory Marketing Board(3). In that case, the learned Chief Justice observed: A tax is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered. Dealing with the distinction between 'tax ' and 'fee ' the learned Judge observed :(4) It is said that the essence of taxation is compulsion, that is to say, it is imposed under statutory power without 541 the tax payer 's consent and the payment is enforced by law. A The second characteristic of tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax. This is expressed by saying that the levy of tax is for the purposes of general revenue, which when collected forms part of the public revenues of the State. As the object of a tax is not to confer any special benefit upon any particular individual, there is, as it is said, no element of quid pro quo between the tax payer and the public authority. Another feature of taxation is that as it is a part of the common burden, the quantum of imposition upon the tax payer depends gene rally upon his capacity to pay. Coming now to fees, 'a fee ' is generally defined to be a charge for a special service rendered to individuals by some Governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service, though in many cases the costs are arbitrarily assessed. Ordinarily, the fees are uniform and no account is taken of the varying abilities of different recipients to pay. These are undoubtedly some of the general characteristics, but as there may be various kinds of fees, it is not possible to formulate a definition that would be applicable to all cases. . If, as we hold, a fee is regarded as a sort of return or consideration for services rendered, it is absolutely necessary that the levy of fees should on the face of the legislative provision, be co related to the expenses incurred by Government in rendering the services. The same view was reiterated by this Court in Mahant Sri Jagannath Ramanuj Das vs The State of Orissa(1) and in Ratilal Pannchand Gandhi vs The State of Bombay. (2) 'Fees ' are the amounts paid for a privilege, and are not an obligation, but the payment is voluntary. Fees are distinguished 542 from taxes in that the chief purpose of a tax is to raise funds for the support of the Government or for a public purpose, while a fee may be charged for the privilege or benefit conferred, or service rendered or to meet the expenses connected therewith. Thus, fees are nothing but payment for some special privilege granted or service rendered. Taxes and taxation are, therefore, distinguishable from various other contributions, charges, or burdens paid or imposed for particular purposes and under particular powers or functions of the Government. It is now increasingly realised that merely because the collections for the services rendered or grant of a privilege or licence, are taken to the consolidated fund of the State and are not separately appropriated towards the expenditure for rendering the service is not by itself decisive. That is because the Constitution did not contemplate it to be an essential element of a fee that it should be credited to J a separate fund and not to the consolidated fund. It is also increasingly realised that the element of quid pro quo stricto senso is not always a sine qua non of a fee. It is needless to stress that the element of quid pro quo is not necessarily absent in every tax. We may, Din this connection, refer with profit to the observations of Seervai in his Costitutional Law, to the effect: (1) It is submitted that as recognised by Mukherjee, J. him self, the fact that the collections are not merged in the consolidated fund, is not conclusive, though that fact may enable a court to say that very important feature of a fee was present. But the attention of the Supreme Court does not appear to have been called to article 266 which requires that all revenues of the Union of India and the States must go into their respective consolidated funds and all other public moneys must go into the respective public accounts of the Union and the States. It is submitted that if the services rendered are not by a separate body like the Charity Com missioner, but by a government department, the character of imposition would not change because under article 266 the moneys collected for the services must be credited to the consolidated fund. It may be mentioned that the element of quid pro quo is not necessarily absent in every tax. (emphasis added) Our attention has been drawn to the observations in Kewal Krishan Puri & Anr vs State of Punjab and Ors. (2) 543 The element of quid pro quo must be established A between the payer of the fee and the authority charging it. It may not be exact equivalent of the fee by a mathematical precision, yet, by and large, or predominantly, the authority collecting the fee must show that the service which they are rendering in lieu of fee is for some special benefit of the payer of the fee. To our mind, these observations are not intended and meant as laying down a rule of universal application. The Court was considering the rate of a market fee, and the question was whether there was any justification for the increase in rate from Rs. 2/ per every hundred rupees to Rs. 31 . There was no material placed to justify the increase in rate of the fee and, therefore, it partook the nature of a tax. It seems that the Court proceeded on the assumption that the element of quid pro quo must always be present in a fee. The traditional concept of quid pro quo is undergoing a transformation. It seems obvious that. in the case of a manufacturer of medicinal and toilet preparations containing alcohol in a bonded manufactory, the imposition of the cost of establishment under section 14(e) of the Act calculated in accordance with the nature and extent of that establishment could not be said to be an imposition of a duty of excise, but is a price for his franchise to carry on the business. If an exaction is to be classed as a duty of excise, it must, of course, be a tax; its essential distinguishing feature is that it is a tax imposed "upon" or "in respect of ' or "in relation to" goods: Matthews vs Chickory Marketing Board (l). The exaction is in truth, as it purports to be, simply a fee payable as a condition of a right to carry on a business. No one has a fundamental right to the supply of rectified spirit which is an intoxicating liquor. It is up to the State to control and regulate its supply from a distillery or a spirit warehouse in the State under and in accordance with terms and conditions of a licence or permit its import from outside by grant of a privilege and charge a fee for the same. A fee may be charged for the privilege or benefit conferred, or service rendered, or to meet the expenses connected therewith. A fee may be levided to meet the cost of supervision and maybe, something more. It is in consideration for the privilege, licence or service. The State is undoubtedly entitled to levy H 544 excise duty on the rectified spirit issued from a distillery under section 17(f) of the Act read with r. 13 of the Kerala Rectified Spirit Rules, 1972, but it refrained from making any such levy by reason of r. 21 of the Central Rules and has, therefore, by proviso to r. 8, allowed a manufacturer of medicinal and toilet preparations to draw rectified spirit from a distillery without payment of duty. It is thus a privilege conferred on the licensee. To claim the privilege he must comply with the conditions prescribed. If one of the condition is the payment of cost of establishment under section 14(e) of the Act read with r. 16(4) of the Central Rules, the manufacturer of such preparations must necessarily bear the burden as the licensee gets services in return in lieu of such payment. The decision in the Indian Mica Micanite Industries case (supra) on which reliance is placed furnishes a complete answer to the appellant 's contention. The Court there was concerned with the validity of supervisory charges of the excise establishment from a consumer and not from the manufacturer under the Bihar and Orissa Excise Act, 1915. It was clearly indicated that the burden of the cost of supervisory charges must fall on the manufacturer and not on the consumer because there was no co relationship between the levy of fee and the services rendered. Further, though there was a double duty on the manufacturer as well as the consumer, the Court did not strike down the levy on the consumer because it was observed that the question of co relationship between the services rendered and the fee levied is essentially a question of fact. In dealing with the question whether the impugned levy could be justified as a fee on the basis of the law as enunciated by this Court, it was observed : (1) According to the finding of the High Court the only services rendered by the Government to the appellant and to other similar licensees is that the Excise Department have to maintain an elaborate staff not only for the purposes of ensuring that denaturing is done properly by the manufacturer but also for the purpose of seeing that the subsequent possession of. denatured spirit in the hands either of a wholesale dealer or retail seller or any other licensee or permit holder is not misused by coverting the denatured spirit into alcohol fit for human consumption and thereby 545 evade payment of heavy duty. So far as the manufacturing A process is concerned, the appellant or other similar licensees have nothing to do with it. They are only the purchasers of manufactured denatured spirit. Hence the cost of super vising the manufacturing process or any assistance rendered to the manufacturers cannot be recovered from the consumers like the appellant. Further, under Rule 9 of the Board 's rules the actual cost of supervision of the manufacturing process by the Excise Department is required to be borne by the manufacturer, There cannot be a double levy in that regard. (emphasis added) The Court then went into the question whether there was any corelationship between the services rendered and the fee levied and whether the levy in question was not disproportionate to the value of the services rendered by the State, and observed: D In the opinion of the High Court the subsequent transfer of denatured spirit and possession of the same in the hands of various persons such as whole sale dealer, retail dealer or other manufacturers also requires close and effective supervision because of the risk of the denatured spirit being converted into palatable liquor and thus evading heavy duty. Assuming this conclusion to be correct, by doing so, the State is rendering no service to the consumer. It is merely protecting its own rights. Further in this case, the State which was in a position to place material before the Court to show what services had been rendered by it to the appellant and other similar licensees, the costs or at any rate the probable costs that can be said to have been incurred for rendering those services and the amount realised as fees has failed to do so. On the side of the appellant, it is alleged that the State is collecting huge amounts as fees and that it is rendering little or no service in return. The co relationship between the services rendered and the fee levied is essentially a question of fact. Prima facie, the levy appears to be excessive even if the State can be said to be rendering some service to the licensees. The State ought to be in possession of the material from which the co relationship between the levy and the services 546 rendered can be established at least in a general way. But the State has not chosen to place those materials before the Court. Therefore the levy under the impugned Rule can not be justified. Nevertheless, the Court remitted the matter to the High Court with a direction that opportunity be given to the State to place material to show that the value of the services rendered has reasonable co relationship with the fee charged. We fail to see how the decision in the Indian Mica Micanite case (supra) can be of any help to the appellants. The portions extracted above clearly show that the levy of service charges on the manufacturer are valid. There is a broad co relationship between the fee collected and the cost of the establishment. Under section 14(e) of the Act it is provided that the Commissioner, with the previous approval of the Government, may prescribe the size and nature of the establishment necessary for supervision of a manufactory and the cost of the establishment and other incidental charges in connection with such supervision be realised from the licence. There can be no doubt that the supervisory staff is deployed in a bonded manufactory by the Government for its own protection to prevent the leakage of revenue, but there is no denying the fact that a licensee undoubtedly receives a service in return. The cost of the establishment levied under section 14(e) of the Act is to be collected from the licensee in the manner provided by r. 16(4) of the Kerala Rectified Spirit Rules, 1972, relevant part of which reads: (4) All the transactions in the spirit store shall be conducted only in the presence of an Excise officer not below the rank of an Excise Inspector. Such officer shall be assisted by at least two Excise Guards. The cost of establishment of such officer and the guards shall be payable by the licensee in advance in the first week of every month as per countersigned chalan to be obtained from such officer. The rate at which the cost of establishment is to be paid by the licensee shall be fixed by the Commissioner from time to time and intimated to the licensee in writing There is admittedly no provision made in the Central Rules for the recover of supervisor charges, perhaps because as the Court 547 Observed in the Hyderabad Chemicals and Pharmaceutical 's case A (supra) it was felt that the duty on medicinal and toilet preparations containing alcohol would be sufficient to defray the cost of such supervision. But the absence of such a provision in the Central Rules, as we have already indicated, does not deprive the State from making a provision in that behalf. It is true that the supervisory charges are in the nature of a compulsory exaction from a licensee and the collections are not credited to a separate fund, but are taken to the consolidated fund of the State and are not separately appropriated towards the expenditure incurred in rendering the service. However, as observed in Government of Madras vs Zenith Lamp and Electricals Ltd. (1) followed in State of Rajasthan vs Sajjanlal Panjawat and Ors. (2), that by itself is not decisive, by reason of article 266 of the Constitution. lt is equally true that normally a fee is uniform and no account is taken of the paying capacity of the recipient of the service, but absence of uniformity will not make it a tax if co relationship is established (see Commissioner, H.R.E. Madras vs Lakshmindra Thirtha Swamiar of Shirur Mutt and Government of Madras vs Zenith Lamp and chemicals Ltd. supra). The cost of supervisory charges can be sustained even if they are regarded as a fee for services rendered by the State or its instrumentalities. The last ground on which the appellants took their stand is even less tenable. It is urged that r. 13 of the Kerala Rectified Spirit Rules, 1972, providing for the levy of excise duty on excess wastage of alcohol in the manufacture of medicinal and toilet preparations cannot be supported in terms of the charging provision contained in section 17 of the Act. Rule 13 reads as follows: 13(1) If the rectified spirit imported or purchased P under these rules is used for the manufacture of medicinal and toilet preparations which duty of excise is leviable under the (Central Act 16 of 1955), no duty shall be collected under the Abkari Act 1 of 1077 on so much quantity of alcohol, as is present in the finished product. (2) The assessment of duty under the Medicinal and Toilet Preparations Excise Duties) Act, 1955 (Central Act 548 16 of 1955) being applicable only to the quantity of spirit existing in the finished product, all spirit wasted during the course of manufacture of any medicinal or toilet preparation shall be assessable to duty under the Abkari Act, 1 of 1077. Provided that the Government may, in consultation with the Drugs Controller and the Chemical Examiner, by notification in the Gazette. permit such allowance as they think fit for such wastages occurring during the manufacture. No exception is taken to r. 13(1) which provides that no duty shall be collected under the Act on so much quantity of alcohol "as is present in the finished product". The objection is to the validity of r. 13(2) in so far as it enables the levy of duty on excess wastage of alcohol. We find it difficult to appreciate the contention that r. 13(2) cannot be supported in terms of the charging provision in section 17(f). Rule 13(2) is nothing but a corollary of r. 13(1). On a combined reading of section 17(f) and r. 8 read with the proviso thereof, no duty is chargeable on alcohol actually used in the manufacture of medicinal and toilet preparations. The Government fully realised that some margin for wastage should be allowed and, therefore inserted the proviso to r. 13(1). It provides that the Government may, in consultation with the Drugs Controller and the Chemical Examiner, by notification in the Gazette, permit such allowance as they think fit for such wastages occurring during the manufacture. Beyond the permissible limit, the State has the right to levy a duty on excess wastage of alcohol, i.e. On alcohol not accounted for. In the connected Special Leave Petition, the petitioner, P. Krishna Wariyar, Managing Trustee, Arya Vaidyasala, Kottakkal, who is engaged in the business of manufacture for sale of ayurvedic medicinal preparations, challenges the validity of sections 12A, 56A and 68A of the Act and rr. 5, 6 and 7 of the Kerala Spirituous Preparations Rules. Apart from the question of legislative competence, two other grounds were raised: (1) the power to restrict the quantity of medicinal preparations to be manufactured, by the Commissioner under section 12 cannot be exercised in relation to ayurvedic preparations as alcohol is self generated in the process of manufac 549 ture; and (2) the impugned provisions offend against article 301 of the Constitution. As regards the Rules, it was generally said that they constitute unreasonable restrictions on the fundamental right guaranteed under article 19(1) (g) of the Constitution. None of these contentions can prevail. It is to be observed that restriction imposed by section 12A of the Act as to the quantity of medicinal preparations to be manufactured relates not only to such preparations to which alcohol is added, but also to medicinal preparations in which alcohol is self generated. There can be no doubt that ayurvedic asavas and aristhas which are capable of being misused as alcoholic beverages can come within the purview of the definition of 'liquor ' contained in section 3(10) of the Act being of the Spirituous Preparations (Control) Rules, 1969 liquids containing alcohol The contention that Note to r. 3(1) is an unreasonable restriction on the freedom of trade guaranteed under article 19(1) (g) of the Constitution has no substance. It provides that unless otherwise declared by the Expert Committee, asavas and aristas and other preparations containing alcohal are deemed to be spurious if their self generated alcohol content exceeds 12% by volume. It is a matter of common knowledge that such preparations are always likely to be misused as a substitute for alcoholic beverages and, therefore, the restriction imposed by section 12A is a reasonable restriction within the meaning of s 19(6) of the Constitution, So far as the contention based on article 301 of the constitution is concerned, it is urged that there is demand for the petitioner 's medicinal preparations not only in the State, but throughout the country and to limit the quantity to be manufactured, taking into account the requirements of the State alone, is but an abridgment on the freedom of inter State trade and commerce. In our opinion, section 12A has no such effect. As already stated, the expression 'shall have regard to ' as interpreted by the Judicial Committee in the Ryots of Garobandho 's case (supra), means 'shall take into consideration '. All that the provision enjoins is that the Commissioner shall have regard to the total requirements for consumption and use in the State, while fixing the quantity of the medicinal preparations to be manufactured. Furthermore, the challenge with regard to article 301 does not arise as, admittedly, the Bill was reserved for the assent of the President, and 550 is, therefore, protected by article 304(b) of the Constitution. It is not disputed that the provisions are regulatory in nature and they impose reasonable restrictions on the freedom of trade. For these reasons, both the Appeal and the Special Leave Petition must fail and are dismissed with costs. [/INST]Respondent No. 1 who was the landlord and had let out the petition premises to respondent No. 2, served a notice (dated July 28, 1962) terminating her tenancy and filed an ejectment suit. A decree for ejectment was passed (in 1966) and the appeal of respondent No. 2 was dismissed (in 1972). The landlord took out execution of the decree. Obstructionist notice served on the petitioners who were sub tenants of respondent No. 2 was made absolute in favour of the landlord. The pensioners ' appeal was dismissed. Dismissing the petitioners ' suits against the landlord for a declaration that they were lawful sub tenants /licensee entitled to the protection of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and for an injunction restraining the landlord from executing the decree for ejectment the trial Court held that they were not entitled to the benefit of the Act as lawful sub tenants or as deemed tenants or as protected licensees. The petitioners appeals were dismissed on the ground that having been inducted into the premises after 1960 they were not entitled to be regarded as lawful sub tenants. In the Special Leave Petitions to this Court it was contended that the petitioners: (1) must be regarded as licensees entitled to the benefit of section 14(2) read with section 15 A(1) of the Act: and (2) having been in occupation since 1943 and having in 1960 merely restricted their occupation to the portions occupied by them, they were lawful sub tenants since 1943, and, therefore, by virtue of section 14(1) they must be regarded as tenants on the determination of respondent No. 2 's tenancy. Dismissing the Special Leave Petitions: ^ HELD: 1. An agreement for licence can subsist and continue only so long as the licensor continues to enjoy a right, title or interest in the premises. On the termination of his right, title or interest in the premises, the agreement for licence comes to an end. If the licensor is a tenant, the agreement for licence terminates with the tenancy. No tenant is ordinarily competent to grant a licence beyond his tenancy. On the termination of the licensor 's tenancy the licensee cases to be a licensee. This loss of status is the point 713 from which sub section (2) of section 14 of the Act begins to operate and in consequence of its operation, the erstwhile licensee becomes a tenant of the landlord on the terms and conditions of the agreement. [715 F H] In the instant case respondent No. 2 ceased to be a tenant of any description long before February 1, 1973. The contractual tenancy came to an end when the notice to quit took effect and the statutory tenancy terminated when the decree for ejectment was passed thereafter. When she had ceased to be tenant, the agreement for licence stood automatically terminated by reason of which the petitioners cannot claim to be licensees on February 1, 1973. [715 H 716 B] 2. The benefit of section 14(1) can be claimed by a sub tenant to whom the premises had been lawfully sub let before the commencement of the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Ordinance, 1959. [716 E] In the instant case the sub tenancy has been found to commence from 1962 and not earlier. The benefit of sub section (1) of section 14 cannot be available, and there can be no right to continue in possession. [716 F] Madhusudan A Mahale vs P.M. Gidh and others, held inapplicable. </s>
<s>[INST] Summarize the judgementivil Appeal No. 3474 of 1988. From the Judgment and Order dated 10.5.1988 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. E/62/85 C. Harish N. Salve, Mrs. M. Sud, Ms. Aruna Jain and Praveen Kumar for the Appellant. B. Dutta, Additional Solicitor General, T.V.S.N. Chari and P. Parmeshwaran for the Respondent. 894 The Judgment of the Court was delivered by OJHA, J. This appeal under section 35L of the (hereinafter referred to as the Act) has been preferred against the order dated June 28, 1988 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi. The appellant carries on the business of manufacture and sale of paper. On the plea that in the manufacture of paper the appellant uses paper cores, exemp tion from payment of excise on such paper cores was claimed by it on the basis of a Notification No. 201/79 dated June 4, 1979 as amended by Notification No. 105/82 dated February 28, 1982 (hereinafter referred to as the Notification) The Assistant Collector, Central Excise rejected the claim of the appellant but its claim on appeal as regards exemption from duty on paper cores was allowed by the Appellate Col lector. Aggrieved by that order the Collector of Central Excise, Meerut, preferred the appeal in which the order which is the subjectmatter of the present appeal, was passed. The Notification on the basis of which exemption was claimed by the appellant inter alia provides: "the Central Government hereby exempts all excisable goods (hereinafter referred as "the said goods"), on which the duty of excise is leviable and in the manufacture of which any goods fall ing under Item No. 68 of the First Schedule to the (1 of 1944) have been used, as raw materials or component parts (hereinafter referred as "the inputs"), from so much of the duty of excise leviable thereon as is equivalent to the duty of excise already paid on the inputs." As is apparent even from the order of the Tribunal the details of the use of paper cores in the manufacture of paper as set out by the appellant on the basis whereof the exemption was claimed by it read as hereunder: "Paper cores: Paper cores are used in paper mill on re winding and cutting machines. The full width of paper manufactured on paper machine is cut in different sizes of reel and sheets according to customer 's requirement. To cut the parent roll of paper manufactured on paper machine which is wound on steel shell into small reels suitable for cutter machine, the paper is re wound on 'paper cores ' fitted on a shaft on re winding machine. The reels thus re winded on paper cores can be easily cut into sheets on cutter machine into re quired size or sent to customers as 895 reels as such, there is no other use of paper cores except their use in re winding and cutting machine in paper mills". On the basis of the details aforesaid the case of the appel lant was that the paper cores constituted "component parts" within the meaning of the Notification entitling it to the exemption granted by the said Notification. The case of the respondent on the other hand was that paper cores were really used by the appellant as packing material after the paper had already been manufactured for taking it to the market and did not constitute component parts of paper. Before dealing with respective submissions made by learned counsel for the parties it may be pointed out that it is not in dispute that the excise duty was payable at the relevant time separately both on paper and paper core under different tariff items of the First Schedule to the Act and it has also not been disputed by the respondent that if paper core fell under the term "component parts", the appellant would be entitled to the exemption as claimed by it and contem plated by the Notification. The short question which, there fore, arises for consideration in the instant appeal is whether paper core is used in the manufacture of paper as component part. Even though the term "component parts" has not been defined either by the Act or by the Notification the term "manufacture" has been defined in section 2(f) of the Act. This definition inter alia contemplates that "manufacture" includes any process, incidental or ancillary to the completion of a manufactured product. Section 3 of the Act which is the charging section contemplates levy and collection of duty of excise on all "excisable goods". The First Schedule to the Act specifies the excisable goods under various tariff items. In the absence of any definition of the term "component parts" it is permissible to refer to the dictionary meaning of the word "component". According to the Webster Comprehensive Dictionary, International Edition the word "component" inter alia means a constitutent part. The term "manufacture", as already indicated above, accord ing to its definition in the Act includes any process inci dental or ancillary to the completion of manufactured product. In this context what has to be considered is wheth er in the manufacture of paper, paper core is used as a constituent part and is necessary to be used in "any process incidental or ancillary to the completion of a manufactured product" namely paper in the instant case. In M/s J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs Sales Tax Officer, Kanpur and Another, [1965] 1 S.C.R. Page 900 while dealing with the expression "in the manufacture of goods" used in section 8(3)(b) of the Central Sales Tax Act, 1965 and Rule 13 framed 896 under the Act it was held that the said expression "would normally encompass the entire process carried on by the dealer of converting raw materials into finished goods. Where any particular process is so integrally connected with the ultimate production of goods that but for that process, manufacture or processing of goods would be commercially inexpedient, goods required in that process would, in our judgment, fall Within the expression. " It was further held: "In our judgment if a process or activity is so integrally related to the ultimate manufacture of goods so that without that process or activity manufacture may, even if theoreti cally possible, be commercially inexpedient, goods intended for use in the process or activity as specified in Rule 13 will qualify for special treatment." (Emphasis supplied) In Bhor Industries Ltd., Bombay vs Collector of Central Excise, Bombay, [1989] 1 S.C.C. Page 602 while dealing with excise duty it was held: "Therefore, the first principle that emerges is that excise was a duty on goods as speci fied in the schedule. In order to be goods an article must be something which can ordinarily come to the market and is brought for sale and must be known to the market as such. There fore, the marketability in the sense that the goods are known in the market or are capable of being sold and purchased in the market is essential. " It is in this background that the use of paper core in the process of manufacture of paper has to be considered. If it is found that the use of paper core is necessary in "any process incidental or ancillary to the completion of" paper as marketable goods and it would consequently be commercial ly inexpedient to sell paper without the use of paper core, it would certainly be a constituent part of paper and would thus fall within the purview of the term "component parts" used in the Notification. This takes us to the process of manufacture of paper. The process of paper manufacture is to be found at pages 230 to 235 of Part 17 of Encyclopaedia Britannica. The process of paper manufacture by paper making machine is contained at pages 232 onwards. After referring to the various stages of manufacture of paper it is stated: "After the drying comes the calendering and there are usually two or more sets or stacks of calendering rolls, according to the grade of surface required. These calenders consist of vertical stacks of chilled iron rolls, generally five 897 in a stack, which revolve on one another and some of which are bored for heating by steam; pressure is applied to them at will, by ad justing levers at the top of each stack. Finally the paper passes to cooling rolls, where the paper can be cooled by water spray if necessary and is then wound on to a reel. " Thereafter at page 234 it is stated: "Paper, though made in the roll on the ma chine, is usually sold in the form of sheets. A number of reels of paper, on their spindles, mounted in a stack, are fed, as a pile of webs, between two rollers: a series of revolv ing knives slits them longitudinally as they emerge from between the rollers, in effect into strips which are cut again transversely by the scissors action of a movable upper knife, working periodically against a lower fixed knife. The cut sheets fall on 'to an endless felt for stacking. " At the bottom of the same page it is stated: "Paper is sold in sheets of different sizes and is made up into reams containing from 480 to 5 16 sheets in Great Britain, 500 in the United States; these sizes correspond to different trade names, as foolscap, demy, royal, etc. " It is thus apparent that paper is made (1) in the form of rolls and (2) in the form of sheets and the paper which is sold in the form of sheets is cut in desired sizes by taking recourse to the process referred to above. Chapter XIII of the Story of Papermaking by Edwin Suter meister 1954 Edition contains the process known as calender ing and finishing. At pages 183 and 184 it is stated: "The paper from the machine, no matter what its finish, goes next to the reels which form large rolls the full width of the machine. The reels are so arranged that when one cylinder is full another can take its place while the paper machine is running continuously. The full cylinder is then rewound at higher speed so that it may again be ready when needed by the paper machine. On rewinding the paper is trimmed on the edges and if desired is slit into any number 898 of narrower rolls . The cores on which the paper is wound will depend to some extent on what happens to the paper next. If it is delivered to the customer in rolls as it comes from the rewinder the cores are apt to be of heavy board stock, wound and pasted on a mandrel: if the rolls of paper pass to another part of the same plant for further treatment the cores are likely to be of iron pipe, which can be used over and over. " With regard to the use of roll paper it is stated at page 185: "Roll paper is very widely used in many lines of work. Newspapers are printed, cut and folded direct from rolls, each of which may weigh 1400 pounds or more; much craft paper is sold to be used directly from the roll in wrapping goods, while tremendous quantities are used to feed the machines making paper bags. Paper for the conventional coating operations is delivered to the coating plant in roll form; and considerable quantities of white paper are printed continuously from rolls. These are only a few of the more obvi ous uses of roll paper. All roll paper must reach the consumer in perfect condition if it is to be of the great est use. It must be carefully wrapped and the ends of the rolls protected by stout heads to keep edges of the paper from being injured. " As regards paper which is to be used in sheet form it is stated at pages 190 and 191: "Paper which is to be used in sheet form may be so prepared by passing directly from the reel stand of the paper machine to a cutter, layboy and sheet counter in line with the machine and attended by the paper machine crew. This system is used for coarse papers which do not need sorting, and it is common on machines which run off pulp for chemical or papermaking use. As a more common alternative the rolls go to independent cutters from the rewinders or the supercalenders, according to the finish the final paper is to have. The rolls are placed on reel stands which are constructed to hold up to twelve or more. Any one of these may be cut singly, or all may be cut together as desired. From the reels the paper passes through a cutter 899 which has a knife on a revolving drum acting in a shearing manner against a fixed bed knife. Each time the drum revolves the knife cuts a sheet from the web of paper being fed continuously at constant speed, and the length of the sheet cut is regulated by altering the speed at which the revolving knife tums. Cutters are also designed to split the paper into the right width of roll, and to trim the edges, if this has not already been done at the rewinder. The paper leaves the cutter on trav eling tapes and goes to a layboy which auto matically jogs the sheets into uniform piles. These layboys take the place of operatives who formerly did the same work, and enable higher cutter speeds to be employed. " In the Dictionary of Paper (Fourth Edi tion, published under the Auspices and Direc tion of the American Paper Institute, Inc.) the purpose of rewinding is stated thus at page 346: "Rewinding: The operation of winding the paper accumulated on the reel of a paper machine onto a core to a tightly wound roll suitable for shipping or for use in the finishing or converting department. During rewinding, defective paper in the reel is usually removed and breaks in the sheet are spliced and marked. " In Pulp & Paper Science & Technology (Vol. 2, edited by C. Earl Libby) it is stated at page 271. "The prime purpose of the paper machine re winder is to split the sheet into the required widths, to provide rolls of paper having the correct diameter, and to produce firm, tightly wound rolls of paper that can be unwound into highspeed printing presses with few tension problems. " What becomes obvious from the processes referred to above, therefore, is that even though rewinding has to be done both for manufacturing roll paper as well as sheet paper, use of paper core in rewinding is necessary only with regard to manufacture of roll paper, inasmuch as it is the paper as rolled on paper core which is delivered to the customer in the form of rolls and unless in the process of rewinding paper core is used, paper cannot come cut of the machine in rolls so as to be sold as a marketable commodity known as roll paper. The use of 900 paper core, however, is not 'necessary for the manufacture of paper sheets. As stated at page 184 of the Story of Papermaking (supra), the core on which the paper is wound will depend to some extent on what happens to the paper next. If it is delivered to the customer in rolls as it comes from the rewinder the core is apt to be of heavy board stock wound and pasted at mandrel. If, however, the rolls of paper are not be delivered to the customer in the form of rolls as such and the rolls of paper are to pass to another part of the same plant for further treatment the core is likely to be of iron pipe which can be used over and over. Consequently core of iron pipe is more likely to be used in the normal course for further treatment in the plant which will include the process of cutting the paper into sheets. Inasmuch as core of iron pipe can be used over and over, it cannot be said that the use of paper core is necessary for the rewinding of paper meant to be cut into sheets. It may be that for the sake of convenience paper core may be used by some manufacturer even for rewinding of such paper as is meant to be cut in sheets but in that case it would at best provide more convenience to such manufacturer but for that reason paper core will not become a constitutent part of paper manufactured in sheets. In view of the foregoing discussion, we are of the opinion that use of paper core is necessary for rewinding of paper if it is delivered to the customer in rolls and would come within the purview of the expression "any process incidental or ancillary to the completion of a manufactured product" used in the definition of the term "manufacture" in section 2(f) of the Act and for the same reason paper core would also be constituent part of paper and would thus fall within the term "component parts" used in the Notification in so far as manufacture of paper in rolls is concerned. Paper core, however, cannot be said to be used in the manu facture of paper in sheets as component part. We are con scious that the relevant tariff item uses the word "paper" but since paper in rolls and paper in sheets are nothing but different forms of paper, both of them would be excisable goods as paper under the relevant tariff item. In the result, this appeal succeeds and is allowed to this extent that it is held that in the manufacture of paper rolls delivered to the customers for use as roll paper, paper core is used as component part. The orders of the authorities below are modified to this extent. In the cir cumstances of the case, however, the parties shall bear their own costs. R.S.S. Appeal allowed. [/INST]The respondent, in the first of these appeals, was manufacturing different varieties of printing paper includ ing wrapping paper failing under Item No. 17 of the erst while Central Excise Tariff. The appellant issued a show cause notice to the Respondent for the alleged violation of Rules 9(1), 173 F and 173 G of the Central Excise Rules, 1944 in respect of wrapping paper removed outside the Facto ry without payment of Central Excise duty, and for imposi tion of penalty. Showing cause, the Respondent contended that the wrapping paper was captively consumed and utilised as component :art of other varieties of paper and as such no duty was payable. Reliance was placed on section 2(f) of the and Notification No. 18A/83 CE dated 9th July, 1983. The Superintendent (Techni cal) having held otherwise, the respondent preferred an appeal to the Collector (Appeals). The Collector rejected the claim. On appeal, the Customs, Excise and Gold (Control) Appellate Tribunal referred to its own decision, which is the subject matter of the other appeals herein and set aside the order of the Collector. The facts leading to the other appeals are similar, and the issue involved is the same. The Revenue has filed the appeals under section 35 L of the Central Excises & Salt Act. On behalf of the Revenue, it was contended that wrapping paper cannot be deemed to be component part because it did not become an integral part of the packed paper. The assessee, however contended that wrapping paper was raw material or component part of the wrapped paper, and relied on section 2(f) of the Act which includes any process incidental or ancillary to the 1018 completion of a manufactured product. It was also urged that Revenue had itself considered the stage of wrapped or packed paper as the stage at which goods should be entered in the statutory production register. Dismissing the appeals, HELD: 1. 'Manufacture ' in the sense it is used in the excise law, was not complete until and unless wrapping was done. It is the law now that excise is a duty on manufac ture. Manufacture is the process or activity which brings into existence new, identifiable and distinct goods. Goods have been understood to be articles known as identifiable articles known in the market as goods and marketed or mar ketable in the market as such. The finished goods were cut to size and packed paper which, according to the Indian standard and trade practice, consisted of the wrapping paper and the wrapped paper. Duty is levied on goods. As the Act does not define goods, the legislature must be taken to have used that word in its ordinary, dictionary meaning. The dictionary meaning of the expression is that to become 'goods ' it must be something which can ordinarily come to the market to be bought and sold and is known to the market as such. The Tribunal found, and there was material for the Tribunal to do so, that the market in which articles in question were sold were paper packed and wrapped in paper. Therefore, anything that enters into and forms part of that process must be deemed to be raw material or component part of the end product and must be deemed to have been used in completion or manufacture of the end product. [1021G H; 1022A D] Bhor Industries Ltd., Bombay vs Collector of Central Excise, Bombay, ; ; South Bihar Sugar Mills Ltd., etc. vs Union of India & Ors. , ; ; Union of India vs Delhi Cloth & General Mills Ltd., [1963] Suppl. I SCR 586; Union Carbide India Ltd. vs Union of India and Ors. , ; Collector of Central Excise, Baroda vs M/s Ambalal Sarabhai Enterprises, ; relied on. Processes incidental or ancillary to wrapping are to be included in the process of manufacture, manufacture in the sense of bringing the goods into existence as these are known in the market, is not complete until these are wrapped in wrapping paper. Manufacture of goods should normally encompass the entire process carried on by the dealer of converting raw materials into finished goods. Where any particular process, is so integrally connected with the ultimate production of goods that, but for that process, manufacture or processing of 1019 goods would be commercially inexpedient, article required in that process, would fail within the expression 'in the manufacture of goods '. [1022E G] Empire Industries Ltd. & Ors. vs Union of India & Ors. , ; ; J.K. Cotton Spinning and Weaving Mills Co. Ltd. vs Sales Tax Officer, [1965] 16 STC 563 (SC); relied on. [1023F] 3. To be able to be marketed or to be marketable, in the light of facts in the appeals, it was an essential require ment to be goods, to be wrapped in paper. Anything required to make the goods marketable, must form part of the manufac ture and any raw material or any material used for the same would be component part for the end product. Collector of Central Excise vs Jay Engineering Works Ltd., ; referred to. </s>
<s>[INST] Summarize the judgementivil Appeal Nos. 165166 of 1989. From the Judgment and Order dated 8.12.1986 of the Allahabad 183 High Court in W.P. Nos.6819 of 1985 and 367 of 1986. Civil Appeal Nos.167 to 171 of 1989. From the Judgment and Order dated 8.12.1986 of the Allahabad High Court in W.P. Nos.3463, 367 of 1986, 5521, 5699 and 6819 of 1985. Yogeshwar Prasad, D.D. Thakur, Soli J. Sorabjee and S.N. Kacker, Mrs. Shobha Dikshit, C.P. Lal, Umesh Chandra, Kri shan Chandra, R.K. Mehta, R.C. Verma, Dr. Roxma Swamy, Dilip Tandon, Harish N. Salve, Rajiv Shakdher for the appearing parties. The Judgment of the Court was delivered by VENKATACHALIAH, J. Special Leave Petitions (Civil) 4761 and 4762 of 1985 are by the State of Uttar Pradesh and its officers and SLPs 13298 and 11498 of 1987 by the Lucknow Development Authority, (LDA for short) a statutory body constituted under Sec. 4(1) of the Uttar Pradesh Urban Planning & Development Act, 1973 (Act for short) and its Authorities. Seeking special leave to appeal from the common judgment dated 8.12 1986 of the High Court of Judicature, Allahabad, in Writ Petition Nos. 68 19 of 1985 and 367 of 1986 which were heard and decided along with three other writ petitions i.e. WP 5521 & 5699 of 1985 and 3463 of 1986. Special leave petitions 11515 of 1987 and SLP 11499 of 1987 are by the LDA and its Authorities directed against the said common judgment dated 8.12.1986 in so far as it per tains respectively to W.P. 5699 of 1985 and 5521 of 1985. Special leave petition 11220 of 1987 is by the LDA and its Authorities seeking leave to appeal from the Order in W.P. 3463 of 1986. The Writ petitions before the High Court were pre ferred by the Respondent Lessees Sri D.P. Singh and his mother Smt.Raj Lakshmi Devi, the heirs of Maharaja Patesh wari Prasad Singh in respect of Nazool land in Plot No. 10, Ashok Marg, Hasratganj, Lucknow, under deed dated 7.10.1961 commencing from 15.11.1961 and stated to expire on 31.3.1991. The proceedings arose out of two matters. The first pertained to the legality of the Notice dated 19.11.1985 issued by the State Government in cancelling the lease. The cancella 184 tion was challenged in two writ petitions filed separately by Sri D.P. Singh and Smt.Raj Lakshmi Devi in W.P. 6819 of 1985 and WP 367 of 1986 respectively. The High Court by its common order dated 8.12.1986 allowing the said two writ petitions quashed the said cancellation. In SLPs 4761 and 4762 of 1987 and in SLPs 13298 and 11498 of 1987 the Lucknow Development Authority have assailed this part of the common order. The second area of the controversy arises out of the order dated 19.4.1986 of the Vice Chairman, Lucknow Develop ment Authority, (LDA for short) cancelling the earlier order dated 31.1.1985 granting permission under Sec.15 of the Act in favour of the Respondent Lessees to develop the lease hold property by effecting thereon a multi storeyed building called "Balarampur Towers" comprising of flats etc. This cancellation was challenged by the two Lessees in the joint writ petition No 3463 of 1986. The High Court allowed this WritPetition also and has quashed the impugned order dated 19.4.1986 by which the permission to build earlier granted was sought to be revoked. In SLP 11220 of 1987 the LDA seeks leave to appeal against this part of the order WPs 5699 of 1985 and 5521 of 1985 from which the LDA has preferred SLP 11515 of 1987 and SLP 11499 of 1987 respectively do not relate to or bear upon the substantial points of controversy between the parties. They relate to certain incidental matters. Accordingly SLPs 11515 of 1987 and SLP 11499 of 1987 would be governed by the order made in the main SLPs. Special leave is granted in all the petitions. We have heard Sri D.D. Thakur, learned Senior Counsel for the LDA and its authorities; Sri Yogeshwar Prasad, learned senior counsel for the State of Uttar Pradesh and its offi cers and Sri Soli J. Sorabjee for the respondentLessees. The subject matter of the lease is stated to be an extent of about 9885 Sq.Metres of Nazool land, which was comprised in the lease in favour of a certain Mr. Edwards, granted in the year 1901 for a period of 30 years in the first instance, with provision for renewal for two more terms of 30 years each. On 6.11.1936, there was the first renewal for 30 years effective from 1.4.1931 in favour of a certain Sri Syed Ali Zahir, a transferee from Mr. Edwards. Sri Syed Ali Zaheer assigned his interest under the lease in favour of Maharaja Pateshwari Prasad Singh of Balrampur. On 7.10.1961, there was a second renewal in 185 favour of the present respondents, as the heirs of the said Maharaja Sri Pateshwari Prasad Singh. On 11.8.1981, Respondent lessees, in collaboration with M/s Ambar Builders (P) Limited applied to the LDA under Sec.15(1) of the Act for permission to put up a multi storeyed building on the demised property. The permission was refused on the ground, inter alia, that the proposed construction would bring about a change in the user permit ted under the lease. The lessees preferred an appeal before the Appellate Authority who dismissed their appeal. The RevisionPetition filed by the lessees before the Government under Sec.41(1) of the Act was partly allowed and the Government by its order dated 15.10.1984, remitted the matter to the appropriate authority under the Act for a fresh consideration. On 31.3.1984, during the pendency of the revision petition respondents submitted a modified plan, styling the construction as consisting of "residential flats". After remand, the Nazool Officer is said to have given his "No objection Certificate" dated 2.12.1984 for the grant of permission. The power of attorney holder of re spondents, a certain Sri Pawan Kumar Aggarwai, filed an affidavit dated 28.12.1984 before the appropriate authority of the LDA in regard to their being no impediment under Urban Ceiling Laws and the manner in which the Lessees propose to comply with any order that may eventually be made in that behalf. Finally on 23.1.1985, the Vice Chairman of LDA sanctioned the permission. This was formally communicat ed to the Respondents on 31.1.1985. The lessees were re quired to, and did, deposit Rs. 53,440 with the LDA towards what was called 'Malba ' charges. This marked one stage of the proceedings. The next stage of the matter opened on 24.7.1985 with the issue of directions from Government purporting to be under sec.41(1) of the Act interdicting the progress of the construction as, in the view of the Government, the lessees had violated the conditions of the lease; that the matter would require further examination and that any further construction in the meanwhile would create avoidable hard ship to themselves. In W.P. 3732 of 1985 Respondent Lessees challenged this direction of the Government before the High Court, which allowed the petition and quashed those directions. Thereafter, on 12.8.1985, the Government brought to the notice of the then Vice Chairman of the LDA what, according to Government, were serious illegalities in the sanction of the permission dated 31.1.1985 and indicated to the Vice Chairman that sanction earlier 186 granted on 31.1.1985 be reviewed and revoked. The Vice Chairman, however, did not appear to share the view of Government either as to the existence of any legal infirmi ties in the grant of permission or as to the availability and the justifiability of review of the permission suggested by Government. The disinclination of the Vice Chairman in this behalf was communicated to the Government by letter dated 12.9.1985. This marked yet another stage of the proceedings. The State Government, apparently, was in no mood to relent. By communication No. 5062 37 37 3 1985 dated 15.10.1985 Shri Kamal Pandey, the then Secretary to Govern ment of Uttar Pradesh, wrote to the Chairman, LDA recapitu lating therein the previous proceedings in the matter of grant of permission for the "BalrampurTowers" on the lease land and enumerating what, according to Government, were serious infirmities in, and illegalities resulting from, the permission and as to how the construction violated the terms and conditions of the lease and directed the Chairman, LDA, to initiate immediate proceedings as directed in the said communication. To that letter was annexed, a show cause notice which the Chairman was asked to serve on the Lessees and the Builders associated with the construction. It is necessary to excerpt some portion of that communication. "It has come to the notice of the Govt.that in obtaining the said permission the following illegalities, irregularities, material misrep resentation, fraudulent statements, conceal ments of material facts etc.appear to have been committed. " Referring to the various alleged illegalities, and breaches of covenants and of violations of law which, ac cording to Government, vitiated the grant of permission to build and also render the lease liable to forfeiture. The communication proceeded to direct the Chairman. "Therefore, the Governor is pleased to direct you to serve the enclosed show cause notice in the Maharani, Sri Singh and Builders and obtain their explanation within three days of the service of the notice, give them an opportunity of heating on the fourth day and submit your comments on the explanation along with your recommendations in the light of the above mentioned circumstances along with your report fixing the responsibility on the Vice Chairman of the Lucknow Development Authority and 187 Officers/Officials of the Nazul and building section latest by 28th October, 1985. " The relevant portions of the show cause notice annexed to the said letter and intended to be, and was later, served on the respondents Lessees said: "Therefore, in compliance with the instruc tions of the Govt. Maharani Raj Laxmi Kumari Devi Sahiba and Sri Singh and M/s Arebar Builders (P) Ltd. are hereby given the show cause notice and an opportunity of hearing and they are required to explain within three days of the receipt of this notice as to why the Nazul lease granted in their favour be not cancelled and the unauthorised construction be not demolished for breach of the lease condi tions and violation of the provisions of Urban Land and Ceiling Act and for making fraudulent statement and misrepresentation in respect of the land use in Lucknow Master Plan and on account of continuing constructions on the basis of fraudulently obtained building per mission." "If the desired explanation is not received within three days of the service of this notice by the undersigned, it will be presumed that they have nothing to say in their defence and thereafter action for can cellation of nazul lease and building permit and the removal of the unauthorised construc tions will be taken along with their prosecu tion for fraudulent statement and misrepresen tation as contained in the affidavit. The respondents filed their objections and representations against the proposed cancellation. But Government, by its order No. 5496/37 3/85 dated 19.11.1985, found the explanation unacceptable to it and proceeded to terminate the lease. The operative part of the "notice" terminating the lease reads: "Now therefore on account of the aforesaid breach of the lease conditions the Governor of U.P. does hereby terminate the lease. You are required to hand over posses sion of the land and building standing thereon to Collector, Lucknow, within 30 days of the receipt of this notice otherwise action for eviction will be taken against you at your cost. " 188 This order was, as stated earlier, challenged by the respondentlessees in WP No. 3463 of 1986 before the High Court. So far as the permission for development of the property earlier granted on 31.1.1985 was concerned, separate action was taken by the Vice Chairman of the LDA who issued the notice dated 9.1.1986 to the respondents requir ing them to show cause why the permission should not be cancelled. Respondents objected to the proposed action; but the Vice Chairman found the objections unacceptable and proceeded, by his order No. 363/VC/RBO/86 dated 19.4.1986, to cancel the permission. The operative portion of the said order dated 19.4.1985 reads: "From the above it is clear that the above irregularities, material mis representa tion and fradulent statements have been made along with the building map plan and other documents submitted by Sri D.P. Singh and he has deliberately concealed material facts and mislead the Authority. Therefore, the permis sion dated 31.1.1985 granted to him is being cancelled. " The two Lessees challenged this cancellation before the High Court in two separate writ petitions filed by each of them in WP 68 19 of 1985 and WP 367 of 1986 respectively. The High Court was persuaded to the view that the proceedings initiated and the action taken by the Government and the Vice Chairman of the LDA in the matter, respective ly, of forfeiture of the lease and the cancellation of the permission to build were both infirm in law and required, to be quashed. Accordingly, writ petitions 6819 of 1985 and WP 367 of 1986 were allowed and the order dated 19.11.1985 of the Government purporting to cancel the lease was quashed. Likewise, WP 3463 of 1986 filed jointly by the Lessees was allowed and the show cause notice dated 9.1.1986 as well as the order dated 19.4.1986 of the Vice Chairman cancelling the permission were quashed. We may first take up the appeals of the State Gov ernment and of the LDA assailing the order of the High Court quashing the cancellation of the lease. Sri Yogeshwar Prasad for the appellants 189 submitted that the High Court fell into an error in allowing a matter, which should properly have been the subject matter of a civil suit, to be agitated in proceedings under Article 226 of the Constitution. Learned counsel submitted that the relationship between the parties was one of the Lessor and Lessee; the dispute between them pertained to the question whether there were breaches and non performance of the covenants and conditions of the lease justifying the forfei ture of the lease, and that these matters, pertained to a private law situation and were not appropriately matters for enforcement of public law remedies. Learned Counsel further submitted that the question whether there were breaches of covenants on the part of the lessee involved the construc tion of the terms of the lease deed and required evidence on the matter. Disputes of this nature, learned counsel submit ted, could not be resolved on mere affidavits. Thirdly, Sri Yogeshwar Prasad submitted that on the merits of the conten tions, the High Court should have noticed that even on the facts admitted, there were clear violations of the covenants and conditions of the lease. Learned counsel also submitted that the view of the High Court that a reasonable opportuni ty of being heard had been denied to the respondents was erroneous and that, at all events, no hearing could be contemplated in the context for forfeiture of a lease of this nature. Sri Sorabjee for the respondents contended that the State, even as a lessor, could not act arbitrarily either in the grant or premature termination of the leases of public property and disputes arising in such contexts cannot always be reckoned as private law situations and that, at all events, the threatened exercise of extra judicial re entry by the State, being violative both of the limitations of the powers of the State as lessor under the law of landlord and tenant and of its actions as State, is a matter which re quires to be mandated against. The show cause notice preceding the cancellation of the lease and the decision dated 19.11.1985 to cancel the lease, refer to and rely upon 10 grounds. Grounds 1 to 7 pertain to what the Government consider to be violations and breaches of the terms and conditions of the lease. They pertain to an alleged change of user, to subletting and sub division of the leasehold property. The grounds also refer to the alleged non disclosure of the terms and condi tions of the Memorandum dated 7.7.1984 between the Lessees on the one hand and Messrs Amar Builders Private Limited on the other. The grounds for forfeiture also refer to the likelihood of fraud being practised on the prospective pur chasers of the fiats as to the nature and extent of the lessees ' subsisting interest under the lease and the limitations thereon. 190 We do not propose to go into the merits of these grounds and their sufficiency in law to support the purported for feiture as, in our view, this exercise, having regard to the disputed questions of fact that are required to be gone into in that behalf, are extraneous to proceedings under Article 226 of the Constitution. In regard to the merits of the grounds for forfei ture of the lease, the High Court after an elaborate discus sion of the relevance and tenability of each of the grounds, the learned judge held: "From the comments made by me on the above nine grounds it would be seen that some of the grounds are irrelevant or illusory or based on irrelevant material or on non exist ent facts and some require serious considera tion which has not been given. It has also been seen that while under the lease deed the right of re entry could be exercised only for a breach of the term of the lease in presenti, the lease has been cancelled for a breach in future. In this view of the matter the im pugned order of the State Government cannot be sustained. " Shri Yogeshwar Prasad says that this exercise Was extra neous to a proceeding under Article 226 as the question whether the construction with 39 flats would be one unit or multiplicity of units; whether if third party rights were created by the transfer, or use, of the flat, that would amount to sub letting or assignment; or would, in any other way, violate the terms and conditions of the lease and the like, would not be matters that admit of being satisfactori ly resolved on mere affidavits. Learned counsel submitted that even according to the learned judges there were serious questions to be examined. On a consideration of the matter, we think, in the facts and circumstances of this case, the High Court should have abstained from the examination of the legality or correctness of the purported cancellation ' of the lease which involved resolution of disputes on questions of fact as well. In Express News Papers vs Union of India, [1985] Supp. 3 SCR 382 Venkataramiah, J. in a somewhat analogous situation observed: "The rest of the questions relate truly to the civil rights of the parties flowing from the lease deed. Those questions cannot be effectively disposed of in this petition under Article 32 of the Constitution. The questions arising out of the lease, such as, whether there has been breach of the convenants 191 under the lease, whether the lease can be forfeited, whether relief against forfeiture can be granted etc. are foreign to the scope of Article 32 of the Constitution. They cannot be decided just on affidavits. These are matters which should be tried in a regular civil proceeding. One should remember that the property belongs to the Union of India and the rights in it cannot be bartered away in ac cordance with the sweet will of an Officer or a Minister or a Lt.Governor but they should be dealt with in accordance with law. At the same time a person who has acquired rights in such property cannot also be deprived of them except in accordance with law. The stakes in this case are very high for both the parties and neither of them can take law into his own hands. " Accordingly, we hold that the question whether the purported forfeiture and cancellation of the lease were valid or not should not have been allowed to be agitated in proceedings under Article 226. Sri Sorabjee submitted that great hardship and injustice would be occasioned to the respondents if the State Government, on the self assumed and self assessed validity of its own action of cancellation of the lease, attempts at and succeeds in, a resumption of possession extra judicially by physical force. Sri Sorabjee referred to the notice dated 19.11.1985 in which the Government, accord ing to Sri Sorabjee, had left no one in doubt as to its intentions of resorting to an extra judicial resumption of possession. Sri Sorabjee referred to paras 3.10 and 4 of the order dated 19.11.1985. A lessor, with the best of title, has no right to resume possession extra judicially by use of force, from a lessee, even after the expiry or earlier termination of the lease by forfeiture or otherwise. The use of the expression 're entry ' in the lease deed does not authorise extrajudicial methods to resume possession. Under law, the possession of a lessee, even after the expiry or its earlier termination is juridical posSessiOn and forcible dispossession is prohibit ed; a lessee cannot be dispossessed otherwise than in due course of law. In the present case, the fact that the lessor is the State does not place it in any higher or better position. On the contrary, it is under an additional inhibition stemming from the requirement that all actions of Government and Governmental authorities should have a 'legal pedigree '. In Bishandas vs State of Punjab, ; this Court said: "We must, therefore, repel the argument based on the contention that the petitioners were trespassers and 192 could be removed by an executive order. The argument is not only specious but highly dangerous by reason of its implications and impact on law and order." Before we part with this case, we feel it our duty to say that the executive action taken in this case by the State and its officers is destructive of the basic principle of the rule of law. " Therefore, there is no question in the present case of the Government thinking of appropriating to itself an extra judicial right of re entry. Possession can be resumed by Government only in a manner known to or recognised by law. It cannot resume possession otherwise than in accord ance with law. Government is, accordingly, prohibited from taking possession otherwise than in due course of law. In the result, the appeals of the State of Utter Pradesh (SLPs 4761 and 4762 of 1987) and of the LDA (SLPs 13298 and 11498 of 1987) directed against the common Judgment dated 8.12.1985 in so far as it pertains to WP 6819 of 1985 and WP 357 of 1986 are allowed and the said two writ petitions are dismissed, leaving the question of the legality and validity of the purported cancellation of the lease and the defence of the lessees open to be urged in appropriate legal pro ceedings, whenever and wherever Government proceeds to initiate action in accordance with law for resumption of possession on the basis of the alleged cancellation or forfeiture of the lease. Any developmental work that may be made by the lessees or at their instance would, of course, be at their own risk and shall be subject to the result of such proceedings. We may now turn to the controversy of the cancella tion or revocation dated 19.4.1986 of the permission earlier granted under section 15 of the "Act", which was the subject matter of writ petition No. 3463 of 1986. The order of revocation was passed by the successor Vice Chairman, Shri Govindan Nair, IAS. The earlier permission was granted by the then Vice Chairman, Shri Babu Ram. A show cause notice dated 9.1.1986 preceding the cancel lation was issued by Vice Chairman, Shri Govindan Nair himself. The order dated 19.4.1986 revoking the permission was challenged before the High Court on four grounds, viz., (a) that the lessees had had no reasonable opportunity of showing cause against the action proposed in the notice dated 9.1.1986 and that an opportunity of an oral hearing had 193 been denied; (b) that the Vice Chairman, under the provi sions of the Act had no authority or power to revoke a permission once granted; (c) that, at all events, the les sees having incurred enormous expenditure on the development work, and having, on the strength of the permission granted earlier on 31.1.1985, altered their position substantially to their disadvantage, the Vice Chairman was estopped from revoking the permission on principles of promissory estop pel; and (d) that the grounds on which cancellation rested were themselves irrelevant and insufficient in law to sup port the cancellation. The High Court accepted grounds at (a), (b) and (d). It did not find it necessary to go into ground (c) in regard to which the High Court observed: "The petitioners also contended that the ViceChairman of Lucknow Development Au thority was estopped from cancelling the sanction to build, more so when it was acted upon . . . . . In the instant case this question need not be gone into detail inasmuch as sanction to build was sought to be cancelled on the ground of sup pression of material facts, fraud and misrep resentation etc. " In regard to the Lessees ', grievance at (a) supra of denial of natural justice, the High Court said: "He even did not give any opportunity of hearing to the petitioner on the said question and passed an order some 2 1/2 months thereaf ter without even touching the objection of the petitioner regarding the competence and juris diction of the Vice Chairman. Some new facts which found place in para 3 of the show cause notice also found place in the order. The Vice Chairman did not make any enquiry into those facts including construction of three buildings in the city itself and as such it became still more necessary on him to give atleast a personal hearing to the petitioner. As hearing has not been given to the petition er although there was enough time for the same, the order passed by the ViceChairman violates the principles of natural justice and cannot be sustained. On the contention (b), the High Court held that the ViceChairman had no power to review the earlier order. The High Court was of the view and this is exactly the opposite of Sri Sorabjee 's contention before us that the Vice Chair man could derive power to 194 review only if he had been empowered by Government by a direction under section 41(1) of the Act. The High Court said: "It has not been pleaded by opposite parties that on 9.1.1986 when the new Vice Chairman took over charge or on any date thereafter the state Government issued any direction to him to issue any show cause notice to the petitioners. There is no other provision in the Development Act conferring powers on the Vice Chairman to review the decision in the matter of sanctioning a plan to build. In the absence of any provision in the Act or any direction issued by the State Government, the ViceChairman had no jurisdic tion or authority to reconsider the decision granting sanction to a plan i.e. permit to build after the same was acted upon and con structions were being made only in accordance with it. " As to ground (d), the High Court examined the merits of each of the grounds and, in substance, came to the conclusion that the grounds were either irrelevant or, otherwise, insufficient in law to support the purported cancellation. The High Court held: "The above discussion shows that even though fraud, misrepresentation and concealment of facts etc. on the part of the petitioners having not been made out, yet such conclusions have been arrived at. The matter essentially hinged on the meaning and interpretation of the word 'Building ' and instead of doing it in the right and correct perspectives, suspicion 'and presumptions have been made in arriving at the conclusions so arrived at. Shri Thakur assailed the conclusions reached by the High Court on all the three questions. Learned counsel urged that the order dated 19.4.1986 itself discloses the extent of the opportunities afforded to the Lessees and there could, therefore, be no question of failure of natural justice in this case. As to the Vice Chairman 's power to cancel or to revoke a permission earlier granted, Sri Thakur submitted that if the permission had been obtained by the lessees by misrepresentation or fraud or, if after obtaining the permission there had been violation of the terms and conditions of the grant, the statutory authority granting the permission has itself the inherent and incidental and supplemental powers to revoke the permission, and that no express grant of power in this behalf was necessary. Shri Thakur submitted that the 195 grounds in this case related not only to fraud and misrepre sentation practised at the time of securing the permission but also violation of the terms and conditions of the grant itself. He further submitted that there was material on record to show that the officers and the authorities of the LDA concerned with the grant of the permission under section 15 had betrayed the trust reposed in them by the statute and were disloyal to the Development Authority and on that ground also the successor Vice Chairman could revoke and rescind the sanction so vitiated by fraud. Shri Thakur relied upon Sec.21 of General Clauses Act for the exercise of the power to revoke. Shri Sorabjee for the Lessees, however, maintained that the Vice Chairman, having regard to the nature of the allegations on which the revocation is purported and which fell in the last category mentioned by Sri Thakur, had no authority in law to cancel the permission. He submitted that the view of the High Court as to the irrelevance and insuf ficiency in law of the grounds on which the purported can cellation was based were effect as they were well known administrative law tests of administrative or statutory discretion, and that appeal to Section 21 of the General Clauses Act to sustain the review was wholly inapposite in this case. Sri Sorabjee submitted that the ' power to cancel or revoke a licence or permission, even assuming that the Statute enabled such cancellation, was clearly distinguisha ble from a power of refusal of an initial grant and that the exercise of the power of cancellation which prejudically affects vested rights partake predominently of quasi judi cial complexion and where, as here, such power is resorted to at the behest of some body extraneous to the power, there would be an abdication and surrender of the statutory dis cretion vitiating the decision. Sri Sorabjee said that the ViceChairman, even granting that he had power to cancel, acted at the behest of the Government which purported to Act under Section 41(1) issued directives on 12.8.1985 and on 15.10.1985 overriding the discretion of the Vice Chairman. To appreciate these contentions in their proper perspective it is necessary to notice the scheme of the Act in relation to the Regulation of Development in the "Devel opment Area" under the Act. The preamble of the Act says: "In the developing areas of the State of Uttar Pradesh the problems of town planning and urban development need to be tackled resolutely. The existing local bodies and other au thorities in spite of their best efforts have not been able 196 to cope with these problems to the desired extent. In order to bring about improvement in this situation, the State Government consid ered it advisable that in such developing areas, Development Authorities patterned on the Delhi Development Authority be estab lished. As the State Government was of the view that the urban development and planning work in the State had already been delayed it was felt necessary to provide for early estab lishment of such Authorities. " Sec. 2(b), (e) and (f) defines "building" "Development" and "Development Area": "2(b) 'building ' includes any struc ture or erection or part of a structure or erection which is intended to be used for residential, industrial, commercial or other purposes whether in actual use or not." "2(e) 'development ', with its gram matical variations, means the carrying out of building, engineering, mining or other opera tions in, on over or under land, or the making of any material change in any building or land, and includes re development." "2(f) 'development area ' means any area declared to be development area under Section 3. " Section 3 provides: "Declaration of development areas: If in the opinion of the State Government any area within the State requires to be developed according to plan it may, by notification in the Gazette, declare the area to be a develop ment area." Section 14(1) provides: Development of land in the developed area. After the declaration of any area as development area under Section 3, no develop ment of land shall be undertaken or carried out or continued in that area by any person or body (including a department of Government) unless permission for such development has been obtained in writing from the (Vice Chair man) in accordance with the provisions of this Act." Section 15(1) provides: "Application for permission Every person or body (other than any department of Government or any local authority) desiring to obtain the permission referred to in Section 14 shah make an application in writing to the (ViceChairman) in such form and containing such particulars in respect of the development to which the application relates as may be prescribed by (bye laws)." Section 15(3) provides that on receipt of an application for permission for development, the Vice Chairman, after making such enquiry as he considers necessary in relation to matters specified in Sec.9(2)(d) or any other matter by order in writing either grant the permission subject to such conditions as he may specify or refuse the permission. The Vice Chairman, for purposes of Section 15(3) is a distinct statutory authority with statutory powers of his own dis tinct from the "Development Authority" which under section 4(2) is a body corporate having perpetual succession and common seal. Section 15(5) contemplates and enables an appeal to the Chairman against an order made by the Vice Chairman refusing permission. Section 37, inter alia, makes an order of the Vice Chairman made under Sec.15 final. Section 41(3) enables the State Government either on its own motion or on an application made to it in this behalf to call for the records of any case disposed of or order passed by the Authority or the Chairman for purposes of satisfying itself as to its legality or propriety and may pass such orders or issue such directions in relation there to as it may think fit. It is relevant to note that an order made by an Vice Chairman under Sec.15(3) of the Act grant ing permission is not one of the orders revisable by Govern ment under section 41(3). Such an order, under the scheme of the Act, is not also appealable but assumes a finality contemplated by Sec.of the Act provides: "Control by State Government The (Authority, the Chairman or the Vice Chairman) shah carry out such directions as may be issued to it from time to time by the State 198 Government for the efficient administration of this Act." This power of the State Government consistent with the scheme of the Act, cannot be construed as a source of power to authorise any authority or functionary under the Act to do or carry out something which that authority or function ary is not, otherwise, competent to do or carryout under the Act. Section 41(1) is not a Super Henry VIII clause for the supply or source of additional provisions and powers not already obtaining under the 'Act '. Sri Sorabjee for the Lessees says that the proceedings for cancellation were initiated at the instance of and compelled by the directives issued by Government under Section 41(1) and that therefore there was a surrender of discretion by the statutory Authority viz., the ViceChair man. Here is a piquant situation. The High Court says that section 41(1) could authorise the Vice Chairman to review the earlier permission but that there being no such direc tive, the Vice Chairman had no power to review. The High Court was in effect, held that the earlier directive dated 15.10.1985 under Sec.41(1) was limited to the cancellation of the lease and for suspension of the building work in the interrugnam as incidental thereto and that the show cause notice dated 9.1.1986 for cancellation of the permission was not pursuant to any directive under Sec.41(1). Thus, the legal position which the High Court assumes as to the scope of Sec.41(1) is precisely what Shri Sorabjee contends against. It appears to us that view of the High Court that in the absence of a directive or authorisation from the Govern ment under Section 41(1), the Vice Chairman, acting as the statutory authority dispensing permissions for development under the Act, cannot revoke or cancel a permission once granted is clearly erroneous. In this case the grant of permission is part of or incidental to the statutory power to regulate orderly development of the "Development Area" under the Act under Regulatory Laws. The power to regulate with the obligations and functions that go with and are incidental to it, are not spent or exhausted with the grant of permission. The power of regulation which stretches beyond the mere grant of permission, takes within its sweep the power, in appropriate cases, to revoke or cancel the permission as incidental or supplemental to the power to grant. Otherwise the planitude of the power to regulate would be whittled down or even frustrated. It is erroneous to equate the powers under sections 14 and 15 of 199 the Act with Judicial power which, in the absence of express provisions, could not enable the review of a judicial order after its exercise on the principle of Functus Officio. In Sardul Singh vs The District Food and Supplies Controller, Patiala and Ors., in writ petition 126/ a statutory order, promulgated under sec 3 of the , contained a provision enabling the cancellation of a 'permit ' under certain circumstances. The contention was that section 3 of the parent 'Act ' itself did not delegate to the subordinate legislative authority to make such a provision for cancellation and, therefore, the provision for cancellation in the subordinate legislature was ultra vires. There was no provision in the Act expressly conferring the power to make a provision for cancellation of the permit. Section 3(2)(d) of the parent Act merely enabled the government to make orders "for Regulating by licences, permits or otherwise, the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity" and Section 3(2)(j) merely enabled Government to make orders for incidental and supplementary matters (empha sis supplied). The question arose whether provisions for cancellation of the permits envisaged in para 10 of the particular statutory order could be said to be relatable to or justified as a matter incidental or supplementary to Regulation. This Court held that the power to cancel was an "incidental and supplementary" matter. It was held: "If a trade in an essential commodi ty like coal is to be regulated by licenses or permits, it is obvious that the power to grant licenses or permits must include the power to cancel or suspend such licenses or permits as an "incidental or supplementary matter"; otherwise, the very purpose of section 3 of the Act would be frustrated. Indeed, the submissions of Sri Thakur on the point contemplate the exercise of the power to cancel or revoke the permission in three distinct situations. The first is where the grant is itself vitiated by fraud or misrepresen tation on the part of the grantee at the time of obtaining the grant. To the second situation belong the class of cases where the grantee, after the grant violates the essential terms and conditions subject to which the grant is made. In these two areas, the power to grant must be held to include the power to revoke or cancel the permit, even in the ab sence of any other express statutory provisions in that behalf. There must, of course be the compliance with the requirements of natural justice and the grounds must be such as would justify such drastic action. This cancellation is a preventive step. The 200 one aspect of the remedial measures is set out in Section 27 of the Act. There may be cases of third kind where the grant may be voidable at the instance of the Development Authority or otherwise entitling the Development Authority to initiate appropriate declaratory or other action to get rid of the effect of the permission. It is true that in exercise of powers of revoking or cancelling the permission is akin to and partakes of a quasi judicial complexion and that in exercising of the former power the authority must bring to bear an unbiased mind, consider impartially the objections raised by the aggrieved party and decide the matter consistent with the principles of natural justice. The authority cannot permit its decision to be influenced by the dictation of others as this would amount to abdication and surrender of its discre tion. It would then not be the Authority 's discretion that is exercised, but someone else 'section If an authority "hands over its discretion to another body it acts ultra vires". Such an interference by a person or body extraneous to the power would plainly be contrary to the nature of the power conferred upon the authority. De Smith sums up the position thus: "The relevant principles formulated by the courts may be broadly summarised as follows. The authority in which a discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner. In general, a discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it: it must not act under the dictation of another body or disable itself from exercising a discretion in each individual case. In the purported exercise of its discretion it must not do what it has been forbidden to do, nor must it do what it has not been authorised to do. It must act in good faith, must have regard to all relevant considerations and must not be swayed by irrelevant considerations, must not seek to promote purposes alien to the letter or to the spirit of the legislation that gives it power to act, and must not act arbitrarily or capriciously. Nor where a judgment must be made that certain facts exist can a discretion be validly exercised on the basis of an erroneous assumption about those facts. These several principles can conven iently be grouped in two main categories: failure to exercise a discretion, and excess or abuse of discretionary power. The two classes are not, however, mutually exclusive." But the question is whether the issue of the show cause notice or the subsequent decision to cancel could be said to have been made at the behest or compulsion of Government. Shri Sorabjee refers to paragraphs 17 and 18 of Shri Kamal Pandey 's letter dated 15.10.1985. We are not sure that this is a correct understanding of the position. The High Court did not see any casual connection between the Government 's directive dated 15.10.1985 and the proceedings initiated by the Vice Chairman on 9.1.1986. The High Court was of the view that directive confined itself to the can cellation of the lease and as incidental thereto, required the stoppage of work pending decision whether the lease should be cancelled or not. This infact, was the basis for holding that the Vice Chairman had no power to cancel. Lessees do not rely upon any subsequent directive to the ViceChairman from the Government in the matter of revocation of the permission. The earlier directive dated 12.8.1985 from the Government to the Vice Chairman spent itself out with the then ViceChairman declining to act in accordance with it. There is no material to hold that Sri Govardhan Nair felt himself bound by that directive. Sri Sorabjee 's contention based on an alleged surrender of discretion cannot, therefore, be upheld. It has, therefore, to be held that the finding of the High Court that the Vice Chairman had no competence to initiate proceedings to revoke the permission on the ground that the permission itself had been obtained by misrepresen tation and fraud and on the ground that there were viola tions of the conditions of the grant, appear to us to be unsupportable. The contention of the Respondent Lessees that the show cause notice, dated 9.1.1986 and the cancellation order, dated 19.4.1986, are vitiated by a surrender of a discretion on the part of the Vice Chairman cannot also be held to be well founded. Sri Thakur 's contention to the contrary on both these points would require to be accepted. Now in the end, two more findings of the High Court remain to be considered, viz., on the Lessees ' grievance of denial of reasonable opportunity of being heard and the validity and sufficiency of the alleged grounds to sustain the cancellation. We may consider the latter, first: It not unoften happens that what appears to be a judicial review for breach of natural justice is, in reali ty, a review for abuse of discretion. It is true that amongst the many grounds ' put forward in the show cause notice dated 19.1.1986, quite a few overlap each other and 202 are distinguishable from those urged for the cancellation of the lease itself. Some of the grounds might, perhaps, be somewhat premature. Some of them even if true are so trivial that no authority could reasonably be expected to cancel the permission on that basis. For instance the ground that the permission was applied for and granted in the name of one only of the two lessees would be one such. However, Judicial review under Article 226 cannot be converted into an appeal. Judicial review is directed, not against the decision, but is confined to the examination of the decision making process. In Chief Constable of the North Wales Police vs Evans, ; refers to the merits legality distinction in judicial review. Lord Hail sham said: "The purpose "of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorised by law to decide for itself a conclusion which is correct in the eyes of the court." Lord Brightman observed: " . . Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made . . " And held that it would be an error to think: " . . that the court sits in judgment not only on the correctness of the decision making process but also on the correctness of the decision itself." When the issue raised in judicial review is whether a decision is vitiated by taking into account irrelevant, or neglecting to take into account of relevant, factors or is so manifestly unreasonable that no reasonable authority, entrusted with the power in question could reasonably have made such a decision, the judicial review of the decision making process includes examination, as a matter of law, of the relevance of the factors. In the present case, it is, however, not necessary to go into the merits and relevance of the grounds having regard to the view we propose to take on the point on natural justice. It would, however, be appropriate for the statutory authority, if 203 it proposes to initiate action afresh, to classify the grounds pointing out which grounds, in its opinion, support the allegation of fraud or misre presentation and which, in its view constitute subsequent violations of the terms and conditions of the grant. The grounds must be specific so as to afford the Lessees an effective opportunity of showing cause. On the point of denial of natural justice, we agree with conclusion of the High Court, though not for the same reasons, that there has been such a denial in the proceed ings culminating in the order of cancellation. The show cause notice itself an impalpable congeries of suspicions and fears, of relevant or irrelevant matter and has included some trivia. On a matter of such importance where the stakes are heavy for the Lessees who claim to have made large investments on the project and where a number of grounds require the determination of factual matters of some com plexity, the statutory authority should, in the facts of this case, have afforded a personal heating to the lessees. We, therefore, agree with the conclusion of the High Court that both the show cause notice dated 9 1.1986 and the subsequent order dated 19.4 1986 would require to be quashed, however, leaving it open to the statutory authori ty, should it consider it necessary, to issue a fresh show cause notice setting out the precise grounds, and afford a reasonable opportunity including an opportunity of personal heating and of adducing evidence wherever necessary to the Respondent Lessees In view of this liberty, reserved to the authority, it is necessary to setaside the findings recorded by the High Court on the merits of the grounds. The appeal of the Lucknow Development Authority arising out of SLP 11220 of 1987 is partly allowed and the order of the High Court in WP 3463l 1986 modified accordingly. Appeals arising out of SLPs 11515 of 1987 and 11499 of 1987 of the LDA directed against the common judgment of the High Court in so far as it relates to WP 5699 of 1985 and WP 5521 of 1985 also disposed of in the light of the order is made in the appeals arising out of SLPs 4761, 4762, 13298, 11498 and 11220 of 1987. In the circumstances, we leave the parties to bear and pay their own costs. P.S.S. Appeals allowed partly. [/INST]The Syndicate Bank Scheduled Castes and Scheduled Tribes Employees Associated representing the interests of SC/ST employees throughout the country and three Assistant Manag ers of the Bank have filed this petition under article 32 of the constitution of India. Their case is as follows: That Group 'A ' Officers posts are class I posts with Grade Scale I to Grade Scale VII. Criteria for promotion from Grade I to the next Grade and onwards is regulated by a promotion policy dated 17.9.1985. Being a nationalised Bank all policy decisions are controlled and governed by rules framed by the Central Government from time to time. In order to implement the principles enshrined in the Constitution of granting benefit of members of Scheduled Castes and Scheduled Tribes, the Government has evolved the policy of reservation for them in the ratio of 5% and 7 1/2% respectively both at the time of initial recruitment as well as at the time of promo tions in all government establishments. Though this policy was extended to the Banking Industry in 1972 it remained restricted to appointments by direct recruitment only. Later the Central Govt. by its D.C. letter dated 31.12.1977 ad dressed to all the nationalised banks required them to implement the reservation policy to promotional posts also. But the respondent bank did not follow the policy within the Officers cadre on the mistaken impression that the reserva tion in promotional cadres through selection is barred. To this the petitioners submitted that the Home Ministry 's O.M. issued as early as on 26.3.1970 clearly provided 714 reservations for SC & ST Officers ' promotion within class I posts including officers drawing a basic pay of Rs.2,000 per month or less. This was later followed by O.M. dated 23.12.1974 issued by the department of Personnel and Admin istrative Reforms to all the Ministries on the same lines. However the Ministry of Finance, Department of Economic affairs (Banking Division) issued a circular dated 30.5.1981 to all the nationalised banks that there is no reservation for Scheduled Castes and Scheduled Tribes in 'Promotion by Selection ' within the officers cadre; that the concessions to SC & ST employees mentioned in Home Ministry 's O.M. dated 26.3.1970 would be available to them in ' Promotion by Selection ' to posts within the officers cadre upto scale III only and all the banks were required to implement instruc tions contained in Home Ministry 's O.Ms. dated 26.3.1970 and 23.12.1974 with such modifications as may be necessary in the light of the circular dated 30.5.1981. The petitioners have contended that the Central Government wrongly and erroneously interpreted these circulars in taking the view that there was no reservation in the promotional posts within the officers cadre. Finally they say that despite the unequivocal directions from the Govt. of India, Ministry of Finance contained in its letter dated 28.11.1986 to all the nationalised banks clarifying the position in regard to reservations for Scheduled Castes and Scheduled Tribes for promotions and the decision of this Court in Bihar State Harijan Kalyan Parishad vs Union of India & Ors., which applied in all force to the case of the petitioners, the Respondent Bank failed to make reservations within the officers cadre and continues to follow the selection method of promotion which has lead to the filing of this Petition. Allowing the Writ Petition, this Court, HELD: Even though the promotion posts are based on selection method, the rule of reservation will supply to posts within group 'A ' and the benefit of reservation policy to members of SC and ST cannot be denied on the ground that promotional posts are to be filled by method of selection. Government of India committed a clear mistake in not apply ing the principle already decided in Bihar State Harijan Kalyan Parishad 's case to the Syndicate Bank and in not giving it a clear direction this regard. [725G H; 726A] There can be no manner of doubt that the management of the Syndicate Bank was not at fault as they were bound by the instructions and policy laid down by the government of India and in the absence of a clear direction from the Government it was not possible for them to grant relief to the SC/ST employees of the bank. [726B] 715 Though Group 'A ' posts were selection posts still the reservation policy is applicable to such posts and the respondents are directed to compute the backlog of unfilled reserved quota available to SC/ST officers in the promotion al posts with effect from 1.1.1978, the date of introduction of reservation policy in the respondent bank. The respond ents are further directed to grant promotion to the SC/ST employees of the Syndicate Bank with all consequential benefits of salary and allowances from the respective dates they should have been promoted, after applying the roster system in their favour. [726D E] Bihar State Harijan Kalval Parishad vs Union of India & Ors. ; , followed. </s>
<s>[INST] Summarize the judgementivil Appeal No. 3535 of 1982. From the Judgment and Order dated 16.3. 1982 of the Calcutta High Court in F.M.A No. 282 of 1981 & C.R. No. 3842 (m) of 1980. T.S. Krishnamurthy Iyer, G.L. Sanghi, G.S. Chatterjee and D.P. Mukherjee for the Appellant. L.N. Sinha, M.P. Jha, K.C. Mittal and A.K. Chopra for the Respondents. The Judgment of the Court was delivered by KANIA, J. This is an appeal directed against the judg ment of a Division Bench of the High Court of Calcutta in Appeal from Original Order No. 282 of 1981 with C.R. No. 3842 (m) of 1980. The relevant facts for the purpose of this appeal can be shortly stated. In August 1969, the appellant before us obtained a money decree in the High Court at Calcutta against the judgment debtor Maharaj Kumar Maley Chand Mahatab. On 31st July 1970 the appellant filed a petition for execution of the decree, numbered as Title Execution Case No. 19 of 1970. On 3rd August 1970 attachment was levied in execution on open land 1040 belonging to the judgment debtor admeasuring about 19 Kathas at 10A, Diamond Harbour Road, and portion of premises No. 2 Judges Court Road, now, numbered as 6/1D, Diamond Harbour Road and 2/A, Judges Court Road, 24 Paraganas respectively. On 14th September 1970, the judgment debtor sold a portion of the attached property admeasuring a little over to 11 Kathas to one Bharat Shamshere Jung Bahadur Rana. On 29th March, 1972 Bharat Shamshere ,lung Bahadur Rana sold a portion of the said land admeasuring a little over 9 Kathas (referred to hereinafter as "the said property") to Prabhat ilal Chowdhary and others who are the respondents in the present appeal. On 9th May, 1972 the aforesaid Execution Petition, namely. Title Execution Case No. 19 of 1970 was dismisssed for default. On 16th September, 1975, on an application by the appellant, the said Title Execution Case No. 19 of 1970 was restored. On a petition dated 26th Sep tember, 1975 the said property was again attached. Thereaf ter. a proclamation for sale of the said property was issued under Order 21 Rule 66 of the Code of Civil Procedure. The respondents Prabhatilal Chowdhary & Others filed a petition under Order 21 Rule 58 of C.P.C. for releasing the said property from attachment. This application was registered as Misc. Case No. 8 of 1978. On 11th August, 1980 the said Misc. Case No. 8 filed by Prabhatilal and Others was dis missed. On 16th March, 1982 the aforesaid appeal from Order No. 282 of 1981 and C.R. NO. 2843(m) of 1980 was allowed by the Calcutta High Court. It is this decision allowing the said appeal which is assailed before us. Mr. Sanghi, learned counsel for the appellant urged that the sale of the said property by the judgment debtor to Bharat Shamshere Jung Bahadur Rana and the sale of the said property by the said Bharat Shamshere Jung Bahadur Rana to the respondent were both effected during the subsistence of the attachment. Although the attachment ceased on the dis missal of the said Title Execution Case on 9th May, 1972, the said attachment was revived by reason of restoration of the said case on 16th September, 1975. It was submitted by him that, in view of the provisions of Section 64 of the Code of Civil Procedure, the sale of the said property by the judgment debtor to Bharat Shamshere Jung Bahadur Rana and the sale of the same by the Bharat Shamshere Jung Baha dur Rana to the respondent are both void as against the appellant decree holder. Section 64 of the Code of Civil Procedure runs as follows: "Where an attachment has been made, any private transfer 1041 or delivery of the property attached or of any interest therein and any payment to the judgment debtor of any debt, dividend or other monies contrary to such attachment, shall be void as against all claims enforceable under the attach ment. " There is an Explanation to this Section, but it is not material for our purposes. Order 21 Rule 57 as it stood prior to its amendment in 1976 and as amended by the Calcutta High Court as follows: "Where any property has been attached in execution of a decree but by reason of the decree holder 's default the Court is unable to proceed further with the application for execution, it shall either dismiss the appli cation or for any sufficient reason adjourn the proceedings to a future date. Upon the dismissal of such application the attachment shall cease unless the Court shall make an order to the contrary. " The words "unless the Court shall make an order to the contrary" have been added by way of amendment to the said Rule made by the Calcutta High Court. In view of the plain wording of the aforesaid Rule, it is clear that when the aforesaid Title Execution Suit was dismissed for default, the attachment levied ceased as no order to continue that attachment was made by the Court. The question as to what is the effect of the restoration of the said Title Execution Suit, that is, whether the said resto ration would restore the original attachment and, if so, to what extent. In this connection, it has been held by the Calcutta High Court that where an order for releasing property from attachment is set aside on appeal, the effect is to make the property still subject to the attachment and to restore the state of things which had been disturbed by the order of release. It makes no difference whether the order for releasing the attachment under Order 21 Rule 63 of the Code of Civil Procedure is passed in appeal or revision. (See Sushila Bala Dasi vs Guest Keen Williams, Ltd., I.L.R. 1949 Vol. 1 Calcutta, p. 177. A Division Bench of the Madras High Court in Annapurna Patrani & Ors. vs Lakshmana Kara & Anr., A.I.R. 1950, Ma dras, p. 740 has held that where in execution of decree property is attached 1042 but the petition for execution is dismissed for default and on appeal the order of dismissal for default is set aside, the effect of the appellate order is to restore the order attaching property and the trial Court would have to proceed with the execution application from the stage at which it had interrupted it by dismissing it for default. The appel late order restoring attachment would relate back to the date when the attachment was first made and would render invalid any alienation in the interim period. A similar view has been taken by a learned Single Judge of the Bombay High Court in Pradyut Natwarlal Shah vs SuryakantN. Sangani & Ors., A.I.R. 1979 Bombay, p. 166. However, in the present case the restoration of the Title Execution Case was not made on an appeal or revision, whereby order of dismissing the said suit for default was set aside, but the said suit has been restored on an appli cation made for restoration. Such an order for restoration cannot be equated with an order passed on appeal or in 2revision setting aside the dismissal. In this case we are not called upon to consider what is the effect of an order of dismissing the Execution Application for default being set aside on appeal or revision, and we do not propose to express any opinion in that connection. In a case which is more relevant for determination of the question before us, namely, Tavvala Veeraswami vs Pulim Ram anna & Ors., A.I.R 1935 Madras, p. 365 which was decided by a full Bench of the Madras High Court an order dismissing a suit for default was set aside on an application for that purpose. It was held that where an order dismissing a suit for default is set aside on an application for that purpose, the suit remains as it was on the day when it was dismissed and all proceed ings taken up upto that date must be deemed to be in force when the dismissal is set aside and all interlocutory orders will be revived on the setting aside of the dismissal. Similarly, an order for attachment of property will also be revived. In that case an attachment before judgment was raised on security being furnished. The suit in which the attachment was levied was dismissed for default, but was restored on an application made for that purpose and decreed and the decreeholder sought to enforce the security bond. It was held that on the restoration of the suit, all ancillary orders were restored without any further order, and that therefore, the security bond given for the raising of at tachment before judgment was also restored and the decree holder was entitled to enforce the security bond. It was observed by Beasley C.J., who delivered the judgment with which other learned Judges concurred, as follows: "It does not seem to be reasonable that the plaintiff in a 1043 suit who has got an attachment before judgment should have again, after the restoration of the suit after its dismissal for default, to apply to the Court for a fresh attachment and that having done so, the defendant should have to apply to raise the attachment by producing a surety or sureties. The commonsense view of the matter is that all ancillary orders should be restored on the suit 's restoration without any further orders. " In the present case both, the sale by the judgment debtor to Bharat Shamshere Jung Bahadur Rana and the sale by Bharat Shamshere Jung Bahadur Rana to the respondent, were effected during the subsistence of the attachment and before the Title Execution Case was dismissed for default. In our view, even if a doubt were to be entertained as to whether an order for restoration of the suit or execution applica tion would have the effect of restoring the attachment retrospectively so as to affect alienations made during the period between dismissal of the suit or execution applica tion and the order directing restoration, it is clear that an order of restoration would certainly restore or revive the attachment for the period during which it was in sub sistence, namely, prior to the dismissal of the suit or execution application. The learned counsel for the respondent drew our atten tion to the decision of the Division Bench of the Calcutta High Court in the case of Patringa Koer vs Madhavanand Ram & Ors., Calcutta Law Journal, 1911, Vol. 14 p. 476 where it was held that a revival of execution proceedings does not operate as revival of the attachment so as to prejudice the rights of strangers who have in the interval acquired a title to the property. The reversal of judicial orders leaves unaffected the rights of strangers, bona fide pur chasers, whether under execution sale or under private sale, who have acquired title on the assumption that such orders were valid in law. A careful reading of this decision shows it is of no assistance to the case of the respondent because the judgment makes it clear that what was really held was that in the absence of statutory provisions to the contrary, the court cannot cancel the order of dismissal for default of an execution application with retrospective effect so as to prejudice the title that might have been acquired in the interval by a stranger, when the property was admittedly not in the custody of the Court. This decision might have helped the respondents if the alienations in question had been effected during the interval between the dismissal of the Title Execution Case and its restoration. But, in the present case, the alienations were effected 1044 when the attachment was subsisting as we have already point ed out and hence this decision is of no assistance to the respondents. We are not called upon to consider as to wheth er the aforesaid decision lays down good law or as to what would have been the effect of the restoration of the Title Execution Case had the alienations been effected during the aforesaid interval and we do not propose to say anything in this regard. In our view, the Division Bench of the Calcutta High Court was in error in taking the view, in the judgment appealed against, that by reason of the dismissal of the said Title Execution Case, the attachment came to an end and the order of restoration of the said case would not affect any alienation made before the restoration although such alienations might have been made during the subsistence of the attachment. We may mention that our attention was drawn to the amendment of Rule 57 of Order 21 made by the Calcutta High Court, but in our view that amendment merely provides that although under Rule 57 of Order 21 the attachment would cease on an order dismissing the application for execution it is open to the Court to make an order to the contrary. which would mean that the Court could make an order to continue the attachment for some time. The amendment, howev er, is of no relevance in the case before us. In the result, the appeal is allowed, the impugned judgment set aside and the order of First Subordinate Jude at Alipore in Misc. Case No. 8 of 1978 which was set aside by the Calcutta High Court restored. The respondents must pay to the appellant the cost of the appeal. N.P.V. Appeal allowed. [/INST]In criminal writ petition No. 292 of 1986, preferred by detenu 's wife on various grounds, the Vacation Judge ordered his release on parole till further orders. However, when the petition came up for hearing before the Division Bench on 3rd March, 1987 the counsel confined his submissions to one aspect only that arose out of the proceedings in Court i.e., that the period of parole should not be added to the period of detention. That plea was rejected and the petition dis missed on 22nd April, 1987. In the present writ petition filed thereafter on April 27, 1987 it was averred that the counsel did not give up the other points in the earlier writ petition, and had the Court indicated that the petitioner 's submission would not find favour with it he would have proceeded to argue the case. Further, two more points were raised: (1) that the detenu had been prejudiced in making an effective representation to the Board against his detention in the absence of the sum mons issued under section 108 of the Customs Act to him, which document had not been supplied in spite of demand, and (2) that since the detenu was already in custody at the time the order of detention was served the said order was liable to be quashed. Dismissing the writ petition, HELD: 1. It is common experience that when several contentions are advanced in the pleadings, counsel chooses to press one or some out of the several contentions at the time of the hearing. In the instant case, only one point was argued at the previous hearing. It was open to the counsel to make full submissions on all aspects arising in the writ petition. That having not been done it was improper on his part to raise such allegations. [844A, D] 841 2.1 The detenu had been called by the Customs Authori ties for investigation on February 27, 1986. A statement had been made by him under section 108 of the Customs Act and there after he was taken into custody and produced before the Additional Chief Metropolitan Magistrate, who remanded him to custody and directed him to be produced on the following day in the court. By the time the order of detention under section 3(1) of the COFEPOSA Act for one year came to be made on February 28, 1986 he was in jail at the most for one day. Chargesheet had not been submitted against him in the crimi nal case. [847FG] 2.2 Since there was no summons and the detenu had been orally directed to attend the office by the authorities concerned, it could not be held that summons under section 108 of the Customs Act was in existence. Once the summons was out in existence it could not be said that there was prejudice to the detenu on account of the authority 's withholding the summons. [846D] 3.1 The fact that the detenu was already in detention did not take away the jurisdiction of the detaining authori ty in making an order of preventive detention. What is necessary in a case of that type is to satisfy the court when detention is challenged on that ground that the detain ing authority was aware of the fact that the detenu was already in custody and yet he was subjectively satisfied that his order of detention became necessary. [851D] 3.2 In the instant case, there was sufficient material to show that the detaining authority was aware of the fact that the petitioner was in custody when the order was made yet he was satisfied that his preventive detention was necessary. The order of detention was, therefore, not viti ated. [851E] Binod Singh vs District Magistrate, Dhanbad, ; ; Rameshwar Shaw vs District Magistrate Burdwan, ; ; Kartic Chandra Guha vs State of West Bengal, ; Dr. Ramakrishna Rawat vs District Magistrate, Jabalpur, Vijay Kumar vs State of Jammu and Kashmir, ; ; Merugu Satyanarayana vs State of Andhra Pradesh, ; and Suraj Pal Sahu vs State of Maharashtra, ; , referred to. </s>
<s>[INST] Summarize the judgement: Civil Appeal No. 33 of 1953. Appeal by special leave from the Judgment and Order dated the 16th May, 1951, of the High Court of Judicature at Patna in Miscellaneous Judicial Case No. 126 of 1950, arising out of the Order dated the 17th May, 1949, of the Income tax Appellate Tribunal, Calcutta Bench, Calcutta, in I.T.A. No. 147 of 1948 49. sukumar Mitra (section N. Mukherjee with him) for the appellant. C.K. Daphtary,. Solicitor General for India (Porus A. Mehta, with him) for the respondent 1954. February 9. The Judgment of the Court was delivered by DAS J. This is an appeal by special leave from the judgment of the Patna High Court delivered on a reference made by the Income tax Appellate Tribunal under section 66(1) of the Indian Income tax Act. The tribunal referred the following two questions for the opinion of the High Court: 769 1. On the facts and in the circumstances of this case is the surplus of Rs. 13,05,144 arising out of the sale of the plant and machinery of the sugar factory chargeable under section 10 (2) (vii) ? 2. Was the profit of Rs. 15,882 on the sale of stores of the factory taxable under the Income tax Act in the circumstances of this case ? The reference came up for hearing before a Division Bench consisting of Shearer and Sarjoo Prasad JJ. and after a prolonged hearing the learned Judges delivered separate judgments on the27th February. 1951, giving divergent answers to the questions, Shearer J. answering both the questions in the negative and Sarjoo Prasad J. giving an affirmative answer to both of them. The matter thereupon was placed before a third Judge, Ramaswami J. who, after a fresh hearing delivered his judgment on the 16th May, 1951, agreeing with Sarjoo Prasad J. on the first question and with Shearer J. on the second question. The result was that the High Court by a majority decision answered the first question in the affirmative, i.e., against the assessee, and the second question in the negative, i,e. in favour of the assessee. The assessee applied to the High Court for leave to appeal to this court against the High Court 's decision on the first question. The High Court having declined to grant the necessary certificate the assessee applied for and obtained the special leave of this court to prefer the present appeal. The department has not preferred any appeal against the High Court 's decision on the second question and nothing further need be said about that question. The controversy arose in course of the proceedings for the assessment of Pursa Ltd. to income tax for the assessment year 1945 46, the relevant accounting year covering the period between the 1st October, 1943, to 30th September, 1944. Pursa Ltd., was a company incorporated in 1905 under the Indian Companies Act but all its shareholders and directors were residents in the United Kingdom. The business of the 770 company was that of growers of sugarcane, manufacturers of sugar and dealers in sugar. It is common ground that the crushing season for the manufacture of sugar is from December to April of each year. It appears that towards the end of 1942 an attempt was made to sell the entire business of the company but such attempt did not succeed. It appears from the case filed by the respondent in tiffs appeal that in the middle of 1943 the directors of the company commenced negotiations for the sale of the factory and other assets of the company with the ultimate object of winding up the company. From the correspondence, affidavit and other materials placed before the tribunal and referred to by Sarjoo Prasad J. in his judgment it appears that on the 9th August, 1943, an inventory was prepared and a firm offer was received from Dalmia lain & Company Ltd., for the purchase of the factory and stores as on that date. This offer was on the 16th August, 1943, communicated by cable to the directors in England. On the 20th August, 1943, the directors, asked the local managers in India to proceed with the matter in anticipation of the sanction of the shareholders which the directors expected to obtain at an extraordinary general meeting to be held very shortly. That meeting, however, was held on the 8th October, 1943, i.e., 8 days after the accounting year had started. , At that meeting the firm offer of Dalmia lain & Company Ltd. was accepted and a concluded agreement for sale came into existence. Thereafter instructions were given to the solicitors to draw up the necessary documents. On the 7th December, 1943, a written memorandum of agreement was executed whereby the company agreed to sell and demise to Dalmia Jain & Company Ltd., free from all mortgages and charges at and for the price of rupees twenty eight lacs all the lands, buildings, machinery and plant and all vats, reservoirs, cisterns, pumps, machinery, engines, boilers, plant, implements, utensils, tramways, furniture, stores, articles and things as on the ninth day of August, one thousand nine hundred and forty three (subject to subsequent use and consumption in the ordinary course 771 of business) used in connection with the said sugar factory, but excepting stocks of manufactured sugar and stocks of grain in godown on the ninth day of August, one thousand nine hundred and forty three and all stores and other articles bought or received by the company after the date. Dalmia Jain & Company Ltd., paid the sum of rupees twenty eight lacs on the same day and on the 10th December, 1943, they got possession of the factory. On the date of the aforesaid sale, the company possessed sugar stock valued at rupees six lacs which was excluded from the sale. This stock of sugar the company continued to sell up to June, 1944. It is said that the said stock of sugar was excluded because at the time it was not possible to know at what date such a sale would be concluded and the sugar produced in 1943 had to be sold by and through the exclusive selling agents of the company under a contract entered into with them. It is, however, not disputed that between the 9th August, 1943, when the firm offer was obtained and the 10th December, 1943, when possession of the factory was made over to Dalmia Jain & Company Ltd., the company never used the machinery and plant for the purpose of manufacturing sugar or for any other purpose except that of keeping them in trim and running order. Indeed, throughout the accounting period the machinery and plant were not used by the company. The company went into voluntary liquidation on the 20th June, 1945. The reason for the delay in putting the company into liquidation is said to have been caused by considerable legal difficulties with regard to the transfer of certain mokarari lands belonging to the company. The liquidators appointed by the shareholders of the company represented the company in the matter of proceedings for assessment of the company for the assessment year 1945 46. In the course of these assessment proceedings the Income tax Officer on the 21st February, 1947, wrote a letter to the liquidators asking for elucidation on certain points. Amongst other things, the Income tax Officer wanted to know the liquidators ' objection why the company 's activities during the previous 772 year might not be treated as amounting to a realisation of assets on impending liquidation rather than to the carrying on of business within the meaning of the Income tax Act. To this letter an answer was sent by the liquidators . on the 19th March, 1947, pointing out that the company had gone into liquidation on the 20th June, 1945, and that in view of the date of liquidation the liquidators could not agree that the company was not carrying on business during the year ended 30th September, 1944, and they further pointed out that the various debits contained in the sugar factory accounts were those incurred in carrying on the company 's business. By his letter dated the 17th May, 1947, the Income tax Officer claimed that large profits which had been made by the company on the sale of their machinery and plant were taxable under the second proviso to section 10 (2)(vii)of the Income tax Act and called upon the liquidators to retain sufficient funds and assets in their hands to meet the heavy tax liabilities that might eventually arise and also to warn the shareholders accordingly. He also asked for certain information which, however, the liquidators did not furnish. The liquidators, in their letter in reply dated the 22nd May, 1947, did not agree that the profits were taxable, for the profits to which reference had been made were not profits arising from a business carried on by the company but were profits arising from the company ceasing to carry on business. The Income tax Officer, however, by his order dated the 21st June, 1947, held that the profits of the sale of machinery and plant were liable to assessment under section 10 (2)(vii)of the Act and added a sum of Rs. 13,05,144 to the profits. The Appellate Assistant Commissioner of Income tax having dismissed the liquidators ' appeal on the 30th January, 1947, the liquidators went up on further appeal to the Income tax Appellate Tribunal. By its order dated the 17th May, 1949, the tribunal dismissed that appeal. Upon an application under section 66(1) of the Act the tribunal stated a case to the High Court referring the two. questions herein before 773 set out. The subsequent history of the matter has already been mentioned and needs no reiteration. The relevant portion of section 10 of the Income tax Act as amended by Act VI of 1939was as follows : "10 (1) The tax shall be payable by anassessee under the head "Profits and gains of business, profession or vocation" in respect of the profits or gains of any business, profession or vocation carried on by him. (2) Such profits or gains shall be computed after making the following allowances, namely : (i) . . . . . . . (ii) . . . . . . . (iii) . . . . . . . (iv) in respect of insurance against risk of damage or destruction of buildings, machinery, plaint, furniture, stocks or stores, used for the purposes of the business, profession or vocation, the amount of any premium paid; (v) in respect of current repairs to 'such buildings, machinery, plant, or furniture, the amount paid on account thereof; (vi) in respect of depreciation of such buildings, machinery, plant, or furniture being the property of the assessee, a sum equivalent to such percentage on the original cost thereof to the assessee as may in any case or class of cases be prescribed: (vii) in respect of any machinery or plant which has been sold or discarded, the amount by which the written down value of the machinery or plant exceeds the. amount for which the machinery or plant is actually sold or its scrap value: Provided that such amount is actually written off in the books of the assessee: Provided further that where the amount for which any such machinery or plant is sold exceeds the written down value, the excess shall be deemed to be profits of the previous year in which the sale took place; . . . . . . . . . . . . . . . ." 774 It is necessary to bear in mind the meaning and import of the provisions of section 10 (2)(vii)in so far as they apply to the present case. Under section 10 tax is payable by an assessee "in respect of the profits or gains of any business, profession or vocation carried on by him." "Business" is defined by section 2, sub section (4) as "including any trade, commerce or manufacture, or any adventure or concern in the nature of trade, commerce or manufacture. " As pointed out by the Judicial Committee in Shaw Wallace & Co. 's case(1) the fundamental idea underlying each of these words is the continuous exercise of an activity and the same central idea is implicit in the words "carried on by him" occurring in section 10 (1)and those critical words are an essential constituent of that which is to produce the taxable income. Therefore, it is clear that the tax is payable only in respect of the profits or gains of the business which is carried on by the assessee. Sub section (2)permits allowances to be made before the taxable profits are ascertained. Proviso (2)to clause (vii) of that sub section on which the income tax authorities have relied makes the excess of sale proceeds over the written down value of "any such machinery or plant" to be deemed to be profits of the previous year in which the sale took place. Any such machinery or plant in the proviso clearly refers to the machinery or plant in respect of which the allowance is to be given under that clause. Although the word "such" was not used in the body of clause (vii), the scheme of sub section (2) which is apparent from the other clauses of allowances e.g., (iv), (v) and (vi), clearly indicates that the machinery or plant referred to in clause (vii) must be the same as those mentioned in the earlier clauses, i.e., such machinery or plant as were "used for the purposes of the business, profession or vacation." Indeed, the position has been made clear and placed beyond any doubt by the subsequent amendment of 1946 which added the word "such" in clause (vii). The words"used for the purposes of the business" obviously [1] L. R, 59 I.A. 206 at p. 213. 775 mean used for the purpose of enabling the owner to carry on the business and earn profits in the business. In other words, the machinery or plant must be used for the purpose of that business which is actually carried on and the profits of which are assessable under section 10 (1). The word "used" has been read in some of the pool cases in a wide sense so as to include a passive as well as active user. It is not necessary, for the purposes of the present appeal, to express any opinion on that point on which the High Courts have expressed different views. It is, however, clear that in order to attract the operation clauses (v), (vi) and (vii) the machinery and plant must be such as were used, in whatever sense that word is taken, at least for a part of the accounting year. If the machinery and plant have not at all been used at any time during the accounting year no allowance can be claimed under clause (vii) in respect them and the second proviso also does not come into operation. In its statement of the case, after referring to its decision that the profits on the sale of machinery and plant were assessable under section 10 (2)(vii), the tribunal proceeded to state: "This decision was based on two considerations. First, that as admitted by the applicant company the company had been carrying on its business up to the date of the sale of the machinery, namely, 7th December, 1943. 'The tribunal was of the opinion that as the applicant company had not ceased to carry on its business till the date of the sale of the machinery, it must be held that the sale of the 'machinery was a part of the applicant company 's carrying on of the business. The second reason for the decision of the tribunal was that the applicant company did not sell its sugar stocks amounting to over Rs.6,00,000, on 7th December, 1943. The applicant company s plea that the sugar stocks could not be sold as the applicant company had sole agents for the sale of sugar, was not accepted by the tribunal. The ' Income tax Appellate Tribunal found that sugar continued to be sold for more than 6 months 776 after the sale of the machinery and substantial expenses on establishment and general charges continued to be incurred. From this the Income tax Appellate Tribunal concluded that the sugar stocks had not been sold on 7th December; 1943, purposely in order to sell these to the best advantage later on. This, the Income tax Appellate Tribunal held, showed that the applicant company carried on business even subsequent to the sate of machinery on '7th December, 1943." Although the High Court will not disturb or go behind the finding of fact of the tribunal, it is now well settled that where it is competent for a tribunal to make findings in fact which are excluded from review, the appeal court has always jurisdiction to intervene if it appears either that the tribunal has misunderstood the statutory language because the proper construction of the statutory language is a matter of law or that the tribunal has made a finding for which there is no evidence or which is inconsistent with the evidence and contradictory of it. [See Lord Normand in Commissioners of Inland Revenue vs Fraser(1)]. It appears to us that the tribunal misdirected itself in law as to the meaning and import of the relevant provisions of section 10 of the Act. ]t completely overlooked the fact which is plainly in evidence on the record that the machinery and plant which were sold had not at all been used for the purposes of the business carried on in the accounting year and consequently the second proviso to section 10 (2) (vii) could have no application to the sale proceeds of such machinery and plant. In fact the entire decision of the tribunal was vitiated by its failure to keep in view the true meaning and scope of section 10 (2) (vii) and cannot, therefore, be supported. It further appears to us that in the statement of the case the tribunal was not merely stating something in the nature of a primary fact but was also drawing a conclusion which is to a certain extent contrary to the primary finding. As is stated clearly in the statement of the case, the decision of the tribunal was based on (1) at p. 501. 777 two considerations. The first consideration was rounded on an admission by the liquidators that the company had been carrying on its business up to the date of the sale of the machinery on the 7th December, 1943. This admission is quite consistent with the case that the company was only selling its stock of sugar and not doing any business of manufacture of sugar. Indeed, the manufacturing process does not begin until December of each year and the memorandum of agreement was made on the 7th December, 1943, and possession was delivered to the purchaser on the 10th December, 1943. It is nobody 's case and it has not been found that the company had manufactured any sugar during the whole of the accounting year. Therefore, this finding that the company carried on its business up to the 7th December, 1943, certainly does not indicate that the company was also carrying on any business of 'growing sugarcane or manufacturing sugar by the use of the machinery or plant in question. The second finding that the company carried on business even after the sale of the machinery and the plant clearly indicates that that business had nothing to do with the machinery or plant. Both the findings, therefore, are inconclusive. The matter, however, does not rest there. It appears to us that the findings of fact, taken literally, cannot support the decision of the tribunal. If, as held by the tribunal, "the sale of the machinery was a part of the applicant company 's carrying on of the business" then the sale must be regarded as an ordinary operation of such business and consequently the profits arising out of such ordinary business operation would be assessable under the provisions of section 10 (1) and it would not be necessary to have recourse to the statutory fiction created by the second proviso to clause (vii)under which the excess of the sale proceeds over the written down value is to be deemed to be profits of the business. If the profits on the sale of the machinery and plant are to be made assessable under the second proviso, as has ' been done by the tribunal, then it must be conceded that these deemed profits were not in reality the profits of the business carried on by the (2) 24 Tax Cases 498 at p. 501. 13 95 section C.I./59 778 company and, therefore, the sale transaction which brought in these profits was not in fact part of the company 's business, which conclusion again will be inconsistent with the finding of fact if the business is not understood as limited only to the selling of sugar. For reasons stated above, it appears to us that having misdirected itself in law as to the scope and effect of the relevant portions of section 10 of the Act the tribunal did not approach the facts from a proper angle and, further, that its findings cannot, in the circumstances of this case, be given such sanctity as would exclude the same from review by the High Court or this court. Turning to the facts to be gathered from the records it is quite clear that the intention of the company was to discontinue its business and the sale of the machinery and plant was a step in the process of the winding up of its business. The sale of the machinery and plant was not an operation in furtherance of the business carried on by the company but was a realisation of its assets in the process of gradual winding up of its business which eventually culminated in the voluntary liquidation of the company. Even if the sale of the stock of sugar be regarded as carrying on of business by the company and not a realisation of its assets with a view to winding up, the machinery or plant not being used during the accounting year at all and in any event not having had any connection with the carrying on of that limited business during the accounting year, section 10 (2) (vii) can have no application to the sale of any such machinery or plant. In this view of the matter, the answer to the first question should be in the negative and we answer accordingly. The result is that this appeal is allowed and the respondent shall pay the costs of the appellants both in this court and in the High Court. Appeal allowed. Agent for the appellant:B. N. Ghose. [/INST]The three appellants were a wholesale dealer in spices, a dealer in groceries, and his servant respectively. The second appellant purchased a bag of turmeric powder from the first and the third appellant took delivery of it on behalf of the second appellant, his master. Immediately after it was taken delivery of, the food inspector purchased from the third appellant some turmeric powder contained in that bag for the purpose of analysis, and after issuing notice to the third appellant as required by section 1 1 of the , sent a portion of the powder purchased to the public analyst, who gave a report that it was adulterated food. The three appellants were then prosecuted under sections 6(1) (a) read with section 7(v) of the Act and convicted by the Magistrate. The conviction was confirmed by the High Court. In the appeal to this Court it was contended that, (i) the report of the public analyst, by itself was not sufficient to sustain the conviction, and the public analyst should have been called as a witness, (ii) the report of the public analyst could not be used as evidence against a person who was not given notice under section 11 of the Act, (iii) the first appellant could not be convicted without establishing that he had the mens rea, and (iv) the taking of the sample under section 10 by a food inspector, was not a "sale" within the meaning of section 2(xiii) and therefore section 7(v) of the Act was not infringed. HELD : (i) Section 13(5) of the Act, makes the report of the public analyst admissible in evidence and a Court of fact is free to act on it or not, as it thinks fit. The Court could therefore legally act solely on the basis of the report and the prosecution Could not fail on the ground that the public analyst was not called as a witness. If the appellant wanted the analyst to be examined, it was for the appellant to take appropriate steps. C D] (ii)The law requires notice under section 11 to be given only to the person from whom the sample was taken and none else. If that formality had been complied with and the report of the analyst is placed on record at the trial, it would be admissible against all the accused persons. [902 H ; 903 C] (iii)The word "vendor" in section 19(1) means the person who had add the article of food which was alleged to be adulterated. At one stage, the first appellant was the vendor of the turmeric powder. Since the section deprives the vendor of adulterated food of the defence of merely alleging that he was ignorant of the nature, substance or quality of the article of food sold by him the burden of showing that he had no mens rea to commit the offence would be upon the first appellant. [904 B D] State of Maharashtra vs Mayer Hans George, ; followed. 895 (iv)The definition of "sale" in section 2(xiii) of the Act, specificallY includes within its ambit a &,de for analysis. The transaction in the instant can would amount to sale inspite of the fact that where a person is required by the food inspector to sell him a sample of a commodity, there is an element of compulsion under section 10 of the Act. L906 H] Sarjo Prasad vs State of U.P., ; , M. Y. Joshi vs M. U. Shimpi, ; and State of Uttar Pradesh vs Kartar Singh, ; , referred to. Food Inspector vs Parameswaran, [1962] 1 Cr. L.J. 652, overruled. </s>
<s>[INST] Summarize the judgementAppeals Nos. 664 to 669 of 1967. Appeals from the judgment and order dated March 22, 1962, July 23, 1962, July 24, 1962, July 12, 1963 and August 14, 1963 in Writ Petitions Nos. 1077 of 1959, 19 and 739 of 1960, 157 of 1961, 970 of 1962 and 594 of 1963. Jagadish Swarup, Solicitor General, section K. Aiyar and R. N. Sachthey, for the appellants (in all the appeals). section V. Gupte, A. K. Varma, J. B. Dadachanji, 0. C. Mathur and Ravinder Narain, for the respondent. (in C. A. Nos. 664 and 668 of 1967). O. P. Rana, for the intervener for the State of U.P. M. R. K. Pillai, for the intervener for the State of Kerala. B. Sen, Santosh Chatterjee and G. section Chatterjee for Sukumar Bose, for the State of West Bengal. section Govind Swaminathan, Advocate General, Tamil Nadu, A. V. Rangam and M. Subramaniam, for the State of Tamil Nadu. Lal Narayan Sinha, Advocate General, Bihar, D. P. Singh nad V. J. Francis, for the intervener for the State of Bihar. K. A. Chitaley, Advocate General, State of Madhya Pradesh, M.N. Shroff and I. N. Shroff, for the intervener for the State of Madhya Pradesh. E. section Venkataramiah, Advocate General, Mysore and section P. Nayar, for the intervener for the State of Mysore. J. C. Medhi, Advocate General, Assam and Naunit Lal, for the intervener for the State of Assam. The Judgment of the Court was delivered by Hidayatullah, C.J. These six appeals by certificate under article 132(1) of the Constitution are filed against the decision of the High Court of Mysore, declaring that Parliament had no power to legislate with respect to taxes on gift of lands and buildings. The High Court passed a detailed judgment on two of the petitions by which the competence of Parliament was challenged and followed its own decision in the other four cases. It is not necessary to give the facts of the six petitions in the High Court. As illustrative of the facts involved we may mention on W.P. No. 1077 of 1959. In that case a certain D. H. Nazareth, owner of a coffee plantation, 197 made a gift by registered deed, January 22, 1958, of a coffee plantation and other properties in favour of his four sons. The market value of the property was Rs. 3,74,080 and the coffee plantation accounted for Rs. 3,24,700. Gift tax of Rs. 35,612/ was demanded. If the coffee _plantation was left out of consideration the tax was liable to be reduced by Rs. 3,4,036. The authority to charge gift tax on the gift of the coffee plantation was challenged and the right of Parliament to impose a gift tax on lands and buildings questioned. In some of the other cases agricultural or paddy lands or buildings were the subjects of gifts and they were similarly taxed and the tax questioned. The High Court held that, entry 49 of the State List read with entry 18 of the same list reserved the power to tax lands and buildings to the Legislature of the States and Parliament could not, therefore, use the residuary power conferred by entry 97 of the Union list. This decision is challenged before us. The Gift Tax Act was passed in 1958 and subjected gifts made in the year ending March 31, 1958 to tax. The Act contained the usual exempted limits and other exemptions. We need not concern ourselves with them here. We are only concerned with the validity of parliamentary legislation imposing gift tax at all. To consider the objection to the Gift Tax Act which was sus tained by the High Court a few general principles may be borne in mind. Under article 245 Parliament makes laws for the whole or any part of the territory of India and the Legislatures of the States for the whole or part of their respective States. The subject matter of laws are set out in three lists in the Seventh Schedule. List I (usually referred to as the Union List) enumerates topics of legislation in respect to which Parliament has exclusive power to make laws and List II (usually referred to as the State List) enumerates topics of legislation in respect to which the State Legislatures have exclusive power to make laws. List III (usually referred to as the Concurrent List) contains topics in respect to which both Parliament and Legislature of a State have power to make laws. Inconsistency between laws made by Parliament and those made by the Legislatures of the State, both acting under the Concurrent List, is resolved by making Parliamentary law to prevail over the law made by the State Legislature. So long as the Parliamentary law continues, the State law remains inoperative but becomes operative once the Parliamentary law, throwing it into shadow, is removed. Then there is the declaration in article 248 of the residuary powers of legislation. Parliament has exclusive power to make any law in respect to any matter not enumerated in the Concurrent List or State List and this power includes the power of mak ing any law imposing a tax not mentioned in either of those lists. 198 For this purpose, and to avoid any doubts, an entry has also been included in the Union List to the following effect: "97. Any other matter not enumerated in List II or List III including any tax not mentioned in either of those lists". It will, therefore, be seen that the sovereignty of Parliament and the Legislatures is a sovereignty of enumerated entries, but within the ambit of an entry, the exercise of power is as plenary as any legislature can possess, subject, of course, to the limitations arising from the Fundamental Rights. The entries themselves do not follow any logical classification or dichotomy. As was said in State of Rajasthan vs section Chawla and another(1) the entries in the list must be regarded as enumeratio simplex of broad categories. Since they are likely to overlap occasionally, it is usual to examine the pith and substance of legislation with a view to determining to which entry they can be substantially related, a slight connection with another entry in another list notwithstanding. Therefore, to find out whether a piece of legislation falls within any entry its true nature and character must be in respect to that particular entry. The entries must of course receive a large and liberal interpretation because the few words of the entry are intended to confer vast and plenary _powers. If, however, no entry in any of the three lists covers it, then it must be regarded as a matter not enumerated in any of the three lists. Then it belongs exclusively to Parliament under entry 97 of the Union List as a topic of legislation. The Gift Tax Act was enacted by Parliament and it is admit ted that no entry in the Union List or the Concurrent List mentions such a tax. Therefore, Parliament purported to use its powers derived from entry 97 of the Union List read with article 248 of the Constitution. This power admittedly could not be invoked if the subject of taxes on gifts could be said to be comprehended in any entry in the State List. The High Court has accepted the contention of the tax payers that it is so comprehended in entries 18 and 49 of the State List. Those entries read 18. Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization." "49. Taxes on lands and buildings. " The argument is that by entry 18, 'land ' of all description is made subject to legislation in the States and by entry 49 taxes of (1) [1959] Supp. 1 S.C.R. 904. 199 whatever description on lands in that large sense and buildings generally fall also in the jurisdiction of the State. Reference is made to entries 45, 46, 47 and 48 of the State List in which certain taxes are to be imposed on land and agricultural land or income from agriculture exclusively by the States in contrast with entries 82, 86, 87 and 88 where the taxes are imposed on properties other than agricultural land or income from agriculture. It is submitted, therefore, that the general scheme of division of taxing and other entries by which land particularly agricultural land and income therefrom is reserved for the States shows that taxes on lands and buildings read liberally must also cover taxes in respect of gifts of land particularly agricultural land and buildings. If the entry so read can be reasonably said to include the tax, then there can be no question of recourse to the residuary powers of Parliament. The matter is not res integra and however attractive the argument, it cannot be accepted. Many High Courts in India have considered this matter before the Supreme Court decided it. The Mysore view was not followed in section Dhandapani vs Addl. Gift Tax Officer, Cuddalore(1) (Madras High Court); Shyam Sunder vs Gift Tax Officer(2) (disapproved on another point in the Supreme Court). A contrary view was earlier also expressed in Jupadi Sesharatnam vs Gift Tax Officer, Palacole(3) (Andhra Pradesh High Court) and Joseph vs Gift Tax Officer (4) (Kerala High Court). In fact the judgment under appeal stands alone. The subject of entry 49 of the State List in relation to imposition of Wealth Tax came up for consideration in Sudhir Chandra Nawn vs Wealth Tax Officer, Calcutta & ors.(5) and the view of the High Court on the construction of this entry was affirmed. Although the judgment ' under appeal was not referred to expressly the result is that it must be taken to be impliedly overruled. In view of the decision of this Court it is not necessary to deal with the matter except briefly. The Constitution divides the topics of legislation into three broad categories : (a) entries enabling laws to be made, (b) entries enabling taxes to be imposed, and (c) entries enabling fees and stamp duties to be collected. It is not intended that every entry gives a right to levy a tax. The taxes are separately mentioned and in fact contain the whole of the power of taxation. Unless a tax is specifically mentioned it cannot be imposed except by Parliament in the exercise of its residuary powers already mentioned. Therefore, entry 18 of the State List does not confer additional power (1) (3) (5) (2) A.I.R. 1967 All. 19. (4) 200 of taxation. At the most fees can be levied in respect of the items mentioned in that entry, vide entry 66 of the same list. Nor ,is it possible to read a clear cut division of agricultural land in favour of the States although the intention is to put land in most of its aspects in the State List But however wide that entry, it cannot still authorise a tax not expressly mentioned. Therefore, either the pith and substance of the Gift Tax Act falls within entry 49 of State List or it does not. If it does, then Parliament will have no power to levy the tax even under the residuary powers. If it does not, then Parliament must undoubtedly possess that power under article 248 and entry 97 of the Union List. The pith and 'substance of Gift Tax Act is to place the tax on the gift of property which may include land and buildings. It is not a tax imposed directly upon lands and buildings but is a tax upon the value of the total gifts made, in a year which is above the exempted limit. There is no tax upon lands or buildings as units of taxation. Indeed the lands and buildings are valued to find out the total amount of the gift and what is taxed is the gift. The value of the lands and buildings is only the measure of the value of the gift. A gift tax is thus not a tax on lands and buildings as such (which is a tax resting upon general ownership of lands and buildings) but is a levy upon a particular use, which is transmission of title by gift. The two are not the same thing and the incidence of the tax is not the same. Since entry 49 of the State List contemplates a tax directly levied by reason of the general ownership of lands and buildings, it cannot include the gift tax as levied by Parliament. There being no other entry which covers a gift tax, the residuary powers of Parliament could be exercised to enact a law. The appeals must, therefore, be allowed but there shall be no order about costs throughout. The appeal 666/67 however abates as the sole respondent died. V.P.S. Appeals allowed. [/INST]P was the owner of the suit properties. He had no children. He gifted some of his properties to his wife on June 14, 1943. On April 29, 1946 the first 'respondent instituted a suit for a declaration that he was the adopted son of P and for partition and possession of his share in the family property. The first respondent claimed to have been adopted on July 12, 1943, P denied the said adoption and alleged that in fact he had adopted the appellant on April 10, 1946. In view of that allegation the appellant was added as a supplemental defendant in the said suit, but no relief was claimed against him. During the pendency of that suit P died. Thereafter the first respondent moved the court to withdraw the suit. He was permitted to withdraw the 'same with liberty to file a fresh suit on the same cause of action on condition that he paid the defendants ' costs of that suit before instituting a fresh suit. Thereafter P 's widow bequeathed her properties to the first respondent and died soon after. On November 29, 1951 the first respondent brought a fresh suit without having paid the costs of the appellant in the earlier suit. The appellant resisted the suit on several grounds. However the trial court and the High Court decided in favour of the first respondent. Thereupon by special leave the present appeal was filed by the appellant. The main question that fell for consideration was whether the suit under appeal was maintainable when the condition precedent imposed by the court in the earlier suit namely, the payment of defendants ' costs by the plaintiff before bringing a fresh suit on the same cause of action had not been complied with. HELD : (i) Rule 1, 0. 23, Code of Civil Procedure empowers the courts to permit a plaintiff to withdraw from the suit brought by him with liberty to institute a fresh suit in respect of the subject matter of that suit on such terms as it thinks fit. The expression 'subject matter ' is not defined in the Code. It does not mean property. That expression has a reference to a right in the property which the plaintiff seeks to enforce. That expression includes the cause of action and the relief claimed. Unless the cause of action and the relief claimed in the second suit are the same as in the first suit it cannot be said that the subject matter of the second suit is the same as in the previous suit. [213 G 214 B] (ii) The non fulfilment of the condition imposed by the Court at the time of withdrawal of the first suit did not bar the present suit because the subject matter of the two suits was not the same. In the first suit the first respondent was seeking to enforce his right to partition and separate possession. In the present suit he sought to get possession of the suit properties from a trespasser on the basis of his, title. In the first suit the cause of action was the division of status between the first respondent and his adoptive father and the relief claimed was the conversion of joint possession into separate possession. In the present suit the plaintiff was seeking possession of the suit properties from a trespasser 212 In the first case his cause of action arose on the day he got separated from his family. In the present suit the cause of action, namely, the series of transactions which formed the basis of the title to the suit properties arose on the death of his adoptive father and mother. [214 B D] Mere identity of some of the issues in the two suits did not bring about an identity of the subject matter in the two suits. [214 D E] The appeal must accordingly be dismissed. Rakhma Bai vs Mahadeo Narayan, I.L.R. and Singa Reddy vs Subba Reddy, I.L.R. , approved and applied. </s>
<s>[INST] Summarize the judgementiminal Appeal No. 22 of 1973. Appeal by special leave from the judgment and order dated the 13th July 1972 of the High Court of Himachal Pradesh at Simla in Criminal Appeal No. 31 of 1970 and Murder Reference No. 21 of 1970. 72 4 Yogeshwar Prasa , for the appellant. H. R. Khanna and M. N. Shroff, for the respondent. The Judgment of the, Court was delivered by KHANNA, J. Kali Ram (40) was tried in the court of Sessions Judge Simla & Sirmur Districts for an offence under section 302 Indian Penal Code for causing the death of Dhianu (60) and the latter 's daughter Nanti (40). Charge was also framed against the accused under section 392 read with section 397 Indian Penal Code for having at the time of the occurrence committed robbery. The learned Sessions Judge convicted the accused under section 302 Indian Penal Code and sentenced him to death. On appeal and reference, the High Court of Himachal Pradesh affirmed the conviction and the sentence of death. The accused thereafter came up to this Court in appeal by special leave. The prosecution case is that Dhianu deceased was suffering from leprosy. This disease had resulted in partially destroying the hands and feet of Dhianu. For about a couple of months before the present occurrence. Nanti, daughter of Dhianu, had been staying with him in his house in village Amrahi. There was no other house near the house of Dhianu. Dhianu did business of money lending on the security of ornaments. The accused, it is stated, is a previous convict having been convicted in cases under sections 380, 454 and 457 Indian Penal Code in the years, 1955, 1957, 1960, 1962 and 1963. He was sentenced to undergo various terms of imprisonment in those cases. The last sentence of imprisonment undergone by the accused was from December 17, 1963 to November 7, 1967 on which day he was released from Central Jail Nahan. On August 1, 1968 the police presented a challan against the accused under section 1 10 of the Code of Criminal Procedure in the court of District Magistrate Naban. Notice under section 112 of the Code of Criminal Procedure was then issued to the. accused. It was served upon him for September 16. , 1968. As the. notice was not received back, the District Magistrate adjourned the case to October 16, 1968 and thereafter to November 6, 1968. On 13 Asuj, which corresponds to September 28, 1968, it is stated, the accused went at evening time to the shop of Parma Nand (PW 14) in village Paliara, at a distance of three or four miles from the house of Dhianu. The accused spent the night with Parma Nand. On the morning of 14 Asuj, corresponding to September 29, 1968, the accused gave Rs. 18 to Parma Nand for purchase of liquor and fish. Fish was thereafter purchased by Parma Nand. The accused and Parma Nand took liquor and fish on the evening of 14 Asuj. The accused then told Parma Nand that he had to meet Dhianu of village Amralu and that Parma Nand should serve the evening meals to him. After taking his meals, the accused left for the house of Dhianu deceased. The way to village Amrahi of Dhianu was shown to the, 725 accused by, Parma Nand. At about mid night hour on that night the accused shouted to Parma Nand from outside. the shop. Parma Nand asked the accused to come in but the latter replied that he had some work. The accused thereafter went away. Dhianu deceased had two nephews, Hira Singh (PW 1) and Mehru (PW 10), who lived in village Lohara at a distance of half a mile from, the house of Dhianu. On October 1, 1968 Mehru went to a Gharat (flour ginding place). On the way back Mehru did not see the cattle of Dhianu grazing in the field. On reaching home, Mehru told his brother Hira Singh that he had not seen Dhianu 's cattle. Hira Singh and Mehru then went to the house of Dhianu and found Dhianu and Nanti lying murdered in the courtyard of their house. The dead bodies were covered with cloth. On removing the cloth, Hira Singh and Mehru noticed injuries on the heads of Dhianu and Nanti. The bodies were in a state of decomposition. The door of the residential room was open and the goods were lying scattered. Hira Singh informed PW 31 Udey Singh, Pradhan of the Gram Panchyat about what he had seen. On the advice of the Pradhan, Hira Singh went with village chowkidar to police station Renuka, at a distance of six miles from the place of occurrence, and lodged there report PA at 1 a.m. on October 2, 1968. On the following morning ASI Mohd. Sardar (PW 49) accompanied by Hira Singh arrived at the place of occurrence. Sub Inspector Attar Singh, who was away from the police station at the time the report was,lodged at the police station, on learning of the occurrence, also reached the place of occurrence at about 9 a.m. on October 2, 1968. Sub Inspector Attar Singh prepared inquest reports PB and PC relating to the dead bodies of Dhianu and Nanti. The dead bodies were thereafter sent to Civil Hospital Renuka where post mortem examination was performed by Dr. N. C. Jain (PW 43) on October 3, 1968. The case of the prosecution further is that on November 22, 1968 at 9.15 a.m. Kedar Nath (PW 2), who was in those days a clerk in Government High School, Tikri Dasakna, went to the shop of one Mulak Raj for buying some goods. Near that shop Kedar Nath saw the accused, who was having a gun with him. The accused called Kedar Nath and asked him to write, a letter on his behalf to the Deputy Commissioner. Mulak Raj then told Kedar Nath that the accused was a dangerous man and that Kedar Nath should write the letter as desired by the accused. Kedar Nath then told the accused 'that he had to go to the school and that he would write the letter after taking the permission of the Head Master. The accused thereupon remarked that the Head Master was nobody and that the accused would shoot him. Kedar Nath was at that time carrying a notebook. At the dictation of the accused, Kedar Nath wrote a 22 page letter on behalf of the accused addressed to the Deputy Commissioner Nahan. In the course of that letter, the accused referred to the previous cases in which he had been convicted. as well as to the proceedings under section 110 of the Code of Criminal Procedure pending against him. According to the accused, he had been directed by police Sub Inspector to report twice at, the police, station. The accused, however, told the Sub Inspector that it was difficult for him to do so. The 726 accused tried to meet the Deputy Commissioner at Nahan and the Chief Minister of Himachal Pradesh at Simla but could not do so. The accused felt that as he had no money and no one would be prepared to stand surety for him, he would have to go to jail. It was also mentioned by the accused that he had murdered Dhianu and Nanti because the accused had been told that Dhianu had Rs. 30,000 to 40,000 with him. After getting letter PD written from Kedar Nath, the accused appended his signature to it. The accused further told Kedr Nath not to disclose die matter to any one and that otherwise he would kill him (Kedar Nath). The accused thereafter went to the post office and sent the letter by registered post to the Deputy Commissioner Nahan. The said letter was received in the office of the Deputy Commissioner Nahan on November 27, 1968. No action was taken on that letter. On November 28, 1968, it is alleged, the accused met Sahi Ram (PW 46). Sahi Ram is the son of the Lambardar of village Shalahan. Sahi Ram told the accused not to commit thefts. The accused then told Sabi Ram that after being released from jail, he had been involved in a case under section 1 10 of the Code of Criminal Procedure. As the accused felt that no one would stand surety for him and as he would have again to, go to jail for two or three years, he decided to commit such an offence as would bring money for his children. The accused added that he, bad learnt that Dhianu was a rich man and that the accused had committed the murder of Dhianu and his daughter. According further to the confession made by the accused to Sabi Ram, the accused was served meals by Nanti and Dhianu when he went to their house. After Dhianu and Nanti had gone to sleep, the accused got up from his bed and thought of committing theft of the goods. Feeling then began to weigh with the accused that Dhianu, who was suffering from leprosy, would die of hunger. This circumstance induced the accused to kill Dhianu. Accordingly, the accused gave blows to Dhianu with a dhangra. Nanti then got up and, on seeing the injuries of Dhianu, she became unconscious. The accused then went inside the house of Dhianu and picked up a sword. With that sword, he gave further blows an the head and neck of Dhianu. He, also gave blows with the sword to Nanti. It was further stated by the accused that be found Rs. 180 in cash and silver ware weighing about two or three kilograms. Sahi Ram then wrote letter PEEE dated November 28, 1968 to the Station House Officer of police station Renuka wherein Sahi Ram apprised the Station House Officer of the extra judicial confession made by accused to Sabi Ram, as mentioned above. Letter PEEE was received at the police station on December 2, 1968. Sub Inspector Budh Ram (PW 50) then recorded the statement of Sabi Ram. On December 20, 1968 Sub Inspector Attar Singh on receipt of information went to village Minus. On the night between December 20 21, 1968 the Sub Inspector surrounded a hotel wherein the accused was stated to be present in village Minus. The, accused was arrested early on the morning of December 21, 1968 from that hotel. A gun dhangra P9, currency notes of the value of Rs. 684 and some other articles were taken into possession from the accused. 727 The case, of the prosecution further is that silver ornaments and other articles belonging to Dhianu and Nanti deceased, as well as some ornaments which had been left with Dhianu as security: for the money lent by him were pawned by the accused to, various persons after this occurrence. Those ornaments and articles were after the arrest of the accused recovered at the instance of the accused from the persons with whom they had been pawned. After the recovery of the ornaments, Shri Malhotra magistrate on being moved by the police, mixed the recovered ornaments with sonic other ornaments. Salkoo, husband of Nanti deceased, and one Zalmu identified the recovered ornaments as those which were with the two deceased persons. The accused in his statement under section 342 of the Code of Criminal Procedure denied the various allegations made against him. It was, denied by the accused that he had stayed with Parma Nand PW at his shop and that he had gone from that shop towards the house of Dbianu. It was also denied by the accused that he had got letter PD written from Kedar Nath PW or that he had sent the same to the Deputy Commissioner. The accused further denied having made any confession to Sahi Ram. It was also denied by the accused that any ornaments had been recovered at his instance. The prosecution allegation about the recovery of dhangra from him was likewise denied by the, accused. According to the accused, Sahi Ram PW and two others were, engaged with him in doing the business of opium smuggling. Sahi Ram and one other person misappropriated goods worth Rs. 5000 whereupon there was a dispute between the accused and Sahi Ram. The accused added that he had been falsely implicated in this case at the instance of Sahi Ram. The trial court held that document PD wherein the. accused had made a confession about his having murdered Dhianu and Nanti had been voluntarily got written by the accused. it was further held that the accused had made an oral confession about his guilt to Sahi Ram PW. The prosecution allegation that the ornaments belonging to the deceased persons were found in possession of the accused and had been pawned by, him was also accepted by the trial court. It was also held by the trial court that the accused had stayed at the shop of Parma Nand in village Paliara on the day preceding the occurrence and that he had gone from that shop towards the house of the deceased. The evidence of Parma Nand that the accused had shouted to him from outside the shop at mid night hour and that he had thereafter gone away was not accepted by the trial court. On appeal and reference, the High Court upheld the finding of the trial court with regard to the confession of the accused contained in letter PD. The High Court also agreed with the trial court that the accused had made confession to Sahi Ram as contained in Sahi Ram 's letter PEEE. The, High Court further upheld the findings of the trial court regarding the stay of the accused with Parma Nand before the occurrence. The High Court agreed with the trial court that the evidence of Parma Nand regarding the shout of the accused at mid night hour from outside the shop could not be accepted. The 728 High Court, however, disagreed with the trial court regarding its findings of the possession of silver ornaments, belonging to the two deceased persons by the accused after the occurrence. As regards the recovery of dhangra, the High Court held that the same was not shown to have been recovered from the possession of the accused. In appeal before us, Mr. Yogeshwar Prasad has assailed the findings of the High Court on the basis of which the High Court arrived at the conclusion of the, guilt of the accused. It has been urged that the evidence adduced in support of those findings is innately unconvincing and it is not safe to base the conviction of the accused on a capital charge upon such evidence. As against that, Mr. Khanna on behalf of the State has supported the findings of the High Court and has urged that no case has been made for interference with those findings. It cannot be disputed that Dhianu and Nanti were the victims of a murderous assault. Dr. Jain, who performed the post mortem examination on the two dead bodies, found the following two injuries on the body of Dhianu: "Injury (1). A sharp wound injury over the left side of the skull. Injury over the scalp is running from outer angle of the left eye to the middle of the, forehead, reaching I" above the hair line. The whole socket of the left eye is ruptured, frontal bone and part of the parietal bone are completely fractured around the course of the wound. Wound is 5 1/2 broad and " above the left eye. Scalp and skull is completely separated from the line of wound due to decomposition. Whole cranial cavity is seen through the wound. Whole of brain matter and meanings have sloughed out. Eye ball is also eaten up. (2) A sharp wound over the forehead running from the bridge of the nose going towards the right frontal prominence. Wound is 4 1/2" long tapering at both the ends and I" wide in the centre of the wound. Margins are even. Bones around the Wound are completely fractured. Maggots from the wound coming and going out. The rest of the parts of the body were normal except that they were in a state as described above. " The following three injuries were found on the body of Nanti: "A sharp wound over the scalp, starting from forehead on right side 1/4 from upper margin of middle of right eye ,to, the right parietal bone on the same side Wound is ending near the middle of parietal bone. Wound is 7 1/2" long and tapering at both the ends. Wound is I" apart at the prominence of the right frontal bone. Skull underneath the wound is completely fractured. Due to this, injury, whole in= bones of right eye and bones of the bridge of nose is, completely fractured. Pieces of bones are clearly seen in the hollow of the skull. And one can nicely peep into 729 the hollow of skull by making wound apart by fingers. Margins of the wound are even. (2) A sharp cut wound of 8" size, starting from 1 1/2" above the middle of left eye having a semilunar shape, reaching to the most prominent part of the, occipital bone. Wound is tapering at both the ends, margins are even. Scalp and skull is completely apart. Skull during the course of wound is completely fractured and depressed at the places. (3) Neck injury. A deep sharp wound starting from the right angle of the mandible to the middle of the neck and reaching to I" short of laryngeal prominence, wound is 2 1/2" deep at the angle of the mandible and tapering towards the middle of neck. All underlying structures, nerves, arteries, veins are cut, laryngeal prominence is also fractured Wound is 3" long and 1/2" broad." According to Dr. Jain, the injuries on the bodies of Dhianu and Nanti had been caused with a heavy sharp weapon. The injuries were sufficient in the ordinary course of nature to cause death. The case of the prosecution is that the injuries to Dhianu and Nanti deceased were caused by the accused. The accused has, however, denied this allegation. In order to bring the charge home to, the accused, the prosecution led evidence on a number of points. The High Court accepted the prosecution allegation in this respect and. based its conclusion upon the following three pieces of evidence : (1) The evidence of Parma Nand that the accused had stayed with him on September 29, 1968 and had on the evening of that day proceeded towards the house of Dhianu deceased after he had been shown the way by Parma Nand. (2) The confession of the accused contained in letter PD. (3) The extra judicial confession made by the accused to Sahi Ram incorported in letter PEEE. We may first deal with the deposition of Parma Nand (PW 14). The deposition consists of three parts. The first part relates to the stay of the accused with Parma Nand at his shop in village Paliara on September 28 and 29, 1968 when some fish and liquor are stated to have been taken by the accused and Parma Nand. This part of the deposition relates to an innocuous circumstance and hardly connects the accused with the crime. The second part of the deposition is to the effect that the accused on the evening of September 29, 1968 told Parma Nand that he had to go to the house of Dhianu and that Parma Nand showed at the instance of the accused the way which leads to the house of Dhianu at a distance of three or four miles from the shop of Parma Nand. We find it difficult to accept this part of the deposition of Parma Nand. Parma Nand admits that he came to know of the murder of Dhianu and Nanti about four days after those persons were found to have been murdered. It would, therefore, follow that Parma Nand came to know ' of 730 the murder of Dhianu and Nanti on or about October 4, 1968. Had the accused left for the house of Dhianu deceased on the evening of September 29, and had Parma Nand PW come to know that Dhianu and Nanti were murdered in their house, this fact must have aroused the suspicion of Parma Nand regarding the complicity of the accused. Parma Nand, however, kept quiet in the matter and did not talk of it. The statement of Parma Nand was recorded by the police on December 11, 1968. If a witness professes to know about a gravely incriminating circumstance against a person accused of the offence of murder and the witness keeps silent for over two months regarding the said incriminating circumstance against the accused, his statement relating to the incriminating circumstance, in the absence of any cogent reason, is bound to lose most of its value. No cogent reason has been shown to us as to why Parma Nand kept quiet for over two months after coming to know of the murder of Dhianu and Nanti about the fact that the accused had left for the, house of the deceased shortly before the murder. We are, therefore, not prepared to place any reliance upon the second part of the deposition of Parma Nand. The third part of the deposition of Parma Nand PW pertains to the shout of the accused from outside the shop of Parma Nand at about mid night hour on the night of occurrence. This part of the deposition has not been accepted by the trial court and the High Court and we find no valid reason to take a different view. Coming to the confession of the accused, which is alleged to be incorporated in letter PD, we find that the question which arises for consideration is whether the letter sent by the accused to the Deputy Commissioner contained confession about his having murdered Dhianu and Nanti. The fact that a registered letter purporting to be from the accused was received in the office of the Deputy Commissioner cannot be disputed. The controversy before us has, however, ranged on the point whether the letter contained any confession regarding the murder of Dhianu and Nanti by the accused or whether that portion of the letter has been subsequently inserted. In this respect we find that letter PD is on loose leaves. It is only the first leaf of the letter which bears the stamp of the office of the Deputy Commissioner, while the remaining leaves have not been stamped. In the circumstances, it was not difficult to replace or add some other leaves. According to PW Sundar Singh, who was working as postmaster at Kurag during the relevant days, the letter addressed by the accused to the Deputy Commissioner consisted of 18 or 19 pages. Letter PD produced at the trial consists of 22 pages. PW 21 Mehta, Superintendent of Deputy Commissioner 's office, has deposed that on receipt of letter PD, he read that letter. An entry was then made in the diary that letter PD related to the subject of jail dispute. Had the letter addressed by the accused to the Deputy Commissioner contained confession about a double murder committed by the accused, it is difficult to believe that the Superintendent of Deputy Commissioner 's office would have after reading the letter kept quiet and not brought it to the notice of the authorities concerned. The fact that no action was taken on the letter till it was taken into possession by the police on January 1, 731 1969 lends support to the contention that letter PD did not contain the confession. The portion of the letter relating to the confession is also somewhat incongruous with the entire tenor and context 'of the letter. The letter appears to have been sent by the accused to the Deputy Commissioner to show that after his release from jail in 1967, the accused had turned a new leaf and he wanted the Deputy Com missioner to give him help and relief so that the accused might rehabilitate himself and support his family. It is not likely that a person asking for relief would make a confession that after his release from jail, he has committed two murders. The circumstances in which the accused is stated to have got letter PD written from Kedar Nath (PW 2) are also rather peculiar. According to Kedar Nath, the accused compelled Kedar Nath at the point of gun to write that letter. The accused also told Kedar Nath not to disclose the contents of the letter to any one. It is not clear as to why the accused should ask Kedar Nath to keep the matter secret when he was himself, according to letter PD, making a confession about his having committed the crime of two murders. Apart from that, if Kedar Nath came to know on November 22, 1968 that the accused had committed the murder of Dhianu and Nanti, his failure to make any statement IQ the police till December 24, 1968 regarding the confession made by the accused to the witness would deprive his evidence of much of its value. We, therefore, find it difficult to act upon the confession incorporated in letter PD. The last piece of evidence upon which the High Court has maintained the conviction of the accused consists of the confession of the accused contained in letter PEEE sent by Sahi Ram (PW 4) to the Station House Officer Renuka. The first question which arises for consideration in respect of letter PEEE is whether it is admissible in evidence. Section 162 of the Code of Criminal Procedure reads as, under : 162. (1) No statement made by any person to a police officer in the course of. an investigation under this Chapter shall, if reduced into writing, be signed by the person making it; nor shall any such statement or any record thereof, whether in a police diary or otherwise, or any part of such statement or record, be used for any purpose (save as hereinafter provided) at any inquiry or trial in respect of any offence, under inve stigation it the time when such statement was made : provided that when any witness is called for the prosecution in such inquiry or trial whose statement has been reduced into writing as aforesaid, any part of his statement, if duly proved, may be used by the accused, and with the permission of the Court, by the prosecution to contradict such witness in the manner provided by Section 145 of the and when any part of such statement is 732 so used, any part thereof may also be, used in the re examination of such witness, but for the purpose only of explaining any matter referred to in his cross examination. (2) Nothing in this section shall be deemed to apply to any statement falling within the provisions of Section 32, clause (1) of the , or to affect the provisions of Section 27 of that Act." Bare perusal of the provision reproduced above makes it plain that the statement made by any person to a police officer in the course of an investigation cannot be used for any purpose except for the purpose of contradicting a witness, as mentioned in the proviso to sub section (1), or for the purposes mentioned in sub section (2) with which we are not concerned in the present case. The prohibition contained in the section relates to all statements made during the course of an investigation. Letter PEEE which was addressed by Sahi Ram to Station House Officer was in the nature of narration of what, according to Sahi Ram, he had been told by the accused. Such a letter, in our opinion, would constitute statement for the purpose of section 162 of the Code of Criminal Procedure. The prohibition relating to the use of a statement made to a police officer during the course of an investigation cannot be set at naught by the police officer not himself recording the statement of a person but having it in the form of a communication addressed by the person concerned to the police officer. If a statement made by a person to a police officer in the course of an investigation is inadmissible, except for the purposes mentioned in section 162, the same would be true of a letter containing narration of facts addressed by a person to a police officer during the course of an investigation. It is not permissible to circumvent the prohibition contained in section 162 by the investigating officer obtain a written statement of a person instead of the investigating officer himself recording that statement. It has been argued by Mr. Khanna on behalf of the State that at the time letter PEEE was addressed by Sahi Ram to the police, no investigation had been made by the police against the accused and, as such, the aforesaid letter cannot be held to be inadmissible. This contention, in our opinion, is wholly devoid of force. The restriction placed by section 162 on the use of statement made during the course ,of investigation is in general terms. There is nothing in the section to show that the investigation must relate to any particular accused before a statement to the police pertaining to that accused can be held to be inadmissible. Reference has been made by Mr. Khanna to the case of Sita Ram vs State of Uttar Pradesh( ') wherein it was held by majority that a letter addressed by the accused to a sub inspector of police containing his confession was not inadmissible under section 25 of the . There is nothing in the aforesaid judgment to show that the letter in question had been written during the course of the (1) [19661 Supp. section C. R. 265. 733 investigation of the case. As such, this Court in that cast did not consider the question as to whether the letter in question wag inadmissible under section 162 of the Code of Criminal Procedure. As such, the State cannot derive much help from that authority. We would, therefore, hold that letter PEEE is inadmissible in evidence. Although letter PEEE has been held by us to be inadmissible we would still have to deal with the oral deposition of Sahi Ram that the, accused had made a confession to him on November 28, 1968. The version of the accused in this respect is that Sahi Ram is inimical to him as he had a dispute with him because of some misappropriation committed by Sahi Ram in connection with the smuggling of opium. According to Sahi Ram, he happened to meet the accused on November 28, 1968 when the accused made a confession to him about his having committed the murder of Dhianu and Nanti. The story about the gratuitous confession made by the accused to Sahi Ram, in our opinion, hardly inspires confidence. It is not the case of the prosecution that the police was after the accused and that the accused in that connection went to Sahi Ram to seek his help and made a confession to him. Sahi Ram is the son of a village lambardar. It has been argued on behalf of the accused appellant that the police, with a view to see that the crime relating to the murder of Dhianu and Nanti might not remain untraced, utilised the services of Sahi Rain for bringing in the evidence regarding the extra judicial confession of the accused. Looking to all the circumstances we find this contention to be not devoid of all force. Mr. Khanna submits that both the trial court and the High Court have accepted the evidence of Sahi Ram and we should not interfere with the concurrent finding in this respect. We find it difficult to accede to this submission because we find that both the trial court as well as the High Court were influenced by the fact that exhibit PEEE was admissible in evidence. As letter PEEE has been held by us to be not admissible and as we find that the statement of Sahi Ram about the extra judicial confession is otherwise also lacking in credence, there should not arise any difficulty in this Court disaggreeing with the above finding of the trial court and the High Court. Mr. Khanna on behalf of the State has also tried to assail the finding of the High Court regarding the possession of silver ornaments of the two deceased persons by the accused. In our opinion, the finding of the High Court in this respect is based upon the appraisement of the evidence on record and there is no valid ground to disturb it. Observations in a recent decision of this Court, Shivaji Sahabrao Bobade & Anr. vs State of Maharashtra( ') to which reference has been made during arguments were not intended to make a departure from the rule of the presumption of innocence of the accused and his entitlement to the benefit of reasonable doubt in criminal cases. One of the cardinal principles which has always to be kept in view in our system (1) Cr. App. Ho.26 of 1970 decided on August 27, 1973 734 of administration of justice for criminal cases is that a person arraigned as an accused is presumed to be innocent unless that presumption is rebutted by the prosecution by production of evidence as may show him to be guilty of the offence with which he is charged. The burden of proving the guilt of the accused is upon the prosecution and unless it relieves itself of that burden, the courts cannot record a finding of the guilt of the accused. There are certain cases in which statutory presumptions arise regarding the guilt of the accused, but the burden even in those cases is upon the prosecution to prove the existence of facts which have to be present before the presumption can be drawn. Once those facts are shown by the prosecution to exist, the court can raise the statutory presumption and it would, in such an event, be for the accused to rebut the presumption. The onus even in such cases upon the accused is not as heavy as is normally upon the prosecution to prove the guilt of the accused. If some material is brought on the record consistent with the innocence of the accused which may reasonably be true, even though it is not positively proved to be true, the accused would be entitled to acquittal. Leaving aside the cases of statutory presumptions, the onus is upon the prosecution to prove the different ingredients of the offence and unless it discharges that onus, the prosecution cannot succeed. The court may, of course, presume, as mentioned in section 114 of the , the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business. in their relation to the facts of the particular case. The illustrations mentioned in that section, though taken from different spheres of human activity, are not exhaustive. They are based upon human experience and have to be applied in the context of the facts of each case. The illustrations are merely examples of circumstances in which certain presumptions may be made. Other presumptions of a similar kind in similar circumstances can be made under the provisions of the section itself Whether or not a presumption can be drawn under the section in a particular case depends ultimately upon the facts and circumstances of each case. No hard and fast rule can be laid down. Human behaviour is so complex that room must be left for play in the joints. It is not possible to formulate a series of exact propositions and confine human behaviour within straitjackets. The raw material here is far too complex to be susceptible of precise and exact propositions for exactness here is a fake. Another golden thread which runs through the web of the administration of justice in criminal cases is that if two views are possible on the evidence adduced in the case, one pointing to the guilt of the accused and the other to his innocence, the view which is favourable to the accused should be adopted. This principle has a special relevance in cases wherein the guilt of the accused is sought to be established by circumstantial evidence. Rule has accordingly been laid down that unless the evidence adduced in the case is consistent only with the hypothesis of the guilt of the accused and is inconsistent with that of his innocence, the court should refrain from recording a finding of guilt of the accused. It is also an accepted rule that in case the 73 5 court entertains reasonable doubt regarding the, guilt of the accused, the accused must have the benefit of that doubt. Of course, the doubt regarding the guilt of the accused should be reasonable : it is not the doubt of a mind which is either so vacillating that it is incapable of reaching a firm conclusion or so timid that it is hesitant and afraid to take things to their natural consequences. The rule regarding the benefit of doubt also does not warrant acquittal of the accused by resort to surmises, conjectures or fanciful considerations. As mentioned by us recently in the case of State of Punjab vs Jagir Singh,( ') a criminal trial is not like a fairy tale wherein one is free to give flight to one 's imagination and phantasy. It concerns itself with the question as to whether the accused arraigned at the trial is guilty of the offence with which he is charged. Crime is an event in real life and is the product of interplay of different human emotions. In arriv ing at the conclusion about the guilt of the accused charged with the commission of a crime, the, court has to judge, the evidence by the yardstick of probabilities, its intrinsic worth and the animus of witnesses. Every case in the final analysis would have to depend upon its own facts. Although the benefit of every reasonable doubt should be given to the accused, the courts should not at the same time reject evidence which is ex facie trustworthy, on grounds which are fanciful or in the nature of conjectures. It needs all the same to be re emphasised that if a reasonable doubt arises regarding the guilt of the accused, the benefit of that cannot be withheld from the accused. The courts would not be justified in withholding that benefit because the acquittal might have an impact upon the law and order situation or create adverse reaction in society or amongst those members of the society who believe the accused to be guilty. The guilt of the accused has to be adjudged not by the fact that a vast number of people believe him to be guilty but whether his guilt has been established by the evidence brought on record. Indeed, the courts have hardly any other yardstick or material to adjudge the guilt of the person arraigned as accused. Reference is sometimes made to the clash of public interest and that of the individual accused. The conflict in this respect, in our opinion, is more apparent than real. As observed on page 3 of the book entitled "The Accused" by J.A. Coutts 1966 Edition, "When once it is realised, however, that the public interest is limited to the conviction, not of the guilty, but of those proved guilty, so that the function of the prosecutor is limited to securing the conviction only of those who can legitimately be proved guilty, the clash of interest is seen to operate only within a very narrow limit, namely, where the evidence is such that the guilt of the accused should be established. In the case of an accused who is innocent, or whose guilt cannot be proved. the public interest and the interest of the accused alike require an acquittal. " It is no doubt true that wrongful acquittals are undesirable and shake the confidence of the people in the judicial system, much worse, however, is the wrongful conviction of an innocent person. The consequences of the conviction of an innocent person are far more (1) Cr. 7 of 1972 decided on August 6, 1973 7 3 6 serious and its reverberations cannot but be felt in a civilized society. Suppose an innocent person is convicted of the offence of murder and is hanged, nothing further can undo the mischief for the wrong resulting from the unmerited conviction is irretrievable. To take another instance, if an innocent person is sent to jail and undergoes the sentence, the scars left by the miscarriage of justice cannot be erased by any subsequent act of expidation. Not many persons undergoing the pangs of wrongful conviction are fortunate like Dreyfus to have an Emile Zola to champion their cause and succeed in getting the verdict of guilt annulled. All this highlights the importance of ensuring. as far as possible, that there should be no wrongful conviction of an innocent person. Some risk of the conviction of the innocent, of course, is always there in any system of the administration of criminal justice. Such a risk can be minimised but not ruled out altogether. It may in this connection be apposite to refer to the following observations of Sir Carleton Allen quoted on page 157 of "The Proof of Guilt" by Glanville Williams, Second Edition: "I dare say some sentimentalists would assent to the proposition that it is better that a thousand, or even a million, guilty persons should escape than that one innocent person should suffer; but no responsible and practical person would accept such a view. For it is obvious that if our ratio is extended indefinitely, there comes a point when the whole system of justice has broken down and society is in a state of chaos. " The fact that there has to be clear evidence of the guilt of the accused and that in the absence of that it is not possible to record a finding of his guilt was stressed by this Court in the case of Shivaji Sahabrao Bobade & Anr. (supra) as is clear from the following observations : "Certainly it is a primary principle that the accused must be and not merely may be guilty before a court can convict and the mental distinction between 'may be ' and 'must be ' is long and divides vague conjectures from sure considerations". As a result of the above, we accept the appeal, set aside the judgments of the. trial court and the High Court and acquit the accused. P.B.R. Appeal allowed. [/INST]Prior to the Hindu Seccession Act, 1956, the parties were governed by the Aliyasantana law. The customary Aliyasantana law was known by two different names, namely marumakattayam and aliyasantana which literally connotes inheritance in the line of nephews ' or sisters ' sons respectively. The basic principle underlying the joint family composition, otherwise known as kutumba or tarwad, is the matriarchal system, in which devolution is through females. A kutumba under the customary Aliyasantana law was a family corporation; every member, male or female, born in it has equal rights in the property owned by it. On the death of any member of the kutumba, his or her interest in the kutumba property devolved on the remaining members by survivorship. Partition could be effected only at the instance of all the adult members. The children of the female members alone were the coparceners in the kutumba, but not the wife and children of the male members. The Madras Aliyasantana Act, 1949, defined and amended in certain respects the customary Aliyasantana laws relating to, inter alia, intestate succession and partition and in other respects saved the prevailing laws. Thereafter, the Hindu Secession Act, 1956, came into operation whereby the antecedent Hindu Law ceased to have effect to the extent that it was either provided for or was inconsistent with the Act. The first appellant and the other appellants are the widow and sons respectively of C, while the first respondent and the other respondents are C 's sister and her sons respectively. C executed a will on January 15, 1957 bequeathing his interest in favour of the appellants. On January 25, 1957, the respondents issued a notice to C stating that he was the manager of the undivided family, that he was a missanthathi kavaru while the respondents were santhathi kavaurs, as such there were only two kavarus and that they had decided to divide the properties between C and themselves. They, therefore, demanded under the Madras Act a share belonging to their kavaru from out of the entire movable and immovable properties of the family. C replied on January 24, 1957, stating that the respondents ' family was not a santhathi kavaru but a nissanthathi kavaru as the first respondent was mere than fifty years old on the date of the said notice and had no female issue. He admitted, however, that there are only two kavarus in the family, and as both the kavarus were nissanthathi kavarus, each kavaru was entitled to a absolute share in the kutumba properties. He also stated that he bad no objection to the claim for partition made by the respondents and was prepared to effect it provided the respondents cooperated. C subsequently died on February 13, 1957, after the coming into force of the Succession Act. On March 23 1957, the appellants gave a notice to the respondents claiming a separate share under C 's will. The respondents replied to the notice on the same day denying that the appellants had any share because according to them C was entitled only to a life interest under the Aliyasantana law. The appellants plaintitfs then filed a suit against the respondents defendants for partition, separate possession of their 7/20th share of the suit Properties and for mesne profits. The trial court decreed the suit but the High Court dismissed. In appeal by special leave to this Court, the questions that arose for consideration were : (i) whether the rights of the parties, are to be determined in accordance with the Aliyasantana law or under the Succession Act; (ii) what interest C had, 708 under the Madras Act, in the joint family properties on the date of his death; (iii) whether a partition had been effected; (iv) whether C 's will is effective in respect of his share; (v) whether he had a life interest in the properties; and (vi) whether, under the Succession Act. that interest had been enlarged into an absolute interest which could be bequeathed by a will. Dismissing the appeal, HELD : (i) From the definitions of 'kavaru ' [section 3 (b) (i) & (ii) ], 'Kutumba ' section 3(c), 'Nissanthathi kavaru ' section 3(f) and 'Santhathi Kavaru section 3(h), under the Madras Act, it is apparent that the, basic concept of inheritance through a female has been maintained. The presence of even one female in the kavaru will have the effect of continuing the kavaru, while the absence of a female would amount to the absence of progeny. [712D] (ii) Under the provisions of Sections 35 and 36 of the Madras Act, any kavaru represented by the majority of its major members can claim its share of all the properties of the kutumba over which the kutumba has power of disposal. It may thereafter take its share and separate from the kutumba provided that where a kavaru consists of only two persons, such a claim can be made by either of them. But no kavaru can make such a claim during the life time of any common ancestress who is common to such kavaru and to any other kavaru or kavarus of the kutumba who has not completed 50 years unless she has signified her consent in writing or 2/3 of the major members of the kavaru have joined in making the claim for partition. The common ancestress can however on her own volition claim a partition. The share obtained by the kavaru on partition is with all the incidents of a kavaru property which is divisible into certain proportion for a period of 15 years from the commencement of that Act, and thereafter, is divisible per stirpes and each kavaru gets a share on the basis. The same position applies to every kavaru possessing separate property as if it were a kutumba. However, u/s 36(3), if at the time of the partition any kavaru taking a share is a nissanthathi kavaru it would have only a life interest in the property allotted to it, if the kutumba from which it separated has at least one family member who has not completed the age of 50 years or where the kutumba broke up into a number of kavarus at partition, if at least one such kavaru is the santhathi kavaru. But if there is no such female member or santhathi kavaru, the nissanthathi kavaru would have an absolute interest in the properties allotted to it. The properties allotted to a nissanthithi kavaru at a partition and in which it had only a life interest at the time of the death of the last of its members, devolves upon the kutumba or where the kutumba is broken up at the same or at a sub sequent partition into a number of kavarus, upon the nearest santhathi kavaru or kavarus. [713H] Gupte, Hindu Law of Succession, 2nd edition, at page 484, referred to. (iii) The provisions of the Madras Act, particularly section 36(2)(h) with its explanation without doubt indicates the time when a share of a kavaru is ascertained on a partition in the family and whether the property is divided by metes and bounds or not the share in the property has to be determined as on the date when the claim is made. In the present case, the claim was made on January 22, 1957, and therefore, the share of the parties has to be determined as on that date even though the physical partition of the properties by metes and bounds may take place some time later. [715B] (iv) Under the provisions of the Succession Act, on the demand for partition, there is a division in status, and though partition by metes and bounds may not have taken place, that family can thereafter never be considered as an undivided family nor can the interest of a coparcener be considered to be an undivided interest. It is a well established principle in the Hindu Law that a member of a joint Hindu family has a right to intimate his definite and unambiguous intention to the other members of the joint family that he will separate himself from the family and enjoy his share in severally. Such an unequivocal intention communicated to the other will amount, to a division in status and on such division, he will have a right to get the division of his specific share of the joint family property in which till then all of them had an undivided coparcenary interest, and in which none of them could claim that he had any right 709 to any specific part thereof. Once the decision to divide has been unequivocally expressed and clearly intimated to his co sharers, whether or not the other co sharers agree, an immediate severance of the joint status is effected and his right to obtain and possess the share to which he is admittedly entitled becomes specified. This principle enunciated in Girja Bai vs Sadashiv Dhundiraj and others L.R. 43 I.A. 151 and Appovier vs Ramasubbier [1866] 11 M.I.A. 75 has been enacted in section 36(2) (h) of the Madras Act which specifies the point of time for ascertaining the share when a division in status is effected. The term "partition" in sub section (3) of section 36 therefore, must be given the same meaning as in Sec. 36(2)(h) of the Madras Act. If so on a demand for partition, a severance of status takes place and the share to which each is entitled in the undivided properties is ascertained. In the case of an Aliyasantana kutumba, this Court, in Panduraja and others vs Dhanawanti and others, held that if the jointness of the kutumba had been disrupted, there is no question on claiming any partition as there is no kutumba in existence as in the present case. Similarly, on the same parity of reasoning, when there are two kavarus, demand for partition would disrupt them within the meaning of section 7(2) of the Succession Act. If he had no undivided interest in the property, his interest cannot be enlarged into an absolute estate nor can his interest devolve upon his heirs by intestate succession. Prior to the Succession Act, neither under the customary law nor under the Madras Act, nor under the Indian Succession Act, the interest of a coparcener in an Aliyanasantana kutumba could have been disposed of by testamentary disposition. But section 30 of the Succession Act made a definite change in the law by enabling a member of an undivided Aliyanasanta kutumba or of a kavaru to dispose of his interest in the kutumba or kavaru properties by a will. [717H] Karthiyayini Kunehi vs Minakshi Ammal [1935] M.L.F. 114 and Mahalinga Sherty vs Jataja Shedthi and others [1956] 2 M.L.F. 446, approved. Padmaraja and others vs Dhanavanthi and Ors. [1972] 2 S.C.C. 100, 104, applied. Girja Bai vs Sadashiv Dhundiraj and others L.R. 43 I.A. 151 and Appovier vs Ramasubbier [1866] 11 M.I.A. 75, referred to. (v) In the present case, there is neither a kutumba nor can C be a kavaru. The two kavarus after the division in status, became only one kavaru, viz. that of respondent No. 1 (C 's sister). C will not be a kavaru within the meaning of section 3(b) of the Madras Act because u/s 3(b)(ii), there being no female line, it is only C 's mother who can be a kavaru but not C. In fact, a male can never be a kavaru either under the customary law or under the Madras Act. When Sec. 7(2) of the Succession Act refers to kavaru in relation to its "undivided interest ', it is the kavaru under the customary law or the Madras Act and not a deemed kavaru for the purpose of partition. If C is not a kavaru, there is no property of a kavaru, which can be disposed of under sec. 30 of the Succession Act. Even under the explanation to that section, the life interest which C had on severance of status is not property capable of being disposed of by a will nor could it devolve by survivorship. He is no longer a kavaru and had, therefore, no interest in the property of the kavaru. C 's live interest is also not enlarged u/s 7(2) of the Succession Act into an absolute interest, because a male with a life interest under the Aliyasantana law being in the same position as a female limited owner under the Hindu law, the Succession Act while enlarging the right of the latter under sec. 14 into an absolute interest did not specifically provide for the enalrging of the right of the former. In the absence of any such specific provisions, it must be held that C 's interest enured till his life time only. [721] Dundara Adapa and others vs Girija & Ors. I.L.R. , applied. </s>
<s>[INST] Summarize the judgementCivil Appeal No. 3121 of 1981. From the Judgment and Order dated 28 9 1979 of the Madhya Pradesh High Court in Misc. Petition No. 408 of 1978. M.K. Ramamurthi and H.S. Parihar for the Appellants. Maheshwari T. V.S.N. Chari and R.N. Poddar for the Respondents. The Judgment of the Court was delivered by KHALID, J. The question involved in this appeal brings to fore how the equality doctrine embodied in the Constitution of India is attempted to be flouted by some authorities under cover of artificial divisions, dividing persons doing the same work into two 103 groups without any justification and denying to one group by way of pay and emoluments what the other group gets. We do not propose to examine the width of the quality provisions contained in article 39(d) in all its manifold aspects but would like to restrict it in its application to the facts of this case, in our attempt to see whether the High Court was justified or not, in declining relief to the petitioners. Now the facts: This appeal by special leave is directed against the Judgment of a Division Bench of the High Court of Madhya Pradesh at Jabalpur in Miscellaneous Petition No. 408 of 1978, dismissing the petition challenging the Order of the Government of India accepting the recommendations of the Third Pay Commission dividing Senior Draughtsmen into two groups with different pay scales, which according to the appellants violated Articles 14 and 16 of the Constitution. The Appellants Nos. 1 to 8 are Senior Draughtsmen in the Ordnance Factories under the Ministry of Defence, Department of Defence Production and the Director General of Ordnance Factories. Appellants Nos. 1 to 5 were promoted on different dates to the post of senior Draughtsman when they were working as Draughtsmen. Appellants Nos. 6, 7 & 8 were directly recruited as Senior Draughtsmen in the Vehicle Factory, Jabalpur on different dates. Appellant No. 9 is a registered Association of the Employees working in the Design/Drawing Office of the Defence Establishments under the Ministry of Defence, etc. There are 33 establishments under the Ministry of Defence Production and Director General of ordnance Factories, Calcutta. In these establishments, there are two categories of Drawing Office Staff; (1) Senior Draughtsman and (2) Draughtsman. Senior Draughtsmen are either directly recruited or promoted from the post of Draughtsmen. At all relevant times, all the Senior Draughtsmen throughout the above establishments, were drawing the same pay scale. The first and the second Pay Commission set up by the Government of India, recommended same scales of pay for all the Senior Draughtsmen. A Third Pay Commission was set up by the Government of India under the Chairmanship of Shri Raghubar Dayal, a retired Judge of the Supreme Court of India and consisting of three other members. One of the recommendations of this Pay Commission, related to the scales of pay of Draughtsmen and Senior Draughtsmen, 104 Draughtsmen were to be in the scale of Rs. 330 560 while the Senior Draughtsmen were divided into two groups with two scales of pay, Rs. 330 560 and Rs. 425 700. It is this division of Senior Draughtsmen that was under challenge before the High Court. Representations were made by the Petitioner against this grouping by the Third Pay Commission, and they pleaded that there should not be any discrimination in the pay scales of Senior Draughtsmen as was recommended by the Third Pay Commission. Similar representations were made by others also like Senior Rate Estimator, Senior Rate Fixer, Senior Planner and Supervisor etc. Some representations were accepted by the Government but not the representations made by the appellants ' Association. Aggrieved by this unhelpful attitude of the Government in not accepting their representation, the appellants moved the High Court under Article 226 of the Constitution, Their case before the High Court was that Senior Draughtsmen discharged identical duties and performed similar work. That being so there was little or no justification in putting 50% of them in a higher scale of pay and 50% others in a lower scale of pay. This grouping was without any intelligible differentia. The High Court referred to a decision of this Court in Kishori Mohanlal Bakshi vs Union of India(1) and sought support from it to deny relief to the petitioners. That was a case where the grouping of Income tax Officers as Class I and class II with different scales of pay and different channel of Promotion was questioned. This Court observed in that Judgment as follows: "It might very well be that "matters relating to employment or appointment to any office" in article 16(1) are wide enough to include the matter of promotion. Inequality of opportunity for promotion as between citizens holding different posts in the same grade may, therefore, be an infringement of article 16. Thus, if of the Income tax Officers of the same grade, some are eligible for promotion to a superior grade, and others are not, the question of contravention of article 16(1) may well arise. But no such question can arise at all when the rules make Income tax Officers of Class I, eligible for appointment as Assistant Commissioner, but make 105 Income tax Officers of Class II eligible for promotion as Income tax Officers of Class I but not for promotion to the post of Assistant Commissioners. There is no denial in such a case of equality of opportunity as among citizens holding posts of the same grade. As between citizens holding posts in different grades in Government service there can be no question of equality of opportunity. article 16 does not forbid the creation of different grades in the Government service. The abstract doctrine of equal pay for equal work has nothing to do with article 14. article 14, therefore, cannot be said to be violated whose the pay scales of Class I and Class II Income tax Officers are different though they do the same kind of work. Incremental scales of pay can be validly fixed dependent on the duration of an officers service. " The High Court also referred to the decisions of this Court in State of Punjab vs Joginder Singh(1), Unikat Saakunni Menon vs State of Rajasthan(2) and State of Mysore & Anr. vs P. Narsingh Rao(3) in which cases also certain grouping of employees were challenged as violative of article 14 & 16, which challenge was repelled by the Supreme Court. The High Court relied upon these decisions and held that "It is therefore evident that it was open to the Government to fix two different pay scales for Senior Draughtsmen," and that "It was for the Government to decide what pay scale should be provided to the different. classes of employees and simply because they have been provided different pay scales that would not amount to discriminations. " The High Court was told that all the Senior Draughtsmen did the same kind of work and discharged same or similar duties and that therefore there was no justification for a distinction being made between the two classes of Senior Draughtsmen, providing two different pay scales on the basis of seniority, Denial of the higher scale of pay to one class of Senior Draughtsmen, only on the ground of length of service was, according to the appellants, wrong. The Government brought in this classification, by its Order dated 1 7 1978, directing that only Senior Draughtsmen, holding that post on 31 12 1972, would be given the Senior scale and not 106 those who did not hold that post on 31 12 1972. This basis, the appellants, contended was unsupportable. These contentions did not appeal to the High Court. While repelling the arguments of the Petitioners, the High Court observed that "The petitioners are unable to show a single authority in support of their contention that all the persons doing the same work are entitled to same scale of pay. " It is the correctness of this decision that falls to be decided in this appeal. Before discussing the factual matrix of the case, we will refer to the Order passed by the Government of India on 27th January, 1978, which brought into effect this difference in the pay scale. The said Order reads as follows: "The undersigned is directed to refer to Sl. No. 32 of Part D, Section I, in the First Schedule to the Civilians in Defence Services (Revised Pay) Rules, 1973 and to say that the President is pleased to decide that, as recommended by the Third Pay Commission in para 81, Chapter 14, of their report, half the number of posts of Draughtsman in the DGOF Organisation on the present pay scale of Rs. 205 7 240 8 280 will be placed in the revised scale of Rs. 425 15 500 EB 15 560 20 700 and the remaining half in the revised scale of Rs. 330 10 380 EB 12 500 EB 15 560. . . . . On their allocation to the revised scale of Rs. 425 700 and Rs. 350 560, the existing Draughtsman in the present pay scale of Rs. 205 280 who are brought on to the revised scale of Rs 330 560 would continue to retain their present designation as a personal to them. The placement of the existing Draughtsman in the higher revised pay scale of Rs. 425 700 will be on the basis of seniority, subject to the rejection of the unfit. Any administrative instruction that may be considered necessary may be issued by you. These orders will take effect from 1 1 73. " It is pursuant to this Order that the change in the emoluments of the petitioners ' group of Draughtsmen was effected. 107 It has to be borne in mind that this differentiation is not based on any intelligible ground. The group of Draughtsmen entitled to the higher scale of pay, is not selected by any process nor is it based on any merit cum seniority basis, but is based only on seniority cum fitness. There is no denial anywhere that both these types of Draughtsmen do the same work and discharge the same functions and duties. According to the recommendations of the Third Pay Commission, a Draughtsman has to get Rs. 330 10 380 EB 12 500 EB 15 560, while Senior Draughtsman, like the appellants, who have become so on promotion, will continue to get the same scale of pay and not the higher scale of pay. In other words, the promoted persons like the appellants, are without any monetary benefit to them. The pay that they would get as Senior Draughtsman, would be the same as a Draughtsman would get under the Third Pay Commission. That is, for the same work and same functions, the appellants would get less pay than the other group of Senior Draughtsmen. The explanation is that this division is based on seniority. This cannot be accepted as sufficient to meet the requirements of law. By seniority, a Senior Draughtsman will get higher pay with the increments that he earns proportionate to the number of years he is in service. Here that is not the case. It is the classification of the Senior Draughtsmen into two groups, that is responsible for the higher pay. For this classification, the Government must be able to satisfy the Court of certain other tests which are non existent, in this case, since it is not in dispute that Senior Draughtsmen, belonging to the two Divisions, do equal and same work. In view of the total absence of any plea on the side of the respondents, that the Senior Draughtsmen who are placed in the advantageous group, do not perform work and duties more onerous or different from the work performed by the appellants group, it will have to be held that this grouping violates Article 14 of the Constitution. The High Court did not have the advantage of a decision of this Court in Randhir Singh vs Union of India & Ors.(1), to which one of us was a party, which evolved the equality doctrine embodied in Article 39(d) and read Article 14 into it; while considering the complaint of a driver who was originally in the Army but later employed as a driver constable in Delhi Police Force under the Delhi Administration and who was denied the same pay as was available to the other drivers in the service of the Delhi Administration. This Court 108 allowed the Writ Petition and directed the concerned authorities to pay the petitioners in that case, salary at least equal to the Drivers of the Railway Protection Force. Disagreeing with the plea, put forward by the Union of India this Court observed as follows: "The Counter Affidavit does not explain how the case of the drivers in the police force is different from that of the drivers in other departments and what special factors weighed in fixing a lower scale of pay for them. Apparently in the view of the respondents, the circumstance that persons belong to different departments of the Government is itself a sufficient circumstance to justify different scales of pay irrespective of their identity of their powers, duties and responsibilities. We cannot accept this view. If this view is to be stretched to its logical conclusion, the scales of pay of officers of the same rank in the Government of India may vary from department to department notwithstanding that their powers duties and responsibilities are identical. We concede that equation of posts and equation of pay are matters, primarily for the Executive Government and expert bodies like the Pay Commission and not for Courts but we must hasten to say that where all things are equal, that is where all relevant considerations are the same, persons holding identical posts may not be treated differentially in the matter of their pay merely because they belong to different departments. Of course, if officers of the same rank perform dissimilar functions and the powers, duties and responsibilities of the posts held by them vary, such officers may not be heard to complain of dissimilar pay merely because the posts are of the same rank and the nomenclature is the same. " This Court however observed that a differential treatment in appropriate cases can be justified, when there are two grades based on reasonable grounds, and stated as follows: "It is well known that there can be and there are different grades in a service, with varying qualification for entry into a particular grade, the higher grade often being a promotional avenue for officers of the lower grade. The higher qualifications for the higher grade, which may be 109 either academic qualifications or experience based on length of service reasonably sustain the classification of the officers into two grades with different scales of pay. The principle of equal pay for equal work would be an abstract doctrine not attracting article 14 if sought to be applied to them." With respect we agree with the conclusion arrived at in the above Judgment, that where all relevant considerations are the same, persons holding identical posts and discharging similar duties should not be treated differently. The case on hand is much stronger than the facts of the Randhir Singh 's case. In that case, the drivers belonged to two different departments. In this case, the Senior Draughtsmen, divided into two groups are in the same department doing identical and same work. It is not a case of different grades created on the ground of higher qualification either academic or otherwise or an entitlement by any other criteria laid down. The justification for this classification is by the mere accident of an earlier entry into service. This cannot be justified. The above decision of this Court has enlarged the doctrine of equal pay for equal work, envisaged in Article 39(d) of the Constitution of India and has exalted it to the position of a fundamental right by reading it alongwith Article 14. This exposition of law had given rise to some whispering dissent in that the doctrine had been extended beyond permissible limits. The observations that the abstract doctrine of equal pay for equal work has nothing to do with article 14, in the Judgment in Kishori Mohanlal Bakshi vs Union of India (supra), rendered by a Constitution Bench of this Court it is contended, may perhaps run counter to the observations in the decision referred above. We do not think it necessary on the facts of this case to dwelve at length upon the effect of this observation on a wider campus of service jurisprudence in the context of equal pay for equal work which will have to be attempted in an appropriate case. For the purposes of the case on hand, it is sufficient to note that the classification between two groups of Senior Draughtsmen is 110 without any basis. They do the same work, they perform the same duties, and as such the ratio of the decision in Randhir Singh 's case applies to this case with greater force. The Order passed by the Government of India on 27th January, 1978, implementing this classification violates article 14 of the Constitution and has to be struck down and we do so. In our opinion, it would be a great injustice to continue the appellants on the scales of pay of Draughtsmen even after promotion as Senior Draughtsmen, which is destructive of all incentive and initiative in the service. In our Judgment, the High Court was in error in declining relief to the appellants. We accordingly, set aside the Judgment of the High Court and allow this appeal and direct the Union of India to fix the scale of pay of appellants at Rs. 425 15 50 EB 15 560 20 640 EB 20 700. The appellants will be entitled to costs from the respondent No. 1. M.L.A. Appeal allowed. [/INST]Senior Draughtsmen in the Ordnance Factories under the Ministry of Defence are either directly recruited or promoted from the post Draughtsmen. At all relevant times all the Senior Draughtsmen throughout the above establishments were drawing the same pay scale of Rs. 205 280. While revising the pay scale of various categories of employees, the Third Pay Commission recommended that the Draughtsmen should be placed in the scale of Rs. 330 560. The Pay Commission also recommended that the Senior Draughtsmen should be divided into two groups and half the number of posts of Draughtsmen in the above organisations on the present pay scale of Rs. 205 280 be placed in the revised scale of Rs. 425 700 on the basis of seniority and the remaining half in the revised scale of Rs. 330 560. Pursuant to the aforesaid recommendation, the Government of India by its Order dated 1st July, 1978 directed that only those senior Draughtsmen who were holding that post on 31st December, 1972 would be given the senior scale of pay i.e. Rs. 425 700. The appellants who are senior Draughtsmen made representation to the Government of India against this grouping by the Third Pay Commission. As the representations were not accepted, the appellants challenged the Order of the Government before the High Court in a Writ Petition contending that all the Senior Draughtsmen did the same kind of work and discharged same or similar duties and therefore there was no justification for distinction being made amongst the Senior Draughtsmen, providing two different pay scales on the basis of seniority. The High Court dismissed the petition holding that it was open to the Government to fix two different pay scales for Senior Draughtsmen and that it was for the Government to decide what pay scale should be provided to the different classes of employees. 102 Allowing the appeal, ^ HELD: (1) Where all relevant considerations are the same, persons holding identical posts and discharging similar duties should not be treated differently. Therefore the Order passed by the Government of India implementing the impugned recommendation of the Third Pay Commission dividing the Senior Draughtsmen into two categories with two different pay scales on the basis of seniority violates Article 14 of the Constitution and is struck down. Randhir Singh vs Union of India and Ors. ; , followed. In the instant case the group of Draughtsmen entitled to the higher scale of pay is not selected by any process nor is it based on any merit cum seniority basis, but is based only on seniority cum fitness. Moreover, the Senior Draughtsmen divided into two groups are in the same Department doing identical and same work. It is not a case of different grades created on the ground of higher qualification either academic or otherwise or an entitlement by any other criteria. Thus the classification between the two groups of Senior Draughtsmen is without any basis. In view of the total absence of any plea on the side of the respondents that the Senior Draughtsmen who are placed in the advantageous group, do not perform work and duties more onerous or different from the works performed by the appellants group, it will have to be held that this grouping violates Article 14 of the Constitution. [107 E F] Kishori Mohanlal Bakshi vs Union of India, A.I.R. 1962 S.C. 1139; State of Punjab vs Joginder Singh, ; ; Unikat Sankunni Menon vs State of Rajasthan A.I.R. ; State of Mysore and Anr. vs P. Narsingh Rao ; , distinguished. </s>
<s>[INST] Summarize the judgementAppeal No. 517 of 1958. Appeal from the judgment and order dated October 31, 1957, of the Kerala High Court in O. P. No. 215 of 1957. G. B. Pai and Sardar Bahadur, for the appellant. Hardyal Hardy and D. Gupta, for the respondents. November 29. The Judgment of the Court was delivered by SHAH, J. C. A. Abraham hereinafter referred to as the appellant and one M. P. Thomas carried on business in food grains in partnership in the name and style of M. P. Thomas & Company at Kottayam. M. P. Thomas died on October 11, 1949. For the account years 1123, 1124 and 1125 M.E. corresponding to August 1947 July 1948, August 1948 July 1949 and August 1949 July 1950, the appellant submitted as a partner returns of the income of the firm as an unregistered firm. In the course of the assessment proceedings, it was discovered that the firm had carried on transactions in different commodities in fictitious names and had failed to disclose substantial income earned therein. By order dated November 29, 1954, the Income Tax Officer assessed the suppressed income of the firm in respect of the assessment year 1124 M.E. under the Travancore Income Tax Act and in respect of assessment years 1949 50 and 1950 51 under the Indian Income Tax Act and on the same day issued notices under section 28 of the Indian Income Tax Act in respect of the years 1949 50 and 1950 51 and 767 under section 41 of the Travancore Income Tax Act for the year 1124 M.E., requiring the firm to show cause why penalty should not be imposed. These notices were served upon the appellant. The Income Tax Officer after considering the explanation of the appellant imposed penalty upon the firm, of Rs. 5,000 in respect of the year 1124 M. E., Rs. 2,O00 in respect of the year 1950 51 and Rs. 22,000 in respect of the year 1951 52. Appeals against the orders passed by the Income Tax Officer were dismissed by the Appellate Assistant Commissioner. The appellant then applied to the High Court of Judicature of Kerala praying for a writ of certiorari quashing the orders of assessment and imposition of penalty. It was claimed by the appellant inter alia that after the dissolution of the firm by the death of M. P. Thomas in October, 1949, no order imposing a penalty could be passed against the firm. The High Court rejected the application following the judgment of the Andhra Pradesh High Court in Mareddi Krishna Reddy vs Income Tax Officer, Tenali (1). Against the order dismissing the petition, this appeal is preferred with certificate of the High Court. In our view the petition filed by the appellant should not have been entertained. The Income Tax Act provides a complete machinery for assessment of tax and imposition of penalty and for obtaining relief in respect of any improper orders passed 'by the Income Tax authorities, and the appellant could not be permitted to abandon resort to that machinery and to invoke the jurisdiction of the High Court under article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Tribunal. But the High Court did entertain the petition and has also granted leave to the appellant to appeal to this court. The petition having been entertained and leave having been granted, we do not think that we will be justified at this stage in dismissing the appeal in limine. On the merits, the appellant is not entitled to relief. The Income Tax Officer found that the appellant had, with a view to evade payment of tax, (1) 768 deliberately concealed material particulars of his income. Even though the firm was carrying on transactions in food grains in diverse names, no entries in respect of those transactions in the books of account were posted and false credit entries of loans alleged to have been borrowed from several persons were made. The conditions prescribed by section 28(1)(c) for imposing penalty were therefore fulfilled. But says the appellant, the assessee firm had ceased to exist on the death of M. P. Thomas, and in the absence of a provision in the Indian Income Tax Act whereby liability to pay penalty may be imposed after dissolution against the firm under section 28(1)(c) of the Act, the order was illegal. Section 44 of the Act at the material time stood as follows: "Where any business,. carried on by a firm. has been discontinued . every person who was at the time of such discontinuance . a partner of such firm,. shall in respect of the income, profits and gain of the firm be jointly and severally liable to assessment under Chapter IV for the amount of tax payable and all the provisions of Chapter IV shall, so far as may be, apply to any such assessment. " That the business of the firm was discontinued because of the dissolution of the partnership is not disputed. It is urged however that a proceeding for imposition of penalty and a proceeding for assessment of income tax are matters distinct, and section 44 may be resorted to for assessing tax due and payable by a firm business whereof has been discontinued, but an order imposing penalty under section 28 of the Act cannot by virtue of section 44 be passed. Section 44 sets up machinery for assessing the tax liability of firms which have discontinued their business and provides for three consequences, (1) that on the discontinuance of the business of a firm, every person who was at the time of its discontinuance a partner is liable in respect of income, profits and gains of the firm to be assessed jointly and severally, (2) each partner is liable to pay the amount of tax payable by the firm, and (3) that the provisions of Chapter, so far as may be, apply to such assessment. The liability declared by section 44 is 769 undoubtedly to assessment under Chapter IV, but the expression "assessment" used therein does not merely mean computation of income. The expression "assessment" as has often been said is used in the Income Tax Act with different connotations. In Commissioner of Income Tax, Bombay Presidency & Aden vs Khemchand Ramdas (1), the Judicial Committee of the Privy Council observed: "One of the peculiarities of most Income tax Acts is that the word "assessment" is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the tax payer. The Indian Income tax Act is no exception in this respect. . ". A review of the provisions of Chapter IV of the Act sufficiently discloses that the word "assessment" has been used in its widest connotation in that chapter. The title of the chapter is "Deductions and Assessment". The section which deals with assessment merely as computation of income is section 23; but several sections deal not with computation of income, but determination of liability, machinery for imposing liability and the procedure in that behalf. Section 18A deals with advance payment of tax and imposition of penalties for failure to carry out the provisions there in. Section 23A deals with power to assess individual members of certain companies on the income deemed to have been distributed as dividend, section 23B deals with assessment in case of departure from taxable territories, section 24B deals with collection of tax out of the estate of deceased persons; section 25 deals with assessment in case of discontinued business, section 25A with assessment after partition of Hindu Undivided families and sections 29, 31, 33 and 35 deal with the issue of demand notices and the filing of appeals and for reviewing assessment and section 34 deals with assessment of incomes which have escaped assessment. The expression "assessment" used in these sections is not used merely in the sense of computation of income and there is in our judgment no ground for holding (1) 770 that when by section 44, it is declared that the partners or members of the association shall be jointly and severally liable to assessment, it is only intended to declare the liability to computation of income under section 23 and not to the application of the procedure for declaration and imposition of tax liability and the machinery for enforcement thereof. Nor has the expression, "all the provisions of Chapter IV shall so far as may be apply to such assessment" a restricted content: in terms it says that all the provisions of Chapter IV shall apply so far as may be to assessment of firms which have discontinued their business. By section 28, the liability to pay additional tax which is designated penalty is imposed in view of the dishonest contumacious conduct of the assessee. It is true that this liability arises only if the Income tax Officer is satisfied about the existence of the conditions which give him jurisdiction and the quantum thereof depends upon the circumstances of the case. The penalty is not uniform and its imposition depends upon the exercise of discretion by the Taxing authorities; but it is imposed as a part of the machinery for assessment of tax liability. The use of the expression "so far as may be" in the last clause of section 44 also does not restrict the application of the provisions of Chapter IV only to those which provide for computation of income. By the use of the expression "so far as may be" it is merely intended to enact that the provisions in Ch. IV which from their nature have no application to firms will not apply thereto by virtue of section 44. In effect, the Legislature has enacted by section 44 that the assessment proceedings may be commenced and continued against a firm of which business is discontinued as if discontinuance has not taken place. It is enacted manifestly with a view to ensure continuity in the application of the machinery provided for assessment and imposition of tax liability notwithstanding discontinuance of the business of firms. By a fiction, the firm is deemed to continue after discontinuance for the purpose of assesment under Chapter IV. The Legislature has expressly enacted that the provisions of Chapter IV shall apply to the assessment of 771 a business carried on by a firm even after discontinuance of its business, and if the process of assessment includes taking steps for imposing penalties, the plea that the Legislature has inadvertently left a lacuna in the Act stands refuted. It is implicit in the contention of the appellant that it is open to the partners of a firm guilty of conduct exposing them to penalty under section 28 to evade penalty by the simple expedient of discontinuing the firm. This plea may be accepted only if the court is compelled, in view of unambiguous language, to hold that such was the intention of the Legislature. Here the language used does not even tend to such an interpretation. In interpreting a fiscal statute, the court cannot proceed to make good deficiencies if there be any: the court must interpret the statute as it stands and in case of doubt in a manner favourable to the tax payer. But where as in the present case, by the use of words capable of comprehensive import, provision is made for imposing liability for penalty upon tax payers guilty of fraud, gross negligence or contumacious conduct, an assumption that the words were used in a restricted sense so as to defeat the avowed object of the Legislature qua a certain class will not be lightly made. Counsel for the appellant relying upon Mahankali Subbarao vs Commissioner of Income Tax (1), in which it was held that an order imposing penalty under section 28(1)(c) of the Indian Income Tax Act upon a Hindu Joint Family after it had disrupted, and the disruption was accepted under section 25A(1) is invalid, because there is a lacuna in the Act, submitted that a similar lacuna exists in the Act in relation to dissolved firms. But whether on the dissolution of a Hindu Joint Family the liability for penalty under section 28 which may be incurred during the subsistence of the family cannot be imposed does not fall for decision in this case: it may be sufficient to observe that the provisions of section 25A and section 44 are not in pari materia. In the absence of any such phraseology in section 25A as is used in section 44, no real analogy between the content of that section and section 44 may be assumed. Undoubtedly, (1) 772 by section 44, the joint and several liability which is declared is liability to assessment in respect of income, profits or gains of a firm which has discontinued its business, but if in the process of assessment of income, profits or gains, any other liability such as payment of penalty or liability to pay penal interest as is provided under section 25, sub section (2) or under section 18A sub sections (4), (6), (7), (8) and (9) is incurred, it may also be imposed, discontinuation of the business notwithstanding. In our view, Chief Justice Subba Rao has correctly stated in Mareddi Krishna Reddy 's case (supra) that: "Section 28 is one of the sections in Chapter IV. It imposes a penalty for the concealment of income or the improper distribution of profits. The defaults made in furnishing a return of the total income, in complying with a notice under sub section (4) of section 22 or sub section (2) of section 23 and in concealing the particulars of income or deliberately furnishing inadequate particulars of such income are penalised under that section. The defaults enumerated therein relate to the process of assessment. Section 28, therefore, is a provision enacted for facilitating the proper assessment of taxable income and can properly be said to apply to an assessment made under Chapter IV. We cannot say that there is a lacuna in section 44 such as that found in section 25A of the Act. We are unable to agree with the view expressed by the Andhra Pradesh High Court in the later Full Bench decision in Commissioner of Income Tax vs Rayalaseema Oil Mills (1), which purported to overrule the judgment in Mareddi Krishna Reddy 's case (supra). We are also unable to agree with the view expressed by the Madras High Court in section V. Veerappan Chettiar vs Commissioner of Income Tax, Madras (2). In the view taken by us, the appeal fails and is dismissed with costs. (1) Appeal dismissed. [/INST]The question in this appeal was whether the Tribunal was wrong in not allowing the amount paid to a political fund which was permissible as an item of expense and for disallowing the claim for deduction of certain amounts as extraneous income and whether the salesmen and apprentices were entitled to bonus. 168 Held, that though the law or the rules of the company per mitted the employer to pay amounts as donations to political funds, it was not a proper expense to be deducted when working out the available surplus in the light of the Full Bench formula. Held, further, that neither the profits from transactions which were carried out in the normal course of business, nor the commission earned on transactions entered directly with foreign manufacturers, where the workmen had serviced the goods and did other work which brought such business to the employer, could be allowed as extraneous income. Held, also that the salesmen who were given commission on sales had already taken a share in the profits of the company on a fair basis and there was no justification for granting them further bonus out of the available surplus of profits. That the apprentices hardly contributed to the profits of the company. Thus they were not entitled to any bonus. The Associated Cement Companies Ltd. vs Their Workmen, and The Tata Oil Mills Co. Ltd. vs Its Workmen and Ors., ; , applied. </s>
<s>[INST] Summarize the judgementubt, the order of dete n tion contains fresh facts. In addition, the detaining a u thority has taken into consideration the earlier grounds of detention which grounds had been nullified by the High Cou rt by issuing a prerogative writ of habeas corpus. A copy of the earlier grounds of detention was also one of the doc u ments furnished to the detenu which confirms the fact th at the detaining authority has considered the earlier groun ds of detention alongwith other documents for drawing h is requisite subjective satisfaction for passing the detenti on order. The order of detention is vitiated on that groun d, and is therefore liable to be set aside. [58F. G; 59F G] & ORIGINAL JURISDICTION: Writ Petition (Criminal) No. 61 of 1989. (Under Article 32 of the Constitution of India. ) V.V. Vaze, M.K. Pandit and P.H. Parekh for the Petitioner. P.S. Poti, M.N. Shroff and Mrs. H. Wahi for the Respondent section The Judgment of the Court was delivered by 54 section RATNAVEL PANDIAN, J. This petition under Article 32 of the Constitution of India is filed by the petitioner, t he detenu herein, challenging the legality and validity of t he order of detention dated 21.10.1988 passed by the detaini ng authority (the Commissioner of Police, Surat City) clampi ng upon the detenu the above said order of detention und er Sub section (2) of Section 3 of the Gujarat Prevention of Anti social Activities Act, 1985 (hereinafter referred to as the 'Act ') on the ground that he on consideration of t he materials placed before him was satisfied that it was nece s sary to make the said order with a view to preventing t he detenu from acting in any manner prejudicial to the maint e nance of public order in the area of Nanpura Machhiw ad falling under the jurisdiction of Athwa Lines Police St a tion, Surat City and directed the detenu to be detained in Sabarmati Central Prison, Ahmedabad under the conditio ns specified in the Gujarat Prevention of Anti Social Activ i ties Order, 1985. In pursuance of the impugned order t he detenu has been detained in the aforesaid prison. The second respondent, the State of Gujarat, approv ed the impugned order on 26.10.1988 and confirmed the same on 13.12 '. The detenu submitted his representation dat ed 15.12. 1988 which was received by the 1st respondent on 19.12. 1988 on which date itself the same was rejected. T he copy of the representation sent to the second respondent w as rejected on 21.12.1988. It is stated in the grounds of detention that the dete nu was illegally keeping in possession the country liquor a nd openly selling the same at the comer of Nanpura, Machhiwa d, Masjid Wali Gali, Bhandariwad and conducting a den (Add a) and that he had been arrested in 1988 for offences under t he Bombay Prohibition Act in respect of which number of cas es were registered which cases are still pending trial as disclosed in Annexure I. It is further stated that t he detenu had engaged 10 persons whose names are given in paragraph 2 of the grounds of detention, to accelerate h is bootlegging activities and those hired persons who we re conducting den (Adda)under the instructions and guidance of the detenu had been arrested in 1988 in 19 different cas es under the Bombay Prohibition Act from the detenu 's ad da during police raids of which 8 cases are pending trial a nd the remaining eleven are under investigation, the details of which are given in Annexure 11 attached to the grounds of detention. On the above materials and the statements of witnesses placed before him, the detaining authority h ad satisfied himself that the abovementioned bootlegging acti v ities of the detenu in a large scale in an organised mann er were seriously detrimental to the public health and we re likely 55 to endanger public health and consequently passed th is impuged order of detention. Hence this writ petition. Mr. V.V. Vaze, learned counsel appearing on behalf of the petitioner, detenu raised several contentions assaili ng the legality and validity of the order of detention one of which being that the detaining authority for drawing h is requisite subjective satisfaction to clamp this order of detention upon the petitioner/detenu had taken into consi d eration the previous grounds of detention which was t he subject matter of Special Criminal Application No. 46 of 1987 before the High Court of Gujarat. Since we are inclin ed to dispose of this Writ Petition on this ground alone we a re not traversing on other grounds. Admitedly, the Commission er of Police, Surat City passed an Order of detention. Und er Section 3(2) of the Act on 2.1. 1987 in No. PCB/ PASA/I/ 87 on the ground that between 1984 to 1986 there were 19 cas es filed against the detenu under the Bombay Prohibition Act of which 16 were pending in Court and three others under inve s tigation when this previous order was passed. The petition er filed Special Criminal Application No. 46 of 1987 before t he High Court of Gujarat at Ahmedabad challenging the validi ty of the said order. The High Court by its judgment dated 3. 8. 1987 quashed the earlier impugned order of detention a nd directed the release of the detenu forthwith. A copy of t he High court order is annexed to the Writ Petition as Annexu re 'D '. The detaining authority in this case had made a refe r ence about the previous order in the impugned grounds of detention which reads thus: "You are associated with bootlegging activity for long tim e, therefore, under order number dated 2.1.87 you were order ed to be detained under PASA and were kept in Baroda Centr al Jail. But you filed a petition against this order of dete n tion in the High Court by Special Criminal Misc. Applicati on No. 46/1987, After this petition was heard on 3.8.87, t he Hon 'ble High Court quashed the detention order and releas ed you from detention. The proceedings taken against you ha ve had no effect on you and after you were released from t he detention, you have continued your activity. " The detenu, presumably based on the above statement, h as stated in his writ petition that the present order of dete n tion is clamped upon him since the earlier order passed on 2.1. 1987 had been quashed and set aside. The detaini ng authority in attempting to reply 56 to the allegations made in paragraph No. 6 of the Wr it Petition, wherein it is averred "The petitioner states th at in some of the cases, the petitioner is acquitted and in none of the cases the petitioner is convicted till today ", has made the following statement in paragraph 9 of h is counter: "It is submitted that the present detaining authority to ok into consideration the previous grounds of detention also to establish that the petitioner was engaged in bootleggi ng activities since long. " Now on this above statement it has been streneous ly urged that since the detaining authority for drawing h is subjective satisfaction had taken into consideration all t he previous grounds of detention, namely, the earlier groun ds of detention passed on 2.1. 1987 which had been subsequent ly quashed by the High Court the present detention order is liable to be set aside. According to learned counsel for t he petitioner, once the previous grounds of detention had be en quashed on its merit, then the detaining authority has no justification to take into consideration the earlier groun ds of detention for passing this present detention order whi ch should have been based only on the fresh grounds that we re available subsequent to the quashing of the previous dete n tion order. In support of this statement several decisio ns were relied on about which we make reference presentl y. Firstly, the attention of the Court was drawn to Ghul am Nambi Zaki vs State of Jammu and Kashmir, wherein the State contended that the existence of fre sh material is not a condition precedent for passing the seco nd order and that in any event, the second order can be ma de when the first order is withdrawn or revoked for technic al defect. Hidayatullah, C.J. speaking for the bench repell ed that contention holding thus: "The matter is not res integra. In a number of decisions of this Court to which reference will be made presently, th is point has been considered and it has been held that once an order of revocation is made, another order detaining t he same person can only be passed if some additional or fre sh material is in possession of the State Government on whi ch action can be based. " Then referring to the decision of the Constitution Ben ch in Hadibandhu Das vs District Magistrate, Cuttack and Anot h er; , , the learned Chief Justice observed: 57 "In other words, the revocation or expiry of the previo us order cannot lead ipso facto to a revival of the detenti on by the passing of a fresh order, because a person who is entitled to his liberty can only be put in a second jeopar dy when there are additional or fresh facts against him." Ultimately, he concluded: "As pointed out in the All India Reporter case (Hadiband hu Das case) the inference is very compulsive that fresh fac ts must be found for new orders otherwise once the old dete n tion comes to an end either by the expiry of the period of detention or by the cancellation of the order of detentio n, a fresh detention cannot be ordered." In Har Jas Dev Singh vs State of Punjab & Ors., ; , this Court while examining a similar question wi th regard to validity of second detention order passed und er Section 14(2) of the Maintenance of Internal Security A ct (Act 26 of 1971) on identical grounds of the earlier ord er expressed its view: "In these circumstances after the date on which the ord er cease to be in force, unless fresh facts have arisen on t he basis of which the Central Government or State Government or an Officer, as the case may be, was satisfied that such an order should be made, the subsequent detention on the ve ry same grounds would be invalid." The learned counsel also cited for the same principle of law, the decision in Chotka Hembram vs State of West Beng al & Ors.; , Those decisions mentioned albeit are cases wherein t he first detention order ceased to be either by revocation or by expiry of the period of detention. What would be t he legal implications and ultimate effect of quashing an ord er of detention by the High Court in exercise of its jurisdi c tion under Article 226 of the Constitution of India th is Court in Ibrahim Bachu Bafan vs State of Gujarat & Ors ., , made the following rule: " . . When the High Court exercises jurisdiction und er Article 226 of the Constitution it does not make an order of revocation. By issuing a high prerogative writ like habeas 58 corpus or certiorari it quashes the order impugned before it and by declaring the order to be void and striking down t he same it nullifies the order. The ultimate effect of cance l lation of an order by revocation and quashing of the same in exercise of the high prerogative jurisdiction vested in t he High Court may be the same but the manner in which t he situation is obtained is patently different and while o ne process is covered by Section 11(1) of the Act, the other is not known to the statute and is exercised by an authori ty beyond the purview of sub section (1) of Section 11 of t he Act. It is, therefore, our clear opinion that in a situati on where the order of detention has been quashed by the Hi gh Court, sub section (2) of Section 11 is not applicable a nd the detaining authority is not entitled to make anoth er order under Section 3 of the Act on the same grounds. " It emerges from the above authoritative judicial pr o nouncements that even if the order of detention comes to an end either by revocation or by expiry of the period of detention there must be fresh facts of passing a subseque nt order. A fortiori when a detention order is quashed by t he Court issuing a high prerorgative writ like habeas corpus or certiorari the grounds of the said order should not be tak en into consideration either as a whole or in part even alon g with the fresh grounds of detention for drawing the requ i site subjective satisfaction to pass a fresh order becau se once the Court strikes down an earlier order by issuing ru le it nullifies the entire order. In the present case, no doubt, the order of detenti on contains fresh facts. In addition to that the detaini ng authority has referred to the earlier detention order a nd the judgment of the High Court quashing it, presumably f or the purpose of showing that the detenu in spite of earli er detention order was continuing his bootlegging activitie section But what the detaining authority says clearly in paragraph 9 of his affidavit in reply is that he took into considerati on the previous grounds of detention also for his conclusi on that the detenu 'was engaged in bootlegging activities sin ce long '. In other words the detaining authority has taken in to consideration the earlier grounds of detention which groun ds had been nullified by the High Court in Special Crimin al Application No. 46 of 1987 by issuing a prerogative writ of habeas corpus. Under Section 15 of the Act, the expiry or revocation of an earlier detention order is not a bar for making a subs e quent detention 59 order under Section 3 against the same person. The provi so annexed to that Section states that in a case where no fre sh facts have arisen after expiry or revocation of an earli er order made against such person the maximum period for whi ch such person may be detained in pursuance of the subseque nt detention order shall in no case extend beyond the period of 12 months from the date of detention under the earli er order. Chinnappa Reddy, J. in Abdul Latif Abdul Wahab Shei kh vs B.K. Jha and Another, ; = 03 speaking for the bench of this Court while dealing wi th Section 15 of the Act observed: "It, therefore, becomes imperative to read down Section 15 of the Gujarat Prevention of Anti Social Activities Ac t, 1985 which provides for the making of successive orders of detention so as to bring it in conformity with Article 22( 4) of the Constitution. If there is to be a collision betwe en Article 22(4) of the Constitution and Section 15 of the Ac t, Section 15 has to yield. But by reading down the provisio n, the collision may be avoided and Section 15 may be su s tained." Mr. Poti has sought to explain the statement of t he detaining authority made in his counter saying that t he earlier proceeding was considered only to a limited purpo se of taking note of the detenu 's continued involvement of bootlegging activities; but the entire grounds of earli er detention as they were, were not considered. We are unab le to accept this explanation because the detaining authorit y, in the counter, in clear terms had expressed that he consi d ered the earlier grounds of detention also. Incidently, it was brought to our notice that a copy of the earlier groun ds of detention was also one of the documents furnished to t he detenu in the present case which confirms the fact that t he detaining authority has considered the earlier grounds of detention along with other documents for drawing his requ i site subjective satisfaction for passing this impugn ed order. In other words, the earlier grounds of detenti on dated 2.1. 1987, quashed by the High Court was one of t he material documents considered by the detaining authority in drawing his subjective satisfaction. Therefore, we hold th at this order of detention is vitiated on the ground that t he detaining authority has taken into consideration the groun ds of earlier detention order alongwith other materials f or passing this impugned order. Hence, the order is liable to be set aside. Accordingly, we quash the detention order on this ground and direct that the detenu be set at liber ty forthwith if his detention is not required for any oth er case. R.S.S. Petition allowed. [/INST]With a view to preventing the petitioner detenu fr om acting in any manner prejudicial to the maintenance of public order, an order of detention was passed against h im by the Comissioner of Police, Surat City, under section 3( 2) of the Gujarat Prevention of Anti social Activities Ac t, 1985. The grounds of detention referred to the detenu 's criminal activities connected with bootlegging on a lar ge scale and in an organised manner, and the several cas es registered and pending against him on that account. T he detenu 's representations were dismissed by the 1st respon d ent and the State Government. It was contended on behalf of the petitioner that t he Detaining Authority for drawing his requisite subjecti ve satisfaction had taken into consideration the previo us grounds of detention which were the subject matter of a Special Criminal Application before the Gujarat High Cour t, and the High Court had quashed the order of detention i m pugned in that case. On the other hand, it was contended on behalf of the respondents that the earlier proceeding w as considered only to a limited purpose of taking note of t he detenu 's continued involvement in bootlegging activities. Allowing the writ petition, and quashing the detention ord er it was HELD: (1) Even if the order of detention comes to an e nd either by revocation or by expiry of the period of detenti on there must be fresh facts for passing a subsequent orde r. [58D] Ghulam Nambi Zaki vs State of Jammu & Kashmir, ; Hadibandhu Das vs District Magistrate, Cuttack Anr. ; , ; HarJas Dev Singh vs State of Punja b; , and 53 Chotka Hembram vs State of West Bengal, 1, referred to. (2) A fortiori when a detention order is quashed by t he Court issuing a high prerogative writ like habeas corpus or certiorari, the grounds of the said order should not be taken into consideration either as a whole or in part ev en alongwith the fresh grounds of detention for drawing t he requisite subjective satisfaction to pass a fresh ord er because once the Court strikes down an earlier order by issuing a rule it nullifies the entire order. [58D E] Ibrahim Bachu Bafan vs State of Gujarat, , followed. (3) It is imperative therefore to read down section 15 of the Act which provides for the making of successi ve orders of detention so as to bring it in conformity wi th Article 22(4) of the Constitution. [59C] Abdul Latif Abdul Wahab Sheikh vs B.K. Jha & Anr .; , followed. </s>
<s>[INST] Summarize the judgementAppeal No. 792 of 1975. (Appeal by special heave from the judgment and order dated the 12th March, 1974 of the Orissa High Court in O.J.C. No. 336 of 1972) B. Sen, B. V. Desai and R.H. Dhebar, for the appellant. Mrs. section Bhandare. M.S.Narasimhan, A.K. Mathur and A. K. Sharma, for respondent No. 1. S.K. Mehta, for Girish Chandra, for respondent No. 2. Gobind Das, B. Parthasarthi for respondent No. 3. 704 The Judgment of the Court was delivered by BEG, J. The appellant before us applied on 14th October, 1961, for a prospecting licence for an area of 833.53 acres in the requisite form 'B ', under rule 9(1) of the Mineral Concessions Rules, 1960, made under Section 13 of the (herein after referred to as the Act). The application was filled in correctly. But a sum of Rs. 24/ only, instead of Rs. 32/ , accompanied the application. It appears that 'the appellant realised the mistake in calculating later and paid the deficit of Rs. 8/ on 28th December, 1961. By way of abundant caution, he made a fresh application also on 26th February, 1962. In the meantime, the respondent No. 1 had applied on 2nd November, 1961, for a prospecting licence for 748.16 acres out of which 272.40 acres were common with those for which the appellant had already applied. No orders were passed disposing of the application of the appellant within 90 days of the making of it. The appel lant treated this omission to be tantamount to refusal of his application, as provided by rule 11 (1 ), and preferred a revision application before the Central Government under Section 30 of the Act. On 20th October, 1964, the Central Government asked the State Government to consider the appli cation of the appellant dated 14th October, 1961, within the next nine months. On 13th January, 1965, the State Govern ment offered the appellant a prospecting licence for an area of 365 acres. On 12th February, 1965, the appellant moved the Central Government for revision of the order making the offer. On 19th March, 1965, the Central Government in formed the appellant that his application was premature since neither nine months had elapsed nor final orders had been passed by the State Government. On 9th May, 1965, the Central Government actually rejected the revision applica tion of the appellant presumably for reasons found in the above mentioned communication. On 22nd June, 1965, the State Government directed the grant of a prospecting licence to respondent No. 1 for an area including 272.40 acres, in dispute. On 7th July, 1965, the State Government again offered the appellant the grant of a licence for 3.65 acres. On 2nd January, 1967, the High Court dismissed the Writ Petition of the appellant filed against the abovementioned order of the Central Government dated 9th May, 1965, reject ing his revision application. On 2nd April, 1970, the State Government again offered the appellant a prospecting licence for an area of 365 acres. On 30th April, 1970, a prospecting licence was actually executed in favour of respondent No. 1 for an area which included the disputed 272.40 acres. The appellant 's objections before the Collec tor were rejected. On 27th May, 1970, the appellant again filed a revision application before the; Central Government against the offer dated 2nd April, 1970, for the third time. by the State Government of the smaller area of 365 acres. On 23rd November, 1970. the respondent No. 1, actually applied for a mining lease. but, on 12th April, 1973, the Central Government accepted the appellant 's objec tion relating to 272.40 acres. Hence. the respondent No. 1 went to the High Court under Article 226 of the Constitu tion. The High Court quashed the order of the Central Government by its order dated 12th March, 1974, on the ground that the original application of the 705 appellant, dated 14th October, 1961, not having been accom panied by the correct fee, was no application at all in the eye of law. Hence on the view taken by the High Court, the appellant, not having complied with mandatory provisions, had not filed any application which could be accepted by the State Government. The High Court took the view that the Central Government 's order dated 12th April, 1973, suffers from a patent error. The appellant having obtained special leave to appeal, the case is now before us. It has to be remembered that the special jurisdiction of the High Court under Article 226 had been invoked by the respondent. The High Court had before it a very detailed statement of reasons for the order of the Central Government in exercise of its powers under Section 30 of the Act. We have also been taken through these reasons contained in the letter dated 12th April, 1973, sent to the appellant. It shows that both the parties between whom the dispute relat ing to 272.4.0 acres of land for grant of a prospecting licence had gone before the Central Government several times, and the matter was not finally decided by the State Government. Even though the State Government may have, according to its own erroneous view disabled itself from granting a prospecting licence to the respondent in respect of disputed 272.40 acres, due to its decision to grant this area to the respondent, yet, as the letter from the Central Government points out, the prospecting licence of the re spondent who was impleaded in the revision proceedings before the Central Government and duly heard on all ques tions, was due to expire on 30th April, 1972. After con sidering the legal position and all the facts and equities of the case, the Central Government correctly held, on the question law before it, that the appellants application before the State Government was a valid one as it had been entertained without objection even if it was not accompa nied, when flied, by the correct amount of fee. In a communication sent, the Central Government stated its rea sons to the appellant as follows: "The question arises whether you were indeed or can indeed be deemed to be the prior application for the area. It has been seen that your application dated 14.10.1961 was not perfect in the sense that fee paid into the treasury fell short of Rs. 8/ . However, the State Government itself by giving a chance to you to rectify this mistake ac knowledged implicity that it had in its hands an application otherwise valid. Therefore, the appropriate date which should be taken into consideration is 14.10.61 and not 28 12 1961, as interpreted by the State Gov ernment. The State Government 's order permit ting you to make good the deficit in the amount of fees originally paid into the treas ury has nothing to do with the submission of the application which was done on 14.10.61. The Stale Government could, if it so wished, have refused the application dated 14.10.61 as being imperfect. But, since it did not do so and permitted the application to remain under consideration, it recognised your right as an applicant. Therefore, the State Govern 706 ment cannot argue that impleaded party Phul chand Agarwal by submitting his application on 2.11.61 becomes a prior applicant". In other words, the Central Government had, correctly in our opinion, relied upon an estoppel against the State Govern ment. After giving the above mentioned reasons, the Cen tral Government considered it fair that the appellant should be. granted a prospective licence in respect of 272.40 acres also over and above the 365 acres already granted to him by the State Government. The operative part of the order passed by the Central Government is: "In the circumstances of the case, the Central Government, in exercise of their revisional powers under Rule 55 of of the Mineral Concessions Rules, 1960, and of all other powers enabling in this behalf, hereby set aside the order of the State Government contained in their letter No. II(E)M. 82/70 3015MG, dated 2.4.1970, and further direct the State Government to grant the overlapping of 272.40 acres to you over and above the area of 365 acres already granted to you." The only question which arises beforeus is whether the order of the Central Government suffers from an error appar ent upon the face of the record so as to furnish a ground for interference by the High Court on the purest of pure technicalities, which, as had been pointed out in the letter sent from the Central Government to the appellant, had ceased to matter. The deficiency in the fees having been duly accepted on behalf of the State Government, it was bound to proceed on the assumption that there was a proper application before it valid from the date of filing it. It was precluded, by its own dealings, from denying the validity of the application. It is not very becoming for governmental authorities, when duties laid down by statutory rules. have not been performed by them, to take shelter behind such technicality for denying a citizen 's rights to have his application considered and decided. Rule 11 (1) of the Rules framed was a recognition of that right so that an applicant for a licence under the rules could approach the Central Government in case the State Government did not pass the required orders within a reasonable time. The Central! Government had passed a very fair order after considering the matters ' before it. We have been taken very laboriously through all the relevant provisions of the Act and the Rules to convince us that the High Court 's view was correct that there was an error apparent upon the face of the record in the view of the Central Government which the High Court had corrected in exercise of its extraordinary jurisdiction under Article 226 of the Constitution. We are unable to detect such on error on the part of the Central Government. On the other hand, we find that the High Court itself committed an error, which seems to us to be very apparent, in holding that an applica tion which had only to be accompanied by the fee would be considered validly filed on the date on which, 707 it was made only if proper fee had been tendered with it when it was filed. A right and reasonable procedure looks to substance rather than form of a transaction in order to determine its nature. The statute and the rules made there under would have said so if the application itself was to be deemed to be void ab initio for non compliance with a par ticular technical requirement if that was the intention behind them. All that we have here is the word 'shall ' used in Rule 9(2). But, this Court has repeatedly held that the use of the word 'shall ' in imposing a duty is not conclusive on the question whether the duty imposed is mandatory or directory. Moreover, that question was only incidentally involved here. It is not the breach of every mandatory duty in performing a prescribed act that could make an action total ly ineffective or void ab initio. The filing of the appli cation is one thing and completion of some annexed duty, which is legally separable, is another unless a statute or a rule provides otherwise. Rule 9 reads: "9 (2) Every such application shall be accom panied by (a) a fee calculated in accordance with the provisions of Schedule II; and (b) an income tax clearance certificate in Form C the from Income tax Officer concerned; and (c) a certificate of approval in Form A or if the certificate of approval has expired, a copy of application made to the State Govern ment for its renewal". ' It is not disputed that all the requirements of the rule, except that a properly calculated fee should have accompanied the application, were fulfilled. Apparently, Rule 10 was also complied with and the application was ,duly received and acknowledged. Rule 10 reads as follows: "10. Acknowledgement of application . (1) Where an application for the grant or renewal of a prospecting licence is delivered personally, its receipt shall be acknowledged forthwith. (2) Where such application is received by registered post, its receipt shall be acknowl edged on the same day. (3) In any other case, the receipt of such application shall be acknowledged within three days of the receipt. (4) The receipt of every such application shall be acknowledged in Form D. The next rule provides: "11. Disposal 0f application for the grant and renewal 0f prospecting licence. (1) An application for the grant of a prospecting licence shall be disposed of within nine months 11 112SCI/77 708 from the date of its receipt and, if it is not disposed of within that period, it shall be deemed to have been refused. (2) An application for the grant or renewal of a prospecting licence shall be made at least ninety days be(ore the expiry of the prospect ing licence and shall be disposed of before the expiry of the licence and if the applica tion is not so disposed of within that period, it shall be deemed to have been refused. (3) The State Government may, for reasons to be recorded in writing and communicated to the applicant, at the time of renewal, reduce the area applied for." Repeated offers of the State Government to the appellant show that it acknowledged the pendency of an application before it so that it offered a reduced area to him. Again, the directions of the Central Government, asking the State Government to consider the application and giving nine months for it implied that there was an application to consider before the State Government. The respondent did not question the validity of the Central Government 's order of 20.10.1964. It seems futile to urge now that there was no application at all of the appellant for the State Gov ernment to consider. Again, rule 13 provides: "13. Refund of fee . (1) 'Where an application for the grant of a prospecting licence is refused or deemed to have been refused under these rules, the fee paid by the applicant shall be refunded to the applicant. (2) Where an applicant for the grant of a prospecting licence dies before the order granting him a prospecting licence is passed, his application for the grant of a prospecting licence shall be deemed to have been rejected and the fee paid by him shall be refunded to his legal representative. (3) In the case of an applicant in ,re spect of whom an order granting a prospecting licence is passed but who dies before the deed referred to in sub rule (1) of rule 15 is executed, the order shall be deemed to have been revoked on occurrence of the death and the fee paid shall be refunded to the legal representative of the deceased". This rule also makes it clear that there is a distinction between an application and the fee which has to accompany it. The fee can be refunded, but, the application made remains. There is no rule whatsoever which rays that failure to submit the correct fee at the time of the filing of the application will make the 709 application void or invalid. Section 19 of the Act, howev er, says clearly : "19. ' Any prospecting licence or mining lease granted, renewed or acquired in contra vention of the provisions of this Act or any rules or orders made thereunder shall be void and of no effect". Hence, it is clear that the Act itself provides what is void and ineffective where that is the intention. It would have been provided at least by the Rules that an application not accompanied by the correct fee is void if that had been the intention behind them. Section 19 attaches voidness only to a grant made without due compliance with all rules. It is nowhere said that the act of making an application will be similarly void for a breach of rules. Another submission made before us is that the grant of a prospecting licence in favour of Phulchand, not having been set aside by the Central Government, the High Court had rightly interfered. In view of the provisions of Section 19 of the Act the prospecting licence in favour of respondent No. 1 was itself void to the extent of an area of 272.40 acres for which a licence had already been properly applied for by the appellant. Unless the appellant 's application had been properly refused, for a valid reason, he could not be denied the benefit of section 11 (2) of the Act. Sec tion 11 (2) reads as follows: "11(2) Subject to the provisions of sub section where two or more persons have applied for a prospecting licence or a mining lease in respect of the same land, the appli cant whose application was received earlier shall have a preferential right for the grant of the licence or lease, as the case may be, over an applicant whose application was re ceived later. " Reliance is placed on behalf of the respondent on the conditions for the grant of the licence contained in Rule 14 which does not govern the conditions for filing an applica tion at all. It may be that a licence cannot be granted without making good the deficiency in fee which should accompany the application, but that does not mean that a bona fide application accompanied by an incorrectly calcu lated fee or a fee which is deficient by over sight, could not be made at all, or, if made, must be treated as void or of no effect whatsoever. On this question, the view taken by the Central Government was, in our opinion, correct, just, and proper. On such a view, it is not necessary to discuss any of the cases on the kind of error which could be corrected by the High Court as there was no error of any kind in the Central Government 's order for the High Court to be able to correct it. On the other hand the error, which we consider necessary to correct, is in the High Court 's order. Consequently, we set aside the judgment and order of the High Court and restore those of the Central Government. The parties will bear their own costs. S.R. Appeal allowed. [/INST]The District Magistrate of Delhi, "being satisfied that with a view to the maintenance of public order in Delhi it is necessary to do so" ordered the detention of the peti tioners under section 3 of the . The grounds of detention communicated to the petitioners were "that your speeches generally in the past and particu larly on the 13th and 15th August, 1950, at public meetings in Delhi has been such as to excite disaffection between Hindus and Mussalmans and thereby prejudice the maintenance 01 public order in Delhi and that in order to prevent you from making such speeches it is necessary to make the said order. " The petitioners contended that under the Constitu tion the maintenance of public order was not a purpose for which restriction can be imposed on the freedom of 452 speech guaranteed by article 19 (1) and that the grounds commu nicated were too vague and indefinite to enable them to make a representation and the provisions of article 22 (s) of the Constitution were not complied with, and their detention was therefore ultra vires and illegal: Held by the Full Court (KANIA C.J., PATANJALI SASTRI, MEHR CHAND MAHAJAN, S.R. DAs and VIVIAN BOSE JJ.) that though personal liberty is sufficiently comprehensive to include the freedoms enumerated in article 19 (1) and its deprivation would result in the extinction of those free doms, the Constitution has treated these civil liberties as distinct fundamental rights and made separate provisions in articles 19, 21 and 22 as to the limitations and conditions subject to which alone they could be taken away or abridged. Consequently, even though a law which restricts freedom of speech and expression which is not directed solely against the undermining of the security of the State or its over throw but is concerned generally in the interests of public order may not fall within the reservation of cl. (2) of article 19 and may therefore be void, an order of preventive deten tion cannot be held to be invalid merely because the deten tion is made with a view to prevent the making of speeches. prejudicial to the maintenance of public order. The deci sions in Brij Bhushan and Another vs The State of Delhi (1) and Romesh Thappar vs The State of Madras(2) are not incon sistent with the decision in A.K. Gopalan vs The State(3). Held per KANIA. C.J., PATANJALI SASTRI and S.R. DAS JJ. (MEHR CHAND MAHAJAN and BOSE JJ. dissenting) As the time and place at which the speeches were alleged to have been made and their general nature and effect,. namely, that they were such as to excite disaffection between Hindus and Muslims were also stated in the grounds communicated, they were not too vague or indefinite to enable the petitioners to make an effective representation and the detention cannot be held to be illegal on the ground that article 22 (8) was not complied with. Per CHAND MAHAJAN and BOSE JJ. (contra) In the absence of any indication in the grounds as to the nature of the words used by the petitioners in their speech es, from which an inference has been drawn against them, the petitioners would not be able fully to exercise their funda mental right of making a representation, and as there were no such indications in the grounds supplied, there was a non compliance with the provisions of el. (5) article 22 and the detention was illegal. The State of Bombay vs Alma Ram Sridhar Vaidya(4) applied. </s>
<s>[INST] Summarize the judgementCivil Appeal No. 219 of 1974. Appeal by Special Leave from the Judgment and Order dated the 3 3 1972 of the Madras High Court in Writ Appeal No. 416 of 1970. R. M. Mehta and section P. Nayar for the Appellant. A. V. Rangam and Miss A Subhashini for Respondent. The Judgment of the Court was delivered by RAY, C.J. This appeal is by special leave from the judgment dated 3 March 1972 of the High Court of Madras. The respondent in an application under Article 226 of the Constitution asked for a writ of mandamus directing the appellant Unison to pay the respondent pension at the rate of 1s 9d per rupee in accordance with Regulations 934 A and 934 D of the Civil Service Regulations. 862 The respondent is a Ceylonese national. He joined the Indian Civil Service on 6th October 1933. After 15 August 1947 he continued to serve in our country until his retirement on 31 December 1949. At his retirement he was sanctioned an annuity of $ 743 2 shillings 6 pence per annum. He commuted a part of his pension leaving a balance of Rs. 500 per month. Between March, 1968 and October 1969 he resided in Uganda in East Africa. When the respondent was in Uganda he claimed pension at the rate of 1s 9d to a rupee. His request was accepted by the Accountant General, Madras. The Union Government reversed the decision and directed that the conversion rate should be 1s 6d to a rupee and the excess payment should be recovered from the respondent. The respondent thereafter made an application under Article 226 of the Constitution. The High Court accepted the petition of the respondent on the ground that the respondent shifted his residence from Ceylon to Uganda and was, therefore, entitled to benefit under the second proviso to Article 934 of the Civil Service Regulations. The second proviso to Article 934 was as follows: "Provided that save where a pensioner resides in India (which for the purpose of this Article and Articles 934 A, 934 B, 934 C. 934 D and 935 shall be deemed to include Burma, Ceylon, Nepal, and the French and Portuguese establishments in India) the minimum rate of conversion shall be 1/9 per rupee". The question of payment of pension to Members of the Indian Civil Service in Sterling was examined by this Court in V. B. Raju & Ors. vs State of Gujarat & Ors. The Constitution (Twentyeighth Amendment) Act, 1972 introduced Article 312 A. Article 312 A confers power on Parliament to make law, inter alia, to vary or revoke prospectively or retrospectively the conditions of service as respects pension of persons who having been appointed by Secretary of State or Secretary of State in Council to a Civil Service of the Crown in India before the commencement of the Constitution retired or otherwise ceased to be in service at any time before the commencement of the Constitution (28th Amendment) Act, 1972. The Constitution (28th Amendment) Act, 1972 came into existence on 27 August 1972. Parliament on 21 September 1972 made the law called the Former Secretary of State Service Officers (Conditions Service) Act, 1972. A former Secretary of State officer means a person referred to in sub clause (a) or sub clause (b) sub clause (1) of Article 312 A of the Constitution. The respondent is a former Secretary of State Service officer within the meaning of sub clause (a) of clause (1) of Article 312 A. Section 8(1) of the Conditions of Service Act, 1972 enacts that no former Secretary of State Service officer shall be entitled or be deemed to have been entitled, to claim (a) pension in sterling; or (b) 863 that his pension shall be paid outside India; or (c) where his pension was expressed in sterling or a fixed sterling minimum was applicable in respect of the pension payable to him, that his pension shall be commuted in the rupee equivalent of the amount fixed in sterling at a rate of exchange exceeding the rate of rupees thirteen and one third to the pound sterling. Section 12 of the Former Secretary of State Service officers (Conditions of Service) Act, 1972 states that the provisions of this Act or of any order made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any law other than this Act or in any rule, regulation or order or other instrument having effect by virtue of any law other than the 1972 Act. The Constitution Bench of this Court in V. B. Raju 's case (supra) held that the former Members of the Indian Civil Service as a result of the Conditions of Service Act, 1972 are not entitled to claim payment of pension in sterling or outside India or by converting $ 1000 at the rate of exchange exceeding the rate of exchange of Rupees thirteen and one third to the pound sterling. The judgment of the High Court cannot be sustained by reason of change in law. The appeal is accepted and the judgment of the High Court is set aside. Parties will pay and bear their own costs. S.R. Appeal allowed. [/INST]Section 3 of the Drugs and Magic Remedies (objectionable Advertisements) Act provides that no person shall take part in the publication of any advertisement referring to any drug in terms which suggest or are calculated to lead to the use of that drug for the maintenance or improvement of the capacity of human beings for sexual pleasure or the diagnosis, cure or treatment of any disease or condition specified in the Schedule to the Act. Section 7 of the Act makes it penal to contravene any of the provisions of the Act. The appellant inserted an advertisement in a newspaper to the effect that he would treat diseases "with new methods, new machines of science and electric treatment". He was prosecuted under section 7 read with section 3 of the Act and was convicted and sentenced. The High Court confirmed the conviction and sentence. On appeal to this Court. it was contended that the particular advertisement did not refer to any "drug" and, therefore, the provisions of the Act were not attracted. Dismissing the appeal, ^ HELD: "Machines of science" designed to confer on mankind the blessings of "New Life, New Vigour, New Spirit, New Wave" advertised by the appellant are most likely to trap the ignorant and the unwary. The articles of commerce which the appellant had banefully advertised must be brought within the mischief of the Act. [784 GH] (1) Any article other than food which is intended to affect or influence in any way any organic function of the body of a human being is a drug within the meaning of that provision. The so called "machines of science" or of "electric treatment" whose magically curative properties were advertised by the appellant are articles intended to influence the organic function of the human body. [784C] (2) A machine is a tangible thing which can both be seen and felt and as such, it answers the description of an article within the meaning of section 2(b)(iii) of the Act. A machine is intended to be and is conceived as a useful thing and is therefore, an "article". It does no violence either to commonsense or to rules of interpretation to say that a machine is an "article". [784 D E] </s>
<s>[INST] Summarize the judgementvil Appeal Nos. 18083 of 1985. From the Judgment and Order dated 12.9.1983 of the Rajasthan High Court in D.B. (Civil) Spl. Appeal Nos. 35 of 1982, 76, 268 and 270 of 1983. S.K. Bagga for the Appellants. B.D. Sharma for the Respondents. The Order of the Court was delivered by 247 VENKATARAMIAH, CJ. In these appeals the appellants have questioned the validity of Section 15 (as amended) of the Rajasthan Imposition of Ceiling on Agricultural Holdings Act, 1973. It is not disputed that this Act was enacted by the Rajasthan Legislature for bringing about Agrarian Re forms in the State of Rajasthan. The validity of some of the provisions of the Act came up for consideration before this Court in Bansidhar vs State of Rajasthan, ; before a Constitution Bench of this Court and this Court made declaration that the Rajasthan Imposition of Ceiling Agricultural Holdings Act, 1973 was a legislation which was made for the purpose of bringing out Agrarian Reform. In view of the above finding, it is clear that the provisions including section 15 (as amended) contained therein are protected by Article 31(A)(1)(a) of the Constitution notwithstanding the fact that some of these provisions contravened Articles 14 and 19. The Grounds urged in respect of the appeal are that Section 15 (as amended) in question was violative of Article 14. Since the provisions of the Act as already stated are protected by Article 31(A)(1)(a), the attack does not sur vive. The High Court was therefore right in upholding the validity of Section 15 of the Act. Therefore, there is no ground to interfere with the Judgment of the High Court. These appeals fail and are dismissed. Interim orders passed if any, in these cases stand vacated. T.N.A. Appeals dis missed. [/INST]By a notification issued under Section 4 of the Land Acquisition Act and published in the Government Gazette on 26.10.1967, the State Government declared its intention to acquire the land of the Respondent on 23.2.1968. A notifica tion under section 6 of the Act was published in the Gazette and on 5.3.1969. The Land Acquisition Officer declared award, determining compensation at the rate of 4 paise per square meter with solatium at 15 per cent. At the instance of the respondent claimant, a reference under section 18 of the Act was made to the Distt. judge on May 28, 1985. The Civil Court awarded compensation at Rs.3 per square meter and also awarded solatium at 15 per cent and interest at 6 per cent from the date of taking possession of the land by the State till payment of compensation. Being dissatisfied, the Respondent preferred an appeal to the High Court seeking enhancement both of compensation and solatium at the rate of 30 per cent. The High Court allowed the appeal, and granted three reliefs viz; (1) Additional amount at the rate of 12 per cent of the market value from the date of the notification under section 4 till the date of taking over possession; (2) interest at the rate of 9 percent for the first year from the date of taking possession and 15 per cent for the subse quent. years and (3) Solatium at 30 per cent on the market value. The appellant has thus filed the instant appeal after obtaining Special Leave. There is no grievance as regards the interest awarded. The challenge relates to the grant of enhanced solatium and the additional amount of compensation. Appellants ' conten tion is that sections 30(2) and 23(2) are not at all at tracted and the claim of the Respondent on the said two counts is not sustainable. 337 Partly allowing the appeal, this Court, HELD: Section 30(2) provides that the amended provisions of section 23(2) shall apply, and shall be deemed to have applied, also to, and in relation to, any award made by the Collector or Court between 30th April 1982 and 24th Septem ber 1984, or to an appellate order therefrom passed by the High Court or Supreme Court. The purpose of these provisions seems to be that the awards made in that interregnum must get higher solatium in as much as to awards made subsequent thereto. [343G H] If there is obvious anamoly in the application of law, the Court could shape the law to remove the anamoly. The Legislatures do not always deal with specific controversies which the Court decide. They incorporate general purpose behind the statutory words and it is for the Courts to decide specific cases. If a given case is well within the general purpose of the legislature but not within the liter al meaning of the statute, then the Court must strike the balance. So construing the Court held that benefit of higher solatium under section 23(2) should be available also to the present case. [344A C] In the instant case, on October 26, 1967, the notifica tion under section 4 was issued. On March 5, 1969, the Collector made the award. The result is that on April 30, 1982 there was no proceeding pending before the Collector. Therefore Section 30, sub section (1)(a) is not attracted to the case. Since the proceedings for acquisition commenced before 30th April 1982 Section 30, sub section (1)(b) is also not applicable to the case. The case is therefore really gone by both ways. The claimant is therefore not entitled to additional amount provided under Section 23(IA). [346E F] The purpose of incorporating Transitional Provisions in any Act or amendment is to clarify as to when and how the operative parts of the enactments are to take effect. The transitional provisions generally are intended to take care of the events during the period of transition. [343A] Kamalajammaniavaru vs Special Land Acquisition Offi cer, ; Bhag Singh vs Union Territory of Chandigarh, ; ; State of Punjab vs Mohinder Singh, ; Union of India vs Raghubir Singh, ; ; Towne vs Eisher, ; ,425, 1918; Lenigh Valley Coal Co. vs Yensavage, at 553; Mahadeolal Kanodia vs The Administrator General of West Bengal, ; , referred to. 338 Special Land Acauisition Officer, Dandeli vs Soma Gopal Gowda, AIR 1986 Karnataka 179 at 183 (FB); Jaiwant Laxman P. Sardesai etc. vs Government of Goa Daman & Diu & Anr. , AIR 1987 Bom. 214 at 217 (FB), overruled. </s>
<s>[INST] Summarize the judgementAppeals Nos. 2200, 2200A and 2200B of 1968. Appeals from the judgment and order dated November 30, 1967 of, the Allahabad High Court in Income tax Reference No. 366 of 1963. M. C. Chagla and P. N. Tiwari, for the appellant (in all the appeals). B. Sen, G. L. Sharnia and R. N. Sachthey, for the respondent (in all the appeals). 239 The, judgment of the Court was delivered by Hegde J. In these appeals by certificate the question that falls for decision is whether oil the facts and in the circumstances of the case registration under section 26(A) of the Indian Income Tax Act, 1922 (to be hereinafter referred to as the act) was rightly refused to the appellant firm on the ground that the partnership in question violated the provisions of section 4 of the Indian Companies Act, 1913. The authorities under the Act as well as the High Court of Allahabad have answered that question in the affirmative. The assessee challenges that conclusion. The above appeals relate to different assessment years of the same assessee, the relevant assessment years being 1952 53, 1953 54 and 1954 55. In all these years the Income Tax Officer had refused to register the appellant firm under section 26A. All the partnership deeds are, we are told, similar in terms. We have before us the deed executed on July 7, 1950. It shows that the firm consists of 18 partners. Ex facie that deed does not show that any of the partners had joined the deed as representatives of their Hindu Undivided Families. From the tenor of the document, they appear to be partners in their own right. The Income Tax Officer, the Appellate Assistant Commissioner and the Tribunal have come to the conclusion that some of them had joined the partnership as Kartas of their respective Hindu Undivided Families. All the authorities under the Act as well as the High Court have opined that the partnership in question is not lawful in view of section 4(3) of the Indian Companies Act, 1913. The material portion of that provision reads (4). (1). (2) No company, association or partnership consisting of more than twenty persons shall be formed for the purpose of carrying on any other business that has for its object the acquisition of gain by the company, association or partnership or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of an Act of Parliament of the United Kingdom or some other Indian law or Royal Charter or Letters Patent. (3) This section shall not apply to a joint family carrying on joint family trade or business and where two or more such joint families form a partnership, in computing the number of persons for the purpose of this section, minor members of such families shall be excluded. 240 (4) Every member of a company, association or partnership carrying on business in contravention of this section shall be personally liable for all liabilities incurred in such business. (5). . . . The Income Tax Officer, the Appellate Assistant Commissioner as well as the Tribunal were of the opinion that some partners of the assessee firm having entered into the partnership as representatives of their respective Hindu Undivided Families, the adult members of those families should be taken into consideration for determining whether or not the total number of partners exceeded twenty. On that basis they have arrived at the conclusion that the firm has more than twenty partners and the same having not been registered as a company under the Companies Act, nor having formed 'in pursuance of an Act of Parliament of the United Kingdom or some other Indian law or Royal Charter or Letters Patent, it must be held to be an unlawful partnership. When the question formulated earlier was referred to the High Court under section 66(1) of the Act, it was heard by Jagdish Sahai and Beg, JJ. Jagdish Sahai J. was of the opinion that the partnership in question was not lawful. Beg J. differed from him and answered the question in favour of the assessee. In view of this difference of opinion, the matter was referred to Takru J. He agreed with Jagdish Sahai J. By a majority the question referred to the High Court was answered in favour of the revenue. Hence these appeals. Mr. Chagla appearing on behalf of the assessee urged that no Hindu joint family as such can Join a partnership and it is now well settled that when a karta of Hindu Undivided Family joins a firm as a partner even if he contributes his share from out of the family funds, the other members of his family do not ipso facto 'become partners of that firm. So far as the partnership is concerned, he is the only partner though he may be accountable to the members of his family as regards the profits earned. According to the learned counsel, for the purpose of working out the rights and liabilities of the partners inter se one cannot go behind the partnership deed. Proceeding further he urged that in considering whether a partnership should be registered under section 26A or not, the Income tax Officer has merely to see, whether the requirements of section 26A of the Act and the relevant rules are complied with or not. He is not entitled to investigate into the question as to who are beneficially interested in the partnership. According to him if the requirements of section 26A and the relevant rules are complied with, the Income tax Officer is bound to register the partnership. The counsel urged that the second limb of section 4(3) of the Indian Companies Act, 1913, proceeds on the erroneous impression that 241 a joint Hindu family can enter into a partnership, which in law it cannot as it has no legal personality. Mr. B. Sen, learned counsel for the department did not contest the position that when a karta or a member of a Hindu Joint family joins a partnership the other members of his family do not become partners ipso facto. But according to him it is open to the department to go behind the partnership deed and find out whether the individual who has joined as a partner has joined in his own right or as a representative of any other body. His contention was that in view of section 4(3) of the Indian Companies Act, 1913, once the Income tax Officer comes to the conclusion that one of the partners of a firm is a representative of a joint family, he must deem that the adult members of that family are also partners of that firm and on that 'basis find out whether the total number of partners exceed twenty. If they exceed twenty he cannot register the partnership, as such a partnership contravenes section 4 (2) of the Indian Companies Act, 1913, Section 2 (6B) of the Act provides that the expression 'firm ', partner ' and 'partnership ' in the Act have the same meaning respectively as in the . Section 4 of the Partnership Act, 1932 prescribes "Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Persons who have entered into partnership with one another are called individually 'partners" and collectively "a firm" and the name under which their business is carried on is called the 'firm name '. In view of the aforementioned provision only "persons" can join as partners. Section 2(42) of the General Clauses Act says a "Person" shall include any company or association or body of individuals whether incorporation or not. But this definition applies when there is nothing repugnant in the subject or context. After examining the provisions of the Partnership Act, the Privy Council in SenaJi Kapurchand vs Pannaji Devichand(1) and this Court in Dulichand Laxminarayana vs Commissioner of Income Tax, Nagpur(2) , have held that an association of persons is not a person within the meaning of that expression in the Partnership Act, It is true that section 2(9) of the Act says that unless the context otherwise requires "person" includes Hindu Undivided Family, This definition cannot be imported into the Partnership Act, the provisions of which alone are relevant for finding as to who could join as partners. It is only partnership constituted according to (1) A.I.R. 1930 P.C. 300. (2) 242 the provisions of the Partnership Act that can be considered as partnerships under the Act. The definition of 'person ' in the Act is intended for the purpose of levying income tax and for other cognate matters. On the basis of certain observations of the Judicial Committee in Lala Lachman Das vs Commissioner of Income Tax(1), it Was contended on behalf of the department that a joint Hindu family can enter into a partnership. Those observations have to be read in the context in which they were made. The department in that case had requested the tribunal to refer the question "can there 'be a partnership within the meaning of section 2 sub section 6(B) of the Indian Income tax Act, 1922 between a Hindu Undivided Family as such on the one part and one of its undivided members in his indi vidual capacity on the other part. " But that question was ultimately not referred as being unnecessary on the facts of the case. But the following observations of the Judicial Committee in its judgment are relevant : "It is unnecessary to consider in this case the question relating to the validity of a partnership between a Hindu Undivided family as such of the one part and one of its undivided members in his individual capacity of the other. With reference to the latter kind of partnership there seems to be some authority favouring the view that such a partnership cannot exist under the rules. of Hindu law but their Lordships do not propose to deal with that question in this case. " In that case the partnership was between the karta of a joint Hindu family and an undivided member of that family. Hence the observations in the judgment that the Hindu Undivided family was a partner has really reference to the karta who was a partner as representing the family. In Commissioner of Income tax,, West Bengal vs Kalu Babu Lal Chand(2), this Court observed that it is now well settled that Hindu Undivided Family cannot as such enter into a contract of partnership with another person or persons. ,Several other decisions have taken the same view. No decision taking a contrary view was ' brought to our notice. The concept of a Hindu Undivided Family joining a partnership presents considerable difficulty. A Hindu Undivided Family is a fleeting body. Its composition changes by births, deaths, marriages and divorces. Such a partnership is likely to have a precarious existence. The assumption in section 4(3) of the Companies ' Act, 1913 that a Hindu Joint family can be a partner in a partnership appears to be based on an erroneous view of the law. (1) 74. I.A. 277. (2) 243 The next question is whether when a deed of partnership does not on the face of it show that any Hindu Undivided Family has joined the partnership, is it open to the Income tax Officer to behind the deed and find out for the purpose of registration under section 26A whether the ostensible partner is the representative of someone else. The Judicial Committee in P. K. P. section Pichappa Chettiar and Ors. vs Chokalingam Pillai and Ors. (1) ruled that 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 Contract Act. In such a case the family as a unit does not become a partner but daily such of its members as in fact enter into contractual relationship with the stranger. In Kshetra Mohan Sannyasi Charan Sadhukhan vs Commr. of Excess Profits Tax, West Bengal,(1) this Court laid down that a Hindu Undivided Family is included in the expression "person, as defined in the Indian Income tax Act but it is not a juristic person for all purposes; when two kartas of Hindu Undivided Families. enter into a partnereship agreement, the partnership though popularly known as one between two Hindu Undivided Families in the eye of the law, it is a partnership between the two kartas and the other members of the families do not ipso facto become partners; there is, however, nothing to prevent the individual members of one Hindu Undivided Family from entering into a partnership with the individual members of another Hindu Undivided Family and in such a case it: is a partnership between the individual members and it is wholly inappropriate to describe such a partnership as one between two Hindu Undivided Families. In Firm Bhagat Ram Mohan Lal vs Commissioner of Excess Profits Tax, Nagpur and anr.(3), this Court ruled that when the karta of a joint family enters ' into a partnership with the stranger, the members of the family do not ipso facto become partners in that firm. They have no right to take part in its management or to sue for its dissolution. The creditors of the firm would no doubt be entitled to proceed against the joint family assets including the shares of the non Partner co parceners for realisation of their debts. But that is because under the Hindu law, the karta has. the right when properly carrying on business to pledge the H credit of the joint family to the extent of its assets, and not because the junior members become partners in the business. The liability (1) A.I.R. 1934, P.C. 192. (3) (2)(1953) 244 of the latter arises by reason ' of their status as coparceners and not by reason of any contract of partnership by them. In Commissioner of Income tax, Bombay City vs Nandlal Gandalal(1), this Court again observed that the position in Hindu law with 'regard to a coparcener, even when he is the karta entering into partnership with others in carrying on a business is well settled. The partnership that is created is a contractual partnership and is governed by the provisions of the . The partnership is not between the family and the other partners; it is a partnership between the _coparcener individually and his other partners. The coparcener is undoubtedly accountable to the family for the income received, but the partnership is exclusively one between the contracting members, including the individual coparcener and the strangers. On the death of the coparcener, the surviving members of the family cannot claim to continue as partners with the others or institute a suit for dissolution of partnership; nor can the stranger partners sue them as partners for the coparcener 's share of the loss. Therefore, so far as the partnership is concerned, both under partnership law and under Hindu law, the control and management is in the hands of the individual coparcener who is the partner, and not in the family. In Commissioner of Income tax, Madras vs Bagyalakshmi and Co. Udamalpet(2), this Court observed that contract of partnership has no concern with the obligation of the partners to others in respect of their shares of profit in the partnership. it only regulates the rights and liabilities of the partners. A partner may be the karta of a joint Hindu family, he may be a trustee, he may enter into sub partnership with others, he may under an agreement express or implied, be the representative of a group of persons; he may be a benamidar for another. In all such cases he occupies a dual position qua the partnership, he functions in his personal capacity; qua the third parties in his representative capacity; third parties, whom one of the partner represents, cannot enforce their rights against the other partners nor can the other partners do so against the said third parties. Their right is only to a share in the profits of their partner representative in accordance with law or in accordance with the terms of the agreement, as the case may be. The law of partnership and Hindu law function in different fields. A divided member or some of the divided members of the erstwhile joint family can certainly enter into a partnership, with third parties under some arrangement among the members of the divided family. Their shares in the partnership depend on the terms of the partnership; the shares of the members of the divided (1) (1960) 40 I.T.R.1. (2) ; 245 family in the interest of their representative in the partnership depend upon the terms of the partition deed. From these decisions it follows that for the purpose of finding, out as to who are all partners of. a firm, one has only to look to the partnership deed and not to go behind it. Another contention urged by Mr. Chagla was that the scope of the enquiry I under section 26A is a limited one; if the application made for registration complies with the requirements of that section and the rules framed thereunder. , then it is not open to the income tax Officer to refuse to register the firm. Section 26A says : (1) Application may be made to the Income7tax 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 the Income tax or super tax. (2) The application shall be made by such person or persons, and at such times and shall contain such particulars 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. " The conditions of registration prescribed in this section and the relevant rules are : (1) on behalf of the firm, an application ,should be made to the Income tax Officer by such person and at such times and containing such particulars, being in such form and verified in such manner as are prescribed by the rules;, (2) the firm should be constituted under an instrument of partnership; (3) the instrument must specify the individual shares of the part ners and (4) the partnership must be valid and genuine and must actually exist in the terms specified in the instrument. If all the above conditions are fulfilled, the Income tax Officer is bound to register the firm unless the assessee has contravened section 23(4) of the Act. In Commissioner of Income Tax, Madras vs Sivakashi Match Exporting Co. (1) this Court held that the combined effect of section 26A and the rules made thereunder was that the Income tax Officer could not reject an application made by a firm if it gave the necessary particulars prescribed by the rules and if there was a firm in existence as shown in the instrument of partnership. A firm is said to be not in existence if it was a bogus and not a (1) , Sup. Cl/70 2 246 genuine one or if in law the constitution of the partnership was void. The jurisdiction if the Income tax Officer was, therefore, confined to ascertaining two facts namely (1) whether the application for registration was in conformity with the rules framed under the Act and (2) whether the firm shown in the document presented for registration was a bogus one or had no legal existence. Further the discretion conferred on the Income tax Officer under section 26A was a judicial one and he could not refuse to register a firm on mere speculation. He had to base his conclusion on relevant evidence. Therein this Court further held that there was no prohibition under the Partnership Act against a partner or partners of other firms combining together to form a separate partnership to carry on a different business. The fact that such a partner entered into sub partnership with others in respect of his share did not detract from the validity of the partnership; nor was the manner in which he dealt with his share of the profits of any relevance to the question of the validity of the partnership. In Commissioner of Income Tax Gujarat vs A. Abdul Rahim and Co. (1), this Court ruled that registration of a partnership deed under s.26A of the Act could not 'be refused on the ground that one of the partners was a benamidar for someone else. Therein this Court observed that it is a settled law that if a partnership is a 'genuine and valid one, the Income tax Officer has no power to reject its registration if the other provisions of s.26A and the rules framed thereunder are complied with. When a firm makes an application under s.26A for registration, the Income tax Officer can reject the same if he comes to the conclusion that the partnership is not genuine or the instrument of partnership does not specify correctly the individual share of the partners. But once he comes to the conclusion that the partnership is genuine and a valid one, he cannot refuse registration on the ground that one of the partners is a benamidar of another. If the partnership is genuine and legal, the share given to the benamidar will be the correct specification of his individual share in the partnership. The beneficial interest in the income pertaining to the share of the said benamidar may have relevance to the matter of assessment but none in regard to the question of registration. His beami character does not affect the benaamidar 's capacity as partner or his relationship with the other members of the partnership. If a partner is only a benamidar for, another, it can only mean that he is accountable to the real owner for the profits earned by him from and out of the partnership. Therefore a benamidar is a mere trustee of the real owner and he has no beneficial interest in the property or the business of the real owner. But, in law, just as in the case of a trustee, he can also enter into a partnership with (1) 247 others. The benamidar of a partner, qua the other partners, has separate And real existence; he is governed by the terms of the partnership deed, his rights and liabilities are governed by the terms of the contract and by the provisions of the partnership Act; his liability to third parties for the acts of the partnership is coequal with that of the other partners; the other partners have no concern with the real owner; they can only look to him for enforcing their rights or discharging their obligations under the partnership deed. Any internal arrangement between him and ,another is not governed by the terms of the partnership; that arrangement operates only on the profits accruing to the benamidar; it is outside the partnership arrangement. If a benamidar possesses the legal character to enter into a partnership with another, the fact that he is accountable for his profits to, and has the right to be indemnified for his losses by a third party or even by one of the partners does not discharge him of the said character. As mentioned earlier, the persons who are shown in the part nership deed with which we are concerned in these appeals as partners, appeared to have joined the same in their individual capacity. There is nothing in the partnership deed to indicate that they have joined the partnership as kartas of their respective families. It was not open to the Income tax Officer to go behind the deed and find out, for the purposes of registration under section 26A whether the partners mentioned in the deed have joined the partnership in their own right or as representing others. Hence the partnership must be held to have been validly formed as law did not at the relevant time prohibit any one, otherwise competent to contract from entering into a contract of partnership even though, the beneficial interest in his share may vest in others. The application made for registration complies with the requirements of section 26A and the rules framed thereunder. Therefore the Income tax Officer was bound to register the partnership. For the reasons mentioned above, we allow these appeals, set aside the order made by the High Court and answer the question referred to the High Court in the negative and in favour of the assessee. The department shall pay the costs of the assessee in this Court as well as in the High Court. One hearing fee. R.K.P.S. Appeals allowed. [/INST]A firm consisted of 18 partners. The partnership deed did not show that any of the partners joined the deed as representatives of their Hindu Undivided Families. The firm applied for registration under section 26A of the Income Tax Act, 1922. The income tax Officer, the Appellate Assistant Commissioner and the Tribunal were of the opinion that some partners of the firm having entered into the partnership as representatives of their respective Hindu undivided families, in view of section 4(3) of the Companies Act, 1913, the adult members of these families should be taken into consideration for determining whether or not the total number of partners exceeded twenty. On that basis they arrived at the conclusion that the firm had more than 20 partners and the same having not been registered as a company under the Companies Act, the partnership was un lawful. The High Court answered a reference made to it in favour of the revenue. In the appeal to this Court it was contended; (i) Section 4(3) of the Companies Act, 1913 proceeded on the erroneous impression that a joint Hindu Family can enter into a partnership which in law it cannot as it has no legal personality; (ii) it was not open to the Income Tax Officer to go behind the deed for the purpose of registration under section 26A and (iii) if the application, for registration complied with the requirements of that section and the rules made thereunder, it was not open to the Income Tax Officer to refuse to register. Allowing the appeal, HELD : (i) It is only partnership constituted according to the provisions of the partnership Act that can be considered as partnership under the Act. Under the Partnership Act only "persons" can join as partners. An association of persons is not a person within the meaning of that expression in the Partnership Act. The definition of "Person" in the Income Tax Act including within the definition Hindu Undivided Family is intended for levying income tax and other cognate matters and cannot be imported into the Partnership Act, the provisions of which alone are relevant for finding as to who could join as partners. A Hindu undivided family cannot as such enter into a contact of Partnership with another person or persons. The concept of a Hindu undivided family joining a partnership presents considerable difficulty. It is a fleeting body and such a partnership is likely to have a precarious. existence. Therefore, the assumption in section 4(3) of the Companies Act, 1913, that a Hindu Joint Family can be a partner in a partnership appear& to be based on an erroneous view of the law. [241 H 242 G H] 238 Senaji Kapurchand V. Pannaji Devichand, A I.R. 1930 P.C. 300, Dulichand Laxminarayana vs Commissioner of income tax Nagpur, and Commissioner of Income tax West Bengal vs Kalu Babu Lal Chand, , referred to. Lala Lachman Das vs Commissioner of Income Tax, 74 I.A. 277, distinguished '. (ii) For the purpose of finding out as to who are all partners of a firm, one has only to look to, the partnership deed and not to go behind it. It is well settled that when a co parcener, even when he is the Karta, enters into partnership with others the partnership that is created is a contractual partnership; that partnership is not between the family and the other partners, it is a partnership between the coparcener individually and his other partners. [244 B C] P. K. P. section Pichappa Chettiar vs Chokalingam Pillai. A.I.R. 1934 P.C. 192, Kshetra Mohan Sannyasi Charan Sadhukhan vs Commr. of Excess Profits Tax, West Bengal, , Firm Bhagat Ram Mohan Lal vs Commissioner of Excess Profits Tax, Nagpur and And. and Commissioner of Income tax, Bombay City vs Nandlal Gandalal, , referred to. (iii) The Income tax Officer has no, power to reject an application for registration under section 26.A if the provisions of the section and the rules framed thereunder are complied with. The jurisdiction of the Income tax Officer is confined to ascertaining two facts, namely, (1) whether the application for registration is in conformity with the rules framed under the Act and (2) whether the firm shown in the document %,as a bogus one or had no legal existence. It is not open to the Income tax Officer to go behind the deed and find out for the purpose of registration whether the, partners mentioned in the deed have joined the partnership in their own right or as representing others. In the present cast the application made for registration complies with the requirements of the section and the rules framed thereunder. Hence the partnership must be held to have been validly formed as law did not at the relevant time prohibit anyone, otherwise competent to contract from entering into a contract of partnership even though the beneficial interest in his share may vest in others. [246 A B, 247 E F] Commissioner of Income tax, Madras vs Sivakashi Match Exporting Co. and Commissioner of Income Tax Gujarat vs ,I. Abdul Rahim and Co., , referred to. </s>
<s>[INST] Summarize the judgement: Civil Appeal No. 213 of 1955. Appeal from the judgment and order dated June 26, 1953 of the Calcutta High Court in I.T.R. No. 34 of 1952. A.V. Viswanatha Sastri, Y. C. Talukdar and Sukumar Ghose, for the appellant. K.N Rajagopal Sastri and. D. Gupta, for the respondent. May 12. The Judgment of the Court was delivered by BHAGWATI J. This appeal with a certificate under article 135 of the Constitution read with section 66A(2) of the Indian Income tax Act raises the question as to whether the appellant ",as entitled to a deduction of Rs. 24,809 in the computation of its profits and gains for the assessment year 1948 49. The appellant deals in land and property and carries on land developing business and in the course of the said business, it buys land, develops it so as to make it fit for building purposes and sells it at a profit in plots. The developments undertaken are in the main, 187 that roads are to be laid out, a drainage system to be provided and street lights installed and they are to be maintained till the sample are taken over by the Muncipality. The whole of the development is not carried out before the land is sold, nor the whole of the sale price received in cash at the time of the sales. The procedure followed is that when a plot is sold, the purchaser pays about 25 % of the purchase price in cash and undertakes to pay the balance with interest at a certain rate in ten annual installments which he secures by creating a charge on the land purchased. The appellant, in its turn, undertakes to carry out the developments within six months from the date of the, sale but this time is not of the essence of the contract and what the appellant undertakes is to carry out the 'developments within a reasonable time. The tinderbox is incorporated in the deed of sale itself, whereas the security is given by the purchaser by means of a separate document. In the accounting year relating to the assessment year 1948 49 the appellant sold a number of plots and received a portion of the sale price from the purchasers according to the scheme mentioned above. The appellant maintains its accounts in the mercantile method under which money not actually received but only treated as received on the basis that it was due and receivable is entered in the books of account on the credit side. Even though the appellant did not receive the whole of the price, viz., Rs. 43,692 11 9, it entered in the credit side of its books of account the whole of that sum representing the full sale price of the lands sold during the accounting year though only a sum of Rs. 29,392 11 9 was actually received in cash from the purchaser and the balance of Its. 14,300 represented the unpaid balance retained by the purchasers the payment of which was secured by creating charge on the said lands as also the interest received or receivable in the year of account tinder the deeds of charge. The whole of this sum of Rs. 43,692 11 9 was, however, credited in the books of account by the appellant according to the mercantile system of accounting adopted by it. 188 In so far as under the terms of the deeds of sale the appellant had undertaken to carry out the developments within six months from the date of sale it estimated a sum of Rs. 24,809 as the expenditure for the developments to be carried out in respect of the plots which had been sold during the year and debited the same in its books of account on the ground that the liability for the said sum of Rs. 24,809 had actually arisen, the appellant being bound to provide the facilities it had undertaken to do, even though no part of that amount represented any expenditure actually made during that year. In the course of its assessment to income tax for the year 1948 49, the appellant claimed a deduction of the said sum of Rs. 24,809 in the computation of the profits and gains of its business. The Income tax Officer disallowed that claim on the ground that the expenses had not been actually incurred in the year of account and also on the ground that the estimate had not been proved to be based on a consideration of the real expenses which the Company would have to incur for the purpose. The Appellate Assistant Commissioner, on appeal, confirmed the disallowance by the I.T.O. on the ground that there was as yet no accrued liability and on the further ground that as the development would be carried out in the future, the expenditure estimated at current prices could not be allowed. On appeal taken by the appellant before the Income. tax Appellate Tribunal, the Tribunal, held that it was by no means certain what the actual cost would be when the developments were carried out and that although the appellant had undertaken to carry out certain developments, it could bring expenses into account only when the expenses were actually incurred. The Tribunal accordingly dismissed the appeal. The appellant thereafter made an application before the Tribunal requiring it to refer to the High Court under section 66(1) of the Income tax Act certain questions of law arising out of its order. The Tribunal thereupon stated a case and referred the following question to the High Court for its decision: 189 Whether on the facts and circumstances stated above, the sum of Rs. 24,809 can legally be allowed as an expense of the year under consideration. " The statement of case drawn by the Tribunal was severely criticized by the High Court as under: " Unfortunately, the treatment of the question by the authorities below has been of a somewhat summary character, presumably because it was raised and argued before them in a superficial form. But even if such was the case, there is hardly any justification for the Tribunal failing to realise it least what facts were required to be found and stated. The statement of case is sketchy and bare and like most of the statements we have to deal with during this session, has hardly any appearance of a case seriously stated. " In spite of the above observations the High Court dealt with the question and after dealing exhaustively with the arguments which were urged be fore it by the learned Counsel for the appellant answered the question in the negative. On an application made by the appellant, however, the High Court granted the requisite certificate under article 135 of the Constitution to appeal to this Court and lience, this appeal. The question which really arises for our determination in this appeal is whether having regard to the fact that the appellant 's method of accounting, viz., the Mercantile method was accepted by the Income Tax Officer and the receipts appearing in the books of account included the unpaid balance of the sale price of the plots in question, the amount of liability undertaken by the appellant to earn those receipts was to be deducted even if there had not been actual disbursement made by it during the accounting year. Put in other words, the question was whether in view of the fact that the sum of Rs. 43,692 11 9 had been entered on the credit side in the books of account even though it was not money actually received but only money treated as received on the basis that it. was due and receivable, the sum of Rs. 24,809 which had been entered as debit, being the liability of the appellant 190 undertaken by it to earn those receipts, should be deducted in determining the taxable profits and gains of the appellant. The mercantile system of accounting is well known and this method has been explained in a judgment of this Court in Keshav Mills Ltd. vs Commissioner of Income tax, Bombay (1). " That system brings into credit what is due, immediately it becomes legally due and before it is actually received and it brings into debit expenditure the amount for which a legal liability has been incurred before it is actually disbursed. " The main ground on which the claim of the appellant for deducting this sum of Rs. 24,809 ",as disallowed by all the authorities below was that the expenditure was not actually incurred in the year of account, it was by no means certain what the actual cost would be when the developments " are carried out and that there was as yet no accrued liability but only a contingent liability undertaken by the appellant, even though the undertaking was incorporated in the deeds of sale themselves. The following were the developments undertaken to be carried out by the appellant as appears from the order of the Appellate Assistant Commissioner: " There was a condition in the Conveyance deeds that the appellant does hereby covenant with the purchaser that the appellant shall complete the construction of roads, drains, provide suitable pucca surface drains on both sides of the roads and shall also make arrangements for lighting up the said roads and shall maintain the said roads, drains, lights till the same are taken over by the Municipal Besides provision for roads, drains, etc. , t~he ~Deed provides for filling u~p of low lands and there is a clause in the Conveyance Deed which shows that the ~appellant 's shall at his own cost ~fi.11 the low lands and tank with earth and bring the same to road level. " (~1) II9531 ~S.C.R. ~95o, 958~ 191 This undertaking having been incorporated in the deeds of sale themselves there was certainly a liability undertaken by the appellant to carry out these developments within six months from the dates of those deeds. Time was of course not of the essence of the contract and the appellant therefore was at liberty to carry out that undertaking within a reasonable time. That, however, did not absolve it in any manner whatever from carrying out the undertaking and the purchasers were in a position to enforce the undertaking by taking appropriate proceedings in that behalf. Reliance was placed on behalf of the Revenue on the case of Peter Merchant Ltd. vs Stedeford (Inspector of Taxes) (1) in which a distinction was drawn between an actual i.e., legal liability, which is deductible, and a liability which is future or contingent and for which no deduction can be made. The facts of that case were that the Company which carried on the business of managing factory canteens, had contracted with a factory owner to maintain the crockery, cutlery and utensils used in the canteen otherwise known as the light equipment in its original quantity and quality. The cost of replacement was admittedly a proper deduction in computing profits, as was also any sum paid to a factory owner in settlement of the value of shortages on termination of the contract. Owing to war and. other circumstances it was impossible or impracticable for the Company to obtain replacements in some cases, and the obligations under the contracts with the factory owners in those cases still remained to be performed. in the accounts for the year deductions had been made both of the amounts actually expended on replacements and the amounts which the company was liable to expend when the equipment became available. The Company claimed to be entitled to deduct in computing its profits amounts representing at current prices, the liability to effect replacements as soon as the required equipment became obtainable. The former amounts were allowed as deductions, and the latter the Court of Appeal (reversing the decision (1) 192 of the Court below) held not to be deductible. The basis of the decision was that the real liability under the contract was contingent, not actual, since the obligations of the company were not such that it might be sued for the cost of 'replacements at current prices, but only for possible damages for breach of contract in the event of the factory owner preferring a claim under the contract, and since no legal liability could arise until such a claim was made, the liability had to be regarded as contingent and not deductible. It is clear from the above that on the facts and circumstances of that case the Court held that it was not an accrued liability but was merely a contingent one and if that was the case only the sums actually expended could be deducted and not those which the company was liable to expend in the future. Simon in his " Income tax ", Second Edition, Vol. II, at p. 204 under the caption " Accrued Liability " observes as under, after citing the case mentioned above: . "In cases, however, where an actual liability exists, as is the case with accrued expenses, a deduction is allowable; and this is not affected by the fact that the amount of the liability and the deduction will subsequently have to be varied. A liability, the amount of which is deductible for income tax purposes, is one which is actually existing at the time of making the deduction, and is distinct from the type of liability accruing in Peter Merchant8 Ltd. vs Stedeford (lnspector of Taxes) which although allowable on accountancy principles, is not deductible for the purpose of income tax. " Approaching the question before us in the light of the observations made above we have got to determine what was the nature of the liability which was undertaken by the appellant in regard to the development of the lands in question, whether it was an accrued liability or was one which was contingent on the happening of a certain event in the future. There is no doubt that the undertaking to carry out the developments within six months from the dates of 193 the deeds of sale was incorporated therein and that undertaking was unconditional, the appellant binding itself absolutely to carry out the same. It was not dependent on any condition being fulfilled or the happening of any event, the only condition being that it was to be carried out within six months which in view of the fact that the time was not of the essence of the contract meant a reasonable time. Whatever may be considered a reasonable time under the circumstances of the case, the setting up of that time limit did not prescribe any condition for the carrying out of that undertaking and the undertaking was absolute interms. If that undertaking imported any liability on the appellant the liability had already accrued on the dates of the deeds of sale, though that liability was to be discharged at a future date. It was thus an accrued liability and the estimated expenditure which would be incurred in discharging the same could very well be deducted from the profits and gains of the business. Inasmuch as the liability which had thug accrued during the accounting year was to be discharged at a future date the amount to be expended in the discharge of that liability would have to be estimated in order that under the mercantile system of accounting the amount could be debited before it was actually disbursed. The difficulty in the estimation thereof again would not convert an accrued liability into a conditional one, because it is always open to the Income tax authorities concerned to arrive at a proper estimate thereof having regard to all the circumstances of the case. That it can be so done is illustrated by Gold Coast Selection Trust Ltd. v Humphrey (Inspector of Taxes) (1) where a particular asset which could not be immediately realised in a commercial sense was valued in money for income tax Purposes in the year of its receipt and it was observed by Viscount Simon: " It seems to me that it is not correct to say that an asset, such as this block of shares, cannot be valued in money for income tax purposes in the (1) , 469. 25 194 year of its receipt because it cannot, in a commercial sense, be immediately realized. That is no reason for saying that it is incapable of being valued, though, 'if its realization cannot take place promptly, that may be a reason why the money figure set against it at the earlier date should be reduced in order to allow for an appropriate interval. Supposing, for example, the contract conferring the asset on the taxpayer included a stipulation that the asset should not be realized by the transferee for five years, and that if an attempt was made to realise it before that time, the property in it should revert to the transferor. This might seriously reduce the value of the asset when received, but it is no reason for saving that when received it must be regarded as having no value at all. The Commissioners, as its seems to me, in fixing what money equivalent should be taken as representing the asset, must fix an appropriate money value as at the end of the period to which the appellant 's accounts are made up by taking all the circumstances into consideration. " As in the case of assets received during the accounting year which could not be immediately realized in a commercial sense, so in the case of liabilities which have already accrued during the accounting year, though they may not have to be discharged till a later date. It will be always open to the Income tax authorities to fix an appropriate money value of that liability as at the end of the accounting period by taking all the circumstances into consideration and the estimate of expenses given by the assessee would be liable to scrutiny at their hands having regard to all the facts and circumstances of the case. The High Court was, therefore, clearly in error when it stated: " In view of all the circumstances of the case it must in my opinion, be held that the amounts of sale price, not received in cash, were also received and for the purpose of earning the receipts the assessee spent, besides giving the lands, nothing more than a promise. Since the whole amount was actually received in the year of account before and 195 without making the promised expenditure, no question of allowing a deduction of any expenditure from such receipts of the year arises. " If then the estimated expenses which would have to be incurred in duly discharging that liability which was undertaken by the appellant and was incorporated in the deeds of sale could be deducted in accordance with the mercantile system of accounting adopted by the appellant and accepted by the I.T.O., is there anything in the Income tax Act which would prevent this debit being allowed as a deduction in the computation of the profits and gains of the appellant 's business? The appellant, had, it appears, claimed this deduction as and by way of expenditure wholly laid out for the purposes of its business under section 10(2)(xv) of the Income tax Act. On an interpretation of that provision, the High Court was inclined to hold, though it did not decide the question, that to the extent that a definite liability had accrued about which all preliminary proceedings causing the accrual of the liability in a concluded form had already been gone through although the actual disbursement had not yet taken place, section 10(2)(xv) would cover accrued liabilities though the amount may not actually have been expended on the footing that the liability being certain, the amount was as good as spent and on that basis there would be room in the clause for debits which are proper debits under the mercantile system of accounting. It, however, distinguished the present case on the ground that the liability here was a floating liability, the measure of which depended upon the will of the appellant and the discharge of which rested only in a promise and that the expenses were entirely at large and the development work itself merely so. Apart, however, from the question whether section 10(2) (xv) of the Income tax Act would apply to the facts of the present case, the case is in our opinion, well within the purview of section 10 (1) of the Income tax Act. The appellant here is being. assessed in respect of the profits and gains of its business and the profits and gains of the business cannot be determined unless and until he expenses or the obligations which have been incurred are set off against the receipt 's The expression profits and gains has to be understood in its commercial sense and there can be no computation of such profits and gains until the expenditure which is necessary for the purpose of earning the receipts is deducted therefrom whether the expenditure is actually incurred or the liability in respect thereof has accrued even though it may have to be discharged at some future date. As was observed by Lord Herschell in Bussel vs Town and County Bank, Ltd.( '): " The duty is to be charged upon I a sum not less than the full amount of the balance of the profits or gains of the trade, manufacture, adventure, or concern '; and it appears to me that that language implies that for the purpose of arriving at the balance of profits all that expenditure which is necessary for the purposes of earning the receipts must be deducted, otherwise you do not arrive at the balance of profits, indeed, otherwise you do not ascertain, and ' cannot ascertain, whether there is such a thing as profit or not. The profit of a trade or business is the surplus by which the receipts from the trade or business exceed the expenditure necessary for the purpose of earning those receipts. That seems to me to be the meaning of the word " profits " in relation to any trade or business. Unless and until you have ascertained that there is such a balance, nothing exists to which the name " profits can properly be applied. " A similar opinion was expressed in the Gresham Life Assurance Society V. Styles (2) : " When we speak of the profits or gains of a trader we mean that which he had made by his trading. Whether there be such a thing as profit or gain can only be ascertained by setting against the receipts the expenditure or obligations to which they have given rise. " These are no doubt observations from the English cases dealing with English statutes of Income tax, but the general principles which can he deduced therefrom (1) , 424 (2) 197 are, nevertheless, applicable here and it was stated by Lord Macmillan in Pondicherry Railway Co., Ltd. vs Commissioner of Income tax, Madras (1) " English authorities can only be utilised with caution in the consideration of Indian Income tax cases owing to the difference in the relevant legislation, but the principle laid down by Lord Chancellor Halsbury in Gresham Life Assurance Society vs Styles (supra), is of general application unaffected by the specialities of the English Tax system. " The thing to be taxed", said his Lordship, "is the amount of profits or gains ". The word " profits ", I think, is to be understood in its natural and proper sense in a sense which no commercial man would misunderstand. " ' It may be useful to observe at this stage that prior to the amendment of the Indian Income tax Act in 1939, bad and doubtful debts were not treated as deductible allowance for the purpose of computation of profits or gains of a business, The Privy Council in the Income tax Commissioner vs Chitnavis observed: " Although the Act nowhere in terms authorises the deduction of bad debts of a business, such a deduction is necessarily allowable. What are chargeable to income tax in respect of a business are the profits and gains of a year; and in assessing the amount of the profits and gains of a year account must necessarily be taken of all losses incurred otherwise you would not arrive at the true profits and gains. " The High Court in disallowing the claim of the appellant in the present case only considered the provisions of section 10 (2)(xv) of the Act and came to the conclusion that on a strict interpretation of those provisions the sum of Rs. 24,809 was not an allowable deduction. Its attention was drawn by the learned Counsel for the appellant to the provisions of section 10(1) of the Act also but it negatived this argument observing that under the Indian Act, the profits must be (1) (193i) L. R. 58 1. A. 239, 252. (2) (1932) L. R. 59 I. A. 290, 296. 198 determined by the method of making the statutory deductions from the receipts and any deduction from the business receipts, if it was to be allowed, must be brought under one or the other of the deductions mentioned in section 10(2) and that there was no scope for any preliminary deduction under general principles. It was, however, held by this Court in Badridas Daga vs The Commissioner of Income tax(1) " It is to be noted that while section 10(1) imposes a charge on the profits or gains of a trade, it does not provide how those profits are to be computed. Section 10(2) enumerates various items which are admissible as deductions, but it is well settled that they are not exhaustive of all allowances which could be made in ascertaining profits taxable under section 10(1). " Venkatarama Aiyar, J., who delivered the Judgment of this Court then proceeded to discuss the cases of Commissioner of Income tax vs Chitnavis(2), Gresham Life Assurance Society vs Styles (3) and Pondicherry Railway Co. vs Income tax Commissioner(4), and observed:" The result is that when a claim is made for a deduction for which there is no specific provision in section 10(2), whether it is admissible or not will depend on whether, having regard to accepted commercial practice and trading principles, it can be said to arise out of the carrying on of the business and to be incidental to it. If that is established, then the deduction must be allowed, provided of course there is no prohibition against it, express or implied, in the Act. Turning now to the facts of the present case, we find that the sum of Rs. 24,809 represented the estimated expenditure which had to be incurred by the appellant in discharging a liability which it had already undertaken under the terms of the deeds of sale of the lands in question and was an accrued liability which according to the mercantile system of accounting the appellant was entitled to debit in its books of account (1) , 14. (2) (1932) L.R. 59 I.A. 290, 296. (3) (4) (1931) L.R. 58 I.A. 239, 252. 199 for the accounting year as against the receipts of Rs. 43,692 11 9 which represented the sale proceeds of the said lands. Even under section 10(2) of the Income tax Act, it might. possibly be urged that the word " expended was capable of being interpreted as " expendable "or to be expended " at least in a case where a liability to incur the said expenses had been actually incurred by the assessee who adopted the mercantile system of accounting and the debit of Rs. 24,809 was thus a proper debit in the present case. We need not however base our decision on any such consideration. We are definitely of opinion that the sum of Rs. 24,809 represented the estimated amount which would have to be expended by the appellant in the course of carrying on its business and was incidental to the same and having regard to the accepted commercial practice and trading principles was a deduction which, if there was no specific provision for it under section 10(2) of the Act was certainly allowable deduction, in arriving at the profits and gains of the business of the appellant under section 10(1) of the Act, there being no prohibition against it, express or implied in the Act. It is to be noted that the appellant had led evidence before the Income tax authorities in regard to this estimated expenditure of Rs. 24,809 and no exception was taken to the same in regard to the quantum, though the permissibility of such a deduction was questioned by them relying upon the provisions of s.10(2) of the Act. It therefore follows that the conclusion reached by the High Court in regard to the disallowance of Rs. 24,809 was wrong and it should have answered the referred question in the affirmative. Before we conclude, we are bound to observe that having accepted the receipts of Rs. 43,692 11 9 in their totality even though a sum of Rs. 29,392 11 9 only was actually received by the appellant in cash, thus making the ' appellant liable for income tax on a sum of Rs. 14,300 which had not been received by it during the accounting year, it was hardly open to the Revenue to urge that the sum of Rs. 24,809 should not have been allowed as a permissible deduction before 200 arriving at the profits or gains of the appellant which were liable to tax. Consistently enough with this attitude, the Revenue ought to have expressed its willingness to treat only a sum of Rs. 29,392 11 9 as the actual receipt of the appellant during the accounting year and made up the computation of the profits and gains of the appellant 's business on that basis. The Revenue, however, did nothing of the sort and insisted upon having its pound of flesh, asking us to delete the whole of the item of Rs. 24,809 from the debit side of the account which it was certainly not entitled to do. We accordingly allow the appeal, set aside the judgment of the High Court and answer the referred question in the affirmative. The respondent will of course pay the appellant 's costs throughout. Appeal allowed. [/INST]The appellant company carried on land developing business and sold land after development on a profit. The whole of the development was not carried out before the land was sold nor the whole of the sale price received in cash at the time of the sale. In the accounting year in question the appellant sold a number of plots and received a portion of the sale price but as it maintained its accounts in the mercantile method it entered the whole price receivable, viz., Rs. 43,692 11 9, in credit side though only Rs. 29,392 11 9 was actually received and debited a sum of Rs. 24,809, being the estimated expenditure for the developments it had, by terms incorporated in the deeds of sale, under taken to carry out within six months thereof, although no part of it was actually spent during that year. The appellant claimed a deduction of the said sum of RS. 24,809 in computation of the profits and gains of its business during the assessment year. The Income tax Officer, while accepting the method of accounting adopted by the appellant, disallowed the 'claim on the ground that no expenses had actually been incurred and the estimate was only a probable one. The Appellate Assistant Commissioner as well as the Income tax Appellate Tribunal confirmed the disallowance on appeals and the High Court, on a reference under section 66(1) of the Income tax Act held against the appellant. The question was whether the deduction claimed was a legally allowable expense of the year in question. Held, that the liability which was undertaken by the appel lant under the deeds of sale was an accrued liability and not a contingent one. Although the time of six months was not of the essence of the contract, the undertaking it had given was unconditional and absolute in terms and the liability must be held to have accrued on the execution of the deeds of sale though it was to be discharged at a future date. Keshav Mills Ltd. vs Commissioner of Income tax, Bombay, [1953] S C.R. 950, referred to. Peter Meychant Ltd. vs Stedeford (Inspector of Taxes), distinguished. 24 186 The difficulty in estimating such a liability for purposes of debit under the mercantile system of accounting could be no ground for treating an accrued liability as a conditional one, since it was always open to the Income tax authorities to arrive a proper estimate thereof having regard to all the circumstances of the case. Gold Coast Selection Trust Ltd. vs Humnphrey (Inspector Taxes), [19481 A.C. 459, referred to. Regard being had, therefore, to the accepted commercial practice and trading principles, the estimated deduction, even if it did not come under any of the specific provisions Of section 10(2) of the Act, was certainly an allowable deduction under section 10(1) of the Act, there being no prohibition, either express or implied, against it in the Act and, consequently, the question must be answered in the affirmative. Badridas Daga vs The Conimissioncr of Income tax, ; Russel vs Town and Country Bank Ltd., ; Gyesham Life Assurance Society, vs Styles, ; Pondichcry Railway co Ltd. vs Commissioner of Income tax, Madras, (1913) L.R. 58 .A. 239 and Income tax Commissioner vs Chitnavis, (1932) L.R. 59 I.A. 290, referred to. </s>
<s>[INST] Summarize the judgementAppeal No. 1733 of 1966. Appeal by special leave from the judgment and decree dated March 30, 1966 of the Madhya Pradesh High Court, Indore Bench in Second Appeal No. 341 of 1964. M.C. Bhandare and P.C. Bhartari, for the appellant. S.K. Mehta, A.P. Tayal and K.L. Mehta, for the respondent 48 The Judgment of the Court was delivered by Ray, J. This is an appeal from the judgment dated 30th March, 1966 of the High Court of Madhya Pradesh (Indore Branch) allowing the appeal and setting aside the decree of the lower appellate court and restoring the decree of the trial court with costs. The plaintiff 's suit against the Indore Municipal Corporation was for a declaration that the dismissal of the plaintiff was illegal and that the plaintiff was still on the post of Removal Sub Inspector and a decree against the defendant for Rs. 7,488/ on account of salary at the rate of Rs. 104/ p.m. from 15th April, 1953 till the date of institution of the suit, viz., 15th April, 1959 and other reliefs. The trial court decreed the suit. The lower appellate court set aside the decree. The High Court restored the decree passed by the trial court. The case of the plaintiff Niyamatulla was that the plaintiff was suspended by the order of the Municipal Engineer dated 15th April, 1953. One Shri Ghatpande who acted in place of the Municipal Commissioner in the month of May 1953 directed the dismissal of the plaintiff. The plaintiff contended that the dismissal could have been only under the orders of the Municipal Commissioner. The plaintiff further contended that there was no opportunity given to the plaintiff against the proposed dismissal. The defence of the Municipal Corporation was that the plaintiff preferred a review petition to the Municipal Commissioner who rejected the same. The plaintiff thereafter preferred an appeal to the Appeal Committee of the Municipal Corporation which was dismissed. Thereafter, a revision petition against the order was heard by the Minister in charge of the Government of Madhya Bharat and the same was rejected in the month of September, 1955. It was, therefore, contended that the plaintiff had no right to file the suit. Another defence was that the suit was barred by limitation. Counsel for the appellant canvassed three grounds. First, that the order of dismissal was valid and Shri Ghatpande had jurisdiction to pass the order of dismissal. Secondly, the suit was barred by limitation. Thirdly, the provisions of section 135 of the Indore Municipality Act was a plea in bar of the suit. The authority of Shri Ghatpande to dismiss the plaintiff was based on the provisions contained in section 13 of the Indore Municipal Act, 1909. Section 13 of the Indore Municipal Act, inter alia, reads as follows: "(1) The Municipal Commissioner for the City of Indore shall, from time to time, be appointed by the Government. 49 (2) (a) Leave of absence may be granted to the Commissioner, from time to time, according to the Indore Civil Service Regulations. (b) During such absence of the Commissioner the Government may appoint any person to act as Commissioner. Every person so appointed shall exercise the powers and perform the duties conferred and imposed by the Act or by any other enactment at the time in force, on the person for whom he is appointed to act, and shall be subject to the same liabilities, restrictions and conditions to which the said person is liable and shall receive such monthly salary as may be determined by the Government. In order to rest the defence on section 13 of the Indore Act, it has to be first found out that there is an appointment by the Government of any person to act as Commissioner. The finding of fact by the High Court is that no order of the Government was produced to show that Shri Ghatpande was appointed to act in place of Shri Rao who was the then Municipal Commissioner. The further finding of the fact was that the order of dismissal was passed by Shri Ghatpande. The defence of limitation pleaded by the Indore Municipal Corporation was in general terms that this suit was barred by limitation. The plaintiff in the plaint alleged that the cause of action arose on 15th April, 1953 and on ist May, 1953 when the plaintiff was dismissed from service and on 11th January, 1954 when it was passed by the Appeal Committee of the Indore Municipality. At the trial the plaintiff contended that the suit was well constituted and was governed by Article 120 of the Limitation Act, 1908. At the time of the hearing of the appeal before the District Judge, Indore, the Municipal Corporation, Indore contended that under section 135(2) of the Indore Municipal Act, 1909 a suit in respect of any act done or purporting to be done under the Act by an officer or servant of the municipality or by any person acting under the order of the Government was to be filed within six months from the date of the actual of the cause of action. The District Judge accepted the plea. The alternative contention on behalf of the Municipal Corporation before the District Judge was that Article 115 of the Limitation Act, 1908 will apply if the special period of limitation prescribed by the Act did not apply. The District Judge did not accept that contention on the reasoning that the plaintiff was not under any contract of service and Article 115 applied to compensation for breach of 50 contract. The District Judge held that Article 14 of the Limitation Act, 1908 would apply when an order of an officer in his official capacity was set aside and no special period of limitation was prescribed. In the High Court the Municipal Corporation repeated the plea under section 135 of the Indore Municipal Act, 1909. The High Court, however, repelled that contention by holding that Shri Ghatpande was not the Commissioner when he passed the order, and, therefore, the order being without jurisdiction, the provisions contained in section 135(2) of the Indore Municipal Act were inapplicable and the plaintiff 's suit was governed by Article 120 of the Limitation Act, 1908. The provisions of the Code of Civil Procedure enjoin that if any special plea of limitation is a defence such a defence of limitation should be pleaded. In the present case, the Municipal Corporation did not plead section 135 of the Indore Municipal Act, 1909 as a defence. Such a plea was not taken in the pleadings or in the trial court and the District Judge should have not entertained such a plea. The provisions contained in section 135 of the Indore Municipal Act will be applicable to things done under the Act. It is manifest that in the present case the order of dismissal passed by Shri Ghatpande was beyond his jurisdiction and is therefore not an act done under the Act. Furthermore, section 8(1)(b) of the Indore Act says that the Council shall bear the name of the Municipal Council of the Indore City and be a body corporate and have perpetual succession and a common seal and by such name may sue and be sued. A distinction is to be noticed between suing the Municipal Council of the Indore City as contemplated in section 8(1)(b) of the Act and suits against the Commissioner or any officer or servant of the Municipality or any person acting under the direction of the Government or the Commissioner as contemplated in section 135 of the said Municipal Act. One of the purposes of section 135 of the Municipal Act is to, afford an opportunity to the persons mentioned in the section to make amends within the period of notice. The suit that was filed in the present case was not in respect of any act done or purported to be done under the Act. This Court in the case of Bharat Kala Bhandar Ltd. vs Municipal Committee, Dhamangaon(1) examined the provisions of section 48 of the Central Provinces and Berar Municipalities Act, 1922 which was to the effect that no suit shall be instituted against any Committee or any member, officer or servant thereof or any person acting under the direction of any such committee, member, officer or servant for anything done or purporting to be done under the Act, until the expiration of two months next after notice (1) ; 51 in writing stating the cause of action, the name and place of abode of the intending plaintiff and the relief which he claims. Section 48 of the said Central Provinces and Berar Municipalities Act further provided that every such suit shall be dismissed unless it was instituted within six months from the date of the actual of the cause of action. The appellant in that case contended that it was a case of recovery of an illegal tax and therefore a claim for its refund fell outside the provisions of section 48 of the said Act. The respondent, on the other hand, contended there that the collection of tax was not without jurisdiction but only irregular and therefore the suit would be in respect of a matter purporting to be done under the Act. This Court held that where power existed to assess and recover a tax up to a particular limit the assessment or recovery of an amount in excess was wholly without jurisdiction. To such a case, the statute under which action was purported to be taken could afford no protection. On logic and principle the same reasoning applies to the provisions contained in section 135 of the Indore Municipal Act, 1909 with the result that the suit in the present case is not within the mischief of section 135 of the Indore Municipal Act. For these reasons, the appeal fails and is dismissed with costs. Appeal dismissed. [/INST]The appellants, motor transport operators, challenged the increase in surcharge of the fares and freights imposed by the Andhra Pradesh Motor Vehicles (Taxation of Passengers and Goods) Amendment and Validation Act, 1961. They urged: (i) the Act was neither regulatory nor compensatory in nature and, it fell directly within the mischief of article 301 of the Constitution; (ii) the imposts exceeded the limits of permissible reasonableness, were not in the public interest and, therefore, violated articles 304(b) and 19(1)(g); and (iii) the Act violated article 14 (a) inasmuch as it had not been made applicable to the Telegana area although it was applicable to the Andhra area and (b) the vehicles on inter State routes on permits granted by other States had not been subjected to tax. HELD: (i) It was not the contention of the State that the impugned Act imposed a tax by way 'of a regulatory or compensatory measure. Therefore, it had to be been whether the restrictions imposed were reasonable and in the public interest within the meaning of article 304(b); these questions were open to examination by the court notwithstanding the fact that the sanction of the President was obtained in compliance with the Article. [55 E F] Mathurai Pillay vs State of Madras, , Automobile Transport (Rajasthan) Ltd. vs State of Rajasthan vs State of Assam. ; and Atiabari Tea Co. Ltd. vs State of Assam, ; , referred to. (ii) There was no material which would justify the view that the tax which had been imposed exceeded the limit of permissible reasonableness or was not in the public interest. The argument that by raising the rate of tax the burden had been increased to such an extent that the business of the appellants had been virtually annihilated had no substance. The operators had been permitted to enhance the freights and if the freights could be enhanced, obviously, the burden would not fall on them. If the operators were not prepared to charge higher rates as a matter of policy or for the purpose of business competition that could not impinge on the reasonableness of the restrictions. This disposed of the challenge under article </s>
<s>[INST] Summarize the judgementl Appeal No. 16 of 1970. Appeal by special leave from the judgment and order dated May 22, 1969 of the Allahabad High Court in Civil Misc. Writ No. 588 of 1966. 582 Jagadish Swarup, Solicitor General, R. N. Sachthey, and B. D. Sharma, for the appellants. G. C. Sharma and P. K. Mukherjee, for the respondent. The Judgment of the Court was delivered by Shah, J. Jawahar Lal Rastogi hereinafter called 'the assessee is a Hindu Undivided Family which carries on the business of money lending at Lucknow and is also interested as a partner in different firms engaged in the business of manufacturing barbed wire, pharmaceuticals, etc. On September 14, 1964, the Income tax Officer, Award, called upon the assesee to furnish within 10 days certain information with regard to its income and assets. On September 17, 1964 the Income tax Officer submitted to the Commissioner of Income tax a report requesting that he be authorised to enter and search the premises of, the assessee. The Commissioner by his order dated September 19, 1964, authorised entry and search after recording reasons for his belief that it was necessary to carry out the search. On September 21 and 22, 1964, the premises of the assessee were searched and a large number of documents were seized and were taken away to the Income tax Officer. The Income tax Officer also prepared inventories of the ornaments and other goods kept in the premises searched. After the seizure of the books of account and other documents the case was fixed for hearing before the Income tax Officer on several occasions, but no substantial step was taken. In May 1966 the assessee filed a writ petition in the High Court of Allahabad challenging the validity of the search made by the Department contending that it "was illegal and in excess of the power conferred by section 132 of the Income tax Act, 1961" and prayed that the documents seized may be ordered to be released. The High Court of Allahabad considered the evidence appearing from the affidavits filed and observed that in the present case the assessee had established the following "points" : (1) The Income tax Officer was apparently interested in investigating transactions prior to 1953. On September 14, 1964, the assessee was directed to furnish statements relating to four years ending on March 31, 1960, yet the Commissioner of Income tax issued letters of authorisation permitting Income tax Officer to seize documents relevant to nine assessment years; (2)The raid was ordered and organised before the expiry of the period of the notice; (3)More than 300 books and registers were seized during the raid and the Income tax. Officers carried away thousands of promissory notes. Some of the documents seized appear to be 583 irrelevant for assessment purposes and some of them were public documents. (4)There is reason to believe that all or almost all the documents found on the premises were seized and carried away by the Income tax Officers; (5)Marks of identification were. not placed on the documents inspite of the direction contained in the letters of authorisation; and (6)The documents seized during the raid were detained by the Income tax Officers for 19 months before, the petition was filed. In the view of the High Court the circumstances of the case indicated that the Commissioner of Income tax and the Income tax Officers acted beyond "the legitimate scope of section 132 of the Act and there was force in the complaint of the assesse that the Allahabad High Court in Seth Brothers ' Case(1) was overtituted abuse of power conferred on Income tax authorities by section 132 of the Act". In reaching its conclusion, the High .Court relied upon the judgment of the Allahabad High Court in Seth Brothers vs Commissioner of Income tax(1). In this appeal filed by the Commissioner of Income tax with special leave, the Solicitor General contends that the decision of the Allahabad High Court in Seth Brothers ' Case(1) was overruled by this Court in Income tax Officer, Special Investigation Circle "B", Meerut vs Seth Brothers & Ors.(2) and on , that account the judgment under appeal is liable to be set aside. In Seth Brothers ' case (2) this Court examined the scheme of section 132 in some detail and observed "The condition for entry into and making search of any building or place is the reason to believe that any books of account or other documents which will be useful for,. or relevant to, any proceeding under the Act may be found. If the Officer has reason to believe that any books of account or other documents would be useful for, or relevant to, any proceedings under. the Act, he is authorised by law to seize those books of account or other documents, and to place marks of identification therein, to make extracts or. copies, therefrom and also to make a note or an, inventory of any articles or other things found in the course of the search. Since by the exercise of the power a serious invasion is made upon the rights, privacy and freedom of the taxpayer, the power must be (1) 584 exercised strictly in accordance with the law and only for the purposes for which the law authorises it to be exercised. . . If the conditions for exercise of the power are not satisfied the proceeding liable to be quashed. . . The Act and the. Rules do not require that the warrant of authorisation should specify the particulars of documents and books of account : a general authonsation to search for and seize documents and books of account relevant to or useful for any proceeding complies with the requirement of the Act and the Rules. It is for the officer making the search to exercise his judgment and seize or not to seize any documents or books of account. The aggrieved party may undoubtedly move a competent court for an order releasing the documents seized. In such a proceeding the Officer who has made the search will b e called upon to prove how the documents seized are likely to be 'useful for or relevant to a proceeding under the Act. 1 If he is unable to do so, the court may order that those document$ be released. But the circumstance ;hat a large number of documents seized is not a ground for holding that all documents seized are irrelevant or the action of the officer is mala fide. " It must, however, be stated that the findings that the action of the Commissioner of Income tax and the Income tax Officer amounted to "indiscriminate search" and was beyond the "legitimate scope of section 132" depends upon the evidence in each case and no general rule can be laid down in that behalf. In the present case the High Court has noticed two important circumstances: (1) that where as the notice dated September 14, 1964, required the assessee to furnish statements rela ting to the four assessment years ending on March 31, 1960, the Commissioner of Income tax authorised search for a period ,of nine assessment years even before the period fixed by the notice had expired; and (2) that contrary to the plain terms ,of section 132(8) the Income tax Officer retained with him the books of account for a period exceeding 180 days. Under section 132(2) as in force on the date on which the search and seizure took place stood as follows : "The books of account or other documents seized under sub section (1) shall not be retained by the Inspecting Assistant Commissioner or the Income tax 585 Officer for a period exceeding one hundred and eighty days from the date of the seizure unless the reasons for retaining the same are recorded by him in writing and the approval of the Commissioner for such retention is obtained : Provided. . . By the Finance Act of 1965, sub section (2) was re eracted as sub s (8) with the modification that for the words "Inspecting Assistant Commissioner or the Income tax Officer" the words "authorised officer" be substituted. In the present case the premises of the assessee were searched on September 21 and 22, 1964, and the documents were retained till May 1966, i.e. for a period, of 19 months. Our attention has not been invited to any order of the authorities recording reasons for retaining the documents seized after the expiry of 180 days, nor is there any approval of the Commissioner for retaining such documents. The retention of the documents without complying with the requirements of the statute after expiry of the period of 180 days would be plainly contrary to law. The Solicitor General said that it *as not urged before the High Court that because the authorised officer did not record reasons and the Commissioner did not approve retention of the documents after 180 days, the revenue, authorities were bound to release the documents. Counsel submitted that failure to produce evidence on a matter not put in issue may not be regarded as a ground in support of an order releasing documents. But the High Court has found that the documents seized during the raid were detained by the authorised officer for 19 months before the application was filed. If it was the case of the Department that retention of the documents after the expiry of 180 days was supported by good and adequate reasons recorded by the Income tax Officer and the. approval of the Commissioner as required by the Act was obtained, such record of reasons and approval would have been tendered in evidence. It cannot be said that the attention of the parties was not directed to the circumstance that the Income tax Officer had failed to comply with the requirements of the Act. The order recorded by the High Court must be sustained on the ground that the documents taken possession of were re tained without authority of law for a period exceeding 180 days contrary to the terms of section 132(8) as amended by the Income tax (Amendment) Act, 1965. The appeal therefore fails and is dismissed with costs. V.P.S. Appeal dismissed. [/INST]Article 254(2) of the Constitution is, in substance, a reproduction of section 107(2) of the Government of India Act, 1935, the concluding portion whereof is incorporated in a proviso with further additions. The principle embodied therein is that when there is legislation covering the same ground both by the Centre and by the State, both of them being competent to enact the same, the law of the Centre should prevail over that of the State. Section 7 of the Essential Supplies (Temporary Powers) Act, 1946, was amended in 1948 and 1949 and thereafter by Act LII of 1950. Held, that Act LII of 1950 is a legislation in respect of the same matter as Bombay Act (XXX VI of 1947) within the meaning of article 254(2) of the Constitution and therefore section 2 of Bombay Act XXXVI of 1947 cannot prevail as against section 7 of the Essential Supplies (Temporary Powers) Act as amended by Act LII of 1950. It is a well settled rule of construction that if a later statute again describes an off once created by a previous one and imposes a different punishment or varies the procedure, the earlier statute is repealed by the later statute. Attorniey Geneeral for Ontario vs Attorney General for the Dominion , Smith vs Benabo [1937] 1. K.B. 518, and Michell vs Brown (I El. & El. 267, 274) referred to. </s>
<s>[INST] Summarize the judgement: Criminal Appeal No. 21 of 1973. Appeal by Special Leave from the Judgment and Order dated 3 5 1972 of the Delhi High Court in Criminal Revision No. 450/69. D. Mukherjee, section K. Dholakia and R. C. Bhatia for the Appellants. Respondent in person. The Judgment of the Court was delivered by SARKARIA, J. This appeal by special leave directed against a judgment, dated May 3, 1962, of the Delhi High Court, arises out of these circumstances : M. section Kochar, the respondent herein, filed a complaint in the Court of the Sub Divisional Magistrate, Delhi, alleging that the appellants herein, who are officers of the Customs Department, had committed offences under Sections 120B/166/409, Indian Penal Code. It was stated in the complaint as follows : The complainant was the sole representative in India of various manufacturing concerns in West Germany, and was carrying on business under the style of "House of German Machinery". He imported certain items of machinery from the German firms for displaying them in the International Industries Fair held in New Delhi in November, 1961. In spite of the fact that he had obtained a valid Customs Clearance Permit for the import of these items of machinery, the Customs Authorities prevented him from clearing the goods from the Railway Station. Ultimately, the complainant was able to clear the goods by obtaining the necessary permission from the Government. He was allowed to retain the imported goods with him till the first of June, 1962. The goods were to be re exported from India, thereafter. The respondent applied for extension of the period, but his request was declined. On June 16, 1962, the accused (appellants) raided the premises of the complainant at 30, Pusa Road, New Delhi, and seized some of those imported goods which were meant for display in the International Industries Fair. The appellants also seized certain other goods kept by 114 the complainant at the site of the Fair, itself. Inventories of the goods were prepared by the appellants at the time of their seizure. The goods were then packed in boxes and sealed by the appellants with their own seals which were signed by the complainant as well as the appellants. One copy of the inventories, duly signed by the appellants and the complainant, also was handed over to him. On November 20, 1963, the complainant made an application before the Sub Divisional Magistrate, praying that the goods seized by the appellants be handed over to him on Superdari as they were likely to deteriorate unless kept safely under proper conditions. The Sub Divisional Magistrate, on January 22, 1964, made an order directing that all the goods seized by the appellants be handed over to the complainant on Superdari. The Customs, however, felt aggrieved by this order of the Magistrate and went in revision against it before the Additional Sessions Judge, Delhi, who, on February 7, 1964, passed an order staying delivery of possession. Subsequently, by order dated April 3, 1965, the Additional Sessions Judge dismissed the revision petition and vacated the stay order. In spite of the order of the Magistrate, confirmed by the Additional Sessions Judge, the Customs handed over to the complainant on Superdari only a part of the goods seized, and in respect of the remaining goods, the Customs Authorities went in further revision to the High Court and obtained an interim stay of the order of the Additional Sessions Judge. Subsequently, on August 22, 1966, the High Court made an order directing that all the goods which had been seized by the Customs Authorities from the complainant, including those which had been returned to him on Superdari, should be produced before the Sub Divisional Magistrate, who was seized of a case under Section 5 of the Import and Export (Control) Act and Section 166(81) of the Sea Customs Act, regarding the goods, pending against the complainant. Accordingly, Shri H. L. Sikka, Sub Divisional Magistrate, prepared two inventories of these goods on November 16, 1966 and thereafter. The boxes were opened before Shri Sikka, who got inventories of the goods found therein prepared, and after noting the condition of those goods, he got the same repacked and sealed in proper boxes in the presence of the parties with a seal of the Court. Before resealing, the Magistrate noted down the condition of the four packages which were produced before him by the appellants and which remained in their possession since the seizure (16 6 1962). "It was then found by the Magistrate that the seals of these boxes were tampered. One 115 wooden box was broken and the seal on it was also broken; while the remaining three packages were completely empty but sealed". The goods of Consignment No. 1 of M/s. Gebr. Ruhstrat, concerning the complaint filed by the Assistant Collector of Customs under Section 5 of the Import & Export (Control) Act, and Section 117(81) of the Sea Customs Act, which were also seized by appellant No. 1, who had obtained their delivery from the Railway Station, were not produced before Shri H. L. Sikka, Magistrate, along with the other goods when the inventories were prepared. This gives "a bona fide apprehension to the complainant that the said goods have been criminally misappropriated by the accused." "The accused by their act in illegally tampering and breaking the seals of the consignment seized by them and removing some of these goods and further abusing their positions and seizing some of the personal articles of the complainant under the colour of search warrant issued by the S.D.M. Karol Bagh and illegally holding those goods of the complainant uptil. have committed offences under Sections 120B/166/409 IPC." The Sub Divisional Magistrate before whom the complaint had been filed, examined the complainant under Section 200 and further held a preliminary enquiry under Section 202, Cr. P.C., in the course of which, he examined Shri H. L. Sikka, Magistrate, also. After considering the statements recorded in the preliminary enquiry, and the documents produced by the complainant, the Magistrate found a prima facie case under Sections 120B/409, I.P.C. against the three appellants. He, therefore, directed that the accused (appellants herein) be summoned. On receiving the summons, the appellants appeared before the Magistrate and made an application praying for their immediate discharge, inter alia, on the ground that the Magistrate had no jurisdiction to take cognizance of the complaint in the absence of sanction under Section 197 of the Code of Criminal Procedure, 1898, and under Section 155 of the , for prosecution of the appellants. The Magistrate accepted this objection and held that in the absence of sanction for the prosecution of the present appellants, he had no jurisdiction to take cognizance of the complaint. He purportedly relied on the decision of this Court in Shreekantiah Rammayya Munipalli & Anr. vs State of Bombay(1). In the result, he discharged the accused (appellants, herein). 116 Aggrieved, the complainant filed a revision petition which was dismissed by the Additional Sessions Judge, on December 6, 1968, on the ground that since the shortage of goods was discovered at the time when they were produced before the Customs House, and there was absolutely nothing to show that the goods in question remained in the personal custody of the appellants, "it was difficult to hold that the shortage, if any, was due to the act of the accused. " The complainant went in further revision to the High Court, which was heard and allowed by a learned Judge by his judgment now under appeal before us. After an elaborate discussion, the learned Judge has held that no sanction was required for the prosecution of the accused appellants for an offence under Sections 120B/409, Indian Penal Code, because "they were certainly not acting in the discharge of their official duties, when they misappropriated these goods". The first contention of Mr. Mukerjee, learned Counsel for the appellants is that the complainant has falsely alleged in the complaint that when the Sub Divisional Magistrate, Shri Sikka, in compliance with the order of the High Court, inspected the goods and noted the condition thereof, "it was found that the seals of four boxes were broken, while the remaining three packages were completely empty but sealed". It is maintained that the inventory itself, prepared by Shri Sikka, falsifies this allegation. It is further pointed out that in the complaint it is not alleged with particularity as to what goods disappeared or were removed, nor that the disappearance of some of the goods, if any, occurred after their seizure and before their deposit in the Customs House by the appellants, and that the allegation made by the complainant during arguments before the High Court, to the effect, that the goods in question were misappropriated sometime after seizure and before their deposit in the Customs House, was not based on any facts or circumstances appearing in the statements of the complainant and Shri Sikka recorded during the preliminary enquiry. Learned counsel also repeatedly urged that the allegations regarding the commission of the offence of criminal breach of trust by the appellants, were false and groundless. For this purpose, it is stressed, the Court should not confine itself to the allegations in the complaint but also consider all the evidential material on the record including that brought on the record by the appellants. In support of the contention that the question of sanction can be raised from stage to stage, Mr. Mukherjee relied on certain observations of this Court in Matajog Dobey vs H. C. Bari(1). We have no quarrel with the proposition that the question of sanction under Section 197, Cr. P.C. can be raised and considered at any 117 stage of the proceedings. We will further concede that in considering the question whether or not sanction for prosecution was required, it is not necessary for the Court to confine itself to the allegations in the complaint, and it can take into account all the material on the record at the time when the question is raised and falls for consideration. Now, in paragraph 20 of the complaint, it was clearly alleged that the Sub Divisional Magistrate, Shri H. L. Sikka found that the seals of four boxes had been tampered with and one of the boxes broken, while the remaining three packages "were completely empty but sealed". Mr. Mukherjee has not read out or referred to any portion of the statement of Shri H. L. Sikka recorded under Section 202, Cr.P.C., to show that the same contradicts or falsifies the allegations in paragraphs 19, 20 and 21 of the complaint. Indeed, no copy of the statements of the complainant and Shri Sikka recorded in proceedings preliminary to the issue of process, has been furnished for our perusal. It is true that the precise time and manner or the misappropriation and the detailed particulars of the items of goods alleged to have been misappropriated, are not given in the complaint. But it seems that some foundation for the allegation that the goods in question had been misappropriated by the appellants sometime after their seizure and before their deposit in the Customs House, had been laid during the preliminary enquiry made by the Magistrate. This allegation was made not only before the High Court, but has been reiterated by the complainant in paragraph 12 of his counter affidavit that he had filed in this Court in opposition to the special leave petition of the appellants. For this averment, he relied on a certain letter/notice dated January 30, 1963 addressed to him by the Customs Authority. Thus, the material brought on the record upto the stage when the question of want of sanction was raised by the appellants, contained a clear allegation against the appellants about the commission of an offence under Section 409, I.P.C. To elaborate, it was substantially alleged that the appellants had seized the goods and were holding them in trust in the discharge of their official duty, for being dealt with or disposed of in accordance with law, but in dishonest breach of that trust, they criminally misappropriated or converted those goods. Whether this allegation or charge is true or false is not to be gone into at this stage. In considering the question whether sanction for prosecution was or was not necessary, these criminal acts attributed to the accused are to be taken as alleged. For these reasons, we overrule the first contention canvassed on behalf of the appellants. 118 The second contention advanced by Mr. Mukherjee is in the alternative. It is submitted that even if for the sake of argument, it is assumed that some of the goods were removed and set apart by the appellants after seizure, then also, the seizure and the removal being integrally connected with each other the alleged act constituting the offence of criminal misappropriation/criminal breach of trust could but reasonably be viewed as an act which includes dereliction of duty done or purporting to be done in the discharge of their official duty by the appellants. It is argued that section 197, Cr. P. C. cannot be construed too narrowly, in the sense that since the commission of offence is never a part of the official duty of a public servant, an act constituting an offence can never be said to have been done or purportedly done in the discharge of official duty. Such a narrow construction, it is submitted, will render the Section entirely otiose. For law on the point, the learned counsel referred to several decisions of this Court. He took us through the relevant passages of the judgment in Matajog 's case (supra), and strongly relied on the ratio of Shree kantiah Rammayya 's case (ibid) and Amrik Singh vs The State of Pepsu (1) The words "any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty" employed in Section 197(1) of the Code, are capable of a narrow as well as a wide interpretation. If these words are construed too narrowly, the Section will be rendered altogether sterile, for, "it is no part of an official duty to commit an offence, and never can be". In the wider sense, these words will take under their umbrella every act constituting an offence, committed in the course of the same transaction in which the official duty is performed or purports to be performed. The right approach to the import of these words lies between these two extremes. While on the one hand, it is not every offence committed by a public servant while engaged in the performance of his official duty, which is entitled to the protection of Section 197(1), an act constituting an offence, directly and reasonably connected with his official duty will require sanction for prosecution under the said provision. As pointed out by Ramaswami J. in Baijnath vs State of M.P.(2) "it is the quality of the act that is important, and if it falls within the scope and range of his official duties, the protection contemplated by Section 197 of the Criminal Procedure Code will be attracted. " In sum, the sine qua non for the applicability of this Section is that the offence charged, be it one of commission or omission, must 119 be one which has been committed by the public servant either in his official capacity or under colour of the office held by him. While the question whether an offence was committed in the course of official duty or under colour of office, cannot be answered hypothetically, and depends on the facts of each case, one broad test for this purpose, first deduced by Varadachariar J. of the Federal Court in Hori Ram vs Emperor, (1) is generally applied with advantage. After referring with approval to those observations of Varadachariar J., Lord Simonds in H.H.B. Gill vs The King.(2) tersely reiterated that the "test may well be whether the public servant, if challenged, can reasonably claim, that what he does, he does in virtue of his office." Speaking for the Constitution Bench of this Court, Chandrasekhar. Aiyer J., restated the same principle, thus: ". .in the matter of grant of sanction under Section 197, the offence alleged to have been committed by the accused must have something to do, or must be related in some manner, with the discharge of official duty. there must be a reasonable connection between the act and the discharge of official duty; the act must bear such relation to the duty that the accused could lay a reasonable claim, but not a pretended or fanciful claim, that he did it in the course of the performance of his duty". (Emphasis supplied) Let us now apply this broad test to the facts of the case as alleged and sought to be proved by the complainant. The allegation against the appellants is about the commission of offences under Sections 409/120B, Indian Penal Code. To be more precise, the act complained of is dishonest misappropriation or conversion of the goods by the appellants, which they had seized and as such, were holding in trust to be dealt with in accordance with law. There can be no dispute that the seizure of the goods by the appellants and their being thus entrusted with the goods or dominion over them, was an act committed by them while acting in the discharge of their official duty. But the act complained of is subsequent dishonest misappropriation or conversion of those goods by the appellants, which is the second necessary element of the offence of criminal breach of trust under Section 409, Indian Penal Code. Could it be said, that the act of dishonest misappropriation or conversion complained of bore such an integral relation to the duty of the appellants 120 that they could genuinely claim that they committed it in the course of the performance of their official duty ? In the facts of the instant case, the answer cannot but be in the negative. There is nothing in the nature or quality of the act complained of which attaches to or partakes of the official character of the appellants who allegedly did it. Nor could the alleged act of misappropriation or conversion, be reasonably said to be imbued with the colour of the office held by the appellants. As pointed out by Varadachariar J. in Hori Ram (supra), generally, in a case under Section 409, Indian Penal Code, "the official capacity is material only in connection with the 'entrustment ' and does not necessarily enter into the later act of misappropriation or conversion, which is the act complained of. " This, however, should not be understood as an invariable proposition of law. The question, as already explained, depends on the facts of each case. Cases are conceivable where on their special facts it can be said that the act of criminal misappropriation or conversion complained of is inseparably intertwined with the performance of the official duty of the accused and therefore, sanction under Section 197(1) of the Code of Criminal Procedure for prosecution of the accused for an offence under Section 409, Indian Penal Code was necessary. Shreekantiah Rammayya (supra) was a case of that kind. The act complained of against the second accused in that case was, dishonest disposal of the goods. The peculiarity of the act was that from its very nature, in the circumstances of that case, it could not have been done lawfully or otherwise by the accused save by an act done or purporting to be done in an official capacity. In other words, the very charge, was the dishonest doing of an official act by the accused. Whether the act was dishonest or lawful, it remained an official act because the accused could not dispose of the goods save by the doing of an official act, namely, officially permitting their disposal; and that he did. It was in view of these special facts of the case, it was held that the offence under Section 409, Indian Penal Code was committed or purported to be committed by the accused in the discharge of his official duty, and, as such, sanction under Section 197(1) Cr. P.C. was a prerequisite for his prosecution. The facts of the case before us are entirely different. The ratio of Shreekantiah Rammayya has therefore, no application to the facts of the case before us. In Amrik Singh vs The State of Pepsu,(1) it was laid down that whether sanction is necessary to prosecute a public servant on a charge 121 of criminal misappropriation, will depend on whether the acts complained of hinge on his duties as a public servant. If they do, then sanction is requisite. But if they are unconnected with such duties, then no sanction is necessary. Amrik Singh 's case also stands on its own facts, which were materially different from those of the present case. The correctness of that decision was doubted in Baijnath vs State of Madhya Pradesh (supra), and its authority appears to have been badly shaken. In any case, its ratio must be confined to its own peculiar facts. There are several decisions of this Court, such as, Om Parkash Gupta vs State of Uttar Pradesh,(1) Baijnath vs State of Madhya Pradesh (supra), Marihar Prasad vs State of Bihar,(2) wherein it has been held that sanction under Section 197, Criminal Procedure Code for prosecution for an offence under Section 409, Indian Penal Code was not necessary. In Om Parkash Gupta 's case (ibid) it was held that a public servant committing criminal breach of trust does not normally act in his capacity as a public servant. Since this rule is not absolute, the question being dependent on the facts of each case, we do not think it necessary to burden this judgment with a survey of all those cases. In the light of all that has been said above, we are of opinion that on the facts of the present case, sanction of the appropriate Government was not necessary for the prosecution of the appellants for an offence under Sections 409/120 B, Indian Penal Code, because the alleged act of criminal misappropriation complained of was not committed by them while they were acting or purporting to act in the discharge of their official duty, the commission of the offence having no direct connection or inseparable link with their duties as public servants. At the most, the official status of the appellants furnished them with an opportunity or occasion to commit the alleged criminal act. In the result, the appeal fails and is dismissed. N.K.A. Appeal dismissed. [/INST]In a suit for recovery of money on the basis of a mortgage, a consent decree was passed. When the judgment debtors failed to pay the amount the mortgaged properties were ordered to be sold. The decree holder assigned his interest under the decree in favour of the respondent and this was approved by the Court. A part payment was made to the decree holder. On the death of one of the judgment debtors, his heirs and legal representatives (appellants in this appeal) were substituted. On June 17, 1953 a consent order was passed by the Court on the basis of the terms of settlement arrived at between the parties. According to the will left by one of the judgment debtors his daughter was the universal legatee and his son in law was the sole executor. When the decree holder sought execution of the decree a Single Judge of the High Court dismissed the application on the grounds (1) that the terms of settlement between the parties recorded on 17th June, 1953 were entirely different from the original decree and had the effect of superseding it; (2) that the fact of the death of one of the judgment debtors was not recorded and his heirs were not substituted and (3) execution was barred under section 48 of the Code of Civil Procedure. On appal, a Division Bench of the High Court reversed the order of the Single Judge. Dismissing the appeal, ^ HELD: 1. There was no bar of limitation in the execution instituted in 1965. At no point of time the mortgage decree had been fully satisfied. It is not a case in which the execution was barred either under section 48 CPC or article 183 of the Limitation Act, 1908. Execution was not barred under article 136 of the . [159D] 2. There is no force in the contention that it was already barred when the 1963 Act came into force. All through steps had been taken by the decree holder to enforce the decree. When the order of sale of the mortgaged properties was passed in 1929 some payments were made and finally accounts were settled in 1934. Thereafter the mode of execution proceeded by appointment of a receiver. Some money was paid in 1939. In 1945 the heirs and legal representatives of one of the deceased judgment debtors were substituted. Appellant no 1 was allowed to take steps for the satisfaction of the decree; but nothing was done. A settlement was again arrived at in 1953 for satisfaction of the decree but on the judgment debtor 's failure to comply with the terms of the settlement the present proceedings were started well within 12 years. [159E H] 157 3. The daughter of the second judgment debtor was competent to represent the estate of her father. Even if her husband who was the sole executor of the will was not substituted, execution was not defective. [160B] The Andhra Bank Ltd. vs R. Srinivasan and Others [1962] 3 S.C.R. referred to. 4. The settlement of 17th June, 1953 was not an altogether renovation of the old decree. All that was done was that the amount due was quantified and the mode of satisfaction was prescribed giving opportunity to the judgement debtors to satisfy the decree by conveying one of the two mortgaged houses. The judgment debtors did nothing. Though the terms of settlement were silent with regard to what was to happen on failure to satisfy the decree, it is legitimate to assume that the parties intended that the decree holders would be entitled to realise the dues by execution of the original mortgage decree. The order of 17th June, 1953 passed by the Court had not the effect of passing a new decree in substitution of the old one. It had merely the effect of giving facility to the judgment debtors for the satisfaction of the decretal dues. On their failure to do so they were liable to be proceeded with in execution of the original mortgage decree. [160C F] </s>
<s>[INST] Summarize the judgementAppeals Nos. 635 to 641 of 1957. Appeals from the judgment and decree dated September 8, 1954, of the Punjab High Court in Regular First Appeals Nos. 42, 43, 44, 45, 46, 47 and 48 of 1949. R. Gopalakrishnan, T. M. Sen and R. H. Dhebar, for the appellants. Darya Dutt Chawla, for the respondents. May 1. The Judgment of the Court was delivered by RAGHUBAR DAYAL, J. Civil Appeal No. 635 of 1957 is an appeal, by certificate, and raises the question regarding the effect of the abatement of the appeal, by the State of Punjab, against Labhu Ram, one of the respondents, on the State appeal against Nathu Ram, co respondent. Civil Appeals Nos. 636 to 641 of 1957 also raise the same question between the same parties. The facts leading to the appeal are that the Punjab Government acquired on lease certain parcels of land belonging to Labhu Rain and Nathu Ram, for different military purposes, under the Defence of India Act, 81 638 1939 (XXXV of 1939). Labhu Ram and Nathu Ram, brothers, refused to accept the compensation offered to them by the Collector and applied to the Punjab Government, through the Collector, under r. 6 of the Punjab Land Acquisition (Defence of India) Rules, 1943, hereinafter called the Rules, as amended by the Notification of the Punjab Government No. 1444 HM44/19124, dated 10th March, 1944, and published in the Punjab Gazette, Part 1, dated 17th March, 1944 (Home Department). The State Government referred the matter to an arbitrator as required under r. 10, who, after enquiry, passed an award ordering the payment of an amount higher than what was offered by the Collector and also ordered the payment of certain amount on account of income tax which would be paid on the compensation received. The State Government appealed against the award to the High Court of Punjab. During the pendency of the appeal, Labhu Ram, one of the respondents, died. The High Court, holding that the appeal abated against Labhu Ram and that its effect was that the appeal against Nathu Ram also abated, dismissed the appeal. It also dismissed the cross objections. The State Government applied for a certificate of fitness of the case for appeal to this Court and the High Court granted it, as questions of great private and public importance were involved. It is not disputed that in view of 0. XXII, r. 4, Civil Procedure Code, hereinafter called the Code, the appeal abated against Labhu Ram, deceased, when no application for bringing on record his legal representatives had been made within the time limited by law. The Code does not provide for the abatement of the appeal against the other respondents. Courts have held that in certain circumstances, the appeals against the co respondents would also abate as a result of the abatement of the appeal against the deceased respondent. They have not been always agreed with respect to the result of the particular cir cumstances of a case and there has been, consequently, divergence of opinion in the application of the principle. It will serve no useful purpose to consider the cases. Suffice it to say that when 0. XXII, r. 4 does 639 not provide for the abatement of the appeals against the co respondents of the deceased respondent, there can be no question of abatement of the appeals against them. To say that the appeals against them abated in certain circumstances, is not a correct statement. Of course, the appeals against them cannot proceed in certain circumstances and have therefore to be dismissed. Such a result depends on the nature of the relief sought in the appeal. The same conclusion is to be drawn from the provisions of 0. 1, r. 9, of the Code which provides that no suit shall be defeated by reason of the misjoinder or non joiner of parties and the Court may, in every suit, deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. It follows, therefore, that if the Court can deal with the matter in controversy so far as regards the rights and interests of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it. It is only when it is not possible for the Court to deal with such matters, that it will have to refuse to proceed further with the appeal and therefore dismiss it. The question whether a Court can deal with such matters or not, will depend on the facts of each case and therefore no exhaustive statement can be made about the circumstances when this is possible or is not possible. It may, however, be stated that ordinarily the considerations which weigh with the Court in deciding upon this question are whether the appeal between the appellants and the respondents other than the deceased can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the Court. The test to determine this has been described in diverse forms. Courts will not proceed with an appeal (s) when the success of the appeal may lead to the Court 's coming to a decision which be in conflict with the decision between the appellant and the deceased respondent and therefore which would lead to the Court 's passing a decree which will be contradictory to the decree which had become final with respect to 640 the same subject matter between the appellant and the deceased respondent; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who are still before the Court and (c) when the decree against the surviving respondents, if the appeal succeeds, be ineffective, that is to say, it could not be successfully executed. There has been no divergence between the Courts about the Court 's proceeding with the appeal between the respondents other than the deceased respondent, when the decree in appeal was not a joint decree in favour of all the respondents. The abatement of the appeal against the deceased respondent, in such a case, would make the decree in his favour alone final, and this can, in no circumstances, have a repercussion, on the decision of the controversy between the appellant and the other decree holders or on the execution of the ultimate decree between them. The difficulty arises always when there is a joint decree. Here again, the consensus of opinion is that if the decree is joint and indivisible, the appeal against the other respondents also will not be proceeded with and will have to be dismissed as a result of the abatement of the appeal against the deceased respondent. Different views exist in the case of joint decrees in favour of respondents whose rights in the subject matter of the decree are specified. One view is that in such cases, the abatement of the appeal against the deceased respondent will have the result of making the decree affecting his specific interest to be final and that the decree against the other respondents can be suitably dealt with by the appellate Court. We do not consider this view correct. The specification of shares or of interest of the deceased respondent does not affect the nature of the decree and the capacity of the joint decree holder to execute the entire decree or to resist the attempt of the other party to interfere with the joint right decreed in his favour. The abatement of an appeal means not only that the decree between the appellant, and the deceased respondent has become final, but also, as a necessary corollary, 641 that the appellate Court cannot, in any way, modify that decree directly or indirectly. The reason is plain. It is that in the absence of the legal representatives of the deceased respondents, the appellate Court cannot determine anything between the appellant and the legal representatives which may affect the rights of the legal representatives under the decree. It is immaterial that the modification which the Court will do is one to which exception can or cannot be taken. It is therefore necessary to determine, on the facts of this case, whether the State appeal could proceed against Nathu Ram. The award of the arbitrator in each of these cases was a joint one, in favour of both the respondents Labhu Ram and Nathu Ram. To illustrate the form of the award, we may quote the award for the year 1945 46 in the proceedings leading to Civil Appeal No. 635 of 1957. It is: "On the basis of the report of section Lal Singh, Naib Tehsildar (Exhibit P. W. 9/1) and Sheikh Aziz Din, Tehsildar, Exhibit P. W. 9/2, the applicants are entitled to a sum of Rs. 4,140 on account of rent, plus Rs. 3,872 8 0 on account of Income tax etc., due to the inclusion of Rs. 6,193 8 0 in their total income, plus such sum as the petitioners have to pay to the Income tax Department on account of the inclusion of Rs. 4,140 in their income as awarded by this award." The result of the abatement of the appeal against Labhu Ram is therefore that his legal representatives are entitled to get compensation on the basis of this award, even if they are to be paid separately on calculating their rightful share in the land acquired, for which this compensation is decreed. Such calculation is foreign to the appeal between the State of Punjab and Nathu Ram, The decree in the appeal will have to determine not what Nathu Ram 's share in this compensation is, but what is the correct amount of compensation with respect to the land acquired for which this compensation has been awarded by the arbitrator. The subject matter for which the compensation is to be calculated is one and 642 the same. There cannot be different assessments of the amounts of compensation for the same parcel of land. The appeal before the High Court was an appeal against a decree jointly in favour of Labhu Ram and Nathu Ram. The appeal against Nathu Ram alone cannot be held to be properly constituted when the appeal against Labhu Ram bad abated. To get rid of the joint decree, it was essential for the appellant, the State of Punjab, to implead both the joint decree holders in the appeal. In the absence of one joint decree holder, the appeal is not properly framed. It follows the that State appeal against Nathu Ram alone cannot proceed. It is however contended for the State that according to the entries in the village records, Labhu Ram and Nathu Ram had equal shares in the land acquired and that therefore the appeal against Nathu Ram alone can deal with half the amount of the award. We do not agree. The mere record of specific shares in the revenue records is no guarantee of their correctness. The appellate Court will have to determine the share of Nathu Ram and necessarily the share of Labhu Ram in the absence of his legal representatives. This is not permissible in law. Further, the entire case of Labhu Ram and Nathu Ram, in their application to the Government for the appointment of an arbitrator, was that the land jointly belonged to them and had been acquired for military purposes, that a certain amount had been paid to them as compensation, that they received that amount under protest and that they were entitled to a larger amount mentioned in the application and also for the income tax they would have to pay on account of the compensation received being added to their income. Their claim was a joint claim based on the allegation that the land belonged to them jointly. The award and the joint decree are on this basis and the appellate Court cannot decide on the basis of the separate shares. The State objected before the arbitrator, and urges before us, that under the rules, the joint application of Labhu Ram and Nathu Ram should have been 643 treated as separate applications with respect to the correctness of the compensation payable to each of them respectively and that the arbitrator should have made separate awards with respect to such separate claims of Labhu Ram and Nathu Ram. The necessary corollary of such a contention for the State is that the abatement of the appeal against Labhu Ram will not make infructuous the appeal against Nathu Ram. The respondent urges that the Punjab Land Acquisition (Defence of India) Rules, do not contemplate separate applications by the persons interested in the compensation on account of the acquisition of a particular parcel of land. The arbitrator did not agree to deal with the claims of Labhu Ram and Nathu Ram separately. He, however, did not decide the question on the basis of the land belonging jointly to the two brothers as members of the joint Hindu family. He however held that the expression 'a person interested ' in r. 3, included all persons claiming an interest in the compensation to be paid on account of the acquisition of the land and that r. 18 permitted the joinder of applications for joint enquiry when each case rested on the same and similar basis and each of the applications included land included in a larger part of land acquired at one time. He also took into consideration that the separation of the applications of Labhu Ram and Nathu Ram would involve various difficulties in matters of income tax. He therefore used his discretion and ordered the application to be proceeded with jointly. In view of our opinion on the main point, we do not consider it necessary to interpret the rules and decide whether the joint application was maintainable or not. The fact remains that Labhu Ram and Nathu Ram made a joint claim and got a joint decree against the State for compensation. The frame of the appeal is to be with reference to the nature of the decree challenged. We therefore see no force in this appeal and dismiss it with costs. This order will govern the other 644 connected appeals, viz., Civil Appeals Nos. 636 to 641 of 1957. Appeal dismissed. [/INST]The appellant and another were prosecuted ' for offences under section 5(2) of the Prevention of Corruption Act, 1947. The trial commenced before the special judge who heard the evidence but before he could deliver judgment was transferred and was succeeded by another special judge. The latter did not recall the witnesses and did not hear the evidence over again, but proceeded with the trial without any objection from either side from the stage at which his predecessor had left. He convicted both the accused. On appeal, the Punjab High Court held that section 350 Criminal procedure Code applied to the trial before a special judge in view of section 8(1) of the Criminal Law Amendment Act, 1952, and the succeeding special judge was entitled to proceed on the evidence recorded by his predecessor. The controversy is whether section 330 of the Code of Criminal Procedure is applicable to a special judge under sub s.(1) ,of section 8 of the Criminal Law Amendment Act, 1952, though it is not applicable under sub section (3) of the Act. Therefore the question is what is meant by the words "The procedure prescribed by the court. for the trial of warrant cases by magistrate" in sub s.(1) of section 8 of the Act, and whether section 350 of the Code prescribe one of the rules of such procedure. The Act was since amended and therein it is expressly provided that s.350 of the Code applies to the proceedings before a special judge. The amendment does not govern the present proceeding as the impugned part of the proceedings was concluded before the amendment. Held, that the Criminal Law Amendment Act, 1952, did not intend that section 350 of the Criminal Procedure Code would be available as a rule of procedure prescribed for the trials of warrant cases, to a special judge as the special Judge was not a magistrate for the purpose of the Act not did the Act require before the amendment that he was to be deemed to be such. 329 The Act in using the words "procedure prescribed by the Code. for the trial of warrant cases by magistrate" meant only the sections 251 to 259 of the Criminal Procedure Code as expressly referred in the code as containing the procedure St specified for the trials of warrant cases by magistrate and did not contemplate section 350 of the Code as a procedure so prescribed. Held, further, that where in a case there is want of competency and not a mere irregularity, section 537 of the Code of Criminal Procedure has no application. It cannot be called in aid to make what was incompetent, competent. Held, also, that it is the right of an accused person that his case should be decided by a judge who has heard the whole of it and that very clear words would be necessary to take away such an important and well established right. In the present case the succeeding special judge had no authority under the law to proceed with the trial of the case from the stage at which hi , predecessor in office left it, and the conviction of the appellant cannot be supported as he had not heard the evidence in the case himself. The proceeding before the succeeding special judge were clearly incompetent. There has been no proper trial of the case and there should be one. In re Vaidyanatha Iyer, (1954) 1 M. I,. cable. Pulukuri Kotayya vs King Emperor, (1947) L. R. 74 I A. 65 and Kimbray vs Dapper, , referred to In re Fernandez. (1958) 11 M. L. J. 294, approved,. </s>
<s>[INST] Summarize the judgements Nos. 109 to 114, 117, 118, 120, 121, 128 to 133, 142, 143, 186, 190 and 191 of 1967. Petitions under article 32 of the Constitution of India for the enforcement of the fundamental rights. M.K. Ramamurthi, for the petitioners (in W. Ps. 109, 142 and 143 of 1967). section Shaukat Hussain, for the petitioners (in W. Ps. Nos. 110114 and 118 of 1967). Janardan Sharma, for the petitioners (in W. Ps. Nos. 117, 120, and 121 of 1967). R.C. Prasad, for the petitioners (in W. Ps. 128 133 of 1967) M.K. Ramamurthi and Vineet Kumar, for the petitioners (in W. Ps. Nos. 186, 190 and 191 of 1967). C.K. Daphtary, Attorney General, R.H. Dhebar and S.P. Nayar, for the respondent (in W. Ps. 109, 142 and 143 of 1967). G.R. Rajagopal, R.H. Dhebar and section P. Nayar, for the respondent (in W.P. No. 110 of 1967). R. Gopalakrishnan and section P. Nayar, for the respondent (in W. Ps. 111 to 114, 117, 118, 120, 121. 128 to 133, 186, 190 and 191 of 1967). The Judgment of WANCHOO, C.J., SHAH, BACHAWAT, MITTER and HEGDE, JJ. was delivered by WANCHOO, C.J., HIDAYATULLAH, J. delivered a separate Opinion. Wanchoo, C.J. These twenty one petitions under article 32 of the Constitution for a writ of habeas corpus raise common questions of law and will be dealt with together. It is enough to set out the facts in one of the petitions (No. 142 of 1967), for the facts in other petitions are almost similar. The petitioner was arrested on November 11, 1966 and detained under an order passed under r. 30(1)(b) of the Defence of India Rules, 1962 (hereinafter referred to as the Rules). It appears that though the order was reviewed after the period of six months, no opportunity was given to the petitioner to represent his case before the reviewing authority. In consequence the detention of the petitioner be came illegal after the first period of six months in view of the judgment of this Court in P.L. Lakhanpal vs Union of India(1). The State Government realising this defect, cancelled the order dated November 11, 1966 on August 3, 196 '7, and on the same day a fresh order of detention was passed and it is this order which (1) ; L 1O Sup CI/67 17 230 is being challenged before us. It is not in dispute that in view of the judgment of this Court in Jadev Singh vs State of Jammu and Kashmir(1), it was open to the State Government, in view of the formal defect in making the review, to pass a fresh order of detention after revoking the earlier order, which in any case became ineffective after the first six months, if the circumstances which led to the detention originally still continued. The main attack of the petitioners is on the order of the President passed on November 3, 1962, as amended on November 11, 1962, under article 359(1) of the Constitution. By this order the President declared that the right to move any court for 'the enforcement of the fundamental rights conferred by articles 14, 21 and 22 of the Constitution would remain suspended for the period during which the Proclamation of Emergency issued under article 352(1), was in force, if any person was deprived of such right under the Defence of India Ordinance (No. 4 of 1962) or any rule or order made thereunder. The argument in support is put this way. The President is an "authority" within the meaning of article 12 and therefore is comprised within the definition of the word "State" and the order passed under article 359 is a law within the meaning of article 13(2) of the Constitution. Consequently an order passed by the President under article 359 is liable to be tested on the anvil of the fundamental rights enshrined in Part Ill of the Constitution: Secondly, it is urged that an order passed under article 359 is made in the context of the Emergency and therefore enforcement of only such fundamental rights can be suspended which have nexus with the reasons which led to the Proclamation of Emergency. In consequence, the President can only suspend the enforcement of fundamental rights under article 22 and article 31 (2) under an order passed under article 359 and no others. Thirdly, it is urged that even if the President can suspend the enforcement of any fundamental right, the order passed can still be tested under the very fundamental right enforcement of which has been suspended. Fourthly, it is urged that an order passed under article 359 can in any case be challenged under article 14, and if so the order passed in the present case is violative of article 14 because some persons can be detained under the Defence of India Act, 51 of 1962 (hereinafter referred to as the Act) and the Rules while others can be detained under the Preventive Detention Act. As the Act and the Rules give more drastic powers for detention as compared to the powers conferred by the Preventive Detention Act, there is discrimination, for there is no indication as to when detention should be made under the Act and the Rules and when under the prevention law, and the matter is left to the arbitrary discretion of the executive. Fifthly, it is urged that in view of the language of the order under article 359, there should have been an ; 231 express provision in the Act and the Rules to the effect that enforcement of fundamental rights under articles 14, 21 and 22 was suspended and in the absence of such an express provision, the Presidential order under article 359 cannot stand in the way of the detention order being tested under Part III of the Constitution. Sixthly, it is urged that article 22 (5 ) provides that grounds of detention should be furnished to a detenu and the order of the President did not do away with the necessity of furnishing the grounds. Besides these main contentions, three subsidiary contentions have also been raised in one petition or another and they are (1) that the fresh order had not been communicated to the detenues and was therefore of no avail; (ii) that the order was not in the form as required by article 166 of the Constitution and it is therefore for the State Government to prove that it was passed by the authority which had the power to do so; and (iii) that the fresh order was mala fide. The petitions have been opposed on behalf of the State Government. It is unnecessary to set out in detail the contentions in reply to the main points raised on behalf of the petitioners. It is enough to say that the contention on behalf of the State is that once the President has passed an order under article 359 suspending the enforcement of any fundamental right, it is not open to rely on that fundamental right for any purpose, so long as the order under article 359 stands and such an order cannot be tested in any manner by the very fundamental right the enforcement of which it has suspended. Further as to the subsidiary points, the State contends that the fresh order of detention was communicated to each detenu and that the order was in the form required by the Constitution of Jammu and Kashmir and that article 166 has no application to the State of Jammu and Kashmir. It was finally denied that the order was mala fide in any of the cases. Part XVIII deals with Emergency Provisions and begins with article 352 which provides for making a declaration that "a grave emergency exists whereby the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance", if the President is so satisfied. articles 353 and 354 provide for the effect of the Proclamation of Emergency; but it is unnecessary to refer to them for present purposes. Article 358 lays down that during the period that a Proclamation of Emergency is in operation, Article 19 shall remain suspended, Article 359 with which we are particularly concerned lays down that where a Proclamation of Emergency is in operation, the President may by order declare that the right to move any court for the enforcement of such of the rights conferred by Part III as may be mentioned in the order and all proceedings pending in any court for the enforcement of the rights so mentioned shall remain L10Sup. C1/67 18 232 suspended for the period during which the Proclamation is in force or for such shorter period as may be specified in the order. " The order made under article 359 may extend to whole or any part of the territory of India and has to be laid, as soon as may be after it is made, before each House of Parliament. It will be seen from the terms or article 359 that it gives categorical powers to the President during the period when a Proclamation of Emergency is in operation to suspend the enforcement of any of the fundamental rights conferred by Part III. It is for the President to decide the enforcement of which of the fundamental rights should be suspended during the operation of the Proclamation of Emergency. There is nothing in article 359 which in any way limits the power of the President to suspend. the enforcement of any of the fundamental rights conferred by Part III.It is to our mind quite clear that the President has the power to suspend the enforcement of. any of the fundamental rights conferred by Part III and there is nothing thereunder which makes any distinction between one fundamental right or another. As article 359 stands, it seems to us, it clearly envisages that once a Proclamation of Emergency has been issued, the security of India or any part of the territory thereof may require that the President should suspend the enforcement of any of the fundamental rights conferred by Part III. There is in our opinion no scope for inquiry into the question whether the fundamental right the enforcement of which the President has suspended under article 359 has anything to do with the security of India which is threatened whether by war or external aggression or internal disturbance, for article 359 posits that it may be necessary for the President to suspend any of the fundamental rights in Part HI for the sake of the security of India. There is thus a basic assumption in article 359 that it may be necessary for the President to suspend the enforcement of any of the fundamental rights conferred by Part III in the interest of the security of India. If he considers that necessary, it is unnecessary in the face of that basic assumption to inquire whether enforcement of a particular fundamental right suspended by the President has anything to do with the security of India, for that is implicit in article 359. It follows therefore that it is open to the President to suspend the enforcement of any of the fundamental rights conferred by Part III by an order under article 359 and this Article shows that wherever such suspension is made it is in the interest of the security of India and no further proof of it is necessary. This brings us to the main ground ' raised on behalf of the petitioner that an order under article 359 is a law made by the State within the meaning of article 13(2) and has therefore to be 233 tested under Part III of the Constitution. We may assume for present purposes that the President is comprised within the word "State" in article 12. We may also assume that the order made by the President under article 359 is a law in its widest sense. The question however is whether such an order can be considered to be a law for the purpose of article 13(2) and tested thereunder. Article 13(2) and article 359 being parts of the same Constitution stand on an equal footing and the two provisions have to be read harmoniously in order that the intention behind article 359 is carried out and it is not destroyed altogether by article 13(2). It follows that though an order under article 359 may be assumed to be law in its widest sense, it cannot be law within the meaning of article 13(2), for if that were so, article 359 would be made nugatory. The Constitution through article 359 says that the President may suspend the enforcement of any of the fundamental rights in Part III where a Proclamation of Emergency is in force and that means that during the period of Emergency the fundamental rights, enforcement of which is suspended, cannot be enforced. If the order is a law within the meaning of article 13(2), the result would be that though the order says that the enforcement of a particular fundamental right is suspended during the period of Emergency the order can still be tested with the aid of article 13(2) on the anvil of the same fundamental right, the enforcement of which it suspends. That would in our opinion result in making article '359 completely nugatory, for then a declaration made there under that the enforcement of certain fundamental rights is suspended during the period of Emergency would have no meaning whatsoever. ' Therefore, applying the principle of harmonious construction we are of opinion that an order passed under article 359. cannot be law for the purpose of article 13(2), assuming it to be law in its widest sense. It follows therefore that an order under article 359 derives its force from article 359 itself and takes effect in accordance with its tenor and cannot be affected by article 13 (2), and cannot be tested under any of the provisions of Part III of the Constitution which it suspends. Reliance in this connection is placed on the judgment of this Court in Ghulam Sarwar vs Union of India(1), where the majority made a distinction between the President 's order itself under article 359 and the effect of that order. In that case it was observed that "there is a clear distinction between deprivation of fundamental rights by force of a constitutional provision itself and such deprivation by an order made by the President in exercise of a power conferred on him under a constitutional provision. " It was further observed. that "Article 359(1) does not operate by its own force. The President has to make an order declaring that the right to move a court in respect of a fundamental right (1) ; 234 or rights in Part III is suspended. He can only make an order which is a valid one. " It was further observed that an order making an unjustified discrimination in suspending the right to move a court under article 14, would be void at its inception and would be a still born order. We must say with greatest respect that it is rather difficult to understand how an order under article 359 which suspends the enforcement of a fundamental right can be tested under that very fundamental right. It is true that there is a distinction between article 358 and Art 359(1). Article 358 by its own force suspends the fundamental rights guaranteed by article 19; article 359(1) on the other hand does not suspend any fundamental right of its own force but it gives power to the President to suspend the enforcement of any fundamental right during the period of Emergency. But that cannot mean that an order passed under article 359(1 ) suspending the enforcement of a particular fundamental right has still to be tested under the very fundamental right which it suspends. That would in our opinion be arguing in a circle and make Art 359 completely nugatory. It seems that the majority in Ghulam Sarwar 's(1) case was also conscious of the fact that the reasoning on which it came to the conclusion that an order made under article 359 could be tested under article 14. though it suspended that Article, was open to the criticism that it was an argument in a circle. The argument was however met by making a distinction between the order and the effect of that order and it was observed that if the order did not violate article 14 it could validly 'take away ,the right to enforce the fundamental right under article 14. With greatest respect it is difficult to appreciate this reasoning and the distinction on which it is based. It seems to us that if article 359 is to have any meaning at all and is not to be wiped out from the Constitution an order passed thereunder suspending a fundamental right cannot possibly be tested under ' that very fundamental right which it suspends. If that were permissible no order under article 359 could really be passed. If article 359 is not to be rendered nugatory, it must be held that an order passed thereunder cannot be tested under the very fundamental right the enforcement of which it suspends. We must therefore respectfully differ from the view taken in Ghulam Sarwar 's case(1) and hold that an order passed under article 359(1) cannot be tested with the aid of article 13(2) under that very fundamental right the enforcement of which it suspends. There is therefore no force in the first point raised on behalf of the petitioners. We ,also see no force in the second point raised by the petitioners. As we have already indicated article 359 envisages that an (1) ; 235 order passed thereunder for suspension of the enforcement of particular fundamental right is for the sake of security of India It is therefore not necessary to enquire whether there is any nexus between a particular fundamental right suspended and the security of India. Article 359 itself posits that it may be necessary in the interest of the security of India to pass an order suspending the enforcement of any fundamental right thereunder. This is clear from the fact that article 359(1), provides for the suspension of the enforcement of the fundamental rights in Part III of the Constitution only during the period of Emergency meaning thereby that suspension of the enforcement of any of the fundamental rights which the President considers necessary is for the security of India. We fail to see why only fundamental rights under article 22 or under article 31(2) can be suspended under article 359; Article 359 clearly shows that any fundamental right in Part Ill can be suspended during an Emergency and we cannot limit Article 359 in the face of the unambiguous and express words thereof and say that only the enforcement of fundamental right under Articles 22 and 31(2) can be suspended. It may be that prima facie these two fundamental rights appear to have a clearer nexus with security of India; but it does not follow that other fundamental fights may not in an Emergency have such a nexus. In any case article 359 itself proceeds on the basis that the suspension of the enforcement of all or any of the fundamental rights is for the sake of security of India and so gives the power to the President to suspend such enforcement if he considers it necessary for that purpose. The second contention raised on behalf of the petitioners must also be rejected. As to the third contention, we have already indicated that an order passed under article 359(1) suspending the enforcement of a particular fundamental right cannot be tested under that very fundamental right. We cannot see how if the order under Art 359 suspends article 14 its validity can still be tested under that very Article. We have already expressed our respectful dissent from the view taken in Ghulam Sarwar 's case(1) and must reject this contention. As the enforcement of the fundamental right under article 14 was suspended by the President 's order under article 359, no question of that order being bad under that Article can arise even if we assume that the provisions for detention under the Act and the Rules are more stringent than the provisions for detention under the Preventive Detention Act. The fourth contention also fails. As to the fifth contention it is urged that on. the words of the order passed by the President suspending the enforcement of fundamental rights under articles 14, 21 and 22, there had to be a 236 provision in the Act and the Rules expressly to the effect that these fundamental rights would not be enforceable. We cannot understand how any provision could have been made in the Act and Rules to this effect. Such a provision in the Act 43r the Rules would be clearly unconstitutional. It is only because article 359(1)provides that the President may suspend the enforcement of a particular fundamental right that it is possible for the enforcement of any fundamental right to be suspended during the Emergency. What the President has provided in the present case is that the enforcement of fundamental rights under articles 14, 21 and 22 would be suspended if any person has been deprived of such right under the Defence ' of India Ordinance (later replaced by the Act) or the Rules or orders made thereunder. It is necessary to emphasis that the President 's order speaks of suspension under the Ordinance (later replaced by the Act) or the Rules or orders made thereunder. It does not say that the enforcement of such right is suspended if any person is deprived of it by the Ordinance the Rules or orders made thereunder. Therefore it was not necessary that there should be any express provision in the Act or the Rules suspending the enforcement of fundamental rights under articles 14,21 and 22. The clear intendment of the President 's order is that if any fundamental right of any person under articles 14, 21 and 22 was invaded by any action taken under the Ordinance (later replaced by the Act), or any rule or order thereunder, that action could not be tested on the anvil of those fundamental rights. It was therefore not necessary to make any express provision in the Act or the Rules for the suspension of the enforcement of the fundamental rights under articles 14, 21 and 22. The fifth contention must also fail. The sixth contention is that article 22(5) which lays down that grounds of detention must be communicated to the person detained must still be applicable. We have not been able to understand this argument at all. If the President 's order is validly made as we hold it to be and if it suspends article 22 as it does we fail to see how clause (5 ) continues, for it is only a part of article 22 which has been suspended. There is no question therefore of furnishing any ground under article 22(5) to the detenu if the detention is under the Act on the Rules, for the entire article 22 has been suspended. The argument under this head is also rejected. This brings us to the subsidiary points raised on behalf of the petitioners. It is first said that the fresh order was not communicated to the detenues. This has been denied on behalf of the State. We see no reason why the fresh order which was passed on the same day on which the earlier order was cancelled would not have been communicated. Nothing has been shown to us to disbelieve the statement on behalf of the State that the fresh order was 237 communicated in each case and. therefore any argument based on its not being communicated must fail. Then it is argued that the order is not in the form as required by article 166. It is enough to say that article 166 does not apply to the State of Jammu and Kashmir. We have to look to the Constitution of Jammu and Kashmir to see whether the form of the order is in accordance therewith. It is clear that the order is in the form required by section 45 of the Constitution of Jammu and Kashmir. The presumption must therefore be made that it was passed validly unless the petitioners can show that it was not passed as required by law. No attempt has been made on behalf of the petitioners to show that. The contention on this head must therefore also be rejected. Lastly, it is urged that the orders in these cases were mala fide. This has been denied on behalf of the State. No grounds have been shown which may lead us to the conclusion that the fresh orders which were passed were mala fide. The necessity for fresh orders arose because the review was not made in accordance with the manner indicated by this Court in Lakhanpal 's case(1). The fresh order that was made was on the same facts and must in the circumstances be held to be valid in view of the judgment of this Court in Jagdev Singh 's case(2). The petitions therefore fail and are hereby dismissed. Hidayatullah, J. I agree that the petitions be dismissed. As I was a member of the Constitution Bench which decided Ghulam Sarwar 's(2) case I wish to say a few words in explanation. The judgment of Subba Rao, C.J. to which I was a party has expressed itself somewhat unhappily on ,the point on which it has been overruled in the judgment just delivered. The former Chief Justice upheld the extension of G.S.R. 1418/30 10 62 (which suspended the benefits of articles 21 and 22 to a foreigner) by G.S.R. 1275/27 8 3965. The latter order suspended article 14 in addition to the two articles already suspended. This 'suspension was upheld on the ground that there was a clear classification between citizens and foreigners and in a state of war and emergency foreigners could be treated as a class. In other words, the order was tested on the ground of article 14 itself which the order of the President sought to suspend. In the judgment just delivered it has been said that the reasoning in Ghulam Sarwar 's(3) case is difficult to understand and that the suspension of article 14 precludes examination of the order under that article. I should have thought that I had sufficiently explained my position during the discussion of the draft judgment (1) ; (2) ; (3) ; 238 in Ghulam Sarwar 's(1) case but it appears that in spite of my doubts about the width of language in that judgment, the decision to which I became a party continued to bear the meaning now attributed to it. If I may say with, great respect, the judgment just delivered also suffers from a width of language in the other direction. The truth lies midway. Although a suspension of a fundamental right under article 359(1) may be made either for the whole of India or any part of the territory of India, Ghulam Sarwar 's(1) case points out that there is nothing to prevent the President from restricting the scope of the order to a class of persons provided the operation of the order is confined to an area and to a period. As the order was applicable to the whole of India and for the duration of the emergency although it affected a class, namely, foreigners, it was upheld. This was not the application of article 14. This was said because the argument was that the order could only be with reference to the whole or a part of the territory of India and not with respect to a class such as foreigners. That meant that the Order was considered in relation to the words of article 359(1). Room was, however, to be left for the play of article 14 for those theoretically possible (and fortunately 'only theoretically possible) cases in which the exercise of the power itself may be a cloak for discrimination, in other words, cases of mala fide action and clear abuse of the power for some collateral purpose. This strict reservation only was intended to go into the judgment in Ghulam Sarwar 's(1) case but if a wider meaning can be spelled out from that judgment I dissent from it and say that I never intended to 'be a party to such a wide statement. The examination under article 14 of the suspension of the article itself, as expressed in the judgment of Subba Rao C.J. gives a very different impression. For the same reason I cannot subscribe to the width of language in the judgment just delivered which apparently 'does not make any reservation at all. Therefore I agree to the order proposed but reserve my reasons. R.K.P.S. Petitions dismissed. [/INST]The ten appellants were ratings who had entered into an agreement with a shipping company in Cochin to navigate one of its ships between December 11, 1963 and June 10, 1964. During this period, after they had performed some voyages and while the ship was berthed in Calcutta port, a dispute arose between the appellants and the Company as to the payment of bazar money (victualling charges) which the ratings were allowed according to a custom obtaining in merchant shipping. The appellants claimed Re. 1 per day while the Company normally paid only 0.62 P. per day. The dispute was referred to the Shipping Master, Calcutta, whereupon meetings took place between representatives of the Company and the appellants before the Shipping Master and an agreement was reached according to which the Company promised to pay the amount claimed. However, it was not clear whether this payment was to be made before the commencement of the next voyage or on the termination of the agreement. As the appellants were in fact not paid before commencement of the voyage, upon the instigation of certain labour leaders they left the vessel in a body and, as a result, the ship could not leave port at the appointed time of sailing. The appellants were thereafter prosecuted for deserting the ship and were convicted under section 191 and (b) and section 194(b) and (e) read with section 436 of the . Their revision applications to the High Court were summarily rejected. In the appeal to this Court by special leave, it was contended on behalf of the appellants (a) that there was no desertion on their part, and (b) that even if they be held to have left the ship, they were protected by the fact that there was reasonable cause for absenting themselves at the time. of the sailing of the ship. HELD: dismissing the appeal: (i) The gist of desertion is the existence of animus not to return to the ship or, in other words, to, go against the agreements under which the employment of seamen for sea voyages generally take place. The way the appellants had acted clearly showed that they were using the weapon of strike with a view to force the issue ,with their employers and were not intending to, return to the vessel unless their demands were acceded to immediately. It was therefore legitimate to infer that they were breaking the agreement with the company which was to keep the ship in voyage up to June 10, 1964 . and this was rendered impossible by all the appellants absenting themselves. Their action therefore amounted to desertion. [309 B, F G] 307 Moore vs Canadian Pacific Steamship Co., ; The West morland; , ; referred to. (ii), Section 191(1) is in two parts. The first part deals with only desertion and therefore, if desertion was proved, the penalty which the law provides under the Act was duly incurred. There is no excuse against desertion became reasonable cause which is indicated in the same section is included in cl. (b) and not in el. In the present case there was not that sufficient cause even for the purpose of el. (b) of section 191(1). The dispute was already before the Shipping Master, meetings had taken place and minutes had been recorded. the log book of the shipping Company and other records would clearly show the mount of money due to the appellants. The settlement of the claim could well have waited till the completion of the voyage and there was machinery in law for the enforcement of a demand. [309 H; 310 D F] The law has chosen to regard the duties of seamen as of paramount importance and has therefore, in addition to the ordinary liabilities which arise under the general law, added a penalty of imprisonment for absence from duty without reasonable cause and has also provided for forfeiture of wages and the effects left on board. This indicates that the policy of the law is that the crew must perform their duties under such agreements as they execute with the shipping company on pain of being found guilty and punished if they cannot make out that they had sufficient and reasonable cause for what may otherwise be regarded as dereliction of duty. [310 C D] </s>
<s>[INST] Summarize the judgementminal Appeal No. 260 of 1968. Appeal by special leave from the judgment and order dated October 18, 1968 of the Bombay High Court in Criminal Appeal No. 1161 of 1966. A. section R. Chari, section section Khanduja and Maya Rao, for the appellant. M. C. Bhandare and section P. Nayar, for respondent No. 1. V. M. Tarkunde, Janendra Lal and B. R. Agarwala, for respondent No. 2. The Judgment of the Court was delivered by P. Jaganmohan Reddy, J. This appeal is by special leave against the order of the High Court of Bombay dated the 18th October 1968 allowing the oral application of the learned advocate for the respondent for the amendment of the charge of terms of the draft submitted by him and directing the Chief Presidency Magistrate to assign the case to some court for holding a new trial in respect of the amended charge. This order was made in the following circumstances The appellant was one of the partners of a firm Chandulal Kanji & Co. along with his brother Chandulal K. Mehta. By and under an agreement called the Packing Credit Agreement entered into between the firm and the second respondent, the Union Bank of India, the appellant obtained 75 per cent of the value of groundnut extraction to be purchased by the firm and exported to the United kingdom and other European countries from the Bank on the condition that immediately after the purchase of the goods and its export the shipping documents would be sent to it. This arrangement required the firm while sending a letter requesting the credit to be given to it, to enclose the contract of sale of groundnut extraction entered into between it and the foreign firm. On receipt of this letter and the agreement. the bank would advance 75 per cent of the money required to purchase the groundnut extraction. After the amount was received, goods had to be purchased from the mills and shipped for export and the shipping documents sent to the Bank within a month from the date of such advance. It appears that under this arrangement the second respondent Bank had advanced under the Cash Credit Agreement and the Packing Credit Agreement nearly rupees 4 lacs on several dates the first of which was 744 March 27, 1965 which was for the purchase of 200 tons of groundnut extraction and with which we are now concerned. The Cash Credit Agreement, the Packing Credit Agreement and the letter requesting the advance of Rs. 60,000/ were all signed on the same date. The advance, as requested, was also made on the 27th March 1965. Goods were purchased but could not be shipped within a month from the date of the advance because, as stated in the letter of the appellant dated the 27th April, due to change in the schedule of departure of the ships it was not possible to export the goods on the 24th or 25th March as originally planned as such he undertook to ship the goods a week thereafter. On the same day, the appellant further sent a declaration that the firm had purchased 300 tons from the advance made to it and is holding the stock. On the 6th May the Bank requested the firm to forward the shipping documents in respect of the seven agreements of which one related to the agreement of 27th March. When the shipping documents were not sent to it in conformity with the several documents the bank made certain enquiries from its branch in Veraval, a port in Kathiawar and received certain information as to the dates on which the various quantities were exported and the ships in which they were sent. As the shipping documents were not sent to the second respondent as required under the agreements entered into with it, it again called on the firm on the 24th May to hand over the documents to it in respect of the groundnut exported. When this request was not complied with, it filed a complaint against the appellant who alone was the active partner of the firm, in the court of the Presidency Magistrate on the 26th May alleging against him misappropriation of moneys and goods contrary to the agreement. In support of this complaint the manager of the Bank gave evidence and at the stage of framing the charge the Magistrate heard the lawyers for both sides. He framed only one charge against the accused for misappropriation of the moneys under section 406 I.P.C. advanced by the Bank in respect of which the Magistrate ultimately convicted him on 31st August 1966 and sentenced him to 18 months ' R.I. Against this conviction the appellant appealed to the High Court and when the case came up for hearing and had been argued for a considerable length, the advocate for the complainant, the second respondent, appears to have made an oral application for amending the charge framed by the Magistrate as per the draft handed over to the learned Judge which was to be added as an alternative charge to the charge already framed. It was contended that the Magistrate had framed a charge merely in respect of the entrustment of the moneys that were advanced by the Bank to the appellant but even so the evidence had been led on behalf of the complainant at the trial to show that apart from the money with which the appellant was said to have been 745 entrusted with, even the goods that were purchased by the appellant with the moneys so advanced had also been entrusted to him and which he had agreed to hold on account of the Bank. This prayer was opposed by the learned advocate for the appellant who contended that it was open to the complainant to have urged the Magistrate at the time when the charge was being framed to have an alternate charge similar to the one now required to be added. In fact it was stated by the learned advocate that the charge was actually framed by the Magistrate after substantial evidence of the complainant had been recorded by him and after the complainant 's advocate in the lower court had discussions on the question of the framing of charge, but in spite of it only one charge was framed against the appellant for breach of trust in respect of moneys said to have been entrusted to the appellant by the Bank. The charge relating to goods was omitted and not framed. It was also pointed out that the altering or amending of charge at this stage would really amount to the framing of a totally new charge in regard to altogether a new subject matter, namely, alleged entrustment of goods, which if permitted would prejudice the accused in his defence. The learned Judge, however, after hearing these arguments thought that a charge which would include entrustment of moneys as well as entrustment of goods ought to have been framed by the Magistrate but having regard to the materials which have already been brought on record by the complainant at the trial he thought that it was desirable in the interest of justice to allow the amendment. The following directions given by the learned Judge are relevant for the determination of the contention urged before us : "I direct that the charge as framed by the learned Magistrate be altered and amended in terms of the draft amendment submitted and send the case back for a new trial on this amended charge so as to enable the appellant to have full opportunity to meet this case, till which time this appeal is kept pending. I direct that the papers be sent to the learned Chief Presidency Magistrate forthwith and the learned Chief Presidency Magistrate is further directed to assign the case to some Court for holding the new trial. I further direct that the new trial should be expeditiously completed and preferably within two months from the receipt of the papers by the Court to which the case would be assigned by the learned Chief Presidency Magistrate. The other two appeals being Criminal Appeals Nos. 1162 and 1163 of 1966 should also be adjourned as part heard matters and to be put up along with Cri 746 minal Appeal No. 1161 of 1966 after the record and the proceedings of the new trial is received by this Court." Mr. Chari on behalf of the appellant construing the above order as a direction for a new trial without disposing of the appeal contends that it is unwarranted, unfair, inequitable and unsupported 'by any of the provisions of the Code of Criminal Procedure. The learned advocate further submits that it is grossly prejudicial to the accused, for the prosecution to wait till the end of the trial and then say that the charge should be amended. It could have easily insisted at the stage of framing the charge itself that an additional charge should be framed and if the prayer was not accepted it could have come in revision. The, prosecution having let the trial proceed to the end without insisting on any additional charge cannot now before an appellate court ask for its amendment nor should the said amendment be permitted. Secondly, he submits that the learned Judge did not consider the question whether there was or was not a prima facie case of entrustment of goods. In fact it is the contention that the cumulative effect of the agreement and the transaction between the appellant and the second respon dent Bank does not disclose entrustment of moneys to sustain the charge for which the appellant was convicted and if there can be no question of any entrustment of moneys there can be no entrustment of goods. The learned Judge, it is stated, should have adverted his mind to this aspect of the case before he permitted the framing of additional charge and directed the Magistrate to hold a new trial. In fact the learned advocate urged that before the Magistrate the second respondent 's advocate had specifically stated that the trial should proceed only on one charge relating to entrustment of moneys as a test case and having taken up this position no prayer for the addition of another charge can be made or ought to have been granted. But Shri Tarkunde appearing on behalf of the second respondent denies that there was any such submission and contends that in fact Tulzapurkar J. did not direct a new trial as suggested by the advocate on behalf of the appellant though the use of the words "new trial" has unhappily given rise to such a contention. What in fact the learned Judge did was to send the case back to the Magistrate to enable the appellant to have full opportunity to meet the case and return the record to the court to enable it to dispose of the appeal on both the charges. The learned advocate submits that there is no illegality in the order of the learned Judge because what the appellate court could have done itself it is directing the Magistrate to do, namely, to give an opportunity to the accused to call the prosecution witnesses if he so desires, obtain his statement under section 342 in respect of the additional charge and to allow him to record any evidence on 747 his behalf if he is so desirous. It appears to us that the contention of Shri Tarkunde is amply justified by the following observations of the learned Judge allowing the application for amendment made by Mr. Patel on behalf of the second respondent: "I have therefore asked Mr. Khambata as to whether the appellant would like to have an opportunity of a new trial where he could meet this case and Mr. Khambata has stated that the proper course for the court, after allowing amendment of the charge in the manner sought by the complainant, would be to order a new trial. Mr. Patel for the complainant, however, has stated before me that even during such new trial that would be ordered by the court, no fresh evidence would be led on behalf of the complainant and the complainant would be relying upon the self same material that has already been brought on record by the complainant at the trial, which is already concluded. Mr. Khambata also urged before me that if I were inclined to allow the application of Mr. Patel, I should dispose of the appeal which deals with the alleged entrustment of the monies and either accept the findings or set aside the findings and thereafter order a new trial in regard to the alleged entrustment of the goods. I feel that it would be desirable and proper to keep this pending till the opportunity that is being given to the appellant accused No. 2 to meet this new case is fully availed of by him and the record of such new trial is received by this court. I accordingly allow the application of Mr. Patel for amendment of the charge in terms of the draft submitted by him." From the above observations it would be clear that the learned Judge did not intend that the trial should be a new trial in the sense that the Magistrate would record the evidence afresh, see whether there, was a prima facie case for framing a charge and if there was, to frame a charge then permit the complainant to lead evidence, record the statement of the accused under section 342 and adduce evidence on his behalf after which he would pronounce judgment of conviction or acquittal. If he had so intended and had directed a totally new trial as is alleged, he could not have rejected the contention of Shri Khambata for the appellant that he should dispose of the appeal and order a new trial on the additional charge nor would he have directed that the appeal should be kept pending till the record of the new trial is received back in his court which could only be after giving 748 the accused appellant an opportunity to meet the case on the additional charge. On this interpretation of the order the question is whether what has been directed by the learned Judge is in conformity with the provisions of the Code of Criminal Procedure. In our view the Criminal Procedure Code gives ample power to the courts to alter or amend a charge whether by the trial court or by the appellate court provided that the accused has not to face a charge for a new offence or is not prejudiced either by keeping him in the dark about that charge or in not giving a full opportunity of meeting it and putting forward any defence open to him, on the charge finally preferred against him. The power of the appellate court is set out in section 423 Cr. P. C. and invests, it with very wide powers. A particular reference may be made to clause (d) of sub section (1) as empowering it even to make any amendment or any consequential or incidental order that may be just or proper. Apart from this power of the appellate Court to alter or amend a charge, section 535 Cr. P. C. further provides that no finding or sentence pronounced or passed shall be deemed to be invalid merely on the ground that no charge has been framed unless the Court of appeal or revision thinks that the omission to do so has occasioned failure of justice and if in the opinion of any of these courts a failure of justice has been occasioned by an omission to frame a charge, it shall order a charge to be framed and direct that the trial be recommenced from the point immediately after the framing of the charge. The wide and extensive power which an appellate or revisional court can exercise in this regard has also the support of the Privy Council. Lord Porter who delivered the opinion of the Judicial Committee in Thakar Sahab vs Emperor(1) had occasion to point out that while the history of the growth of Criminal Law in England its line of development and the technicalities consequent thereon would have made it more difficult and may be impossible to justify a variation of the charge, Indian Law was subject to no such limitation but is governed solely by the Penal Code and Criminal Procedure Code. In that case the Privy Council was called on to decide whether the alteration of the charge and the conviction from one of abetment of forgery by known person or persons to abetment of forgery by an unknown person or persons vitiated the conviction. It was held that it did not, because an Appellate Court had wide powers conferred upon it by section 423 and in particular by sub section (1)(a) of that section, which is "always of course subject to the limitation that no course should be taken by reason of which the accused may be prejudiced either because he (1) [1943] P.C.192. 749 is not fully aware of the charge made or is not given full opportunity of meeting it and putting forward any defence open to him on the charge finally preferred. " In this case Shri Chari contends that : (1 ) what the High Court should have done if it found that interest of justice required it either to have recorded the evidence itself or to have asked the trial court to record it and send it back, but it cannot refuse to give a finding on the charge for which he was convicted and (2) that the prosecution having proceeded with the trial on the charge framed and not having asked for an amendment at that stage cannot ask the appellate court to amend or add to the charge. It appears to us that both these contentions are based on a misreading of the order of the High Court. As already pointed out the learned Judge of the High Court did not intend nor did he direct a new trial in the sense that it is contended he had done. There was in fact no retrial directed, but only an opportunity was given to the accused to safeguard himself against any prejudice by giving him an opportunity to recall any witnesses and adduce any evidence on his behalf. The appellant has also understood the order not as a retrial is clear from ground (f) of the Special Leave Petition filed before us. It is therefore not necessary for us to examine the scope and extent of the power or circumstances in which a retrial should be ordered. The complainant 's Advocate Shri Tarkunde in fact said and even now submits before is that he does not want to lead any evidence and would be satisfied on the same evidence to sustain a conviction on the amended charge, nor does the alternative charge now framed requires him to answer a charge against him of a new offence which would cause prejudice. The offence 'With which he is now charged alternatively is the same namely under Section 406 but as the entire transaction was one and indivisible he is not only required to answer the charge of misappropriation of money but in the alternative misappropriation of goods which the complainant Bank contends became their 's as soon as the accused purchased them with the moneys it advanced. In our view no prejudice is caused or is likely to be caused to the accused by the amendment of the charge as directed by the High Court. It was again contended that the High Court ought to have considered whether there was a prima facie case against the accused to justify the framing of the amended charge particularly when it took the view that the first charge could not be sustained. We do not think the learned Judge expressed any view as to the maintainability or otherwise of the conviction, but thought there should have also been framed an alternate charge in respect of the goods. It is true that the court did not give any reasons as 750 to why it thinks there was a prima facie case, but being an appellate court perhaps it was anxious to avoid giving an impression that it has taken any particular view on the evi dence. The accused raised no ground on this account in the Special Leave Petition, nor do we think on this account we should interfere with the judicial exercise of discretion of the learned Judge in framing the charge and in giving the accused an opportunity to recall any witnesses or adduce fresh evidence on his behalf. If no objection could be taken to the trial Court in framing the original charge it is difficult to see how an objection can be taken at this stage to the framing of an alternate charge on the same allegation in the complaint. The appeal is accordingly dismissed. Y.P. Appeal dismissed. [/INST]The appellants, a firm of brokers, entered into a contrct for the sale and purchase of a quantity of jute under a "sold note" addressed to the respondents which they signed as "A & Co., brokers" and a "bought note" of the same date and for the same quantity of jute addressed to a third person in which also they signed as "A & C0. , brokers ". The" sold note" contained the usual arbitration clause under which all matters, questions, disputes, differences and/or claims, arising out of and/or concerning, and/or in connec tion and/or in consequence of, or relating to, the contract . . shall be referred to the arbitration of the Bengal Chamber of Commerce. " A dispute having arisen with regard to a matter which admittedly arose out of the contract evidenced by the sold note, the appellants referred the dispute for arbitration. The respondents raised before the arbitrators the further contention that as the appel lants were only brokers they were not entitled to refer the matter to arbitration. The arbitrators made an award in favour of the appellants. The respondents made an applica tion to the. High Court under the Indian Arbitration Act for setting aside the award: Held that, assuming that it was open to the respondents to raise this objection at that stage, inasmuch as this further dispute 793 was also one which turned on the true interpretation of the contract and the respondents must have recourse to the contract to establish their claim, this was also a dispute arising out of or concerning the contract and as such fell within the arbitration clause, and the award could not be set aside under the Indian , on the ground that it was beyond jurisdiction and void. Heyman vs Darwins Ltd. ([1942.] A.C. 356) referred to. </s>
<s>[INST] Summarize the judgementl Appeal No. P 409 of 1958. Appeal by special leave from the judgment and order dated May 13, 1958, of the Punjab High Court at Chandigarh in First Appeal from Order No. 24 of 1958. C. B. Aggarwala and Naunit Lal, for the appellant. H. section Doabia, K. R. Chaudhury and M. K. Ramamurty, for the respondent No. 1. 1958. September 30. This appeal by special leave has been filed against the decision of the Punjab High Court confirming the order passed by the Election Tribunal by which the appellant 's election has been declared to be void. The appellant Shri Baru Ram was elected to the Punjab Legislative Assembly from the Rajaund constituency in the Karnal District. Initially seventeen candidates had filed their nomination papers in this constituency. Out of these candidates, thirteen withdrew and the nomination paper filed by Jai Bhagawan was rejected by the returning officer. That left three candidates in the field. They were the appellant Baru Ram, Mrs. Prasanni and Harkesh, respondents 1 and 2 respectively. The polling took place on March 14, 1957, and the result was declared the next day. Since the appellant had secured the largest number of votes he was declared duly elected. Soon thereafter Mrs. Prasanni, respondent 1, filed an election petition in which she alleged that the appellant had committed several corrupt practices and claimed a declaration that his election was void. The appellant denied all the allegations made by respondent 1. The election tribunal first framed six preliminary issues and after they were decided, it raised twenty nine issues on the merits. The tribunal was not 1406 satisfied with the evidence adduced by respondent I to prove her allegations in respect of the corrupt practices committed by the appellant and so it recorded findings against respondent 1 on all the issues in regard to the said corrupt practices. Respondent I had also challenged the validity of the appellant 's election on the ground that the returning officer had improperly rejected the nomination paper of Jai Bhagawan. This point was upheld. by the election tribunal with the result that the appellant 's election was declared to be void. The appellant then preferred an appeal to the Punjab High Court. He urged before the High Court that the election tribunal was in error in coming to the conclusion that the nomination paper of Jai Bhagawan ' had been improperly rejected. This contention was accepted by the High Court and the finding of 'the tribunal on the point was reversed. Respondent 1 sought to support the order of the election tribunal on the ground that the tribunal was not justified in holding that the appellant was not guilty of a corrupt practice under section 123(7)(c). This argument was also accepted by the High Court and it was held that the appellant was in fact guilty of the said alleged corrupt practice. In the result, though the appellant succeeded in effectively challenging the only finding recorded by the tribunal against him, his appeal was not allowed because another finding which was made by the tribunal in favour of the appellant was also reversed by the High Court. That is why the order passed by the tribunal declaring the appellant 's election to be void was confirmed though on a different ground. It is this order which is challenged before us by Mr. Aggarwal on behalf of, the appellant and both the points decided by the High Court are raised before us by the parties. At the hearing of the appeal Mr. Doabia raised a preliminary objection. He contends that the present appeal has been preferred beyond time and should be rejected on that ground alone. The judgment under appeal was delivered on May 13, 1958, and the petition for leave to appeal under article 136 of the Constitution 1407 has been filed in this Court on September 2, 1958. It is common ground that the appellant had appliedfor leave to the Punjab High Court on June 9, 1958,and his application was dismissed on August 22, 1958.If the time occupied by the appellants application for leave is taken into account, his appeal would be in time; on the other hand, if the said period is not taken into account, his application would be beyond time. Mr. Doabia argues that the proceedings taken on an election petition are not civil proceedings and so an application for leave under article 133 of the Constitution was incompetent; the time taken in the disposal of the said application cannot therefore be taken into account in computing the period of limitation. On the other hand, Mr. Aggarwal urges that section 116A (2) of the Representation of the People Act (43 of 1951) (hereinafter called the Act) specifically provides that the High Court, in hearing an appeal presented to it shall have the same powers, jurisdiction and authority and follow the same procedure with respect to the said appeal as if it were an appeal from an original decree passed by a civil court situated within the local limits of its civil appellate jurisdiction. The result of this provision is to assimilate the election proceedings coming before the High Court in appeal to civil proceedings as contemplated by article 133 of the Constitution and so, according to him, it was not only open to the appellant but it was obligatory on him to make an application for leave to the Punjab High Court under the said article. That is why the time occupied by the said proceedings in the Punjab High Court must be excluded in deciding the question of limitation. We do not propose to deal with the merits of these contentions. It is not seriously disputed by Mr. Doabia that parties aggrieved by orders passed by High Courts in appeals under section 116A of the Act generally apply for leave under article 133 and in fact such applications are entertained and considered on the merits by them. It is true that Mr. Doabia 's argument is that this practice is erroneous and that article 133 has no application to the appellate decision of the High Court under section 116A 179 1408 of the Act. Assuming that Mr. Doabia is right, it is clear that the appellant has merely followed the general practice in this matter when he applied for leave to the Punjab High Court; his application was entertained, considered on the merits and rejected by the High Court. Under these circumstances we think that even if we were to hold that article 133 has no application, we would unhesitatingly have excused the delay made in the presentation of the appeal; and so we do not think we can throw out the appeal in limine on the ground of limitation. If necessary we would excuse the delay alleged to have been made in presenting this appeal. On the merits, Mr. Aggarwal contends that the finding of the High Court that the appellant has committed a corrupt practice under section 123(7)(c) is not supported by any evidence. Before dealing with this argument it would be relevant to consider the legal position in the matter. Corrupt practice as defined in section 2(c) of the Act means " any of the practices specified in section 123 ". Section 123(7)(c) provides inter alia that the obtaining or procuring or abetting or attempting to obtain or procure by a candidate any assistance other than giving of vote for the furtherance of the prospects of that candidate 's election from any person in the service of the Government and who is a member of the armed forces of the Union, is a corrupt practice. The case against the appellant as set out by respondent 1 in her election petition on this point is that the appellant secured the assistance of Puran Singh who is a member of the armed forces of the Union. It was alleged that Puran Singh " actively canvassed for the appellant on March 11th to 13th, 1957, in his village and so much so that he subsequently served as his polling agent at polling booth No. 15 at village Kotra on March 14, 1957 ". Both the tribunal and the High Court are agreed in holding that it had not been proved that Puran Singh actively canvassed for the appellant on March 11th to 13th as alleged by respondent 1. They have, however, differed on the question as to whether the appellant had appointed Puran Singh as his polling agent for the 1409 polling booth in question. It would thus be seen that the point which falls for our decision in the present appeal lies within a very narrow compass. Did the appellant secure the assistance of Puran Singh by appointing him as his polling agent ? Going back to section 123, explanation (2) to the said section provides that " for the purpose of cl. (7) a person shall be ' deemed to assist in the furtherance of the prospects of a candidate for election if he acts as an election agent or polling agent or a counting agent of that candidate ". In other words, the effect of explanation (2) is that once it is shown that Puran Singh had acted as polling agent of the appellant, it would follow that the appellant had committed a corrupt practice under section 123(7)(c). But it is important to bear in mind that before such a conclusion is drawn the provisions of section 46 of the Act must be taken into account. Section 46 authorises a contesting candidate to appoint in the prescribed manner such number of agents and relief agents as may be prescribed to act as polling agents of such candidate at each polling station provided under section 25 or at the place fixed under subs. (1) of section 29 for the poll. There can be no doubt that, when explanation (2) to section 123 refers to a person acting as a polling agent of a candidate, it contemplates the action of the polling agent who is duly appointed in that behalf by the candidate under section 46. It is only when it is shown that a person has been appointed a polling agent by the candidate and has in consequence acted as such agent for the said candidate that explanation (2) would come into operation. If, without being appointed as a polling agent by the candidate, a person fraudulently, or without authority, manages to act as the polling agent of the said candidate, explanation (2) would not apply. That being the true legal position the short point which arises for our decision is whether the appellant had appointed Puran Singh as his polling agent and whether Puran Singh acted as such polling agent at the polling booth No. 15 at Kotra. What then are the facts held proved by the High Court in support of its conclusion against the appellant 1410 under section 123(7)(c) ? The first point which impressed the High Court is in respect of the writing by which the appellant is alleged to have appointed Puran Singh as his polling agent. The printed prescribed forms were not available to the candidates and so they had to copy the prescribed form for the purpose of appointing their polling agents. This position is not disputed. The form by which Puran Singh is alleged to have been appointed the appellant 's polling agent contains a glaring mistake in that while reciting that the polling agent agreed to act as such polling agent the form says " I agree to act as such following agent " (P. W. 48/1). The same glaring mistake is to be found in the form by which the appellant admittedly appointed Pal Chand to act as his polling agent at the same polling booth. The High Court thought that the identity of this glaring mistake in both the forms coupled with the similarity of the handwriting of the rest of the writing in them showed that the two forms must have been written by the same scribe. This is a finding of fact and it may be accepted as correct for the purpose of our decision. It would, however, be relevant to add that it is not at all clear from the record that the same scribe may not have written similar forms for other candidates as well. There is no evidence to show that the scribe who made this glaring mistake had been employed as his own scribe by the appellant. The High Court was also disposed to take the view that Puran Singh in fact had acted as the polling agent on the day of the election at the said polling booth. Respondent 1 had examined herself in support of this plea and Banwari Lal whom she examined supported her in that behalf. The tribunal was not impressed by the evidence of these two witnesses; and it has given reasons for not accepting their evidence as true or reliable. It is unnecessary to emphasize that, in dealing with an appeal under section 116A of the Act, High Courts should normally attach importance to the findings of fact recorded by the tribunal when the said findings rest solely on the appreciation of oral evidence. The judgment of the High Court does not show that 1411 the High Court definitely accepted the evidence of the two witnesses as reliable; in dealing with the question the High Court has referred to this evidence without expressly stating whether the evidence was accepted or not; but it may be assumed that the High Court was disposed to accept that evidence. In this connection, we would like to add that it is difficult to understand why the High Court did not accept the criticism made by the tribunal against these two witnesses. If we consider the verifications made by respondent I in regard to the material allegations on this point both in her petition and in her replication, it would appear that she had made them on information received and not as a result of personal knowledge; that being so, it is not easy to accept her present claim that she saw Puran Singh working as polling agent; but apart from this consideration, the evidence of respondent 1, even if believed, does not show that Puran Singh was working as a polling agent of the appellant ; and the statement of Banwari Lal that Puran Singh was working as the appellant 's polling agent loses much of its force in view of his admission that he had no knowledge that Puran Singh had been appointed by the appellant as his polling agent. Even so, we may assume, though not without hesitation, that Puran Singh did act as appellant 's polling agent as alleged by respondent 1. in dealing with this question the High Court appears to have been considerably influenced by the statement made by Jangi Ram whom the appellant had examined. In his cross examination, Jangi Ram stated that Jagtu and Pal Chand were the agents of Shri Baru Ram, but he added that Puran Singh was not at the polling booth. It may be mentioned that the appellant 's case was that he had appointed only one polling agent at Kotra; and this allegation, according to the High Court, was disproved by the statement of Jangi Ram inasmuch as he referred to two polling agents working for the appellant. In considering the effect of this statement, the High Court has failed to take into account the positive statement of the witness that Puran Singh was not at the polling 1412 station at all. The evidence of the witness may be rejected if it appears to be unreliable; but if it is accepted, it would not be fair to accept it only in part and to hold that two polling agents had been appointed by the appellant one of whom was Puran Singh. There is another serious infirmity in the inference drawn by the High Court from the statement of Jangi Ram ; that is that Jagtu to whom the witness has referred as a polling agent of the appellant appears in fact to have acted as a polling agent of Harkesh, respondent 2. Jhandu, another witness examined by the appellant has stated so on oath and his statement has not been challenged in cross examination. Thus, reading the evidence of Jhandu and Jangi Ram, it would be clear that Jangi Ram was right when he said that Jagtu was acting as a polling agent but he was wrong when he thought that Jagtu was the polling agent of the appellant. If the attention of the High Court had been drawn to the unchallenged statement of Jhandu on this point, it would probably not have drawn the inference that Jangi Ram 's evidence supports the case of respondent I about the appointment of Puran Singh as the appellant 's polling agent. The next ' circumstance on which reliance has been placed in the judgment of the High Court is that Puran Singh has signed the prescribed form appointing him as the polling agent and he must have presented it to the returning officer. The prescribed form requires that a candidate appointing his polling agent and the polling agent himself should sign the first part of the form. Then the polling agent is required to take the form to the returning officer, sign in token of his agreeing to work as a polling agent before the said officer and present it to him. The High Court has found that Puran Singh must have signed the form and presented it as required by law. Puran Singh was examined by respondent 1; but when he gave evidence, he was allowed to be treated as hostile and cross examined by her counsel. Puran Singh denied that he had acted as the appellant 's polling agent and that he had signed the form and presented it to the returning officer. It, however, appears that Chand 1413 Jamadar to whose platoon Puran Singh is attached gave evidence that the signature of Puran Singh on the form in question (P.W. 48/1) appeared to be like the signatures on acquittance rolls which had been admittedly made by him. On the same question hand writing experts were examined by both the parties. Mr. Om Parkas was examined by respondent I and he stated that he had compared the admitted signatures of Puran Singh with the disputed signature and had come to the conclusion that Puran Singh must have made the disputed signature. On the other hand, Mr. Kapur whom the appellant examined gave a contrary opinion. The tribunal thought that in view of this conflicting evidence it would not be justified in finding that Puran Singh had signed the form. The High Court has taken a contrary view. Mr. Aggarwal for the appellant contends that the High Court was in error in reversing the finding of the tribunal on this point. There may be some force in this contention ; but we propose to deal with this appeal on the basis that the finding of the High Court on this question is right. The position thus is that, according to the High Court, Puran Singh signed the form appointing him as the appellant 's agent and presented it before the officer. Puran Singh was seen at the polling booth and the scribe who wrote the form in question also wrote the form by which the appellant appointed Pal Singh as his polling agent at the same booth. The High Court thought that from these circumstances it would be legitimate to infer that the appellant had appointed Puran Singh as his polling agent and had in fact signed the form in token of the said appointment. It is the correctness of this finding which is seriously disputed by Mr. Aggarwal before us. It is significant that from the start the parties were at issue on the question as to whether Puran Singh had been appointed by the appellant as his polling agent; and so respondent 1 must have known that she had to prove the said appointment in order to obtain a finding in her favour on issue 29 under section 123 (7)(c) of the Act. Respondent I in fact led evidence to prove the signature of Puran Singh but no attempt 1414 was made by her to prove the signature of the appellant on the said form. The appellant had specifically denied that he had appointed Puran Singh as his polling agent and when he stepped into the witness box he stated on oath that he had not signed any form in that behalf. Under these circumstances, it was clearly necessary for respondent I to examine competent witnesses to prove the appellant 's signature on the form. It is true that the appellant 's signature on the form appears to have been overwritten, but it is only the expert who could have stated whether the overwriting in question made it impossible to compare the said signature with the admitted signatures of the appellant. It appears that after the whole of the evidence was recorded, respondent woke up to this infirmity in her case and applied to the tribunal for permission to examine an expert in that behalf. This application was made on February 6, 1958; and the only explanation given for the delay in making it was that it was after the appellant denied his signature on oath that respondent I realized the need for examining an expert. The tribunal rejected this application and we think rightly. In its order the tribunal has pointed out that respondent I had been given an opportunity to examine an expert and if she wanted her expert to give evidence on the alleged signature of the appellant her counsel should have asked him relevant questions when he was in the witness box. Thus the position is that there is no evidence on the record to support the case of respondent I that the said alleged signature has in fact been made by the appellant. The only relevant evidence on the record is the statement of the appellant on oath that he had not signed the form in question. Mr. Doabia fairly conceded that there was no legal evidence on this point; but his argument was that from the other findings of fact recorded by the High Court it would be legitimate to infer that the appellant had made the said signature. In our opinion this contention is wholly untenable. It must be borne in mind that the allegation against the appellant is that he has committed a corrupt practice and a finding 1415 against him on the point would involve serious consequences. In such a case, it would be difficult to hold that merely from the findings recorded by the High Court it would be legitimate to infer that the appellant had signed the form and had in fact appointed Puran Singh as his polling agent. Mr. Doabia argues that it is not always absolutely necessary to examine an expert or to lead other evidence to prove handwriting. It would be possible and legal, he contends, to prove the handwriting of a person from circumstantial evidence. Section 67 of the Indian Evidence Act provides inter alia that if a document is alleged to be signed by any person the signature must be proved to be in his handwriting. Sections 45 and 47 of the said Act (I of 1872), prescribe the method in which such signature can be proved. Under section 45, the opinion of the handwriting experts is relevant while under section 47 the opinion of any person acquainted with the handwriting of the person who is alleged to have signed the document is admissible. The explanation to the section explains when a person can be said to be acquainted with the handwriting of another person. Thus, there can be no doubt as to the manner in which the alleged signature of the appellant could and should have been proved; but even assuming that the signature of the appellant can be legally held to be proved on circumstantial evidence the principle which governs the appreciation of such circumstantial evidence in cases of this kind cannot be ignored. It is only if the court is satisfied that the circumstantial evidence irresistibly leads to the inference that the appellant must have signed the form that the court can legitimately reach such a conclusion. In our opinion, it is impossible to accede to Mr. Doabia 's argument that the facts hold proved in the High Court inevitably lead to its final conclusion that the appellant had in fact signed the form. It is clear that in reaching this conclusion the High Court did not properly appreciate the fact that there was no legal evidence on the point and that the other facts found by it cannot even reasonably support the 180 1416 case for respondent 1. We must accordingly reverse the finding of the, High Court and hold that respondent I has failed to prove that the appellant had committed a corrupt practice under section 123(7)(c) of the Act. This finding, however, does not finally dispose of the appeal because Mr. Doabia contends that the High Court was in error in reversing the tribunal 's conclusion that the nomination paper of Jai Bhagawan had been improperly rejected. Mr. Aggarwal, however, argues that it is not open to respondent I to challenge the correctness of the finding of the High Court on this point. In support of his objection, Mr. Aggarwal has referred us to the decision of this Court in Vashist Narain Sharma vs Dev Chandra (1). In this case, when the respondent, having failed on the finding recorded by the tribunal in his favour, attempted to argue that he could support the decision of the tribunal on other grounds which had been found against him, this Court hold that he was not entitled to do so. The provision of the Code of Civil Procedure which permits the respondent to adopt such a course, it was observed, has no application to an appeal filed by special leave under article 136. "We have no appeal before us on behalf of the respondent ", observed Ghulam Hasan J. " and we are unable to allow that question to be reagitated ". Mr. Doabia challenges the correctness of these observations. He relies on section 116A of the Act which empowers the High Court to exercise its jurisdiction, authority and power, and to follow the same procedure, as would apply to appeals preferred against original decrees passed by a civil court within the local limits of its civil appellate jurisdiction. There is no doubt that, in an ordinary civil appeal, the respondent would be entitled to support the decree under appeal on grounds other than those found by the trial court in his favour. Order 41, rule 22 of the Code of Civil Procedure, which permits the respondent to file crossobjections recognize the respondent 's right to support the decree on any of the grounds decided against him by the court below. In the present case no appeal (1)[1955] 1 S.C.R. 509. 1417 could have been preferred by respondent I because she had succeeded in obtaining the declaration that the appellant 's election was void and it should therefore be open to her to support the final conclusion of the High Court by contending that the other finding recorded by the High Court which would go to the root of the matter is erroneous. Prima facie there appears to be some force in this contention; but we do not think it necessary to decide this point in the present appeal. Mr. Aggarwal 's objection assumes that respondent I should have preferred a petition for special leave to appeal against the finding of the High Court on the issue in question; if that be so, the application made by her for leave to urge additional grounds can be converted into a petition for special leave to appeal against the said finding, and the delay made in filing the same can be condoned. As in the case of the preliminary objection raised by respondent 1 against the appellant on the ground of limitation, so in the case of the objection raised by the appellant against respondent I in this matter, we would proceed on the basis that we have condoned the delay made by respondent 1 in preferring her petition to this Court for leave to challenge the finding of the High Court that the nomination form of Jai Bhagawan had been properly rejected. That is why we have allowed Mr. Doabia to argue this point before us. We may add that the two points of law raised by the respective objections of both the parties may have to be considered by a larger Bench on a suitable occasion. On the merits, Mr. Doabia 's case is that the returning officer was not justified in rejecting Jai Bhagawan 's nomination under section 36(2)(b) of the Act. The facts on which this contention is raised are no longer in dispute. Mr. Jai Bhagawan who presented his nomination paper to the returning officer on January 29, 1956, was admittedly not an elector in the constituency of Rajaund in the District of Karnal. It is alleged that he was a voter in another constituency. When his nomination paper was presented, he did not produce a copy of the electoral roll of the said constituency or of the relevant part thereof or a certified copy of the 1418 relevant entries in the said roll; nor did he produce any of these documents on the first of February which was fixed for scrutiny of the nomination papers. When the returning officer noticed that the candidate had not produced the relevant document, he gave him, at his request, two hours time to produce it. The candidate failed to produce the document within the time allowed and thereupon the returning officer rejected his nomination paper tinder section 36 (2)(b) of the Act. It is true that the candidate subsequently purported to produce before the officer his affidavit that his name was entered as a voter in the list of voters (No. 1074, Constituency No. 6, Karnal Baneket No. 21, Vol. 10), but the returning officer refused to consider the said affi davit because he had already rejected his nomination paper under section 36(2)(b). Thus the rejection of the nomination paper was the result of the candidate 's failure to produce any of the prescribed documents before the returning officer. On these facts the question which arises for decision is whether the returning officer was justified in rejecting the nomination paper under section 36(2)(b). Section 33 of the Act deals with the presentation of nomination papers and prescribe , the requirements for valid nomination. It would be relevant to refer to sub sections (4) and (5) of this section. Sub section (4) provides that on the presentation of the nomination paper, the returning officer shall satisfy himself that the names and electoral roll numbers of the candidate and his proposer as entered in the nomination paper are the same as those entered in the electoral roll. The proviso to this sub section requires the returning officer to permit clerical or technical errors to be corrected. Under this sub section it would have been open to Jai Bhagawan while presenting his nomination paper to produce one of the prescribed documents to show his electoral roll number on the roll of his constituency. However, his failure to do so does not entail any penalty. Sub section (5) of section 33 deals with the stage of the scrutiny of the nomination papers and it provides that where a candidate is an elector of a different constituency, a copy of the electoral 1419 roll of that constituency or the relevant part thereof or a certified copy of the relevant entry of such roll shall, unless it is filed along with the nomination paper, be produced before the returning officer at the time of the scrutiny. It is thus clear that when the stage of scrutiny is reached the returning officer has to be satisfied that the candidate is an elector of a different constituency and for that purpose the statute has provided the mode of proof Section 36, sub section (7) lays down that the certified copies which are required to be produced under section 33 (5) shall be conclusive evidence of the fact that the person referred to in the relevant entry is an elector of that constituency. In other words, the scheme of the Act appears to be that where a candidate is an elector of a different constituency he has to prove that fact in the manner prescribed and the production of the prescribed copy has to be taken as conclusive evidence of the said fact. This requirement had not been complied with by Jai Bhagawan and the returning officer thought that the said non compliance with the provisions of section 33(5) justified him in rejecting the nomination paper under section 36(2)(b) of the Act. The question is whether this view of the returning officer is right. Section 36 of the Act deals with the scrutiny of nominations and the object of its provisions as shown by sub section (8) is to prepare a list of validly nominated candidates, that is to say, candidates whose nominations have been found valid and to affix it to the notice board of the returning officer. Sub section (1) of section 36 provides that on the date fixed for the scrutiny of nominations each candidate and one other person duly authorized may attend at such time and place as the returning officer may appoint and the returning officer is required to give them all reasonable facilities for examining the nomination papers of all candidates which have been duly delivered. Sub section (2) then deals with the scrutiny of the nomination papers and provides that the returning officer shall decide all objections which may be made to any nomination and may either on such objection, or on his own motion, after such summary enquiry, if any, as he thinks 1420 necessary, reject any nomination on any of the grounds mentioned in cls. (a), (b) and (c) of the said sub section. It is obvious that this enquiry must be summary and cannot be elaborate or prolonged. In fact, sub section (5) directs that the returning officer shall not allow any adjournment of the proceedings except when such proceedings are interrupted or obstructed by riots, by open violence or by causes beyond hip, control and the proviso to this sub section adds that in case an objection is made the candidate concerned may be allowed time to rebut it not later than the next day but one following the date fixed for scrutiny, and the returning officer shall record his decision on the date to which the proceedings have been adjourned. Sub section (2) (b) deals with cases where there has been a failure to comply with any of the provisions of section 33 or section 34. There is no doubt that in the present case there was failure on the part of Jai Bhagawan to comply with section 33(5) and prima facie section 36(2)(b) seems to justify the rejection of his nomination paper on that ground. Section 33(5) requires the candidate to supply the prescribed copy and section 36(2)(b) provides that on his failure to comply with the said requirement his nomination paper is liable to be rejected. In other words, this is a case where the statute requires the candidate to produce the prescribed evidence and provides a penalty for his failure to do so. In such a case it is difficult to appreciate the relevance or validity of the argument that the requirement of section 33(5) is not mandatory but is directory, because the statute itself has made it clear that the failure to comply with the said requirement leads to the rejection of the nomination paper. Whenever the statute requires a parti cular act to be done in a particular manner and also lays down that failure to comply with the said requirement leads to a specific consequence it would be difficult to accept the argument that the failure to comply with the said requirement should lead to any other consequence. It is, however, urged that the statute itself makes a distinction between defects which are of a substantial character and those which are not of a substantial 1421 character. This argument is based upon the provisions of section 36(4) of the Act which provides that the returning officer shall not reject any nomination paper on the ground of any defect " which is not of a substantial character ". The failure to produce the requisite copy, it is urged, may amount to a defect but it is not a defect of a substantial character. We are not impressed by this argument. There is no doubt that the essential object of the scrutiny of nomination papers is that the returning officer should be satisfied that the candidate who is not an elector in the constituency in question is in fact an elector of a different constituency. The satisfaction of the returning officer is thus the matter of substance in these proceedings; and if the statute provides the mode in which the returning officer has to be satisfied by the candidate it is that mode which the candidate must adopt. In the present case Jai Bhagawan failed to produce any of the copies prescribed and the returning officer was naturally not satisfied that jai Bhagawan was an elector of ' a different constituency. If that in substance was the result of Jai Bhagawan 's failure to produce the relevant copy the consequence prescribed by section 36(2)(b) must inevitably follow. It is only if the returning officer had been satisfied that Jai Bhagawan was an elector of a different constituency that his nomination papers could have been accepted as valid. It is well settled that the statutory requirements of election law have to be strictly observed. As observed by Mahajan C. J. who delivered the judgment of this Court in Jagan Nath vs Jagwant Singh(1) ". an election contest is not an action at law or a suit in equity but is a purely statutory proceeding unknown to the common law and that the court possesses no common law power ". The learned Chief Justice has also added that ". it is a sound principle of natural justice that the success of a candidate who has won at an election should not be lightly interfered with and any petition seeking such interference must strictly conform to the requirements of the law." In this connection we may usefully refer to another decision of this Court in Rattan Anmol (1)[1954] S.C. R. 892, 895, 896. 1422 Singh vs Atma Ram (1). While dealing with the question as to whether the requirements as to attestation were of a technical or of an unsubstantial character, Bose J. observed that " when the law enjoins the obser vance of a particular formality, it cannot be disregarded and the substance of the thing must be there ". We must, therefore, hold that the High Court was right in coming to the conclusion that the nomination paper of Jai Bhagawan had been validly rejected by the returning officer. Mr. Doabia, however, contends that the view taken by the High Court is purely technical and does not take into account the substance of the matter. This approach, it is said, is inconsistent with the decision of this Court in Pratap Singh vs Shri Krishna Gupta (1). It is true that in this case Bose J. has disapproved of the tendency of the courts towards technicalities and has observed that " it is the substance that counts and must take precedence over mere form ". But in order to appreciate the scope and effect of these observations, it would be necessary to bear in mind the relevant facts and the nature of the point raised before the court for decision in this case. The question raised was whether the failure of the candidate to mention his occupation as required by r. 9(1)(i) rendered his nomination paper invalid and it was answered by the court in the negative. The question arose under the provisions of the C. P. and Berar Municipalities Act 11 of 1922. It is significant that the decision of this Court rested principally on the provisions of section 23 of the said Act according to which " Anything done or any proceedings taken under this Act shall not be questioned on account of any. . defect or irregularity in affecting the merits of the case ". It was held by this Court that reading r. 9(1) (iii) (c) which directed the supervising officer to examine nomination papers, in the light of section 23, the court had to see whether the omission to set out a candidate 's occupation can be said to affect the merits of the case and on that point there was no doubt that the said failure could not possibly affect the merits of the case. The High Court had, however, taken a (1) ; , 488. (2) A.I.R. 1956 S.C. 140,141. 1423 contrary view and it was in reversing this view that Bose J. disapproved the purely technical approach adopted by the High Court. Where, however, the statute requires specific facts to be proved in a specific way and it also provides for the consequence of non P compliance with the said requirement it would be difficult to resist the application of the penalty clause on the ground that such an application is based on a technical approach. Indeed it was precisely this approach which was adopted by this Court in the case of Rattan Anmol Singh vs Atma Ram (1). Mr. Doabia has also relied upon a decision of the Andhra High Court in Mohan Reddy vs Neelagiri Muralidhar Rao (2) in support of his argument that the failure to produce the prescribed copy cannot justify the rejection of the nomination paper. In our opinion this decision does not assist Mr. Doabia 's contention. In this case it was urged before the High Court that the document produced by the party was riot a certified copy as required by section 33 (5) of the Act. This argument was based on the assumption that the certified copy mentioned in section 33(5) of the Act must satisfy the test prescribed by section 76 of the Indian Evidence Act. The High Court rejected this argument for two reasons. It held that the certified copy mentioned ins. 33(5) need not necessarily satisfy the test prescribed by section 76 of the Indian Evidence Act. Alternatively it held, on a consideration of the relevant statutory provisions, that the document in question was in fact and in law a certified copy under section 76 of the Indian Evidence Act. These points do not arise for our decision in the present appeal. Mr. Doabia, however, relies on certain observations made in the judgment of the nigh Court and it may be conceded that these observations seem to suggest that according to the High Court the provisions of sections 33(5) and 36(7) do not preclude proof by other means of the fact that the name of the candidate is on the relevant electoral roll. These observations are clearly obiter. Even so we (1) ; , 483. (2) A.I.R. 1958 Andhra Pradesh 485. 181 1424 would like to add that they do not correctly represent the effect of the relevant provisions of the Act. The result is the appeal is allowed, the order passed by the High Court is set aside and the election petition filed by respondent 1 is dismissed with costs throughout. Appeal allowed. [/INST]The first respondent filed an election petition against the 1404 appellant on the grounds: (i) that he committed the corrupt practice specified in section 123(7) Of the Representation of the People Act, 195I inasmuch as he had obtained the assistance of one P, a member of the armed forces, who had acted as his polling agent and (ii) that the nomination of one J had been improperly rejected by returning officer. The election tribunal held that the corrupt practice was not proved but that the nomination of J had been improperly rejected and consequently it declared the election of the appellant to be void. On appeal the High Court held that the nomination of J was not improperly rejected but that the corrupt practice alleged was established and dismissed the appeal. The High Court found that P had signed the form a pointing him as the appellant 's polling agent and had presented it before the presiding officer, that P was seen at the polling booth and that the scribe who wrote this form had also written the form by which the appellant had appointed another polling agent. From these circumstances the High Court drew the inference that the appellant had appointed P as his polling agent and had in fact signed the form in token of such appointment. With respect to the rejection of the nomination of J the High Court held that J was a voter in a different constituency and that he had failed to produce a copy of the electoral roll when he presented the nomination paper, nor was it produced at the time of the scrutiny or within the time given by the returning officer and that consequently the nomination was properly rejected. Held, that to establish that the appellant was guilty of the corrupt practice charged it was not sufficient to show that P had acted as his polling agent but it must also be proved that the appellant had appointed P as his polling agent. This fact the first respondent had failed to prove by any legal evidence. The facts and circumstances found by the High Court did not inevitably lead to the conclusion that the appellant had signed the form and hence such an inference could not be drawn. Held, further, that the nomination of J was not improperly rejected. Where a candidate is an elector of a different constituency he has to prove that fact in the manner prescribed by section 33(5) by the production of a copy of the electoral roll of that constituency or of the relevant part thereof or of a certified copy of the relevant entries thereof. In the present case there was failure on the part of J to comply with section 33(5) and his nomination was properly rejected under section 36(2)(b). The failure to comply with section 33(5) is not a defect of an unsubstantial character so as to attract the application Of section 36(4). When the statute requires specific facts to be proved in a specific way and it also provides for the consequences of non compliance with the said requirement the application of the penalty clause cannot be resisted on the ground that such application is based on a technical approach. jagan Nath vs jaswant Singh; , ; Rattan 1405 Anmol Singh vs Atma Ram, ; and Pratap Singh vs Shri Krishna Gupta, A.I.R. 1956 S.C. 140, referred to. Mohan Reddy vs Neelagiri Muralidhar Rao, A.I.R. 1958 A.P. 485, not approved. </s>
<s>[INST] Summarize the judgementCivil Appeal No. 1877 of 1970. From the judgment and order dated the 10th January, 1968 of the Madhya Pradesh High Court at Jabalpur in Misc. Civil Case No. 221 of 1962. V. section Desai, B. B. Ahuja and section P. Nayar, for the appellant. M. C. Chagla, B. Sen, A. K. Chitale, A. K. Verma, Ravinder Narain J. B. Dadachanji and O.C. Mathur, for respondent. The Judgment of the Court was delivered by MATHEW, J. This is an appeal from the judgment of the High Court of Madhya Pradesh in a reference made at the instance of the assessee M/s. Sutlej Cotton Mills Supply Agency Ltd. (hereinafter referred to as the 'assessee ') by the Income Tax Appellate Tribunal (hereinafter referred to as the 'Tribunal ') under section 66(1) of the Indian Income Tax Act. The question referred was: Whether the inference of the Tribunal that the profit of Rs. 2,13,150/ arising from the sale of 1,58,200 shares of the Gwalior Rayon Silk Manufacturing (Weaving) Co. Ltd., is assessable as business profit is correct ?". When the reference came up for hearing before the High Court, the High Court found that although the Tribunal was of the view that the question referred was a mixed question of law and fact, it had not stated all the facts and circumstances on which it based its conclusion that the profit of Rs. 2,13,150/ was a business profit and so the Court called for a supplementary statement of the case and a supplementary statement of the case was submitted to the Court by the Tribunal. The material facts in the statement of the case were as follows. The assessee is a public limited company and it is controlled by the Birlas. the assessee applied for certain shares of the Gwalior Rayon Silk Manufacturing (Weaving) Company Limited (hereinafter referred to as the "Rayon Company"), also a company controlled by the Birlas. This company was floated on 25 8 1947 with a paid up capital of Rs. 5 lakhs made up of 50,000 ordinary shares of Rs. 10/ each. in the year ending 31 12 1951, the Rayon Company issued certain new shares for paid up capital of Rs. 1,17,25,000/ made up as follows: Rs. 7,60,000 Ordinary shares of Rs. 10/ each 76,00,000 fully paid up. 1 50,000 Ordinary shares of Rs.10/. each 3,75,000 with paid up at Rs. 2/8/ each. 1,50,000 6% preference shares of Rs. 100/ 37,50,000 each paid up at Rs 25/ each (redeemable at par at the company 's option after specified date by giving one Year 's notice). 129 The assessee which was interested in the Rayon Company and which had already purchased 1,000 ordinary shares, subscribed for 3,49,000 shares of the new issue and paid Rs. 8,72,500/ as application money on the 25th and 21th February, 1951, and paid Rs. 26,17,500/ as final call money on 10 8 1951. These purchases were authorized by a resolution of the assessee dated 7 2 1951. The assessee sold a part of its stock viz., 1,58,200 shares at a profit of Rs. 2,13,150/ . For the assessment year 1956 57 (accounting year ending on 31 3 1956), the Income Tax Officer sought to assess the amount on the basis that it was profit accruing to the assessee from an adventure L in the nature of business. The assessee contended that the amount re presented capital gain as the shares were purchased by way of investment and that the same cannot be taxed as revenue receipt. The Income Tax Officer rejected the contention. the assessee filed in appeal before the Appellate Assistant Commissioner. He confirmed the order. The assessee then went up in appeal before the Appellate Tribunal. The Tribunal came to the conclusion, after considering all the circumstances, that the transaction was in the nature of a business ad venture and that profits were liable to be taxed. The reasons which induced the Tribunal to come to this conclusion were: The assessee was authorised by clauses 12, 13, 28 and 29 of paragraph 3 of its Memorandum of Association to buy and sell shares; there were specific resolutions of the Company authorising a director of the assessee to purchase and sell these shares; the assessee had included the profit of Rs. 2,13,150/ in the profit and loss account without taking it to any reserve account or specifically set it apart for any other purpose; the assessee had purchased the shares from borrowed funds and not with money readily available to it; the assessee did not make the sales on account of any pressing necessity to meet existing liabilities but had in fact kept a part of the sale proceeds as liquid cash in the United Commercial Bank Ltd.; the assessee had. in the past, dealt in shares as business transaction and had claimed for the assessment year 1951 52 Rs. 1.29,214/ as loss on account of its dealing in shares of M/s. Titagarh Paper Mills Ltd.; it also claimed Rs. 6,30,000/ as loss on account of devaluation of the shares of M/s. Pilani Investment Corporation though that was not allowed; there had recently grown a business practice of investing large sums of money in shares in new ventures with an eye on their appreciation for obtaining by sale substantial pro fits in future. The High Court, in its judgment, said that there was no provision in clauses 10, 12, 13, 28 and 29 of paragraph 3 of Memorandum of Association of the assessee which authorised the carrying on of the business of purchasing and selling shares, although some of these clauses did authorise the assessee to acquire and sell shares in other similar companies. that the inclusion of the profit of Rs. 2,13,150/ in the profit and loss account without taking it into any reserve specifically was not conclusive of the question whether it was a capital asset or a revenue receipt; that the true nature and character of the moneys received was to be determined not by the manner in which the assessee treated it but by its inherent character, and, that it was wholly immaterial 130 as to how the assessee treated the amount in question; and that there was no evidence that the shares were purchased out of borrowed funds as the assessee had a fixed deposit of Rs. 31,75,000/ in the United Commercial Bank Ltd. and a deposit of Rs. 8,76,008 2 0 in the current account of the Bank. The High Court was of the view that the finding of the Tribunal that the sale of shares in 1955 was made not on account of any pressing necessity to meet existing liabilities was based on materials placed before the Tribunal. The Court, however, said: "It may be that, at that time, the liabilities of the assessee company existed, but it is quite another matter to say that it was obliged to sell the shares in order to meet those liabilities. " The High Court was also of the view that the conclusion of the Tribunal that the assessee had claimed Rs. 1,29,214/ as loss on account of dealing in shares of M/s. Titagarh Paper Mills Ltd. for the assessment year 1951 52 and that the claim was allowed by the Income Tax officer must be accepted as correct, but said that this solitary transaction cannot be taken as conclusive of the fact that the sale of shares in question here was an adventure in the nature of trade. The main reason which impelled the High Court to hold that the transaction was not an adventure in the nature of trade was that the dominant intention of the assessee in acquiring the shares was to boost the shares of a sister concern viz, the Rayon Company, and thus render it assistance for setting it up as a going concern and when that was accomplished, the assessee started selling the investment which had in the mean time enhanced in value. The question which the Tribunal had to consider in the appeal and which was referred to the High Court was a mixed question of law and fact, namely. whether the profit from sale of the shares in question was a revenue or a capital receipt. The distinction between capital accretion and income has been explained by Rowlatt, J. in Thew vs South West Africa Cc. Ltd.(1). The learned judge said that for the purpose of ascertaining whether profits made upon a sale of an article are taxable profits. the question to be asked is: "Is the article acquired for the purpose of trade ?. If it is, the profit arising from its sale must be brought into revenue account and that the profit is chargeable as capital gains if the sale is of a capital asset, and as business profit if the sale is in the course of business or the transaction constitutes an adventure in the nature of trade. The line between capital sales and sales producing income has been drawn by Lord Justice Clerk in Californian Copper Syndicate vs Harris(2) in a passage which has become classical: "It is quite a well settled principle in dealing with questions of assessment of income tax that where the owner of an Ordinary Investment chooses to realise it, and obtains a greater price for it than he originally acquired it at, the enhanced price is not profit. assessable to income tax. but it is equally well established that enhanced values obtained from realisation or conversion of securities may be so assessable where what is done is not merely a realisation or change of investments but an act done in what is truly the carrying on, l I or carrying out, of a business. What is the line which 131 separates the two classes of cases may he difficult to define, and each case must be considered according to its facts. the question to be determined being Is the sum of gain that ha been made a mere enhancement of value by realising a security or is it a gain made in an operation of business in carrying, out a scheme for profit making ?" In the absence of any evidence of trading activity in cases of purchase and resale of shares, it has been held that profit arising from the resale is an accretion to the capital. If a transaction is in the assessee`s ordinary line of business there can be no difficulty in holding that it is in the nature of trade. But the difficulty arises where the transacting is outside the assessee 's the of business and then, it must depend upon the facts and circumstances of each case whether the transaction is in the nature of a trade. It is not necessary to constitute trade that there should be a series of transactions both of purchase and of sale. A single transaction of purchase and sale outside the assessee 's line of business may constitute an adventure in the nature of trade. Neither repetition nor continuity of similar transactions is necessary to constitute a transaction an adventure in the nature of trade. If there is repetition and continuity, the assessee would be carrying on a business and the question whether the activity is an adventure in the nature of trade can hardly arise. A transaction may be regarded as isolated although a similar transaction may have taken place a fairly long time before [see 1. R. vs Reinhold(1)]. The principles underlying the distinction between a capital sale and an adventure in the nature of trade were examined by this Court In Venkataswami Naidu & Co. vs C.l. T.(2), where this Court said that the character of a transaction cannot be determined solely in the application of any abstract rule, principle or test but must depend upon all the facts and circumstances of the case. Ultimately, it is a matter of first impression with Court whether a particular transaction is in the nature of trade or not it has been said that a single plunge may be enough provided it is shown to the satisfaction of the Court that the plunge is made in the waters of the trade; but mere purchase/sale of shares if that is all that is involved in the plunge may fall short of anything in the nature of trade. Whether It is in the nature f trade will depend on the facts and circumstances. Where the purchase of any article or of any capital investment, for instance, shares. is made without the intention to resell at a profit. a resale under changed circumstances would only be a realisation of capital and would not stamp the transaction with a business character [see C.l. T. vs P.K.N. Co., Ltd.(3)]. Where a purchase is made With the intention of resale, it depends upon the conduct of the assessee and the circumstances of the case whether the venture is on capital account or in the nature of trade. A transaction is not necessarily in the nature of trade because the purchase 132 was made with the intention of resale [see Jenkinson vs Freeland(1); Radha Debi Jalan vs C.l. T.(2); India Nut Co. Ltd. vs C.l. T.(3); M/s. Sooniram Poddar vs C.l. T.(4); Ajax Products Ltd. vs C.l. T.(5); Gustad Irani vs C.l.T.(5); and Mrs. Alexander vs C.l. T.(7);]. A capital investment and resale do not lose their capital nature merely because the resale was foreseen and contemplated when the investment was made and the possibility of enhanced values motivated the investment [see Leeming vs Jones(8) and also the decisions of this Court in Saroj Kumar Mazumdar vs C.l. T.(9) and Janki Ram Bhadur Ram vs C.I.T.(10)]. In I. R. vs Fraser(11) Lord Norman said: "The individual who enters into a purchase of an article or commodity may have in view the resale of it at a profit, and yet it may be that this is not the only purpose for which he purchased the article or the commodity nor the only purpose to which he might turn it if favourable opportunity for sale does not occur. An amateur may purchase a picture with a view to its resale at a profit, and yet he may recognise at the time or afterwards that the possession of the picture will give him aesthetic enjoyment if he is unable ultimately, or at his chosen time, to realise it at a profit . " An accretion to capital does not become income merely because the original capital was invested in the hope and expectation that it would rise in value. if it does so rise, its realisation does not make it income. Lord Dunedin said in Leeming vs Jones(8) at p. 360: "The fact that a man does not mean to hold an investment may be an item of evidence tending to show whether he is carrying on a trade or a concern in the nature of trade in respect of his investments, but per se it leads to no conclusion whatever." This Court laid down in Venkataswami Naidu & Co. vs C.l. T.(12) that the dominant or even sole intention to resell is a relevant factor and raises a strong presumption, but by itself is not conclusive proof, of an adventure in the nature of trade. The intention to resell would, in conjunction with the conduct of the assessee and other circumstances, point to the business character of the transaction. In the light of the principles above referred to, it is necessary to examine whether the Tribunal had approached the question from the right perspective, viz., whether on the basis of its finding on questions of fact, the inference that the transaction was an adventure in the nature of trade was justified. 133 The Tribunal relied on the following circumstances for coming to the conclusion. The assessee has been dealing in shares from 1951 to 1953. For the assessment year 1951 52, the assessee claimed a sum of Rs. 1,29,214/ which was shown in the profit and loss account and the balance sheet of the company for the year ending 31 3 1951 as a loss in the dealing of shares of M/s. Titagarh Paper Mills Ltd. This claim was allowed by the Income Tax officer. According to the Tribunal, this would show that the assessee had been buying and selling shares even though as an isolated adventure in the nature of business The High Court has not upset this finding, but has only said that this is an isolated transaction. That apart, in the same year, a sum of Rs. 6,30,000/ was debited to the profit and loss account on devaluation of the shares of M/s. Pilani Investment Corporation. Such a debit was permissible only on the footing that the shares constituted the stock in Trade of the assessee. It is no doubt true that the Department did not allow this claim. But that was on the basis that the claim that the shares leave fallen in value was not proved to the satisfaction of the Income Tax officer, and not on the basis that the shares were not held as stock in trade as the High Court wrongly thought. The Tribunal also referred to the resolutions passed by the assessee authorising one of its directors to purchase and sell the shares in the Rayon Company The finding of the High Court that the clauses of the Memorandum o Association viz., clauses 10, 12, 13, 28 and 29 and not authorize the company to acquire and sell shares as business has no relevance in view of the aforesaid resolution of the assessee and of the fact that it had been dealing in shares in a commercial spirit as is evident from its claim for loss in dealings in the shares of M/s. Titagarh Paper Mills Ltd. and devaluation of shares of M/s. Pilani Investment Corporation on the basis that they had fallen in value. Secondly, the Tribunal said that from 1947 to 1956, no dividend had been declared by the Rayon Company and that the money which went into the purchase of these shares was borrowed by the assessee. In other words, the view of the Tribunal was, it was with borrowed funds that the assessee purchased the shares. It is no doubt true that there was no evidence to show that the money was specifically borrowed for the purpose of buying shares. But there was evidence before the Tribunal for its finding that the liabilities of the assessee exceeded its assets. The finding, therefore, that the shares were purchased with borrowed funds on which the assessee was paying interest, was a finding supported by evidence. The reasoning of the Tribunal that it is most improbable that the assessee would be investing borrowed money on which interest would have to be paid in shares which yielded no dividend, was correct. We cannot say that this was not a relevant circumstance for the Tribunal to take into consideration for coming to the conclusion that the transaction was an adventure in the nature of business. Looking into all the circumstances, the Tribunal negatived the case of the assessee that it had invested its funds with a view to earn dividend. The case of the assessee throughout was that the purchase of the shares was by way of investment and the sale was forced by necessity because the creditors were pressing for repayment of the loan. The 134 Tribunal found that the shares were not sold to liquidate the debts of the assessee as the balance sheet as on 21 3 1956 showed that the proceeds were kept is liquid cash in the United Commercial Bank Ltd. As already stated, the main reason why the High Court came to a different conclusion. is stated as follows in the judgment : " . Undoubtedly, there are some elements which are contra indicative of investment but there are other considerations which detract from their value as elements indicating an adventure in the nature of trade, the main being, that the assessee company, which is controlled by the Birlas, purchased the shares with a view to assisting a sister company controlled by the same persons, and not to embark upon a venture in the nature of trade. " At no time had the assessee a case that the shares were purchased with a view to help a sister company controlled by the Birlas. No such case was set up by the assessee either before the Income Tax officer or the Appellate Assistant Commissioner; nor was it urged before the Appellate Tribunal. Nowhere in the statement of case or the supplementary statement of case prepared by the Tribunal and filed in the High Court was there any finding on the question. The whole conclusion of the High Court is based on unwarranted assumption of facts which must have been taken from the argument of the assessee before the High Court. The danger of failing to recognize that the jurisdiction of the High Court in these matters is only advisory and that conclusion of facts are conclusions on which the High Court is to exercise the advisory jurisdiction is illustrated by this case. Mr. Chagla for the respondent contended that the only question to be asked and answered is : What was the dominant intention of the assessee when it purchased the shares ? If the dominant intention was to carry on an adventure in the nature of business, the profit can be taxed. Otherwise not. In other words, the question is whether the assessee purchased the shares in a commercial spirit with a view to make profit by trading in them. The Tribunal found, after taking in to account all the relevant circumstances that the dominant intention of the assessee was to make profit by resale of the shares and not to make an investment. The finding that loss or profit is a trading loss or profit is primarily a finding of fact, though in reaching that finding the Tribunal has to apply the correct test laid down by law When we see that the Tribunal has considered the evidence on record and applied the correct test there is no scope for interference with the finding of the Tribunal (see C. 1. T. vs Ashoka Marketing Co.(l). We do not think that the High Court was right in interfering with the judgment of the Tribunal. In the result we reverse the judgment of the High Court and allow the appeal with costs. P.B.R. Appeal allowed. [/INST]The election for Pandhurna Constituency for the M.P. legislative Assembly took place in March, 1970. There were 6 candidates who contested the election. The main contest was between respondents nos. 1 and 2. Respondent No. 1 was declared elected. The appellant, a voter, filed an Election Petition challenging the election on the grounds that respondent No. 1 published and circulated a leaflet containing defamatory and false averments against respondent No. 1 and it was calculated to prejudice the election prospects of respondent No. 2. The leaflet it was alleged contained the statement of fact about the personal character or conduct of respondent No. 2. In the leaflet it was mentioned that respondent No. 2 committed rape and he was carrying on with another woman. The ties of respondent No. 2 were stated to have driven his wife into insanity. Reference was also made to some other shady and unethical activities. Before the High Court the appellant wanted to file a photostat copy of the manuscript of the leaflet which according to the appellant was written by respondent No. 1. The High Court did not admit the aforesaid photostat copy in evidence on the ground that there was no sufficient reason for allowing the appellant to lead secondary evidence. The High Court also held that though the material contained in the leaflet related to the personal character and conduct of respondent No. 2, the appellant failed to prove that its contents were false to The knowledge of respondent No. 1, and he did not believe them to be true and that, therefore, the corrupt practice defined in section 123(4) of the Representation of the People Act was not proved. While dismissing the appeal this Court held: ^ Under section 65(a) of the Indian Evidence Act, secondary evidence may been of the existence, condition or contents of a document when the original is shown or appears to be in the possession or power of the person against whom the document is sought to be proved or when a person refuses to produce it. There was no affidavit that the original document was in possession of respondent No. 1. The photostat copy appeared to the High Court to be not above suspicion. In view of all the circumstances, the High Court rightly came to the conclusion that no foundation was laid by the appellant for leading secondary evidence in the shape of photostat copy. There is no evidence on record to show that the contents of the leaflet were false. The respondent No. 2 was not examined as a witness. No other evidence was also led of any person who knew about the character or conduct of respondent No. 2 to show that the statements contained in the leaflet in question were false. Apart from the other requirements, it is of the essence of section 123(4) of the Representation of the People Act. 1951 that the impugned statement of fact in relation to the personal character or conduct of a candidate. which is alleged to have been published should be false [249D, F 250D] </s>
<s>[INST] Summarize the judgementvil Appeal No. 1594 of 1973. From the Judgment and Order dated 19.9.1972 of the Gujarat High Court in L.P.A. No. 72 of 1971. M.V. Goswami for the Appellant. M.N. Shroff, P.C. Kapur and T. Sridharan for the Respondent. The Judgment of the Court was delivered by KHALID, J. This appeal is by special leave granted by this Court on 30.10.1973 against the judgment and order of the High Court of Gujarat dated 19.9.1972 passed in Letters Patent Appeal No. 72 of 1971. The facts necessary in brief for disposal of the appeal are as hereunder: 1085 The Deputy Charity Commissioner, Ahmedabad Region ap pointed under the Bombay Public Trust Act 1950 (for short 'the Act ') started suo motu enquiry under the Act against the appellant as Enquiry No. 578 of 1958 with regard to the nature of the properties involved in the appeal. The Deputy Charity Commissioner held by his order dated 20.10.1960 that the properties were of a public trust. Aggrieved by this order, the appellant filed an appeal before the Charity Commissioner. The Charity Commissioner dismissed the appeal on 15.5.1961. Thereupon the appellant moved the City Civil Court by filing an application under Section 72 of the Act. This application was dismissed on 6.8.1963. The First Appeal No. 448 of 1963, was then filed in the High Court of Gujarat against this order of the City Civil Court. This appeal was dismissed by the High Court on 30.9.1970. The appellant then filed Letters Patent Appeal before the High Court. It was admitted on 25.2.1971. However, it was dismissed on 19.9.1972 holding that the appeal was not maintainable since the requisite certificate under clause 15 of the Letters Patent was not obtained by the appellant. Hence this appeal. The Division Bench dismissed the appeal relying upon an earlier judgment rendered by another Division Bench of that Court reported in Hiragar Dayagar vs Ratanlal, ; This decision was rendered on 26.10.197 1. The ratio of the decision is that the single Judge who disposed of the appeal was hearing an appeal in respect of an order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the High Court and that, therefore it was necessary for the appellant to obtain a certificate from the single Judge that the case was a fit one for appeal to the Division Bench under clause 15 of the Letters Patent Appeal. It is this question that we have to consider in the case. For this purpose we will first read Section 72 which is as follows: "72(1) Any person aggrieved by the decision of the Charity Commissioner under Sections 40, 41, 50 A, 70 or 70 A or on the questions whether a trust exists and whether such trust is a public trust or whether any property is the property of such trust may, within sixty days from the date of the decision, apply to the Court to set aside the said decision. (1 A) No party to such application shall be entitled to produce additional evi dence, whether oral or documen 1086 tary, before the Court, unless the Deputy or Assistant Charity Commissioner or the Charity Commissioner has refused to admit evidence which ought to have been admitted or the Court requires any documents to be produced or any witness to be examined to enable it to pro nounce judgment or for any other substantial cause the Court thinks it necessary to allow such additional evidence: Provided that whenever additional evidence is allowed to be produced by the Court, the Court shall record the reason for its admission. (2) The Court after taking evidence if any, may confirm, revoke or modify the decision or remit the amount of the surcharge and make such orders as to costs as it thinks proper in the circumstances. (emphasis supplied) XX XX XX" The argument put forward before the Gujarat High Court in this case which was repeated before us also is that Section 72(1) speaks only of an application to the Court to set aside the decision of the Charity Commissioner, and it does not speak of an appeal. It Was argued that while Sec tions 70 & 71 use the word appeal, a deliberate departure is made in Section 72 by using the word "apply" instead of the word "appeal". On this reasoning, a case is attempted to be built up that the proceedings under Section 72 were not in the nature of an appeal and that, therefore, when the Dis trict Court exercised its jurisdiction it did not exercise an appellate jurisdiction but a special jurisdiction under the Section. This contention was repelled by the Gujarat High Court. It was held that though the well known word "appeal" was not used in Section 72, the absence of that word cannot be regarded as determinative of the nature of the proceedings. The question considered was as to what was the scope, ambit and content of the proceedings before the District Court. Now the question is as to whether it is an appellate jurisdiction, revisional jurisdiction or original jurisdiction that the District Court is exercising under Section 72. The Court answered that it was appellate juris diction. The District Court while dealing with an applica tion under Section 72 was given the power to confirm, revoke or modify a decision of the Charity Commissioner and the Section did not impose any fetters or limits on this power. In an application under Section 72, the entire matter was at 1087 large before the District Court and the District Court had complete power to review the decision of the Charity Commis sioner either on law or on fact in such manner as it thought proper. A contrary view was taken by the Bombay High Court dealing with the identical Section in the decision reported in AIR 1974, Bombay 40. The Bombay High Court relying upon the phraseology used in Section 72 held that the proceedings under Section 72 was not in the nature of an appeal. The question was answered in favour of the contention raised by the appellant before us as follows: "16. If it could not be held in the present case that the court under Section 72 was itself exercising the appellate jurisdiction, undoubtedly the present appeals filed without the leave of the learned Single Judge are incompetent. Such appeals lie only with his leave and not otherwise. If otherwise it could be held, as the natural meaning of the expres sion suggests, that Section 72 provides a remedy by way of an application only, and though the inquiry held by the District Court seems to have some semblance of an appellate jurisdiction, it is not a jurisdiction created by the legislature as an appellate jurisdic tion. It is only where the jurisdiction is appellate and a decision in exercise of such jurisdiction is given, and the High Court has also exercised the appellate jurisdiction, that the bar contemplated by ClaUse 15 of the Letters Patent of obtaining leave of the Court seems to come in. We are therefore satisfied that whatever the type of function that the Court performs under Section 72 of the Act when an applica tion is received by it from any aggrieved party, it is certainly not appellate jurisdic tion as is contemplated by clause 15 of the Letters Patent. If that is, so, the decree or the order of the District Court was not in the exercise of the appellate jurisdiction, even though the High Court exercised the appellate jurisdiction, while hearing First Appeals Nos. 830 & 831 of 1965. " It would be useful at this stage to refer to another decision of the Bombay High Court also rendered by a Divi sion Bench reported in (1956) 58 Bombay Law Reporter 894. There also Section 72 of the Act fell for consideration not in the context of a plea similar to the one raised before us but in the context of a plea under the Limitation Act. 1088 However, the following observations by Chagla, C.J. can be usefully extracted in support of our conclusion: "Now, although Section 72(1) confers a right upon a person aggrieved by the decision of the Charity Commissioner to apply to the City Civil Court, we must look at and consider the real nature of the right that is conferred by this sub section. In substance, if not in form, the right is in the nature of an appeal. The application is intended to set aside the decision of the Charity Commissioner and the City Civil Court must consider that decision, and if satisfied that the decision is errone ous must set it aside and give the necessary relief to the party aggrieved by that deci sion. Therefore, in substance there is very little difference between an application contemplated by Section 72(1) and a right of appeal against the order of the Charity Com missioner. . . . . . . . " This decision was noted by the Bombay High Court in the decision reported in 1974 Bombay 40, but the observations therein were distinguished as follows: "15. We will at once point out that the learned Judges who dealt with the case of had a very different proposition before them. Primarily they were concerned with the obstacle of limitation which was being created in the way of a party by resorting to the technical provisions of Chapter 11 and more particularly Section 75 of the Act. It is in that context when the days for obtaining copies were to be excluded that they read the remedy provided under Section 72 of the Act in a liberal way for the purpose of bringing it under the provisions of Sections 12(2) and 29(2) of the Limitation Act of 1908. While making this liberal construction, the language used by the learned Judges is worth noting. They point out that the application to the Court was in the nature of an appeal but they have nowhere called it as an appeal so provided by the Legislature. While considering the nature and type of function performed by the court under Section 72, the learned Judges have construed liberally the provisions of Section 75 of the Act as also Sections 12(2) and 29(20) of the Limitation Act, 1908. It is possible that the courts might look at 1089 the particular provisions in a liberal manner for the purpose of technical provisions like Limitation Act. However, when it comes to the construction of provisions which awards a positive right to a party it would be appro priate that the provisions are construed in a manner which are conducive to the right of the party. " We have considered the reasoning in the three judgments referred above. With respect, we find it difficult to agree with the reasoning in We agree with the rea soning in the other two cases. The slender thread on which the appellants ' arguments rests is the absence of the word "appeal" in Section 72(1). That alone cannot decide the issue. If the well known word "appeal" had been used in this Section that would have clinched the issue. It is the ab sence of this word that has necessitated a closer scrutiny of the nature extent and content of the power under Section 72(1). The power of the District Court in exercising jurisdic tion under Section 72 is a plenary power. It is true that the Commissioner is not subordinate to the District Court but the District Court has powers to correct, modify, review or set aside the order passed by the Commissioner. All the characteristics of an appeal and all the powers of an appel late Court are available to the District Court while decid ing an application under Section 72. To decide this case we must be guided not only by the nomenclature used by the Section for the proceedings but by the essence and content of the proceedings. That being so, we have no hesitation to hold that the proceedings before the District Court under Section 72(1) are in the nature of an appeal and that Dis trict Court exercises appellate jurisdiction while disposing of a matter under Section 72(1). Consequently, the Single Judge of the High Court while deciding the appeal from the order of the District Court deals with a matter made by the District Judge in the exercise of an appellate jurisdiction by a Court subject to the superintendence of the High Court and hence clause 15 of the Letters Patent is directly at tracted. The appeal has, therefore, to fail and is dismissed. However, there will be no order as to costs. [/INST]On suo motu enquiry conducted against the appellant with regard to the nature of the properties in question, the Deputy Charity Commissioner held that the properties were of a public trust. The appellant 's appeal before the Charity CommissiOner was dismissed. An application filed under section 72 of the Bombay Public Trust Act, 1950 was also dismissed by the City Civil Court. The First Appeal filed in the High Court was dismissed by a Single Judge. In the Letters Patent Appeal on behalf of the appellant it was contended: that section 72(1) speaks only of an applica tion to the Court to set aside the decision of the Charity Commissioner, and it does not speak of an appeal; that while section 70 and 71 use the word "appeal" and that the proceedings under section 72 were not in the nature of an appeal and that, therefore. when the District Court exercised its jurisdic tion it did not exercise an appellate jurisdiction but a special jurisdiction under 'the section. The High Court dismissed the appeal holding that it was not maintainable since the requisite certificate under clause 15 of Letters Patent Appeal was not obtained by the appellant, that though the well known word "appeal" was not used in section 72, the absence of that word cannot be regarded as determinative of the nature of the proceedings, and that the jurisdiction that the District Court is exercising under section 72 was appellate jurisdiction. Dismissing the appeal. 1084 HELD:1.1 The power of the District Court in exercising jurisdiction under section 72 of the Bombay Public Trust Act, 1950, is a plenary power. It is true that the Commissioner is not subordinate to the District Court but the District Court has powers to correct, modify, review or set aside the order passed by the Commissioner. All the characteristics of an appeal and all the powers of an appellate Court are available to the District Court while deciding an applica tion under section 72. [1089D E] 1.2 The proceedings before the District Court under section 72(1) are in the nature of an appeal and that District Court exercises appellate jurisdiction while disposing of a matter under section 72(1). [1089E F ] 1.3 The absence of the word "appeal" in section 72(1) does not make any difference. [1089C] Hiragar Dayagar vs Ratanlal, ; and [1986] 58 Bombay Law Reporter 894 approved and AIR 1974, Bombay 40, disapproved. Consequently, the Single judge of tile High Court while deciding the appeal from the order of the District Court deals with a matter made by the District Judge in the exercise of a appellate jurisdiction by a Court subject to the superintendence of the High Court and hence clause 15 of the Letters Patent Appeal is directly attracted. [1089F G] </s>
<s>[INST] Summarize the judgementivil Appeal No. 173 of 1986. From the Judgment and Order dated 29.3. 1985 of the Andhra Pradesh Administrative Tribunal, Hyderabad in Repre sentation Petition No. 1589 of 1983. WITH Writ Petition (Civil) Nos. 11135 37 of 1984. 485 (Under Article 32 of the Constitution of India). C. Sitharamaiah, G. Prabhakar, D. Prakash Reddy, B. Rajeshwar Rao and Vimal Dave for the Appellants. Subodh Markandeya, W.A. Nomani, Seshagiri Rao, Mrs. Chitra Markandeya and A. Subba Rao for the Respondents. The Judgment of the Court was delivered by SHARMA, J. Civil Appeal No. 173 of 1986: By the judgment under appeal the Andhra Pradesh Adminis trative Tribunal has accepted the claim of seniority pressed by the respondents in their Representation Petition No. 1589 of 1983. The respondents were working as Lower Division Clerks (LDCs) in the district police offices/units in Andhra Pra desh, when the question of appointing LDCs in the Chief Office arose. It was decided to give an opportunity to the LDCs working in the district police offices/units on the condition that they would be willing not to rely upon their service rendered in the district police offices/units for the purpose of seniority and that their seniority would be counted with effect from the date they joined the Chief Office. Accordingly a Memorandum Rc. No. 1020/S1/68 dated 21.11. 1968 (Annexure 'A ') was issued to the district police offices/units. The choice was limited to probationers and approved probationers having good service records. The letter expressly stated that the appointees were to be put at the bottom of the list of probationers or approved proba tioners already working in the Chief Office. Immediately thereafter the respondents and two other LDCs, who are not parties to the present case, expressed their desire to join the Chief Office on the condition as mentioned in the said memorandum. They in positive terms declared in Annexure 'C ' series their willingness to forego their seniority. After examination of their service records, orders were passed and accordingly Memorandum Rc. No. 1020/S1/68 dated 1.6. 197 (1 Annexure '0 ') was issued to the heads of departments of the concerned district police offices/units. A pointed reference to the memorandum of 21.11. 1968 was made stating that the clerks in question were to take their seniority from the date of their joining the duty in the Chief Office as already mentioned in their letters. Accordingly, all the five respondents joined their duty in the Chief Office after submitting, with reference to the memorandum dated 1.6. 1970, separate letters (at pages 40 44 of the 486 paper book) addressed to the Inspector General of Police, stating that: "I submit that I am willing to take the last rank in senior ity in the category of LDCs. in Chief Office from the date reporting duty in Chief Office. " Their respective dates of joining the Chief Office are detailed in the Memorandum dated 7.9.1970, Annexure 'H ' (page 47 of the paper book). They were placed on probation with the condition that if they failed to complete their probation satisfactorily they would be sent back to their original district/unit offices. The respondents satisfactorily completed their proba tion and were substantively confirmed in the Chief Office and their seniority was counted with effect from the dates they joined the Chief Office. In 1983 they filed an applica tion before the Andhra Pradesh Administrative Tribunal claiming that they were entitled to count their service rendered in the district police offices/units for the pur pose of their seniority in the Chief Office, which has been allowed by the impugned judgment. In support of their claim the respondents relied on the Memorandum Rc. No. 1020/S1/68 dated 18.1. 1969 (Annexure 'B ') issued by the office of the Inspector General of Police to the heads of the district police organisations/units, stating that, "In continuation of the Chief Office memorandum cited, the Commissioner of Police, all Superintendents of Police and Commandants etc., are requested to state whether there are any L.D. Clerks willing to come on transfer to Chief Office, if the condition stipulated in the Memorandum cited regarding taking of last rank is not insisted upon. The records of the L.D. Clerks recommended should be good. " It has been argued before the Tribunal as also before us that this letter clearly indicates that adequate number of clerks from the district police offices/units were not available and a decision to forgo the condition in regard to the seniority of the clerks was taken. It has been contended that in view of this departmental decision the respondents should not be bound down by their statements made in Annex ures 'C ' series and in their letters Annexures 'E ' series. The Tribunal has accepted their plea. 487 5. Mr. C. Sitharamaiah, the learned counsel appearing in support of the appeal, has urged that the Memorandum Annex ure 'B ' does not indicate any final decision taken by the Department. The learned counsel appears to be right. A perusal of the letter makes it clear that the office of the Inspector General of Police was only making an inquiry in the terms indicated therein. It is true that presumably. sufficient number of volunteers from the district police offices/units were not available which promoted the authori ty concerned to issue the letter Annexure 'B ', but it does not go beyond circulating a query. It cannot be suggested on its basis that there was a reversal of the policy with respect to the counting of the seniority of the incoming LDCs from the district police offices/units. It has been asserted in the counter affidavit of the State filed before the Tribunal that not a single person was allowed to join the Chief Office on the condition indicated in Annexure 'B ', and it has not been denied on behalf of the respondents either before the Tribunal or before us. The respondents have not been able to produce a copy of any decision taken on the lines indicated in Annexure 'B ' nor have they been able to cite even a single case of an LDC joining the Chief Office on such a supposed decision. We have, therefore, no hesitation in holding that the condition mentioned in Annex ure 'B ' is of no avail to the respondents. The learned counsel for the respondents referred to r. 16 of the A.P. Ministerial Service Rules (hereinafter referred to as the Rules) and urged that when the respond ents were permitted to join the Chief Office, they were allowed to do so by way of a regular transfer from one department to another and this was done for administrative exigencies of the Police Department, within the meaning of the said Rules, and not on their own request. They are, therefore, entitled to count their earlier service for the purpose of seniority. It is alleged that the fact that the respondents were paid travelling allowances for joining the Chief Office corroborates their stand. We have considered the argument addressed on behalf of the respondents along with the relevant documents but do not find any merit in their stand. It has to be appreciated that the cadre of the Chief Office is altogether different from cadre,of the district police offices/units where the respondents were earlier appointed and they were not liable to be transferred to the Chief Office. The service conditions at the Chief Office were better, which was presumably the reason for the respondents to give up their claim based upon their past services. It is true that the differential advantage was not so substantial as to attract every LDC working in the dis trict offices/units, and in that situation the letter Annex ure 'B ' had to be circulated. However, so far the respond ents and the two others 488 were concerned, they found it in their own interest to forego their claim of seniority on the Oasis of their past services and they did so. It is significant to note that their letters Annexures 'E ' series were sent to the Inspec tor General of Police many months after the issuance of Annexure 'B ' and they were allowed to join the Chief Office on clear Understanding that they would not be entitled to count their past services. It is, therefore, idle to suggest that the respondents can.now turn back and repudiate their commitment expressly made many months after Annexure 'B '. So far the allegation regarding payment of travelling allowance is concerned, the same has been dealt with in paragraph 6 of the counter affidavit of the appellant filed before the Tribunal in the following terms: "They cannot claim seniority now after a lapse of 13 years on the ground that they were given T.T.A. at the time of their transfer. No orders were issued from this office to the Subordinate Officer that the petitioners are eligible for T.T.A. and joining time. In fact the Dy. Inspr. of Police, Hyderabad Range in his order No. 534/E/256/70 Hr. Dt. 5.6.70, addressed to Supdt. of Police, Medak had specif ically informed that the petitioners No. 1 and 2 are not entitled for any T.T.A. and joining time." [t is urged that inspite of the clarification made by the Deputy Inspector General of Police, as stated above, if some officers permitted the respondents to draw travelling allow ance, this cannot be a ground to hold that it was a case of regular departmental transfer. The '. 16 cannot, therefore, be held to be applicable in the present case. Mr. Sitharamaiah urged that having regard to the entire circumstances as spelt out of the different documents on the records of the present case, it should be held that the Memorandum Annexure A ' issued by the Office of the 'Inspector General of Police was a mere invitation to the LDCs in the district police offices/units to apply for appointment in the Chief Office with the condition mentioned therein. and availing of the opportunity, the respondents accordingly requested by their statements and letters for appointment in the Chief Office. It is suggested by the learned counsel that if the case be treated to be one of transfer, it has to be held, in the circumstances, to be at the request of the LDCs concerned within the meaning of r. 16 of the Rules. There considerable substance in the alter native argument of Mr. Sithara 489 maiah also, but, it is not necessary to go into this ques tion deeper as the absorption of the respondents in the Chief Office cannot be treated by way of transfer within the meaning of the Rules. Besides the above infirmities there are two other important considerations which weigh heavily against the respondents. The petition before the Tribunal was filed by the respondents after a period of 13 years of their initial appointment in the Chief Office, during which period many orders consistent with the terms of service as indicated in the Memorandum Annexure 'A ' must have been passed in favour of the other incumbents of the service. The courts and tribunals should be slow in disturbing the settled affairs in a service for such a long period. Besides, the respond ents, in the application before the Tribunal, did not im plead their colleagues who have been prejudicially affected by the impugned judgment. It cannot be assumed that the respondents had no knowledge about them. As was rightly pointed out by Mr. Sitharamaiah, although in paragraph 4(d) of their application before the Tribunal (page 53 of the paper book) the respondents mentioned one Vijaya Chand alleged to be an officiating LDC who was put over them, they did not implead even him. We are, therefore, of the view that apart from the merits of the case, the petition of the respondents before the Tribunal was fit to be rejected on the ground of the above mentioned last two points. Finally the learned counsel for the respondents said that in any event they should not be put below those persons who had not successfully completed their probation in the Chief Office on the date the respondents joined there. We do not find any merit in this submission either. Accordingly, the judgment under appeal passed by the Andhra Pradesh Administrative Tribunal is set aside and the Representation petition of the respondents is dismissed. The appeal is allowed, but, in the circumstances, there will be no order as to costs. Writ Petitions (Civil) Nos. 11135 37 of 1984: 11. These applications under Article 32 of the Constitu tion have been filed by the three petitioners who were appointed during the years 1965 67 in the Central Office of the Inspector General of Police (now redesignated as Direc tor General and Inspector General of Police), Andhra Pra desh. Since they had not passed the general examination held for the purpose, a special qualifying examination was held in 1968 to facilitate the petitioners and other similarly situated persons to pass at the test. The petitioners, however, did not appear at this 490 examination. Another special qualifying examination was held in 1974 and the petitioners successfully cleared the same. Thereafter, by an order dated 17.6. 1976 (Annexure 'E '), their services were regularised with effect from 1.8.1972. Their claim in the present case is for counting their sen iority with effect from their initial dates of appointment in the years 1965 67 12. It has been contended by the learned counsel for the petitioners that they were not qualified for the 1968 exami nation and at the very first opportunity available to them in 1974, they passed the special qualifying examination and, therefore, they should not be penalised by ignoring their services rendered before 1.8. 1972. It is significant to note that although the impugned order was passed in 1976, the petitioners did not commence any legal remedy before the year 1984 when they filed the present application directly before this Court after a period of 8 years. By way of a preliminary objection, Mr. Subbarao, the learned counsel appearing for some of the officers impleaded as respondents in this petition, has drawn our attention to the fact that earlier a writ application, being W.P. No. 106 of 1980, was filed by some of the employees of the central office making similar claim of seniority and the present petitioners specifically stated that their case would be governed by the judgment in the earlier writ petition which was ultimately dismissed by this Court on August 8, 1986 (M. Nirmala and Others vs State of Andhra Pradesh and Others, Mr. Subbarao contends that after the dismissal of the earlier case, the petitioners now cannot be permitted to urge any new ground in support of their claim. The reply on behalf of the petitioners is that if the earli er writ application had been allowed, they would also be entitled to succeed, but after its dismissal their claim cannot be rejected without examination of the additional questions which did not arise in the earlier case. On merits the reply on behalf of the Government of Andhra Pradesh is that the respondent officers had joined the office of the Inspector General of Police after qualify ing at the general examination held for the purpose, and since the petitioners did not appear at the examination, they cannot be equated with the respondent officers. The general examinations for recruitment to the central office were held in 1964, 1965, 1966, 1967 and 1968, but the peti tioners did not choose to avail of the ordinary method for joining the service. Instead 491 they entered the service by the side door and their depart ment, taking an attitude liberal to them and other similar officers, decided to hold special qualifying examinations. It is contended that in these circumstances the rule as laid down in Memorandum No. 473/Y1/70 5 dated 24.7. 1970 (Annex ure 'VII ') is clearly applicable, and for the purpose of seniority the petitioners were given the advantage of two years of service rendered by them prior to their successful ly completing the special qualifying examination. The argu ment is well founded. The learned counsel also pointed out that the standard of the special qualifying examination was not the same as that of the general examination held for recruitment. Besides the weakness in the case of the petitioners as mentioned above, the delay of 8 years on their part to initiate legal remedy is fatal and these writ petitions are fit to be rejected on this ground alone. The writ applica tions are, therefore, dismissed with costs payable to the respondents represented by Mr. Subbarao. G.N. Appeal allowed and writ petition dismissed. [/INST]The Appellant 's father purchased the house of respondent Nos. 1 and 2 with condition of repurchase by the sellers after five years. He permitted the respondents to remain in possession but got a rent note executed by Respondent No.3, the first cousin of Respondent No.1. After the expiry of 5 years when the house was not repurchased by the respondents, the appellant 's father (plaintiff) instituted a suit for arrears of rent and ejectment against Respondent Nos. 1, 2 and 3 (Defendant Nos. 2, 3 and 1) claiming that defendant No. 1 was in arrears of rent and defendant Nos. 2 and 3 were his sub tenants. The Trial Court decreed the suit for ar rears of rent against defendant No. 1 but dismissed the suit for ejectment against defendant Nos. 2 and 3 holding that they were not sub tenants. Defendant No. 1 filed an appeal against the decree for arrears of rent. The Appellate Court dismissed the appeal with an observation that though the rent note was executed by Defendant No. 1, the possession of Defendant Nos. 2 and 3 was on behalf of Defendant No. 1 since they were closely related. Relying on these observa tions the plaintiff filed a second suit against the defend ants with a change that defendant Nos. 2 and 3 were licen sees of defendant No.1. The Trial Court decreed the suit for arrears of rent against defendant No. 1 and for ejectment against defendant Nos. 2 and 3. Both defendant No. 1 sepa rately and defendant Nos. 2 and 3 jointly filed two appeals which were dismissed. Separate appeals were filed in the High Court which dismissed the appeal of defendant No. 1 and allowed the appeal of defendant Nos. 2 and 3 holding that the findings recorded in appeal arising out of earlier suit that they were licensees did not operate as res judicata. Accordingly the High Court dismissed the suit for ejectment against defendant Nos. 2 and 3. Hence this appeal. Dismissing the appeal, this Court, 98 HELD: One of the tests to ascertain if a finding oper ates as res judicata is if the party aggrieved could chal lenge it. Since the dismissal of appeal or the appellate decree was not against defendants Nos. 2 and 3 they could not challenge it by way of appeal. Even assuming that de fendant No. 1 could challenge the finding that liability of rent was of defendant Nos. 2 and 3 as they were in posses sion he did not file any written statement in the Trial Court raising any dispute between him. self and defendants Nos. 2 and 3. There was thus no occasion for the appellate court to make the observation when there was neither plead ing nor evidence. Therefore, from either point of view the finding could not operate against defendants Nos. 2 and 3 as res judicata. [100E G] Keshardeo Chamria vs Radha Kissen Chamria, [1953] S.C.R. 154; held in applicable. </s>
<s>[INST] Summarize the judgementCivil Appeal No. 1074(N) of 1977. From the Judgment and order dated 26.11.1976 of the High Court of Orissa in original Jurisdiction Case No. 811 of 1974. Rajinder Sachher and Amrish Kumar for the Appellant. Pankaj Kalra, Amicus Curiae and R.K. Mehta for the Respondents. The Judgment of the Court was delivered by SHARMA, J. The respondent Padmanabha Padhy was appointed as a Lecturer in the appellant College on the 26th July, 1971 and was placed under probation for one year. He was informed by the letter dated the 28th March, 1972 that his services were no longer required and would stand terminated with effect from the afternoon of the 30th April, 1972. He challenged the termination order by a writ application before the orissa High Court, which was allowed and the writ petitioner was declared to have continued in service. The appellant has filed the present appeal against the High Court judgment after obtaining special leave. The respondent, in the first instance had filed a writ application which was registered as O.J.C. No. 308 of 1972 but later withdrew it and approached the Director of Public Instruction (in short referred to as the DPI), present respondent No. 2, for the necessary relief. Subsequently on 12.8.1974 he filed a second writ application being o. J.C. No. 811 of 1974 which has been allowed by the judgment presently impugned. It is stated before us on his behalf that the D.P.I. by his order dated 19.9.1973 declined to interfere which necessitated the filing of the second case. It has been, inter alia, contended by Sri Padhy in his writ application that his appointing authority was "the Managing Committee or the Governing Body" and as such the impugned order of termination of his services by the Principal was without jurisdiction. The stand of the College was that the Principal who was the Ex officio Secretary was the appointing authority and was vested with the power to terminate the appellant 's services. The counter 710 affidavit of the D.P.I. stated that both the orders of appointment and termination had been passed by the Governing Body and the Principal was, in sending the orders to Sri Padhy, acting on behalf of the Governing Body. It has further been said that he (D.P.I.) was not concerned with termination orders passed before the 3rd of May, 1972, the date from which the relevant 1974 Amendment of the Orissa Education Act, 1969 took effect and he had, therefore, no power to look into the matter. The High Court held that, "undoubtedly, until confirmation petitioner had no right to the post and during the period of probation he could be turned out from service", but in view of the language of the appointment letter and the termination order it proceeded to point out that both the orders had been passed by some authority other than the Principal and the Principal was merely a communicating agent. The High Court further opined that the Principal was acting on behalf of the Management of the Trust which had established the College, and the termination order did not emanate from the Governing Body. Observing that it is only the Governing Body of a College which has power to terminate the services of a teacher, it was further held that the impugned order was without jurisdiction. The objection to the maintainability of the writ application on the ground that the College was a private institution was rejected and it was held that in view of the provisions of the Orissa Education Act, 1969, Berhampur University Act, 1966 and the Berhampur University Statutes, 1966, the college must be considered to be a statutory body amenable to the writ jurisdiction. Mr. Sachher, learned counsel appearing in support of the appeal, has contended that both the orders of appointment and termination of service were passed by one and the same body and the finding of the High Court to the contrary is not based on any material and, therefore, has to be set aside. Referring to the statement of Sri Padhy in paragraph 7 of the writ petition that the Governing Body of the College and the Managing Committee are one and the same body, it was argued that the termination order was passed by the appointing authority of the writ petitioner and it could not be set aside on the ground of lack of jurisdiction. The maintainability of the writ application in the High Court has also been seriously challenged and it has further been urged that in any view of the matter the High Court on the facts and in the circumstances of the case should have refused to allow any relief to the writ petitioner. 711 5. Mr. Kalra, learned counsel representing Sri Padhy respondent No. 1, has submitted that the. finding of the High Court as to the authorship of the appointment and termination orders should not be disturbed by this Court. He also supported the view of the court below that the writ petition was maintainable and that it is a fit case in which the High Court was right in granting the relief as prayed for. The learned counsel for both sides placed before us the appointment and termination orders more than once and there is no manner of doubt that none of the orders was passed by the Principal alone. The termination order stated that the Principal had been directed to inform Sri Padhy that his services were being no longer required and stood terminated with effect from 30.4.1972. It is true that none of the two letters expressly states about the authority passing the respective orders but this much is clear that the Principal was only conveying the decision of another authority and was thus acting in the same capacity on both occasions. The writ petition was founded on the assumption that it was the Principal who had passed the termination order by himself and that he had no jurisdiction to do so. Instead of merely pointing out that it was not so, the affidavit on behalf of the College made a confused statement forgetting that the Principal was only one of the members of the Governing Body. Both sides, thus, misrepresented the situation before the Court and it was only the D.P.I. who correctly appreciated the position. In this background the question arises as to whether the High Court was right in assuming that the termination order was passed by an authority other than the appointing authority. No material or basis has been referred to in the Judgment of the High Court in support of its view and neither side has pointed out before us any evidence to that effect. Mr. Kalra contended that in view of the statutory provisions it should be presumed that Sri Padhy had been appointed by the Governing Body as envisaged in law, and further in view of the stand of the College before the High Court that the Principal had issued the termination order, it should be held that the same was without jurisdiction. The finding of the High Court in this regard is in his opinion thus supported by the supposed admission of the College in its pleading. We are afraid, the argument cannot be accepted. The case of the College has been that both the appointment and the termination orders were given by the Principal. This plea is of course incorrect but for that reason the statement by the College cannot be truncated and part of it accepted while rejecting the other part. 712 As was observed by the Privy Council in M.M. Essabhoy vs M. Haridas, AIR 1915 PC 2, although it is permissible for a tribunal to accept part and reject the rest of any witness 's testimony, so far as admission in pleading is concerned, it cannot be so dissected. It may be accepted as a whole or not at all. We therefore, hold that the assumption made by the High Court in this connection being not supported by any material whatsoever on the records has to be set aside. The burden of proving the necessary facts for grant of relief was on the writ petitioner which was not discharged. The writ application was, therefore, bound to fail. The appeal accordingly must succeed on this ground and it is, therefore, not necessary to consider the other questions raised on behalf of the appellant. In the result, the appeal is allowed, the decision of the High Court is set aside and the writ petition is dismissed. Parties shall bear their own costs throughout. N. V. K. Appeal allowed. [/INST]% Civil Appeal Nos. 2049 and 3129 of 1979 were filed in this Court by special leave against the judgment of the High Court in a Writ Petition filed by respondents 6 to 51 of Civil Appeal No. 2049 of 1979. One appeal was. by the employees and the other, by the State of Bihar, etc., against the judgment of the High Court above said. There were three different wings of Engineers in the Department of Agriculture, viz., Irrigation, minor Irrigation and River Valley Projects. On January 9, 1969, the State Government amalgamated the cadres of engineers and other employees of the Irrigation and the River Valley departments. Engineers and other employees of the minor Irrigation wing were not amalgamated. Later, the Directorate of minor Irrigation was made permanent and a distinct and permanent cadre of overseers termed as Junior Engineers, was created. 191 permanent posts of overseers were sanctioned. Thereafter, the minor Irrigation wing was also amalgamated with the other two wings, and a combined final gradation list prepared on the basis of the status of the overseers as obtaining on. January 9, 1969, was issued. On the Writ Petition of the respondents 6 to 51 above mentioned, the High Court quashed the orders contained in the various annexures viz 11.11/1, 12, 13, 13/1, 15 and 16 directed the State Government to prepare a fresh combined gradation list in accordance with the principles laid down by the High Court. Allowing the appeals in part, the Court, ^ HELD: The three wings though under the administrative control of the Agricultural Department, were separate before amalgamation. Permanent posts had been sanctioned in the minor Irrigation wing to 411 which the petitioners before the High Court belonged and they were appointed on permanent basis. When integration takes place and officers in different cadres are merged into one, there is bound to be some difficulty in the matter of adjustment. That has occurred in this case. The approach of the High Court has been that if within the cadre earlier confirmation gives seniority why should that basis be not extended to the combined gradation list. That may not be applicable in every situation particularly when there is a merger of cadres and the combined gradation list is proposed. [414C D,FJ] Seniority would ordinarily depend upon the length of service, subject, of course, to the rules holding the field. This view has been taken by this Court in several cases. The High Court recorded a finding that there is no applicable rule in the matter of fixing inter se seniority in a situation of this type. In the absence of rules, the more equitable way of preparing the combined gradation list would be to take the total length of service in the common cadre as the basis for determining the inter se seniority The Court does not agree with the High Court that confirmation should be the basis and would substitute it by the length of service test, but the Court upholds the direction that in fixing the combined gradation list the inter se seniority of incumbents in their respective departments would not be disturbed. The gradation list as published by the Government has to be modified. The conclusion of the High Court that Annexures 11, 11/1, 12,13, 1311, 15 and 16 should be quashed and a fresh combined gradation list has to be published, is confirmed. The test for fixing the seniority inter se generally, is altered, but the direction of inter se seniority in their own departments to be respected is approved. The respondent State directed to prepare and publish the fresh combined gradation list keeping these directions in view. [4t4G; 4t5C F] A. Janardhana vs Union of India and Ors., ; and K.S. Vora and Ors. vs State of Gujarat and Ors. , ; , referred to. </s>
<s>[INST] Summarize the judgementtition (Criminal) No. 53 of 1983. (Under Article 32 of the Constitution of India) J. Verghese for the Petitioner. A. K. Sanghi and D. Goburdhan for the Respondent. The Judgment of the Court was delivered by BHAGWATI, J. This writ petition has been filed on the basis of a letter addressed by one Ram Kumar Misra, President of Free Legal Aid Committee, Bhagalpur. This letter complained that the workmen employed in two ferries one at Bhagalpur and the other at Sultanganj which were being operated by respondent No. 5 were not being paid minimum wages as prescribed by the relevant notification issued under the . The wages of the workmen employed in these two ferries were given in the annexure to the letter and the amount of the difference between what the petitioner claimed to be the minimum wage payable to the workmen and the actual wage paid to them, was set out in the annexure. The letter was treated as a writ petition and by an order dated 25th January, 1983, this Court issued notice on the writ petition and on Mr. Goburdhan, learned Advocate, for the State of Bihar, waiving service of the notice, the District Magistrate, Bhagalpur and Ram Kumar Misra, the petitioner, were directed to jointly carry out an inquiry into the various averments made in the writ petition and submit a report within two weeks from the date of the order. The direction for holding an inquiry was given by us because we wanted to satisfy ourselves whether there was a prima facie case to proceed further with the writ petition. Pursuant to the order made by us, the District Magistrate, Bhagalpur and the petitioner conducted a joint inquiry into the various averments made 1013 in the writ petition and they finally submitted a report dated 23rd February, 1983 stating that in their opinion, in the light of the material gathered at the inquiry, the ferries operated by respondent No. 5 at Bhagalpur and Sultanganj were establishments to which the applied, since they fell within Entry 27 in the Schedule to the Act and respondent No. 5 was, therefore, liable to pay minimum wage to the workmen employed in the two ferries with effect from 20th January, 1979, that being the date when the notification issued under section 3(1) (a) of the was amended so as to make the minimum wage applicable to "employment in any shop or establishment other than that covered under any of the other entries in this Schedule. " We may point out that there was also one other complaint in the writ petition, namely, that the workmen were made to work as bonded labourers, but his complaint was not found to be correct by the District Magistrate, Bhagalpur and the petitioner in the Report made by them. When the report was received by this Court, copies thereof were supplied to the learned Advocates appearing on behalf of the parties. Respondent No. 5, who was joined as respondent to the writ petitions on an application made by him and who appeared at the hearing of the writ petition, disputed the correctness of the report made by the District Magistrate, Bhagalpur and the petitioner. It is not necessary for us for the purpose of the present writ petition to go into the question whether the facts stated in the report are correct or not, because, as we have stated above, the report was called for by us for the purpose of satisfying ourselves that there was a prima facie case for respondent No. 5 to meet. The only question which was raised before us and argued vehemently on both sides was whether the applied at all to the Bhagalpur and Sultanganj ferries owned by respondent No. 5. argument of respondent No. 5 was that the had no application to these two ferries since they did not fall within any of the entries in the Schedule to the Act, whereas, on the other hand, both the petitioner and the State Government argued that the Act applied to these two ferries because they were establishments within Entry 27 of the Schedule to the Act. These rival contentions raised a short question of construction of the relevant provisions of the and the notifications issued under that Act. 1014 The provides for fixation of Minimum rates of wages in certain employments. 3(1) (a) provides that the appropriate Government shall fix the minimum rates of wages payable to employees employed in an employment specified in or of the Schedule. Sub section (IA) of Section 3 enacts that "Notwithstanding anything contained in sub sec. (1), the appropriate Government may refrain from fixing minimum rates of wages in respect of any scheduled employment in which there are in the whole state less than 1,000 employees engaged in such employment. " It is obvious that sub sec. (IA) of sec. 3 does not preclude the appropriate Government from fixing minimum rates of wages in respect of any scheduled employment even if there are in the whole State less them 1,000 employees engaged in such employment. It merely empowers the appropriate Government to refrain from fixing minimum rates of wages in respect of such employment. Leaving it open to the appropriate Government to fix minimum rates of wages in respect of such employment, if it so thinks fit. The Schedule to the Act lists various employments in respect of which minimum rates of wages can be fixed by the appropriate Government. Mr. Verghese, learned Advocate appearing on behalf of the petitioner, relied on Entry 6 of the Schedule which reads "Employment under any local authority" but we do not think any reliance can be placed upon it, because in the present case, the workmen, on whose behalf claim of minimum wages has been made, are not employed under any local authority. Respondent No. 5, who is the employer of the workmen employed in the Bhagalpur and Sultanganj ferries, is not a local authority; he is merely a lessee of the tolls of public ferry. Entry 6 in the schedule can, therefore, have no application in the present case, but there is Entry 27 in the Schedule which helps the petitioner. This Entry prior to its amendment by the State Government on 25th November, 1978 read as follows: "27. Employment in Shops and Establishments registered under the Bihar Shops and Establishments Act, 1953 other than those covered under any of the other entries in this Schedule. " The Bhagalpur and Sultanganj ferries were not establishments registered under the Bihar Shops and Establishments Act, 1953 and prima 1015 facie, they would not, therefore, be covered by Entry 27 as it stood prior to 25th November, 1978. But Entry 27 was amended to enlarge its scope and the amended Entry ran as follows: 27. Employment in any Shop or establishment other than that covered under any of the other entries in this Schedule. " The State Government thereafter issued a Notification dated 20th January, 1979 in exercise of the powers conferred under sec. 3(1) (a) of the amending an earlier Notification dated 25th June 1975 under which rates of minimum wages were fixed for different categories of employees employed in shops and establishments registered under the Bihar Shops and Establishments Act, 1953 other than those covered under any of the other entries in the Schedule and by this amendment, the words "Employment in Shops and establishments registered under the Bihar Shops and Establishments Act, 1953 other than those covered under any of the other entries in this Schedule" were substituted by the words "Employment in any shop or establishment other than that covered under any of the other entries in this Schedule. " The object of the amendment was to make the Notification dated 25th June, 1975 applicable in relation to employment in any shop or establishment other than that covered under any of the other entries in the Schedule so as to bring it in line with the amended Entry 27 in the Schedule. Now it is clear from the Explanation to the amended Entry 27 that the word "establishment" in that entry has the same meaning which is assigned to it in the Bihar Shops and Establishments Act, 1953 and we must, therefore, look at the definition of "establishment" as given in the Bihar Shops and Establishments Act, 1953 in order to determine as to whether the Bhagalpur and Sultanganj ferries could be said to be establishments within the meaning of the amended Entry 27. The word "establishment" is defined in sec. 2(6) of the Bihar Shops and Establishments Act, 1953 to mean an establishment which carries on any business, trade or profession or any work in connection with, or incidential or ancillary to, any business, trade or profession. Now it can hardly be disputed that the Bhagalpur and Sultanganj ferries are establishments which carry on business or trade of plying ferries across the Ganges and they are clearly within the meaning of the word "establishment" in sec. 2(6) 1016 of the Bihar Shops and Establishments Act, 1953 and consequently they would also be establishments within the meaning of that expression as used in the amended Entry 27. The would, therefore, clearly be applicable to employment in the Bhagalpur and Sultanganj ferries. Since the Notification dated 25th June, 1975 as amended by the Notification dated 20th January, 1979 fixed rates of minimum wages for different categories of employees employed in any establishment, which would cover the Bhagalpur and Sultanganj ferries, there can be no doubt that the workmen employed in these two ferries were entitled to receive minimum wages as laid down in the Notification dated 25th June, 1975 read with the Notification dated 20th January, 1979 with effect from the date of latter notification. It appears that a further Notification was issued by the State Government on 26th November, 1981 in exercise of the powers conferred under sec. 3(1) read with sec. 5(2) of the revising the minimum rates of wages for different categories of employees employed in any shop or establishment other than that covered under any of the other entries in the Schedule. This Notification came into force with effect from 26th November, 1981. The workmen employed in Bhagalpur and Sultanganj ferries were, therefore, entitled to the revised minimum wage as set out in the Notification dated 26th November, 1981 with effect from that date. We accordingly reach the conclusion that the workmen employed in the Bhagalpur and Sultanganj ferries were entitled to receive minimum wage as set out in the Notification dated 25th June 1975 as amended by the Notification dated 20th January 1979 for the period from 20th January 1979 upto 25th November 1981 and thereafter at the rate fixed in the Notification dated 26th November 1981. The question, however, remains whether the workmen were paid wages at these minimum rates. Since there is a dispute between the parties in regard to this question, the argument of the petitioner being that the workmen were not paid wages at these minimum rates, while the contention of respondent No. 5 being that they where so paid, it becomes necessary to give directions for the purpose of determining whether the workmen employed in these two ferries were paid wages at these minimum rates with effect from 20th January, 1979. We would therefore direct the Labour Department of the Government of Bihar to intimate to the petitioner as to which 1017 is the appropriate authority under the Minimum wages Act, 1948 for adjudicating upon the claims of the workmen employed in these two ferries for arrears of minimum wage. The appropriate authority will, by adopting suitable means including the giving of publicity, invite the workmen to file their claims for arrears of minimum wage and not only the workmen will be entitled to file their claims but the petitioner who has moved this court will also be at liberty to file claims on behalf of the workmen for arrears of minimum wage. The appropriate authority will inquire into all such claims which may be filed before it by or on behalf of the workmen and determine, after giving full opportunity to respondent No. 5 of being heard in the matter, whether any and if so what arrears of minimum wage in the light of this judgment remain to be paid by respondent No. 5 to the workmen employed in these two ferries. The workmen will be entitled to appear before the appropriate authority either personally or through their agent or advocate and the petitioner will also be at liberty to appear before the appropriate authority on behalf of the workmen. If any amount is determined by the appropriate authority to be payable by respondent No. 5 to any of the workmen in respect of the arrears of minimum wage, respondent No. 5 is directed to make payment of the same within one month from the date of the order of the appropriate authority. The appropriate authority will carry out the directions given by us and complete the assignment entrusted to it within six months from today. We would also direct respondent No. 5 to pay to the workmen employed in these two ferries minimum wage at the rate fixed under the Notification dated 26th November 1981 or at such other revised rate or rates as may be fixed from time to time. So far as the costs of the writ petition are concerned since the petitioner has come to this Court for the purpose of vindicating the rights of poor workmen, he we would direct the State of Bihar to pay to the petitioner a sum of Rs. 2,000 by way of costs. H.S.K. Petition allowed. [/INST]Pursuant to tho policy decision taken by the Andhra Pradesh Government in 1964 that the secondary school duration should be 10 years instead of 11 years and it should be followed by a two years ' intermediate course, the Government decided in G.O.Ms. 1920, Education, dated 25.10.1968 that in the existing colleges the two years ' intermediate course should be introduced and laid down in G.O.Ms. 2063, Education, dated 25.8.69 the staff pattern and pay scales of staff m Junior Colleges started for the two years ' intermediate course. In G.O.Ms. 2186, Education, dated 17.9.1969 the Government issued instructions regarding the absorption of Post Graduate teachers in Junior Colleges on the basis of the Post Graduate degree and the number of years of service rendered by them. It was stated in that G.O. that all the existing Post Graduates who will be absorbed as Junior Lecturers in Junior Colleges will be appointed temporarily as Junior Lecturers pending framing of adhoc rules in due course. The Government ordered in G.O. Ms, 1147, Education, dated 4.6.1970 that in the common seniority list first rank should be given only to those who have secured first and second class Post Graduate degree. On 19.9.1973 the Government framed Adhoc Rules, 1973 with retrospective effect from 1.8.1969 for the temporary post of Junior Lecturers in Junior Colleges. Rule 13 of the Adhoc Rules, 1973 says that seniority of Post Graduate Assistants appointed as Junior Lecturers shall be a determined with reference to the dates of their actual appointment as Post Graduate Assistants. Rule 3 states that post graduates with first or second class degrees are to be given preference over Post Graduates holding third class degrees. On 19.6.1974 the Government framed Adhoc Rules, 1974 for the temporary posts of principals of Junior Colleges with retrospective effect from 1.8.1969. Rule 6 of the Adhoc Rules, 1974 prescribes first or second class Post Graduate degree for promotion of Junior Lecturers to the posts of Principals of Junior Colleges. Rule 8 of the Adhoc Rules 1974 says that a person who held the post of Principal of a Junior College immediately before 546 the issue of these Rules shall be continued as Principal and given option either A to continue in the post of Principal or to revert to his original post. The appellants in Civil Appeals 1652 1659 of 1978 who were working as Post Graduate Assistants and were first or second class Post Graduate degree holders were appointed as Junior Lecturers in 1969. Soon after the Adhoc Rules, 1973 were framed the second respondent, Joint Director of Higher Education, prepared a subjectwise seniority list in 1974 and on the basis of their seniority in that seniority list all the appellants except one were promoted as Principals of different Junior Colleges. The first respondent State, under the directions of the High Court in a separate proceeding to prepare the seniority list as per Rule 13(1) of the Adhoc Rules, 1973, prepared a revised seniority list in 1976 in which respondents 3 to 8, who were third class Post Graduate degree holders and were appointed as Junior Lecturers in 1970 and 1975 were placed as seniors to the appellants. The appellants as petitioners filed petitions in the Administrative Tribunal for quashing the revised seniority list of 1976 and restoring the earlier seniority list of 1974 or in the alternative for declaring that Rule 13(1) of the Adhoc Rules, 1973 is violative of Articles 14 and 16 of the Constitution. The petitioners contended that under the Adhoc Rules Post Graduate Assistants with first and second class Post Graduate degrees should be treated as one group and as senior to Post Graduate Assistants with third class Post Graduate degrees The Tribunal held that the seniority list of 1976 framed as per Rule 13(1) of the Adhoc Rules, 1973 having precedence over the earlier executive instruction is valid and as the petitioners and respondents 3 to 8 belonged to the same category of Post Graduate Assistants, there is no question of violation of Articles I 1 and 16 of the Constitution. The appellants in Civil Appeal 415 of 1979 who were working as School Assistants in Higher Secondary Schools and were third class Post Graduates were appointed as Junior Lecturers in Junior Colleges in terms of Rule 3 of t the Adhoc Rules, 1973. Pending the framing of Adhoc Rules for the temporary posts of Principals of Junior Colleges, the second respondent, Director of Public Instructions, issued proceedings dated 14.3.1974 promoting under Rule 10(a) (i) of the State and Subordinate Services Rules seven third class Post Graduate Junior Lecturers as Principals of Junior Colleges. The appellants as petitioners challenged in the Administrative Tribunal these Adhoc promotions. They also challenged the validity of Rule 6 of the Adhoc Rules, 1974 on the ground that it violates Articles 14 and 16 of the Constitution. The Tribunal held that Rule 6 does not contravene Articles 14 and 16 of the Constitution. The Tribunal found nothing objectionable in Rule 8 of the Adhoc Rules, 1974 which protects the right of third class Post Graduate degree holders who had been promoted under Rule 10(a) (i) of the State and Subordinate Services Rules pending framing of Adhoc Rules. Allowing Civil Appeals 1652 59 and dismissing Civil Appeal 415, ^ HELD: There is no need to quash Rule 13(1) of the Adhoc Rules, 1973 which has to be interpreted in the manner indicated in the Judgment and 547 seniority has to be fixed accordingly. The seniority list of 1976 is quashed and the seniority list of 1974 is restored. Rule 6 of the Adhoc Rules, 1974 is valid. [571 H, 572 A] There is no reason to think that the Government intended by Rule 13(1) of the Adhoc Rules, 1973 to take away from First and second class Post Graduate Junior Lecturers the preference shown to them over third class Post Graduate Junior Lecturers in the executive instructions especially G.O. Ms. 1147, Education, dated 4,6.1970 and even in Rule 3(1) and (2) of the Adhoc Rules, 1973. Rules 3(1) and (2) and 13(1) have to be read together. Only then there will be harmony between those rules. If Rule 13(1) is read without reference to Rule 3(1) and (2) the consequence will be disharmony and the first and second class Post Graduate Junior Lecturers who were given preference over third class Post Graduate Junior Lecturers will be placed in a less advantageous and inferior position as compared with third class Post Graduate Junior Lecturers as regards seniority alone, which will not even help them in the matter of promotion as Principals of Junior Colleges in view of Rule 6 of Adhoc Rules, 1974 so long as they do not improve their academic attainment by obtaining a first or second class Post Graduate Degree. Every rule in the Adhoc Rules must be given its full, natural and legal effect. There is no doubt that Rule 13(1) is inartistically worded though when read with Rule 3(1) and (2) it would be clear that the principle laid down in it has to be applied separately to each of the three categories of Junior Lecturers mentioned in Rule 3(1) and (2). Each of these three categories forms a distinct and separate category. The first category consists of first and second class Post Graduates, and on their appointment as Junior Lecturers their inter se seniority has to be fixed under Rule 13(1) with reference to the dates of their original appointment as Post Graduate School Assistants. When Post Graduates with not less than five years of service, working as Post Graduate School Assistants are appointed as Junior Lecturers their inter se seniority has to be fixed like wise under Rule 13(1) on the basis of the dates of their original appointment as Post Graduate School Assistants. Similarly, when Post Graduates with less than five years of service, working as Post Graduate School Assistants are appointed as Junior Lecturers their inter se seniority has to be fixed on the basis of the dates of their original appointment as Post Graduate School Assistants. If Rule 13(1) is interpreted in this manner, no disharmony will result from applying all the adhoc rules. It is only by constructing Rule 13(1) in this manner the Government framed the seniority list of 1974. [569 D H 570 A F] The object of achieving excellence in educational institutions like Junior Colleges is a laudable one, and excellence in academic attainments of heads of such institutions is a relevant fact. Promotion of Junior Lecturers as Principals is based only on merit judged by their academic distinction which cannot be said to be discriminatory. Prescribing a first or second class Post Graduate Degree for the head of an educational institution has a direct nexus with the object of excellence sought to be achieved, and it cannot be said to be discriminatory. Therefore, it is not possible to hold that Rule 6 of the Adhoc Rules? 1974 is liable to be struck down as being discriminatory and illegal. [572 G H, 573 A] 548 section M. Pandit vs State of Gujarat, not applicable. The promotion of seven third class Post Graduate Junior Lecturers as Principals were irregular having regard to the fact that even for appointment as Junior Lecturers preference has to be given to first and second class Post Graduate School Assistants. The irregularity has been sought to be overlooked by providing a saving clause by way of Rule 8 of the Adhoc Ruler, 1974. It is not possible to think that there could have been any valid necessity to continue those adhoc promotions made even after the Adhoc Rules, 1974 were framed within about three month of those promotions. There is no meaning in providing for the option in that rule as it is not likely that a person who has been promoted as Principal would voluntarily opt for reverting to his original post of Junior Lecturer. However, having regard to the long lapse of time it is not desirable to declare those appointments as illegal. [573 E H, 574 A] Rule 33(c) of the Andhra Pradesh State and Subordinate Services Rules applies to persons who were transferred from one class or category of service to another class or category of the same service and would not apply to the fact of the present case where Junior Lecturers have been appointed by election amongst Post Graduate School Assistants in the manner indicated in Rule 3(1) and (2) of the Adhoc Rules and there is no question of transfer of Post Graduate School Assistants as Junior Lecturers. [571 C E] Reserve Bank of India vs N. C. Paliwal, A.I.R. 1976 S.C. 2342 not applicable. </s>
<s>[INST] Summarize the judgementminal Appeal No. 218 of 1966. Appeal by special leave from the order dated August 5, 1966 of the Patna High Court in Criminal Revision No. 1020 of 966, AND Criminal Appeal No. 238 of 1966. Appeal by special leave from the judgment and order dated September 13, 1966 of the Patna High Court in Criminal Revi sion No. 40 of 1965. B. P. Jha and Subhag Mal Jain, for the appellants (in Cr. A. No. 218 of 1966). Nuruddin Ahmed and R. C. Prasad, for the appellants (in Cr. A. No. 238 of 1966). U. P. Singh, for the respondents (in both the appeals). The Judgment of the Court was delivered by Vaidialingam, J. The common question, that arises for con sideration, in these two criminal appeals, by special leave, is as to whether a Magistrate can direct the police to submit a charge sheet, when the police, after the investigation into a congnizable offence, had submitted a final report, under section 173 of the Code of. Criminal Procedure (hereinafter called the Code). There is a conflict of opinion, on this point between the various High Courts in India. The High Courts of Madras, Calcutta, Madhya Pradesh, Assam and Gujarat have taken the view that the Magistrate has no such power, whereas, the Patna and Bombay High Courts have held a contrary view. In Criminal Appeal No. 218 of 1966, the respondent, Dinesh Mishra, lodged a first information report, on June 3, 670 1965, at the Rajoun Police Station, that he saw a thatched house, of one Uma Kant Misra, situated on the northern side of his house, burning, and the petitioners herein., running away from the scene,. The police made an investigation and submitted what is called a 'final report ', under section 173 (1) of the Code, to the effect that the offence complained of, was false. The Sub Divisional Magistrate received this report on July 13, 1965, but, in the meanwhile, the respondent had filed what is termed 'a protest petition ', challenging the correctness of the report submitted by the police. The Magistrate appears to have perused the police diary and, after hearing the counsel for the respondent and the public prosecutor, passed an order on October 27, 1965, directing the police to submit a charge sheet, against the petitioners, herein. The petitioners challenged this order, without success, both before the learned Sessions Judge, Bhagalpur, and the Patna High Court. It was held by the High Court, following its previous decision, that the Magistrate has jurisdiction to call for a charge sheet, when he disagrees with the report submitted by the police, under section 173(1) of the Code. The petitioners, in this appeal, challenge these orders. Similarly, in Criminal Appeal No. 238 of 1966, the second respondent therein, had lodged a written report, on February 24. 1.964, before the police, at Malsalami police station, that his daughter, Hiramani, was missing from February 21, 1964, and that the appellants in that appeal, had kidnapped her. A case under section 366 I.P.C. was registered against them. The police, after investigation, submitted a final report to the Magistrate. to the effect that the girl concerned, had been recovered and that she bad stated that she had, of her own accord, eloped; and therefore the police stated that the case might be treated as closed. The second respondent filed a 'protest petition ' in Court, challenging the statements of the police and he also filed a complaint, under section 498 I.P.C. The Magistrate, after a perusal of the case diary of the police, and hearing the lawyer for the appellants and the second respondent, as also the public prosecutor, passed an order directing the investigating officer to submit a charge sheet, against the accused persons, under section 366 I.P.C This order has been confirmed by the, learned Sessions Judge, as well as the Patna High Court. Here also, the Patna High Court, in accordance with its previous decision, held that the Magistrate had jurisdiction to pass the order, in question. All these orders are challenged by the appellants, in this appeal. On behalf of the appellants, in Criminal Appeal No. 218 of 1966, Mr. Jha, learned counsel pointed out that when a final report is submitted by the police, under section 173(1) of the Code,, 6 71 stating that no case is made out, the Magistrate has no jurisdiction to direct the police to file a charge sheet. It may be open, counsel points out, to the Magistrate, to direct further investigation to be made by the police, or to treat the protest petition filed by the second respondent, as a complaint, and take cognizance of the offence and proceed, according to law. , The scheme of Chapter XIV of the Code, counsel points out, clearly indicates that the formation of an opinion, as to whether or not there is a case to place the accused on trial, is that of the investigating officers, and the Magistrate cannot compel the police to form a particular opinion on the 'investigation and to submit a report, according to such opinion. In this case, there is nothing to show that the protest petition, filed by the second respondent, has befell treated as a complaint, in which case, it may be open to the Magistrate to take cognizance of the offence, but, in the absence of any such procedure being adopted according to counsel, the order of the Magistrate directing a charge sheet to be filed, is illegal and not warranted by the provisions of the Code. These contentions have been adopted, and reiterated, by Mr. Nuruddin Ahmed, on behalf of the appellants, in Criminal Appeal No. 238 of 1966. Both the learned counsel pressed before us, for acceptance, the views, as expressed by the Gujarat High Court, in its Full Bench judgment, reported as State of Gujarat vs Shah Lakhamshi(1). On the, other hand, Mr. U. P. Singh, learned counsel for the respondent, in Criminal Appeal No. 218 of 1966, has pointed out that the Magistrate has jurisdiction, in proper cases, when he does not agree with the final report submitted by the police, to direct them to submit a charge sheet. Otherwise, counsel points out, the position will be that the entire matter is left to the discretion of the police authorities, and the Courts will be powerless, even when 'they feel that the action of the police is not justified. Quite naturally, counsel prays for acceptance of the views expressed by the dissenting Judges, in A. K. Roy vs State of W. B. (2) and by the Bombay and Patna High Courts, in the decisions reported as State vs Murlidhar Govardhan(3), and Ram Nandan vs State ( 4 ) , respectively. In order, properly, to appreciate the duties of the police, in the matter of 'investigation of offences, as well as their powers, it is necessary to refer to the provisions contained in Chapter XIV of the Code. That chapter deals with 'Information to the Police and their Powers to investigate ', and it contains the group of section beginning from section 154 and ending with section 176. Section 154 deals with information relating to the commission of a cognizable R. 1966 Guj, 283. (2) A. 1. R. B.). (3) A. 1. R. (4) A. 1. R. 1966 Pat. 67 2 offence, and the procedure to be adopted in respect of the same. Section 155, similarly, deals with information in respect of noncognizable offences. Sub section (2), of this section, prohibits a police officer from investigating a non cognizable case, without the order of a Magistrate. Section 156 authorizes a police officer, in charge of a police station, to investigate any cognizable case, without the order of a Magistrate. Therefore, it wilt be seen that large powers are conferred on the police, in the matter of investigation into a cognizable offence. Sub section (3), of section 156, provides for any Magistrate empowered under section 190, to order an investigation. In cases where a cognizable offence is suspected to have been committed, the officer, in charge of a police station, after sending a report to the Magistrate, is entitled, under section 157, to investigate the facts and circumstances of the case and also to take steps for the discovery and arrest of the offender. Clause (b), of the proviso to section 157(1), gives a discretion to the police officer not to investigate the case, if it appears to him that there is no sufficient ground for entering on an investigation. Section 158 deals with the procedure to be adopted in the matter of"a report to be sent, under section 157. Section 159 gives power to a Magistrate, on receiving a report under section 157, either to direct an investigation or, himself or through another Magistrate subordinate to him, to hold a preliminary enquiry into the matter, or otherwise dispose of the case, in accordance with the Code. Sections 160 to 163 deal with the power of the police to require attendance of witnesses, examine witnesses and record statements. Sections 165 and 166 deal with the power of police officers, in the matter of conducting searches, during an investigation, in the circumstances, mentioned therein. Section 167 provides for the procedure to be adopted by the police, when investigation cannot be completed in 24 hours. Section 168 provides for a report being sent to the officer, incharge of a police station, about the result of an investigation, when such investigation has been made by a subordinate police officer, under Chapter XIV. Section 169 authorises a police officer to release a person from custody, on his executing a bond, to appear, if and when so required, before a Magistrate, in cases when, on investigation under Chapter XIV, it appears to the officer, in charge of the police station, or to the police officer making the investigation, that there is no sufficient evidence or reasonable ground of suspicion, to justify the forwarding of the accused to a Magistrate. Section 170 empowers the officer, incharge of a police station, after investigation under Chapter XIV, and if it appears to him that there is sufficient evidence, to forward the accused, under custody, to a competent Magistrate or to take securtiy from the accused for his appearance before the Magistrate, in cases where the offence is bailable. Section 172 makes it obligatory on the police officer making an investigation, to maintain a diary recording the various particulars therein and in the 673 manner indicated in that section. Section 173 provides for an investigation, under Chapter XIV, to be completed, without unnecessary delay and also makes it obligatory, on the officer, incharge of the police station, to send a report to the Magistrate concerned, in the manner provided for therein, containing the necessary particulars. It is now only necessary to refer to section 190, occurring in Chapter XV, relating to jurisdiction of criminal Courts in inquiries and trials. That section is to be found under the heading 'Conditions requisite for initiation of proceedings ' and its sub section (1) is as follows : "(1) Except as hereinafter provided, any Presidency Magistrate, District Magistrate or Sub divisional Magistrate and any other Magistrate specially empowered in this behalf, may take cognizance of any offence (a) upon receiving a complaint of facts which constitute such offence; (b) upon a report in writing of such facts made, by any police officer; (c) upon information received from any person other than a police officer, or upon his own knowledge or suspicion, that such offence has been committed. " From the foregoing sections, occurring in Chapter XIV, it will be seen that very elaborate provisions have been made for securing that an investigation does take place into a reported offence and the investigation is carried out within the limits of the law, without causing any harassment to the accused and is also completed without unnecessary or undue delay. But the point to be noted is that the manner and method of conducting the investigation, are left entirely to the police, and the Magistrate, so far as we can see, has no power under any of these provisions, to interfere with the same. If, on investigation, it appears to the officer, in charge of a police station, or to the officer making an investigation, that ,,here is no sufficient evidence or reasonable grounds of suspicion justifying the forwarding of an accused to a Magistrate,, section 169 says that the officer shall release the accused, if in custody, on hi , executing a bond to appear before the Magistrate. Similarly, if on the other hand, it appears to the officer, in charge of a police station, or to the officer making the investigation, under Chapter XIV, that there is sufficient evidence or reasonable ground to justify the forwarding of an accused to a Magistrate, such an officer is required, under section 170, to forward the accused to a Magistrate or, if the offence is bailable, to take security from him for his appearance before such Magistrate. But, whether a case comes under section 169, or under section 170, of the Code, on the completion of the investigation, the police officer has to L7SupCI/67 13 674 submit a report to the Magistrate, under section 173, in the manner indicated therein, containing the various details. The question as to whether the Magistrate has got power to direct the police to file a charge sheet, on receipt of a report under section 173 really depends upon the nature of the jurisdiction exercised by a Magistrate, on receiving a report. In this connection, we may refer to certain observations, made by the Judicial Committee in King Emperor vs Khwaja Nazir Ahmed(1) and by this Court, in H. N. Rishbud and Inder Singh vs The State of Delhi(2). In Nazir Ahmed 's Case(1), Lord Porter observes, at 212, as follows "Just as it is essential that every one accused of a crime should have free access to a court of justice so that he may be duly acquitted if found not guilty of the offence with which he is charged, so it is, of the utmost importance that the judiciary should not interfere with the police in matters which are within their province and into which the law imposes on them the duty of inquiry. In India, as has been shown, there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities, and it would, as their Lordships think, be an unfortunate result if it should be held possible to interfere with those statutory rights by an exercise of the inherent jurisdiction of the court. The functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, of course, subject to the right of the court to intervene in an appropriate case when moved under section 491 of the Criminal Procedure Code to give directions in the nature of habeas corpus. In such a case as the present, however, the court 's functions begin when a charge is preferred before it, and not until then. " These observations have been quoted, with approval, by this Court, in State of West Bengal vs section N. Basak(3). This Court in Rishbud and Inder Singh 's Case(1), observes, at p. 1156, as follows : "Investigation usually starts on information relating to the commission of an offence given to an officer incharge of a police station and recorded under sec (1) L. R. 71 1. A. 203. (2) (3) A. 1. R. 675 tion 154 of the Code. If from information so received or otherwise, the officer in charge of the police station has reason to suspect the commission of an offence, he or some other subordinate officer deputed by him, has to proceed to the spot to investigate the facts and circumstances of the case and if necessary to take measures for the discovery and arrest of the offender. Thus investigation primarily consists in the ascertainment or the facts and circumstances of the case. By definition, it includes 'all the proceedings under the Code for the collection of evidence conducted by a police officer '. " Again after a reference to some of the provisions in Chapter XIV of the Code, it is observed at p. 1157 "Thus, under the Code investigation consists generally of the following steps : (1) Proceeding to the spot, (2) Ascertainment of the facts and circumstances of the case, (3) Discovery and arrest of the suspected offender, (4) Collection of evidence relating to the commission of the offence which may consist of (a) the examination of various persons (including the accused) and the reduction of their statements into writing, if ' the officer thinks fit, (b) the search of places of seizure of things considered necessary for the investigation and to be produced at the trial, and (5) Formation of the opinion as to whether on the material collected there is a case to place the accused before a Magistrate for trial and if so taking the necessary steps for the same by filing of a charge sheet under section 1 7 3. . It is also clear that the final step in the investigation viz., the formation of the opinion as to whether or no ' there is a case to place the accused on trial is to be that of the officer in charge of the police station. " We are referring to these observations for the purpose of emphasizing that the scheme of Chapter XIV, clearly shows that the formation of an opinion as to whether or not there is a case to place the accused on trial, has been left to the officer incharge of a police station. Bearing in mind these principles referred to above, we have to consider the question that arises for consideration, in this case. The High Courts which have held that the Magistrate has no jurisdiction to call upon the police to file a charge sheet, under such circumstances, have Tested their decision on two principles viz., (a) that there is no express provision in the Code empowering a Magistrate to pass such an order; and (b) such a power, in view of the scheme of L7SUPCI/67 14 676 Chapter XIV, cannot be inferred vide Venkata Subha v Anjanayulu(1); Abdul Rahim vs Abdul Muktadin(2); Aman Premanand vs State(3); the majority view in A. K. Roy vs State of W. B.(1); and Stale of Gujarat vs Shah Lakhamshi(5). Or the other hand, the High Courts which have recognised such a power, rest their decision again on two grounds viz., (a) where a report is submitted by the police, after investigation, the Magistrate has to deal with it judicially, which will mean that where the report is not accepted, the Magistrate can give suitable directions to the police , and (b) the Magistrate is given supervision over the conduct of investigation by the police, and there ore, such a power can be recognised in the Magistrate vide State vs Murlidhar Goverdhan(6); and Ram Nandan vs State(7). Though it may be that a report submitted by the police may have to be dealt with, judicially, by a Magistrate, and although the Magistrate may have certain supervisory powers, nevertheless, we are not inclined to agree with the further view that from these considerations alone it can be said that when the police submit a report that no case has been made out for sending up an accused for trial, it is open to the Magistrate to direct the police to file a charge sheet. But, we may make it clear, that this is not to say that the Magistrate is absolutely powerless, because, as will be indicated later, it is open to him lo take cognizance of an offence and proceed, according to law. We do not also find any such power, under section 173(3), as is sought to be inferred, in some of the decisions cited above. As we have indicated broadly the, approach made by the various High Courts in coming to different conclusions, we do not think it necessary to refer to those decisions in detail. It will be seen that the Code, as such, does not use the ex pression 'charge sheet ' or 'final report '. But it is understood, in the Police Manual containing Rules and Regulations, that a report by the Police, filed under section 170 of the Code, is referred to as a 'charge sheet '. But in respect of the reports sent under section 169, i.e., when there is no sufficient evidence to justify the forwarding of the accused to a Magistrate, it is termed variously, in different States, as either 'referred charge ', 'final report ', or 'Summary '. In these two appeals, which are from the State of Bihar, the reports, under section 169, are referred to as 'final report '. Now, the question as to what exactly is to be done by a Magistrate, on receiving a report. under section 173, will have to be considered. That report may be inrespect of a case, coming under section 170, (1) A.I.R. 1932 Mad. 673. (2) A.I.R. 1953 Assam 112. (3) A.I.R. 1960 M P. 12. (4) A.I.R. 1962 Cal. (5) A.I.R. 1966 Guj. (6) A.I.R. 1960 Born. (7) A.I.R. 1966 Pat. 677 or one coming under section 169. We have already referred to section 190, which is the first section in the group of sections headed 'Conditions requisite for Initiation of Proceedings. ' Sub section (1), of this section, will cover a report sent, under section 173. The use of the words 'may take cognizance of any offence ', in sub section (1) of section 190 in our opinion imports the exercise of a 'judicial discretion ', and the Magistrate, who receives the report, under section 173, will have to consider the said report and judicially take a decision, whether or not to take cognizance of the offence. From this it follows that it is not as if that the Magistrate is bound to accept ,,the opinion of the police that there is a case for placing the accused, on trial. It is open to the Magistrate to take the view that the facts disclosed in the report do not make out an offence for taking cognizance or he may take the view that there is no sufficient evidence to justify an accused being put on trial. On either of these grounds, the Magistrate will be perfectly justified in declining to take cognizance of an offence, irrespective of the opinion of the police. On the other hand, if the Magistrate agrees with the report, which is a charge sheet submitted by the police, no difficulty whatsoever is caused, because he will have full jurisdiction to take cognizance of the offence, under section 190(1)(b) of the Code. This will be the position, when the report under section 173, is a charge sheet. Then the question is, what is the position, when the Magis trate is dealing with a report submitted by the police, under section 173, that no case is made out for sending up an accused for trial, which report, as we have already indicated, is called, in the area in question, as a 'final report '? Even in those cases, if the Magistrate agrees with the said report, he may accept the final report and close the proceedings. But there may be instances when the Magistrate may take the view, on a consideration of the final report, that the opinion formed by the police is not based on a full and complete investigation, in which case in our opinion the Magistrate will have ample jurisdiction to give directions to the police, under section 1 5 6 ( 3 ), to make a further investigation. That is, if the Magistrate feels, after considering the final report, that the investigation is unsatisfactory, or incomplete, or that there is scope for further investigation, it will be open to the Magistrate to decline to accept the final report and direct the police to make further investigation, under section 156(3). The police, after such further investigation, may submit a charge sheet, or,, again submit a final report, depending upon the further investigation made by them. If, ultimately, the Magistrate forms the opinion that the facts, set out in the final report, constitute an offence, he, can take cognizance of the offence under section 190(1) (c), notwithstanding the contrary opinion of the police, expressed in the final report. 678 In this connection, the provisions of section 169 of the Code, are relevant. They specifically provide that even though, on investigation, a police officer, or other investigating officer, is of the opinion that there is no case for proceeding against the accused, he is bound, While releasing the accused,, to take a bond from him to appear, 'If and. when required, before a Magistrate. This provision is obviously to meet a contingency of the Magistrate, when he considers the report of the investigating officer, and judicially takes a view different from the police. We have to approach the, question, arising for consideration in this case, in the light of the circumstances pointed out above. We have, already referred to the scheme of Chapter XXIV, as well as the observations of this Court in Rishbud and Inder Singh 's Case(1) that the formation of the opinion as to whether or not there is a case to place the accused on trial before a Magistrate, is 'left to the officer in charge of the police station. There is no express power, so far as we can see, which gives jurisdiction to pass an order of the nature under attack; nor can any such powers be implied. There is certainly no obligation, on the Magistrate, to accept the report, if he does not agree with the opinion formed by the police. Under those circumstances, if he still suspects that an offence has been committed, he is entitled, notwithstanding the opinion of tile police, to take cognizance, under section 190(1)(c) of the Code. That provision, in our opinion, is obviously intended to secure that offences may not go unpunished and justice may be in voked even where persons individually aggrieved are unwilling or unable to prosecute. or the police, either wantonly or through bona fide error, fail to submit a report, setting out the facts constituting the offence. Therefore, a very wide power is conferred on the Magistrate to take cognizance of an offence. not only when he receives information about the commission of an offence from a third person, but also where he has knowledge or even suspicion that the offence has been committed. It is open to the Magistrate to take cognizance of the offence, under section 190(1) (c), on the ground that, after having due regard to the final report and the police records placed before him, be has reason to suspect that an offence has been committed. Therefore, these circumstances will also clearly negative the power of a Magistrate to call for a charge sheet from the police, when they have submitted a final report. The entire scheme of Chapter XIV clearly indicates that the formation of the opinion, as to whether or not there is a case to, place the accused for trial, is that of the officer in charge of the police station and that opinion determines whether the report is to be under section 170, being a 'charge sheet ', or under section 169, 'a final report '. It is no (1) [1955]1 S.C.R. 1150. 67 9 doubt open to the Magistrate, as we have already pointed out, to accept or disagree with the opinion of the police and, if he disagrees, he is entitled to adopt any one of the courses indicated by us. But he cannot direct the police to submit a charge sheet, because, the submission of the report depends upon the opinion formed by the police, and not on the opinion of the Magistrate. The Magistrate cannot compel the police to form a particular opinion, on the investigation, and to submit a report, according to such opinion. Thai will be really encroaching on the sphere of the police and compelling the police to form an opinion so as to accord with the decision of the Magistrate and send a report, either under section 169, or under section 170, depending upon the nature of the decision. Such a function has been left to the police, under the Code. We have already pointed out that the investigation, under the Code, takes in several aspects, and stages, ending ultimately with the formation of an opinion by the police as to whether, on the material covered and collected, a case is made out to place the accused before the Magistrate for trial, and the submission of either a charge sheet, or a final report is dependent on the nature of the opinion, so formed. The formation of ,the said opinion, by the police, as pointed out earlier, is the final step in the investigation, and that final step is to be taken only by the police and by no other authority. The question can also be consider from another point of view. Supposing the police send a report, viz., a charge sheet, under section 170 of the Code. As we have already pointed out, the Magistrate is not bound to accept that report, when he considers the matter judicially. But, can he differ from the police. and call upon them to submit a final report, under s.169 ? In our opinion, the Magistrate has no such power. If he has no such power, in law, it also follows that the Magistrate has no power to direct the police to submit a charge sheet when the police have submitted a final report that no case is made out for sending the accused for trial. The functions of the Magistracy and the police, are entirely different, and though, in the circumstances mentioned earlier the Magistrate may or may not accept the report, and take suitable action, according to law, he cannot certainly infringe upon the jurisdiction of the police, by compelling them to change their opinion, so as to accord with his view. Therefore, to conclude, there is no power, expressly or im pliedly conferred, under the Code, on a Magistrate to call upon the police to submit a charge sheet, when they have sent a report under section 169 of the Code, that there is no case made out for sending tip an accused for trial. L7 Sup. CI/67 15 680 In these two appeals, one other fact will have to be taken note of. It is not very clear as to whether the Magistrate, in each of these cases, has chosen to treat the protest petitions, filed by the respective respondents, as complaints, because, we do not find that the Magistrate has adopted the suitable procedure indicated in the Code, when he takes cognizance of an offence, on a complaint made to him. Therefore, while holding that the orders of the Magistrate, in each of these cases, directing the police to file charge sheets, is Without jurisdiction, we make it clear that it is open to the Magistrate to treat the respective protest petitions, as complaints, and take further proceedings, according to law, and in the light of the views expressed by us, in this judgment. Mr. Nuruddin Ahmed, learned counsel for the appellants in Criminal Appeal No. 238 of 1966, particularly urged that it is unnecessary to direct further proceedings to be continued, so far as his clients are concerned. Learned counsel pointed out that the police report before the Magistrate clearly shows that the girl, in question, who is stated to be above 19 years of age, has herself stated that she bad eloped, of her own accord and that if that is so, further proceedings against his clients, are absolutely unnecessary, to be continued. We are not inclined to accept these contentions of the learned counsel. As to whether an offence is made out or whether any of the appellants or both of them are guilty of the offences with which they may be charged, are all matters which do not require to be considered, by this Court, at this stage. In the result, subject to the directions contained above, the orders of the Magistrate, directing the police to file a charge, will be set aside, and the appeals allowed, to that extent. V.P.S. Appeals allowed. [/INST]The respondent joined Class III service of the Mysore Government in 1958 as a local candidate. According to the Mysore Civil Service Rules, 1958 a local candidate meant a temporary Government servant not appointed regularly in accordance with the rules of recruitment to that service. On September 22, 1961 the Mysore Government passed art order whereby under sub cl. (i) of cl. 2 local candidates appointed before Dec. 31, 1959, were entitled to have their appointments regularised subject to certain conditions. According to sub cl. (ii) of cl. 2 of the Order the services of local candidates were to be regularised with effect from the date of their appointment ', from which their service was continuous provided they were in service on 1st January 1960 and continued to be in service at the time their services were regularised. Sub clause (iii) said that local service would count for purposes of leave, pension and increments but not for purposes of seniority, and that only the service from the date of regularisation of the appointment in the particular department would count for seniority. Sub clause (iv) laid down that breaks in service would not be condoned even if such breaks were only for short periods. There was a break of one day in the respondent 's service on March 1, 1961. The Mysore Government terminated his service on July 4, 1963. The respondent filed a writ petition before the High Court claiming that he was entitled to have his appointment regularised under the aforesaid Government Order. The High Court held that the requirements of the Order were that a local candidate was entitled to its benefit if he joined service before Dec. 31, 1959, and was in service on two dates, namely 1st January 1960 and 22nd September 1961. On this view the High Court allowed the respondent 's petition whereupon the State appealed to this Court. HELD : The High Court was wrong in its construction of sub cl. (ii) of cl. 2 of the Order. On a harmonious construction of sub cl. (ii) with the other subclauses of cl. 2 its proper interpretation would be that in order that the regularisation order may apply to a particular case the local candidate must be initially appointed prior to December 31, 1959, he must be in service on January 1, 1960 and continue to be in service without any break till the date of the order. Since the service of the respondent was not continuous during this period he was not entitled to regularisation of his appointment under the Order. (133 G] </s>
<s>[INST] Summarize the judgement.A. Nos. 4,5,6 and 7 in Civil Appeal Nos. 1401 & 1402 of 1990. From the Judgment and Order dated 22.5.1987 of the Delhi High Court in C.W.P No. 2687 of 1986. Kapil Sibal, V.B. Saharya and R.K. Khanna for the Appellant. Rajiv Sawhney, Sanjay Anand, Deepak Kumar Thakur, Mrs. Ameeta Rathore, Kapil Chandra for J.B. Dadachanji & Co. and R.K. Maheshwari for the Respondents. The following Order of the Court was delivered: PUNCHHI, J. These are applications for directions in Civil Appeal Nos. 1401 and 1402 of 1990 decided by us on March 13, 1990. For facility of fact situation resort be had to our judgment dated March 13, 1990. Direction given by to the D.D.A was meaningful and clear that it shall grant to the Delhi Cloth Mills conditional approval subject to the removal of the objections enumerated and extracted in the judgment, as raised, or such of them as were valid and tenable in law, after the Delhi Cloth Mills is heard by the Municipal Corporation of Delhi, the author of the objections, and which the D.D.A. had adopted, and the matter to be formalised forthwith by the D.D.A. and the authorities connected therewith within a time frame. This has reportedly met with hurdles necessitating these applications. The objections may broadly be divided in three parts: (i) objections which are within the exclusive domain of the Municipal Corporation of Delhi 593 (ii) objections which are exclusively within the domain of the D.D.A.; and (iii) objections which are lendingly common to both, the D.D.A. and the Municipal Corporation of Delhi overseeing and safeguarding the interests of each other. And these objections can also be divided as surmountable and insurmountable. The objections, to begin with, as raised by the Municipal Corporation of Delhi and later adopted by the D.D.A., presently requiring smoothening before us relate to those which are within the exclusive domain of the D.D.A. for it is asserted by the applicant Delhi Cloth Mills that the objections relating to the Municipal Corporation of Delhi are not insurmountable and those can for the present, be left alone to be tackled by the applicant without the intervention of the Court. For this reason neither any direction is asked at this stage nor is one necessary to the Municipal Corporation of Delhi. The D.D.A. has broadly three objections: (i) To further the resolution of the D.D.A., dated February 1, 1983, the Delhi Cloth Mills should file an amended or modified plan so as to conform to the Master Plan of the year 2001; (ii) Since the matter before the Delhi High Court, as also in this Court, had proceeded on the assumption that the entire 63 acres of land involved in the re development for flatted factories and residential complex was owned by the Delhi Cloth Mills, which assumption was wrong, the Delhi Cloth Mills should confine its plan to about 52 acres of land as owned by it as the balance about 11 acres of land is owned by the D.D.A. which is either on varied termed leases or in trespass with the Delhi Cloth Mills. The plan would require rectification accordingly; and (iii) The fact of grant of permission vide resolution of 1 2 1983 did not ipso facto mean that the D.D.A. had given up its rights on lease hold lands in accordance with the terms thereof or the tittle to it or to regularize possession of the trespassed upon land with the Delhi Cloth Mills. 594 On that basis it is required of the Delhi Cloth Mills to confine its plans within those 52 acres as owned by it and by a process of reasoning it is hinted that after providing for recreational and other necessary facilities, as required by law, there hardly would remain any land to further the project. It has been maintained on behalf of the Delhi Cloth Mills that the posture of the D.D.A. is obstructive in nature and a step to flout or undermine the orders of this Court. It has on the other hand been maintained on behalf of the retrenched workers that since the settlement arrived at by them with the Delhi Cloth Mills was beneficial to them in nature, as a price for closure of the Mill, the posture of the D.D.A. was indirectly against their interests. They have prayed for suitable directions so that the benefits accruing to them by lapse of time may not go dry. At the outset, we put it beyond any doubt and re affirm that the D.D.A. stands directed by this Court to grant to the D.C.M. approval, even though conditional, and the D.C.M. stands impliedly directed and is duty bound to remove the objections as were valid and tenable in law as raised by the D.D.A. within its domain. Having gone thus far there is no retreat of it contemplated. It is further to be understood that this Court had endorsed by means of this directive the already known views of the Delhi High Court towards restoring resolution of the D.D.A. dated February 1, 1983, whereby the scheme as given by the Delhi Cloth Mills was approved in terms thereof. And obviously the approval came from the D.D.A. at a time when the Master Plan of the year 1962 was operative and the one of the year 2001 was not existant, and if at all existant in an embryonic stage. The law governing the object and the rules and regulations then in vogue and applicable were deemingly kept in view and applied by the D.D.A. in the approval of the scheme. To whittle down the effect of that resolution on the emergence of the new Master Plan of the year 2001, made applicable after the orders of this Court would, at the present stage, if insisted upon be spelled out as a step to undermine the orders of this Court. Such an objection by the D.D.A. when raised before March 13, 1990, the day when we passed judgment, was untenable in law and the D.D.A. should have known it before putting such an objection to use. For this reason, we repel the first objection of the D.D.A. and require of it to stick to the position as per Master Plan as existing on February 1, 1983. This objection is thus surmounted. The second objection of the D.D.A. with regard to the wrong 595 impression of the ownership of the land appears to us to be valid substantially. It is the admitted case of the parties that the scheme pertains to 63 acres of land which the Delhi Cloth Mills while applying for sanction claimed to own and one of the considerations in passing the resolution dated February 1, 1983 ex facie was the D.D.A. being impressed by a private entrepreneur coming forward with a scheme with such a large chunk of land. It is significant that nowhere at that stage, even remotely, or at any stage during the litigation before the Delhi High Court or this Court, was the Delhi Cloth Mill 's claim of owning 63 acres of land been given a serious thought or refuted or put to proof or testing. One way of looking at it now can be that the Delhi Cloth Mills misled the D.D.A. in that regard and had the D.D.A. known that the Delhi Cloth Mills owned only about 52 acres of land the D.D.A. might have resolved differently. The other view as suggested by the Delhi Cloth Mills is that the D.D.A. of its own should have counter checked the extent of the ownership of the land of the Delhi Cloth Mills at the time of granting sanction. Learned counsel on both sides have dwelt upon this matter a great deal. We cannot assume that by upholding resolution dated February 1,1983, the Delhi High Court, or for that matter this Court, had made or acknowledged Delhi Cloth Mills as the owner of 63 acres of land involved in the scheme or that the right of ownership of the D.D.A. over about 11 acres of land stood extinguished by such exercise. The D.D.A. when engaged in examining and sanctioning the proposal was justified on proceedings on the supposition of facts given by the Delhi Cloth Mills as true, and in processing the same cannot be said to have surrendered its ownership rights qua land measuring 11 acres. Thus we are clear in arriving at the view that the said resolution cannot trample the right of D.D.A. as owner over about 11 acres of land when the respective leases reserve to the D.D.A. the right of resumption, and in leases expiring by efflux of time the option not to renew. The scheme approved must thus of necessity be dented to that effect as the objection of the D.D.A. in that regard and to that extent is valid and tenable. Reservation in that regard appears also to have been made by the Delhi High Court in its judgment in C.W.P. No. 1281 of 1985 decided on July 22,1988. While dealing with possibility of a law and order problem, the court relied on the Delhi Cloth Mill 's management 's affidavit towards granting statutory compensation to the workers as well as its undertaking to pay, in some event, additional compensation. The Delhi Cloth Mills had in the affidavit stated that the additional compensation shall be payable on expiry of two years from the date the Delhi Cloth Mills is allowed by all the concerned authorities 596 including the D.D.A. and Municipal Corporation of Delhi to redevelop its entire 63 acres of land at Bara Hindu Rao and Krishan Ganj, in accordance with the user stipulated therefore under the Master Plan for Delhi dated September 1962. The High Court in judging the stand taken by the delhi Cloth Mills made the following significant observations: "No assurance is extended by any competent authority to the workmen that the authorities shall not enforce the Master Plan or shall not insist for due compliance of the provisions of the Act and the regulations in the matter of the Mill. It is also doubtful if any one could opt out of the statutory provisions. " These observations make it clear that the D.D.A. cannot be said to have abandoned its right either as a statutory body or that of the lessor of land on leases held by the Delhi Cloth Mills by mere passing of the resolution afore mentioned, or correspondingly to have given any right to the workers. We have been given the break up of those leases numbering 10. One of them pertains to 36425 sq. yards(about 7 acres) which is perpetual in nature and is not required to be renewed except that the rent is revisable after every 25 years. The remaining leases are in comparison short durated, some of which have expired and others are expiring in the year 2001. The unexpired period of leases is not long enough in the context of the project. besides there is an area which is said to be trespassed upon by the Delhi Cloth Mills. this area under durated leases and trespass totals about 4 acres. the Delhi Cloth Mills cannot be permitted to lay hands on this area as of right to further the scheme. there a common term in each respective lease reserving right to the lessor to determine the lease at any time if the land is required for public purpose in consideration of the land having been demised free of any premium. To involve this four acres of land in the scheme the D.C.M may have to work it out under a different shade and premise and not from this Court. The objection is thus insurmountable on this plain. So far as the perpetual lease is concerned, its purpose covenants for residential, cultural and recreational purposes of staff and workers of the lessee and purposes ancillary thereto, in accordance with the rules and regulations in force in Delhi under the Municipality Act or any bye laws framed by the lessor. It is further covenanted that for 597 purposes of construction of building the approval of the lessor in writing is a pre condition before the start of the construction, and further no alteration or addition in the building as approved by the lessor either externally or internally can be made without first obtaining the permission of the lessor in writing. Besides that if during the period of lease, it is certified by the Central Government that the premises are required for the purposes of the Central Government or any other public purpose, the lessor shall be entitled to take possession of the land together with all building structures etc. with certain consequences. It is thus plain and evident that even in the case of perpetual lease enormous residual control is left with the lessor who alone can accord permission to construct building for the specified purpose for residential, cultural and recreational purpose of the staff and workers of the Mill and purposes ancillary thereto, and on frustration of such purpose has the further right to treat the lease to have become void if the land is used for any purpose other than for which the lease was granted, not being the purpose subsequently approved by the lessor. Thus unless the D.D.A. grants approval to the change of user as asked and reconstruction, the Delhi Cloth Mills has no such deemed right or privilege ignoring the covenants and the terms of the lease. Thus it cannot be suggested that the resolution afore mentioned has the automatic effect of the D.D.A. having granted change of user, consciously or impliedly, or vesting any right in that regard to the Delhi Cloth Mills. Here as well the D.C.M. would have to work out its plans with the D.D.A. under the terms of the lease without any further mandate from this Court in this regard. This objection also is insurmountable in the presence of the void clause. Yet all is not lost for the Delhi Cloth Mills. It can still steer through its project in its owned 52 acres, even though in a truncated from and submit an amended plan. On the other hand its relationship with the D.D.A. being that of a lessee and lessor permits a meaningful dialogue seeking extensions of lease periods, and change of permissive user in respect of 11 acres of land. It can make attractive suggestions to the D.D.A. for setting up cultural, educational, recreational and other facilities etc. at the expense of the Delhi Cloth Mills, if the project is to remain of the 63 acre size. It is the case of Delhi Cloth Mills that if it is allowed to involve the said 11 acres of land, the project would be better and it is prepared to pay any charges as are known to law to keep it as part of the project of the original size. Be that as it may we are no experts to opine whether a 52 acre project would be more viable or better or a 63 acre one. But since the project has in terms of our order dated March 13, 1990 to go on, the D.D.A. 598 may if asked examine the suggestions. That is their field and not ours to decide. Before concluding this Order, we cannot help remarking that both parties, i.e., the D.C.M. and the D.D.A. have to share mutually the blame for the present situation. The D.C.M. for its cavalier away in having asserted to own 63 acres of land and the D.D.A. in casually, without consulting its records, passing its Resolution No. 26 dated February 1, 1983 and communicating the same to the D.C.M. on 31 3 1983. Should the D.C.M. now confine its scheme and project to its owned 52 acres of land, abandoning any effort to have included the remaining D.D.A. owned 11 acres of land by negotiations, and the D.D.A. in not offering on its own, or otherwise, the said land to the D.C.M., the project as originally conceived would have to be spruced. It is evident from the proceedings of the Resolution that as per Master Plan, 23.14 acres have been earmarked for flatted factories and 43.39 acres as residential, though the sum total goes to more than 63 acres. Both these areas include areas set apart for facilities and amenities enumerated therein. The respective areas in that event would have to be reduced keeping in view the ground realities of ownership and the earmarking in the Master plan. Cuts inevitably may have to be employed in either area or both. Be that as it may, the scheme in the modified from would have to be brought in, not a new but as a substitute for the original scheme and that scheme would register its birth, legitimacy and binding force as of the original scheme. The mandate in this regard should be clearly understood by the parties concerned for they are under obligation to responsibly carry out the directions of this Court dated March 13, 1990, in all events, and share the burden of it, indeed as doing the blame. With these observations, these applications are disposed of. No Costs. T.N.A. Applications disposed of. [/INST]By an order dated 13.3.1990 the Supreme Court directed the Delhi Development Authority (D.D.A.) to grant conditional approval to the respondent Company 's (D.C.M.) scheme pertaining to the development of mills land measuring 63 acres for construction of flatted factories and residential complex subject to removal of objections raised by Municipal Corporation of Delhi and Delhi Development Authority. The matter could not be finalised by the parties since the DDA took certain objections to the scheme:(a) that the Delhi Cloth Mills should file a modified plan so as to conform to the Master Plan of the year 2001; (b) the legal proceedings before the High Court and the Supreme Court proceeded on the wrong assumption that the entire 63 acres of land was owned by the Delhi Cloth Mills whereas the DCM owns only 52 acres of land while the balance 11 acres was owned by the DDA which is partly on lease and partly in trespass with the Delhi Cloth Mills; and (c) the grant of permission by the DDA vide its resolution No. 26 dated 1.2.83 does not ipso facto mean that it had given up its rights or title to the lease hold lands or that it had regularised the possession of the trespassed upon land with the Delhi Cloth Mills. The respondent Company filed applications for direction in this Court. Disposing the applications, this Court, HELD: 1. The D.D.A. stands directed by this Court to grant to the D.C.M. approval, even though conditional, and the D.C.M. stands impliedly directed and is duty bound to remove the objections raised by the D.D.A. This Court had endorsed by means of this directive the already known views of the Delhi High Court towards restoring resolu 591 tion of the D.D.A. dated February 1, 1983, whereby the scheme as given by the Delhi Cloth Mills was approved in terms thereof. The approval came from the D.D.A. at a time when the Master Plan of the year 1962 was operative and the one of the year 2001 was not existent, and if at all existent in an embryonic stage. The law governing the subject and the rules and regulations then in vogue and applicable were deemingly kept in view and applied by the D.D.A. in the approval of the scheme. To whittle down the effect of that resolution on the emergence of the new Master Plan of the year 2001, made applicable after the orders of this Court would, at the present stage, if insisted upon be spelled out as a step to undermine the orders of this Court. Such an objection by the D.D.A. when raised before March 13, 1990, the day when the Supreme Court passed its judgment, was untenable in law and the D.D.A. should have known it before putting such on objection to use. Therefore, the first objection of the D.D.A. is repelled and it is directed to stick to the position as per Master Plan as existing on February 1. 1983. [594 D G] 2. The objection of the D.D.A. with regard to the wrong impression of the ownership of the land is valid substantially. It is the admitted case of the parties that the scheme pertains to 63 acres of land which the Delhi Cloth Mills while applying for sanction claimed to own and one of the considerations in passing the resolution dated February 1,1983 ex facie was the D.D.A. being impressed by a private entrepreneur coming forward with a scheme with such a large chunk of land. The D.D.A. when engaged in examining and sanctioning the proposal was justified on proceeding on the supposition of facts given by the Delhi Cloth Mills as true, and in processing the same cannot be said to have surrendered its ownership rights qua land measuring 11 acres. It cannot be assumed that by upholding the resolution dated February 1, 1983, the Delhi High Court, or Supreme Court, had acknowledged Delhi Cloth Mills as the owner of 63 acress of land involved in the scheme or that the right of ownership of the D.D.A. over about 11 acres of land stood extinguished by such exercise. Therefore, the said resolution cannot trample the rights of D.D.A. as owner over 11 acres of land when the respective leases reserve to the D.D.A. the right of resumption, and in lease expiring by efflux of time the option not to renew. The scheme approved must thus of necessity be denoted to that effect as the objection of the D.D.A. in that regard and to that extent is valid and tenable. But the Delhi Cloth Mills can still steer through its project in its owned 52 acres, even though in a truncated form and submit an amended plan. The scheme in the modified form would have to be brought in, not a new but as a substitute for the original scheme and that scheme would register its birth, legitimacy and binding force as of the original 592 scheme.[594H, 595 A D, E F, D] 3. Respondent Company 's relationship with the D.D.A. is that of a lessee and lessor. Out of 10 leases one is perpetual in nature and the remaining leases are short durated. Under the terms of the perpetual lease unless the D.D.A. grants approval to the change of user as asked and reconstruction, the Delhi Cloth Mills has no such deemed right or privilege ignoring the covenants and the terms of the lease. Therefore, it cannot be said that the resolution has the automatic effect of the D.D.A. having granted change of user, consciously or impliedly, or vesting any right in that regard to the Delhi Cloth Mills. [597 D F, 596 E] </s>
<s>[INST] Summarize the judgementivil Appeal No. 2581 of 1986. Appeal by Certificate from the Judgment and Order dated 15.10.1985 of the Bombay High Court in Appeal No. 547 of 1984. WITH Civil Appeal No. 855 of 1987. 220 From the Judgment and Order dated 8.12.1986 of the Industrial Court, Maharashtra, Bombay in Complaint (ULP) No. 1202 of 1984. Ashok Desai, Attorney General, G.B. Pai, J. Ramamurthy, Jitendra Sharma, B.N. Dutt, H.S. Parihar, Vipin Chandra, R.F. Nariman, P.H. Parekh, N.K. Sahu, Mrs. Urmila Sirur and Raj Birbal for the appearing parties. The Judgment of the Court was delivered by SAWANT, J. These are two appeals involving a common question of law, viz., whether an employer has a right to deduct wages unilaterally and without holding an enquiry for the period the employees go on strike or resort to go slow. In CA No. 2581 of 1986 we are concerned with the case of a strike while in the other appeal, it is a,case of a go slow. By their very nature, the facts in the two appeals differ, though the principles of law involved and many of the au thorities to be considered in both cases may be the same. For the sake of convenience, however, we propose to deal with each case separately to the extent of the distinction. Civil Appeal No. 2581 of 1986 2. The appellant in this case is a nationalised bank, and respondents 1 and 2 are its employees whereas respond ents 3 and 4 are the Unions representing the employees of the Bank. It appears that some demands for wage revision made by the employees of all the banks were pending at the relevant time, and in support of the said demands the All India Bank Employees ' Association had given a call for a countrywide strike. The appellant Bank issued a circular on September 23, 1977 to all its managers and agents to deduct wages of the employees who would participate in the strike for the days they go on strike. Respondents 3 and 4, i.e., the employees ' Unions gave a call for a four hours strike on December 29, 1977. Hence, the Bank on December 27, 1977 issued an Administrative Circular warning the employees that they would be committing a breach of their contract of service if they participated in the strike and that they would not be entitled to draw the salary for the full day if they did so, and consequently, they need not report for work for the rest of the working hours on that day. Notwithstand ing it, the employees went on a four hours strike from the beginning of the working hours on 29th December 1977. There is no dispute that the banking hours for the public covered the said four hours. The employees, however, resumed 221 work on that day after the strike hours, and the Bank did not prevent them from doing so. On January 16, 1978, the Bank issued a Circular directing its managers and agents to deduct the full day 's salary of those of the employees who had participated in the strike. The respondents filed a writ petition in the High Court for quashing the circular. The petition was allowed. The Bank preferred a Letters Patent Appeal in the High Court which also came to be dismissed. Hence, the present appeal. The High Court has taken the view, firstly, that neither regulations nor awards nor settlements empowered the Bank to make the deductions, and secondly, in justice, equity and good conscience the Bank could not by the dictate of the impugned circular attempt to stifle the legitimate weapon given by the law to the workers to ventilate their griev ances by resorting to strike. The High Court further took the view that since strikes and demonstrations were not banned in the country and despite the inconvenience that they may cause, they were recognised as a legitimate form of protest for the workers, the circular acted as a deterrent to the employees from resorting to a legally recognised mode of protest. According to the High Court, the circular even acted as an expedient to stifle the legitimate mode of protest allowed and recognised by law. The deduction of the wages for the day according to the Court amounted to unilat erally changing the service conditions depriving the workers of their fixed monthly wages under the contract of service. The Court also reasoned that under the conditions of serv ice, wages were paid not from day to day or hour to hour but as a fixed sum on a monthly basis. The contract between the Bank and the workers being not a divisible one, in the absence of a specific term in the regulations, awards and settlements, the Bank could not unilaterally reduce the monthly wage and thus give the employees lesser monthly wages than the one contracted. The non observance by the employees of the terms of the contract may give the employer a cause of action and a right to take appropriate remedy for the breach, but the employer was not entitled to deduct any part of the wages either on a pro rata basis or otherwise. The High Court further opined that the Bank was not without a remedy and the employees cannot hold the bank to ransom. The Bank could get the four hours strike declared illegal by recourse to the machinery provided by law or put the erring workers under suspension for minor misconduct under Regula tion 19.7, hold an enquiry and if found guilty, impose punishment of warning, censure, adverse remarks or stoppage of increment for not more than six months as prescribed by Regulation 19.8. The High Court also rejected the contention of the Bank that the Bank was entitled to make 222 deductions under Section 7(2) of the by holding that the provision enabled the employer to deduct wages only if the Bank had power under the contract of employment. The principal question involved in the case, accord ing to us, is, notwithstanding the absence of a term in the contract of employment or of a provision in the service rules or regulations, whether an employer is entitled to deduct wages for the period that the employees refuse to work although the work is offered to them. The deliberate refusal to work may be the result of various actions on their part such as a sit in or stay in strike at the work place or a strike whether legal or illegal, or a go slow tactics. The deliberate refusal to work further may be legal or illegal as when the employees go on a legal or illegal strike. The legality of strike does not always exempt the employees from the deduction of their salaries for the period of strike. It only saves them from a disciplinary action since a legal strike is recognised as a legitimate weapon in the hands of the workers to redress their griev ances. It appears to us that this confusion between the strike as a legitimate weapon in the hands of the workmen and the liability of deduction of wages incurred on account of it, whether the strike is legal or illegal, has been responsible for the approach the High Court has taken in the matter. It is necessary to clear yet another misconception. There is no doubt that whenever a worker indulges in a misconduct such as a deliberate refusal to work, the employ er can take a disciplinary action against him and impose on him the penalty prescribed for it which may include some deduction from his wages. However, when misconduct is not disputed but is, on the other hand, admitted and is resorted to on a mass scale such as when the employees go on strike, legal or illegal, there is no need to hold an inquiry. To insist on an inquiry even in such cases is to pervert the very object of the inquiry. In a mass action such as a strike it is not possible to hold an inquiry against every employee nor is it necessary to do so unless, of course, an employee contends that although he did not want to go on strike and wanted to resume his duty, he was prevented from doing so by the other employees or that the employer did not give him proper assistance to resume his duty though he had asked for it. That was certainly not the situation in the present case in respect of any of the employees and that is not the contention of the employees either. Hence, in cases such as the present one, the only question that has to be considered is whether, when admittedly the employees refuse to work by going on strike, the employer is entitled to deduct wages for the relevant period or not. We 223 thought that the answer to this question was apparent enough and did not require much discussion. However, the question has assumed a different dimension in the present case be cause on the facts, it is contended that although the em ployees went on strike only for four hours and thereafter resumed their duties, the Bank has deducted wages for the whole day. It is contended that in any case this was imper missible and the Bank could at the most deduct only pro rata wages. Normally, this contention on the part of the workers would be valid. But in a case such as the present one, where the employees go on strike during the crucial working hours which generate work for the rest of the day, to accept this argument is in effect to negate the purpose and efficacy of the remedy, and to permit its circumvention effectively. It is true that in the present case when the employees came back to work after their four hours strike, they were not prevented from entering the Bank premises. But admittedly, their attendance after the four hours strike was useless because there was no work to do during the rest of the hours. It is for this reason that the Bank had made it clear, in advance, that if they went on strike for the four hours as threatended, they would not be entitled to the wages for the whole day and hence they need not report for work thereafter. Short of physically preventing the employ ees from resuming the work which it was unnecessary to do, the Bank had done all in its power to warn the employees of the consequences of their action and if the employees, in spite of it, chose to enter the Bank 's premises where they had no work to do, and in fact did not do any, they did so of their own choice and not according to the requirement of the service or at the direction of the Bank. In fact, the direction was to the contrary. Hence, the later resumption of work by the employees was not in fulfilment of the con tract of service or any obligation under it. The Bank was therefore not liable to pay either full day 's salary or even the pro rata salary for the hours of work that the employees remained in the Bank premises without doing any work. It is not a mere presence of the workmen at the place of work but the work that they do according to the terms of the contract which constitutes the fulfilment of the contract of employ ment and for which they are entitled to be paid. It is also necessary to state that though, before the High Court, reliance was placed by the Bank on the provi sions of Section 7(2)(b) read with Section 9 of the for a right to deduct the wages for absence from duty, there is nothing on record to show that the provisions of the said Act have been made applicable to the Bank. However, assuming that Act was applicable to the Bank, we are of the opinion that the relevant discussion of the 224 High Court has missed the contentions urged by the Bank on the basis of the said provisions. What was urged by the Bank was that the said provisions enabled it to deduct wages for absence from duty. Hence, even if the Service rules/regula tions were silent on the point, the Bank could legally deduct the wages under the said provisions. The High Court has reasoned that the power given by the said provisions come into play only when the employer has power to do so, probably meaning thereby, the power under the Service rules/regulations. We are unable to appreciate this reason ing, which to say the least, begs the question. It is, therefore, necessary to point out that if the Act was ap plicable, the Bank would certainly have had the power to deduct the wages under the said provisions in the absence of any service rule regulation to govern the situation. Since the admitted position is that the service rules do not provide for such a situation, the question as stated earlier which requires to be answered in the present case, is whether there exists an implied right in the employer Bank to take action as it has done. There is no dispute that although the service regulations do not provide for a situa tion where employees on a mass scale resort to absence from duty for whole day or a part of the day whether during crucial hours or otherwise, they do provide for treating an absence from duty of an individual employee as a misconduct and for taking appropriate action against him for such absence. Since the High Court has indicated a disciplinary action under the said provision even in the present circum stances, we will also have to deal with that aspect. But before we do so, we may examine the relevant authorities cited at the Bar. 8. In Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham and Carnatic Co. Ltd., ; the facts were that on 1st November, 1948 the night shift operatives of the carding and spinning department of the appellant Mills stopped work, some at 4 p.m., some at 4.30 p.m. and some at 5 p.m. and the stoppage ended at 8 p.m. in both the departments, and at 10 p.m. the strike ended completely. The apparent cause for the strike was that the management of the Mills had expressed its inability to comply with the request of the workers to declare the forenoon of the 1st November, 1948 as a holiday for solar eclipse. On 3rd November, 1948, the management put up a notice that the stoppage of work on the 1st November amounted to an illegal strike and a break in service within the meaning of the Factories Act and that the management had decided that the workers who had partici pated in the said strike would not be entitled to holidays with pay as provided by the Act. The disputes having thus arisen, 225 the State Government referred the matter to Industrial Tribunal. The Tribunal held that the workers had resorted to an illegal strike and upheld the view of the management that the continuity of service of the workers was broken by the interruption caused by the illegal strike and as a result the ' workers were not entitled to annual holidays with pay under Section 49 B(1) of the Factories Act. The Tribunal, however, held that the total deprivation of leave with pay was a severe punishment and reduced the punishment by 50 per cent and held that the workers would be deprived of only half their holidays with pay. In the appeal before the then Labour Appellate Tribunal, the Tribunal held, among other things, that what happened on the night of the 1st November did not amount to a strike and did not cause any interrup tion in the workers ' service. The Tribunal observed that "It would be absurd to hold that non permitted absence from work even for half an hour or less in the course of a working day would be regarded as interruption of service of a workman for the purpose of the said section (i.e., Section 49 B(1) of the Factories Act). We are inclined to hold that the stoppage of work for the period for about 2 to 4 hours in the circumstances of the ease is not to be regarded as a strike so as to amount to a break in the continuity of service of the workman concerned". In the result, the Tribu nal allowed the Union 's appeal and ordered that holidays at full rates as provided for in Section 49 A of the Factories Act will have to be calculated on the footing that there was no break in the continuity of service. This Court set aside the finding of the Appellate Tribunal by holding that it could not be disputed that there was a cessation of work by a body of persons employed in the Mills and that they were acting in combination and their refusal to go back to work was concerted, and the necessary ingredients of the defini tion of "strike" in Section 2 (q) of the Industrial Disputes Act existed and it was not a ease of an individual worker 's failure to turn up for work. Hence, it was an illegal strike because no notice had been given to the management, the Mills being a public utility industry. In Secretary of State for Employment vs Associated Society of Locomotive Engineers and Firemen and Ors. (No. 2), , Lord Denning MR observed: ". It is equally the case when he is employed as one of many 's to work in an undertaking which needs the service of all. If he, with the others, takes steps wilfully to disrupt the undertaking to produce chaos so that it will not run as it should. then each one who is a party to those steps is guilty 226 of a breach of his contract. It is no answer for any one of them to say 'I am only obeying the rule book ', or 'I am not bound to do more than a 40 hour week '. That would be all very well if done in good faith without any wilful disrup tion of services; but what makes it wrong is the object with which it is done. There are many branches of our law when an act which would otherwise be lawful is rendered unlawful by the motive or object with which it is done. So here it is the wilful disruption which is the breach. It means that the work of each man goes for naught. It is made of no effect. I ask: is a man to be entitled to wages for his work when he, with others, is doing his best to make it useless? Surely not. Wages are to be paid for services rendered, not for producing deliberate chaos. The breach goes to the whole of the consideration, as was put by Lord Campbell CJ in Cuckson vs Stones, [1858] 1 E & E 248 at 255, (1983 60) All ER Rep 390 at 392 and with other cases quoted in Smith 's Leading Cases (13th Edn., Vol. 2, p. 48), the notes to Cutter vs Power, [1795] 6 Term Rep 320, (1775 1802)All ER Rep 159)". In Miles vs Wakefield Metropolitan District Council, [ 1989] I LLJ 335 the facts were that the plaintiff, Miles was the Superintendent Registrar in the Wakefield Metropolitan District Council. His duties included performing marriages. As part of trade union action, he declined to perform mar riages on Saturdays which day was very popular with marrying couples. However, on that day he performed his other duties. The Council, not wanting to terminate his services, imposed a cut in his remuneration. He sued the Council for payment but failed. He appealed to the Court of Appeal and was successful. The appellate court held that he was a statutory official and there was no contractual relation and the only action against him was dismissal. Aggrieved by this appel late decision, the Council went before the House of Lords in appeal. The House of Lords held that the salary payable to the plaintiff was not an honorarium for the mere tenure of office but had the character of remuneration for work done. If an employee refused to perform the full duties which could be required of him under his contract of service, the employer is entitled to refuse to accept any partial per formance. In an action by an employee to recover his pay, it must be proved or admitted that the employee worked or was willing to work in accordance with the contract of employ ment or that such service as was given by the employee, if falling short of. his contractual obligations was accepted by the 227 employer as sufficient performance of the contract. In a contract of employment wages and work go together. The employer pays for the work and the worker works for his wages. If the employer declines to pay, the worker need not work. If the worker declines to work, the employer need not pay In an action by a worker to recover his pay, he must allege and prove that he worked or was willing to work. In the instant case, the plaintiff disentitled himself to salary for Saturday morning because he declined to work on Saturday morning in accordance with his duty. Since the employee had offered only partial performance of his con tract, the employer was entitled, without terminating the contract of employment, to decline partial performance, and in that case the employee would not be entitled to sue for his unwanted service. In this connection, Lord Templeman stated as follows: "The consequences of counsel 's submissions demonstrate that his analysis of a contract of employment is deficient. It cannot be right that an employer should be compelled to pay something for nothing whether he dismisses or retains a worker. In a contract of employment wages and work go together. The employer pays for work and the worker works for his wages. If the employer declines to pay, the worker need not work. If the worker declines to work, the employer need not pay. In an action by a worker to recover his pay he must allege and be ready to prove that he worked or was willing to work . . " It may be mentioned here that on the question whether the employee engaged in some kind of industrial action can claim wages on the basis of quantum meruit, only two of the Law Lords expressed themselves in favour, while the other three did not want to express any definite opinion on the question. Among the decisions of the various High Courts relied upon by the parties in support of the respective cass, we find that except for the decision in V. Ganesan vs The State Bank of India & Ors., given by the learned Single Judge of the Madras High Court and the deci sion of the Division Bench of the same Court in that matter and other matters decided together in State Bank of India, Canara Bank, Central Bank etc. & Ors. vs Ganesan, Jambuna than, Venkataraman, B.V. Kamath, V.K. Krishnamurthy, etc. & Ors., , all other decisions, namely, (i) Sukumar Bandyo 228 padhyyay & Ors. vs State of West Bengal & Ors., [1976] IXLIC 1689; (ii) Algemene Bank Nederland, N.V. vs Central Govern ment Labour Court, Calcutta & Ors., [1978] II LLJ, 117; (iii) V. Ramachandran vs Indian Bank, ; (iv) Dharam Singh Rajput & Ors. vs Bank of India, Bombay & Ors., [1979]12 LIC 1079; (v) R. Rajamanickam, for himself and on behalf of other Award Staff vs Indian Bank, [1981] II LLJ 367; (vi) R.N. Shenoy & Anr. etc. vs Central Bank of India & Ors. , [1984] XVII LIC 1493 and (vii) Prakash Chandra Johari vs Indian Overseas Bank & Anr. [1986] II LI J 496, have variously taken the view that it is not only permissi ble for the employer to deduct wages for the hours or the days for which the employees are absent from duty but in cases such as the present, it is permissible to deduct wages for the whole day even if the absence is for a few hours. It is also held that the contract is not indivisible. Some of the decisions have also held that the deduction of wages can also be made under the provisions of the and similar statutes where they are applicable. It is further held that deduction of wages in such cases is not a penalty but is in enforcement of the contract of employment and hence no disciplinary proceedings need precede it. Even in V. Ganesan vs The State Bank of India & Ors., (supra), it was not disputed on behalf of the employees that the employer, namely, the Bank had no fight to deduct pro rata the salary of the officers for the period of absence from duty. What was contended there was that the Bank was not entitled to deduct the salary for the whole three days on which the employees had staged a demonstration for a duration of 30 minutes during working hours on two days and for an hour, on the third day. The learned Judge held that by permitting the employees to perform their work during the rest of the day and by accepting such performance the bank must be deemed to have acquiesced in the breach of contract by the employees. It is on this fact that the learned Judge held that the right to deduct salary (obviously for the whole day) on the principle of "no work no pay" could be exercised only when there was a term in the contract or when there was a statutory provision to that effect. The Division Bench of the said Court in appeal against the said decision and similar other matters (supra) confirmed the reasoning of the learned Judge and held that in the absence of either a term in the contract of service stipulating that if an employee abstains from doing a particular work on a particu lar day, he would not be entitled to emoluments for the whole day or in the absence of a statutory provision laying down such a rule, it was impermissible for the employer to deduct or withhold the emoluments 229 of the employees even for the hours during which they worked. Having accepted the performance of work from the employees for the rest of the day, the Banks are bound to compensate the employees for the work performed by them. In that very case, the Court also held, on the facts arising from the other matters before it, that the refusal to per form the clearing house work can only be the subject matter of a disciplinary action and it cannot straightaway result in the withholding of the wages for the whole day. Non signing of the attendance register and doing work is also work for which the employees should be compensated by pay ment of remuneration. On the specific question whether the management can take action in situations, where either the contract, Stand ing Order or rules and regulations are silent, both parties relied on further authorities. In Workmen of M/s. Firestone Tyre & Rubber Co. of India (P) Limited vs Firestone Tyre & Rubber Co., ; on which reliance was placed on behalf of the workmen it was held that under the general law of master and servant, an employer may discharge an employee either temporarily or permanently but that cannot be without adequate notice. Mere refusal or inability to give employment to the workmen when he reports for duty, on one or more grounds mentioned in clause (kkk) of Section 2 of the Industrial Disputes Act is not a temporary discharge of the workmen. Such a power, therefore, must be found out from the terms of the contract of service or the Standing Orders governing the establish ment Hence, even for lay off of the workmen there must be a power in the management either in the contract of service or the standing orders governing the establishment. Ordinarily, the workmen, therefore, would be entitled to their full wages when the workmen are laid off without there being any such power. There was no common law right to lay off the workmen, and, therefore, no right to deny the workmen their full wages. In Krishnatosh Das Gupta vs Union of India & Ors., , it was a case of the employees of the National Test House, Calcutta who had staged demonstration after signing the attendance register to register their protest against suspension of some of their colleagues. Though the employees signed the attendance register and attended the office, they did no work on the relevant day. As such, a circular was issued by the Joint Director inform ing the employees that they would be considered as "not on duty". By a subsequent circular the same Joint Director notified to all departments concerned the decision of the Cabinet that there shall not be pay for no work. Relying on the said 230 circular the Management of the National Test House effected on a mass scale pay cut from the pay and allowances of the concerned employees. The circular was challenged by the employees by a writ petition before the High Court. The High Court held that in order to deduct any amount from salary, there must be specific rules relating to the contract of service of the person concerned. On behalf of the employers, reliance was placed on a decision of this Court in Sant Ram Sharma vs State of Rajas than & Anr.; , for the proposition laid down there.that in the absence of any statutory rules or a spe cific provision in the rules, the Government can act by administrative instructions. The Court has held there that though it is true that the Government cannot amend or super sede statutory rules by administrative instructions, if the rules are silent on any particular point, Government can fill up the gaps and supplement the rules and issue instruc tions not inconsistent with the rules already framed. In Roshan Lal Tandon vs Union of India, ; , this Court has stated that although the origin of Government service is contractual in the sense that there is an offer and acceptance in every case, once appointed to his post or office, the Government servant acquires a status, and his rights and obligations are no longer determined by consent of both parties but by statute or statutory rules which may be flamed or altered unilaterally by the Govern ment. In other words, the legal position of the Government servant is more of status than of contract. The hallmark of status is the attachment to legal relationship of rights and duties imposed by the public law and not by mere agreement of the parties. The relationship between the Government and the servant is not like an ordinary contract of service between a master and servant. The legal relationship is something entirely different, something in the nature of status. In V.T. Khanzode & Ors. vs Reserve Bank of India & Anr. , ; , this Court has reiterated that so long as Staff Regulations are not flamed, it is open to issue admin istrative circulars regulating the service conditions in the exercise of power conferred by Section 7(2) of the so long as they do not impinge on any regulations made under Section 58 of the Act. The same view with regard to power to issue administra tive instructions when rules are silent on a subject has been reiterated by the Court in Paluru Ramkrishnaiah & Ors. vs Union of India & 231 Anr. ; , and in Senior Superintendent of Post Office & Ors. vs Izhar Hussain, ; 11. The principles which emerge from the aforesaid authorities may now by stated. Where the contract, Standing Orders or the service rules/regulations are silent on the subject, the management has the power to deduct wages for absence from duty when the absence is a concerted action on the part of the employees and the absence is not disputed. Whether the deduction from wages will be pro rata for the period of absence only or will be for a longer period will depend upon the facts of each case such as whether where was any work to be done in the said period, whether the work was in fact done and whether it was accepted and acquiesced in, etc. It is not enough that the employees attend the place of work. They must put in the work allotted to them. It is for the work and not for their mere attendance that the wages/salaries are paid. For the same reason, if the employ ees put in the allotted work but do not, for some reason may be even as a protest comply with the formali ties such as signing the attendance register, no deduction can be effected from their wages When there is a dispute as to whether the employees attended the place of work or put in the allotted work or not, and if they have not, the reasons therefore etc., the dispute has to be investigated by holding an inquiry into the matter. In such cases, no deduction from the wages can be made without establishing the omission and/or commission on the part of the employees concerned. When the contract, Standing Orders, or the service rules/regulations are silent, but enactment such as the providing for wage cuts for the absence from duty is applicable to the establishment concerned, the wages can be deducted even under the provisions of such enactment. Apart from the aforesaid ratio of the decisions and the provisions of the and similar statutes on the subject, according to us, the relevant provisions of the major legislation governing the industrial disputes, viz., the also lend their support to the view that the wages are payable pro rata for the work done and hence deductible for the work not done. Section 2 (rr) of the said Act defines "wages" to mean "all remuneration . which would, if terms of employ ment, expressed or implied, were fulfilled, be payable to workman in respect of his employment or work done in such employment . " while Section 232 2(q) defines "strike" to mean "cessation of work" or "refus al to continue to work or accept employment by workman". Reading the two definitions together, it is clear that wages are payable only if the contract of employment is fulfilled and not otherwise. Hence, when the workers do not put in the allotted work or refuse to do it, they would not be entitled to the wages proportionately. The decisions including the one impugned in this appeal which have taken the view which is either contrary to or inconsistent with the above conclusions, have done so because they have proceeded on certain wrong presumptions. The first error, as we have pointed out at the outset, is to confuse the question of the legitimacy of the strike as a weapon in the workers ' hands with that of the liability to lose wages for the period of strike. The working class has indisputably earned the right to strike as an industrial action after a long struggle, so much so that the relevant industrial legislation recognises it as their implied right. However, the legislation also circumscribes this right by prescribing conditions under which alone its exercise may become legal. Whereas, therefore, a legal strike may not invite disciplinary proceedings, an illegal strike may do so, it being a misconduct. However, whether the strike is legal or illegal, the workers are liable to lose wages for the period of strike. The liability to lose wages does not either make the strike illegal as a weapon or deprive the workers of it. When workers resort to it, they do so knowing full well its consequences. During the period of strike the contract of employment continues but the workers withhold their labour. Consequently, they cannot expect to be paid. The second fallacy from which the said decisions suffer is to view the contract of employment as an indivisible one in terms of the wageperiod. When it is argued that the wages cannot be deducted pro rata for the hours or for the day or days for which the workers are on strike because the con tract, which in this case is monthly, cannot be subdivided into days and hours, what is forgotten is that, in that case if the contract comes to an end amidst a month by death, resignation or retirement of the employee, he would not be entitled to the proportionate payment for the part of the month he served. This was the iniquitous and harsh conse quence of the rule of indivisibility of contract laid down in an English case, Cutter vs Powell, [1795] 6 TR 320 which was rightly vehemently criticised and later, fortunately not followed. If the employment contract is held indivisible, it will be so for both the parties. We are also unable to see any difficulty, inequity or impracticability in construing the contract as divisible into different 233 periods such as days and hours for proportionate reimburse ment or deduction of wages, which is normally done in prac tice. The third fallacy was to equate disputed individual conduct with admitted mass conduct. A disciplinary proceed ing is neither necessary nor feasible in the latter case. The contract of employment, Standing Orders or the service rules provide for disciplinary proceedings for the lapse on the part of a particular individual or individuals when the misconduct is disputed. As things stand today; they do not provide a remedy for mass misconduct which is admitted or cannot be disputed. Hence, to drive the management to hold disciplinary proceedings even in such cases is neither necessary nor proper. The service conditions are not expect ed to visualise and provide for all situations. Hence, when they are silent on unexpected eventualities, the management should be deemed to have the requisite power to deal with them consistent with law and the other service conditions and to the extent it is reasonably necessary to do so. The pro rata deduction of wages is not an unreasonable exercise of power on such occasions. Whether on such occasions the wages are deductible at all and to what extent will, howev er, depend on the facts of each case. Although the employees may strike only for some hours but there is no work for the rest of the day as in the present case, the employer may be justified in deducting salary for tile whole day. On the other hand, the employees may put in work after the strike hours and the employer may accept it or acquiesce in it. In that case the employer may not be entitled to deduct wages at all or be entitled to deduct them only for the hours of strike. If further statutes such as the or the State enactments like the Shops and Establishments Act apply, the employer may be justified in deducting wages under their provisions. Even if they do not apply, nothing prevents the employer from taking guidance from the legisla tive wisdom contained in it to adopt measures on the lines outlined therein, when the contract of employment is relent on the subject. It is, however, necessary to reiterate that even in cases such as the present one where action is resorted to on a mass scale, some employees may not be a party to the action and may have genuinely desired to discharge their duties but could not do so for failure of the management to give the necessary assistance or protection or on account of other circumstances. The management will not be justified in deducting wages of such employees without holding an in quiry. That, however, was not the grievance of any of the employees in the present case, as pointed out earlier. 234 15. Hence, we are unable to sustain the impugned deci sion which is untenable in law. The decision is accordingly set aside with no order as to costs. Civil Appeal No. 855 of 1987 16. The facts in this case are different from those in the earlier appeal. In this case, the allegation of the employer Company is that the workers had indulged in "go slow" and as a result there was negligible production in the month of July 1984. The workers did not attend to their duty and only loitered in the premises and indulged in go slow tactics only with a view to pressurise the Company to con cede demands. The Company was, therefore, compelled to suspend its operation by giving a notice of lock out. Ac cording to the Company, therefore, since the workers had not worked during all the working hours, they had not earned their wages. Hence, the Company did not pay the workers their wages for the entire month of July 1984. The workers ' Union, therefore, filed a complaint before the Industrial Court under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act, for short) complaining that the Company had indulged in unfair labour practice mentioned in Item 9 of Schedule 4, from 7th August, 1984 which was the date for payment of salary for the month of July 1984, and under Item 6 of Schedule 2 of the Act with effect from 14th August, 1984 since the Company had declared a lock out from that day. It was also alleged that since no specific date of the com mencement of the alleged lock out had been specified, it was an illegal one. It appears that the Company had declared the lock out by notice dated July 30, 1984 and the lock out was effected from August 14, 1984. Subsequently, there were negotiations between the Union and the Company, and a set tlement was reached on October 15, 1984 as a result of which the lock out was lifted with effect from October 16, 1984. The terms of the settlement were formally reduced to writing on November 30, 1984. In this appeal, we are not concerned with the lock out and the subsequent settlement. The question that falls for consideration before us is whether the Company was justified in denying to the workers the full monthly wages for the month of July 1984. On this question, the Industrial Court accepted the oral testimony of the Company 's witnesses that the workmen had not at all worked for full eight hours on any day in July 1984 and that they were working intermit 235 tently only for some time and sitting idle during the rest of the day. On an average the workers had not worked for more than one hour and 15 to 20 minutes per day, during that month. The Industrial Court did not accept the evidence of the Union 's witness that the witness and the other workmen had worked on all the days during the entire month of July 1984 because he admitted that after the Company told the workers that it could not concede to the demands, the work ers had started staging demonstration. Although the witness denied that from July 3, 1984, the workers started indulging in go slow, he admitted that the Company was displaying notices from time to time with effect from July 4, 1984 alleging that the workers were not giving production and that they were loitering here and there. According to the Industrial Court in the circumstances, it did not see any good reason to disbelieve the Company 's witnesses. The Court further held that normally in view of this evidence on record, it would have held that the pro rata deduction of wages made by the Company for the month of July 1984 would not amount to an act of unfair labour practice falling under Item 9 of Schedule IV of the MRTU and PULP Act. However, in view of the two judgments of the Bombay High Court in T.S. Kelwala & Ors. vs Bank of India & Ors., i.e. the one impugned in the earlier appeal and Apar (Pvt) Limited vs S.R. Samant & Ors., [1980] II LLJ 344, the Court had to hold that the non payment of full wages to the work men for the month of July 1984 was an act of unfair labour practice falling under the said provision of the Act. The Court further held that admittedly the workers were not piece rated and there was no agreement or settlement allow ing the Company to deduct wages on the ground that they were indulging in "go slow" or that they had not given normal production. According to the Court, the remedy of the Compa ny against the workmen may lie elsewhere. Thus, the Court taking sustenance from the Bombay High Court Judgments referred to above held that the deduction of wages during the month of July, 1984 on account of the go slow was not justified, and declared that the Company had committed an unfair labour practice by not paying full monthly wages to the workmen, and directed the Company to pay the said wages for the month of July 1984. It is this order of the Indus trial Court which is challenged directly in this Court by the present appeal. Since one of the two decisions of the Bombay High Court on which the Industrial Court relied was rendered in another context and it has already been discussed in the other appeal, we may refer here only to the other decision, viz., Apar (Pvt) Ltd. vs S.R. Samant & Ors. , (supra) which is pressed in service before us on behalf of the workmen. The facts in that case were that by a settlement dated Au 236 gust 3, 1974 the workmen were allowed increase in the basis wages, dearness allowance, house rent, etc. in addition to the production bonus in terms of a scheme. That settlement was binding on the parties upto the end of April 1977. The matters ran a smooth course till August 1975. However, from September 1975, the Company refused to pay the production bonus and with effect from 15th October, 1975 it refused to pay the wages, dearness allowances etc. as per the settle ment. On August 21, 1975, a notice was put up by the Company starting that because of the attitude of indiscipline on the part of the workers and deliberate go slow tactics resulting in low production, the management was relieved of its com mitments and obligation imposed upon it by the settlement. A notice in terms of Section 9A of the was also put up indicating a certain scale of wages to which only the workers would be entitled. These wages were not more than the wages under the Minimum Wages Act and were even less than what was agreed to in the earli er agreement of January 23, 1971. A complaint was, there fore, filed under the MRTU & PULP Act before the Industrial Court, and the Industrial Court recorded a finding that the figures of production produced by the Company before it related only to few departments. Out of total of 700 employ ees who were working earlier, 116 were retrenched at the relevant time. The Company 's allotment of material, viz., aluminium was also reduced from 7390 metric tones to 2038 and there was no supply of even that allotted quantity. The Court further referred to certain inconsistent statements made by the factory manager and held that the management had failed to discharge the burden of proof of justifying the drastic reduction of the wages and other emoluments. The Court therefore recorded a finding that the Company had engaged in an unfair labour practice. Against the said decision, the Company preferred a writ petition before the High Court. The High Court on these facts held that the wages could be deducted only in terms of a statutory provi sion or of a settlement. A reduction of wages on the allega tion that the workers in general had resorted to go slow was wholly impermissible in law specially when the workmen were not piece rated employees. The High Court referred to the cases where reduction of wages for absence from duty for striking work was held as valid such as Major Kanti Bose & Ors. vs Bank of India & Ors., (supra); V. Ramachandran vs Indian Bank, (supra) and Algemene Bank, Nederland vs Central Government Labour Court, Calcutta, (supra) and held that those cases were distinguishable because they related to absence from duty and not go slow. In M/s. Bharat Sugar Mills Ltd. vs Shri Jai Singh & Ors., [1962] 3 237 SCR 684 the facts were that certain workmen of the appel lant Mills resorted to "go slow". The appellant Mills held a domestic inquiry and as a result thereof decided to dismiss 21 workmen, and apply to the Industrial Tribunal under Section 33 of the for permission to dismiss the workmen. Evidence was laid before the Tribunal to prove the charge against the workmen. The Tribunal held that the domestic enquiry was not proper, that the appellant was guilty of mala fide conduct and victimisation, that except in the case of one workman, the others were guilty of deliberate go slow and accordingly granted permission in respect of the one workman only. It is against the said decision that the appellant Mills had approached this Court. This Court held that the evidence produced before the Tribu nal clearly established that 13 out of the 20 workmen were guilty of deliberate go slow and in that connection observed as follows: "Go slow which a picturesque description of deliberate delaying of production by workmen pretending to be engaged in the factory is one of the most pernicious practices that discontended or disgruntled workmen sometime resort to. It would not be far wrong to call this dishonest. For, while thus delaying production and thereby reducing the output the workmen claim to have remained employed and thus to be entitled to full wages. Apart from this also, "go slow" is likely to be much more harmful than total cessation of work by strike. For, while during a strike much of the machinery can be fully turned off, during the "go slow" the machinery is kept going on a reduced speed which is often extremely damaging to machinery parts. For all these reasons "go slow" has always been considered a serious type of misconduct." This Court, therefore, set aside the order of the Tribunal refusing permission to dismiss 13 of the workmen. There cannot be two opinions that go slow is a serious misconduct being a covert and a more damaging breach of the contract of employment. It is an insidious method of undermining discipline and at the same time a crude device to defy the norms of work. It has been roundly condemned as an industrial action and has not been recognised as a legit imate weapon of the workmen to redress their grievances. In fact the model standing orders as well as the certified standing orders of most of the industrial establishments define it as a misconduct and provide for a disciplinary action for it. Hence, once it is 238 proved, those guilty of it have to face the consequences which may include deduction of wages and even dismissal from service. But by its very nature, the proof of go slow, particu larly when it is disputed, involves investigation into various aspects such as the nature of the process of produc tion, the stages of production and their relative impor tance, the role of the workers engaged at each stage of production, the pre production activities and the facilities for production and the activities of the workmen connected therewith and their effect on production, the factors bear ing on the average production etc. The go slow further may be indulged in by an individual workman or only some workmen either in one section or different sections or in one shift or both shifts affecting the output in varying degrees and to different extent depending upon the nature of product and the productive process. Even where it is admitted, go slow may in some case present difficulties in determining the actual or approximate loss, for it may have repercussions on production after the go slow ceases which may be difficult to estimate. The deduction of wages for go slow may, there fore, present difficulties which may not be easily resolu ble. When, therefore, wages are sought to be deducted for breach of con tract on account of go slow, the quantum of deduction may become a bone of contention in most of the cases inevitably leading to an industrial dispute to be adjudicated by an independent machinery statutory or other wise as the parties may resort to. It is necessary to empha size this because unlike in this case of a strike where a simple measure of a pro rata deduction from wages may pro vide a just and fair remedy, the extent of deduction of wages on account of a go slow action may in some case raise a complex question. The simplistic method of deducting uniform percentage of wages from the wages of all workmen calculated on the basis of the percentage fail in production compared to the normal or average production may not always be equitable. It is, therefore, necessary that in all cases where the factum of go slow and/or the extent of the loss of production on account of it, is disputed, there should be a proper inquiry on charges which furnish particulars of the go slow and the loss of production on that account. The rules of natural justice require it, and whether they have been followed or not will depend on the facts of each case. In the present case, the Industrial Court, as point ed out earlier, has accepted the evidence of the witness of the Company that the workmen had not worked for full eight hours on any day in the month concerned, namely, July 1984, and that they were working intermittently only for sometime and were sitting idle during the rest 239 Of the time. According to him, the workers had worked hardly for an hour and 15 to 20 minutes on an average during the said month. The witness had also produced notices put up by the Company from time to time showing the daily fall in the production and calling upon the workmen to resume normalcy. There is further no dispute that the copies of these notices were sent to the Union of the workmen as well as to the Government Labour Officer. The Industrial Court did not accept the evidence of the workmen that there was no go slow as alleged by the Company. Accordingly, the Industrial Court has recorded a finding that the pro rata deduction of wages made by the Company for the month of July 1984 did not amount to an act of unfair labour practice within the mean ing of the said Act. It does not further appear from the record of the proceedings before the Industrial Court that any attempt was made on behalf of the workmen to challenge the figures of production produced by the Company. These figures show that during the entire month of July 1984, the production varied from 7.06 per cent of 13.9 per cent of the normal production. The Company has deducted wages on the basis of each day 's production. In view of the fact that there is a finding recorded by the Industrial Court that there was a go slow resorted to by the workmen and the production was as alleged by the Company during the said period, which finding is not challenged before us, it is not possible for us to interfere with it in this appeal. As stated above, all that was challenged was the right of the employer to deduct wages even when admittedly there is a go slow which question we have answered in favour of the employer earlier. The question with regard to the quantum of deduction from the wages, therefore, does not arise before us for consideration. It is, however, likely that the work men did not question the figures of production before the Industrial Court because they were armed with the two deci sions of the High Curt (supra) which according to them, had negatived the right of the employer to deduct wages even in such circumstances. While, therefore, allowing the appeal, we direct that the appellant will not deduct more than 5 per cent of the wages of the workmen for the month of July 1984. The appeal is allowed accordingly with no order as to costs. G.N. Appeals allowed. [/INST]In the former appeal, the appellant is a nationalised Bank. In 1977, some demands for wage revision made by the employees of all Banks were pending and in support of their demands, a call for a country wide strike was given. The appellant Bank issued a Circular on September 23, 1977 to its managers and agents directing them to deduct wages of the employees for the days they go on strike. The respondent Unions gave a car for a four hour strike on December 29, 1977. Two days before the strike, the appellant Bank issued an Administrative Circular warning the employees that if they participate in the strike, they would be committing a breach of their contract of service and they would not be entitled to salary for the full day and they need not report for work for the rest of the working hours on that day. However, the employees went on strike as scheduled, for four hours which included banking hours of the public, and re sumed duty thereafter. The appellant Bank did not prevent them from doing so. The appellant Bank by its circular di rected the managers and agents to deduct the full day 's salary of those employees who participated in the strike. On a writ petition filed by the respondents, the High Court quashed the said Circular. The Letters Patent Appeal filed by the appellant was dismissed. Hence, the appeal by the Bank. In the latter appeal, the appellant is a company whose workers had indulged in "go slow" in July 1984, thereby bringing down production. The workers did not attend to their work and were loitering in the premises and were indulging in go slow tactics to pressurise the 215 company to concede their demands. The company suspended its operation by giving a notice of lock out. It did not pay wages to the workers for July , 1984 on the ground that they did not work during all the working hours and had not their wags. The workers ' union filed a complaint before the Indus trial Court complaining that the appellant company had indulged in unfair labour practice and that the lock out declared was illegal The Industrial Court held that the deduction of wages for July, 1984 on account of the go slow was not justified It also declared that the company had committed an unfair labour practice by not paying full monthly wages to the workers and directed the company to pay the said wages for the month of July, 1984. Aggrieved, the appellant company has preferred the appeal. Allowing the appeals, this Court, HELD: 1.1 There is no doubt that whenever a worker indulges in a misconduct such as a deliberate refusal to work, the employer can take disciplinary action against him and impose on him the penalty prescribed for it which may include some deduction from his wages. However, when miscon duct is not disputed but is, on the other band, ' admitted and is resorted to on a mass scale such as when the employ ees go on strike, legal or illegal, there is no need to hold an inquiry. To insist on an inquiry even in such cases is to pervert the very object of the inquiry. In a mass action such as strike it is not possible to hold an inquiry against every employee nor is it necessary to do so unless, of course, an employee contends that although he did not want to go on strike and wanted to resume his duty, he was pre vented from doing so by the other employees or that the employer did not give him proper assistance to resume his duty though he had asked for it. That was certainly not the situation in the present case in respect of any of the employees and that is not the contention of the employees either. It is true that in the present case when the employ ees came back to work after their four hours strike, they were not prevented from entering the Bank premises. But admittedly, their attendance after the four hours strike was useless because there was no work to do during the rest of the hours. It is for this reason that the Bank had made it clear, in advance, that if they went on strike for the four hours as threatened, they would not be entitled to the wages for the whole day and hence they need not report for work thereafter Short of physically preventing the employ ees from resuming the work which it was unnecessary to do, the Bank had done all hi its power to warn the employees of the consequences of their action and if the employees, in spite of it, chose to enter the Bank 's premises where they had no work to do, and in fact did not 216 do any, they did so of their own choice and not according to the requirement of the service or at the direction of the Bank. In fact, the direction was to the contrary. Hence, the later resumption of work by the employees was not in fulfil ment of the contract of service or any obligation under it. The Bank was therefore not liable to pay either full day 's salary or even the pro rata salary for the hours or work that the employees remained in the Bank premises without doing any work. It is not a mere presence of the workmen at the place of work but the work that they do according to the terms of the contract which constitutes the fulfilment of the contract of employment and for which they were entitled to be paid. [222E H; 223A F] 1.2 Although the service regulations do not provide for a situation where employees on a mass scale resort to ab sence from duty for whole day or a part of the day whether during crucial hours or otherwise they do provide for treat ing an absence from duty of an individual employee as a misconduct and for taking appropriate action against him for such absence. [224D E] 2.1. When the contract, Standing Orders, or the service rules/ regulations are silent, but enactment such as the payment of Wages Act providing for wage cuts for the absence from duty is applicable to the establishment concerned, the wages can be deducted even under the provisions of such enactment. [231F] 2.2. The working class has indisputably earned the right to strike as an industrial action after a long struggle, so much so that the relevant industrial legislation recognises it as their implied right. However, the legislation also circumscribes this right by prescribing conditions under which alone its exercise may become legal. Whereas, there fore, a legal strike may not invite disciplinary proceed ings, an illegal strike may do so, it being a misconduct. However, whether the strike is legal or illegal, the workers are liable to lose wages for the period of strike. The liability to lose wages does not either make the strike illegal as a weapon or deprive the workers of it. When workers resort to it, they do so knowing full well its consequences. During the period of strike the contract of employment continues but the workers withhold their labour. Consequently, they cannot expect to be paid. [232C E] 2.3. The contract, which is this case is monthly, cannot be subdivided into days and hours. If the contract comes to an end amidst a month by death, resignation or retirement of the employee, he would not be entitled to the proportionate payment for the part of the month 217 he served. If the employment contract is held indivisible, it will be so for both the parties. There is no difficulty, inequity or impracticability in construing the contract as divisible into different periods such as days and hours for proportionate reimbursement or deduction of wages, which is normally done in practice. [232G H; 233A] 2.4. The contract of employment, Standing Orders or the service rules provide for disciplinary proceedings for the lapse on the part of a particular individual or individuals when the misconduct is disputed. As things stand today, they do not provide a remedy for mass misconduct which is admit ted or cannot be disputed. Hence, to drive the management to hold disciplinary proceedings even in such cases is neither necessary nor proper. The service conditions are not expect ed to visualise and provide for all situations. When they are silent on unexpected eventualities, the management should be deemed to have the requisite power to deal with them consistent with law and the other service conditions and to the extent it is reasonably necessary to do so. The pro rata deduction of wages is not an unreasonable exercise of power on such occasions. Whether on such occasions, the wages are deductable at all and to what extent will, howev er, depend on the facts of each case. Although the employees may strike only for some hours but there is no work for the rest of the day as in the present case, the employer may be justified in deducting salary for the whole day. On the other hand, the employees may put in work after the strike hours and the employer may accept it or acquiense in it. In that case the employer may not be entitled to deduct wages at all or be entitled to deduct only for the hours of strike. If statutes such as the or the State enactments like the Shops and Establishments Act apply, the employer ,may be justified in deducting wages under their provisions. Even if they do not apply, nothing prevents the employer from taking guidance from the legisla tive wisdom contained in it to adopt measures on the lines outlined therein, when the contract of employment is silent on the subject. [233B F] V.T. Khanzode & Ors. vs Reserve Bank of India & Anr., ; ; Paluru Ramkrishnaiah & Ors. etc. vs Union of India & Anr. ; , and Senior Superin tendent of Post Office & Ors. vs lzhar Hussain; , , relied on. Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham and Carnatic Co. Ltd., ; ; V. Ganesan vs The State Bank of India & Ors., ; State Bank of India, Canara Bank, Central Bank etc. & Ors. vs Ganesan, Jambunathan, Venkatara 218 man, B.V. Kamath, V.K. Krishnamurthy, etc. & Ors. , ; Sukumar Bandyopadhyyay & Ors. vs State of West Bengal & Ors., [1976] IX LIC 1689; Algemene Bank Nederland, N.V. vs Central Government Labour Court, Calcutta & Ors., [1978] II LLJ, 117; V. Ramachandran vs Indian Bank, [1979] I LLJ 122; Dharam Singh Rajput & Ors. vs Bank of India, Bombay & Ors. , ; R. Rajamanickam, for himself and on behalf of other Award Staff vs Indian Bank, [1981] II LLJ 367; R.N. Shenoy & Anr. etc. vs Central Bank of India & Ors. , [1984] XVII LIC 1493; Prakash Chandra Johari vs Indian Overseas Bank & Anr., [1986] II LLJ 496; Workmen of M/s. Firestone Tyre & Rubber Co. of India (P) Ltd. vs Firestone Tyre & Rubber Co., ; ; Krishnatosh Das Gupta vs Union of India & Ors., ; Sant Ram Sharma vs State of Rajasthan & Anr., ; ; Roshan Lal Tandon vs Union of India, ; ; Secretary of State for Employment vs Associated Society of Locomotive Engineers and Firemen and Ors. (No. 2), ; Miles vs Wakefield Metropolitan District Council, [1989] I LLJ 335 and Cutter vs Pwell, [1795] 6 TR 320, referred to. There cannot be two opinions that go slow is a serious misconduct being a covert and a more damaging breach of the contract of employment. It is an insidious method of undermining discipline and at the same time a crude device to defy the norms of work. It has been roundly condemned as an industrial action and has not been recognised as a legit imate weapon of the workmen to redress their grievances. In fact the model standing orders as well as the certified standing orders of most of the industrial establishments define it as a misconduct and provide for disciplinary action for it. Hence, once it is proved. those guilty of it have to face the consequences which may include deduction of wages and even dismissal from service. [237G H; 238A] 3.2. The proof of go slow, particularly when it is disputed, involves investigation into various aspects such as the nature of the process of production, the stages of production and their relative importance, the role of the workers engaged at each stage of production, the pre produc tion activities and the facilities for production and the activities of the workmen connected therewith and their effect on production, the factors hearing on the average production etc. The go slow further may be indulged in by an individual workman or only some workmen either in one sec tion or different sections or in one shift or both shifts affecting the output in varying degrees and to different extent depending upon the nature of product and the produc tive process. Even where it is admitted, go slow may in some case present 219 difficulties in determining the actual or approximate loss, for it may have repercussions on production after the go slow ceases which may be difficult to estimate. The deduc tion of wages for go slow may, therefore, present difficul ties which may not be easily resoluble. When, therefore, wages are sought to be deducted for breach of contract on account of go slow, the quantum of deduction may become a bone of contention in most of the cases inevitably leading to an industrial dispute to he adjudicated by an independent machinery statutory or otherwise as the parties may resort to. The simplistic method of deducting uniform percentage of wages from the wages of all workmen calculated on the basis of the percentage fail in production compared to the normal or average production may not always be equitable. It is, therefore, necessary that in all cases where the factum of go slow and/or the extent of the loss of production on account of it, is disputed, there should he a proper inquiry on charges which furnish particulars of the go slow and the loss of production on that account. The rules of natural justice require it, and whether they have been followed or not will depend on the facts of each case. [238B G] 3.3. In the instant case, there is a finding recorded by the Industrial Court that there was a go slow resorted to by the workmen resulting in loss of production during the said period. Since the said finding is not challenged, it is not possible to interfere with it in this appeal. Though the appellant is justified in deducting wages for the said period, in the facts and circumstances of the case it is directed that it will not deduct more than 5 per cent of the wages of the workmen for the month of July, 1984 when they indulged in go slow tactics. [239D F] M/s. Bharat Sugar Mills Ltd. vs Shri Jai Singh & Ors., ; T.S. Kelwala & Ors. vs Bank of India & Ors., and Apar (Pvt) Ltd. vs S.R. Samant & Ors., [1980] II LLJ 344, referred to. </s>
<s>[INST] Summarize the judgementvil Appeal No. 139 of 1951. Appeal from the Judgment and Decree dated February 10, 1960, of the High Court of I Judicature at Calcutta (Harries C.J. and Sarkar J.) in Appeal from Original Order No. 95 of 1945, arising out of Judgment and, Order dated January 30, 1945, of the Court of Subordinate Judge at Asansol of Zilla Burdwan in Miscellaneous Case No. 70 of 1941. N. C. Chatterjee '(B. C. Boy and A. E. Mukherjea, with him) for the appellant. Dr. N. C. Sen Gupta (B. L. Pal, with him) for res pondent No. I. 379 1962. December 9. Das J. and Ghulam Hassan J. delivered separate judgments. The judgment of Mahajan J. and Vivian Bose J. was delivered by MAHAJAN J. MAHAJAN J. In our opinions the decision can be rested on either of the ground, which have been raised by our brothers Das and Ghulam Hasan respectively. We would therefore allow the appeal on both the grounds. DAS J. I have had the privilege of perusing the judgment delivered by my learned brother Hasan and I agree with his conclusion that this appeal should be allowed. I would, however, prefer to rest my decision on a ground different from that which has commended itself to my learned brother and as to which I do not wish to express any opinion on this occasion. The relevant facts material for the purpose of disposing of this appeal have been very clearly and fully set forth in the judgment of Hasan J. and I need not set them out in detail here. Suffice it to say that on June 12, 1931, the High Court, Original Side, which is the Court which had passed the decree, transmitted the same for execution to the Asansol Court through the District Judge of Burdwan and that the Asansol Court thereupon acquired jurisdiction to execute the decree against properties situate within its territorial limits. The application for execution made by the decree holder which was numbered 296 of 1931 was, however, on February 27, 1932,dismissed for default and on March 11, 1932, the Asansol Court sent to the High Court what in form purported to be a certificate under section 41 of the Code. There is no dispute, however, that the Asansol Court did not return to the High Court the certified copy ' of the decree and other documents which had been previously transmitted by the High Court The decree holder on November24, 1932 filed in the Asansol Court another petition for 380 execution of the decree against the same judgment debtors with the same prayer for the realisation of the decretal amount by sale of the same properties as mentioned in the previous execution case. The application 'was registered as Execution Case No. 224 of 1932. The judgment debtors ' contention is that the certificate sent by the Asansol Court to the High Court on March 11, 1932, was and was intended to be in form as well as in substance a certificate under section 41 of the Code, and that thereafter the Asansol Court ceased to have jurisdiction as the executing Court and that as there was no fresh transmission of the decree by the High Court the Asansol court could not entertain Execution Case No. 224 of 1932 and consequently all subsequent proceedings in the Asansol Court were void and inoperative for lack of inherent jurisdiction in that Court. This contention was rejected by the Subordinate Judge of, the Asansol Court in his judgment delivered on January 30, 1945, in Miscellaneous Case No. 70 of 1941 but found favour with the High Court in its judgment delivered on February 10, 1950, which is now under appeal before us. It appears that on. March 17,1933, the decreeholder took out a Master 's summons in the Original Side of the High Court being the Court which passed the decree in Suit No. 1518 of 1923 praying, interalia, that the Official Receiver be discharged from further acting as Receiver in execution, that leave be given to the Asansol Court to sell the colliery in execution of the decree dated June 25, 1923, and the order dated February 7, 1924, and that leave be given to the plaintiff to bid for and purchase the Sripur colliery. This summons was supported by an affidavit affirmed by one Pramatha Nath Roy Chowdhury, an assistant in the employ of the plaintiff. This affidavit refers to the consent decree of January 25, 1923, passed in the said suit and the additional terms of settlement embodied in the order of February 7, 1924, the payments made by the judgment debtors from time to time amounting to 381 Rs. 30,437 8 0 besides a sum of Rs. 3,500 which bad been paid on account of settled costs and states that, the balance of the decretal amount was still due and that there had been no other adjustment of the decree. It refers to a previous application by tabular statement for execution of the decree by the appointment of a Receiver and by the sale of the Sripur colliery which was charged under the order of February 7, 1924, and to the order made by the High ' Court on that tabular statement on June 21, 1926, appointing the Official Receiver of the High Court as Receiver of the Sripur colliery. The affidavit then recites that the Official Receiver who had been given liberty to sell the colliery on certain terms took steps to put up the same to sale but had been prevented from actually doing so by reason of an injunction obtained by one of the judgment debtors Benoy Krishna Mukherjee in Suit No. 843 of 1928 filed by him. The affidavit further refers to the fact that the said Suit No. 843 of 1928 had since then been dismissed and that no appeal had been preferred against that decree of dismissal and that no order had been made for stay of execution of the said decree. Paragraph 13 of the affidavit then states as follows : " that the plaintiff was advised that charge should be enforced and Sripur colliery should be sold in execution of the said order by the Asansol Court in the local jurisdiction of which the colliery is situate and the plaintiff accordingly by an order made on the 15th of April, 1931, obtained leave of the Court to execute the decree against Basantidas Chatterjee, Srimantodas Chatterjee and Bholanath Chatterjee as sons, heirs and legal representatives of the deceased Prankristo Chatterjee and the other defendants judgment debtors and caused the certified copies of the decree dated 25th June, 1923, and the order dated 7th February, 1924, to be transmitted to the District Judge at Burdwan who in his turn sent the decree to the Subordinate Judge of Asansol to execute the decree. Such execution proceedings are 382 now pending before the Asansol Subordinate Judge 's Court being Execution Proceedings No.224 of 1932. " In the circumstances the plaintiffs asked for directions on the lines mentioned in the summons. The summons was duly served on all the judgment debtors as mentioned in the affidavit of service filed in Court and referred to in the order made by the Court on the Master 's summons on March 27, 1933. The operative part of the said order of the High Court was as follows: " It is ordered that Official Receiver of this Court who was appointed the Receiver in this suit of the Sripur colliery pursuant to the said order dated the 21st day of June, 1926, be and he is hereby discharged from further acting as such Receiver as aforesaid: And it is further ordered that the said Receiver do pass his final accounts before one of the Judges of this Court and it is further ordered that the Subordinate Judge of Asansol be at liberty in execution of the said decree and order dated the 7th day of February, 1924, to sell either by public auction or by private treaty to the best purchaser or purchasers that can be got for the same provided the said Subordinate Judge shall consider that a sufficient sum has been offered the Sripur colliery aforesaid charged under the said order dated the 7th day of February, 1924 And it is further ordered that the plaintiff be at liberty to bid for and purchase the said colliery at the said sale and if declared the purchaser to set off the amount of the purchase money pro tanto against the balance of his claim under the said decree: And it is further ordered that the plaintiff be also at liberty to add his costs of and incidental to this application to be taxed by the Taxing Officer of this Court to his claim under the said decree. " The order sheet of Execution Case No. 224 of 1932 has not been printed in extenso but there can be no doubt that this order of the High Court was communicated to the Asansol Court, for it was after this order 383 that the Asansol Court proceeded with the execution 2case and sripur colliery was sold for the first time on June 9, 1933, and the decree holder purchased the same for Rs. 20,000. This sale of course was eventually set aside, but this order made by the High Court on the Original Side being the Court which passed the decree in Suit No. 1518 of 1923 appears to me to involve and imply, and may well be regarded as in substance amounting to, an order for transmission of the decree to the Asansol Court for execution under section 39 of the Code of Civil Procedure. The Civil Procedure Code does not prescribe arty particular form for an application for transmission of a decree under section 39. Under sub section (2) of that section the Court can even suo motu send the decree for ,execution to another Court. It is true that Order XXI, rule 6, provides that the Court sending a decree for execution shall send a copy of the decree, a% certifi cate setting forth that satisfaction of the decree hid not been obtained by execution within the jurisdiction of the Court and a copy of the order for the execution of the decree but there is authority to the effect that an omission to send a copy of the decree or an omission to transmit to the ' Court executing the decree the certificate referred to in clause (b) does not prevent the decree holder from applying for execution to the Court to which the decree has been transmitted. Such omission does not amount to a material irregularity within the meaning of Order XXI, rule 90, and as such cannot be made a ground for setting aside a sale in execution. Further, the fact remains that the certified copy of the decree and the certificate of non satisfaction which had been sent by the High Court 2to the Asansol Court on April 15, 1931, through the District Judge of Burdwan who forwarded the same to the Subordinate Judge at Asansol were still lying on the records of that Court and the sending of another certified copy of the decree and a fresh certificate of non satisfaction by the High Court would have been nothing more than a formality. In the circumstances, the omission to send those documents 384 over again to the Asansol Court was a mere irregularity which did not affect the question of jurisdiction of the executing Court. In my opinion, after the order made by the High Court on March 27, 1933, had been communicated to the Asansol Court the Asansol. Court became fully seized of jurisdiction as the executing Court and none of the proceedings had thereafter in that Court can be questioned for lack of inherent jurisdiction. I would, therefore, on this ground alone accept this appeal and concur in the order proposed by my learned brother. GHULAM HASAN J. This case is illustrative of the difficulties which a decree holder has to encounter in recovering the money in execution after he has obtained the decree of court. It is one of those cases, by no means rare, in which the execution proceedings in the courts below have dragged on to inordinate lengths and led to consequent waste of public time and expense to the parties. The decree in the present case was passed upon a compromise in Suit No. 1518 of 1923 on the original :side of the Calcutta High Court as long ago as June 25, 1923, in favour of one Nagarmull Rajghoria against Pran Krishna Chatterjee and 5 others, hereinafter referred to as the Chatterjees. The decree was for a sum of Rs. 75,000 with interest at twelve per cent. per annum with quarterly rests. The Chatterjees hypothecated their Kbradauga colliery as security for the payment of the decretal amount. Subsequent to this decree the Chatterjees entered into an agreement ,With one Benoy Krishna Mukherjee hereinafter referred to as Mukherjee on January 24, 1924, appointing the latter as Managing Agent of the aforesaid colliery whereby he became entitled to receive royalty of another colliery called Sripur colliery. The decree was adjusted on March 18, 1924, by making Mukherjee liable as surety and by the Chatterjees charging their Sripur colliery as additional security. The hypothecated properties were situate at Asansol and 50 385 Nagarmull obtained an order from the High Court for permission to execute the decree at Asansol with the direction that a certified copy of the decree, a copy of the order of transmission and a certificate of partial satisfaction of the decree should be transferred to the court of the Subordinate Judge at Asansol. ' This order was passed on April 15, 1931, and the three documents aforementioned were sent to the transferee court at Asansol through the District Judge, Burdwan on June 12, 1931. (Order XXI, rule 6, Civil Procedure code.) On August 20, 1931, Nagarmull filed his first appli cation for execution of the decree by sale of Sripur colliery. The execution case is numbered as 296 of 1931. Notices under Order XXI, rule 22, rule 64 and rule 66, of the Civil Procedure Code were issued and served on various dates. The case was fixed for February 16, '1932. On this date Nagarmull applied for time to prove service of the notices and the case was adjourned to February 23 1932. He again applied for time on that date and the case was adjourned to February 27, 1932. On this latter date Nagarmull was again not ready and asked for more time. But this was refused, and the execution case was dismissed for default without any amount being realized under the decree. The transferee court sent to the High Court what purported to be a certificate under section 41 of the Civil Procedure Code, stating that the execution case was dismissed for default on February 27, 1932. Neither the copy of the decree, nor any covering letter as required by the rules of the High Court was sent along with the certificate. The certificate was received by the High Court on March 11, 1932. It appears that the decree holder filed a second application for execution of the decree on November 24, 1932, by sale of the Sripur colliery. This case was numbered as Execution Case 224 of 1932. Notices under Order XXI, rule 22 and rule 66, 'of the Civil Procedure Code were duly served and the executing court ordered the issue of a sale proclamation fixing April 8, 1933, as the date of the sale, It 386 appears that the decree holder received only partial satisfaction of the decree out of the sale proceeds of Koradanga colliery which had been sold at the instance of the superior landlords and by certain cash payments. He applied for execution of the decree by appointment of a Receiver and by sale of the Sripur colliery. The Receiver was appointed on June 21, 1926, and he was directed to sell the Sripur colliery to the highest bidder permitting the decree holder at the same time to bid for and purchase the property, but he was restrained from proceeding with the sale by an order of court passed in a certain suit filed by Mukherjeo against the decree holder. This suit was dismissed by the High Court. Accordingly the. decree holder applied on March 17, 1933, to the High Court praying that the Receiver be discharged and leave be given to the executing court to sell the Sripur colliery in execution of the decree of June 25, 1923, in which Execution Proceedings No. 224 of 1 932 were pending at the time. He also asked: that leave be given to him to bid for and to, purchase the property. Notices of this application were duly served on the parties and on March 27, 1933, the High Court granted all the , prayers (Exhibit F. 5). The property was sold on the 9th of June, 1933, and was purchased by the decree holder for Rs. 20,000. Mukherjee, however, filed an application on July 7, 1933, under section 47 and Order XXI, rule 90, of the Civil Procedure Code for setting aside the sale. The application was numbered as Miscellaneous ,Case No. 63 of 1933. The Chatterjees also started two Miscellaneous Cases Nos. 64 and 55 of 1933 on July 8, 1933. During the pendency of the three miscellaneous cases, the appellant Mohanlal Goenka purchased the decree on January 10, 1934. Miscellaneous Case No. 53 of 1933 was allowed and the sale was set aside on January 29, 1934, and Cases Nos. 54 and 55 of 1933 were dismissed for default. The result of these miscellaneous cases was communicated to the High Court in a document which purports to be a certificate under section 41 of the 387 Civil Procedure Code and wag received on February 1, 1934. Two appeals were preferred by the decreeholder on April 18, 1934, but the order setting aside the gale was confirmed and resale of the Sripur properties was ordered by the High Court. The properties were again sold on April 22, 1936, and were purchased by the decree holder for Rs. 12,000. Mukherjee filed an appeal in the High Court and during the pendency of the appeal he filed an application under section 47 and Order XXI, rule 90 of the Civil Procedure Code for setting aside the sale. The appeal was disposed of by consent of parties and it was agreed that the application under Order XXI, rule 90, be heard by the executing court. Accordingly the application was heard and the sale set aside. Mukherjee then applied under section 47 on April 4, 1938, stating that Mohanlal Goenka could not continue the proceedings started by Nagarmull, but the application was dismissed and May 22, 1938, was fixed for the sale of the property,. He filed an appeal in the High Court which was dismissed under Order XLI, rule II, of the Civil Procedure Code. The property was sold for the third time and was purchased by the decree holder for Rs. 2,60,000 on May 27, 1938. Mukherjee applied under section 47 and Order XXI, rule 90, of the Civil Procedure Code for setting aside this sale on June 27, 1938 : (E 4) (Miscellaneous Case No. ' 76 of 1938). The application was dismissed on June 30, 1938, and the sale was confirmed. Execution Case No. 224 of 1932 was dismissed for part satisfaction. The executing court on July 9, 1938, sent to the High Court a certificate under section 41 of the Civil Procedure Code, accompanied with the covering letter communicating the result of the execution case. This was received by the High Court on July 12, 1938. Mukherjee carried the matter in appeal to the High Court but the appeal was dismissed on August 5, 1940: (Exhibit F). Mukherjee filed an application for review under Order XLVII, rule 1, of the Civil Procedure Code against. the aforesaid order on November 25, 1940, 388 (Exhibit B). He also. filed on November 28, 1940,7 an application for leave to appeal to the Privy Council (Exhibit A). The review application was dismissed on May 8,1941, and leave was refused on June 16, 1941. On May 12, 1941, Mukherjee filed an application under sections 47 and 151 of the Civil Procedure Code (Miscellaneous Case No. 70 of 1941) and it is this application which has given rise to the present appeal before us. The application was supported by an affidavit filed on may 26, 1941. The present appellant filed an objection on July 5, 1941, to the, application. The application was dismissed by the Subordinate Judge on January 30, 1945 but the order was set aside on appeal by the High Court on February 10, 1950. Leave to appeal to this Court was granted by the ' High Court on July 28, 1950. The case put forward by Mukherjee before the Subordinate Judge was that after the dismissal of Execution: Case No. 296 of 1931 on Februarv 27. 1932, and the sending of a certificate under section 41 to the High Court, the decree was never again transferred to the Asansol court for execution. According to him, the decree holder fraudulently detached the certificate of non satisfaction from the Execution Case No. 296 of 1931 and attached it to the second Execution Case No. 224 of 1932, inducing the court to believe that the certificate had been obtained from the High Court for taking fresh proceedings in execution, Mukherjee had instituted Title Suit No. ' 3 of 1936 to recover some money and to enforce a charge against the Sripur colliery and for, permission to redeem the charge declared in favour of the decree holder if it was prior to his own claim ' The suit was dismissed but on appeal the High Court, allowed him to redeem the charge in favour of the decree holder. In order to ascertain the amount of the charge Mukherjee instructed his attorney to search the record of Suit No. 1518 of of 1923 and he came to know for the first time on August 23, 1940, that after the dismissal of 'the first 389 application & certifioate under section 41 of the Civil Procedure Code had been sent by the Asansol Court to the High Court and the, latter never retransferred the decree for execution. Accordingly his case was that the Asansol Court had no jurisdiction to entertain Execution Case No. 224 of 1932, and all, the proceedings in connection therewith were null and void. , He therefore urged that the auction sale should be set aside. The present appellant denied the allegations of the judgment debtor. He pleaded that no certificate under section 41 of the Civil Procedure Code was sent to the High Court in Execution Case No. 296 of 1931 and the execution court retained jurisdiction throughout, that the High Court had authorised the sale of the property in execution of the decree and that no fresh certificate of non satisfaction was required to give jurisdiction to the Asansol Court to proceed with Execution Case No. 224 of 1932. The judgment debtor was aware that the copy of the decree and the certificate of non satisfaotion were not sent to the High Court and he could not possibly have laboured under a wrong impression that a fresh certificate had been ,sent by the High Court for taking execution prooeedings and that the decree holder practised no fraud upon him. He also pleaded that the application was barred, by limitation, that it was barred by the principle of res judicata as the objection now raised had previously been made and either not pressed, or rejected and that the judgment debtor was fully aware of all the proceedings that had taken place in connection with the decree. The Subordinate Judge framed the following three main issues in the case: 1. Is this Miscellaneous Case maintainable under section 151 of the Civil Procedure Code? 2.Did this court act in accordance with section 41, Civil Procedure Code ? If so, was the decree retransmitted to this court for fresh execution in 1932 ? If not, had this court jurisdiction to execute the decree again in 1932 ? 390 3. Is this Miscellaneous Case barred according to the principle of res judicata ? Upon the first point the learned Subordinate Judge held that the executing court did not lose jurisdiction to execute the decree, that the allegation about the detaching of certificate of non satisfaction from the records in the custody of the court and its surreptitious insertion in Execution Case No. 224 of 1932 constitute grounds for a suit, and a fresh application under section 151 of the Civil Procedure Code, was not maintainable. Upon the second point the court held that having regard to the circumstances of the case, no certificate of non satisfaction of the decree as required by section 41 was sent by the executing court to the High Court, that no re transmission of the decree by the High Court was required to start Execution Case No. 224 of 1932 and that the executing court retained seisin of the execution and, could execute the same without a further direction from the High Court. Upon the third point, the learned Subordinate Judge held that Mukherjee had alleged in para. 15 of his petition in Miscellaneous Case No. 53 of 1933 that the decree and the certificate were not sent by the High Court for starting the execution case afresh, but this objection to jurisdiction was not pressed at the time of the hearing. Again in para. 20 of his petition in Miscellaneous; ,Case No. 76 of 1938 he had urged the same point but ,it was not pressed. Mukherjee admitted in his evidence as P. W. 4 that all his applications were drawn up according to his instructions but despite this fact he did not press the allegations made in the miscellaneous cases. It was accordingly held on the authority of Annada Kumar Roy and Another vs Sheik Madan and Others (1) and Mahadeo Prasad Bhagat vs Bhagwat Narain Singh (2) that the principle of constructive resjudicata is applicable to execution proceedings. The view taken by the Court was that having made the allegations in the miscellaneous oases and then abandoned them, the judgment debtor (1) (2) A.I.R. 1938 Patna 427. 391 was precluded from raising the plea of jurisdiction of the court to execute the decree: Mukherjee preferred an appeal to the High Court. The matter came up before Harries C. J. and Sarkar J. The learned Chief Justice held that the Asansol Court not only sent what purported to be a certificate under section 41 of the Civil Procedure Code to the High Court, but intended such certificate to be a certificate of non satisfaction. He did not agree with the Subordinate Judge that the document was not intended to be a certificate and was merely an intimation that the first attempt at execution ' had failed. In the view of the learned Chief Justice there was no need for the Court at Asansol to send any intimation at all. The learned Chief Justice agreed that upon a true construction of section 41, failure to execute the decree at the first attempt for non appearance of the decree holder was not the total failure to, execute the decree as contemplated in that section. He, however, held that the fact that the certificate was sent when it should not have been sent cannot affect the question if, as he held, the certificate was intended to be a certificate of non satisfaction. The learned Chief Justice referred to a number of authorities in support of his conclusion. He accordingly held that the Asansol Court had ceased to have jurisdiction to execute the decree and was not entitled to entertain the second application for execution. Upon the question of res judicata the learned Chief Justice observed that " a judgment delivered by a Court not competent to deliver it cannot operate as res judicata and the order of the Subordinate Judge of Asansol, being wholly without jurisdiction, cannot be relied upon to found a defence upon the principle of res judicata. " He went on to say: "It is true that the appellant could and should have raised the question in the second execution case that the Asansol Court had no jurisdiction ' in the absence of a certificate of non satisfaction from the High Court to entertain the application. But in my view though this, point was neither made nor pressed, these orders of the learned 392 Subordinate Judge in the second execution application cannot be urged as a bar to the present application under the doctrine of res judicata. It is true that section 11 of the Code of Civil Procedure does not apply to execution proceedings, but it has been held by their Lordships of the Privy Council that the principles of the law relating to resjudicata do apply to execution proceedings and Mr. Atul Gupta has urged that the present application is barred by res judicata. . . He drew a ' distinction between the case of an irregular assumption of jurisdiction and want of inherent jurisdiction and holding that the order of the Subordinate Judge at Asansol fell under the latter category, he came to the conclusion that the order is wholly null and void and cannot be pleaded in bar of the application on the principle of res judicata. It has been contended before us on behalf of the appellant (assignee decree holder) that the execution Court at Asansol never lost jurisdiction over the execution proceedings and that what purported to be a certificate under section 41 of the Civil Procedure Code was no more than a mere intimation to the High Court that the execution case had been dismissed only for default, that it was no failure to execute the decree within the meaning of section 41 of the Civil Procedure Code, that in any case the subsequent orders of the High Court passed from time to time in the presence of the parties conferred jurisdiction upon the execution Court to proceed with the execution and that in any event the question whether the execution Court had or had not jurisdiction to execute the decree was barred by the principle of res judicata. Having heard learned counsel for the parties, we are of opinion that the appeal can be dis posed of on the ground of res judicata without entering into other questions. It cannot be disputed that the transferee Court was invested with jurisdiction by the High Court when its decree was transferred to it for execution. The first application for execution of the decree was dismissed 393 for default on February 27, 1932, and a document purporting to be a certificate of non satisfaction under section 41 of the Civil Procedure Code was sent by the execution Court to the High Court. The decree was admittedly not retransmitted for execution by the High Court. Despite this fact the decreeholder made a second application for execution on November 24, 1932, (Execution Case No. 224 of 1932). Notice was duly served upon the judgmentdebtor but he preferred no objection before the execution Court that it had no jurisdiction to execute the decree. This is the first occasion on, which he could have raised the plea of jurisdiction. The second occasion arose when the decree holder filed an affidavit (Exhibit C) before the High Court on March 17, 1933, praying that certain directions should be given to the execution Court for the sale of Sripur properties and for an order discharging the Receiver. Notice was duly served upon the judgment debtors, including Mukherjee (Exhibit 13) and the order granting the prayers of the decree holder was passed on March 27, 1933 (Exhibit F. 5). The judgmentdebtor could have pointed out that the Asansol Court was functus officio after sending the certificate under section 41 and had no further jurisdiction to sell the property in execution but no such objection was raised. This order clearly recites that notice was sent to the Chatterjees as well as to Mukherjee and was proved by an affidavit to have been duly served upon them. The decree holder 's prayer was granted and in pursuance of the order of the High Court the property was sold and was purchased by the decreeholder for Rs. 20,000, whereupon Mukherjee started Miscellaneous Case No. 53 of 1933 for setting aside the sale. In this application (Exhibit E) the judgment debtor raised the question of jurisdiction in paragraph 19 which runs thus: " As the said decree has not been sent to this court for execution nor has any certificate come to this Court therefore the execution proceedings and the auction sale are wholly irregular, illegal, fraudulent and collusive. " 394 The order of the Subordinate Judge dated January 29, 1934, by which he set aside the sale does not mention that the plea raised in paragraph 19 of the application was pressed. The decree holder who was aggrieved by this order preferred two appeals Nos. 254 and 255 of 1934. The order of the High Court (Exhibit F. 2) dated July 11, 1935, shows that the decision of the Subordinate Judge setting aside the sale was confirmed. It appears that the judgmentdebtors had raised the question that the decree could not be executed 'without the decree holder applying for making the decree absolute. In view of this dispute the learned Judges added in the order that although they were confirming the order of the Subordinate Judge setting aside the sale, the judgment debtors will not be entitled to raise any objection as to the nature of the decree which in their opinion was executable under the terms of the compromise arrived at by the parties concerned. Here again no objection was raised by the judgment debtors that the execution Court had no jurisdiction to execute the decree and sell the property. The next occasion when the objection to jurisdiction should have been raised was when the property was to be resold. Mukherjee started Miscellaneous Case No. 62 of 1936 on April 2, 1936, (Exhibit 1), in which he raised all sorts of objections to the execution but nowhere stated that the execution Court had no jurisdiction to sell the property after the certificate under section 41 of the Civil Procedure Code had been sent to the High Court. The property was sold for the second time and was purchased by the decreeholder on April 22, 1936. Mukherjee preferred an appeal No. 238 of 1936 and at the same time started a Miscellaneous Case No. 80 of 1936 in the execution. Court to set aside the sale. No plea of jurisdiction was raised either in the grounds of appeal to the High Court or in the application f or setting aside the execution sale. The appeal was disposed of by consent of parties with the direction that Miscellaneous Case No. 80 of 1936 should be reheard by the 395 execution Court. The sale was set aside on rehearing. Mukherjee then started Miscellaneous Case No, 40 of 1938 under section 47 of the Civil Procedure Code on April 4, 1938. The objection of lack of jurisdiction in the execution Court was again missing in this application. The application was dismissed and the appeal against it was also dismissed on May 25, 1938. When a the property was sold for the third time, Mukherjee started Miscellaneous Case No. 76 of 1938 on June 27, 1938, for setting aside the sale (Exhibit E. 4). In paragraph 20 of his application he stated: "That this court has no jurisdiction to entertain this application for execution without a fresh certificate (sic) the court passing the decree under executions The previous certificate creating jurisdiction in the present court has long expired after the dismissal of the previous execution case. The whole proceeding and the sale thereunder is not only illegal and materially irregular but is absolutely void for want of jurisdiction. " This plea was apparently not pressed and the Miscellaneous Case was dismissed on June 30, 1938. Mukherjee filed an appeal F. M. A. No. 262 of 1938 (Exhibit F.) on August 23, 1938, but the appeal was dismissed on August 5, 1940, on the ground, that there was no material irregularity in publishing the sale and the colliery had not been sold at an inadequate price on ' account of any such irregularity. This again shows that no question of jurisdiction was raised before the learned Judges of the High Court. Then followed the review application (Exhibit B) presented on November 25, 1940, to the High Court. Paragraphs 11, 12 and 13 of this application are important and they run as follows " 11. That after passing the '. judgment in F.A. No.246 of 1937 on 13th August, 1940,your petitioner got the records of Suit No. 1518 of 1923 of the Original Side of this Hon 'ble Court searched for ascertaining the amount due under the decree of the said 396 suit and came to, know for the first time on 23rd August, 1940, that after dismissal of the old Execution Case No. 296 of 1931 by the Subordinate Judge of Asansol on 27th February, 1932, the result of the said execution case was sent to the Original Side of this Hon 'ble Court under section 41, Civil Procedure Code, and that was received on 11th March, 1932, and that no fresh , certificate of non satisfaction of the decree was sent by the Original Side of this Hon 'ble Court for fresh execution and so there was no basis on which the Execution Case No. 224 of 1932 could be started in the Court of the Subordinate Judge of Asansol. That your petitioner submits that the copies of the decree and certificate of non satisfaction were taken by the decree holder on detaching the same from the records of old used Execution Case No. 296 of 1931 and fraudulently used afterwards in Execution Case No. 224 of 1932 by practising fraud upon the Court. That your petitioner further begs to submit that he was misled by order of the Court of the Subordinate Judge which runs as follows: S 'Register. Let the certificate of non satisfaction received be annexed to the record. ' " This application was rejected on May 8, 1941, and the order of the learned Judges which is brief may be reproduced in full: "The ground for review is that after the dismissal of the said appeal the petitioner discovered that the execution proceedings in which the sale took place was held by the executing Court although that Court did not receive any certificate of non satisfaction from the Court which passed the decree under execution. This objection does not properly come for investigation in a proceeding under Order XXI, rule 90, Civil Procedure Code. Even if the allegation of the petitioner about the discovery of new matter is correct, it cannot affect the decision of the appeal which we have dismissed. " 397 The foregoing narrative of the various stages through which the execution proceedings passed from time to time will show that neither at the time when the execution application was made and a notice served upon the judgment debtor, nor in the applications for setting aside the two sales made by him did the judgment debtor raise any objection to execution being proceeded with on the ground that the execution Court had no jurisdiction to execute the decree. The failure to raise such an objection which went to the root of the matter precludes him from raising the plea of jurisdiction on the principle of constructiveres judicata after the property has been sold to the auction purchaser who has entered into possession. There ate two occasions on which the judgment debtor raised the question of, jurisdiction for the first time. He did not, however, press it with the result that the objection must be taken to have been impliedly overruled. One such occasion was when the property was sold for the second time and was purchased by the decree holder for Rs. 20,000. In paragraph 19 of his application dated July 7, I 933 (Exhibit E) to set aside the sale he challenged the jurisdiction of the Court, but the order of the Court dated the 29th January, 1934, does not show that the plea was persisted in. The second occasion was when the property was sold for the third time and in his application (Exhibit E.4) dated June 27, 1938, for setting aside the sale he raised the question in paragraph 20. The objection application was dismissed but there is no trace of the judgment debtor having pressed this objection. When he preferred an appeal to the High Court, he did not make the plea of jurisdiction a ground of attack against the execution of the decree and the appeal was dismissed on other points. Finally he filed a review application and in paragraphs 11, 12 and 13 he raised the objection to execution in more elaborate words, but the application was rejected by the High Court on the ground that such an objection did not fall within the purview of Order XXI, rule 90, of the Code of Civil Procedure 398 This order therefore became final. The judgmentdebtor admitted that the two applications (Exhibits E and E. 4) were prepared according to his instructions. It is not possible therefore for the judgmentdebtor to escape the effect of the above orders which became binding upon him. That the principle of constructive res judicata is applicable to execution proceedings is no longer open to doubt. See Annada Kumar Boy and Another vs Sheik Madan and Others (1), and Mahadeo Prasad Bhagat vs Bhagwat Narain Singh(2). In the first case an application was made by a certain person for execution of a decree and no objection was raised that the decree was not maintainable at the instance of the applicant and the application was held to be maintainable. It was held that no further objection on the score, of the maintainability of a fresh application for execution on the part of the same applicant could be raised. In the second case a money decree had been obtained on the foot of a loan which was the subject matter of a mortgage and the property was sold in execution. The judgment debtor raised the question of the validity of the execution proceedings and objected that the execution court had no jurisdiction to sell the property in execution of a money decree as no sanction of the Commissioner had been obtained under section 12 A,Chota Nagpur Encumbered Estates Act. The objection was not decided but the objection petition was dismissed with the result that the property came into the possession of the auction purchaser. In an action for a declaration that the sale to the purchaser was void for want of sanction of the Commissioner it was held that as the point was raised although not decided in the objection petition under section 47, it was res judicata by reason of Explanation IV to section 11. The Privy Council as early as 1883 in Ram Kirpal Shukul vs Mussamat Rup Kuari(3) held that the decision (1) (3) (1884) 11 I. A. 37. (2) A.I. R. 1938 Patna 428. 399 of an execution Court that the decree on a true construction awarded future mesne profits was binding between the parties and could not in a later stage of the execution proceedings be set aside. Their Lordships ruled that the binding force of such a decision depends upon general principles of law and not upon section 13, Act X of 1877, corresponding to section 11 of the present Code. In that case the Subordinate Judge and the District Judge had both held that the decree awarded mesne profits, but their decision was reversed by the Calcutta High Court. The Full Bench of that Court also held that the law of res judicata did not apply to proceedings in execution of the decree. This decision was reversed in appeal by the Privy Council. At page 43, Sir Barnes Peacock, who delivered the judgment of the Board, observed "The High Court assumed jurisdiction to decide that the decree did not award mesne profits, but, whether their construction was right or wrong, they erred in deciding that it did not, because the parties were bound by the decision of Mr. Probyn, who, whether right or wrong, had decided that it did; a decision which, not having been appealed, was final and binding upon the parties and those claiming under them. " In Raja of Bamnad vs Velusami Tevar and Others(1) an assignee of a partially executed decree applied to the Subordinate Judge to be brought on the record in place of the decree holder. The judgment debtor denied the assignment and the liability of certain properties to attachment and alleged that the right to execute the decree was barred by limitation. The Subordinate Judge recognized the assignment, allowed the assignee to execute the decree and gave his permission to file a fresh application for attachment. This order was not appealed against. In the final proceedings. The Subordinate Judge permitted to judgment debtors to raise again the plea of limitation. In the course of the judgment Lord Moulton observed as follows: (1) (1921) 48 I.A.145, 52 400 "Their Lordships are of opinion that it was not open to the learned Judge to admit this plea. The, order of December 13, 1915, is a positive order that the present respondent should be allowed to execute the decree. To that order the plea of limitation, if pleaded, would according to the res pondents ' case have been a complete answer, and therefore it must be taken that a decision was against the respondents on the plea. No appeal was brought against that order, and therefore it stands as binding between the parties. Their Lordships are of opinion that it is not necessary for them to decide whether or not the plea would have succeeded. It was not only competent to the present respondents to bring the plea forward on that occasion but it was incumbent on them to do so if they proposed to rely on it,, and moreover it was in fact brought forward and decided upon. " Sha Shivraj Gopalji vs Edappakth Ayissa Bi and Others (1) : In this case the decree holder in t e earlier execution proceedings could have raised a plea that the judgment debtor had an interest in certain property which could be attached under his decree but the plea was not raised through his own default and the execution was dismissed. It was held under such circumstances that the dismissal operates as res judicata in the subsequent execution proceedings and even apart from the provisions of section 11 of the Civil Procedure Code, it is contrary to principle to allow the decree bolder in fresh proceedings to renew the same claim merely because he neglected at a proper stage in previous proceedings to support his claim by the argument of which he subsequently wishes to avail himself. There is ample authority for the proposition that even an erroneous decision on a question of law operates as resjudicata between the parties to it. The correctness or otherwise of a judicial decision has no bearing upon the question whether or not it operates as res judicata. A decision in the previous execution (1) A.I.R. 1949 P.C. 302; 54 C.W.N, 54. 401 case between the parties that the matter was not within the competence of the executing Court even though erroneous is binding on the parties; see Abhoy Kanta Gohain vs Gopinath Deb Goswami and Others(1). The learned Chief Justice concedes that the principle of res judicata applies to the execution proceedings but he refused to apply it to the present case on the ground that there was lack of inherent jurisdiction in the execution Court to proceed with the execution. He relied upon Ledgard and Another vs Bull (2). This case is distinguishable upon the facts. This was a suit instituted before the Subordinate Judge for infringement of certain exclusive rights secured to the plaintiff by three Indian patents. Under the Patents Act the suit could be brought only before the District Judge. The defendant raised an objection to the jurisdiction of the Court. It appears that , subsequently the defendant joined the plaintiff in petitioning the District Judge to transfer the case to his own Court. This was done. The suit was transferred under section 25 of the Civil Procedure Code. It was admitted that the suit could not be transferred unless the Court from which the transfer was sought to be made had jurisdiction to try it. The defendant adhered to the plea of jurisdiction throughout the proceedings but it was urged that by his subsequent conduct he had waived the objection to the irregularity in the institution of the suit. Their Lordships held that although a defendant may be barred by his own conduct from ' objecting to the irregularity in the institution of the suit, yet where the Judge had no inherent jurisdiction over the subject matter of the suit, the parties cannot by their mutual consent convert it into a proper judicial process. This decision has no bearing upon the present case as no question of constructive res judicata arose in that case. The cases of Gurdeo Singh V. Chandrika Singh and Chandrikah Singh vs Rashbehary Singh (3) and (1) A.I.R. 1943 Cal. 460. (2) (1886) 13 I.A. 134. (3) Cal. 402 Rajlakshmi Dasee vs Katyayani Dasee (1) are both dis tinguishable as they did not involve any question of constructive res judicata. Two cases of the Allahabad High Court (1) Lakhmichand and Others vs Madho Rao (2), (2) Baghubir Saran and Another vs Hori Lal and Another (3) were also relied upon in the judgment under appeal. , The first was a case of the grant of assignment of the, land revenue of a village in favour of the grantee. He mortgaged it and a suit brought on foot of the mortgage was decreed. In a subsequent suit for a declaration that the previous decree of the Court was null and void by reason of the fact that the suit was not cognisable in the absence of a certificate from the Collector as required by the Pensions ' Act authorizing the trial of such a suit, it was held that the decree was one without jurisdiction and that it did not operate as res judicata in the subsequent suit for which the certificate was obtained. It was obvious that the statutory provisions of the Act forbade the trial of any suit without the certificate of the Collector. There was, therefore, an initial lack of jurisdiction to try the case and the case is inapplicable to the facts of the present case. The second case which involved the question of territorial jurisdiction was in our view not correctly decided. There a suit against a minor for enforcement of the mortgage was decreed in respect of property which was beyond the territorial jurisdiction of the Court passing the decree. When the decree was transferred for execution to the Court within whose jurisdiction the property was situate, it was objected that the decree was a nullity. The objection was overruled and the objector was referred to file a regular suit. In the regular suit filed by him it was decided that an independent suit was maintainable for avoiding the decree although no objection was raised to jurisdiction in the Court passing the decree. It was also held that the bar of section 11, Explanation IV, of (1) Cal. 639 (2) (1030) I. L.R. 52 All. 868. (3) All. 403 the Code of Civil Procedure did not apply to the case. We think that although section 21 of the Code of Civil Procedure did not apply in terms to the case, there is no reason why the principle underlying that section should not apply even to a regular suit. The objection to jurisdiction must be deemed to have been waived and there was no question of inherent lack of jurisdiction in the case. The suit was clearly barred by the principle of res judicata and was wrongly decided. The question which arises in the present case is not whether the execution Court at Asansol had or had not jurisdiction to entertain the execution application after it had sent the certificate under section 41 but whether the judgment debtor is precluded by the principle of constructive resjudicata from raising the question of jurisdiction. We accordingly hold that the view taken by the High Court on the question of res judicata is not correct. We allow the appeal, set aside the judgment and the decree,of the High Court and restore that of the Subordinate Judge dismissing the application of the judgment debtor. The appellant will be entitled to his costs here and hitherto. Appeal allowed. Agent for the appellant ': P. K. Chatterjee. Agent for the respondent No. 1: B. B. Biswas. [/INST]Section 7 of the Punjab Shops and Commercial Establishments Act, 1958, provided that no person shall be employed about the business of an establishment for more than forty eight hours in any week and nine hours in any one day. Under section 9 of the Act no establishment shall save otherwise provided by the Act,open earlier than ten o 'clock in the morning or close later than eight o 'clock in the evening. The petitioners challenged the constitutional validity of the aforesaid provisions of the Act on the ground that having,, regard to the nature of their business, it would be impossible for them to carry it on in the manner in which they were doing unless the Act permitted them to work without regard to the restrictions imposed by the limitation as to hours of work of employees under section 7(1) or the hours for the opening and closing of the establishments under section 9, and that, 853 consequently, these provisions imposed unreasonable restric tions on their fundamental right to carry on their trade or business under article 19(1)(e) of the Constitution of India. The petitioners ' case was that their business was such that the customers who supplied them with goods brought them in vehicles which arrived at their godowns at all hours of the day and night and that they received messages by telephone and telegram similarly both during day and night. These according to them rendered it necessary that their place of business should be kept open practically for all the 24 hours of the day. Held, that ss.7 and 9 of the Punjab Shops and Commercial Establishments Act, 1958 are intra vires the Constitution of India. The test of constitutional validity is whether the impugned provisions of the Act which were enacted to afford the worker better conditions of work and more regulated hours so as to avoid physical overstrain and ensure to him a reasonable amount of leisure in the interest of the general public, are unreasonable restrictions from the point of view of the employer and go beyond what is reasonably needed to protect the worker. judged by this test, neither the 48 hour week, nor the specification of the opening and closing hours could be said to have gone beyond what by modern standards are necessary for ensuring the health and efficiency of the employee. Manohar Lal vs The State of Punjab, ; , followed. </s>
<s>[INST] Summarize the judgement: Criminal Appeal No 188 of 1971. Appeal by special leave from the judgment and order dated the 29 9 1970 of the Gujarat High Court in Criminal Appeal No. 410 304 D. Mookherjee, section K. Dholakia and M. N. Shroff, for the appellant. K. J. Shethna and Vimal Dave and Miss Kailash Mehta, for the respondent. The Judgment of the Court was delivered by GOSWAMl, J. The accused Haidarali Kalubhai was convicted by the Sessions Judge, Mehsana, under section 304 Part II, Indian Penal Code, and was sentenced to rigorous imprisonment for seven years for causing death of Mahomadali Kasamali. He was also convicted under sections 326 and 323 I.P.C. and sentenced to rigorous imprisonment for two years and to three months respectively in connection with injuries to two other persons. On appeal to the High Court conviction was altered to one under section 304 A.I.P.C. Only and the accused was sentenced to rigorous imprisonment for eighteen months and to a fine of Rs. 500/ , in default rigorous imprisonment for six months. Briefly the facts are as Follows: It was usual for the deceased Mahomadali Kasamali, who was the sarpanch of village Nandasan, to spend some hours of the night from 8.00 P.M. to 11.P.M. near the Hotel Shanker Vijay which is situated by the side of the highway from Mehsana to Ahmedabad. There is a big open space in front of the hotel towards the north and a kutcha road branches off from the highway towards Dangarwa. This kutcha road is almost in the centre of the open space in front of the hotel measuring about 80 feet. It is said that the portion immediately in front of the hotel is about two feet higher in elevation from the kutcha road. On August 23, 1969, the accused came in a tractor and stopped the same on the highway. He saw truck No. G.T.F. 904 which Was parked opposite to the aforesaid hotel of Vasudev (P.W. 7). The owner of the truck had gone to the village leaving his conductor Usman Imamali (P.W. 11) in the truck. It is said that the accused used to drive this truck earlier with permission of the truck owner. This time he used the key of his tractor to start the truck and he drove the same by the open field in front of the hotel. He drove the truck with the head lights on in full speed straight on the steel cot on which The deceased was resting with the result that the truck dashed against the cot and the deceased was thrown away to a distance of about ten feet from the cot. Head Constable Revajit (PW 3) was sitting on the same cot with the deceased and he was also thrown away. There was another wooden cot nearby where Constable Dalpat Singh (PW 4) and Vavdinmiya (PW 5) were sitting. The Head Constable with the other Constable came to meet the Sarpanch in connection with the investigation of a certain case. Since there was enmity between the accused and the deceased on account of Panchayat elections the prosecution case is that the accused willfully and deliberately drove the vehicle towards the cot with the intention of causing death to the A deceased Sarpanch. The accused was originally charged under section 302 IPC and under section 326 and 323 IPC with the result mentioned above. Hence this appeal by the State by special leave against the judgment of the High Court. The question that arises for consideration is whether the facts that `are established against the accused fulfil the ingredients of section 304 305 Part II as submitted by Mr. Debabrata Mukherjee on behalf of the State. According to the learned counsel this is a clear case under section 304 Part II and conviction under section 304A is unsustainable. Section 304A carves out a specific offence where death is caused by doing a rash or negligent act and that act does not amount to culpable homicide under section 299 IPC or murder under section 300 IPC. If a person willfully drives a motor vehicle into the midst of a crowd and thereby causes death to some person, it will not be a case of mere rash and negligent driving and the act will amount to culpable homicide. Each case will, therefore, depend upon the particular facts established against the accused. The prosecution in this case wanted to establish a motive for committing the offence against the Sarpanch. It was sought to be established that there was enmity between the Sarpanch and the accused ` and his relations on account of Panchayat elections. Some evidence was led in order to prove that the accused and his relations were gunning against the Sarpanch for some time after the latter 's election as Sarpanch. Even an anonymous letter was received by the Sarpanch threatening his life which was handed over to the police by the Sarpanch. Both the Sessions Judge as well as the High Court did not accept the evidence appertaining to motive. Mr. Mukherjee, therefore, rightly and very fairly did not address us with regard to that part of the case. Even so, the learned counsel submits that the act per se and the manner in which the vehicle was driven clearly brought the case under section 304 Part II IPC. The following facts are established. The accused drove the truck at great speed with lights on. He had the conductor with him in the truck. Some time before driving the truck the accused had seen the Constables talking with the Sarpanch at the spot in question. There is no evidence that the accused had a licence to drive the truck. It, however appears from it. 70, which is a complaint in criminal case No. 160 of 1969 dated January 17, 1969 that the accused "had no licence. while driving his truck No. GTF 704. " While the two Constables jumped from the cot and escaped the deceased could not do so in spite of being alerted by the Head Constable as he was in a Lying posture on the cot. It appears from the map of the scene Ext. 9 that the truck while being driven by the field was trying to turn towards the kutcha road at a point near the cot shown in the map. This would go to show that the accused was unable to control the vehicle in high speed while taking a turn to get into the kutcha road from the open field and in this process hit the cot throwing the deceased out of the cot by the impact resulting in injuries which ultimately led to his death. Even the Constables, who jumped from the cot, received injuries. There was no direct impact of the persons with the vehicle in speed. The accused in his statement under section 342, Criminal Procedure Code, stated as follows: "I took the truck in reverse first and as there were other trucks lying round about, I took out my truck from the available way. 306 The accilator (sic) stuck down and hence the truck went in full speed and did not remain in control. One truck was coming from opposite side with full light. While driving with (sic) this way, I heard some noise, and the conductor Usman told me that the truck had struck with something then I heard some shouts and realised that some persons were injured but I did not stop the truck through fear of assault . truck through fear of assault . . I presented myself at the Police Station". Now this version is supported by Usman (PW 11) who, however, has been declared hostile by the prosecution. He was cross examined by the prosecution in order to show that he made a wrong statement in the examination in chief when he stated that the accused drove the truck with the key of the truck whereas he had stated before the police that the accused came on his tractor and started the truck with his key. He was also cross examined about a truck coming from the opposite side with full light that he had not stated to the police to that effect. We do not think that the omission to mention before the police about another truck coming from the opposite direction can be a contradiction within the meaning of section 162, Criminal Procedure Code. We also do not give much importance as to whether the accused drove the truck with his key or with the key of the tractor. That has not much relevance in view of the fact that the accused admitted to have driven the truck. Besides, it is admitted by the prosecution witnesses (PWs ' 2 and 6) that the conductor (PW 11 ) was in the truck when the accused drove the same. PW11 is, therefore, a natural witness and we do not find any reason to disbelieve him when he stated that a truck was coming from the opposite direction with full lights on. Besides, the owner of the truck having not found the truck in the place where he had parked had already telephoned to the Police Station about someone taking away the truck. PW11, who is an employee of the truck owner, was, therefore, not even obliged to speak in favour of the accused. The facts disclosed in the prosecution evidence, therefore, do not make out a case of any wilful or deliberate act on the part of the accused in order to cause the death of the Sarpanch by driving the truck in the way he did. Besides, the presence of the Head Constable and another Constable with the deceased whom the accused had himself seen prior to his driving the truck would run counter to a theory of wilful and deliberate act on the part of the accused to cause the death not only of the Sarpanch but necessarily also of the Constables. Section 304A by its own definition totally excludes the ingredients of section 299 or section 300 IPC. Doing an act with the intent to kill a person or knowledge that doing of an act was likely to cause a person 's death are ingredients of the offence of culpable homicide. When intent or knowledge as described above is the direct motivating force of the act complained of, section 304 A has to make room for the graver 307 and more serious charge of culpable homicide. Does this happen in A this case ? The tangential track of the speeding truck coming in contact with the corner of the steel cot throwing it over the wooden cot and thereby throwing the deceased out of it resulting in fatal injuries would not reveal the accused intention or any deliberate act with the requisite knowledge for an offence of culpable homicide. The facts and circumstances disclosed in this case fit in more reasonably with the theory of loss of control by the accused of the vehicle in high speed trying to take a turn for the kutcha road. There is, therefore, no error committed by the High Court in holding that the falls under section 304A IPC and not under 304 Part II IPC. The appeal is accordingly dismissed. C S.R. Appeal dismissed. [/INST]One of the buses belonging to the appellant, DLB 5749, driven by "HS" enroute to Hissar, while negotiating a turn in village Kheri Sadh overturned, causing the death of "LWS" and injuries to many. At the time of the fatal accident, the bus was over loaded with passengers and goods, driven by "HS" at an excessive speed despite protests by the passengers while negotiating a turn. A suit for damages was filed by the legal heirs of deceased "LWS" against the driver and the appellant, the liability of the appellant arising out of the fact of its negligence in employing such a rash and negligent driver who was responsible for the accident acting in the course of its employment. The appellant took the plea of "vis major", there being rain on the fateful day and the breaking of the tie rod of the vehicle when it fell into a pit and making the bus out of the control of the driver. The suit was dismissed fixing the "quantum damni ficatus" at Rs. 34,210/ applying the principle of "quantum meruit" and on appeal the Punjab and Haryana High Court held that the accident was due to negligence attributable to the driver or both the driver and the appellant and decreed the suit, basing on the cogent and trustworthy evidence of P.Ws. 5, 6 and 8 to these facts (i) overload of the bus with goods and passengers; (ii) Witness and slippery nature of the road due to drizzling (iii) The expert report of the mechanic to the effect that the "tie rod" of the vehicle was only "opened" (dismantled) but not broken and the bad conditions of the foot brake and hand brakes: (iv) Factum of negotiating a turn and passing through the habitation of village Kheri; (v) Zig zag movement of the bus and the fast speed at which the bus was driven despite protests and shouts of the passengers. (vi) The actual) speed of the bus at 30 miles per hour at the time ", of the accident and (vii) over turning of the bus resulting in the death of "LWS" on the spot and injuries to many. The High Court, drawing an adverse inference against the appellant and the driver for non appearance in the witness box held that "inasmuch as buses in sound road worthy condition and driven with ordinary care do not normally overtime, and in this case the bus did overturn, the principle of "res ipsa loquitur" applied. " The High Court also awarded a decree for Rs. 21,600/ with proportionate cost as damages against the appellant and the driver limiting the liability of Rs. 2,000/ only against the insurance company. On appeal by certificate the appellant contended (i) that it was wrong to assume that over turning of the bus was "res ipsa loquitur"; (ii) that it was wrong to shift the onus on the appellant to show that they were not negligent and (iii) that in the absence of specific assignment of the reasons by the witnesses in their evidence the sudden breaking` of the tie rod was the cause of the accident and hence a vis major". Dismissing the appeal, the Court, 179 ^ HELD: (1) ordinarily in second appeal, it is not necessary for the court to reappraise the evidence on record because the first appellate court is supposed to be the final court of fact. [182E] (2) Buses in sound road worthy condition, driven with ordinary care, do not normally over turn. It would be for the driver who had special knowledge of the relevant facts to explain why the vehicle over turned. The maxim "res ipsa loquitur" would be attracted in such a case. In the present case, the defendants failed to rebut the presumption of negligence that arose from the manifest circumstances of the case. [184 C D] Shyam Sundar and others vs State of Rajasthan, A.I.R. , not applicable. Barkway vs South Wales Transport Co. Ltd. [1948] 2 All. E.R. 460, applied. (3) Viewed in the light of the other circumstances, in the instant case, like overloading, negotiating of a turn near the village habitation on a slippery road a duty was cast on the driver to go dead slow. A speed of 25 to 30 miles per hour, in these conditions and in this situation, at the turning of the road would be imprudently excessive. [184A B] (4) Had the bus been properly maintained in a sound road worthy condition and used with due care and driven with due caution, the tie rod should not have broken loose by the fall of the wheel in a pit hardly six inches deep, particularly when the upward thrust of the water in the pit would have largely absorbed the shock of the fall. The pit was in the kacha berm and not right in the mettled portion. The driver could have with ordinary care and diligence avoided it. Thus, the breaking of the tie rod assuming it did break was. at best, a neutral circumstance. [184 B C] (5) In the instant case the driver was admittedly an employee of the appellant company, and at the relevant` time he was acting in the! course of his employment. The vehicle was the property of the appellant company under whose management defendant 3 was working at the material time. It s well settled that where in an action for negligence the thing causing fatal injury to the deceased and consequent pecuniary loss to the plaintiff, is shown to be under the management of the defendant or his servants and the accident is such as in the ordinary course of events, does not happen, if those who have the management use proper case, that affords reasonable evidence, in the absence of explanation by the defendants, that the accident arose from want of care. The appellant company was, therefore, fully liable for the negligent act of their employee and the injury resulting therefrom. [185 D F] </s>
<s>[INST] Summarize the judgementivil Appeal No. 469 of 1975. From the Order dated 31.5.1974 of the Government of India, Ministry of Finance, Department of Revenue and Insur ance, New Delhi, in Order No. 615 of 1974 on Central Excise Revision Application. Dr. Y.S. Chitale, Ms. M. Ray and H.K. Dutt for the Appel lant. V.C. Mahajan, (N.P.), P. Parmeshwaran and R.P. Srivasta va for the Respondents. K .R. Nambiar for the Intervener. 372 The Order of the Court was delivered by RANGANATHAN J. The appellant assessee manufactures goods known in the market as cushion repair compound, tread repair compound and cover. compound. These materials, ac cording to the assessee, are used to mend injured and defec tive sections of tyres and are not meant to be used either in the resoling or in retreading of tyres. Under the Cen tral Excise & Salt Act, 1944, ( 'the Act '), the above goods were normally dutiable under tariff item No. 15A (2). Howev er, the assessee claimed exemption from duty under notifica tion No. 71 of 1968 dated 1.4.1968. By this notification under section 8 of the Act, the Central Government exempted "all rubber products, in the form of plates, sheets and strips unhardened, whether vulcanised or not, and whether combined with any textile material or otherwise (other than the products which are made either wholly or partly of rubber and which are used for the resoling or retreading of tyres, including the products commonly known as tread rub ber, camel back, cushion compound, cushion gum, tread gum and tread packing strips) falling under sub item (2) of this item, from the whole of the duty of excise leviable thereon". The Superintendant of Central Excise having re jected the claim for exemption and charged the goods in question to duty at 20% (basic) under the tariff item above mentioned, the assessee preferred an appeal to the Collector of Central Excise, West Bengal. The Collector also rejected the claim observing that there was no evidence that the goods in question could not be used for the resoling or retreading of tyres. The assessee thereupon preferred a revision to the Central Government under section 36 of the Act as it then stood. In the revision petition, it was pointed out that tread repair compound and cushion repair compound were primarily meant for and also used as repair material only with reference to the treads and cushions of tyres and that since they were designed to serve the limited purpose of mending small sections of tyres it would be grossly erroneous to hold that these repair materials could be used in place of tread rubber or camel back which only have the necessary physical dimensions and technical proper ties to serve as retreading and resoling material. Similarly cover compound, it was said, was material which was used only for repairing conveyor belting and was also marketed by the assessee solely for the purpose of repairing damaged sections of the conveyor belting. It was not meant for use in retreading and resoling of tyres since their sole intend ed use was to repair conveyor belts. The Central Government, however, dismissed the revision petition by its order dated 21.5.1974. The Government referred to the fact that the 373 notification of exemption specifically excluded cushion compound, cushion gum and tread gum and observed that, in view of this, cushion repair compound and tread repair compound would also be assessable to duty under item No. 16A. So far as cover compound was concerned, it was observed that its composition was such that its use for repair of conveyor belts was indistinguishable from the other use of resoling of tyres. The present appeal has been preferred from the order of the Central Government. On behalf of the appellant it is pointed out that the whole purpose of the exemption notification was to exclude products which were used for the resoling and retreading of tyres. The Government has overlooked that while tread rub ber, cushion compound and tread gum are all items used for resoling or retreading of tyres, that was not the use to which the articles manufactured by the assessee were put. The statement of the assessee that the goods manufactured by it were employed only for repairing tyres and conveyor belts has not been disbelieved. It is therefore submitted that the Government erred in holding that the goods produced by the assessee are not eligible for the exemption in question. In support of his contention, learned counsel for the appellant relied on two important circumstances. One is that by a notification No. 27 of 1973 dated 1.3.1973, notifica tion No. 71 of 1968 was amended and the words "used for resoling, retreading or repairing of tyres" was substituted for the words "used for the resoling or retread~ ing of tyres". This amendment was not effective for the period with which we are concerned and it is therefore argued that the compounds used for repairing as against resoling or retread ing will not be covered by the exclusion in the exemption notification. The second circumstances relied upon by the learned counsel for the appellant is this. Earlier, there was a notification No. 31 of 1964 under which the duty leviable in respect of latex foam sponge as well as products commonly known as tread rubber or camel back including cushion compound, cushion gum, tread gum, and tread packing strips were subjected to a concessional rate of duty while other rubber products falling under item 16A were granted an exemption from the levy of duty. In the context of that notification, a question arose as to whether rubber products which are capable of being used for retreading or resoling of tyres but are only used for repairs would attract duty or not. The position was clarified by the Central Board of Excise and Customs in its circular No. Rubber 1/66 dated 7.2.1966. The relevant part of the circular reads as fol lows: 374 "2. Those rubber products which are not 'latex foam sponge ' may be excisable under the said tariff item No. 16A but would not attract Central Excise duty unless commonly known as per description given in Column 2 against section No. 2 of the table to the above cited notifi cation. While the scope of the levy on the rubber products thus gets very much restrict ed, it may so happen that different brand names are given by different manufactures to the same or similar product giving rise to the question whether or not a particular product can be deemed to be commonly known as 'tread rubber ', 'camel back ', 'cushion compound ', 'cushion gum ' etc., so as to attract duty. Doubts of the above nature should not in fact arise in view of para 6 to the 1962 Budget instructions. It was made quite explic it therein that 'item is . fairly comprehen sive as to wording but the intention . is to subject only 'latex foam sponge ' and the rubber products popularly known as 'tread rubber ' or camel back ' used for the resoling or retreading of tyres to duty. That being the intention a rubber product which is neither 'latex foam sponge ' nor used for the resoling or retreading of tyres is classifiable as 'all other products ' and therefore exempt from whole of the duty leviable thereon under section No. 3 of the Table to the above cited notifi cation. It is possible that some of the rubber products are capable of being used for re treading or resoling of tyres. Mere capacity does not, however, attract duty in the absence of normal usage in that manner being estab lished it would not be appropriate to hold that the products are dutiable. Rubber products used for repair of tubes or tyres also, in view of what has been stated above, does not attract duty. Pending cases regarding assessment of rubber products may be finalised accordingly". Learned counsel submits that the above interpretation is equally applicable in the context of notification No. 71 of 1968. 375 We are of opinion that the appellant 's contention is well founded. The notification of 1978 only reproduces with some modifications the notification of 1964; however, the broad purport of both the notifications is to exempt rubber products other than those which are commonly sold under certain descriptions and are used for the resoling or re treading of tyres. The circular of 1966, which can be con sidered as a contemporaneous exposition of the understanding of the Government while issuing the exemption notification of 1964, makes it clear that, at that time, it was not intended to deny exemption to rubber products used merely for repair purposes. The notification of 1973 was one in which various amendments were carried out to a series of notifications relating to various items and does not contain anything to suggest that it was only a clarification that was intended to be given and not a prospspective amendment of the previous notification. As already mentioned, the fact that the appellant is using or marketing the products for use, only for repairing tyres and conveyor belts is not controverted. In these circumstances, we are of opinion that the appellant assessee was entitled to exemption under the notification. In one sense, any rubber compound has a compo sition which theoretically permits it to be used either for repair purposes or for resoling or retreading of tyres. But the assessee 's contention is that the product marketed by it ' has not the physical dimensions or technical properties to be capable of use for retreading or resoling. Also, the notification talks of products "used for" resoling and retreading of tyres and that is not the case here. The notification thus imports a limitation on the exclusion from the exemption specified in the paranthetical clause of the notification. That exclusion is only in respect of compound used for resoling or retreading. For the reasons mentioned above we allow this appeal and set aside the order of the Central Government under section 36 of the Central Excise Act as well as the orders of the subordinate authorities and hold that the assessee is enti tled to the exemption prayed for. The concerned assessment will be modified accordingly. We however make no order as to costs. G.N. Appeal allowed. [/INST]The appellant assessee has been manufacturing cushion repair compoud, tread repair compound and cover compound. According to the assessee, these were not meant either for resoling or retreading of tyres, but for mending injured and defective sections of tyres. Though normally these goods are dutiable under tariff item No. 16A(2), the assessee claimed exemption from duty under Notification No. 71 of 1968 dated 1.4.68. The Superintendent rejected the claim. On appeal by the assessee, the Collector observed that there was no evidence that the goods in question should not be used for the resoling or retreading of tyres and rejected the claim. The assessee preferred a revision to the Central Govt. The Central Govt. while rejecting the Revision Peti tion, referred to the fact that the notification specifical ly excluded cushion compound, cushion gum and tread gum. As regards cover cushion compound, it observed that the compo sition was such that its use for repair of conveyor belts was indistinguishable from the other use of resoling of tyres. This appeal has been filed against the order of the Central Govt. The appellant contended that the Government had overlooked the fact that while tread repair, cushion compound and tread gum are items used for resoling or re treading of tyres, that was not the use to which the arti cles manufactured by the assessee were put. Since the fact that the goods manufactured by it were employed only for repairing tyres and conveyor belts was not disbelieved, it was argued, the assessee was eligible for the exemption claimed by it. Allowing the appeal, this court, HELD: 1. The notification of 1978 only reproduces with some 371 modifications the notification of 1964. The broad purport of both the notifications is to exempt rubber products other than those which are commonly sold under certain descrip tions and are used for the resoling or retreading of tyres. The circular of 1966, which can be considered as a contempo raneous exposition of the understanding of the Government while issuing the exemption notification of 1964, makes it clear that at that time, it was not intended to deny exemp tion to rubber products used merely for repair purposes. The notification of 1973 was one in which various amendments were carried out to a series of notifications relating to various items and does not contain anything to suggest that it was only a clarification that was intended to be given and not a prospective amendment of the previous notifica tion. [375A C] 2.1 The fact that the appellant is using or marketing the products for use, only for repearing tyres and conveyor belts is not controverted. Hence the appellant assessee was entitled to exemption under the notification. In one sense, any rubber compound has a composition which theoretically permits it to be used either for repair purposes or for resoling or retreading of tyres. But the assessee 's claim is that the product marketed by it has not the physical dimen sions or technical properties to be capable of use for retreading or resoling. Also, the notification talks of products "used for" resoling and retreading of tyres; and it is not so in the instant case. [375C E] 2.2 The notification imports a limitation on the exclu sion from the exemption specified in the paranthetical clause of the notification. That exclusion is only in re spect of compounds used for resoling or retreading. [375E] </s>
<s>[INST] Summarize the judgementCIVIL APPEALS Nos. 170 to 176 and 178 to 183 of 1953. Appeals from the Judgment and Order dated the 22nd August, 1952, of the High Court of Judicature at Madras in Civil Miscellaneous Petitions Nos. 13386, 13388,13390, 7812, 12003, 13188, 13262, 7822, 13123, 13347, 13341, 12997, 12494 of 1950 and Order dated 8th September, 1952, in C.M.P. No. 13936 of 1950. K. section Krishnaswamy lyengar (K. g. Champakesa lyengar, with him) for the appellants. V. K.T. Chari, Advocate General of Madras (R. Ganapathy lyer and V.V. Raghavan, with him) for the respondent (State of Madras) in Civil Appeals Nos. 170 to 176 and 178 to 181. M. Seshachalapathi for the respondent (State of Andhra) in Civil Appeals Nos. 182 and 183. February 5. The Judgment of the Court was delivered by MUKHERJEA J. I2 95 S.C. I./59 762 MUKHERJEA J. These consolidated appeals, numbering fourteen in all, are directed against a common judgment of a Division Bench of the Madras High Court dated the 23rd of August, 1952, by which the learned Judges dismissed the petitions of the different appellants made under article 226 of the Constitution. The appellants are landholders of Madras, holding zamindaries within that State, and in their applications under article 226 of the Constitution they prayed for writs in the nature of mandamus, directing the State of Madras to forbear from notifying and taking over possession of the estates held by them and also to cancel the notifications already issued, in exercise of its powers under the Madras Estates (Abolition and Conversion into Ryotwari) Act, (Act XXVI of 1948). This Act, the constitutional validity of which has been assailed by the appellants, was passed by the Provincial Legislature of Madras functioning under the Government of India Act, 1935, and it received the assent the Governor General of India on the 2nd of April, 1949. The avowed object of the Act is to abolish the zamindary system by repealing the Madras Permanent Settlement Regulation of 1802, to acquire the rights landholders in the permanently settled and other ,estates and to introduce the Ryotwari system in all such estates. After the advent of the Constitution, the Act was reserved for certification of the President and it was certified on the 12th of April, 1950. In the petitions presented by the appellants, a large number of grounds were put forward by way of attacking the validity of the legislation which was characterised as confiscatory in its character and subversive of the fundamental right of property, which the petitioners had in the zamindaries held by them under the Permanent Settlement Regulation. Pending the disposal of these petitions, the Constitution (First Amendment) Act of 1951 was passed on 1st of June, 1951, and this amendment introduced two new articles namely, article 31 A and 31 B in the Constitution, apparently with a view to protect the 'various laws enacted for acquisition of estates from being challenged under the relevant articles of Part III of the 763 Constitution. Article 31 B specifically refers to a number of statutes mentioned in the ninth Schedule to the Constitution and it declares expressly that none of them shall be deemed to be void on the ground that they contravened any of the fundamental rights, notwithstanding the decision of a court or tribunal to the contrary. It is not disputed that Madras Act XXVI of 1948 is one of the statutes included in this schedule. It may be remembered that an attempt was made to impeach the validity of the Constitution (First Amendment) Act itself before this court in the case of Shankari Prasad Singh Deo vs Union of India (1). The attempt failed and after the pronouncement of this court in Shankari Prasad 's case, the grounds upon which the writ petitions of the appellants were sought to be supported became for the most part unavailing. It appears that at the time of the final hearing of the applications the arguments actually advanced on behalf of the petitioners were aimed not at invalidating the enactment as a whole, but only some of its provisions, firstly on the ground that there was no public purpose behind the acquisition of some of the items of property mentioned therein and secondly, that the provisions for compensation in certain aspects were colourable exercise of legislative powers and constituted a fraud upon the Constitution Act of 1935. These arguments were sought to be supported entirely on the authority of the majority decision of this court in the case of The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh (2) to the extent that it pronounced two of the provisions of the Bihar Land Reforms Act. 1950 a legislation similar in type to the Madras Act 1948 to be unconstitutional. These contentions did not find favour with the learned Judges of the High Court who heard the petitions and holding that the principles enunciated by the majority of this court in the Bihar case referred to above were not applicable to the impugned provisions of the Madras Act, they dismissed all the petitions. Certificates, however, were granted by the High Court to the petitioners (1) ; (2) 764 under article 132(1) of the Constitution and it is on the strength of these certificates that the appeals have ' come before us. Mr. Ayyangar, appearing in support of these appeals, has taken his stand solely upon the doctrine of ' 'colourable legislation ' as enunciated by the majority of this court in the Bihar case referred to above. He has very properly not attempted to make any point as to the absence of a public purpose in regard to any of the items of acquisition, since it is clear that according to the majority view of this court, as explained in Narayan Deo vs State of Orissa (1), the existence of a public purpose is not a justiciable issue in case of an enactment which having fulfilled the requirements of clause (4) of article 31 of the Constitution enjoys the protection afforded by it. The contentions of Mr. Ayyangar, in substance, are that the provisions of 'section 27(i) as well as of section 30 of the impugned Act are colourable legislative provisions which have been enacted in fraud of the Constitution Act of 1935. It appears that in determining the amount of compensation, that is to be paid under the Act, in respect of an acquired estate, it is necessary, first of all, to ascertain what has been described as the 'basic annual sum ' in regard to that estate. The ' basic annual sum comprises several items or parts which have been set out in section 27 and the subsequent sections of the Act, and it is upon the amount of the basis annual sum determined in accordance with the provisions of these sections that the total amount of compensation money payable to a proprietor is made to depend. Mr. Ayyangar contends that section 27(i) of the Act, which lays down that in computing the basic annual sum only one third of the gross annual Ryotwari demand of specified kinds is to be taken into account, is a colourable provision which, ignores altogether the actual income derived from the property and introduces an artificial and an arbitrary standard for determining the income or profits which has absolutely no relation to facts. Similarly, in computing the net miscellaneous revenue, which is an (x) [1945] S.C.R. A.I.R. x953 8. G. 375 at P. 380. 765 element in the computation of the basic annual sum, what is to be taken into account under section 30 is not the average of net annual income which the proprietors themselves derived from the sources, mentioned in the Act, when they were in possession of the estates, but which the Government might derive from them in future years after the date of notification. 'Thus if on account of mismanagement or for other reasons the Government does not derive any income from these sources, the proprietor would not have any compensation under this head at all. It is argued that these are mere devices or contrivances aimed at , confiscation of private property and they neither lay down nor are based upon any principle of compensation. Whatever the merits of these contentions might be, it appears to us that there is an initial and an insuperable difficulty in the way of the learned counsel 's invoking the authority of the majority decision of this court in the case of The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh(1) to the circumstances of 'the present case. The Bihar Land Reforms Act, 'which was the subject matter of decision in that case, was a legislation which was pending at the time when the Constitution came into force. It was reserved for consideration of the President and received his assent in due course and consequently under clause (4)of article 31 of the Constitution it was immune from judicial scrutiny on the ground that the compensation provided by it was inadequate or unjust. With regard 'to two of the provisions of the Act, however, which were embodied in sections 4 (b) and 23(f) of 'the Act, it was held by the majority of this court that they were void as they really did not come within entry 42 of List III of Schedule VII of the Constitution, under which they purported to have been enacted. Entry 42 of List III speaks of "principles on which compensation for property acquired or requisitioned for the purposes of the Union or of a State or for any other public purpose is to be determined, and the form and the manner in which such compensation is (1) [1952] s.c. R. 889. 766 to be given. " It was pointed out that entry 42 was undoubtedly the description of a legislative head and in deciding the competency of a legislation under this entry, the court was not concerned with the justice or propriety of the principles upon which the determination of the compensation was to be made or the form or manner in which it was to be given. But even then, the legislation must rest upon some principle of giving compensation and not of denying or withholding it, and a legislation could not be supported which was based upon something which was non existent or was unrelated to facts and consequently could not have a conceivable bearing on any principle of compensation. The initial difficulty in the way of invoking this doctrine in the present case lies in the fact that the legislation, which is impugned here, was passed by the Madras Provincial Legislature functioning under the Government of India Act, 1935, and ' there was no entry in any of the lists attached to the Act of 1935 corresponding to entry 42 in List I1I of the Indian Constitution. The only entry relevant to. this point in the Act of 1935 was entry9 of List I1 which spoke merely of 'compulsory acquisition of land '; and it is clear that a duty to pay compensation or of ' laying down any principle regarding it was not inherent in the language of that entry. The guarantee for payment of compensation, so far as the Constitution Act of 1935 is concerned, was contained in section 299 clause (2) which was worded as follows: "Neither the Federal Legislature nor a Provincial Legislature shall have power to make any law ' authorising the compulsory acquisition for public purposes of any land, or any commercial or industrial ' undertaking . . unless the law provides for the payment of compensation for the property acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which it is to be determined. " The appellants could have very well relied upon this guarantee if a bar had not been created in their way by the provision of article 31(6) of the Constitution. That clause of article 31 stands of follows: 767 "Any law of the State enacted not more than eighteen months before the commencement of this Constitution may within three months from such commencement be submitted to the president for his certification; and thereupon, if the President by public notification so certifies, it shall not be called in question in any court on the ground that it contravenes the provisions of clause (2) of this article or has contravened the provisions of sub section (2) of section 299 of the Government of India Act, 1935. " It is not disputed that the Madras Act XXVI of 1948 does fulfil all the requirements mentioned above. Consequently, it is not possible for us to allow the appellants to raise the contentions which the learned counsel on their behalf wants to raise. The result is that the appeals would stand dismissed, but in the circumstances of this case we shall make no order as costs. Appeals dismissed. [/INST]The respondent, a manufacturer of cotton Textiles, purchased unginned cotton and paid purchase tax thereon. The cotton was ginned and pressed by the respondent, the ginned cotton was used in the manufacture of cotton textile while the cotton seeds were sold by it. The respondent claimed refund of purchase tax paid on the unginned cotton under the Bombay Sales Tax (Exemption, Set off and Composition) Rules, 1954 which was disallowed by the Sales Tax authorities on the ground that r. 6(ii) was not applicable when subsidiary or incidental product alone was ,,old and the main product was used in the manufacture of the goods and looking at the working of the aforesaid Rule, all the products of the unprocessed goods should be sold. In reference, the High Court allowed the refund of the purchase tax under r. 12(i). HELD : The respondent was entitled to refund under r. 12(i). What is necessary under rule 12(i) is that the goods should have been actually used for the purpose specified viz., the production of any of the goods aforementioned for sale. These conditions have been satisfied in this case because unginned cotton was used for the purpose of producing one of the goods specified in column 2 for sale, namely, cotton seeds. [672 H] </s>
<s>[INST] Summarize the judgementAppeal No. 804 of 1963. Appeal by special leave from the judgment and decree, dated January 3, 1961 of the Orissa High Court in Appeal under Orissa High Court Order No. 3 of 1959. 25 K. R. Chaudhuri, for the appellant. C. B. Aggarwala, B. Parthasarathy, J. B. Dadachanji, O.C. Mathur, and Ravinder Narain, for respondent No. 1. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought by special leave on behalf of the judgment debtor against the judgment of the Orissa High Court, dated January 3, 1961 in Letters Patent Appeal No. 3 of 1959. The deceased plaintiff filed Original Suit No. 500 of 1941 against the appellant defendant in the Court of the Additional Munsif, Aska claiming Rs. 970 on the basis of a promissory note. The suit was dismissed on August 17, 1942. The plaintiff preferred an appeal No. 178 of 1942 before the District Judge who allowed the appeal and set aside the decree of the Munsif and decreed the suit ex parte on March 9, 1943. Against this decree of the appellate Court, the appellant filed Second Appeal No. 100 of 1943 in the Orissa High Court which set aside the decree of the District Judge on November 11, 1946 and remanded the suit to the lower appellate court for disposal. The lower appellate court in its turn remanded the suit to the trial court by its judgment, dated April 11, 1947. In the meantime the original plaintiff died and the present respondents were brought on record as his legal representatives. The suit was again dismissed by the trial court on November 29, 1947 but on appeal the Additional Subordinate Judge set aside the judgment and decree of the Munsif on November 30, 1948. The appellant carried the matter in Second Appeal No. 12 of 1949 to the Orissa High Court which dismissed the appeal on August 27, 1954. After the ex parte decree was passed inappeal No. 178 of 1942 by the District Judge on March 9,1943, the plaintiff executed the decree, attached the propertiesin dispute and himself purchased the properties in Court auction. The plaintiff also took delivery of the properties on May 17, 1946 and since that date the respondents have been in possession of the properties and enjoying the usufruct. After the decree of the High Court, dated November 11. 1946 in Second Appeal No. 100 of 1943 the appellant made an application for restitution in the Court of the Additional Munsif in Miscellaneous Judicial Case No. 34 of 1947. The plaintiff obtained a stay of the hearing of the Miscellaneous Judicial Case from the Court of the Additional District Judge but on March 30, 1948 the order of stay was discharged. In Civil Revision No. 75 sup, Cl/66 3 2 6 of 1948 the High Court also granted interim stay in the proceedings in the Miscellaneous Judicial Case at the instance of the plaintiff but the order of stay was vacated by the High Court on April 28, 1949. Thereafter the present appellant got the Miscellaneous Judicial Case stayed till disposal of his Second Appeal after remand. On July 12, 1956 the Miscellaneous Judicial case was allowed by the Munsif and an order of restitution was made in favour of the appellant. The respondents filed an appeal before the Subordinate Judge of Berhampur who allowed the appeal and set aside the order of restitution. The appellant took the matter before the High Court in Miscellaneous Appeal No. 24 of 1958 which was allowed by P. V. Balakrishna Rao, J. on October 3, 1958 and it was ordered that the restitution of the properties should be made to the appellant subject to the condition that he must deposit the amount decreed in favour of the plaintiff decree holder. The order of the learned Single Judge was, however, set aside in Letters Patent appeal by a Division Bench which held that the appellant was not entitled to restitution of properties sold in the execution case. The question presented for determination in this case is whether the appellant was entitled to restitution of his properties purchased by judgment debtor in execution of the decree passed by the District Judge on the ground that the decree was set aside by the High Court and the suit was remanded for rehearing and fresh disposal under the provisions of section 144 of the Civil Procedure Code which states as follows 144 (1) Where and in so far as a decree or order is varied or reversed, the Court of first instance shall, on the application of any party entitled to any benefit by way of restitution or otherwise, cause such restitution to be made as will, so far as may be, place the parties in the position which they would have occupied but for such decree or such part thereof as has been varied or reversed; and, for this purpose, the Court may make any orders, including orders for the refund of costs and for the payment of interest, damages, compensation and mesne profits, which are properly consequential on such variation or reversal. " On behalf of the responds Mr. aggarwala made the submission that after the suit was re heard a decree was passed in favour of the respondents and that decree was eventually affirmed by the High Court., and the appellant was, therefore, not entitled to 27 restitution under the provisions of this section. We are unable to accept this argument as correct. The properties of the appellant were sold in execution at the instance of the respondents who were executing the ex parte decree passed by the District Judge on March 9, 1943. In this execution case, the properties of the appellant were sold and the respondents got delivery of possession on May 17, 1946. It is true that the suit was eventually decreed after remand on August 27, 1954 by judgment of the High Court, but we are unable to accept the argument of the respondents that the execution sale held under the previous ex parte decree which was set aside by the High Court, is validated by the passing of the subsequent decree and therefore the appellant is not entitled to, any restitution. It is evident that the application for restitution was filed by the appellant in 1947 in Miscellaneous Judicial Case, No. 34 of 1947 before the passing of a fresh decree by the High Court in the Second Appeal. At the time of the application for restitution, therefore, the appellant was entitled to restitution,. because on that date the decree in execution of which the properties. were sold had been set aside. We are of the opinion that the appellant is entitled to restitution notwithstanding anything which happened subsequently as the right to claim restitution is based upon the existence or otherwise of a decree in favour of the plaintiff ' at the time when the application for restitution was made. The principle of the doctrine of restitution is that on the reversal of a decree, the law imposes an obligation on the party to the suit who received the benefit of the erroneous decree to make restitution to the other party for what he has lost. This obligation arises automatically on the reversal or modification of the decree and ' necessarily carries with it the right to restitution of all that has been done under the erroneous decree; and the Court in making restitution is bound to restore the parties, so far as they can berestored, to the same position they were in at the time when the Court by its erroneous action had displaced them from. It should be noticed, in the present case, that the properties were purchased ' by the decree holder himself in execution of the ex parte decree and not by a stranger auction purchaser. After the ex parte decree was set aside in appeal and after a fresh decree was passed on remand, the sale held in execution of the ex parte decree becomes invalid and the decree holder who purchased the properties in executions of the invalid decree is bound to restore to the judgment debtor what he had gained under the decree which was subsequently set aside. The view that we have expressed is borne out by the decision of the Judicial Committee in Zain Ul Abdin Khan vs 28 Muhammad Asghar Ali Khan(1) in which a suit was brought by the judgment debtor to set aside the sale of his property in execution of the decree against him in force at the time of the sales, but afterwards so modified, as the result of an appeal to Her Majesty in Council, that, as it finally stood, it would have been satisfied without the sales in question having taken place. The judgmentdebtor sued both those who were purchasers at some of the sales, being also holders of the decree to satisfy which the sales took place, and those who were bona fide purchasers at other sales, under the same decree, who were no parties to it. The Judicial Committee held that, as against the latter purchasers, whose position was different from that of the decree holding purchasers, the suit must be dismissed. At page 172 of the Report, Sir B. Peacock observed as follows "It appears to their Lordships that there is a great distinction between the decree holders who came in and purchased under their own decree, which was afterwards reversed on appeal, and the bona fide purchasers who came in and bought at the sale in execution of the decree to which they were no parties, and at a time when that decree was a valid decree, and when the order for the sale was a valid order." The same principle has been laid down by the Calcutta High Court in Set Umedmal and another vs Srinath Ray and another (2 ) where certain immovable properties were sold in execution of an exparte decree and were purchased by the decree holder himself. After the confirmation of the sale, the decree was set aside under section 108 of the Civil Procedure Code, 1882 at the instance of some of the defendants in the original suit. On an application unders. 244 of the Civil Procedure Code, 1882 having been made by adecree, to set aside the sale held in execution of the ex parte decree the defence was that the application could not come under section 244 of the Civil Procedure Code, 1882, and that the sale could not be set aside, as it had been confirmed. It was held by the Calcutta High Court that the ex parte decree having been set aside the sale could not stand, inasmuch as the decree holder himself was the purchaser. At page 813 Maclean, C.J. stated : "As regards the second point, viz., whether, notwithstanding the confirmation, the sale ought to be set aside, (1) I.L,R. 10 All, 166. (2) I.L.R. 29 the fact that the decree holder is himself the auction purchaser is an element of considerable importance. The distinction between the case of the decree holder and of a third party being the auction purchaser is pointed out by their Lordships of the Judicial Committee in the case of Nawab Zainal abdin Khan vs Mahommed Asghar Ali (I.L.R. 10 All., 166), and also in the case of Mina Kumari Bibee vs Jagat Sattani Bibee (I.L.R. , which is a clear authority for the proposition that where the decree holder is himself the auction purchaser, the sale cannot stand, if the decree be subsequently set aside. I am not aware that this decision, which was given in 1883, has since been impugned. " The same view has been expressed in Raghu Nandan Singh vs Jagdish Singh(1) where it was held that if an ex parte decree has been set aside, it cannot by any subsequent proceeding be revived and if a decree is passed against judgment debtors on re hearing, it is a new decree and does not revive the former decree. The same opinion has been expressed in Abdul Rahaman vs Sarafat Ali(2) in which it was pointed out that as soon as an ex parte decree was set aside, the sale, where the decree holder was the purchaser, falls through and was not validated by a fresh decree subsequently made. The same principle was reiterated by the Bombay High Court in Shivbai Kom Babya Swami vs Yesoo.(3). In that case, an ex parte decree was passed against the defendant, in execution of which the defendant 's house was sold and purchased by the plaintiff decree holder. The ex parte decree was subsequently set aside; but at the retrial, a decree was again passed in plaintiffs favour. In the meanwhile, the defendant applied to have the sale of the house set aside. It was held, in these circumstances, by the Bombay High Court that the previous sale of the house in execution under the previous decree which had been set aside should itself be set aside as being no longer based on any solid foundation; but subject in all the circumstances to the condition that the defendant should pay up the amount due under the second decree within a specified time. On behalf of the respondents reference was made to the decision of this Court in Lal Bhagwant Singh vs Rai Sahib Lala Sri Kishen Das. (4 ) But the ratio of that case has no application to the present case. It should be noticed that the decree in that case was affirmed at all stages of the litigation except that the amount of (1) 14 Calcutta Weekly Notes, 182. (3) I.L.R. (2) 20 Calcutta Weekly Notes, 667. (4) 30 the decree was slightly altered from Rs. 3,38,300 and odd to Rs. 3,76,790 and odd which amount was ultimately decreed by the Privy Council in the appeal which the judgment debtor preferred from the decision of the Oudh Chief Court which restored the decree of the trial Judge who decreed a sum of Rs. 3,88,300. It was held by this Court that the Privy Council had merely restored the amended decree without altering the provisions as to payment by instalments or extending the time for payment by instalments and its decree did not in any way alter the position of the parties as it stood under the amended decree, and, the sale was not in consequence of any error in a decree which was reversed on appeal by the Privy Council and so the judgment debtor was not entitled to restitution. In the present case the material.facts are manifestly very different. For the reasons expressed, we are satisfied that the appellant is entitled to restitution of the properties sold in execution of the export decree subject to equities to be adjusted in favour of the respondent decree holders. We order that the appellant should be restored back to possession of the properties sold in the execution case subject to the condition that he deposits the amount of Rs. 970 in the Court of the Munsif, Aska within two months from this date. If no deposit is made within this time this appeal will stand dismissed with costs. But if the appellant makes the deposit within the time allowed the sale of the properties in the execution case will be set aside and the respondents will make over the possession of the properties sold to the appellant. The appellant will not be entitled to any past mesne profits but if the respondents do not deliver the possession of the properties the appellant will be entitled to the future mesne profits from the respondents from the date of deposit till the actual date of delivery of possession. Learned Counsel for the appellant has informed us that the deposit has already been made by the appellant in pursuance of the order of the learned Single Judge of the High Court, dated October 3, 1958. If the deposit has already been made the appellant will be entitled to take possession of the properties through the executing court and to future mesne profits from the date of this judgment till the actual date of delivery of possession. We accordingly allow the appeal to the extent indicated above. In the circumstances of the case we do not propose to make any order as to costs. Appeal allowed in part. [/INST]A money suit against the appellant was dismissed by the trial court but the first appellate court passed an ex parte decree against him. The appellant 's property was sold in execution and purchased by the decreeholder. The appellant went to the High Court which set aside the exparte decree and remanded the suit. The appellant then filed an appli cation for restitution under section 144 of the Code of Civil Procedure. It was stayed pending proceedings in the main suit. 'Me suit was finally decided against the applicant, by the High Court. Thereafter the trial court allowed the appellant 's application for restitution. After intermediate proceedings the High Court decided in Letters Patent Appeal that the appellant was not entitled to restitution. He appealed to this Court by special leave. HELD: The application for restitution was filed by the appellant before the passing of a fresh decree by the High Court in second appeal. At the time of the application therefore the appellant was entitled to restitution because on that date the decree in execution of which the properties were sold had been set aside. The appellant was therefore entitled to restitution notwithstanding anything which happened subsequently. [27 C E] The principle of the doctrine of restitution is that on the reverse of a decree the law imposes an obligation on the party to the suit who received the benefit of the erroneous decree to make restitution to the other party for what he has lost. The Court in making restitution is bound to restore the parties so far as they can be restored to the same position they were in at the time when the Court by its erroneous action had displaced them from. [27 E F] Zainal Abdin Khan vs Muhammad Asghar All Khan, I.L.R. 10 All 166, relied on. Set Umedmal & Anr. vs Srinath Ray & Anr. I.L.R. 27 Cal. 810, Raghu Nandan Singh vs Jagdish Singh, , Abdul Rahaman vs Sarafat Ali, and Shivbai Kom Babya Swam vs Yesoo, I.L.R. , referred to. Lal Bhagwant Singh vs Rai Sahib Lala Sri Kishen Das, , distinguished. </s>
<s>[INST] Summarize the judgementil Appeal No. 1049 of 1968. 167 Appeal by special leave from the order, dated August 11, 1967 of the Delhi High Court in L.P.A. No. 85 of 1967. Niren De, Solicitor General, B.P. Maheshwari and R.K. Maheshwari, for the appellant. M.C. Chagla and Urmila Kapoor, for the respondents. The Judgment of the Court was delivered by Vaidialingam, J. This appeal, by the Municipal Corporation of Delhi, by special leave, is directed against the judgment and order, dated August 11, 1967 passed by the High Court of Delhi High Court, dated May 10, 1967 whereby a writ of manda Patent Bench had confirmed an order of the learned Chief Justice, Delhi High Court, dated May 10, 1967 whereby a writ of Mandamus had been issued to the appellant to approve the plans submitted by the respondents and grant the sanction asked for. The circumstances leading up to the issue of the writ of mandamus against the appellant may be briefly adverted to. The respondents are the owners and are. in possession of the building bearing municipal door Nos. 3766 to 3776, situated in the main Chawri Bazar, Delhi. As the building was an old construction and required urgent and extensive repairs, on October 16, 1965 the respondents submitted to the appellant plans for its sanction for execution of work consisting of repairs, additions as well as alterations to the said building. The Commissioner of the appellant Corporation, by letter, dated February 4, 1966 informed the respondents that their application for execution of construction work in respect of house Nos. 3766 to 3776 had been refused on the grounds "that the proposal was under acquisition and also effected in the ROW and the land was residential against proposal of commercial". A controversy appears to have been raised by the appellant before the High Court that the application, by the respondents, related also. to certain other municipal door numbers, but as that is not material for the present purpose, we do not refer to the same. Attempts made by the respondents to satisfy the Commissioner that their application was quite legal and that there was no violation of any law or rules having failed, they filed Civil Writ Petition No. 410 D of 1966 in the Circuit Bench of the Punjab High Court at Delhi, under article 226 of the Constitution praying for the issue of an order or direction in the nature of mandamus directing the appellant to accord sanction to the plan for execution of work in respect of the building. as per their application of October 16, 1965. According to the respondents it was. incumbent on the Commissioner of the appellant, under section 336 of the Delhi Municipal Corporation Act, 1957 (Act LXVI of 1957) (hereinafter referred to as the Corporation Act), to sanction the plans of a building or 168 execution of a work unless such a building or work contravened any of the provisions, of sub section (2) of section 336 or section 340 of the Corporation Act. It was further stated that the plan submitted by them did not contravene any of the provisions of sub section (2) of section 336 or section 340 of the Corporation Act. The reasons given for rejection, by the Commissioner, were also challenged as being vague and unintelligible apart from being extraneous to the provisions of the Act. The respondents further averred that the build Lags required extensive repairs. as was clear from the notice, dated March 3, 1966, issued by the Commissioner of the appellant stating that the building posed a danger to the residents of the area and that the necessary repairs had to be carried out immediately, after obtaining sanction from the building department, and threatening penal consequences if the respondents did not comply with the notice. On these grounds. they urged that the order, dated February 4, 1966 passed by the Commissioner refusing to accord sanction was illegal and ultra vires and in consequence they prayed for the issue of a writ of mandamus directing the appellant to accord sanction, as asked for by them. On behalf of the appellant, the Assistant Engineer had filed a counter affidavit. The material averments, relevant for the present purpose, are that the respondents are the owners of the premises and that the construction was old and required repairs; but the plans submitted by the respondents did not conform to bye laws and contravened section 336(2) (a) in respect of land use and section 340(2) with respect to requisitioning of land by the Delhi Development Authority for their Scheme and that the plans were also affected by road widening. In their reply affidavit the respondents controverted the averments of the Assistant Engineer that the plans did not conform to bye laws or the provisions of section 336(2) or any other law in respect of land use. They stated that according to. the Master Plan prepared under the Delhi Development Act, 1957 certain areas, including Chawri Bazar, would be the Central Business District of Delhi and that the proposed user, mentioned by them in the plan sent for sanction was not in contravention of the Master Plan. They also denied that the Delhi Development Authority had any scheme for road widening. They further referred to a letter, dated April 30, 1966 of the Delhi Development Authority stating that the Zonal Development Plan has not been prepared for the area in question. They finally reiterated the plea that the order refusing sanction was not based on any of the grounds envisaged by section 336(2) or section 340 or any other provision of the Corporation Act or of any other Act. The learned Chief Justice of the Delhi High Court, who heard the writ petition in the first instance, by his judgment and order 169 dated May 10, 1967 accepted the writ petition filed by the respondents and issued a mandamus to the appellant to approve the plans and grant the sanction asked for '. The learned Chief Justice has expressed the view that the Commissioner could decline the sanction only if there was a contravention of sub section (2) of section 336 or section 340 of the Corporation Act. In this case, according to the learned Chief Justice, there was no such contravention established by the appellant and if that were so the Commissioner had no power to refuse to accord the sanction asked for by the respondents. He was of the further view that the grounds on which the Commissioner refused sanction were wholly irrelevant and not germane to the sanction asked for. Taking the further view that the Commissioner had a statutory duty to grant the sanction asked for, the learned Chief Justice directed the issue of a writ of mandamus. This judgment of the learned Chief Justice as mentioned earlier, was affirmed by the judgment of the Letters Patent Bench of the Delhi High Court, dated August 11, 1967. The learned Solicitor General, on behalf of the Corporation, has urged that the order of the Commissioner refusing sanction is legal and is justified by the provisions, of cl. (a) of sub section (2) of section 336 of the Corporation Act. Even at the outset he has made it clear that he is relying upon only one of the grounds given in the order, dated February 4, 1966 of the Commissioner, viz., that the plan submitted was affected by the proposals contained in the Master Plan in respect of widening of the read in the area in question. The expression 'ROW ' used in the order refers to 'right of way ' which is with reference to the road proposed under the Master Plan. The Master Plan has been prepared under section 7 of the Delhi Development Act, 1957 (Act LXI of 1957 ) (hereinafter referred to as the Development Act) and it has come into operation, under section 11, in the area concerned. The building operation proposed by the respondents as per the plans submitted by the:m will be contrary to. the Master Plan and, as such, will be hit by section 14 of the Development Act. In short, the contention of the ]earned Solicitor General is that the Master Plan prepared by the Authority for Delhi, which has statutory force, has come into effect under the Development Act. Under section 336(2)(a) of the Corporation Act, the Commissioner is entitled to refuse sanction of a building or work if the building or work or use of the site for building or work would contravene 'any other law '. As the proposed construction would not be in conformity with the Master Plan, section 14 of the Development Act will be violated, in which case there will be a contravention of 'any other law '. Hence the order of rejection passed by the Commissioner is legal and valid. In this connection the learned Solicitor General referred us to the Master Plan wherein it is stated that the proposed road (in Chawri Bazar, which is the area with which we are concerned) CI 69 12 170 from Hauz Kazi to Jama Masjid is recommended to have a width of 60 feet. The width of the existing road is only 48 feet. The object of the Development Act is to freeze new building constructions which will be inconsistent with the Master Plan; and, if the Master Plan mentions the width of a proposed road and the width of an existing road is less, no new construction will be permissible on either side of the road till the excess area required for the road is found. The Solicitor General has further urged that though a Zonal Development Plan for each of the Zones in which Delhi will have to be divided will have also to be prepared and has not come into operation for the zone concerned, nevertheless, till such a Zonal Development Plan comes into operation, the Master Plan will hold the field. If a Zonal Development Plan comes into force and has made any alteration, the Zonal Development Plan will then have effect and the Master Plan will stand abridged or modified. At present, it is the Master Plan that holds the field and, as according to it an excess area of 12 feet for the proposed road will have to be found, all building operations on either side of the proposed road will have to come to a standstill. That is, the learned Solicitor General was prepared to take the stand that, so to say, there is a freezing of all building operations, on either side of the existing road which, according to him, is warranted by section 14 of the Development Act. In support of his contentions, the learned Solicitor General drew our attention to certain provisions contained in the Corporation Act and the Development Act. The stand taken by the learned Solicitor General has been very strenuously controverted by Mr. M.C. Chagla, learned counsel for the respondents. Mr. Chagla, apart from criticising the order, dated August 11, 1967 as laconic and unintelligible and not containing any valid reasons has urged that the Master Plan, so strongly relied on by the learned Solicitor General, does not, as such, refer to the survey numbers in respect of which the respondents had asked for sanction. Before the High Court the appellant has not relied upon the Master Plan nor did it place any material to show that any part of the proposed road shown in the Master Plan will pass through any of the properties of the respondents. The Master Plan prepared under the Development Act is nothing but a broad outline of what Delhi would look like, in future. The plan, which may probably give more accurately the lands in the area which are reserved for roads, is the Zonal Development Plan, the preparation of which is mandatory under section 8 of the Development Act. Admittedly no such plan has been prepared, much less has come into operation in the concerned zone. So long as the Master Plan does not state that any part of the property belonging to the respondents will be covered by the proposed road, it cannot be stated that when the respondents are attempting to renovate the building they are using the land in the zone otherwise than in conformity with the Master Plan. Mr. Chagla further points out 171 that if the contentions advanced on behalf of the appellant are accepted, the entire building operations in Delhi will have to come to a standstill for an indefinite number of years and, according to him, that position is not envisaged either by the Master Plan or the provisions of the Development Act. He finally urged that section 14 of the Development Act has no application at all. From the contentions of both the parties set out above, it will be noticed that according to the appellant ii building operations are allowed to be carried on, there will be a violation of the Master Plan, and in consequence of the provisions of section 14 of the Development Act; whereas, according to the respondent, there is no violation of either the Master Plan or any provisions of the Development Act or of any other law. A reference to the material provisions of the Corporation Act and the Development Act, which will be made by us presently, will clearly establish that the contentions of the learned Solicitor General cannot be accepted. We shall first take up the provisions of the Corporation Act. Section 332 prohibits the erection or commencement of the erection of any building, or execution of any of the works specified in section 334, except with the previous sanction of the Commissioner. Section 333 makes its mandatory on a person intending to erect a building to apply to the Commissioner in that behalf. Section 334 makes it obligatory on a person, who intends to execute any of the works mentioned therein, to apply for sanction to the Commissioner. Section 336 deals with sanction or refusal of building or work. It is only necessary to refer to sub section (1) and cl. (a) of sub section (2) of this section, because, as we have already stated, the order of rejection by the Commissioner is sought to be justified under this provision. These provisions are:, "336. ( 1 ) The Commisioner shall sanction the erection of a building or the execution of a work unless such building or work would contravene any of the provisions of sub section (2) of this section or the provisions of section 340. (2) The grounds on which the sanction of a building or work may be refused shall be the following, namely : (a) that the building or work or the use of the site for the building or work or any of the particulars comprised in the site plan, ground plan, elevation, section or specification would contravene the provisions of any byelaw made in this behalf or of any other law or rule, byelaw or order made under such other law; 172 Sub section (3) of section 336 provides for the Commissioner communicating the sanction to the person who has given the notice; and in cases where he refuses sanction on any of the grounds specified in subs. (2) of section 336 or under section 340, to record a brief statement of his reasons for such refusal and communication of the refusal along with the reasons to the party concerned. It will be clear, from a perusal of section 336, that the Commissioner has to give sanction for the erection of a building or the execution of a work, unless such building or work would contravene any of the provisions of sub section (2) of section 336 or the provisions of section 340. Therefore, in order to sustain the validity of the order of rejection passed by the Commissioner the appellant has to establish, as it seeks to, that the proposed building or the use of the site for the building, by the respondents, would contravene the provisions of 'any other law '. If the proposed building or use of the site for the building would contravene the provisions of any other law ', the Commissioner has ample powers under cl. (a) of section 336(2) to refuse sanction. Section 340 gives power to the Commissioner to refuse sanction for erection of any building on either side of a new street, under the circumstances mentioned therein. We shall now refer to some of the provisions of the Development Act in order to appreciate the scheme of that statute. The Development Act is an Act to provide for the development of Delhi according to plan and for matters ancillary thereto. Section 2, clauses (d) and (e), define the expressions 'development ' and 'development area ' respectively. Chapter II deals with the Delhi Development Authority and its objects. Section 3, therein, provides for the Central Government constituting for the purposes of the Act an authority to be called the Delhi Development Authority. It is referred to in the Act as the Authority. Section 5 provides for the Authority constituting an Advisory Council for the purpose of advising the Authority on the preparation of the Master Plan and the Zonal Development Plans and on such other matters in connection with the administration of the Act. Such Advisory Council also has been duly constituted. Section 6 provides that the object of the Authority shall be to promote and secure the development of Delhi according to plan and clothes the Authority with the various powers mentioned therein. Chapter III deals with Master Plan and Zonal Development Plans. Section 7, therein, provides for the Authority carrying out a civic survey of and preparing a Master Plan for Delhi. Under sub section (2), the Master Plan shall (a) define the various zones into which Delhi may be divided for the purposes of development and indicate the manner in which the land in each zone is proposed 173 to be used (whether by the carrying out thereon of development or otherwise) and the stages by which any such development shall be carried out; and (b) serve as a basic pattern of frame work within which the zonal development plans of the various zones may be prepared '. Section 8 provides for the preparation by the Authority of a zonal development plan for each of the zones into which Delhi may be divided and also refers to the various matters which are to be indicated in the same. The material provisions of section 8 which, according to us, will have a vital bearing in considering the soundness of the stand taken by the appellant are as follows: "8. (1 ) Simultaneously with the preparation of the master plan or as soon as may be thereafter, the Authority shall proceed with the preparation of a zonal development plan for each of the zones into which Delhi may be divided. (2) A Zonal Development Plan may (a) contain a site plan and use plan for the development of the zone and show the approximate locations and extents of land uses proposed in the zone for such things as public buildings and other .public works and utilities, roads, housing, recreation, industry, business, markets, schools, hospitals and public and private open spaces and other categories of public and private uses; (d) in particular, contain provisions regarding all or any of the following matters, namely : (ii) the allotment or reservation of land for roads, open spaces, gardens, recreation grounds, schools, markets and other public purposes; Section 9 (1 ) states that the expression 'plan ' in that section and in sections 10, 11, 12 and 14 means the Master Plan as well as the Zonal Development Plan for a zone. Sub section (2) provides for the plan which means the Master Plan as well as the Zonal Development Plan being submitted after preparation by the Authority to the Central Government for approval and it also gives power to the Government to approve the plan, without modification or with such modifications as it may consider necessary, or reject the plan with directions to the Authority to prepare a fresh plan. 174 Section 10 provides for the procedure to be followed in the preparation and approval of plans. A perusal of that section shows that ample opportunity has to be provided for persons and every local authority to submit objections at the stage of the draft, and it also requires the authority to consider any objections, suggestions and representations that may have been made, before the final plan is prepared and submitted to the Central Government for its approval. It also empowers the Central Government to call for any information that it thinks necessary from the Authority for the purpose of approving any plan submitted to it. Section 11 provides for the date of operation of the plan. There is no controversy, in this case, that the Master Plan has been prepared under section 7 by the Authority on September 1, 1962 and it has also come into force, as contemplated by section 11. Though section 8 contemplates the preparation of a Zonal Development Plan simultaneously with the preparation of the Master Plan, or as soon as may be thereafter, no Zonal Development Plan for the zone concerned has been prepared up to now. It may also be pointed out that if and when such a Plan is prepared, containing the various matters referred to in sub section (2) of section 8, before it is finalized and sent to the Central Government for approval, parties and local authorities will have to be given an opportunity of sending their objections and suggestions and representations, which have all to be duly and properly considered by the Authority concerned. Chapter III A deals with modifications to the Master Plan and the Zonal Development Plan. Section 1 I A, therein, provides for the Authority and the Central Government making modifications in the Master Plan or the Zonal Development Plan under the circumstances and after following the procedure, mentioned therein. Chapter IV deals with development of lands. Sub section (1 ) of section 12 gives power to the Central Government, by notification in the Official Gazette, to declare any area in Delhi to be a development area for the purposes of the Act. Sub section (2) prohibits the Authority, except as otherwise provided for in the Act, to undertake or carry out any development of land in any area which is not a development area. Sub section (3) provides that after the commencement of the Act no development of land shall be undertaken or carried out in any area by any person or body (including a department of Government) except in the manner provided therein. Section 14, on which considerable reliance has been placed, on behalf of the appellant, is as follows: "14. After the coming into operation of any of the plans in a zone no person shall use or permit to be 175 used any land or building in that zone otherwise than in conformity with such plan: Provided that it shall be lawful to continue to use upon such terms and conditions as may be prescribed by regulations made in this behalf any land or building for the purpose and to the extent for and to which it is being used upon the date on which such plan comes into force. " A copy of the Master Plan for Delhi has been placed before us by the learned Solicitor General. Chapter I deals with the Land Use Plan under various sub heads. Chapter II deals with Zoning and Sub division Regulations. There are certain maps annexed to this Plan. Under the heading 'Proposed rights of way in Old City ', in paragraph 11 of Chapter I, item 7 refers to the area concerned, viz., Chawri Bazar. Against that it is stated that the road from Hauz Kazi to Jama Masjid, which is approximately 1,800 feet long is recommended to have a road width of 60 feet. There is no controversy that the existing .road is only 48 feet wide. Our attention has also been invited to two of the maps annexed to this Master Plan, viz. the Zonal Map and the Proposed Circulation Pattern of Walled City and it was stated that the area marked 'A ' in the Zonal Map refers to the Walled City which is divided into 27 zones. The second map viz. the Proposed Circulation Pattern of Walled City, is an enlargement of the area 'A ' shown in the Zonal Map and the Chawri Bazar is shown there. As stated earlier, considerable reliance has been placed by the learned Solicitor General on the statement in the Master Plan that the road in Chawri Bazar is to have a width of 60 feet and on the two maps annexed to the Master Plan which, according to him, will show the lay out of the proposed road. The Master Plan and the two maps relied on by the appellant do not give any indication that any part of the land belonging to the respondents will be covered by any portion of the proposed road. The provisions of section 7 of the Development Act clearly indicate and that is borne out by the various matters mentioned in the Master Plan that the Master Plan will only give a very broad outline of DeLhi as it will look in future. Though there is an obligation on the Authority to prepare the Zonal Development Plan simultaneously with the preparation of the Master Plan, or as soon as there may be thereafter, no such Zonal Development Plan has been prepared. That assumes considerable importance in this case because it is the Zonal Development Plan, under section 8(2)(a) which will show the approximate locations and extents of land uses proposed in a zone for roads; further, under sub cl. (ii) of cl. (d) of sub section (2) of section 8, the said Zonal Development Plan will also contain provision regarding the allotment or reservation of land for roads. It is only when such allotment or reservation of land for roads is made that it will be possible to know clearly as to which part of 176 a person 's land and what portion thereof is allotted or reserved for a road. If such an indication is made available by the Zonal Development Plan, then section 14 will quite naturally stand attracted, because any user of a land or building otherwise than in conformity with the Zonal Development Plan will be hit by that section. In the absence of any indication in the Master Plan, in this case, that any part of the land of the respondents will be covered by a road, or portion of a road it is not possible to accept the contention of the learned Solicitor General that there will be any violation of section 14 of the Development Act if the respondents be permitted to use the land, as. asked for by them. To attract section 14, the appellant will have to establish that any land or part of a land or a building in a Zone has been dealt with in a particular manner by the Master Plan and that it is proposed to be used in a different manner. If a Zonal Development Plan is prepared for the area, before it comes into operation in the Zone, the procedure indicated in section 10 will have to be followed and parties will have to be given an opportunity of placing any objections or making any representations or offering any suggestions. So far as we can see, it is certainly not the scheme of the Development Act that the moment a Master Plan has come into operation and if it contains a proposal regarding the width that a road should have, all use of land adjoining that road is prohibited for an indefinite period. The reasonable interpretation to be placed on section 14 will be that if any particular and definite use of land is indicated in a Master Plan, a different use of that land cannot be permitted. Similarly, if a Zonal Development Plan provides for a particular use of any land or any building in that zone, it cannot be put to a different use. If neither of the plans provide for the particular use of any land or building in the area or Zone, section 14 will have No. application whatsoever. We have already stated that the respondents ' lands are not in any manner indicated as being taken up by any part of the proposed road, mentioned in the Master Plan and, if that is so, there is no violation of section 14 of the Development Act. It .also follows that there is no violation of 'any law ' under cl. (a) of sub section (2) of section 316 of the Corporation Act. The High Court was perfectly justified, in the circumstances, in issuing the writ of mandamus. The result is that the appeal fails, and is dismissed. The appellant will pay the costs of the respondents. Appeal dismissed. [/INST]The appellant 's husband was one of the applicants for a permanent stage carriage permit on a route under the jurisdiction of the North Bihar Regional Transport Authority. On her husband 's death during the pendency of the aforesaid application, the appellant came into possession of all his transport vehicles. The Regional Transport Authority allowed the appellant to prosecute the application and directed the grant of the permit to her. The appeal filed by the unsuccessful applicants against this order was allowed by the State Transport Authority but the Transport Minister, in revision under section 64A of the , decided in favour of the appellant. Against the orders of the Transport Minister writ petitions were filed in the High Court and were allowed. The ,appellant came to this Court. The question for consideration was whether on the death of an applicant for a stage carriage permit in respect of his transport vehicles the Regional Authority has power to a11ow the person succeeding to the possession of the vehicles, to prosecute the application filled by the deceased applicant. HELD: The High Court was in error in setting aside the order of the Transport Minister., A person in possession of a transport vehicle is not entitled to a permit as a matter of right. His only right is to make an application under section 45 of the and to a consideration of the application under the provisions of the Act. If he dies after obtaining the permit, the Regional Transport Authority has power under section 61(2) to transfer the permit to the person succeeding to the possession of the vehicles covered by the permit. In the case of death of the applicant before the final disposal of his application for the grant of a permit in respect of his vehicles the Regional Transport Authority has power to substitute the person succeeding to the possession of the of the. deceased applicant. As the relief sought for in the application is dependent upon and related to the possession of the vehicles, the application is capable of being revived at the instance of the person succeeding to the possession of the vehicles. [509 G 510 C] Verappa Pillai.v. Raman. & Raman Ltd., ; , 591, 595. referred to. Under section 57 an application for a stage carriage permit or a public carrier permit must be made within the appointed time and published in the prescribed manner. The representations relating thereto must also be made at the appointed time. In the event of the death of the applicant after the expiry of the time appointed for making the application, the person succeeding to the possession of the vehicles cannot, having regard to the lapse of dine, make another application in his own right. 508 The successor cannot obtain the permit unless he is allowed to prosecute the application filed by his predecessor and there is no reason why he cannot be permitted to do so. Section 57 does not deal with the situation arising on the death of an applicant nor has it prescribed any time for the making of an application for substitution of the successor or for the filing of objections against the grant of the permit to him. In the absence of any statute or statutory rule the Regional Transport Authority may devise any procedure for dealing with the situation. The Regional Transport Authority has complete discretion in the matter of allowing or refusing substitution. It is not bound to embark on a prolonged investigation into disputed questions of possession. Nor is it bound to allow substitution if such order will delay the proceedings unreasonably or will otherwise be detrimental to the interests of the public generally. [510 C 511 A] The same principle would apply to applications under sections 57(1), 58(8) and 58, as well as to appeals under section 64, and revisions under section 64A. [511 B] Ratanlal vs State Transport Authority, A.I.R. 1957 All 471, disapproved Meenakshi vs Mysore S.T.A. Tribunal, A.I.R. 1963 Mys. 279, Hanuman Transport Co. vs Meenakshi, C.A. No. 794/63 dt. 20 12 63, Maruthavanan vs Balasubramaniam A.I.R. 1963 Mad. 292, Kuppu swarmi vs Ramchandran, A.I.R. 1964 Mad. 356, and Director of Public 'Works vs Ho Po Sang & Ors., [1961] A.C. 901, referred to. </s>
<s>[INST] Summarize the judgementAppeals Nos. 489 & 490 of 1961. Appeals by special leave from the award dated March 16, 1959, of the Second Industrial Tribunal, Delhi in Reference I. D. No. 20 of 1958. G.S. Pathak, section T. Desai, M. L. Sethi, B. Dutta and Anand Prakash, for the appellant (in C. A. No. 489/61) and the respondent (in C. A. No. 490/61). M. C. Setalvad, Attorney General for India M.K. Ramamurthi, D. P. Singh, R. K. Garg and S.C. Agarwal, for the respondents (in C.A. No. 489/61) and the appellants (in C. A. No. 490/61). December 14. The judgment of the Court was delivered by DAs GUPTA,. ' J. These two appeals by special leave, one by the employer and the other by the workmen, arise out of an industrial dispute that was referred for adjudication to the Industrial Tribunal Delhi, by an order made on January 23, 1958 by the Chief Commissioner, Delhi. The Tribunal made its award on March 16, 1959. Out of the numerous 237 matters that were included in the terms of reference, we are concerned in these appeals only with a few. The employer challenges the award as regards : (1) Scales of pay, (2) Dearness allowance, (3) Adjustments, (4) Leave Rules, (5) Gratuity and (6) Retrospective effect of the award. The workmen also attacked the award as regards the scales of pay and dearness allowance. In addition, they have attacked the award as regards the working hours, leave rules, night shift allowance, retirement age and procedure for taking disciplinary action. At the time of the hearing before us however the learned Attorney General, appearing for the workmen, did not press their claim for modification of the award as regards, night shift allowance, leave rules and procedure for taking disciplinary action and working hours. It appears that when the dispute was before the Conciliation Officer, Delhi, for settlement an interim agreement was arrived at between the parties on December 20, 1957 by which the management agreed to give certain interim reliefs, ranging between Rs. 6/ to Rs. 10/ per month from the month of November 1957. One of the terms of the agreement was that this payment "will be adjusted against the final outcome of the demands by constitutional means". The Tribunal has in its award given a direction that this interim relief shall remain unaffected. Taking this to be a direction that the adjustment as agreed upon of payments under the interim arrangement shall not be made, the employer has in its appeal challenged the correctness of this direction also. The most important of the matters in dispute are the questions of the wage scale, the dearness allowance and the adjustment of existing employees into the new scales. It appears that from 1946 onwards the Company 's workmen have had a consolidated wage scale, no distinction being made between 238 the basic wage and the dearness allowance. This wage scale has remained practically unaltered except for some special increments given in the year 1948. By the award the Tribunal has introduced new wage scale for certain existing categories of workmen and in some cases has introduced new scales, after amalgamating more than one category. Thus certain railway despatchers, advertisers, Box No. sorters, filing clerks and bank clerks who were formerly in the scale of Rs. 50 4 90 EB 4 115 and Junior Clerks etc., who had a scale of Rs. 60 100EB 4 115 have all been put on a new scale of Rs. 70 5 100 EB 5 150. There has been a similar amalgamation or clerks, assistants, cashiers, record keepers and others some of whom were on Rs. 80 175 and some on Rs. 80 203 scale, all of them being now put on a new scale of Rs. 90 200. In both cases the starting salary has been raised; the maximum has been raised for the first category. Supervisors and others who were formerly on three different scales, some on Rs. 125 350, some on Rs. 125 300, and some on Rs. 100 250, have all been amalgamated and have been put on a new scale of Rs. 100 350. Obviously, this would mean a lower starting salary for some and maximum for some. ,job I)Daftries some of whom were on Rs. 70 115 scale and others on Rs. 100 155 have all been put on a new scale of Rs. 80 to Rs. 11,15, resulting thus in a lowering of starting salary for some and a rise of a higher maximum for all. A similar lowering in the starting salary has also occurred in cases of some of the jobmachinemen. They were formerly on two scales, one of Rs.125 175 and the other of Rs. 75 175. The Assistant Foremen in the job Department formerly on Rs. 125 175 are put on a scale of Rs. 125 202. Where there has been no amalgamation the new scale has resulted in a slight increase in some cases both in the starting salary and the maximum. In some catagories, no change has been made at all, 239 It is unnecessary to give more details of the difference between the old scale and the new scale as what has been mentioned above is sufficient to indicate that there has been some change in favour of the workmen, though this change is not much. The employer 's contention before us is that there was no case for any revision whatsoever and the Tribunal acted wrongly in making any change in the old wage scale. The workmen 's contention on the contrary is that the changes do not go far enough. The fixation of wage structure is among the most difficult tasks that industrial adjudication has to tackle. On the one hand not only the demands of social justice but also the claims of national economy require that attempts should be made to secure to workmen a fair share of the national income which they help to produce, on the other hand, care has to be taken that the attempt at a fair distribution does not tend to dry up the source of the national income itself On the one hand, better living conditions for workmen that can only be possible by giving them a "living wage" will tend to increase the nation 's wealth and income on the other hand, unreasonable inroads on the profits of the capitalists might have a tendency to drive capital away from fruitful employment and even to affect prejudicially capital formation itself. The rise in prices that often results from the rise of the workmen 's wages may in its turn affect other members of the community and may even affect prejudicially the living conditions of the workmen themselves. The effect of such a rise in price on the Country 's international trade cannot also be always ignored. Thus numerous complex factors, some of which are economic and some spring from social philosophy give rise to conflicting considerations that have to be borne in mind. Nor does the process of valuation of the numorous factors remain static. While international movements in the cause of labour have for many years influenced thinking and 240 some times even judicial thinking in such matters, in this country, the emergence of an independent demo cratic India has influenced the matter even more profoundly. Gajendragadkar, J. speaking for the Court in Standard vacuum Refining Co., of India vs Its Workmen (1), has observed : "In constructing a wage structure in a given case industrial adjudication does take into account to some extent considerations of right and wrong, propriety and impropriety, fairness and unfairness. As the social conscience of the general community becomes more alive and active, as the welfare policy of the State takes a more dynamic form, as the national economy progresses from stage to stage, and as under the growing strength of the trade union movement, collective bargaining enters the field, wage structure ceases to be a purely arithmetical problem. Considerations of the financial position of the employer and the state of national economy have their say, and the requirements of a workman living in a civilised and progressive society also come to be recognised. " In trying to keep true to the two points of social philosophy and economic necessities which vie for consideration, industrial adjudication has set for itself certain standards in the matter of wage fixation. At the bottom of the ladder, there is the minimum basic wage which the employer of any industrial labour must pay in order to be allowed to continue an industry. Above this is the fair wage, which may roughly be said to approximate to the need based minimum, in the sense of a wage which is "adequate to cover the normal needs of the average employee regarded as a human being in a civilised society. " Above the fair wage is the "living wage" a wage "which will maintain the workman in the highest state of industrial efficiency, which will enable him to (1) , 543. 241 provide his family with all the material things which are needed for their health and physical well being, enough to enable him to qualify to discharge his duties as a citizen." (Cited with approval by Mr. justice Gajendragadkar in Standard Vacuum Company 's Case (1) from "The living Wage" by Philip Snowden). While industrial adjudication will be happy to fix a wage structure which would give the workmen generally a living wage economic considerations make that only a dream for the future. That is why the industrial tribunals in this country generally confine their horizon to the target of fixing a fair wage. But there again, the economic factors have to be carefully considered. For these reasons, this court has repeatedly emphasised the need of considering the problem on an industry cum region basis, and of giving careful consideration to the ability of the industry to pay. (Vide Crown Aluminium 's Case (2); the Express Newspapers Ltd., Case (8) and the Lipton 's Case (4). On an examination of the Tribunal 's award as regards the wage scale, we are satisfied that all the considerations mentioned above were present in the mind of the adjudicator and we are of opinion that there is nothing that would justify us in modifying the award either in favour of the employer or in favour of the workmen. It is stated in the award that before the Tribunal the Company 's representative desired that a fair wage level within its paying capacity should be evolved though at the time he argued that existing wage structure is quite fair ""looking to the Company 's financial position as well as the comparative rates prevailing in the other concern. " The Tribunal has not accepted the Company 's contention that the existing wage structure is fair, though at the same time it has held that the wage system needs no such radical change as alleged by the Union. (1) , 543. (3) (2) ; (4) [1959] Supp. 2 S.C.R. 150. 242 Mr. Pathak, who appeared before us for the Company, did not seriously suggest that the present wage structure gives the employees "a fair wage." He argued generally that no case was made out for any revision of the wage structure. Such an extreme proposition has only to be mentioned to deserve rejection. At the time the Tribunal was dealing with this question the wage scale of the workmen in this concern had remained practically unaltered for almost 12 years 12 years of momentous change through which social ideas have moved forward in favour of workmen getting a better share of the national income; 12 years during which the new India was born and a Constitution was framed for this new democracy "to secure to all its citizens, justice, social and economic and political" and enshrining in its 43rd Article the principle that ,the State shall endeavour to secure by suitable legislation or economic Organisation or in any other way to all workers agricultural, industrial or otherwise" among other things tea living wage and conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities. . . . ". The mere passage of time and these revolutionary changes would be sufficient to convince any right thinking man of the need for revision of wage scales which, on the face of it, were far below the "living wage" and mostly also below the " 'fair wage", provided the industry could bear the additional burden. The case for revision becomes irresistible when one takes into consideration the further fact that the cost of living rose steeply during this period. On the basis of 1939 cost as 100, the index for 1946 was 282. By 1958 it had risen to 389. It may be mentioned that since then there has been a further rise. Nor can it be seriously suggested that this concern cannot bear the burden of an increased wage scale. The Tribunal was, in our opinion, right in its conclusion that the material on record shows that the Company has been prospering and has financial 243 stability. We have for ourselves examined the balance sheets and the other materials on the record and have no hesitation in agreeing with that conclusion. Mr. Pathak 's uphill task in the face of these balance sheets already on the record to show that the Company would not be able to bear the burden of an increased wage scale has been made more difficult by the discovery that even after the imple mentation of the award the Company has made large profits during the years 1959 60, 1960 61 and 1961 62. It appears that when the Company was given special leave to appeal to this Court the operation of the Tribunal 's award was stayed only in so far as it directed the management to pay arrears of the wages determined thereby but the operation of the award in so far as it related to the payment of wages from the date of the award was not stayed; and the management was directed to pay to the workmen from that date wages in accordance with the wage scale fixed by the Tribunal by its award under appeal. The result of this has been that the Tribunal 's award as regards the wage scales has been implemented with effect from the date of the award and it is possible for this Court to know how such additional payment has affected the financial position of the Company. It appears that after meeting the additional charges and also after payment of bonus and appropriation to reserves the net profits for the year 1959 60 rose to Rs. 8,04,508/ . For the year 1960 61 these profits were Rs. 8,44,627/ . For the year 1961 62 the profits are shown in the balance sheet as Rs. 59,955/ . That the Company has been prospering is clear. It has its own aeroplanes and possesses immovable properties of considerable value. It has built up good reserves and inspite of that it has been making good profits. It is reasonable to think that with the progress of education in the country and the increasing news mindedness of the people the future prospects of the Company are no less bright. On a consideration 244 of all this,, we are clearly of opinion that Mr. Pathak 's contention that the wage scale fixed by the Tribunal is too heavy for the Company to bear, must be rejected. Equally unacceptable is Mr. Pathak 's next contention that the wage scale fixed by the Tribunal operates unfavourably on this Company vis a vis two other concerns in Delhi region, viz., the Times of India, Delhi and the Statesman, Delhi. We have compared the wage scales in these two concerns viz., the Times of India, Delhi and the Statesman, Delhi, with the wage scale under the award and have for the purpose of comparison taken into consideration the dearness allowance as fixed by the Tribunal. The comparison shows that while in some cases the Company (the Hindustan Times) will have to pay more to its workmen than what is being paid to workmen of the same category by the Times of India, Delhi and the Statesman, Delhi, in several cases it will be less. It has also to be borne in mind that the Times of India, Delhi and the Statesman, Delhi, are much smaller units of the newspaper industry than the Hindustan Times. These Companies are mere adjuncts to the Times of India, Bombay and the Statesman, Calcutta, respectively. Therefore, even if for some categories the wage scale under the award is higher than that in the Times of India, Delhi and the Statesman, Delhi, that would be no ground for modifying the award in favour of the Company. We have therefore come to the conclusion that there is no ground whatsoever for modifying the wage scale fixed by the award in favour of the Company. On behalf of the workmen it was strenuously contended that the increase given by the award over the previous wage scale falls far short of justice. It is pointed out that even the Times of India, Delhi and the Statesman, Delhi, which are much smaller 245 concerns and of lesser financial stability and strength, pay to some categories of its workmen higher wages than what has been fixed by the award. Thus our attention has been drawn to the fact that for Assistants, the Times of India, Delhi, rate is Rs. 241 402, and in the Statesman, Delhi, it is Rs. 190 297 for some and Rs. 264 463 for others while under the award the scale is Rs. 125 375. There are several other cases also where the wage scale under the award appears to be lower than what is being paid by the Times of India, Delhi and the Statesman, Delhi. It has been urged by the learned Attorney General that in view of the fact that the wage scale of the Company has remained practically stationary for the last 12 years and that it is indisputably well below the fair wage and the further fact that even smaller concerns in this region, like the Times of India, Delhi and the Statesman, Delhi, have been paying more to some categories of its workmen, the wage scale as fixed by the Tribunal should be raised at least for some of the categories. There is undoubtedly some force in the contention and it maybe said that the Tribunal has been rather cautious in the matter of revision of wage scales. Even so, it has to be remembered that where, as in the present case, the proper principles have been applied by the Tribunal, it is not the practice of this Court to interfere, ordinarily, with details of this nature when exercising its special jurisdiction under article 136 of the Constitution. It also appears to us that the very fact that the Tribunal has been cautious in the matter of raising the wage scales has influenced it in the directions it has given on the question of adjustment of the present employees into the wage scale. In this way some relief has been given to the present employees which might otherwise have been given by raising the wage scale. On a consideration of all these facts we have reached the conclusion that it will not be 246 proper for us to modify the wage scales fixed by the Tribunal in favour of the workmen also. On the question of dearness allowance it is not disputed before us that in the circumstances of the resent case the Tribunal acted rightly in awarding dearness allowance at a flat rate for all categories of workmen. On behalf of the Company it was however urged that the Tribunal has made an obvious mistake in fixing the amount of dearness allowance at Rs. 25/ . For fixing the rate at Rs. 25/ the Tribunal has said : "In view of the revised scales as now laid down, I think the same should further be supplemented in the circumstances stated above by a flat rate of dearness allowance in all cases, viz., Rs. 25/ with retrospective effect from the date of reference so that the lowest paid worker will start not less than Rs. 75/ . 1 direct accordingly. " Mr. Pathak points out that the lowest paid worker for whom wage scales have been fixed will be getting under the award a minimum of Rs. 6l0/ so that with the dearness allowance of Rs. 25/ "the lowest paid worker" will start at Rs. 85/ and not Rs. 75/ . Mr. Pathak suggests that the Tribunal has made a mistake in its calculations and that having decided that the lowest paid worker will start at not less than Rs. 75/ , it should have fixed Rs. 15/ and not Rs. 25/as the dearness allowance. This argument however overlooks the fact that the reference as regards the dearness allowance was in respect of all categories of workmen, though the reference as regards scales of pay did not cover some categories, viz., mazdoors and canteen boys. They therefore continue to remain on their old scale of Rs. 50 3 85. When the Tribunal in considering the question of dearness allowance was thinking of the starting pay of the lowest paid worker 247 it had obviously these categories in mind. Having concluded that the lowest paid worker should start at Rs. 75/ as the total amount of basic pay and dearness allowance the necessary conclusion reached by the Tribunal was that Rs. 25/ should be fixed as the dearness allowance. It is, in our opinion, proper and desirable that the dearness allowance should not remain fixed at this figure but should be on a sliding scale. As was pointed out in Workmen of Hindusthan Motors vs Hindusthan Motors (1), the whole purpose of dearness allowance being to neutralise a portion of the increase in the cost of living, it should ordinarily be on a sliding scale and provide for an increase on rise in the cost of living and a decrease on a fall in the cost of living. On a consideration of all the circumstances of this case, we direct that a sliding scale be attached to the dearness allowance of Rs. 25/ per month as awarded by the Tribunal on the lines that it will be liable to be increased or decreased on the basis of Re. 1/ for every ten points in case of rise and fall in the cost of living from the base of 400, the 1939 index being taken to be 100 the sliding scale to take effect from April 1, 1959. This brings us to the question of adjustment of the existing employees into the new scale. The Tribunal has dealt with this matter thus : " '. the adjustment in the new scales shall be made with retrospective effect from the date of the reference, viz., 23rd January, 1958. In making adjustment in the new scales no one shall be adversely affected and it shall be on the line laid down by the Industrial Tribunal in the case of Caltex India Ltd., at p. 659 read with para. 23 of the decision of the Labour Appellate Tribunal, reported in at page 188. " It appears that in the case of Caltex India Ltd. ,(Supra) the Industrial Tribunal, West Bengal, gave (1) 248 the following directions for adjustment of employees into the wage scale fixed by it. All employees for whom the scale has been stated above should be stepped up in the stage next above which the present pay is drawn. A special increment at the rate of one increment in the new scale for every three completed years of service should be given. The employees whose salaries are less than the minimum prescribed will be pulled up to the minimum of the prescribed scale. If the existing salary of an employee is higher than the salary he will be entitled to under the prescribed scale, there will be no cut and he will be stepped up to the nearest increase with the increments given above. After the salaries are adjusted, no employee should be staggered and he will continue to get future increments. If an employee be already drawing a salary which is higher than the maximum prescribed by the award, he will be subjected to no cut in his salary. " This was followed by a direction as regards the date by which the adjustment was to be made. The Labour Appellate Tribunal modified these directions by introducing two provisions : (1) that the maximum of the grade should not be exceeded and (2) that the basic wage that was being paid to an employee at the date of the award of the Tribunal is not to be affected to the employees 'prejudice. The employer 's objection is to the provision that a special increment at the rate of one increment in the new scale for every 249 three completed years of service should be given. It is argued that such a provision may well be appropriate in a case where wage scale is being fixed for the first time or where even if there was already a wage scale in force the rate of increment in the new scale is much higher than that in the old wage scale, but not where, as in the present case, the increments under the new scale and the old scale are practically the same. We are not impressed by this argument. As was pointed out by this Court in a recent judgment in French Motor Car Co., Ltd. vs Its Workmen (1), what adjustment should be given is to be decided when fixing wage scales whether for the first time or in place of an old existing scale has to be decided by industrial adjudication after consideration of all the circumstances of the case. It may well be true that in the absence of any special circumstances and adjustment of the nature as allowed in this case by allowing special increment in the new scale on the basis of service already rendered may not be appropriate. Clearly, however, in the present case the Tribunal took into consideration in deciding this question of adjustment the fact that it had been extremely cautious as regards increasing the old wage scales. Apparently, it thought that it would be fair to give some relief to the existing employees by means of such increase by way of adjustment while at the same time not burdening the employer with higher rates of wages for new incumbents. In these circumstances, we do not see ally Justification for interfering with the directions given by the Tribunal in the matter of adjustment. It will be convenient to consider at this stage the objection raised in the Company 's appeal to the Tribunal 's direction in connection with the interim agreement. As has been stated earlier, this agreement was arrived at between the parties when the dispute was before the Conciliation Officer. The (1)(1962) 250 relevant portion of the agreement is in these words : "It is hereby agreed between the parties that: 1. The Management agrees to make interim relief on the following terms to every employee, excluding working journalists, drawing salary up to Rs. 400 p.m. (i)Advance payment ranging between Rs. 6/ to Rs. 10/ per month beginning from the month of November, 1957 in the following manner : (a) Those with annual increment of Rs. 3/ , Rs. 4/ , and Rs. 5/ Rs. 6/ (b) Those with annual increment of Rs. 6/ Rs. 7/ (c) Thosewith annual increment of Rs. 7/ Rs. 8/ (d) Thosewith annual increment of Rs. 10/ Rs. 10/ Note. (i) In case any employee has already reached the ceiling of his grade, even then he would he entitled for the above benefit. (ii) This payment will be adjusted against the final out come of the present demands by constitutional means." "The final out come of the present demands by constitutional means 's is the Tribunal 's award. Under the agreement therefore what has been received by 251 the workmen as advance payment at Rs. 6/ or Rs. 71or Rs. 8/ or Rs. 10/ per month as interim relief has to be adjusted against what is due to be paid to them under the award. In other words, the Company is entitled under the agreement to deduct the payments made as interim relief from what is payable to these very employees under the award. The Tribunal 's direction that the interim relief shall remain unaffected is in effect an order that term (ii) of the agreement need not be complied with. We can find no justification for such an order. While it is true that industrial adjudication can and often has to modifiy existing contracts between an employer and its workmen, there can be no justification for modification of an agreement of this nature pending final settlement of a dispute. Such a direction that the solemn words of the workmen 's representatives that interim relief which may be given will be adjusted against the relief finally given need not be complied with, is not only unfair to the employer but is also not calculated to serve the best interests of the workmen themselves. For one thing, an order of this nature in one case by a Tribunal that such an undertaking need not be carried out is likely to hamper interim settlements generally; it is also not desirable that workmen should be encouraged to treat their undertakings as of no value. Industrial adjudication must be careful not to encourage bad faith on the part of the workmen or the employer. A direction as given by the Tribunal in this case that the term in the agreement that payments made will be adjusted against the final outcome need not be complied with, is unfortunately to have such effect on workmen. We therefore set aside the Tribunal 's direction that interim relief will remain unaffected and direct that adjustments should be made in terms of the said interim arrangement. This brings us to the question of Leave Rules. The Company objects to the award as regards this matter in so far as it directs the Company to allow 15 252 day 's sick leave with full pay and allowances with accumulation up to six months on production of medical certificate given by a registered medical practitioner. It also objects to the direction that the present practice as to insistence on previous application for the purpose of casual leave should not be relaxed in cases where it cannot possibly be so done in emergent and unforeseen circumstances and the direction that up to 3 days no medical certificate should be asked for. It appears that at present the Management grants 10 days ' casual leave to the business staff and 7 days ' casual leave to all the other categories and there is no sick leave facility available. Mr. Pathak has tried to convince us that in view of the provisions of the , no provision need be made about sickness leave at all. , That this Act has been applied to the Company and that the workmen of the Company get the benefit of this Act is not disputed. It is difficult to see however how the benefit that the workmen will get under this Act can affect the question of sickness leave being provided for the workmen. This Act it has to be noticed does not provide for any leave to the workmen on the ground of sickness. It provides in section 46 (1) (a) for periodical treatment of any insured person in case of his sickness if certified by a duly appointed medical practitioner. It is unnecessary to mention here the several provisions in the Act; viz., Sections, 47, 48 and 49 which deal with the eligibility of workmen for sickness benefit and the extent of the benefit that may be granted. Section 56 of the Act provides for medical benefits to the insured workman or in certain cases to the members of his family. It appears to us clear however that in providing for periodical payments to an insured worker in case of sickness (sickness benefit) or for medical treatment or, attendance to him or the members of his family, the legislature did not intend 253 to substitute any of these benefits for the workmen 's right to get leave on full pay on the ground of sickness. It is next contended that the Tribunal 's direction as regards sickness leave offend the provisions of Delhi Shops and Establishments Act, 1954. Admittedly, a large number of workmen covered by the reference are governed by the provisions as regards leave under the Delhi Shops and Establishments Act, 1954. Section 22 of that Act fixes the maximum for sickness or casual leave with wages to a period of 12 days and further provides that such leave shall riot be accumulated. It is thus clear that as regards those workmen to whom the Delhi Shops and Establishments Act, 1954 applies the Tribunal has acted illegally in fixing the period of sick leave at 15 days and permitting accumulation. We therefore set aside this direction in the award and direct instead that the Company shall allow to the workmen to whom the Delhi Shops and Establishments Act, 1954 applies, sickness or casual leave of a total of 12 days with full pay and allowances and that such leave shall not be accumulated. We are also of opinion that it will not be right to have two separate leave rules for the two classes of workmen, one to whom the Delhi Shops and Establishments Act, 1954 applies and the other two whom it does not apply. For that is likely to be a source of much discord and heartburning. Therefore, in respect also of those workmen to whom the Delhi Shops and Establishments Act, 1954 does not apply, we think that the same period of 12 days in a year with full pay and allowances should be fixed for sickness or causal leave, and there should be no accumultation of such leave; and we direct accordingly. We cannot find any justification for the direction of the Tribunal that the practice of insistence on 254 previous application for the purpose of casual leave should be relaxed in cases where it cannot possibly be so done in emergent and unforeseen circumstances and that upto 3 days no medical certificate should be asked for. The leave rules of the Company as they now stand provide that ordinarily previous permission of the head of the department and the Establishment Manager shall be obtained before casual leave is taken but that when this is not possible due to sudden illness, the head of the Department or the Manager as soon as may be practicable should be informed in writing of the absence from work and of the probable duration of such absence. In our opinion, this provision is reasonable and is calculated to meet the needs of workmen for taking leave without previous permission, in case of emergency. In these circumstances, the further directions as regards this that have been given by the Tribunal appear to us to be unnecessary and are hereby set aside. On the question of gratuity, the only argument seriously pressed by Mr. Pathak was that the scheme as framed by the Tribunal would put undue strain on the Company 's sources. We have already expressed our agreement with the Tribunal 's conclusion that the Company 's financial resources are strong and stable and that not only has the Company been prospering in recent years but that its future prospects are also bright. Therefore, we do not think that the scheme of gratuity as framed by the Tribunal is unduly favourable to the workmen or that it places any undue strain on the Company 's financial resources. One provision in the gratuity scheme which ought to be mentioned is that under it an employee who is dismissed for misconduct shall not be entitled to any gratuity. It has been pointed out by this Court in more than one case that having regard to the nature of gratuity it will not be proper to deprive 255 an employee of the gratuity earned by him because of his dismissal for misconduct and the proper provision to make in this connection is that where an employee is dismissed for misconduct which has resulted in financial loss to the employer the amount lost should be deducted from the amount of gratuity due. As however in the present case, the workmen have not appealed against the award as regards the gratuity scheme framed by the Tribunal, it will not be proper for us to make the modification as indicated above. Coming now to the question of retirement age on which the workmen have appealed, we find there is some controversy as regards the existing position. The workmen stated in their written statement before the Tribunal that " 'at present there are no set rules in the Company in this matter. " Their claim was that the retirement age should be fixed at 60 for all the employees of the Company. According to the Management 's written statement "the existing superannuation system is that the age of retirement is fixed at 55." The Magagement further stated that the age of retirement " 'as fixed, that is, 55 years" is appropriate and should not be raised. In respect of this controversy as regards the existing position there appears to be little material on the record. From the appointment letters of some of the employees that we find on the record it appears that for some appointments made in 1955 the age of retirement was mentioned as 55. In the several letters of appointments made prior to that year no age of retirement has been mentioned. It is not clear, therefore, how on the question of retirement age the Tribunal proceeded on the basis that the "existing retirement" age is 55. Proceeding on this basis the Tribunal directed "that the existing retirement age at 55 years should continue but the workers may be allowed to remain in employment and work up to 60 years if found fit. The question of the further extension 256 should rest with the discretion of the Management. " On behalf of the workmen the learned Attorney General has contended that the assumption that the existing retirement age is 55 is wrong in respect of most of the workmen and that except for a few persons appointed after 1955 no retirement age is fixed either in the letters of appointment or in the standing orders of the Company. For all these employees for whom no retirement age has been fixed already, the learned Attorney General argued on the basis of the decision of this Court in Guest Keen, Williams Private Ltd., vs P. J. Sterling., (1) that it would not be fair to fix any age of superannuation. It was held in that case that it was unfair to fix the age of superannuation of previous employees by a subsequent standing order. The Labour Appellate Tribunal had held that it would be unreasonable and unfair to introduce a condition of retirement at the age of 55 in regard to the prior employees having regard to the fact that when they entered service there was no such limitation. This Court felt that it would not be justified in reversing this decision of the Labour Appellate Tribunal. Dealing next with the question whether it followed that there should be no rule of superannuation in regard to these previous employees the Court said : "In our opinion it is necessary to fix the age of superannuation even with regard to the prior employees, and we feel no difficulty in holding that it would not be unfair or unreasonable to direct that these employees should retire on attaining the age of 60. An option to continue in service even thereafter which the respondent claimed is wholly unreasonable and is entirely inconsistent with the notion of fixing the age of superannuation itself. Once the age of superannuation is fixed it may be open to the employer for special reasons to continue in its employment a workman who has passed that (1) ; 257 age : but it is inconceivable that when the age of superannuation is fixed it should be in the option of the employee to continue in service thereafter. We would accordingly hold that in the circumstances of this case the rule of retirement for the previous employees in the concern should be 60 instead of 55 and that the rule of 55 should apply to all employees who enter the service of the appellant after the relevant standing orders came into force." Assuming therefore that for the majority of the employees there is no existing retirement age it would on the authority of the above case, be open to the Tribunal to fix the age of superannuation even with respect to them. As however the Tribunal 's decision that this age should be 55 is vitiated by the incorrect assumption that there is an existing retirement age of 55 it has been necessary for us to consider the question for ourselves. It appears that before the Tribunal the Union 's representative himself desired that the retirement age should be fixed at 58 years which may be extended up to 60 years in fit cases. Before us the Counsel for the Company did not seriously contest that in consideration of the present day circumstances in the country it would be fair to fix the retirement age at 58. Accordingly, we set aside the Tribunals award on this question of retirement age and fix the age at 58 years, subject to the proviso that it will be open to the Company to continue in its employment a workman who has passed that age. This rule should apply to all the employees of the Company. There remains for consideration the question of retrospective operation of the award. Under section 17A of the , an award shall come into operation with effect from such date as may be specified therein but where no date is so specified it shall come into 258 operation on the date when the award becomes enforceable. Even without a specific reference being made on this question it is open to an industrial tribunal to fix in its discretion a date from which it shall come into operation. The reference, in the present case, included as a matter in dispute the question of retrospective effect in these words : "Whether all the above demands should be made applicable retrospectively with effect from April 1, 1956 and what directions are necessary in this respect ?" The Tribunal rejected the workmen 's claim for giving effect to its award from April 1956. Wherever however the Tribunal has given relief the Tribunal has directed that the award should come into effect from the date of reference, i. e., January 23, 1958. On behalf of the Company Mr. Pathak contends that there is no reason why the award should be given effect to from any date prior to the date of its pronouncement. We are not impressed by this argument . No general formula can be laid down as to the date from which a Tribunal should make its award effective. That question has to be decided by the Tribunal on a consideration of circumstances of each case. There have been cases where this Court has made an award effective from the date when the demand was first made. There are other cases where the orders of the Tribunal directing the award to be made effective from the date of the award has not been interfered with. It is true that in some cases this Court has modified the Tribunal 's award in such a case. But it does not appear however that any general principles have been laid down. Indeed, it is difficult and not even desirable that this Court should try to lay down general principles on such matters that require careful consideration of the 259 peculiar circumstances of each case for the exercise of discretion. It is sufficient to say that we find no reason to interfere with the Tribunal 's direction in this case that the reliefs given by it would become effective from the date of the reference. We therefore allow both the appeals in part by modifying the Tribunal 's award as regards dearness allowance, leave rules and retirement age and also as regards the adjustment of the interim relief as mentioned above. In all other matters in appeal before us the award is confirmed. The modifications made as regards dearness allowance will, as already stated, take effect from April 1, 1959. The modifications as regards leave rules and as regards retirement age will take effect from this date. In both the appeals the parties will bear their own costs. Appeals allowed in part. [/INST]The Chief Commissioner, Delhi, referred an industrial dispute for adjudication to the Industrial Tribunal, Delhi, which gave its award on March 16, 1959. Both the appellant and the respondents were dissatisfied with the award and they came to this Court by special leave. The award was challenged by the appellant with regard to scales of pay, dearness allowance, adjustments, leave rules, gratuity and retrospective effect of the award. The respondents attacked the award as regards the working hours, leave rules and retirement age. Held, that while social justice demands that workmen should get a fair share of the national income which they help to produce, it has also to be seen that that does not result in the drying up of the source of national income itself. Inroads 235 on the profits of the capitalists should not be such as have a tendency to drive capital away from fruitful employment and thereby affect prejudicially capital formation itself The Tribunal had applied the correct principles and the award should not be disturbed, Held, also, that the Tribunal had erred in awarding a fixed dearness allowance of Rs. 25 / . The object of dearness allowance being to neutralise part of the rise or fall in the cost of living, it should ordinarily be on a sliding scale. Held, that the contention of the appellant that in view of the provisions of the , no provision need be made about sickness leave at all, was rejected. It was pointed out that in providing for periodical payments to an insured worker in case of sickness or for medical treatment or attendance to him or the members of his family under the Act of 1948, the Legislature did not intend to substitute any of these benefits for the workmen 's right to get leave on full 'Pay on the ground of sickness. Held, that as regards those workmen to whom the Delhi Shops and Establishments Act, 1954, applied,. the Tribunal had acted illegally in fixing the period of sick leave at 15 days and permitting accumulation. The appellant shall allow to the workmen to whom the Delhi Shops and Establishments Act applied, sickness or casual leave for a total period of 12 days with full pay and allowances, and such leave shall not accumulate. As it was not desirable to have two separate leave rules for two classes of workmen, one to whom the Act of 1954 applied and tile other to whom the Act did not apply, it was held that the same rule should apply to other workers also. Held, also, that tile scheme of gratuity as framed by the tribunal was not unduly favourable to workmen and it also did not place any undue strain on the financial resources of tile Company. As regards the provision in the gratuity scheme that an employee who is dismissed for misconduct shall not be entitled to any gratuity; it was held that the proper provision should be that where an employee is dismissed for misconduct which has resulted in financial loss to the employer, the amount of loss should be deducted from the amount of gratuity due. The award of the Tribunal on tile question of retirement age was set aside and the retirement age was fixed at 58, subject to the proviso that it would be open to the company to continue in its employment a workmen who had passed that age, The rule was to apply to all tile employees of the Company. 236 No general formula could be laid down as to the date from which a Tribunal should make its award effective. That question has to be decided by the Tribunal on consideration of the circumstances of each case. There was no justification for interfering with the direction of the Tribunal that in this case the reliefs given by it should become effective from the date of the reference. Standard Vacuum Refining Co., of India vs Its workmen, , M/s. Crown Aluminium Works vs Its workmen; , , Express Newspapers Ltd. vs Union of India, , M/S. Lipton Ltd. vs Their Workmen [1959] Supp. 2 section C. R. 150, Workmen Hindustan Motors vs Hidustan Motors, 52, French Motor Car Co. vs Their Workmen, and Guest Keen, Williams (P) Ltd. vs P. J. Sterling [1961] 1 section C. R. 348, referred to. </s>
<s>[INST] Summarize the judgementCivil Appeal No. 381 of 1965. Appeal by special leave from the judgment and decree dated May 2, 1961 of the Allahabad High Court in Execution First Appeal No.10 of 1954. Naunit Lal, for the appellant. V.A. Seyid Muhammad and S.P. Nayar, for the respondents. The Judgment of the Court was delivered by Grover, J. This is an appeal by special leave from a judgment of the Allahabad High Court confirming the order of the District Judge dismissing an Execution Application filed by the appellant. On June 16, 1948 the appellant entered into an agreement with Aziz Ahmed Khan respondent No. I for the sale of certain properties comprising houses and plots in the town of Bareilley. The sale consideration of Rs. 1,45,000/ was stated have been already paid by the appellant to the vendor. Subsequently disputes arose between the vendor and the appellant regarding the completion of the sale. These disputes were refered to the arbitration of Shri R.R. Agarwal who gave an award on August 30, 1949 which was made a rule of the court on November 30, 1949. A decree on the basis of the award was granted in favour of the appellant. Sometimes after November 22, 1949 the vendor Aziz Ahmed Khan left India for Pakistan. On December 7, 1950 the appellant moved the Deputy Custodian (Judicial) Meerut Circle for confirmation of the transfer under section 38 of the Administration of Evacuee Property Ordinance, 1949, (Ordinance No. 27 of 1949), or under section 40 of the (Act 31 of 1950). On 9th May 1951 the Deputy Custodian accorded confirmation. The Additional Custodian, however, took suo motu action in exercise of his revisional jurisdiction and set aside the order passed by the Deputy Custodian. On April 4,. 1952 the appellant filed an application for execution of the decree passed on the basis of the award. On May 10, 1952 objections were filed on behalf of the Custodian to the execution. The District Judge held that the award made on August 30, 1949 could not have the effect of transferring the properties as the approval of the Collector had not been obtained under the notification dated July 29, 1949 which had been 798 issued under section 26 of U.P. Administration of Evacuee Property Ordinance No. 1 of 1949 and that on the date of the decree the transfer of properties could not be effected unless confirmed by the Custodian. It was further held by him that no interest by way of charge in favour of the appellant had been created on the properties in dispute. He was further of the view that section 17(1) of the Central Act of 1950 created a bar to execution of the decree. The Execution application was consequently dismissed. The appellant filed an appeal to the High Court which was dismissed. When the appeal came up for hearing before this Court on February 22, 1968 it was. considered expedient to have further findings on certain points. The following questions were therefore framed and remitted to the High Court for that 'purpose. (1) the date on which Aziz Ahmed Khan migrated to Pakistan. (2) whether the properties of Aziz Ahmed Khan vested in the Custodian of Evacuee Property under U.P. Ordinance 1 of 1949 or Central Ordinance 12 of 1949 as made applicable to the State of U.P. by U.P. Ordinance 20 of 1949 or under the Central Ordinance 27 of 1949 or under Central Act of 1950. The High Court remitted these matters to the District Judge. His finding on the first question was that Aziz Ahmed Khan had migrated to Pakistan on some date after November 22, 1949. On the second question he found that Aziz Ahmed Khan 's properties did not vest in the Custodian of Evacuee Property under any of the Ordinances or under the Central Act 31 of 1950. Certain additional evidence was produced before the High Court. The High Court expressed agreement with the conclusions of the District Judge on both the points. It may be mentioned that on certain subsidiary points the. learned District Judge had .also found that it had not been proved that a valid declaration under section 7(1) of the Central Ordinance 27 of 1949 or of the corresponding provision in the Central Act 31 of 1950 was made for declaring Aziz Ahmed Khan an evacuee. In the opinion of the learned Judge such a declaration was necessary if his properties were to be declared evacuee properties. In view of the findings which have been returned by the High Court on the points referred, it has been contended on behalf of the appellant that there could be no bar to the execution of the decree which was based on the award. It is 799 pointed out that on the conclusions at which the High Court has now arrived the properties of Aziz Ahmed Khan were never declared to be evacuee properties either under the Central Ordinance 27 of 1949 or the Central Act 31 of 1950, and they could not vest in the Custodian unless they had been so declared after appropriate proceedings. It is urged that the decree in favour of the appellant was of the nature of a decree passed in a suit for specific performance. The court could and should have executed d conveyance in favour of the appellant since Aziz Ahmed Khan was no longer available or was refusing to do so and the confirmation of the Custodian could be obtained before the registration was effected. According to the counsel for the appellant the Additional Custodian had declined to confirm the transfer at the previous stage because there was no deed of sale or transfer. Counsel for the respondent has drawn attention to a decision of this Court in Azimunissa & Others vs The Deputy Custodian Evacuee Properties, District Deoria & Ors.(1) in which the effect of the declaration of U.P. Ordinance l of 1949 to be invalid by the courts came up for the consideration, as also of the subsequent evacuee legislation namely, Central Ordinance 27 of 1949, Central Act 31 of 1950 and the Administration of Evacuee Property (Amendment) Act, 1960. It appears to have been held in that case that the property which had vested under the U.P. Ordinance 1 of 1949 continued to vest in the Custodian notwithstanding the ,fact that the High Court of Allahabad in Azimunnissa & Ors. vs Assistant Custodian(2) held the vesting to be invalid. This was the result of the introduction of section 8(2 A) in the Central Act of 1931 by the Central Amendment Act I of 960. In the present case, however, Aziz Ahmed Khan migrated to Pakistan after November 22, 1949. At that point of time it was Central Ordinance 27 of 1949 which was in force. It appears highly doubtful that the respondent could take advantage of the. provisions of automatic vesting contained in U.P. Ordinance 1 of 1949. There is, however, a serious hurdle in the way of the appel lant even when the provisions of Central Ordinance 27 of 1949 or the Central Act 31 of 1950 are taken into consideration. Section 38(1) of that Ordinance provided that no transfer of any right or interest in any property after the 14th day of August 1947 by or on behalf of an evacuee or by or on behalf of a person who had become an evacuee after the date of ' the transfer shall be effective so as to confer any rights or remedies on the parties to such transfer unless it was confirmed by the Custodian. The provision of section 40 of the Central Act (1) ; (2) A.I.R. 1957 All. LI5SupCI/69 7 800 31 of 1950 were similar though there was a certain change in the language. Sub section (1) of that section was in the following terms : "No transfer made after the 14th day of August, 1947, but before the 7th day of May 1954, by or on behalf of any person in any manner whatsoever of any property belonging to him shall be effective so as to confer any rights or remedies in respect of the transfer on the parties thereto or any person claiming under them or either of them, if, at any time after the transfer, the transferor becomes an evacuee within the meaning of section 2 or the property of the transferor is declared or notified to be evacuee property within the meaning of this Act, unless the transfer is confirmed by the Custodian in accordance with the provisions of this Act". Under both these enactments transfer of property was ineffective unless confirmed by the Custodian even if it was made by a person who became an evacuee. after the date of the transfer. It was not necessary that the property should have been declared or notified to be evacuee property before the aforesaid provisions were attracted. Under section 40(1) of the Act, the transfer was to be ineffective in both eventualities; (1) if the transferor became an evacuee within the meaning of section 2 after the transfer or (2) if the transferor 's property had been declared or notified to. be evacuee property. It is abundantly clear that if Aziz Ahmed Khan became an evacuee even after the transfer. section 38(1) of the Ordinance and section 40(1) of the Act became applicable. One of the meanings of the word "evacuee" as .given in the definition in section 2(d) of the Ordinance and of the Act was : Section 2(d)(i) "evacuee" means any person, who, on account of the setting up of the Dominions of India and Pakistan or on account of civil disturbances or the fear o.f such disturbances leaves or has, on or after the 1st day of March, 1947, left any place in a Province for any place outside the territories now forming part of India," Aziz Ahmed Khan became an evacuee within the meaning of the above definition. It was necessary, therefore, for the appellant to have obtained the confirmation of the Custodian in respect of the transfer which had been made by Aziz Ahmed Khan in his favour of the properties in question. The Additional Custodian declined to confirm the transfer and thus the condition precedent for the transfer to become effective remained 801 unsatisfied. It is significant that even in the award which formed the basis of the decree it had been provided "the second party (Aziz Ahmed Khan) is hereby directed to execute the necessary documents in respect of the transfer by him of the properties referred to above within one month from the date of the receipt of the confirmation or approval according to law failing which the first party will, at his option, get the same executed and registered through court on the basis of this award which would be made a rule of the court. Therefore according to the award the confirmation or approval of the Custodian had to be obtained before the transfer documents were to be executed and completed in accordance with law. It was incumbent on the appellant to obtain the confirmation order before he could ask for any further steps to be taken by the courts in the matter of execution and registration of the transfer deed. Under section 39 of the Central Ordinance 27 of 1949 no document could be registered of the nature mentioned in section 38 unless the Custodian had confirmed the transfer. Similar provisions were contained in section 40 of the Central Act 31 of 1950. The prayer in the Execution Application that the court might grant assistance "by execution of sale deed under the enabling para 5 of the Decree" could not be entertained or acceded to by the Executing Court. There is one matter, however, on which we would like to express no view and leave it open to the appellant to take such steps as he may be advised. Para 6 of the award which became part of the decree was as follows : "The claim of the first party for this transfer and exchange consideration is Rs. 1,50,000/ (one lac fifty thousand) on account of all principal money and interest and other expenses calculated to date against the second party Sri Aziz Ahmed Khan, which the second party will pay with interest at 12 per cent per annum in case the transaction and transfer of the properties referred to above in favour of the first part Sri Sardana is not confirmed or approved in any way and for any other reasons whatsoever. Sri Sardana will force the payments against the properties referred to above. and these properties are hereby charged with this claim and Sri Sardana will have his remedies to enforce the payment of the above claim against all other properties of the second party and also against his person. " The High Court in the judgment under appeal dealt with this question as if the charge was on the evacuee property. On the reasoning which has been pressed before us about the necessity 802 Of a declaration under the provisions of Central Ordinance 27 of 1949 or Central Act 31 of 1950 this part of the judgment does not appear to be correct. We would, however, refrain from expressing any final opinion as in fairness to both sides this question should be left for being decided, if taken, in appropriate proceedings including proceedings before the Executing Court. With the above observations the appeal is dismissed but in view of the entire circumstances we make no order as to costs. Y.P. Appeal dismissed. [/INST]The appellant, a dealer in pulses in Vijayawada in Madras State made certain sales outside the State during the assessment year 1949 50. The appellant claimed exemption from sales tax of sales effected outside the State during the year but the Deputy Commercial Tax Officer disallowed the claim. A first appeal and a revision petition to the Board of Revenue were unsuccessful. The appellant thereafter brought a suit for the recovery of tax collected from him with interest contending that part of sales effected outside the State could not be taxed under article 285(1)(a) of the Constitution. The Trial Court held that the assessment to tax of the sales during the period from April 1, 1949 to January 25, 1950 ' could not be impeached but the sales from January 26 to March 31 outside the State were not liable to sales tax; as there was a single order of assessment 'for the whole year, the entire assessment was illegal. In appeal to the High Court, and upon a direction from that Court, the Trial Court gave a finding that deliveries of the goods were not made for purposes of consumption within the delivery State only. The High Court. therefore. allowed the appeal holding that the appellant could not claim the benefit under Article 286(1)(a) in the absence of evidence as to how the whole sales disposed of the goods after obtaining delivery and therefore the entire turn over for the year 1949 50 would be assessable to tax. In the appeal to this Court, it was contended inter alia (i) that the High Court was in error in holding that the burden of proof was on the appellant to show that there was not only delivery of goods for consumption within the delivery States but there was actual consumption of goods in those States: (ii) the assessment must be treated as an indivisible one and if a part of the assessment was illegal, the entire assessment must be deemed to be infected and treated as invalid. HELD: Allowing the appeal, (i) The part of the turnover which related to sales from January 26, 1960 to March 31. 1960 was not liable to sales tax and the levy of sales tax from the appellant to this extent was illegal. It was rightly contended that the appellant did not carry the burden of showing that there was not only delivery of goods for consumption within the States but that the goods were actually consumed in those States. [749 C] India Copper Corporation Ltd. vs The State of Bihar, 12 S.T.C. 56 relied upon. 744 (ii) In the present case though there was a single order of assessment for the period from April 1, 1949 to March 31, 1950, the assessment could be split up and dissected and the items of sales separated and taxed for different periods. It was possible to ascertain the turnover of the appellant for the pre Constitution and post Constitution periods from the figures furnished in the plaint by the appellant himself. It was, therefore. open to the Court in these circumstances to sever the illegal part of the assessment and give a declaration with regard to the illegal part alone instead of1 declaring the entire assessment void. [752 B] Case law referred to. </s>
<s>[INST] Summarize the judgementN: Criminal Appeals Nos. 45 to 49 of 1951. Appeals from the judgments and orders dated 20th August, 1951, of the High Court of Judicature at Simla (Bhandari and Soni 33.) in Criminal Writ 'Cases Nos. 46 to 50 of 1951. Jai Gopal Sethi (R. L. Kohli and Sri Ramkumar, with him) for the appellants in Cr. Appeals Nos. 45 and 49. 20 N.C. Chatterjoe (Hardyal Hardy and R.L. Kohli with him) for the appellant in Cr. Appeal No. 46. Hardyal Hardy for the appellant in Cr. Appeal No. 48. S.M. S.M. Sikri, Advocate General of the Punjab (N. section Doabia. with him) for the respondent in all the appeals. M.C. Setalvad, Attorney General for India (G. N. Joshi, with him) for the Intervener in Cr. Appeal No. 45. October 4. The Judgment of the Court was delivered by KANIA C.J. These are five companion appeals from the judgments of the High Court of East Punjab and the principal point argued before us is as to the legality of the deten tion of the appellants under the Preventive Detention Act on the ground that they are engaged in black marketing in cotton piecegoods. The Jullundur Wholesale Cloth Syndicate was formed to work out the distribution of cloth under the Government of Punjab Control (Cloth) Order passed under the Essential Supplies Act. Certain persons who held licences as whole sale dealers in cloth formed themselves into a corporation and all cloth controlled by the Government was distributed in the district to the retail quota holders through them. The Government allotted quotas to the retailers and orders were issued by the Government for giving each retailer certain bales under the distribution control. If some of the retail licence holders did not take delivery of the quotas allotted to them under the Notification of the 4th of October, 1950, issued by the Government of India, Department of Industries and Supplies, it was, inter alia, provided that the wholesale syndicate may give the bales not so lifted to another retail dealer. It may be noted that all along the price for the cloth to be sold wholesale and retail had been fixed under Government orders. The Syndi cate was suspected to be dealing in black market and had been warned against its activities by the District Magis trate of Jullundur several times. On the 7th of June, 1951, 21 an order was issued by the District Organiser, Civil Sup plies and Rationing, Jullundur, to the managing agents of the wholesale cloth corporation, Jullundur City, intimating that they were strictly forbidden to dispose of any uplifted stock against unexpired terms without his prior permission in writing. They were further directed that thenceforth no such stock would be allowed to be sold to an individual retailer, but permission would be granted to sell the same to associations of retailers only. It was stated that this letter was not in accordance with clause 5 of the Notifica tion of the Government of India dated the 4th October, 1950, which authorized the wholesale syndicate to be at liberty to sell uplifted cloth to any other retailer or an association of retail dealers of the same district. It may be further noted that the Cotton Cloth Control Order was in operation even prior to 1950. For some time control on the distribu tion of cloth was lifted but the price remained under the control of the Government. During that time it has been alleged that the appellants and several others sold cloth at rates higher than those fixed by the Government. Even when the distribution and price were both controlled, the manu facturing mills were allowed to sell at prices fixed by the Government a certain percentage of cloth which was not taken by the Government under its control. This was described as free sale cloth and it was alleged that the appellants and several others were doing black marketing in this free sale cloth. By an order passed by the District Magistrate on 19th June, 1951, he directed that the appellants be detained under section 3 (2) of the Preventive Detention Act to prevent them from acting in a manner prejudicial to the maintenance of supplies of cloth, essential to the communi ty. On the 2nd July, 1951, the District Magistrate, Jullun dur, directed that the appellants be committed to District Jail, Jullundur, from the 2nd July until the 1st October, 1951. The appellants were detained accordingly. The grounds for their detention were given to them on the morn ing of the 6th July. The grounds set out the activities of 22 the appellants as managing agents or partners in different firms or employees of the said firms or corporations. It was stated ,that they had been disposing of most of the stocks of cloth received for the Jullundur District in the black market at exhorbitant rates from June, 1949, to Octo ber, 1950, during the period when control on distribution was removed and that even after the reimposition of that control in October, 1950, they disposed of cloth which has been frozen under the directions of Director of Civil Sup plies in the short interval between the passing of the order and its service on them. The second ground was in respect of their individual activities as members of the firm in which they were partners in disposing of stocks of cloth in black market at rates higher than the controlled ones, to various dealers, through agents. The particulars were speci fied in Appendix 'A '. They refer to the free sale cloth. In the third ground it was alleged that ' by illegal means they deprived the rightful claimants of the various stocks of cloth with a view to pass the same into black market at exorbitant rates. We do not think it necessary to go into greater details of these grounds or refer to the other grounds. On the 9th of July, 1951, petitions under article 226 of the Constitution of India were filed in the East Punjab High Court asking for writs of habeas corpus against the State on the ground that the detention of the appellants under the Preventive Detention Act was illegal. The District Magis trate filed his affidavit in reply challenging the allega tion of mala fides and setting out in some detail instances of the activities of the appellants and contended that on the reports received by him he was satisfied that the deten tion of the appellants was necessary. Early in August, 1951, the executive authorities cancelled the licence of the appellants as cloth dealers. The High Court dismissed the petitions and the petitioners have come on appeal to us. Section 3 of the , pro vides that the Central Government or the State Government may, if satisfied with respect to any person that 23 with a view to preventing him from acting in any manner prejudicial to the maintenance of supplies and services essential to the community it is necessary so to do, make an order directing that such person be detained. The power to act in accordance with the terms of this provision was given by section 3 (2) to a District Magistrate. Such Magistrate however was required to make a report to the State Govern ment to which he was subordinate about the order and also to send the grounds on which the order had been made and such other particulars as, in his opinion, had a bearing on the necessity of the order. It is not disputed that an order under section 3 (2) of the to prevent black marketing can be passed by the District Magistrate. On behalf of the appellants it is contended that in the grounds for their detention reference is made to their activities prior to June, 1951, only. This cannot be considered objectionable because having regard to those activities it is alleged that the satisfaction required under the section had arisen. It was next argued that such loophole as existed in the total control of distribution and ' sale and price of piecegoods in the district was sealed by the order of the District Orga niser dated the 7th June, 1951. By virtue of that order the syndicate or corporation could not sell any cloth without an express order in writing from the District Organiser, and therefore there could be no black marketing after that date by any of the appellants and the order was therefore unjus tified. It was next contended that in any event now as their licences are cancelled they cannot deal in cloth and the order of detention now maintained against them is more in the nature of punishment than prevention. It was argued that orders under the were for the purpose of preventing a person from acting in future in the objectionable way contemplated by the Act and it was beyond the scope of the Act to pass orders in respect of their alleged activities anterior to June, 1951. In our opinion the High Court approached the matter quite correctly. Instances of past activities are relevant 24 to be considered in giving rise to the subjective mental conviction of the District Magistrate that the appellants were likely to indulge in objectionable activities. The grounds which were given for the detention are relevant and the question whether they are sufficient or not is not for the decision of the Court. The Legislature has made only the subjective satisfaction of the authority making the order essential for passing the order. The contention that because in the Amending Act of 1951 an Advisory Board is constitut ed, which can supervise and override the decision taken by the executive authority, and therefore the question whether the grounds are sufficient to give rise to the satisfaction has become a justifiable issue in Court, is clearly unsound. The satisfaction for making the initial order is and has always been under the , that of the authority making the order. Because the Amending Act of 1951 establishes a supervisory authority, that discretion and subjective test is not taken away and by the establish ment of the Advisory Board, in our opinion, the Court is not given the jurisdiction to decide whether the subjective decision of the authority making the order was right or not. Proceeding on the footing, therefore, that the jurisdiction to decide whether the appellants should be detained under the on the grounds conveyed to the appellants is of the District Magistrate. In the present cases, two arguments were advanced on behalf of the appel lants. It was strenuously urged that by reason of the order of the District Organiser of the 7th June, 1951, the only loophole which remained in the scheme of distribution and sale of cloth under control of the Government was sealed and it was impossible after that order to do any blackmarketing by any of the appellants. We are unable to accept this contention. In the first place, this order appears to be an administrative order and is in the nature of a warning. It is at variance with the provisions of clause 5 of the Order of the Central Government of the 4th October, 1950. Moreover this order does not bring about the result claimed for it. A lot 25 of cloth which the manufacturers are permitted to distribute through persons outside the Government agencies can still be secured and sold at exhorbitant rates, i.e., at rates higher than those fixed by the Government. The second argument was that as the licences of the appellants are now cancelled they cannot deal in textile cloth at all and therefore there can be no apprehension of their indulging in black market activities. We are unable to accept this argument also because it is common knowledge that licences can be obtained in the name of nominees. Again while these people may not have their licences in Jullundur District they may have or may obtain licences in other districts. From the fact that their licences have been cancelled a month after the order of detention was passed we are unable to hold that it is impossible on that ground for the appellants to indulge in black market activities. In this connection an extract from the further affidavit of the District Magistrate of Jullun dur dated 1st August, 1951, may be usefully noticed. He stated: "There have been orders for the release of certain stocks of cloth in respect of other mills, as free sale cloth after the 9th June, 1951. Any quantity of cloth not paid for and lifted by the owners ' nominees will revert to the Mills for free sale: vide letter No. CYC 2/ SLM, dated the 31st May, 1951, from the Textile Commissioner, Bombay, to all selected Mills in Bombay and Ahmedabad. This cloth can be purchased by any wholesale dealer of cloth of India, without any restriction. Not only this, free sale cloth can be transported from one district to another without a per mit: vide Memo No. 28894 CS (C) 50/48791, dated 2nd January, 1951, from the Joint Director, Civil Supplies, and Under Secretary to Government Punjab to the District Organiser, Civil Supplies and Rationing, Ludhiana. Again free sale cloth is also procurable from individual firms who conspired to make profit by black marketing. The only information which is supplied by a purchaser of wholesale cloth to the District Magistrate is as to what quantity of such cloth has been imported 4 26 into the district. According to the report of the District Organiser no such cloth was imported into Jullundur by the corporation but there are reasons to believe that the Corpo ration had been making their purchases in free sale cloth from the Mills and using those bales to make up the defi ciency in the bales of quota cloth of superior quality which they used to dispose of in the black market in collusion with the Mills. Besides, the firm Rattan Chand Mathra Dass, as would be evident from the attached lists signed by the District Organiser, had been dealing in free sale cloth and had also been importing cloth as Reserve of Kangra and also Provincial Reserve. Most of this quota also found its way into the black market. Similarly the firm Madan Gopal Nand Lall and Company had been dealing in free sale cloth on a large scale. It would be evident from the attached list. Santi Sarup, the Secretary of the Corporation, is believed to be a partner in the firm Hari Chand Bindra Ban and this firm also had been dealing in free sale cloth. The free sale cloth acquired by them used to be invariably sold in the black market as reported by the District Organiser in his Memo No. 6306/6734 M/CT/Do. 7 dated 1st August, 1950, in reply to my Memo. No. nil dated 30th July, 1951. There is absolutely no bar for the wholesale cloth corporation, Jullundur, to its getting free sale cloth from the Mills or other wholesale dealers nor is there any bar for the firms Rattan Chand Mathra Dass and Madan Gopal Nand Lal and Co. to the acquiring of free sale cloth. " It was next argued on behalf of the appellants that the only order of detention made against them was the order of the 2nd July and that did not refer to any section of the and did not suggest that there was any satisfaction of the detaining authority. It was argued that no order of the 19th of June was ever shown to any of the appellants or served on them and therefore their deten tion was illegal. It should be pointed out that these con tentionsare raised in the affidavits not of the detained persons, but of their relations. Their affidavits do not show that they have any personal knowledge. The affidavits 27 on this point are based only on their belief and information and the source of the information is not even disclosed. As against this, there is the affidavit of the District Magis trate which expressly states that the terms of the Order of the 19th of June were fully explained to each of the dete nus. The petitions for the writs of habeas corpus were filed within a week after the service of the detention order and we do not think there is any reason to doubt the cor rectness of the statements of the District Magistrate. In our opinion this ground of attack on the order of detention has no substance and the detention cannot be held illegal on that ground. The judgment of the High Court was attacked on these grounds and as we are unable to accept any of these contentions the appeals must fail. One of the appellants is the secretary of one corpora tion and another is a salesman and clerk in one of the firms. On their behalf it was urged that they could not indulge in black market activities. We are unable to accept this contention in view of what is stated in the affidavits of the District Magistrate. It is there pointed out that in addition to being a secretary or a clerk and in those capac ities actively participating in the black market activities of their principals, they were themselves indulging in black market activities in cloth. If these and other facts in respect of the appellants are disputed the matter will be considered by the Advisory Board. The question of the truth of those statements however is not within the jurisdiction of this Court to decide. As all the grounds urged against the judgment of the High Court fail, all the five appeals are dismissed. Appeals dismissed. Agent for the appellants in all the appeals: R.S. Naru la. Agent for the respondent and Intervener: P.A. Mehta. [/INST]The petitioners were convicted under section 302 read with section 34 I.P.C. and were sentenced to death on November 26, 1977. The High Court upheld the conviction and sentence on July 18, 1978. The petitioners ' Special Leave Petition against the judgment of the High Court was dismissed on March 5, 1979 and the Review Petition against the dismissal of the Special Leave Petition was also dismissed on March 27, 1981. The petitioners ' successive writ petitions challenging the validity of sections 302 and 34 I.P.C. were dismissed on January 20, 1981 and August 24, 1981 respectively. The present writ petitions were filed on March 2, 1983 on the basis of the decision in T.V. Vatheeswaran vs State of Tamil Nadu which was rendered on February 16, 1983. The contention on behalf of the petitioners was that more than two years had elapsed since they were sentenced to death by the trial court and therefore they were entitled in terms of the ruling in vatheeswaran to demand that the said sentence should be quashed and substituted by the sentence of life imprisonment. ^ HELD : Prolonged delay in the execution of a death sentence is unquestionably an important consideration for determining whether the sentence should be allowed to be executed. But no hard and fast rule that "delay exceeding two years in the execution of a sentence of death should be considered sufficient to entitle the person under sentence of death to invoke article 21 and demand the quashing of the sentence of death" can be laid down as has been done in Vatheeswaran. [594 E F] (i) No absolute or unqualified rule can be laid down that in every case in which there is a long delay in the execution of a death sentence, the 583 sentence must be substituted by the sentence of life imprisonment. There are several other factors which must be taken into account while considering the question as to whether the death sentence should be vacated. A convict is entitled to pursue all remedies lawfully open to him and get rid of the sentence of death imposed upon him and his taking recourse to them to ask for the commutation of his sentence even after it is finally confirmed by this Court is understandable. But, it is, at least, relevant to consider whether the delay in the execution of the death sentence is attributable to the fact that he has resorted to a series of untenable proceedings which have the effect of defeating the ends of justice. It is not uncommon that a series of review petitions and writ petitions are filed in this Court to challenge judgments and orders which have assumed finality, without any seeming justification. Stay orders are obtained in those proceedings and then, at the end of it all, comes the argument that there has been prolonged delay in implementing the judgment or order. The Court called upon to vacate a death sentence on the ground of delay caused in executing that sentence must find why the delay was caused and who is responsible for it. If this is not done, the law laid down by this Court will become an object of ridicule by permitting a person to defeat it by resorting to frivolous proceedings in order to delay its implementation. Further, the nature of the offence, the diverse circumstances attendant upon it, its impact upon the contemporary society and the question whether the motivation and pattern of the crime are such as are likely to lead to its repetition if the death sentence is vacated, re matters which must enter into the verdict as to whether the sentence should be vacated for the reason that its execution is delayed. The substitution of the death sentence by a sentence of life imprisonment cannot follow by the application of the two years ' formula as a matter of "quod erat demonstrandum." [595 D H; 596 AE] T.V. Vatheeswaran vs State of Tamil Nadu. overruled. (ii) The period of two years purports to have been fixed in Vatheeswaran after making "all reasonable allowance for the time necessary for appeal and consideration of reprieve. " It is not possible to agree with this part of the judgment in that case. The fixation of the time limit of two years does not accord with the common experience of the time normally consumed by the litigative process and the proceedings before the executive. A period far exceeding two years is generally taken by the High Court and this Court together for the disposal of matters involving even the death sentence. Very often four or five years elapse between the imposition of death sentence by the Sessions Court and the disposal of the Special Leave Petition or an Appeal by this Court in that matter. This is apart from the time which the President or the Governor, as the case may be, takes to consider petitions filed under article 72 or article 161 of the Constitution or the time which the Government takes to dispose of application filed under sections 432 and 433 of the Code of Criminal Procedure. [594 F H; 595 AC] (iii) Piare Dusadh is not an authority for the proposition that if a certain number of years have passed since the imposition of a death sentence, 584 that sentence must necessarily be commuted to life imprisonment. In that case the Federal Court commuted the sentence of death to sentence of transportation for life for reasons other than that a long delay had intervened after the death sentence was imposed. In Ediga Anamma, Piare Dusadh was regarded as a leading case on the point. In the other judgments of this Court referred to in Vatheeswaran, this Court was hearing appeals against judgments of High Courts confirming the sentence of death. However, the Court has not taken the narrow view that the jurisdiction to interfere with a death sentence can be exercised only in an appeal against the judgment of conviction and sentence. In very recent times, the sentence of death has been commuted to life imprisonment by this Court in quite a few cases for the reason, inter alia, that the prisoner was under the spectre of the sentence of death for an unduly long time after the final confirmation of that sentence. [589 B D H; 590 A D] Piare Dusadh, [1944] F.C.R. Vol.6 61; Ediga Anamma; , ; Sunil Batra vs Delhi Administration, ; ; Maneka Gandhi [1978] 2 S.C.R. 621; Bachan Singh, , Hussainara Khatoon; , ; Hoskot; , ; Bhuvan Mohan Patnaik; , ; and Prabhakar Pandurang Sangzgiri; , referred to. (iv) Article 21 is as much relevant at the stage of execution of the death sentence as it is in the interregnum between the imposition of that sentence and its execution. The essence of the matter is that all procedure, no matter what the stage, must be fair, just and reasonable. It is well established that a prisoner cannot be tortured or subjected to unfair or inhuman treatment. It is a logical extension of the self same principle that the death sentence, even if justifiably imposed, cannot be executed if supervening events make its execution harsh, unjust or unfair. A prisoner who has experienced living death for years on end is entitled to invoke the jurisdiction of this Court for examining the question whether, after all the agony and torment he has been subjected to, it is just and fair to allow the sentence of death to be executed. That is the true implication of article 21 of the Constitution. [593 B G] Bhuvan Mohan Patnaik; , ; Prabhakar Pandurang Sangzgiri; , ; and Sunil Batra vs Delhi Administration; , referred to. (v) Traditionally, subsequent events are taken into account in the area of civil law. There is no reason why they should not receive due consideration in other jurisdictions, particularly when their relevance on the implementation or execution of judicial verdicts is undeniable. Principles analogous to res judicata govern all judicial proceedings but when new situations emerge, particularly factual, after a verdict has assumed finality in the course of the hierarchical process, advertence to those situations is not barred on the ground that a final decision has been rendered already. That final decision is not a decision on new facts. Courts are never powerless to do justice, that 585 is to say, to ensure that the processes of law do not result in undue misery, suffering or hardship. That is why, even after the final seal of approval is placed upon a sentence of death, this Court has exercised its power to direct, ex debito justiciae, that though the sentence was justified when passed, its execution, in the circumstances of the case, is not justified by reason of the unduly long time which has elapsed since the confirmation of that sentence by this Court. [590 E H] In the instant case, the sentence of death imposed upon the petitioners by the Sessions Court and which was upheld by the High Court and this Court cannot be vacated merely for the reason that there has been a long delay in the execution of that sentence. Counsel for the petitioners have been asked to argue upon the reasons why, apart from the delay caused in executing the death sentence, it would be unjust and unfair to execute that sentence at this point of time. The question will be decided after hearing the parties. [596 G H; 597 A B] 2. Petitions filed under articles 72 and 161 of the Constitution and under sections 432 and 433, Cr. P.C. must be disposed of expeditiously. A self imposed rule should be followed by the executive authorities that every such petition shall be disposed of within a period of three months from the date on which it is received. [597 C] </s>
<s>[INST] Summarize the judgementition No. 57 of 1979. Mrs. K. Hingorani for the Petitioners. Lal Narain Sinha, U. P. Singh and section N. Jha for the Respondent. section V. Gupte, Attorney General, R. N. Sachthey for the Attorney General. The Order of the Court was delivered by BHAGWATI, J. The Government of Bihar has filed before us a note containing the proposed clarification of paragraph 2(e) of the Government Order dated 9th February, 1979, pursuant to the suggestion made by us in our order dated 19th February, 1979. This clarification states in paragraph one that where the police investigation in a case has been delayed by over two years, the Superintendent of Police will see to it that the investigation is completed expeditiously and final report or charge sheet is submitted by the police as quickly as possible and the responsibility to ensure this has been laid personally on the Superintendent of Police. We are glad to note that the State Government has responded to our suggestion but we are not at all sure whether it is enough merely to provide that the investigation would be completed expeditiously and the final report or charge sheet submitted as quickly as possible. We are of the view that a reasonable time limit should be set by the State Government within which these steps should be taken, so that no further delay is occasioned in the submission of the final report or charge sheet. We fail to see how any police investigation can take so long as two years and if police investigation cannot be completed within two years, then there must be something radically wrong with the police force in the State of Bihar. It appears that there are a number of cases where police investigation has not been completed for over two years and persons have been in jail as under trial prisoners for long periods. This is a shocking state of affairs so far as the administration of law and order is concerned. We would, therefore, suggest that in those cases where police investigation has been delayed by over two years, the final report or charge sheet must be submitted by the police within a further period of three months and if that is not done, the State Government might well withdraw such cases, because if after a period of over two years plus an additional period of three months, the police is not able to file a charge sheet, one can reasonably assume that there is no case against the arrested persons. 395 The Government of Bihar has also filed a counter affidavit made by Mr. Mrinmaya Choudhry, Assistant Inspector General of Prisons (1), Bihar setting out the particulars in regard to 18 under trial who have been ordered to be released by us on their personal bond. The particulars given in this counter affidavit make very distressing reading. It appears from this counter affidavit that there are quite a few women prisoners who are in jail without even being accused of any offence, merely because they happen to be victims of an offence or they are required for the purpose of giving evidence or they are in "protective custody". The expression 'protective custody ' is a euphemism calculated to disguise what is really and in truth nothing but imprisonment. It is an expression intended to appease the conscience. It cannot be gainsaid that women who have been kept in jail under the guise of 'protective custody ' have suffered involuntary deprivation of liberty for long periods without any fault on their part. We may point out that this so called 'protective custody ' is nothing short of a blatant violation of personal liberty guaranteed under Article 21 of the Constitution, because we are not aware of any provision of law under which a woman can be kept in jail by way of "protective custody" or merely because she is required for the purpose of giving evidence. The Government in a social welfare state must set up rescue and welfare homes for the purpose of taking care of women and children who have nowhere else to go and who are otherwise uncared for by the society. It is the duty of government to protect women and children who are homeless or destitute and it is surprising that the Government of Bihar should have come forward with the explanation that they were constrained to keep women in 'protective custody ' in jail because a welfare home maintained by the State was shut down. We direct that all women and children who are in the jails in the State of Bihar under 'protective custody ' or who are in jail because their presence is required for giving evidence or who are victims of offence should be released and taken forthwith to welfare homes or rescue homes and should be kept there and properly looked after. We also find from the counter affidavit that Bhola Mahto was in jail from 23rd November, 1968 until 16th February, 1979 when he was released on his personal bond pursuant to the directions given by us by our order dated 5th February, 1979. He is accused in a case under Section 363 & 368 of the Indian Penal Code and he was committed to the court of Sessions on 13th September, 1972 but his sessions trial has not yet commenced. It is amazing that a sessions 396 trial of a person committed to the court of sessions as far back as 13th September 1972 should not have been commenced for about seven years. We direct that the Sessions Judge, Patna should forward to this Court through the High Court of Patna an explanation as to why the sessions trial of Bhola Mahto has not yet commenced. This is also a matter to which we would invite the attention of the High Court of Patna. The same may be said also of Ram Sagar Mistry who was admitted in jail on 28th March, 1971 and committed to the Court of Sessions on 28th June, 1972 on a charge under section 395 of the Indian Penal Code but whose trial has not yet commenced before the Court of Sessions though a period of more than six years has elapsed since the date of his commitment and a period of eight years since the date of his imprisonment. The counter affidavit shows that Babloo Rai who is reported to be a Naxalite is in jail since 15th May, 1975. He is alleged to be involved in five cases which are set out in the counter affidavit. So far as he is concerned, it will be open to him to make an application to the Magistrate before whom he is produced, for being released on bail or on his personal bond and the Magistrate will deal with his application in accordance with broad guidelines laid down by us in our judgment dated 12th February, 1979. We are not at all sure on reading the counter affidavit whether the under trial prisoners whose particulars are given there, are being produced periodically before the Magistrate as required by the proviso to Section 167(2) of the Code of Criminal Procedure, 1973. We should like to know from the Government in a proper affidavit to be filed before us on or before 3rd March, 1979 whether these under trial prisoners were periodically produced before the Magistrate in compliance with the requirement of the proviso to Section 167(2). The proviso to Section 167(2) says that the Magistrate may authorise the detention of the accused person beyond the period of 15 days if he is satisfied that adequate grounds exist for doing so. We hope and trust that in these cases the Magistrates concerned did not act mechanically but applied their mind and satisfied themselves that adequate grounds existed for remanding these persons to judicial custody from time to time over a period varying from two to ten years, though we fail to see how the Magistrates could possibly have been satisfied about the existence of adequate grounds for remanding these persons to judicial custody for such long periods of time ranging from two to ten years for the purpose of police investigation. This is also a matter which we would like the High Court of Patna to consider after making a detailed inquiry. 397 The Government of Bihar has also filed before us a list giving particulars of the under trial prisoners who are confined in 17 jails in Bihar for more than 18 months as on 1st February, 1979. The chart shows that there are under trial prisoners confined in these jails for long periods of time and sometimes even exceeding the maximum punishment which could be awarded to them even if they are found guilty of the offences charged against them. To take an example, we find at Item 30 one Lambodar Gorain has been in Ranchi Jail since 18th June, 1970 for an offence under Section 25 of the Arms Act for which the maximum punishment is two years, with the result that he has been in jail as an under trial prisoner for 8 1/2 years for an offence for which even if convicted, he could not have been awarded more than two years ' imprisonment. There are many such cases in the chart, but it is not possible to identify them easily from the chart because the chart contains a large number of names of under trial prisoners. We would, therefore, direct the Government of Bihar to submit to us on or before 3rd March, 1979 a revised chart showing yearwise break up of the particulars of the under trial prisoners in these jails after dividing them broadly into two categories, one of minor offences and the other of major offences. Our attention has also been drawn to Section 468 of the Code of Criminal Procedure 1973 which in sub section (1) provides that except as otherwise provided elsewhere in the Code, no court shall take cognizance of an offence of the category specified in sub section (2) after the expiry of the period of limitation and under sub section (2) the period of limitation provided is six months, if the offence is punishable with fine only, one year if the offence is punishable with imprisonment for a term not exceeding one year and three years if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years. It would, therefore, be seen that the under trial prisoners against whom charge sheets have not been filed by the police within the period of limitation provided in sub section (2) of Section 468 cannot be proceeded against at all and they would be entitled to be released forthwith, as their further detention would be unlawful and in violation of their fundamental right under Article 21. We, therefore, direct the Government of Bihar to scrutinise the cases of under trial prisoners charged with offences which are punishable with fine only or punishable with imprisonment for a term not exceeding one year or punishable with imprisonment for a term exceeding one year but not exceeding three years and release such of them who are not liable to be proceeded against by reason of the period of limitation having expired. This direction shall be carried out by the Government of Bihar within a 398 period of six weeks from today and compliance reports containing particulars shall be submitted to this Court, first at the end of four weeks and then at the end of the next two weeks. We also find from section 167(5) of the Code of Criminal Procedure, 1973 that if in any case triable by a Magistrate as a summons case, the investigation is not concluded within a period of six months from the date on which the accused was arrested, the Magistrate shall make an order stopping further investigation into the offence, unless the officer making the investigation satisfies the Magistrate that for special reasons and in the interest of justice the continuation of the investigation beyond the period of six months is necessary. We are not at all sure whether this provision has been complied with, because there are quite a few cases where the offences charged against the under trial prisoners are triable as summons cases and yet they are languishing in jail for a long number of years far exceeding six months. We, therefore, direct the Government of Bihar to inquire into these cases and where it is found that the investigation has been going on for a period of more than six months without satisfying the Magistrate that for special reasons and in the interest of justice the continuation of the investigation beyond the period of six months is necessary, the Government of Bihar will release the under trial prisoners, unless the necessary orders of the Magistrate are obtained within a period of one month from today. We would also request the High Court to look into this matter and satisfy itself whether the Magistrates in Bihar have been complying with the provisions of section 167(5). We adjourn the hearing of the Writ Petition to 5th March, 1979 and on that date, we shall proceed to hear and dispose of the Writ Petition on merits on the various questions arising for determination. [/INST]At the further hearing of the case on release of under trials in the State of Bihar, ^ HELD: (a)(i) The expression 'protective custody ' is an euphemism calculated to disguise what is really and in truth nothing but imprisonment. It is an expression intended to appease the conscience. This so called 'protective custody ' is nothing short of a blatant violation of personal liberty guaranteed under article 21 of the Constitution, because there is no provision of law under which a woman can be kept in jail by way of 'protective custody ' or merely because she is required for the purpose of giving evidence. [395C D] (ii) The Government in a social welfare state must set up rescue and welfare homes for the purpose of taking care of women and children who have nowhere else to go and who are otherwise uncared for by society. [395E] (b) The under trial prisoners against whom charge sheets have not been filed by the police within the period of limitation provided for in sub section (2) of section 468 cannot be proceeded against at all and they would be entitled to be released forthwith, as their further detention would be unlawful and in violation of their fundamental right under article 21. [397 G] (c) The provision of section 167(5) of the Code of Criminal Procedure 1973 requiring the investigating officer to satisfy the Magistrate on the necessity of continuation of the investigation beyond a period of six months has not been complied with, because there are quite a few cases where the offences charged against the under trial prisoners are triable as summons cases and yet they are languishing in jail for a long number of years far exceeding six months. [398C] And the Court directed that: (a) All women and children in the jails in the State of Bihar under 'protective custody ' should be released and taken forthwith to welfare homes or rescue homes and should be kept there and properly looked after. [395F] (b) The State Government should scrutinise the cases of under trial prisoners and release such of them who are not liable to be proceeded against by reason of the period of limitation provided in section 468 Cr. P.C. having expired. [397H] (c) The State Govt. should inquire into those cases where the investigation has been going on for a period of more than six months without the satisfaction 394 of the Magistrate as envisaged in section 167(5) and to release the under trials unless the necessary orders of the Magistrate are obtained within one month. [398D E] </s>
<s>[INST] Summarize the judgementivil Appeal No. 161 of 1952. Appeal from the Judgment and Order dated the 18th May, 1951, of the High Court of Judicature at Calcutta (Chakravartti and Das Gupta JJ.) in its Special Jurisdiction (Income tax) in Income tax Reference No. 63 of 1950. N. C. Chatterjee (section N. Mukherjee, with him) for the appellant. C. K. Daphtary, Solicitor General for India (O. N. Joshi, with him) for the respondent. October 8. The Judgment of the Court was delivered by BHAGWATI J. This is an appeal from the judgment and order of the High Court of Judicature at Calcutta on a reference made by the Income tax Appellate Tribunal under Section 66(1) of the Indian Incometax Act (XI of 1922). 197 The appellant is a banking company carrying on business at, among other places, Calcutta and Allahabad. On the 15th March, 1946, the appellant executed a deed by which it purported to create a trust for the payment of pensions to the members of its staff. The deed declared that a pension fund had been constituted and established. It then recited that a sum of Rs. 2,00,000 had already been made over to three persons who were referred to as the "present trustees" and proceeded to state that the fund would consist in the first instance of the said sum of Rs. 2,00,000, and that there would be added to it such further contributions that the bank might make from time to time, though it would not be bound to make such contributions. In the course of the accounting year 1946 47, the bank made a further payment of Rs. 2,00,000 to this fund. In its assessment for the assessment year 1947 48 the appellant claimed deduction of that sum of Rs. 2,00,000 under section 10 (2) (xv) of the Act on the ground that it was an item of expenditure laid out or expended wholly and exclusively for the purposes of its business. The Income tax Officer, the Appellate Assistant commissioner and the Income tax Appellate Tribunal rejected this claim of the appellant and the Income tax Appellate Tribunal at the instance of the appellant stated a case and referred for the consideration of the High Court the following question : "Whether in the facts and circumstances of this case, the Income tax Appellate Tribunal was right in disallowing Rs. 2,00,000 as a deduction under section 10 (2) (xv) of the Indian Income tax Act. " The High Court answered the question in the affirmative and hence this appeal. Though several contentions were sought to be raised by the appellant as well as the Income tax authorities before the High Court as arising from the question, the only contention which was canvassed before the High Court and was held to be determinative of the enquiry before it was whether the deed of trust dated 27 198 the 15th March, 1946, was valid. On the construction of the several provisions of the deed of trust the High Court held : "I am of opinion that in view of these provisions of the trust deed coupled with the uncertainty as regards the beneficiaries and the absence of any obligation to grant any pension, no legal and effective trust was created, and the so called trust must be held to be void," It further held that even if the ownership of the money had passed over to the trustees, still the further provision regarding the application of the money to the payment of pensions being entirely ineffective and void, the money cannot be said to have been expended for the purpose of the business, and that therefore was not an expenditure or an expenditure for the purposes of the business within the meaning of section 10(2)(xv) of the Act. This was also the only contention urged before us by Shri N. C. Chatterjee appearing on behalf of the appellant. Section 3 of the Indian Trusts Act (II of 1882) defines a trust as an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner. The person for whose benefit the confidence is accepted is called the "beneficiary". Section 5 in so far as it is material for the purpose of this appeal says that no trust in relation to movable property is valid unless declared as aforesaid (i.e., by a non testamentary instrument in writing signed by the author of the trust or the trustee and registered, or by the will of the author of the trust or of the trustee) or unless the ownership of the property is transferred to the trustee. Section 6 of the Act provides that subject to the provisions of section 5, a trust is created when the author of the trust indicates with reasonable certainty by any words or acts. . . (c) the beneficiary. . The validity or otherwise of the trust in question has got to be determined with reference to the above sections of the Indian Trusts Act, 199 The deed of trust provided in clause 5 that the income of the fund if sufficient and if the income of the fund shall not be sufficient then the capital of the fund shall be applied in paying or if insufficient in contributing towards the payment of such pensions and in such manner as the bank or such officers thereof as shall be duly authorised by the bank in that behalf shall direct to be paid out of the fund. Clause 7 stated that the fund was established for the benefit of retiring employees on the European and Indian staff of the bank to whom pensions shall have been granted by the bank. Clause 8 provided that any officer on the European staff of the bank who had been in the service of the bank for at least twenty five years and any officer or other employee on the Indian staff of the bank who had been in the service of the bank for at least thirty years might apply to the bank for a pension, and that in special circumstances the bank might grant pensions to employees who had not completed the respective periods of service above mentioned. Clause 9 provided for the withdrawal, modification or determination by the bank of any pension payable thereunder when in its opinion the conduct of the recipient or the circumstances of the case justified it in so doing and the trustees were bound forthwith to act upon any directions of the bank or of any officers thereof duly authorised by the bank in that behalf. Clause 11 invested the bank with discretion in fixing the amount of each pension and in making any modification therein but without prejudice to such discretion declared what were the pensions which it was contemplating would be payable to recipients qualified under the provisions of clause 8 of the deed. Clause 18 authorised the bank from time to time by instrument in writing under its common seal with the assent in writing of the trustees to alter all or any of the regulations contained in the deed for the time being relating to the fund and make new regulations to the exclusion of or in addition to all or any of the regulations for the time being relating to the fund and for the purposes of that clause all the provisions contained in the deed were deemed to be the regulations in relation to the fund. ' 200 On a consideration of the provisions of the deed of trust above set out it is clear that the bank or its officers duly authorised in that behalf were constituted the sole authorities to determine what pensions and in what manner the same should be paid out of the income of the fund. The fund was declared to have been established for the benefit of the retiring employees to whom pensions shall have been granted by the bank. Officers of the staff who were qualified under clause 8 were declared entitled to apply to the bank for a pension. But there was nothing in the terms of the deed which imposed any obligation on the bank or its officers duly authorised in that behalf to grant any pension to any such applicant. The pension if granted could also be withdrawn, modified or determined under the directions of the bank or any officer of the bank duly authorised in that behalf and such directions were binding on the trustees. The regulations in relation to the fund could also be altered and new regulations could be made to the exclusion of or in addition to all or any of the regulations contained in the deed of trust. It was open under the above provisions for the bank or its officers duly authorised in that behalf to grant no pension at all to any officer of the staff who made an application to them for a pension and also to withdraw, modify or determine any pension payable to such officer if in their opinion the conduct of the recipient or the circumstances of the case should justify them in so doing. The whole scheme of the deed invested the bank or its officers duly authorised in that behalf with the sole discretion of granting or of withdrawing, modifying or determining the pension and it was not at all obligatory on them at any time to grant any pension or to continue the same for any period whatever. The beneficiaries therefore could not be said to have been indicated with reasonable certainty. What is more it could also be validly urged that there being no obligation imposed upon the trustees no trust in fact was created, even though the moneys had been trans ferred to the trustees. Shri N. C. Chatterjee however urged that the power conferred upon the bank or its officers duly authorised 201 in that behalf was a power in the nature of a trust, that there was a general intention in favour of a class and a particular intention in favour of individuals of a class to be selected by them and even though the particular intention failed from the selection not being made the court could carry into effect the general intention in favour of the class and that therefore the trust was valid. He relied in support of this contention on Brown vs Higgs(1) and Burrough vs Philcox(2). The position in law as it emerges from these authorities is thus summarised by Lewin on Trusts, Fifteenth fxEdition, page 324 : "Powers, in the sense in which the term is commonly used, may be distributed into mere powers, and powers in the nature of a trust. The former are powers in the proper sense of the word that is not imperative, but purely discretionary; powers which the trustee cannot be compelled to execute, and which, on failure of the trustee, cannot be executed vicariously by the court. The latter, on the other hand, are not discretionary, but imperative, have all the nature and substance of a trust, and ought rather, as Lord Hardwicke observed, to be designated by the name of trusts. 'It is perfectly clear, ' said Lord Eldon, 'that where there is a mere power, and that power is not executed, the court cannot execute it. It is equally clear, that wherever a trust is created, and the execution of the trust fails by the death of the trustee or by accident, this court will execute the trust. But there are not only a mere trust and a mere power, but there is also known to this court a power which the party to whom it is given is intrusted with and required to execute; and with regard to that species of power, the court considers it as partaking so much of the nature and qualities of a trust, that if the person who has the duty imposed upon him does not discharge it, the court will, to a certain extent, discharge the duty in his room and place '. Thus, if there is a power to appoint among certain objects but no gift to those objects and no gift over in default of appointment, the court implies a trust for or gift to (1) 8 ves. Junior 561 ; (2) 5 Mylne & Graig 72; 41 E.R. 299. 202 those objects equally if the power be not exercised. But for the principle to operate there must be a clear indication that the settlor intended the power to be regarded in the nature of a trust. " This position however does not avail the appellant. As already stated there is no clear indication in the deed of trust that the bank intended the power to be regarded in the nature of a trust, inasmuch as there was no obligation imposed on the bank or its officers duly authorised in that behalf to grant any pension to any applicant. There was no duty to grant any pension at all and the pension, if granted, could be withdrawn, modified or determined by the bank or its officers duly authorised in that behalf as therein mentioned. Under the circumstances it could not be said that there was a power in the nature of a trust which could be exercised by the court if the donee of the power for some reason or other did not exercise the same. It will be appropriate at this stage to consider whether any beneficiary claiming to be entitled to a pension under the terms of the deed could approach the court for the enforcement of any provision purporting to have been made for his benefit Even though he may be qualified under clause 8 to apply for the grant of a pension he could not certainly enforce that provision because there was no obligation imposed at all on the bank or its officers duly authorised in that behalf to grant any pension to him and in the absence of any such obligation imposed upon anybody it would be futile to urge that a valid trust was created in the manner contended on behalf of the appellant. In our opinion therefore the High Court was right in the conclusion to which it came that there was uncertainty as regards the beneficiaries and there was an absence of any obligation to grant any pension with the result that no legal and effective trust could be said to have been created and further that the provision of Rs. 2,00,000 in the accounting year 1946 47 was not an expenditure or an expenditure for the purposes of the business within the meaning of section 10 (2) (xv) of the Indian Income tax Act. 203 In view of the above we do not think it necessary to into the interesting questions which were sought to toe raised by the appellant, viz., what was the scope of the reference, and by the respondent, viz., whether the expenditure was a capital expenditure or revenue expenditure and if the latter whether the deduction could still not be allowed in view of the provisions of section 10 (4) (c) of the Act. The result therefore is that the appeal fails and must be dismissed with costs. Appeal dismissed. [/INST]A notice was served by the appellant State inviting the attention of the respondents to the fact that the agricultural lands of which they were the owners had remained fallow, and intimating to them that the appellant would resume management of the said lands under section 65 of the Bombay Tenancy and Agricultural Laws Act unless the respondents took steps to bring them under cultivation in the following agricultural season. It appears that later, an enquiry was made under the orders of the Deputy Collector as a result of which he passed an order under section 65 directing that the lands should be resumed by the State for cultivation. Having failed in their efforts to get the order of the Deputy Collector altered, the respondents filed a suit for a declaration that the order passed by the Deputy Collector was illegal and void and that it could not dispossess them of the lands which belonged to them. 'Me suit was dismissed. The respondents appealed to the High Court and it found that on a fair and reasonable construction of section 65(l) read with section 83, the appellant could delegate its powers prescribed by section 65(l), but could not delegate its duty incidental to the exercise of the said power, and as it reversed the decree passed by the trial Court. On appeal by special leave : HELD : (i) Section 83 authorises the delegation not only of the powers mentioned by it, but also the duties or functions which are incidental to the existence of the powers and are integrally connected with them [216 A B] Edward Liso Mungoni V. Attorney General of Northern Rhodesia, , referred to. (ii) Section 65(l) does not require that the Deputy Collector mini himself go to the agricultural fields and enquire on the spot whether they were lying fallow. He may, if he so desires, record evidence himself, or the recording of the evidence and the actual inspection on the spot can be left to some subordinate officer. The report of such local inspection and the record of the evidence collected in that behalf would be forwarded to the Deputy Collector, and that would be the material oil which he would hold the enquiry himself. This procedure does not involve any delegation at all. [217 H; 218 B; 217 G H]. Allingham V. Minister of Agriculture and Fisheries, [1948] 1 AB. E.R. 780, distinguished. Nathubhai Gandabhai Desai V. State of Bombay & Ors. I.L.R. , referred to. </s>
<s>[INST] Summarize the judgementCivil Appeal Nos. 11431144/73 and 1201 (N) of 1973. From the Judgment and order dated 16 11 1972 of the Delhi High Court in C.W. No. 580/71, LPA No. 58/72 and 54/72. P. N. Lekhi and M. K. Garg for the Appellants in C.A. Nos.1143 44/73 and for Respondents in C.A. No. 1201/73. F. section Nariman P. D. Singhania, Homi Ranina, Ravinder Narain and T. Ansari in C.A. No. 1143/73 for the Intervener. section N. kaeker Sol. General and A. V. Ramgam for the Respondent in C.A. No. 1144/73 and for the Appellant in C.A. No. 1201/73. section N. Kaeker, Sol.General, B. P. Maheshwari, section Sethi, Bikramjit Nayyar and E. C. Sharma for Respondent No. 1 in C.A. Nos. 1143 44/73 S.T. Desai, section P. Nayyar and Miss A. Subhashini for the Intervener, C.I.T. Delhi. 611 The Judgment of the Court was delivered by BHAGWATI, J. These appeals by certificate raise a common question of law relating to assessment of annual value for levy of house tax where the building is governed by the provisions of Rent Control legislation, but the standard rent has not yet been fixed. One appeal relates to a case where the building is situate within the jurisdiction of the New Delhi Municipal Committee and is liable to be assessed to house tax under the Punjab Municipal Act, 1911 while the other two relate to cases where the building is situate within the limits of the Corporation of Delhi and is assessable to house tax under the Delhi Municipal Corporation Act, 1957. The house tax under both statutes is levied with reference to the annual value of the building. Section 3(1)(b) of the Punjab Municipal Act, 1911 defines "annual value" to mean, in the case of any house or building "the gross annual rent at which such house or building may reasonably be expected to let from year to year" subject to certain specified deductions, and the same definition of "annual value" is to be found in section 116 of the Delhi Municipal Corporation Act, 1957 with only this difference that there is a second proviso to section 116 which is absent in section 3(1)(b). That proviso reads: "Provided further that in respect of any land or building the standard rent of which has been fixed under the Delhi and Ajmer Rent Control Act, 1952, the rateable value thereof shall not exceed the annual amount of standard rent so fixed. " It was, however, common ground between the parties that this proviso is immaterial and, in fact, it was so held in Corporation of Calcutta vs Life Insurance Corporation(1). We may, therefore, ignore the existence of this proviso and deal with both the categories of appeals on the basis of the same definition of "annual value". "Annual value" of a building, according to this definition, would be the gross annual rent at which the building may reasonably be expected to let from year to year (emphasis supplied). It is obvious from this definition that unlike the English Law where the value of occupation by a tenant is the criterion for fixing annual value of the building for rating purposes, here it is the value of the property to the owner which is taken as the standard for making assessment of annual value. The criterion is the rent realisable by the landlord and not the value of the holding in the hands the tenant. The rent which the landlord might realise if the building were let is made the basis for fixing the annual value of the 612 building. The word "reasonably" in the definition is very important. What the landlord might reasonably expect to get from a hypothetical tenant, if the building were let from year to year, affords the statutory yardstick for determining the annual value. Now, what is reasonable is a question of fact and it would depend on the facts and circumstances of a given situation. Ordinarily, as pointed out by Subba Rao, J., speaking on behalf of the Court in Corporation of Calcutta vs Padma Devi(1); "a bargain between a willing lessor and a willing lessee uninfluenced by any extraneous circumstances may afford a guiding test of reasonableness. An inflated or deflated rate of rent based upon fraud, emergency, relationship and such other considerations may take it out of the bounds of reasonableness". The actual rent payable by a tenant to the landlord would in normal circumstances afford reliable evidence of what the landlord might reasonably expect to get from a hypothetical tenant, unless the rent is inflated or depressed by reason of extraneous considerations such as relationship, expectation of some other benefit etc. There would ordinarily be in a free market close approximation between the actual rent received by the landlord and the rent which he might reasonably expect to receive from a hypothetical tenant. But where the rent of the building is subject to rent control legislation, this approximation may and often does get displaced. It is, therefore, necessary to consider the effect of rent control legislation on the determination of annual value This is fortunately not a virgin field. There are at least three decisions of this Court which have spoken on this subject. The first is the decision in Corporation of Calcutta vs Padma Devi (supra). The question which arose in that case was whether the "annual value" of a building governed by the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 could be determined at a figure higher than the standard rent fixed under the provision of that Act. The definition of "annual value" in section 127(a) of the Calcutta Municipal Act, 1923 under which the house tax was being levied was the same as in section 3(1)(b) of the Punjab Municipal Act, 1911 or section 116 of the Delhi Municipal Corporation Act, 1957 without the second proviso and hence in order to determine the "annual value" of the building it was necessary to find out what was the rent at which the building might reasonably be expected to let from year to year. The Court speaking through Subba Rao, J. emphasized the use of the word "reasonably" in the definition and pointed out that since it was penal for the landlord to receive any rent in excess of 613 the standard rent fixed under the Act, the landlord could not reasonably expect to receive any higher rent in breach of the law. It is the standard rent alone which the landlord could reasonably expect to receive from a hypothetical tenant, because to receive anything more would be contrary to law. The learned Judge, after analysing the provisions of the Act, observed: "A combined reading of the said provisions leaves no room for doubt that a contract for a rent at a rate higher than the standard rent is not only not enforceable but also that the landlord would be committing an offence if he collected a rent above the rate of the standard rent. One may legitimately say under those circumstances that a landlord cannot reasonably be expected to let a building for a rent higher than the standard rent. A law of the land with its penal consequences cannot be ignored in ascertaining the reasonable expectations of a landlord in the matter of rent. In this view, the law of the land must necessarily be taken as one of the circumstances obtaining in the open market placing an upper limit on the rate of rent for which a building can reasonably be expected to let". It may be noted that in this case the standard rent of the building was fixed under the Act and since it was penal for the landlord to receive any rent higher than the standard rent fixed under the Act, it was held that the landlord could not reasonably expect to receive anything more than the standard rent from a hypothetical tenant and the annual value of the building could not exceed the standard rent. The next decision to which we must refer in this connection is the decision of this Court in Corporation of Calcutta vs Life Insurance Corporation (supra). This case also related to a building situate in Calcutta which was governed by the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950. Section 2(10) (b) of the Act defined "standard rent" to mean "where the rent has been fixed under section 9, the rent so fixed, or at which it would have been fixed if application were made under the said section". Here, unlike Padma Devi 's case, the standard rent of the building had not been fixed under section 9 but it was common ground between the parties that Rs. 2,800 per month being the amount of the agreed rent represented the figure at which the standard rent would have been fixed if an application had been made for the purpose under section 9 and the standard rent of the building was therefore 614 Rs. 2,800 per month within the meaning of the second part of the definition of that term. The question which arose for consideration was whether the annual value of the building was liable to be determined on the footing of this standard rent or it could be determined by taking into account the higher rent received by the tenant from its sub tenants. The principle of the decision in Padma Devi 's case was invoked by the assessee for contending that the annual value of the building could not be determined at a figure higher than the standard rent and this contention was upheld by the Court, though there was no fixation of standard rent by the Controller under section 9 and the statutory prohibition was only against receipt of rent in excess of the standard rent fixed under the Act. The Court pointed out that the standard rent stood defined by the latter part of section 2(10) (b) and by virtue of that provision it was statutorily determined at Rs. 2,800 per month though not fixed by the Controller under section 9 and proceeded to hold, by applying the principle of the decision in Padma Devi 's case, that the landlord could not reasonably expect to receive any rent higher than the standard rent from a hypothetical tenant and the annual value of the building could not, therefore, be fixed at a figure than the standard rent. It will be seen that this decision marked a step forward from the decision in Padma Devi 's case because here the standard rent was not fixed by the Controller under section 9 and it was not penal for the landlord to receive any rent in excess of the statutorily determined standard rent of Rs. 2.800 per month and yet it was led by this Court that the standard rent determined the upper limit of the rent at which the landlord could reasonably expect to let the building to a hypothetical tenant. It may be pointed out that an attempt was made on behalf of the Corporation to distinguish the decision in Padma Devi 's case by contending that that decision was based on the interpretation of section 127(a) of the Calcutta Municipal Corporation Act, 1923 while the provision which fell for interpretation in this case was section 168 of the Calcutta Municipal Corporation Act, 1951 which was different from section 127(a), in that it contained a proviso that "in respect of any land or building the standard rent of which has been fixed under section 9. the annual value thereof shall not exceed the annual amount of the standard rent so fixed" which was absent in section 127 (a). The argument was that under the proviso the annual value was limited to the standard rent only in those cases where the standard rent was fixed under section 9 and since in the case before the Court the standard rent of the building was not fixed under section 9, the proviso has no application and the assessing authority was not bound to take into account the limi 615 tation of the standard rent. This argument was negatived by the Court and it was held that the enactment of the proviso in section 168 of the Calcutta Municipal Corporation Act, 1951 did not alter the law and by the addition of the proviso, the meaning of the expression "gross rent at which the land or building might reasonably be expected to let" was not changed. It was for this reason that we pointed out at the commencement of the judgment that the existence of the proviso in section 116 of the Delhi Municipal Corporation Act, 1957 is immaterial and we may proceed to deal with the appeals arising under that Act as if the definition of "annual value" did not contain that proviso. That takes us to the third decision in Guntur Municipal Council vs Guntur Town Rate Payers ' Association(1) which extended still further the principle of the decision in Padma Devi 's case. This was a case where the annual value was to be determined under the Madras District Municipalities Act, 1920 which applied in the city of Guntur. Section 82 sub section (2) of the Act gave a definition of "annual value" practically in the same terms as section 3(1)(b) of the Punjab Municipal Act, 1911 and section 116 of the Delhi Municipal Corporation Act, 1957 without the second proviso. There was also in force in the city of Guntur, the Andhra Pradesh Buildings (Lease Rent and Eviction) Control Act, 1960, which provided inter alia for fixation of fair rent of buildings. It is necessary to refer to a material provisions of this Act. Section 4, sub section (1) conferred power on the Controller, on application by the tenant or landlord of a building, to fix the fair rent for such building after holding such inquiry as he thought fit and sub section (2) to (5) of section 4 laid down the formulae for determination of fair rent in different classes of cases. Sub section (1)(a) of section 7 gave teeth to the determination of fair rent by providing that where the Controller has fixed the fair rent of a building, the landlord shall not claim, receive or stipulate for the payment of anything in excess of such fair rent and sub section 2(a) of that section recognised that where the fair rent of a building has not been fixed by the Controller, the agreed rent could be lawfully paid by the tenant to the landord and it was only payment of a sum in addition to the agreed rent that was prohibited by that sub section. Section 29 made it penal for any one to contravene the provisions of subsections 1(a) and 2(a) of section 7. Now there could be no doubt that if the fair rent of a building were fixed under section 4, sub section (1), the decision in Padma Devi 's case would be clearly 616 applicable and the annual value would be limited to the fair rent so fixed. But, would the same principle apply where the fair rent were not fixed ? Would the annual value in such a case be liable to be assessed in the light of the provisions contained in the Rent Act ? That was the question which arose before the Court in the Guntur Municipal Council 's case. The Guntur Municipal Council urged that the decision in Padma Devi 's case was not applicable and attempted to distinguish it by saying that under section 7, sub section (1) it was only after the fixation of fair rent of a building that the landlord was debarred from claiming or receiving payment of any rent in excess of such fair rent and since the fair rent of the building in that case had not been fixed, it was not penal for the landlord to receive any higher rent and the assessment of annual value was therefore, not "limited or governed by the measure provided by the provisions of the Act for determination of the fair rent. " This attempt, however, did not find favour with the court and it was held that there was no distinction "between buildings the fair rent of which has been actually fixed by the Controller and those in respect of which no such rent has been fixed. " The Court pointed out: "It is perfectly clear that the landlord cannot lawfully expect to get more rent than the fair rent which is payable in accordance with the principles laid down in the Act. The assessment of valuation must take into account the measure of fair rent as determinable under the Act. It may be that where the Controller has not fixed the fair rent, the municipal authorities will have to arrive at their own figure of fair rent but that can be done without any difficulty by keeping in view the principles laid down in section 4 of the Act for determination of fair rent. " It will thus be seen that even though fair rent had not been fixed under the Act as in Padma Devi 's case, nor was it statutorily determined as in the Life Insurance Corporation 's case (there being no provision in the Andhra Pradesh Rent Act similar to the latter part of section 2(10)(b) of the West Bengal Rent Act) and it was clear from the provisions of the Rent Act that it was only after the fair rent of a building was fixed by the Controller that the prohibition against receipt of any amount in excess of fair rent became applicable and so long as the fair rent was not fixed by the Controller it was open to the landlord to receive the agreed rent even though it might be higher than the fair rent, yet it was held by the court that in view of the provisions in the Rent Act in regard to fair rent, the landlord could not reasonably expect to receive from a hypothetical tenant anything more than the fair rent payable in accordance with the principles laid down in the Rent Act and the annual value was liable to be determined on the 617 basis of fair rent as determinable under the Rent Act. The Court observed that the assessing authority would have to arrive at its own figure of fair rent by applying the principles laid down in sub sections (2) to (5) of section 4 for determination of fair rent. This decision clearly represented a further extension of the principle in Padma Devi 's case to a situation where no standard rent has been fixed by the Controller and in the absence of fixation of standard rent, there is no prohibition against receipt of higher rent by the landlord. It is in the light of these decisions that we must consider whether in case if a building in respect of which no standard rent has been fixed by the Controller under the Delhi Rent Control Act, 1958 the annual value must be limited to the measure of standard rent determinable under that Act or it can be determined on the basis of the higher rent actually received by the landlord from the tenant. But before we proceed to examine this question, we must refer to a recent decision of this Court in Municipal Corporation, Indore & Ors.vs Smt.Ratnaprabha & Ors.(1) which apparently seems to strike a different note. That was a case relating to a building situated in Indore and subject to the provisions of the Madhya Pradesh Accommodation Control Act, 1961. The building was self occupied and hence there was no occasion to have its standard rent fixed by the Controller. The annual value of the building was sought to be assessed for rating purposes under the Madhya Pradesh Municipal Corporation Act, 1956 and section 138(b) of that Act provided that the annual value of any building shall, notwithstanding anything contained in any other law for the time being in force be deemed to be the gross annual rent at which such building might reasonably be expected to let from year to year, subject to certain specified deductions. The argument of the assessee was that even though no standard rent in respect of the building was fixed by the Controller, the reasonable rent contemplated by section 138(b) could not exceed the standard rent determinable under the Act and it was incumbent on the Municipal Commissioner to determine the annual value of the building on the same basis on which its standard rent was required to be fixed under the Act. This argument was sought to be supported by relying on the three decisions to which we have already made a reference. Now it would appear that the decision in Guntur Municipal Council 's case was clearly applicable on the facts of this case and following that decision the Court ought to have held that the annual value of the building could not exceed 618 the standard rent determinable under section 7 of the Act and the assessing authority should have arrived at its own estimate of the standard rent by applying the principles laid down in that section and determine the annual value on the basis of such standard rent. But the Court negatived the applicability of the decision in Guntur Municipal Council 's case and the earlier two cases by relying on the words "notwithstanding anything contained in any other law for the time being in force" in section 138(b). The Court pointed out that while 'the requirement of the law is that the reasonable letting value should determine the annual value of the building, it has also been specifically provided that this would be so "notwithstanding anything contained in any other law for the time being in force" and observed that it would be a proper interpretation of these words "to hold that in a case where the standard rent of a building has been fixed under section 7 of the Madhya Pradesh Accommodation Control Act, and there is nothing to show that there has been fraud or collusion, that would be its reasonable letting value, but where this is not so, and the building has never been let out and is being used in a manner where the question of fixing its standard rent does not arise, it would be permissible to fix its reasonable rent without regard to the provisions of the Madhya Pradesh Accommodation Control Act, 1961. This view will, in our opinion, give proper effect to the non obstante clause in clause (b), with due regard to its other provision that the letting value should be "reasonable". The Court leaned heavily on the non obstante clause in section 138(b) and distinguished the decision in Guntur Municipal Council 's case and the earlier two cases on the ground that in none of the three Municipal Acts which came up for consideration before the Court in these cases, there was any such non obstante clause. We are not at all sure whether this decision represents the correct interpretation of section 138(b) because it is rather difficult to see how the non obstante clause in that section can possibly affect the interpretation of the words "the annual value of any building shall. . . . be deemed to be the gross annual rent at which such building. might reasonably . . be expected to be let from year to year. " The meaning of these words cannot be different in section 138(b) than what it is in section 127(a) of the Calcutta Municipal Corporation Act, 1923 and section 82(2) of the Madras District, Municipality Act, 1920 and the only effect of the non obstante clause would be that even if there is anything contrary in any other law for the time being in force that should not detract from full effect being given to these words according to their proper meaning. But it is not 619 necessary for the purpose of the present appeals to probe further into the question of correctness of this decision, since there is no non obstante clause either in section 3(1)(b) of the Punjab Municipal Act, 1911 or in section 116 of the Delhi Municipal Corporation Act, 1957 and this decision has therefore, no application. Now let us turn to the present appeals and see how far the trilogy of decisions referred to earlier throws light on the solution of the problem before us. We may first refer to the relevant provisions of the Delhi Rent Control Act, 1958 for that was the law in force at the material time relating to restrictions of rent of buildings situate within the jurisdiction of the Delhi Municipal Corporation and the New Delhi Municipal Committee. Section 2(k) defined 'standard rent ' in relation to any premises to mean "the standard rent referred to in section 6 or where the standard rent has been increased under section 7, such increased rent. " Sub section (1) of section 4 provided that, subject to a single narrow exception which is not material for our purpose, "no tenant shall, notwithstanding any agreement to the contrary be liable to pay to his landlord for the occupation of any premises any amount in excess of the standard rent of the premises" and sub section (2) of section 4 declared that, subject to provision of sub section (1) "any agreement for the payment of rent in excess of the standard rent shall be construed as if it were an agreement for the payment of the standard rent only". Section 5 sub section (1) enacted a prohibition injuncting that "no person shall claim or receive any rent in excess of the standard rent, notwithstanding any agreement to the contrary." Then, section 6 proceeded to set out different formulae for determination of standard rent in different classes of cases and each formula gave a precise and clear cut method of computation yielding a definite figure of standard rent in respect of building falling within its coverage. Section 9 sub section (1) provided that the Controller shall, on an application made to him in this behalf either by the landlord or by the tenant, fix in respect of any premises the standard rent referred to in section 6 and sub section (2) of section 9 laid down that in fixing the standard rent of any premises, the Controller shall fix an amount which appears to him to be reasonable having regard to the provisions of section 6 and the circumstances of the case. Sub section (4) of section 9 provided for determination of standard rent in a case where for any reason it was not possible to determine the standard rent on the principles set forth under section 6 and said that in such a case "the Controller may fix such rent as would be reasonable having regard to the situation, locality 620 and condition of the premises and the amenities provided therein and where there are similar or nearly similar premises in the locality, having regard also to the standard rent payable in respect of such premises". Section 9 sub section (7) enjoined the Controller, while fixing the standard rent of any premises, to specify a date from which the standard rent so fixed shall be deemed to have effect and added a proviso that in no case the date so specified shall be earlier than one year prior to the date of the application for the fixation of the standard rent. Lastly, section 12 laid down a period of limitation within which an application for fixation of the standard rent may be made by the landlord or the tenant by providing that such application must be made within 2 years from the date of commencement of the Act in case of premises let prior to such commencement and if the premises were let after such commencement, then within 2 years from the date on which the premises were let to the tenant. The proviso to section 12 empowered the Controller to entertain the application after the expiry of the period of limitation if he was satisfied that the applicant was prevented by sufficient cause from filing the application in time. These provisions of the Delhi Rent Control Act, 1958 came up for consideration before this Court in M. M. Chawla vs J. section Sethi(1) where the question was whether in answer to a suit for eviction filed by the landlord, the tenant was entitled by way of defence to ask the Controller to fix the standard rent of the premises and to resist eviction by paying or depositing the standard rent so fixed even though at the date of the filing of the defence, the period of limitation for making an application for fixation of the standard rent had expired. The argument of the tenant was that by reason of the prohibition enacted in section 4 and sub section (1) of section 5, it was not competent to the landlord to claim or receive any amount in excess of the standard rent and even though the period of limitation prescribed for making an application for fixation of standard rent had expired, the tenant was entitled to ask the Controller by way of defence to fix the standard rent, since the period of limitation was applicable only where a substantive application was made for fixation of standard rent and it had no application where the fixation of standard rent was sought by way of defence. This Court speaking through Shah, J. negatived the contention of the tenant and construing the scheme of the Act, pointed out: ". . . . . the prohibition in sections 4 and 5 operate only after the standard rent of 621 premises is determined and not till then. So long as the standard rent is not determined by the Controller, the tenant must pay the contractual rent: after the standard rent is determined the landlord becomes disentitled to recover an amount in excess of the standard rent from the date on which the determination operates. We are unable to agree that standard rent of a given tenement is by virtue of section 6 of the Act a fixed quantity, and the liability for payment of a tenant is circumscribed thereby even if the standard rent is not fixed by order of the Controller. Under the scheme of the Act standard rent of a given tenement is that amount only which the Controller determines. Until the standard rent is fixed by the Controller the contract between the landlord and the tenant determines the liability of the tenant to pay rent. That is clear from the terms of section 9 of the Act. That section clearly indicates that the Controller alone has the power to fix the standard rent, and it cannot be determined out of court. An attempt by the parties to determine by agreement the standard rent out of court is not binding. By section 12 in an application for fixation of standard rent of premises the Controller may give retrospective operation to his adjudication for a period not exceeding one year before the date of the application. The scheme of the Act is entirely inconsistent with standard rent being determined otherwise than by order of the Controller. In our view, the prohibition against recovery of rent in excess of the standard rent applies only from the date on which the standard rent is determined by order of the Controller and not before that date. " it was, thus, held that the prohibition in section 4 and sub section (1) of section 5 against recovery by the landlord of any amount in excess of the standard rent was operative only after the standard rent was fixed by the Controller under section 9 and until the standard rent was so fixed, it was lawful for the landlord to receive the contractual rent from the tenant and if the period of limitation prescribed for making an application for fixation of the standard rent had expired, the tenant could not, thereafter, get the standard rent fixed by the Controller and would continue to be liable to pay the contractual rent to the landlord. The Revenue relied heavily on this decision and contended that since in each of the present appeals the building was let out to the tenant, but its standard rent 622 was not fixed by the Controller under section 9 and the period of limitation for making an application for fixation of the standard rent had expired, the landlord was entitled to continue to receive the contractual rent from the tenant without any legal impediment and hence the annual value of the building was not limited to the standard rent determinable in accordance with the principles laid down in the Act, but was liable to be assessed by reference to the contractual rent recoverable by the landlord from the tenant. The argument of the Revenue was that if it was not penal for the landlord to receive the contractual rent from the tenant, even if it be higher than the standard rent determinable under the provisions of the Act, it would not be incorrect to say that he landlord could reasonably expect to let the building at the contractual rent and the contractual rent therefore provided a correct measure for determination of the annual value of the building. This argument, plausible though it may seem at first blush, is in our opinion not well founded and must be rejected. Ordinarily we would have examined the validity of this argument first on principle and then turned to the authorities, but we propose to reverse this order because the decisions in the Life Insurance Corporation 's case and the Guntur Municipal Council 's case (supra) completely cover the present controversy and do not leave any scope for further argument. Of course, the decision in Padma Devi 's case may be said to be distinguishable on the ground that in the present cases, unlike Padma Devi 's case, the standard rent of the building was not fixed by the Controller and hence it could not be said that it was unlawful or penal for the landlord to receive anything more than then the standard rent. But so far as the decision in Life Insurance Corporation 's case is concerned, it is difficult to see how its applicability could be disputed, because there also, as in the present case, the standard rent of the building was not fixed by the Controller and in the absence of fixation of the standard rent, it was open to the landlord to receive rent in excess of the standard rent determinable under the Act. The only distinction which could be urged on behalf of the Revenue was that under the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, which came up for consideration in the Life Insurance Corporation 's case, the standard rent was statutorily determinable on the application of a mathematical formula without any discretion being left in the Controller, while under the Delhi Rent Control Act, 1958, the standard rent was not a certain and definite figure to be arrived at mathematically by application of the formulae laid down in section 6 but it was left to the Controller under section 9 sub section (2) to 623 fix the standard rent at such amount as appeared to him to be reasonable having regard to the provisions of section 6 and the circumstances of the case and hence, until the standard rent was fixed by the Controller, it could not be said what would be the standard rent of the building. Now undoubtedly there is some difference in the provisions of the two statutes but this difference is not of such a character as to affect the applicability of the decision in the Life Insurance Corporation 's case, because in that case too, the prohibition against the landlord to receive any rent in excess of the standard rent was operative only after the fixation of the standard rent by the Controller and so long as the standard rent was not fixed, it was not unlawful or penal for the landlord to receive any rent in excess of the standard rent. If the standard rent though not fixed and hence not legally enforceable, could provide the measure for the reasonable expectation of the landlord to receive rent from a hypothetical tenant in the Life Insurance Corporation 's case, there is no reason, why it should not equally be held to provide such measure in the present cases; as in the one case so also in the other. The upper limit of the standard rent, though yet to be fixed by the Controller, would enter into the determination of the reasonable rent. Moreover, it is not correct to say that under section 9 sub section (2) of the Delhi Rent Control Act, 1958 it is left to the unfettered and unguided discretion of the Controller to fix any standard rent which he considers, reasonable. He is required to fix the standard rent in accordance with the relevant formula laid down in section 6 and he cannot ignore that formula by saying that in the circumstances of the case, he considers it reasonable to do so. The only discretion given to him is to make adjustments in the result arrived at on the application of the relevant formula, where it is necessary to do so by reason of the fact that the landlord might have made some addition, alteration or improvement in the building or circumstances might have transpired affecting the condition or utility of the building or some such circumstances of similar character. The compulsive force of the formulae laid down in section 6 for the determination of the standard rent is not in any way whittled down by section 9 sub section (2) but a marginal discretion is given to the Controller to mitigate the rigour of the formulae where the circumstances of the case do require. The amount calculated in accordance with the relevant formulae set out in section 6 would, therefore, ordinarily represent the standard rent of the building, unless the landlord or the tenant, as the case may be, can persuade the Controller that there are circumstances requiring adjustment in the amount so arrived at. It would thus be seen that there is no material distinction between the West Bengal Premises 624 Rent Control (Temporary Provisions) Act, 1950 and the Delhi Rent Control Act, 1958 so far as the provisions regarding determinations of standard rent are concerned and the decision in the Life Insurance Corporation 's case must be held to be applicable in determination of that annual value in the present cases. But more than the decision in the Life Insurance case decision, it is the Guntur Municipal Council 's case which is nearest to the present case and is almost indistinguishable. In that case also, so in the present cases, the standard rent of the building was not fixed by the Controller and under the Andhra Pradesh Rent Act which applied in the town of Guntur, in the absence of fixation of the fair rent, it was lawfully competent to the landlord to recover rent in excess of the fair rent determinable under that Act. Moreover, the Andhra Pradesh Rent Act did not prescribe any clear cut formula to be applied mechanically for statutorily determining the standard rent, but it was left to the Controller to fix the standard rent having regard to (a) the prevailing rates of rent in the locality for the same or similar accommodation in similar circumstances during the 12 months prior to 5th April, 1944; (b) the rental value entered in the property tax assessment book of the concerned local authority relating to the period mentioned in clause (a) and (c) the circumstances of the case, including any amount paid by the tenant by way of premium or any other like sum in addition to rent after 5th April 1944 with a provision for allowance of increase depending on the quantum of the rent so arrived at. The discretion left to the Controller to fix the fair rent was thus much larger than that under the Delhi Rent Control Act, 1958 and yet it was held that, even though the fair rent was not fixed by the Controller, the annual value was limited by the measure of the fair rent determinable under the Act. The view taken was that there was no material distinction between buildings fair rent of which has been actually fixed by the Controller and those in respect of which no such rent has been fixed and even if the fair rent has not been fixed by the Controller, the upper limit of the fair rent payable in accordance with the principles laid down in the Act is bound to enter into the determination of the rent which the landlord could reasonably expect to receive from a hypothetical tenant. The principle of this decision applies wholly and completely in the present cases and following that principle, it must be held that the annual value of a building governed by the Delhi Rent Control Act 1958 must be limited by the measure of standard rent determinable under that Act. The landlord cannot reasonably expect to get more rent than the standard rent payable in accordance with the principles laid down in the Delhi Rent 625 Control Act, 1958. It is true that the standard rent of the building not having been fixed by the Controller, the assessing authority would have to arrive at its own figure of standard rent by applying the principles laid down in the Delhi Rent Control Act, 1958 for determination of standard rent, but that is a task which the assessing authority would have to perform as a part of the process of assessment and in the Guntur Municipal Council 's case, this Court has said that it is not a task foreign to the function of assessment and has to be carried out by the assessing authority. When the assessing authority arrives at its own figure of standard rent by applying the principles laid down in the Act, it does not, in any way, usurp the functions of the Controller, because it does not fix the standard rent which would be binding on the landlord and the tenant, which can be done only by the Controller under the Act, but it merely arrives at its own estimate of standard rent for the purpose of determining the annual value of the building. That is a perfectly legitimate function within the scope of the jurisdiction of the assessing authority. Now it is true that in the present cases the period of limitation for making an application for fixation of the standard rent had expired long prior to the commencement of the assessment years and in such of the cases, the tenant was precluded by section 12 from making an application for fixation of the standard rent with the result that the landlord was lawfully entitled to continue to receive the contractual rent from the tenant without any let or hindrance. But from this fact situation which prevailed in each of the cases, it does not follow that the landlord could, therefore, reasonably expect to receive the same amount of rent from a hypothetical tenant. The existing tenant may be barred from making an application for fixation of the standard rent and may, therefore, be liable to pay the contractual rent to the landlord, but the hypothetical tenant to whom the building is hypothetically to be let would not suffer from this disability created by the bar of limitation and he would be entitled to make an application for fixation of the standard rent and may, therefore, be liable to pay the contractual rent to the landlord, but the hypothetical tenant to whom the building is hypothetically to be let would not suffer from this disability created by the bar of limitation and he would be entitled to make an application for fixation of the standard rent at any time within two years of the hypothetical letting and the limit of the standard rent determinable under the Act would, therefore, inevitably enter into the bargain and circumscribe the rate of rent at which the building could reasonably be expected to be let. This position becomes absolutely clear if we take a situation where the tenant goes out and the building comes to be self occupied by the owner. It is obvious that in case of a self occupied building, the annual value would be limited by the measure of standard rent determinable under the Act, for it can reasonably be presumed that no hypothetical tenant would ordinarily agree to pay 626 more rent than what he could be made liable to pay under the Act. The anomalous situation which would thus arise on the contention of the Revenue would be that whilst the tenant is occupying the building the measure of the annual value would be the contractual rent, but if the tenant vacates and the building is self occupied, the annual value would be restricted to the standard rent determinable under the Act. It is difficult to see how the annual value of the building could vary accordingly as it is tenanted or self occupied. The circumstance that in each of the present cases the tenant was debarred by the period of limitation from making an application for fixation of the standard rent and the landlord was consequently entitled to continue to receive the contractual rent, cannot therefore affect the applicability of the decisions in the Life Insurance Corporation 's case and the Guntur Municipal Council 's case and it must be held that the annual value of the building in each of these cases was limited by the measure of the standard rent determinable under the Act. The problem can also be looked at from a slightly different angle. When the Rent Control Legislation provides for fixation of standard rent, which alone and nothing more than which the tenant shall be liable to pay to the landlord, it does so because it considers the measure of the standard rent prescribed by it to be reasonable. It lays down the norm of reasonableness in regard to the rent payable by the tenant to the landlord. Any rent which exceeds this norm of reasonableness is regarded by the legislature as unreasonable or excessive. When the legislature has laid down this standard of reasonableness, would it be right for the Court to say that the landlord may reasonably expect to receive rent exceeding the measure provided by this standard? Would it be reasonable on the part of the landlord to expect to receive any rent in excess of the standard or norm of reasonableness laid down by the legislature and would such expectation be countenanced by the Court as reasonable? The legislature obviously regards recovery of rent in excess of the standard rent as exploitative of the tenant and would it be proper for the Court to say that it would be reasonable on the part of the landlord to expect to recover such exploitative rent from the tenant ? We are, therefore, of the view that, even if the standard rent has not been fixed by the Controller, the landlord cannot reasonably expect to receive from a hypothetical tenant anything more than the standard rent determinable under the Act and this would be so equally whether the building has been let out to a tenant who has lost his right to apply for fixation of the standard rent or the building is self occupied by the owner. The assessing authority would, in either case, have to arrive at its own figure of the standard rent by 627 applying principles laid down in the Delhi Rent Control Act, 1958 for determination of standard rent and determine the annual value of the building on the basis of such figure of standard rent. It is, therefore, clear that in each of the present cases, the annual value of the building must be held to be limited by the measure of the standard rent determinable on the principles laid down in the Delhi Rent Control Act, 1958 and it cannot exceed such measure of standard rent. We accordingly allow Appeals Nos. 1143 and 1144 of 1973 and declare in such of these two cases that the assessment of the Annual value of the building in excess of the standard rent determinable on the principles laid down in the Delhi Rent Control Act, 1958 was illegal and ultra vires. So far as Appeal No. 1201(N) of 1973 preferred by the Municipal Corporation of Delhi is concerned, it relates to assessment of annual value of self occupied building and since we have held that in case of self occupied building also the annual value must be determined on the basis of the standard rent determinable under the provisions of the Delhi Rent Control Act, 1958 and there we have agreed with the judgment of the High Court, that appeal must be dismissed. The assessee in each case will get his costs throughout. N.K.A. C.A. Nos.1143 & 1144/73 allowed. C.A. 1201 (N)/73 dismissed. [/INST]Section 22 A of the was inserted in the Act by the Electricity (Amendment) Act, 1959 (32 of 1959). Sub section 1 of section 22 A authorised the State Government to issue direction to a licensee to supply energy to an establishment in preference to any other consumer, if in its opinion it is necessary in the public interest to give such direction and (ii) if the establishment in question is in the opinion of the State Government as establishment used or intended to be used for maintaining supplies and services essential to the community and the decision of the State Government that in its opinion the establishment is used or intended to be used for maintaining supplies and services essential to the community is notified by that Government in the Official Gazette. Sub section (3) of Section 22 A provides that where in any agreement by a licensee, whether made before or after the commencement of the Electricity (Amendment) Act, 1959 for the supply of energy with any establishment referred to in sub section (1) expires, the licensee shall continue to supply energy to such establishment on the same terms and conditions as are specified in the agreement until receipt of a notice in writing from the establishment requiring discontinuance of the supply. The Respondent Municipality which was under an obligation to make reasonable and adequate provision for lighting of public streets, places and buildings situated within its limit, entered into an agreement on August 14, 1940 with the Appellant Company which was licensee under the Electricity Act, 1910. The period during which the supply of electrical energy was to be made under the said agreement was 20 years from the date on which it was executed. On May 10, 1960 the Company wrote a letter to the municipality that the said agreement was to come to an end and on its expiry, the Company was not under any obligation to continue to supply energy to the Municipality as per the rates, terms and conditions stated in the agreement. The company also informed that if the municipality was not willing to purchase energy at the revised rates the supply would be discontinued on the expiry of the period of the agreement. The municipality thereafter wrote a letter on August 6, 1960 requesting the Company to renew the agreement on the same terms and conditions. The Company by its reply informed the municipality that it would not supply electrical energy on the same terms and conditions and insisted on payment being made at the revised rates as stated in its letter dated May 10, 1960. The municipality thereafter filed a suit relying upon the provisions of sub section (3) of section 22 A 477 of the Act, for a declaration that it was entitled to the supply of electrical energy from the Company on the same terms and conditions as were specified in the agreement, until the Company received a notice in writing from the municipality requiring it to discontinue the supply. The company contested the suit on the ground that the municipality was not entitled to the benefit of sub section (3) of section 22 A of the Act as it was not an establishment to which the said provision was applicable. The Trial Court held that in the absence of a notification as required by sub section (1) of Section 22 A of the Act the municipality was not entitled to claim the benefit of the provision and therefore no relief could be granted in the suit and accordingly dismissed the suit. The municipality 's appeal to the District Court was dismissed, but the second appeal was partly allowed by a Single Judge of the High Court, and a decree was passed granting relief in favour of the municipality declaring that the company was bound under sub section (3) of section 22 A of the Act to continue to supply electrical energy to the municipality at the same rates and on the same terms and conditions as were specified in the agreement, dated August 14, 1960. The Letters Patent Appeal filed by the company was dismissed by the Division Bench of the High Court, which however certified the case as a fit one for appeal under Article 133(1)(c) of the Constitution. In the appeal to this Court, on the question whether the municipality was an establishment which can claim the benefit of sub section (3) of section 22 A of the Act. ^ HELD: 1. The High Court was in error in ignoring the requirements which an establishment had to satisfy before claiming the benefit of sub section (3) and in holding that if in the opinion of the Court, the establishment satisfied that it was being used or intended to be used for maintaining supplies and services essential to the community, it could claim the benefit of sub section (3) even though no notification had been issued by the State Government under sub section (1) of Section 22 A of the Act. [489H 490B] 2. If the agreement referred to in sub section (3) of section 22 A of the Act is an agreement entered into by a licensee with an establishment which is at the time of the agreement, an establishment referred to in sub section (1) of section 22 A of the Act, then the provision in sub section (3) making it applicable to agreements made before the commencement of the Electricity (Amendment) Act, 1959 by which section 22 A was introduced becomes meaningless because the formation of the two opinions of the State Government that an establishment is being used or intended to be used for maintaining supplies and services essential to the community and that it is necessary to issue a direction in respect of it under sub section (1) can only be done after section 22 A of the Act was introduced in the Act and there would be no establishment satisfying the requirements of section 22 A(1) before section 22 A(1) was introduced. [486 G 487 A] 3. Sub section (1) of section 22 A of the Act was enacted by the Parliament for the purpose of enabling the State Government to issue a direction and subsection (3) was enacted for the purpose of providing for the continuance of an agreement entered into by a licensee with an establishment referred to in sub section (1) of section 22 A. What, is however, common to the two sub sections is that the establishment referred to in sub section (1) and an establishment 478 referred to in sub section (3) of section 22 A should be of the same kind that is it should be an establishment which is in the opinion of the State Government used or intended to be used for maintaining supplies and services essential to the community and the fact of formation of such opinion is notified in the Official Gazette. It should satisfy the test laid down in sub section 22 A(1) of the Act. [487 C E] 4. There is no impediment for the State Government issuing a notification under sub section (1) of section 22 A in order that an establishment notified therein gets the benefit of sub section (3) of section 22 A of the Act. [487 H 488 A] 5. The words 'referred to in sub section (1) appearing in sub section (1) of section 22 A of the Act are descriptive of and define the establishment to which sub section (3) of section 22 A applies and in order to identify such establishment, recourse should be had to the latter part of sub section (1) which lays down the criteria which such establishment should satisfy. [488 B] 6. A statutory definition or abbreviation should be read subject to all the qualifications expressed in the Statute and unless the context in which the word defined appears otherwise requires, it should be given the same meaning given by the words defining it. [488 C] 7. The power to issue a notification under section 22 A(1) of the Act involves an element of selection and the said process of selection cannot be construed as an empty formality which can be dispensed with. Nor can that power of selection which is entrusted to the State Government by the Parliament be claimed by the Courts. It is for the State Government to notify the establishment which should be the beneficiary of a direction to be issued under section 22 A(1) or which is entitled under section 22 A(3) of the Act to the supply of electrical energy on the same terms and conditions as are specified in the agreement entered into by it with the licensee even after the expiry of the agreement until such establishment serves a notice in writing on the licensee asking the licensee to discontinue the supply. [488 H 489 B] 8. Section 22 A of the Act, suggests that the intention of Parliament appears to be that the State Government can issue a direction only in the case of an establishment which in its opinion satisfies the qualifications mentioned therein and that sub section (3) should be applicable only to an establishment which in the opinion of the State Government satisfies the said qualifications. [488 E] 9. Sub section (3) of section 22 A of the Act makes a serious inroad into the rights of the licensee flowing from a contract stipulating a specific period during which it should subsist and compels the licensee to supply energy to the establishment even after the expiry of the agreement until a notice is issued in writing by the establishment requiring the licensee to discontinue the supply. [489 D] </s>
<s>[INST] Summarize the judgementAppeal No. 87 of 1958. Appeal by special leave from the Award dated October 10, 1956, of the Industrial Tribunal, Bihar, Patna, in Reference No. 6 of 1956. R. J. Kolah, section N. Andley and Rameshwar Nath, for the appellants. B. C. Ghose and P. K. Chatterjee, for the respondents. 705 1959. September 11. The Judgment of the Court was delivered by section K. DAS J. This appeal by special leave from an award dated October 10, 1956, made by the Industrial Tribunal, Bihar, raises an important question of interpretation in the matter of a disqualification for lay off compensation under section 25E read with section 25C of the (hereinafter called the Act), and so far as we know, this is the first case of its kind in which the expression " in another part of the establishment " occurring in cl. (iii) of section 25E has come up for an authoritative interpretation. The facts are simple and are shortly set out below. The Associated Cement Companies Ltd., hereinafter called the Company, have a number of cement factories in different States of the Indian Union as also in Pakistan. There are two such factories in the State of Bihar, one at Khelari and the other at a place called Jhinkpani in the district of Chaibasa in Bihar. The latter factory is commonly known as the Chaibasa Cement Works. There is a limestone quarry owned by the same Company situate about a mile and a half from the Chaibasa Cement Works, the quarry being known as the Rajanka limestone quarry. Limestone is the principal raw material for the manufacture of cement and the Chaibasa Cement Works, depended exclusively for the supply of limestone on the said quarry. At the time relevant to this appeal there were two classes of labourers at the quarry, those employed by the Company through the management of the Chaibasa Cement Works and others who were engaged by a contractor. There was one union known as the Chaibasa Cement Workers ' Union, hereinafter called the Union, of which the Company 's labourers both at the Cement Works and the quarry were members. There was another union consisting of the contractor 's labourers which was known as the A. C. C. Limestone Contractor 's Mazdoor Union. On January 3, 1955, the Union made certain demands on the management on behalf of the labourers in the limestone quarry, but these were rejected by the management. Then, by a subsequent letter dated February 18, 706 1955, the General Secretary of the Union gave a notice to the Manager of the Chaibasa Cement Works to the effect that the Union proposed to organise a general stay in strike in the limestone quarry from March 1, 1955, if certain demands, details whereof are unnecessary for our purpose, were not granted on or before February 28,1955. A similar notice was also given on behalf of the A.C.C. Limestone Contractor 's Mazdoor Union. These notices led to certain efforts at conciliation which however, failed. On February 24, 1955, the management gave a notice to all employees of the Chaibasa Cement Works, in which it was stated that in the event of the strike materialising in the limestone quarry, it would be necessary for the management to close down certain sections of the factory at Jhinkpani on account of the non supply of limestone; the notice further stated that in the event of such closure, it would be necessary to lay off the workers not required during the period of closure for the sections concerned. The strike commenced on March 1, 1955, and lasted till July 4, 1955. On March 25, 1955, the management wrote to the General Secretary of the Union intimating to him that the workers in certain departments referred to in an earlier letter dated March 19, 1955, would be laid off with effect from April 1, 1955. On March 28, 1955, the management gave the lists of employees who were to be laid off with effect from April 1, 1955, and they were, actually laid off from that date. During the period of the strike fresh efforts at conciliation were made and ultimately the strike came to an end on July 5, 1955, when the Central Government referred the dispute between the management and the workers of the limestone quarry to the Central Industrial Tribunal at Dhanbad. This reference was, however, withdrawn by mutual consent in terms of a settlement arrived at on December 7, 1955. The details of this settlement are not relevant to this appeal. Thereafter, a demand was made by the Union for payment of lay off compensation to those workers of Chaibasa Cement Works who had been laid off for the period April 1, 1955, to July 4, 1955. This demand 707 was refused by the management. This gave rise to an industrial dispute which was referred by the Government of Bihar under section 10 of the Act to the Industrial Tribunal, Bihar. The terms of reference set out the dispute in the following words: " Whether the workmen of the Chaibasa Cement Works are entitled to compensation for lay off for the period from April 1, 1955, to July 4, 1955. " The parties filed written statements before the Industrial Tribunal and the only witness examined in the case was Mr. Dongray, Manager of the Chaibasa Cement Works, Jhinkpani. At this point it is necessary to read the two sections of the Act which relate to the right of workmen to lay off compensation and the circumstances in which they are disqualified for the same. The right is given by section 25C and the disqualification is stated in three clauses of section 25E, of which the third clause only is important for our purpose. We now proceed to read sections 25C and 25E so far as they are material for our purpose. " section 25C. (1) Whenever a workman (other than a badli workman or a casual workman) whose name is borne on the muster rolls of an industrial establishment and who has completed not less than one year of continuous service under an employer is laid off, he shall be paid by the employer for all,days during which he is so laid off, except for such weekly holidays as may intervene, compensation which shall be equal to fifty per cent. of the total of the basic wages and dearness allowance that would have been payable to him had he not been so laid off. " " section 25E. No compensation shall be paid to a workman who has been laid off (i) . . . . (ii). . . . (iii) if such laying off is due to a strike or slowing down of production on the part of workmen in another part of the establishment." 708 Now, the central point round which the controversy between the parties has raged is this. Was the lay off of the workers in certain sections of the Chaibasa Cement Works due to a strike on the part of workmen in another part of the establishment within the meaning of cl. (iii) of section 25E ? In other words, was the limestone quarry at Rajanka part of the establishment known as the Chaibasa Cement Works? The contention of the management was and is that the Cement Works and the limestone quarry form one establishment within the meaning of cl. (iii) aforesaid. The contention on behalf of the workmen is that they are not parts of one establishment but are separate establishments. The learned Chairman of the Industrial Tribunal held, for reasons which we shall presently discuss, that the limestone quarry was not part of the establishment known as the Chaibasa Cement Works and the workmen in the latter were not disentitled to lay off compensation by reason of cl. (iii) of section 25E. The correctness of this view is the principal point for decision in this appeal. On behalf of the respondent workmen it has been contended that the conclusion of the Industrial Tribunal that the factory at Jhinkpani and the limestone quarry at Rajanka are not parts of one establishment is a finding of fact and this appeal should be disposed of on that footing. We do not think that this contention is correct and we shall presently deal with it. We propose, however, to examine first the relation between the limestone quarry at Rajanka and the cement factory at Jhinkpani in the light of the evidence given before the Tribunal and the findings arrived at by it; because they will show the process of reasoning by which the Tribunal came to its final conclusion. The evidence was really one sided and the only witness examined was Mr. Dongray, Manager of the Chaibasa Cement Works. Now, the relation between the limestone quarry and the factory can be considered from several points of view, such as (1) ownership, (2) control and supervision, (3) finance, (4) management and employment, (5) geographical proximity and (6) general unity of purpose and functional integrality, 709 with particular reference to the industrial process of making cement. On all that above points Mr. Dongray gave evidence. It was not disputed that the Company owned the limestone quarry as also the factory and there was unity of ownership. Mr. Dongray 's evidence further showed that there was unity of control, management and employment. He said that the limestone quarry was treated as a part and parcel of the Chaibasa Cement Works, that is, as a department thereof and he as the Manager was in overall charge of both, though there was a Quarry Manager in charge as a departmental head under him. On this point Mr. Dongray said: " There is a Manager appointed for the quarries. The Manager is working under me. The Cement Works itself has about eight or nine departments under it. There are heads of each department. The Manager of the quarry has the same status as the heads of other departments at the Cement Works. " This was supported by a circular letter dated March 11, 1952, which said that the entire factory and the associated quarries were under the sole control of the Manager, who was responsible for maintaining full output at economic cost up to the expected standard. The circular letter further stated that all orders and contracts were to be issued by the Manager for the working of the factory and quarries and the relevant bills were to be passed by him. As to finance and conditions of employment, Mr. Dongray said: " All requirements of the quarry are sent by the Manager there to the office of the Cement. Works and if they are available in the Cement Works Stores, they are issued from there; otherwise I indent them from the Bombay office or purchase them locally. There is no account office in the quarries and their account is maintained in the Cement Works ' Office. I as Manager of the Chaibasa Cement Works make payment for the indents or requirements of the quarries stated above. The quarry has no separate banking account. The Quarry Manager is not entitled to operate banking account apart from myself At the quarries there are daily rated workers and monthly paid staff. 90 710 To the daily paid workers in the quarries, the cashier of the Cement Works or his Assistant makes payment, when required. The monthly paid staff of the quarries come to the Cement Office for receiving payment. In the Cement Works we have got a system of allocation of work for different jobs every day. It is done by the Departmental Heads. Same system prevails in the quarries also. The Quarry Manager does the distribution as head of that department. Attendance Register is maintained at the quarry in the same way as it is done in the different departments of the Cement Works. There is only one common pay sheet for all the monthly paid staff, whether he is at the factory or in the quarries. For the daily rated workers we have got different sheets department wise and there is one such sheet for the daily workers of the quarry as well. There is one summary sheet of the payment showing the payment of all the departments including the payment in the quarries as well. I have to send statutory intimation to the authorities under the Mines Act regarding the quarries for working faces and other accidents etc. The staff and workers working in the quarries are transferable to the Cement Works according to the exigencies of the work and also vice versa. There have been a few instances of such transfers. The terms and conditions of service, for instance, T. A., leave, provident fund, gratuity, etc., are same for workers in the Cement Works as also the workers in the quarries. We got the application of the statutory provident fund rules extended to our department in the quarries also. The report of the working of the quarry comes to me from the Manager there from time to time. I as Manager of the Cement Marks make payments of royalties in in respect of limestones raised from the quarries. Payments for compensation, maternity benefits, accidents, etc., in the quarry are made under my authority by the factory office and not by the Quarry Manager. " Exhibits 1 to 26 filed on behalf of the management, which showed the working of the quarry and the 711 factory, supported the aforesaid evidence of Mr. Dongray; they showed, as has been observed by the Tribunal itself, that the management was maintaining one common account and the final authority on the spot in respect of the quarry as also in respect of other departments of the factory was Mr. Dongray, the Manager. There were also other documents to show that the transfer of members of the staff from the quarry to the factory and vice versa was made by Mr. Dongray according to the exigencies of service. It is worthy of note here that the Union itself gave notice to the Manager of the factory with regard to the intended strike in the limestone quarry. The geographical proximity of the limestone quarry was never in dispute. It was adjacent to the factory, being situate within a radius of about a mile. As to general unity of purpose and functional integrality, this was also not seriouly in dispute. Mr. Dongray said that limestone was the principal raw material for the manufacture of cement and the cement factory at Jhinkpani depended exclusively on the supply of limestone from the quarry at Rajanka. His evidence no doubt disclosed that some excess limestone was sent to the factory at Khelari as well. On this point Mr. Dongray said: " Limestone from this quarry is at times sent to the Khelari Cement Works, but that is very rare and in small quantity. It is done only in cases of emergency." Mr. Dongray explained that the normal number of departmental workers in the quarry before the strike was in the neighbourhood of 250; but there were about 1,000 workers employed by contractors. The number of daily rated workers was in the neighbourhood of 950 and the total monthly paid staff varied from 100 to 105. The wages paid to the workers in the quarry were debited to limestone account of the Cement Works, and in the matter of costing, the amount spent on limestone was also debited. The bank accounts, however, were in the name of the Company and the persons who were entitled to operate on those accounts were Mr. Dongray, the Manager, the Chief Engineer, and the Chief Chemist of the Cement Works. 712 All the aforesaid evidence, oral and documentary, was apparently accepted by the Tribunal as correct; for the learned Chairman summarised the evidence of Mr. Dongray without any serious adverse comment. He then referred to certain contentions urged on behalf of the Union, which he said were not without force. We may now state those contentions. The first contention was that under the provisions of the Act, the appropriate authority in respect of the factory at Jhinkpani was the State Government of Bihar, whereas the appropriate authority in respect of the limestone quarry, which was a mine as defined in the , was the Central Government. The second con tention was that there were two sets of Standing Orders, one for the workmen of the factory and the other for the workmen in the limestone quarry. The third contention was that the limestone quarry had an office of its own and a separate attendance register, and the fourth contention was that under the provisions of the , Mr. Dongray was an Agent in respect of the limestone quarry and there was a separate Manager who was responsible for the control, management and direction of the mine under the provisions of section 17 thereof. The learned Chairman referred to certain criticisms made in respect of the evidence of Mr. Dongray. One criticism was that though the Company was the owner of both the factory and the limestone quarry, it had also factories and limestone quarries at other places in India and Pakistan and if the test of one ownership were the determining test, then all the factories and limestone quarries of the Company wherever situtate would be one establishment. This criticism was not, however, pertinent because the Company never claimed that all its factories in different parts of India and Pakistan formed one establishment by reason of unity of ownership only. The other criticism was that Mr. Dongray admitted that, if necessary in the interest of service, the workmen at the Chaibasa Cement Works could be transferred to some other factory of the Company and therefore transferability was not a sure test. This criticism was also not germane, because the Company 713 never claimed that transferability was the only sure test. A third criticism also advanced on behalf of the workmen was that Mr. Dongray admitted that all the accounts of the different factories and limestone quarries of the Company were ultimately consolidated into one Profit and Loss Account, a criticism which in our view was equally not pertinent to the question at issue. The learned Chairman then expressed his final finding in the following words: " From these and other admissions made by Mr. Dongray it would appear that it is only for economy and convenience that he was given charge of the control of both the concerns but his capacity was dual. While he was controlling the Cement Works as it Works Manager he had the control of the quarries as its Agent under the . It has also to be noted that if both these establishments which are inherently different by their very nature are treated as one and the same, anomalous position may arise in dealing with the employees in the quarries in matters of misconduct and such other things if there is a pendency of a dispute in the Cement Works and vice versa. Obviously, the employees of the Cement Works have to be dealt with by the State Tribunal while the employees of the quarries by the Central Tribunal. This also nullifies the force of the management 's contention that both are parts of the same establishment. Considering these it has to be held that the contention of the management fails and that of the Union must prevail. " We now revert to the contention urged on behalf of the respondent that this appeal should be disposed of on the footing that the final conclusion of the Industrial Tribunal is a finding of fact. The judgment of the Tribunal itself shows that the final conclusion was arrived at by a process of reasoning which involved a consideration of several provisions of the Act and some provisions of the . The Tribunal accepted a major portion, if not all, of the evidence of Mr. Dongray; but it felt compelled to hold against the appellant despite that evidence by reason of an 714 anomalous position which, it thought, would arise if the factory and the quarry were held to be one establishment. The question before the Tribunal, and this is also the question before us, was the true scope and effect of cl. (iii) of section 25E of the Act, with particular reference to the expression " in another part of the establishment " occurring therein. That question was not a pure question of fact, as it involved a consideration of the tests which should be applied in determining whether a particular unit is part of a bigger establishment. Indeed, it is true that for the application of the tests certain preliminary facts must be found; but the final conclusion to be drawn therefrom is not a mere question of fact. Learned counsel for the respondent is not, therefore, justified in asking us to adopt the short cut of disposing of the appeal on the footing that a finding of fact should not be disturbed in an appeal by special leave. In this case we cannot relieve ourselves of the task of determining the true scope and effect of cl. (iii) of section 25E by adopting the short cut suggested by learned counsel. We proceed now to consider what should be the proper tests in determining what is meant by " one establishment ". Learned counsel for the respondent has suggested that the test has been laid down by the Legislature itself in the Explanation to section 25A of the Act. That Explanation states: " In this section and in sections 25C, 25D and 25E, "industrial establishment " means (i) a factory as defined in clause (m) of section 2 of the ; or (ii) a mine as defined in clause (j) of section 2 of the ; or (iii) a plantation as defined in clause (f ) of section 2 of the . " The argument is that the Explanation states in clear terms what an industrial establishment means in certain sections of the Act including section 25E, and on a proper construction it negatives the idea of a factory and a mineforming parts of one establishment. Curiously enough, section 25E does not contain the 715 expression "industrial establishment". It uses the word " establishment " only. We agree, however, that if section 25E is read with section 25C and the definition of " layoff " in section 2 (kkk) of the Act, as it must be read, the word " establishment " in section 25E has reference to an industrial establishment. On the footing that the word " establishment " in section 25E means an industrial establishment, what then is the effect of the Explanation ? The contention of the respondent is that an industrial establishment may be either a factory as defined in clause (m) of section 2. of the , or a mine as defined in cl. (j) of section 2 of the , or a plantation as defined in cl. (f) of section 2 of the ; but it cannot be a combination of any two of the aforesaid categories; therefore, a factory and a mine together, as in the present case, cannot form one establishment. This argument proceeds on the assumption that the Explanation while stating what undertakings or enterprises come within the expression " industrial establishment " necessarily lays down the test of 'one establishment ' also. We do not think that there is any warrant for this assumption. The Explanation only gives the meaning of the expression " industrial establishment " for certain sections of the Act; it does not purport to lay down any test as to what constitutes one ' establishment '. Let us take, for example, a factory which has different departments in which manufacturing processes are carried on with the aid of power. Each department, if it employs ten or more workmen, is a factory within the meaning of cl. (m) of section 2 of the ; so is the entire factory where 1,000 workmen may be employed. The Explanation merely states that an undertaking of the nature of a factory as defined in cl. (m) of section 2 of the , is an industrial establishment. It has no bearing on the question if in the example taken, the factory as a whole or each department thereof should be treated as one establishment. That question must be determined on other considerations, because the Explanation does not deal with the question of one establishment. In our view, the true scope and effect 716 of the Explanation is that it explains what categories, factory, mine or plantation, come within the meaning of the expression " industrial establishment " ; it does not deal with the question as to what constitutes one establishment and lays down no tests for determining that question. We cannot, therefore, accept the argument of learned counsel for the respondent that a factory and a mine, a mine which supplies the raw material to the factory, can never be one establishment under the Act; that we do not think is the effect of the Explanation to section 25A. The Act not having prescribed any specific tests for determining what is 'one establishment ', we must fall back on such considerations as in the ordinary industrial or business sense determine the unity of an industrial establishment, having regard no doubt to the scheme and object of the Act and other relevant provisions of the , or the . What then is ' one establishment ' in the ordinary industrial or business sense ? The question of unity or oneness presents difficulties when the industrial establishment consists of parts, units, departments, branches etc. If it is strictly unitary in the sense of having one location and one unit only, there is little difficulty in saying that it is one establishment. Where, however, the industrial undertaking has parts, branches, departments, units etc. with different locations, near or distant, the question arises what tests should be applied for determining what constitutes 'one establishment '. Several tests were referred to in the course of arguments before us, such as, geographical proximity, unity of ownership, management and control, unity of employment and conditions of service, functional integrality, general unity of purpose etc. To most of these we have referred while summarising the evidence of Mr. Dongray ,and the findings of the Tribunal thereon. It is, perhaps, impossible to lay down any one test as an absolute and invariable test for all cases. The real purpose of these tests is to find out the true relation between the parts, branches, units etc. If in their true relation they constitute one integrated whole, we say 717 that the establishment is one; if on the contrary they do not constitute one integrated whole, each unit is then a separate unit. How the relation between the units will be judged must depend on the facts proved, having regard to the scheme and object of the statute which gives the right of unemployment compensation and also prescribes disqualification therefor. Thus, in one case the unity of ownership, management and control may be the important test; in another case functional integrality or general unity may be the important test; and in still another case, the important test may be the unity of employment. Indeed, in a large number of cases several tests may fall for con sideration at the same time. The difficulty of applying these tests arises because of the complexities of modern industrial organisation; many enterprises may have functional integrality between factories which are separately owned; some may be integrated in part with units or factories having the same ownership and in part with factories or plants which are independently owned. In the midst of all these complexities it may be difficult to discover the real thread of unity. In an American decision (Donald L. Nordling vs Ford Motor Company (1)) there is an example of an industrial product consisting of, 3,800 or 4,000 parts, about 900 of which came out of one plant; some came from other plants owned by the same Company and still others came from plants independently owned, and a shutdown caused by a strike or other labour dispute at any one of the plants might conceivably cause a closure of the main plant or factory. Fortunately for us, such complexities do not present themselves in the case under our consideration. We do not say that it is usual in industrial practice, to have one establishment consisting of a factory and a mine; but we have to remember the special facts of this case where the adjacent limestone quarry supplies the raw material, almost exclusively, to the factory ; the quarry is indeed a feeder of the factory and without limestone from the quarry, the factory cannot function. Ours is a case where all the tests are fulfilled, (1) 272. 91 718 as shown from the evidence given on behalf of the appellant to which we have earlier referred. There are unity of ownership, unity of management, supervision and control, unity of finance and employment, unity of labour and conditions of service of workmen, functional integrality, general unity of purpose and geographical proximity. We shall presently deal with the legal difficulties at which the Tribunal has hinted and which have been elaborated by learned counsel for the respondent. But apart from them, the only fair conclusion from the facts proved in the case is that the Chaibasa Cement Works consisting of the factory and the limestone quarry form one establishment. The existence of two sets of Standing Orders and a separate attendance register for the limestone quarry have already been adverted to. They have been sufficiently explained by Mr. Dongray, particularly the existence of two sets of Standing Orders by reason of the statutory requirement of approval by different authorities one set by the Labour Commissioner, Bihar, and other by the relevant Central authority. We proceed now to consider the legal difficulties which according to learned counsel for the respondent stand in the way of treating the limestone quarry and the factory as one establishment. The Tribunal has merely hinted at these difficulties by saying that an anomalous position will arise if the quarry and the factory are treated as one establishment. It is necessary to refer briefly to the scheme and object of lay off compensation and the disqualifications therefor as envisaged by the relevant provisions in Chapter VA of the Act. That chapter was inserted by the Industrial Disputes (Amendment) Act, 1953 (43 of 1953), which came into effect from October 24, 1953. The right of workmen to lay off compensation is obviously designed to relieve the hardship caused by unemployment due to no fault of the employee; involuntary unemployment also causes dislocation of trade and may result in general economic insecurity. Therefore, the right is based on grounds of humane public policy and the statute which gives such right should be 719 liberally construed, and when there are disqualifying provisions, the latter should be construed strictly with reference to the words used therein. Now, section 25 gives the right, and there are three disqualifying clauses in section 25E. They show that the basis of the right to unemployment compensation is that the unemployment is involuntary; in other words, due to no fault of the employees themselves; that is why no unemployment compensation is payable when suitable alternative employment is offered and the workman refuses to accept it as in cl. (1) of section 25E ; or the work man does not present himself for work at the establishment as in cl. (ii); or when the laying off is due to the strike or slowing down of production on the part of workmen in another part of the establishment as in cl. (iii). Obviously, the last clause treats the work men in one establishment as one class and a strike of slow down by some resulting in the laying off of other workmen disqualifies the workmen laid off from claiming unemployment compensation, the reason being that the unemployment is not really involuntary. It is against this background of the scheme and object of the relevant provisions of the Act that were must now consider the legal difficulties alleged by the respondent. The first difficulty is said to arise out of section 17 of the . That section says in effect that every mine shall be under a Manager having prescribed qualifications who shall be responsible for the control, management and direction of the mine; it is then pointed out that the word 'agent ' in relation to a mine means a person who acts as the representative of the owner in respect of the management of the mine and who is superior to a Manager. The argument is that the limestone quarry at Rajanka had a ' Manager ' under the , and Mr. Dongray acted as the agent, that is, representative of the owner, viz., the Company; and this arrangement which was in consonance with the provisions of the , it is argued, made the factory and the quarry two separate establishments. We are unable to accept this argument as correct. We do not think that section 17 of the , has any relevance 720 to the question whether the limestone quarry was part of a bigger establishment. It prescribes the appointment of a Manager for purposes of the , and does not deal with the question of 'one establishment ' within the meaning of cl. (iii) of section 25E of the Act. The fact that the quarry Manager worked under the overall control and supervision of Mr. Dongray showed, on the facts proved in this case, just the contrary of what learned counsel for the respondent has contended ; it showed that the factory and the quarry were treated as one establishment. The second difficulty is said to arise out of certain provisions of the Act which relate to the constitution of Boards of Conciliation, Courts of Inquiry, Labour Courts and Tribunals and the reference of industrial disputes to these bodies for settlement, inquiry or adjudication. The scheme of the Act is that except in the case of National Tribunals which are appointed by the Central Government, the appropriate Government makes the appointment of Boards of Conciliation, Courts of Inquiry, Labour Courts and Tribunals and it is the appropriate Government which makes the refer ence under section 10 of the Act. Now, the expression appropriate Government is defined in section 2(a) of the Act. So far as it is relevant for our purpose, it means the Central Government in relation to the limestone quarry at Rajanka and the State Government of Bihar in relation to the factory at Jhinkpani. We had stated earlier in this judgment that in this very case the original dispute between the management and the workmen in the limestone quarry was referred to the Central Tribunal at Dhanbad, while the latter dispute about lay off compensation to workmen of the factory was referred by the Government of Bihar to the Industrial Tribunal at Patna. The argument before us is that when the statute itself brings the two units, factory and mine, under different authorities, they cannot be treated as one establishment for the purposes of the same statute. Our attention has also been drawn to section 18(3) of the Act under which in certain circumstances, a settlement arrived at in the course of conciliation proceedings under the Act or an award of 721 a Labour Court or Tribunal is made binding " on all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part. " It is contended that it will be difficult to apply section 18(3) if the factory and the limestone quarry are treated as one establishment. Lastly, learned counsel for the respondent has referred us to section 33 of the Act. Sub section (1) of that section, in substance, lays down that during the pendency of any conciliation proceedings or of any proceeding before a Labour Court or Tribunal in respect of any industrial dispute, no employer shall alter the conditions of service to the prejudice of workmen or punish any workmen, save with the permission in writing of the authority before which the proceeding is pending. Sub sections (2) and (3) we need not reproduce, because for the purposes of this _ appeal, the argument is the same, which is that if a proceeding is pending before a Central Tribunal, say in respect of the limestone quarry, there will be difficulty in applying the provisions of section 33 in respect of workmen in the factory over which the Central Tribunal will have no jurisdiction. The Industrial Tribunal did not specifically refer to these provisions, but perhaps, had them in mind when it said that an anomalous position would arise if the factory and the quarry were treated as one establishment. We have given our most earnest consideration to these arguments, but are unable to hold that they should prevail. It is indeed true that in the matter of constitution of Boards of Conciliation, Courts of Inquiry, Labour Courts and Tribunals and also in the matter of reference of industrial disputes to them, and perhaps for certain other limited purposes, the Act gives jurisdiction to two distinct authorities, the Central Government in respect of the limestone quarry and the State Government in respect of the factory. The short question is does this duality ' of jurisdiction, dichotomy one may call it, necessarily imply that for all purposes of the Act, and particularly for 722 payment of unemployment compensation as per the provisions in Ch. VA, the factory and the quarry must be treated as separate establishments. We are unable to find any such necessary implication. There is no provision in the Act which says that the existence of two jurisdictions has the consequence contended for by learned counsel for the respondent; nor do we find anything in the provisions creating two jurisdictions which by reason of the principle underlying them or by their very nature give rise to an implication in law that the existence of two jurisdictions means the existence of two separate establishments. On the contrary, such an implication or inference will be at variance with the scheme and object of unemployment compensation as provided for by the provisions in Ch. VA of the Act. We have pointed out earlier that the object of unemployment compensation is to relieve hardship caused by involuntary unemployment, that is, unemployment not due to any fault of the employees. If in the ordinary business sense the industrial establishment is one, a lay off of some of the workmen in that establishment as a result of a strike by some other workmen in the same establishment cannot be characterised as involuntary unemployment. To hold that such an establishment must be divided into two separate parts by reason of the existence of two jurisdictions is to import an artificiality for which we think there is no justification in the provisions of the Act. Nor do we think that sections 18(3) and 33 present any real difficulty. Section 18(3) clearly contemplates a settlement or an award which is binding on a part of the establishment. It says so in express terms. If, therefore, in the case before us there is a settlement or award in respect of the limestone quarry, it will be binding in the circumstances mentioned in the subsection, on the workmen in that part of the establishment which is the limestone quarry. Similarly, a settlement or award in respect of the factory will be binding on the workmen of the factory. Section 33, as far as it is relevant for the argument now under consideration, is in two parts. Sub section (1) relates 723 to a matter connected with the dispute in respect of which a proceeding is pending. Sub section (2) relates to a matter not connected with the dispute in respect of which the proceeding is pending. In one case permission of the authority before which the proceeding is pending has to be obtained for punishing etc. ; in the other case, an application for approval of the action taken by the employer has to be made. We see no difficulty in applying section 33 in a case like the one before us. For workmen in the mine, the authority will be the one appointed by the Central Government; for the factory, the authority will be that appointed by the State Government. This is the same argument as the argument of two jurisdictions in another form. The assumption is that there cannot be two jurisdic tions for two parts of one establishment. This argument is valid, if the assumption is correct. If, however, there is no warrant for the assumption, as we have held there is none, then the argument has no legs to stand upon. So far we have dealt with the case irrespective of and apart from reported decisions, because there is no decision which really covers the point in controversy before us. Learned counsel for the appellant has referred to the decisions in Hoyle vs Cram (1) and Coles vs Dickinson (2 ). The question in the first case was if the appellants there were liable to be convicted of an offence against the Bleaching Works Act, 23 and 24 Vict. c. 78 in employing the child without a school master 's certificate. It was held that a child employed on the premises where the bleaching, dyeing and finishing were performed was employed in an incidental printing process within the second section of 8 and 9 Vict. c. 29; and that the place where he was so employed formed part of " the establishment where the chief process of printing was carried on " within the meaning of that Act. The decision proceeded mainly on the words of the statute; but Earle, C.J., said: " It appears that the works at Mayfield having some years ago become inadequate, by reason of the (1) ; (2) ; ; 724 increase of the business and by the detorioration and deficiency of the water of the river Medlock, the appellants transferred part of their works to Sandy Vale: but that the principal part of the work continued to be carried on at Mayfield, which was the principal seat of the firm. In a commercial sense, therefore, Sandy Vale clearly was part of one entire establishment. It was contended for the respondent that the statute did not mean forming part in a commercial sense, but in a popular and local sense. But I see no reason for confining the meaning to local proximity. The whole substantially forms one establishment. " In the second case the question was this : by the 73rd section of 7 and 8 Vict. c. 15, premises which are used solely for the manufacture of paper were excluded from the operation of the Factory Acts; there were two mills, one at Manchester and the other in Hertfordshire. The Manchester mill prepared what was called half stuff which was sent to the mill in Hertfordshire to be manufactured into paper, and the question was if the Manchester mill was exempted from the operation of the Factory Acts. The answer given was in the affirmative. It was stated that each step in the process was a step in the manufacture of paper, and the distance between the two places where the several parts were carried on was wholly immaterial in view of the words of the statute. The last decision to which our attention has been drawn is the American decision in Donald L. Nordling vs Ford Motor Company (1). This decision is perhaps more in point as it related to unemployment compensatiOn. The statute in that case provided that an individual losing his employment because of a strike or other labour dispute should be disqualified during its process " at the establishment in which he is or was employed ". The claimants there had been employed at a Minnesota automobile assembly plant which was partially shut down because of a lack of parts due to a strike at a manufacturing plant owned and operated by the same corporation in Michigan. The Minnesota Supreme Court to which an application was made for (1) 272. 725 a certiorari to review a decision of the director of the division of employment and security reviewed the tests which have generally been applied for determining what is meant by the term ' establishment ' within the meaning of the statute concerned; it pointed out that there was no uniformity of decision on the question and it was not possible to lay down an absolute or invariable test. The decision was based on the broader ground that the tests of functional integrality, general unity and physical proximity should all be taken into consideration in determining the ultimate question of whether a factory, plant or unit of a larger industry is a separate establishment within the meaning of the employment and security law. The test which was emphasized in that case was the test of the unity of employment and on that footing it was found that the evidence was ample to support the director 's finding that the Minnesota plant was a separate establishment. We do not think that these decisions carry the matter any further than what we have explained in earlier paragraphs of this judgment. We must have regard to the provisions of the statute under which the question falls to be considered; if the statute itself says what is one establishment, then there is no difficulty. If the statute does not, however, say what constitutes one establishment, then the usual tests have to be applied to determine the true relation between the parts, branches etc. , namely, whether they constitute one integrated whole or not. No particular test can be adopted as an absolute test in all cases of this type and the word 'establishment ' is not to be given the sweeping definition of one organisation of which it is capable, but rather is to be construed in the ordinary business or commercial sense. For the reasons which we have already given, we are of the view that the learned Chairman of the Industrial Tribunal wrongly held that the limestone quarry at Rajanka and the factory at Jhinkpani were separate establishments. In our view, they constituted one establishment within the meaning of cl. (iii) of 92 726 s.25E of the Act. It was conceded on behalf the respondent workmen that the lay off in the factory was due to the non supply of limestone by reason of the strike in the limestone quarry and the strike was decided on by the same Union which consisted of the workmen at the factory and the quarry. That being the position, the disqualification in cl. (iii) aforesaid clearly applied and the workmen at the factory were not entitled to claim lay off compensation. The result, therefore, is that the appeal succeeds and is allowed and the award of the Industrial Tribunal is set aside. In the circumstances of the case in which a difficult question of interpretation arose for decision for the first time, we pass no order as to costs. Appeal allowed. [/INST]The appellants were carrying on motor transport business in Krishna District in Andhra Pradesh. The General Manager of the State Transport Undertaking published a scheme for nationalisation of motor transport and objections to the said scheme were invited. The appellants, among others, filed their objections. The Secretary in charge of the Transport Department gave personal hearing to the objectors and heard the representation made on behalf of the State Transport Undertaking. The Chief Minister, who was in charge of transport, passed the order approving the scheme. The appellants moved this Court under article 32 of the Constitution for quashing the said scheme and this Court in Gullapalli Nageswara Rao vs Andhra Pradesh Road Transport Corporation, previously decided, held that the Secretary in charge of the Transport Department was incompetent to hear the objections on the around that no party could be a judge in his own cause and quashed the order approving the scheme. Thereafter notices were issued by the Government to the objectors. The Chief Minister himself heard the representatives of the objectors and the Road Transport Corporation and passed the order approving the scheme as originally published. The appellants moved the High Court under article 226 of the Constitution for writs of certiorari quashing the order passed by the Government confirming the scheme and subsequent orders Made by the Regional Transport Authority canceling their stage carriage permits. The High Court rejected the petitions and the appellants appealed. It was contended, inter alia, on their behalf that the same infirmity which attached to the Secretary in charge of the Transport Department on the previous occasion, attached to the Chief Minister, who was in charge of transport, and rendered him incompetent to hear the objections. Held, that the two well settled principles of the doctrine of bias that applied equally to judicial as well as quasi judicial tribunals, were, (i) that no man shall be a judge in his own cause and that (2) justice should not merely be done but must also appear to be done. Any kind of bias, therefore, in a judicial authority, whether financial or other, for or against any party, or any position that might impute bias, must disqualify him as a judge. 581 But when a State Legislature or the Parliament, in trans gression of the aforesaid principles, by statute empowers an authority to be a judge in its own cause or decide a dispute in which it has an official bias, such statute, unlike one passed by the English Parliament, has to stand scrutiny in the light of the fundamental rights enshrined in the Constitution. The King vs Bath Compensation Authority, and The King vs Leicester justices, [1927] i K.B. 557, discussed. In the instant case, however, the relevant provisions of the Act do not sanction any transgression of the aforesaid principles of natural justice or authorise the Government to constitute itself a judge in its own cause. Nor could it be said that the State Government, in the present case, acted in violation of the aforesaid principles. Since the appellants never questioned the competence of the Chief Minister to decide the objections on the last occasion and obtained the judgment of this Court on that basis, it was not open to them at this stage to reopen the closed controversy or take a contrary position. The position of the Chief Minister was quite distinct from that of the Secretary of the Department. While the Secretary of the Department was its head and so a part of it, the Minister in charge was only primarily responsible for the disposal of the business pertaining to that Department. It was not, therefore, correct to say that the Chief Minister was a part of the Department constituted as a Statutory Undertaking under the Act. </s>
<s>[INST] Summarize the judgementivil Appeal No. 2948 of 1984 275 From the Judgment and Order dated 20.1.1984 of the Delhi High Court in L.P.A. No. 145 of 1982. G. Ramaswami, Additional Solicitor General, S.C. Dhanda, C.S. Vaidyanathan, P. Chowdhary and S.R. Sethia for the Appellant. Respondent No. 1 In person, Girish Chandra, Ms. Sushma Relan and P. Chowdhary for Respondents. The Judgment of the Court was delivered by PATHAK, CJ. This is an appeal by special leave against a judgment of a Division Bench of the High Court of Delhi in a Letters Patent Appeal upholding the judgment of a Single Judge of the High Court in a writ petition filed by the first respondent for a declaration that he continues to be in the service of the Jawaharlal Nehru University. The sets forth as the objects of the Jawaharlal Nehru University "to dissemi nate and advance knowledge, wisdom and understanding by teaching and research and by the example and influence of corporate life, and in particular the objects set out in the first Schedule. " The powers of the University extend to establishing within the Union Territory of Delhi or outside that territory such Special Centres as may be necessary for the furtherance of its objects, to create such teaching, administrative and other posts as the University may deem necessary, and to make arrangements thereto, and to appoint or recognise persons as Professors, Readers or Lecturers or otherwise as teachers of the University. Section 7(b) of the Act declares that where the University establishes and maintains any institution or body outside the Union Territo ry of Delhi then the powers and jurisdiction of the Univer sity will extend to such institution or body subject to the rules and regulations of the University within whose juris diction the institution or body is situate. On 21 September, 1970 the Additional Secretary, Ministry of Education and Youth Services wrote to the Vice Chancellor of the University informing him of the intention of the Government of India, to establish a Central University at Shillong to serve the needs of the North Eastern Region of India, and that in August, 1969, the University Grants Commission had approved the proposal of the Manipur Adminis tration to have a Post graduate Centre at Imphal under the auspices of the Gauhati University, and considering the fact that the 276 proposed Central University for the Hill Areas was also intended to cater to the needs of Manipur, it would be appropriate, he said, that the Jawaharlal Nehru University should establish a Centre at Imphal also which could later be made over to the proposed new University to be estab lished by the Centre. On 3 October, 1970, a resolution was passed by the Executive Council of the Jawaharlal Nehru University agreeing with the proposal of the Ministry of Education to set up an Institute of Post graduate Studies at Imphal. A committee was set up to study the problems con nected with the setting up of such an Institute and to submit concrete proposals in that regard. On 12 June, 197 1, the Executive Council of the University recorded their agreement in principle to the proposal of the Ministry of Education to set up an Institute of Post graduate Studies at Imphal and noted that the committee had submitted its re port. Then on 12 June, 197 1, the Executive Council passed a resolution that a Centre of Post graduate Studies be set up at Imphal under section 5(2) of the . On 27 January, 197 1, the appellant University informed the respondent that he had been selected for the post of Research Assistant in the Department of South Eastern Stud ies, School of International Studies of the University, that the appointment would be temporary for a period of six months and his services could be terminated on one month 's notice on either side. On 25 April, 1973, the term of tempo rary appointment as Research Assistant in the School of International Studies was extended by the appellant Univer sity for a further period of six months with effect from 4 June, 1973. Thereafter, by letter dated 29 November, 1973 the Vice Chancellor of the appellant University offered the respondent the post of Associate Fellow in the Post graduate Studies Centre of the University at Imphal for a period of one year in the first instance, the appointment being made on ad hoc basis, and his regular appointment at the Centre of the Post graduate Studies at Imphal or at the New Delhi campus of the University would be subject to the recommenda tions of the Selection Committee. It was stated that he was expected to take part in the teaching and research pro grammes of the University. He was directed, in case he accepted the offer, to join the Post graduate Centre, Imphal (Manipur) as early as possible. On the same date the re spondent accepted the offer of appointment as "Associate Fellow", Centre of Post graduate Studies, Imphal, under the terms and conditions of the Vice Chancellor 's letter of that date. On 3 December. 1973 the respondent reiterated his acceptance of the offer of appointment as "Associate Fellow" at the Centre of Post graduate Studies, Imphal, and stated that he was reporting for duty to the Head of the Centre for Political Studies, School 277 of Social Sciences, New Delhi with effect from 3 December, 1973 so that after necessary briefing at the Centre he would proceed to Imphal as early as possible. Thereafter by Office Order No. 2376 dated 24 August, 1974 the term of appointment of the respondent as "Associate Fellow" at the Centre of Post graduate Studies, Imphal, was extended for a period of one year from 3 December, 1974 to 2 December, 1975. By Office Order No. 2440 dated 23 September, 1974 the respond ent 's term of appointment in the same capacity at the said Centre was now enlarged from 3 December, 1974 to 2 December, 1976. His existing scale of Rs.400 40 800 50 950 was revised to Rs.700 40 1100 50 1600 by Office Order No. 295 dated 21 June, 1975 with effect from 1 January, 1973. It appears that the temporary appointment of Associate Professor in Politi cal Science at the Centre of Post graduate Studies, Imphal, was extended upto 3 August, 1987 or until the post was filled on a regular basis whichever is earlier. Thereafter on 23 December, 1977 an advertisement was issued by the Jawaharlal Nehru University, Centre of Post graduate Stud ies, Imphal (Manipur) for appointment to, inter alia, the posts of Associate Professor/Fellow and Assistant Professor/Assistant Fellow in the Political Science. The respondent applied for the post of Associate Professor but the Selection Committee did not find him suitable for that post and recommended him for the lower post of Assistant Professor. By letter dated 29 April, 1978 the Jawaharlal Nehru University offered him the appointment of Assistant Professor in Political Science on an ad hoc basis in the Centre of Post graduate Studies, Imphal, for a period of one year or until his services were required by the Centre, whichever was earlier. The respondent, however, wrote back on 2 May, 1978 stating that he had not applied for the post of Assistant Professor in Political Science and that he deserved to be appointed as Associate Professor at the Imphal Centre. By letter dated 21 March, 1979 the Jawaharlal Nehru University offered the respondent the post of Assist ant Professor in the Political Science Division at the Centre of Post graduate Studies of the University at Imphal for a period of two years. He was informed that in all matters relating to leave and other conditions of service he would be required to enter into an agreement with the Centre of Post graduate Studies, Imphal. This agreement was never executed. On 29 August, 1979 the respondent joined as As sistant Professor in accordance with the terms mentioned in the University 's letter dated 21 March, 1979. Thereafter the respondent was appointed as Assistant Professor by a Resolu tion of the Jawaharlal Nehru University dated 29 October, 1979 on a regular basis with effect from the date of his initial appointment dated 29 August, 1979 and he was con firmed with effect from that date. 278 In 1980 proceedings were taken to transfer the Imphal Centre from the Jawaharlal Nehru University to the Manipur University. To effectuate this the Syndicate of the Manipur University passed a Resolution on 19 December, 1980 detail ing the terms for the transfer of the Centre to the Manipur University, and the Manipur University and the Manipur Government requested the Jawaharlal Nehru University for transferring the Centre accordingly. The Jawaharlal Nehru University by its Resolution dated 3 February, 1981 accepted the proposal and authorised the Vice Chancellor to transfer the Centre to the Manipur University. The date for transfer was fixed as 1 April, 1981. Meanwhile, the Manipur Legisla ture passed the Manipur University Act, 1980, which was assented to by the Governor on 28 May, 1980. Section 1(4) of the Act provided that on and from the date on which the Act came into force in respect of post graduate education and research, the Jawaharlal Nehru University would cease to exercise jurisdiction over the Centre of Post graduate Studies in Imphal, and that the State Government of Manipur may make provision for the transfer of employees from the Jawaharlal Nehru University, Centre of Post graduate Stud ies, Imphal to the Manipur University. Thereafter an order dated 31 March, 1981 was made by the Governor of Manipur providing that the members of the faculties of the Jawahar lal Nehru University, Centre of Post graduate Studies, Imphal, immediately before its merger into the Manipur University would, on and from the 1 April, 1981, become members of the staff of the Manipur University on the same terms and conditions of service as they were entitled to immediately before that day. Meanwhile on 3 February, 1981, the Syndicate of the Jawaharlal Nehru University provided for the transfer of the Centre to the Manipur University. It was resolved that the said Jawaharlal Nehru University for Post graduate Studies would cease to exist as such and the Divisions of the Centre would become the Divisions of the Manipur University and function accordingly. It was further resolved that the members of the faculty employed by the Jawaharlal Nehru University, Centre of Postgraduate Studies, Imphal, immediately before its merger into the University would on and from that date. become members of the staff of the Manipur University. The respondent filed a writ petition in this Court on 27 March, 1981 challenging his transfer from the Jawaharlal Nehru University to the Manipur University, and that peti tion was dismissed as withdrawn on 21 September, 198 1. Thereafter the respondent filed a writ petition on 22 May, 1982 in the Delhi High Court praying for the quashing of the Resolution of the Jawaharlal Nehru University on 3 February, 198 1 transferring his services to the Manipur University. The learned 279 Single Judge of the High Court held that the respondent could not be obliged to join the Manipur University, that he was confirmed as Assistant Professor in the employment of the Jawaharlal Nehru University in its Imphal Centre and was entitled to continue in service until he attained the age of 60 years and that the services had not been specifically terminated. Accordingly, the writ petition was allowed and the respondent was deemed to continue, in the service of the Jawaharlal Nehru University and if no equivalent post was available for him in 1981 in the Jawaharlal Nehru University had he had become surplus, the said University was at liber ty to dispense with his services. In appeal, the Division Bench of the High Court upheld the view that the services of the respondent could not stand automatically transferred from the Jawaharlal Nehru University to the Manipur Univer sity with effect from 1 April, 1981 by operation of law and that the order dated 31 March, 1981 transferring the employ ees at the Imphal Centre to the Manipur must be considered as implying or assuming that the concerned employee had exercised an option to join the Manipur University. The learned Judges also rejected the contention of the appellant that there was an automatic termination of the respondent 's service without notice or order or discharge or dismissal. They held further that the Centre at Imphal was commenced and conducted as part and parcel of the Jawaharlal Nehru University that the respondent must be regarded as an em ployee continuing with the Jawaharlal Nehru University even upon the transfer of the Centre from that University. They further observed that if, in the result, the strength of the staff should be surplus, the principle of "last come first go" had to be applied, and that the application of the principle was to be effected with reference to the cadre to which the respondent belonged and also to the discipline in which he was competent. In the event of it being found that he constitutes a class by himself, his services could be absorbed in some suitable post in the Jawaharlal Nehru University. In this appeal the main contention of the appellant is that the respondent was appointed at the Centre of Post graduate Studies, Imphal, and when the Centre was trans ferred to the Manipur University, his services were automat ically transferred to that University, and consequently he could not claim to be an employee of the appellant Universi ty. The argument proceeds on the assumption that the Centre of Post graduate Studies at Imphal was an independent entity which existed by itself and was not a department of the appellant University. The submission proceeds on a fallacy. The Centre of Postgraduate Studies was set up at Imphal as an activity of the appellant University. To give expression to that activity the appellant University set up and orga nised the Centre at Imphal and appointed a teaching 280 and administrative staff to man it. Since the Centre repre sented an activity of the appellant University the teaching and administrative staff must be understood as employees of the appellant University. In the case of the respondent, there can be no doubt whatever that he was, and continues to be, an employee of the appellant University. There is also no doubt that his employment could not be transferred by the appellant University to the Manipur University without his consent, notwithstanding any statutory provision to that effect whether in the Manipur University Act or elsewhere. The contract of service entered into by the respondent was a contract with the appellant University and no law can con vert that contract into a contract between the respondent and the Manipur University without simultaneously making it, either expressly or by necessary implication, subject to the respondent 's consent. When the Manipur University Act pro vides for the transfer of the services of the staff working at the Centre of Postgraduate Studies, Imphal, to employment in the Manipur University, it must be construed as a provi sion enabling such transfer of employment but only on the assumption that the employee concerned is a consenting party to such transfer. It makes no difference that the respondent was not shown in the list of Assistant Professors of the appellant University or that the provision was not indicated in its budget; that must be regarded as proceeding from an erroneous conception of the status of the respondent. The position in law in clear, that no employee can be trans ferred, without his consent, from one employer to another. The consent may be express or implied. We do not find it necessary to refer to any case law in support of this con clusion. Inasmuch as the transfer of the Centre of Post graduate Studies from the appellant University to the Manipur univer sity could not result in a transfer of the employment of the respondent from the one to the other, it must be concluded that the respondent continues in the employment of the appellant University. The transfer of the Centre of Post graduate Studies to the Manipur University may be regarded as resulting in the abolition of post held by the respondent in the appellant University. In that event, if the post held by the respondent is regarded as one of a number of posts in a group, the principle "last come, first go" will apply, and someone junior to the respondent must go. If the post held by him constitutes a class by itself, it is possible to say that he is surplus to the requirements of the appellant University and is liable to be retrenched. But it appears that the respondent has been adjusted against a suitable post in the appellant University and has been working there without break during the pendency of this 281 litigation, and we cannot, therefore, permit the appellant University to retrench him. In the result, the appeal fails and is dismissed with costs. R.S.S. Appeal dis missed. [/INST]This appeal by the Sales Tax authorities was directed against the judgment and order of the Orissa High Court, passed under article 226 of the Constitution, quashing five orders of assessment covering five quarters made against the respondents who carried on the business of collection and sale of Kendu leaves in the erstwhile Feudatory State of Pallaliara to which, on its merger into the province of Orissa on January 1, 1948, the provisions of the Orissa Sales Tax Act, 1947, were extended on March 1, 1949. On the same date the Government of Orissa issued a notification under section 4(1) of the Act which was in the following terms: " In exercise of the powers conferred by sub section (1) of Section 4 Of the Orissa Sales Tax Act, 1947 (Orissa Act XIV of 1947), as applied to Orissa State, the Government of Orissa are pleased to appoint the 31st March, 1949, as the date with effect from which every dealer whose gross turnover during the year ending the 31st March, 1949, exceeded Rs. 5,000 shall be liable to pay 521 under the said Act on sales effected after the said date Section 4 Of the Act, inter alia, provided : " (1) . with effect from such date as the Provincial Government may by notification in the Gazette, appoint, being not earlier than 'thirty days after the date of the said notification, every dealer whose gross turnover during the year immediately preceding the commencement of this Act exceeded Rs. 5,000 shall be liable to pay tax under the Act on sales effected after the date so notified. (2) Every dealer to whom sub section (1) does not apply shall be liable to pay under this Act with effect from the commencement of the year immedi ately following that during which his gross turnover first exceeded Rs. 5,000 ". The goods were admittedly delivered for consumption at various places outside the State and the Sales Tax Officer as well as the Assistant Collector in appeal, proceeding on the basis that the sales took place in the State, held that the respondents were liable to Sales Tax for all the five quarters, two of which fell before the commencement of the Constitution and three thereafter. The contention of the respondents before the High Court was that the notification under section 4(1) Of the Act was invalid as it ran counter to the provisions of that sub section and no part of that charging section could, therefore, come into force. It was further contended that the assessment for the three quarters following the commencement of the Constitution was invalid by reason or article 286 of the Constitution. The High Court found entirely in favour of the assessee : Held (per Das C. J., Venkatarama Aiyar, section K. Das and Vivian Bose, jj.), that the decision of the High Court in so far as it related to the three post Constitution quarters was correct and must be upheld. The orders of assessment for those quarters contravened both article 286 of the Constitution and section 30(r)(a)(1) of the Orissa Sales Tax Act and were without jurisdiction and must be set aside. So far as the two pre Constitution quarters were concerned, the assessees were clearly liable under section 4(2) of the Act. Per Das C. J. and Venkatarama Aiyar J. The first part of the impugned notification, appointing the date from which the liability was to commence, was in consonance with section 4(1) Of the Act and, therefore, clearly intra vires, whereas the second part, indicating the class of dealers on whom the liability was to fall, went beyond that section and must, therefore, be held to be ultra vires and invalid. But since the two parts were severable, the invalidity of the second part could in no way affect the validity of the first part which brought the charging section into operation and the assessees were liable for the two pre Constitution quarters under section 4(1) as well. Per section K. Das and Vivian Bose JJ. It would not be correct to say that the second part of the notification was a mere surplusage severable from the rest of the notification. Liability to pay the 522 tax under section 4(1) of the Act could arise only on the issue of a valid notification in conformity with the provisions of that sub section and as there was no such notification the assessees were not liable under section 4(1) Of the Act which did not come into operation. Subsections (1) and (2) Of section 4 are mutually exclusive, and their periods of application being different both could not apply at the same time and no notification was necessary to bring into operation sub section (2) Of the Act. The goods having been admittedly sold and delivered for consumption outside the State of Orissa, under article 286 (1)(a) read with the Explanation as also under section 30(1)(a)(1) of the Act, the sales were outside the State of Orissa and, consequently, the assessment for the three post Constitution quarters were without jurisdiction. The State of Bombay vs The United Motors (India) Ltd., ; and The Bengal Immunity Company Limited vs The State of Bihar, , relied on. Per Sarkar J. There could be no liability under section 4(1) Of the Act till a date was appointed thereunder, and where the notification, as in the instant case, fixing such a date, was not in terms of that sub clause, there was no fixing of a date at all and the sub clause could not come into play and no liability could arise under it. It was impossible to ignore the second part of the notification in question as a mere surplusage since the notification read as a whole had one meaning and another without it. The Government could not be heard to say that what it had said in the notification was not what it actually meant. Both the sub clauses Of section 4 having been brought into force at the same time by the same notification, they applied to all dealers together and contemplated a situation in which the liability of a dealer under sub cl. (1) might arise. It was apparent from the scheme of the Act that sub cl. (2) was not intended to have any operation till a date was appointed under sub cl. (1) and a liability under it might have arisen. </s>
<s>[INST] Summarize the judgementivil Appeal No. 4108 of 1982. From the Judgment and Order dated 23.12. 1981 of the Andhra Pradesh High Court in C.R.P. No. 3547 of 1981. P.P. Rao, R. Venkataramani, V.G. Pragasam and Satya Mitra Garg for the Appellant. P. Krishna Rao, B. Krishna Prasad and K.K. Gupta for the Respondents. The Judgment of the Court was delivered by RANGANATH MISRA, J. This is a tenant 's appeal by special leave against the order of eviction from a commercial prem ises at Gudur in Andhra Pradesh. The Controller, the Appel late Authority and the High Court have concurrently found that the appellant was a wilful defaulter liable to be evicted. Under document No. 1327 of 1969, a thirty year lease with an annual stipulated rent was granted in favour of one Narayanan, a partner of the hotel, for a term of 30 years beginning from 9th of 727 September, 1961. For the first 15 years rent was stipulated at the rate of Rs. 150 per month and for the second span of 15 years rent was to be escalated to Rs.200 per month, and the tenant undertook to pay the rent by the 9th of every succeeding month. The lease deed further stipulated: "Out of the advance of Rs.6,500, the second party shall deduct every month Rs.75 from the stipulated rent upto Rs. 1,500 and the balance of Rs.5,000 shall be paid back to the second party by the first party under valid receipt after the expiry of the lease period." Thus, by March 1971 the amount of Rs. 1,500 had been adjust ed and the landlord held Rs.5,000 refundable to the tenant. Action for eviction was initiated on the plea that the tenant had failed to pay the rent for a certain subsequent period. Courts below debated the main perhaps the only contention as to whether the plea of payment which the tenant advanced had been established. On behalf of the landlord the account books of the Hotel were placed and the benefit of section 34 of the Evidence Act was claimed. Lot of attention was bestowed in the Courts below on the question as to whether the oral evidence along with the presumption arising under section 34 of the Evidence Act had not established the position that no payment as claimed had been made. On the finding that payment had not been established, eviction was ordered. Two contentions have been advanced by Mr. P.P. Rao appearing for the appellant to maintain that the order of eviction was contrary to law and cannot be sustained. Reli ance is placed on section 7 of the Andhra Pradesh Buildings (Lease, Rent & Eviction) Control Act, 1960, (hereafter 'Act ') in support of the stand that the sum of Rs.5,000 which lay as advance in the hands of the respondent landlord was either refundable to the tenant or adjustable against rent and if out of the sum of Rs.5,000 the arrears were available to be adjusted, the tenant was not at all in ' default. It has next been contended that the lease of 1969 was for a term of 30 years certain and eviction has been claimed against a contractual tenant during the subsistence of the lease. Admittedly, the lease does not have a forfei ture clause so as to bring the matter within the ambit of section 111(g) of the Transfer of Property Act. The application for eviction, a copy of which is available on the record (at p. 10 of the second paper book), refers to a notice in para graph 7 in the following terms: 728 "The petitioners caused a registered notice through their counsel dated 28.10.1973 to the respondent demanding the rent due and also for the eviction from the schedule mentioned premises since the respondent has become a wilful defaulter. The respondent received the notice and has not chosen to give any reply. " It, therefore, follows, appellant 's counsel has contended, that the lease remained unter minated and the right created under the lease cannot be taken away by filing an application for eviction on the plea of wilful default in the matter of payment of rent. Section 7 of the Act as far as relevant, provides: "7 (2) Where the fair rent of a building has not been so fixed (a) the landlord shall not, after the commencement of this Act claim, receive or stipulate for the payment of any premium or other like sum in addition to the agreed rent: Provided that the landlord may receive, or stipulate for the payment of, an amount not exceeding one month 's rent by way of advance; (b) save as provided in clause (a), any sum paid in excess of the agreed rent whether before or after the commencement of this Act, in consideration of the grant, continuance or renewal of the tenancy of the building after such commencement, shall be refunded by the landlord to the person by whom it was paid or, at the option of such person, shall be otherwise adjusted by the landlord. (3) Any stipulation in contravention of sub section (1) or sub section (2) shall be null and void. " The lease deed described the amount of Rs.6,500 as advance at four places and stipulates adjustment of a sum of Rs. 1,500 out of it and the balance amount of Rs.5,000 to be paid back to the tenant after the expiry of the lease peri od. The provio to section 7(2)(a) prohibits payment of any sum exceeding one month 's rent by way of advance and sub section (3) declares the stipulation for payment of rent in advance beyond that of one month as null and void. 729 The receipt of Rs.6,500 by the landlord was, therefore, contrary to law and opposed to public policy. A sum of Rs. 1,500 has already been adjusted in the manner indicated in the petition for eviction and the fact that a sum of Rs.5,000 was still held by the landlord was admitted there in. On the facts appearing on the record it is thus clear that the landlord held a higher amount than the rent due on the date when the petition for eviction was filed on the plea of wilful default of payment of rent. The stipulation of holding the excess amount of RS.5,000 free of interest to be refunded under a valid receipt after the expiry of the lease period is the null and void stipulation and the amount of Rs.5,000 in the hands of the landlord was an amount held by the landlord on account of the tenant on the date of filing of the petition for eviction. This Court in Mohd. Salimuddin vs Misri Lal & Anr., ; had occasion to deal with a more or less similar situation arising under the Bihar Buildings (Lease, Rent & Eviction) Control Act, 1947. There, a sum of Rs.2,000 had been advanced by the tenant to the landlord stipulating adjustment of the loan amount_against the rent which accrued subsequently. The landlord asked for eviction on the ground of arrears of rent by filing a suit. The trial court had decreed the suit but the lower appellate court reversed the decree by holding that the tenant was not in arrears of rent since the amount advanced by the tenant was sufficient to cover the landlord 's claim of arrears. The High Court, however, vacated the appellate judgment and restored that of the trial court holding that the loan amount by the tenant was in violation of the prohibition contained in section 3 of the Bihar Act and the tenant was in arrears of rent and liable to be evicted. This Court set aside the judgment of the High Court by saying: "The view taken by the High Court is unsus tainable inasmuch as the High Court has lost sight of the fact that the parties to the contract were unequal. The tenant was acting under compulsion of circumstances and was obliged to succumb to the will of the land lord, who was in a dominating position. If the tenant had not agreed to advance the loan he would not have been able to secure the tenan cy. " The Court referred to the doctrine of pari delicto and held that the same was not applicable against the tenant. In M/s. Sarwan Kumar Onkar Nath vs Subhas Kumar Agarwalla, 730 ; , Salimuddin 's case came for consideration. This was also a dispute under the Bihar Act where two months ' rent had been paid in advance by the tenant to the landlord on the stipulation that the advance amount would be liable to be adjusted towards arrears of rent, whenever necessary or required. The Court held that the tenant could not be evicted on the ground of default in the payment of rent for two months even if the tenant failed to ask the landlord to make adjustment of the advance amount in the absence of any agreement requiring the tenant to inform the landlord as to when such adjustment is to be made. This Court said that when the Rent Act prohibited the landlord to claim such advance payment, the tenant could not be consid ered to be a defaulter and the doctrine of pari delicto was not attracted to such a fact situation. Mr. Rao building upon the ratio of these two decisions rightly contended before us that when the landlord had Rs.5,000 on tenant 's account with him which he was holding for years without paying interest and against the clear statutory bar, there could be no justification for granting a decree of eviction on the plea of arrears of rent. In view of the fact that the stipulation that the amount would be refundable at the end of the tenancy is null and void under section 7(3) of the Act, the amount became payable to the tenant immediately and the landlord with Rs.5,000 of the tenant with him could not contend that the tenant was in default for a smaller amount by not paying the rent for some months. The second contention advanced before us is equally weighty. The lease being for a term of 30 years is to expire in September, 1999. As we have already said, the lease did not stipulate a forfeiture clause and in the absence of a forfeiture clause in the lease leading to termination by forfeiture, the contractual tenancy was subsisting under the provisions of the Transfer of Property Act and there could not be any eviction from such a tenancy. We are somewhat surprised to find that these irresisti ble defences were not advanced in the Courts below and the course of the litigation was confined to a consideration of section 34 of the Evidence Act. The appeal is allowed, the concurrent decision of all the three Courts below directing the tenant to be evicted are set aside and the application for eviction is dismissed with costs throughout. Hearing fee in this Court is assessed at Rs.3,000. P.S.S. Appeal allowed. [/INST]The proviso to section 7(2)(a) of the Andhra Pradesh Build ings (Lease, Rent and Eviction) Control Act, 1960 prohibits payment of any sum exceeding one month 's rent by way of advance, clause (b) thereto makes any such sum refundable or at the option of the tenant otherwise adjustable, and sub section (3) declares the stipulation for payment of rent in advance beyond that of one month as null and void. The appellant tenant took the demised premises on a thirty year lease beginning from September 9, 1969 and paid a large amount as advance, only a part of which was adjust able towards the stipulated rent in the subsequent months and the balance was to be paid back under a valid receipt after the expiry of the lease period. The lease deed did not have a forfeiture clause. The respondent land lord initiated action for eviction in October 1973 on the plea that the tenant had failed to pay rent for a certain subsequent period. The tenant advanced the plea of payment. The land lord placed the account books of the appellant and claimed the benefit of section 34 of the Evidence Act. All the courts below found that the payment as claimed had not been estab lished. In this appeal by special leave, it was contended that the balance of advance which lay in the hands of the re spondent landlord was either refundable to the tenant or adjustable against rent under section 7 of the Act, and if out of that sum the arrears were available to be adjusted the tenant was not at all in default; that the lease of 1969 being for a term of thirty years certain, eviction could not be claimed against a contractual tenant during the subsist ence of the lease, and that the lease did not have a forfei ture clause so as to bring the matter within the ambit of section 111(g) of the Transfer of Property Act. 726 Allowing the appeal by special leave, HELD: 1. The stipulation in the lease deed that the amount of advance would be refundable at the end of the tenancy was null and void under section 7(3) of the Act. The said amount became payable to the tenant immediately. It was thus held by the landlord on account of the tenant on the date of filing of the petition for eviction. The tenant could not, therefore, be considered a defaulter for a smaller amount by not paying the rent for some months. [730D, 729BC, 730E] Mohd. Salimuddin vs Misri Lal & Anr., ; and M/s. Sarwan Kumar Onkar Nath vs Subhas Kumar Agarwalla, ; referred to. The lease being for a term of thirty years was to expire in September, 1999. The deed did not stipulate a forfeiture clause. In the absence of such a clause the contractual tenancy was subsisting under the provisions of the Transfer of Property Act. There could not, therefore, be any eviction from such a tenancy. [730F] </s>
<s>[INST] Summarize the judgementvil Appeals Nos. 89 93 of 1964. Appeals by special leave from the judgment and orders dated August 30, 1961 and June 13, 1961 in Special Civil Application Nos. 440, 441,509, 510 and 7 of 1961. K.S. Chawla and R.S. Sachthey, for the appellant (in C. As. 89/91 of 1964). 79 C.K. Daphtary, Attorney General, K.S. Chawla and R.N. Sachthey, for the appellant (in C.A. NO. 93/64). N.N. Keshwani, for the respondents in all the appeals. The Judgment of the Court was delivered by Sikri, J. These five appeals by special leave raise a common question of interpretation of r. 19 of the Displaced Persons (Compensation & Rehabilitation) Rules, 1955 (hereinafter referred to as the Rules). It is common ground that nothing turns on any dissimilarity in the facts of each appeal. It will accordingly suffice if facts in Civil Appeal No. 93 of 1964 are set out. The respondent, Lachman Hotchand Kriplani, is a displaced person from West Pakistan. He has three brothers. They owned 731 acres of agricultural land in District Nawabshah, Taluka Nawab Shah, Sind now in Pakistan. The respondent submitted a claim under the Displaced Persons (Claims) Act, 1950 (XLIV of 1950) hereinafter referred to as the Claims Act. The word 'claim ' was defined to mean "assertion of a right to the ownership of, or to any interest in (i) any immovable property in West Pakistan which is situated within an urban area, or (,ii) such class of property in any part of West Pakistan, other than an urban area as may be notified by the Central Government in this behalf in the official gazette". It is common ground that agricultural land in Sind was so notified. The respondent 's claim was that he owned 1/4 share of 731 acres and 14 ghuntas standing in the name, of Fatehehand. The Claim Officer, by order dated October 7, 1952, accepted the claim and assessed his claim as 94 3 standard acres. On July 2, 1955, the respondent applied for compensation under the (XLIV Of 1954) hereinafter referred to as the Compensation Act. In the application he stated that he was not a member of a Joint Hindu Family in Pakistan, but his claim was as a co sharer alongwith three others, who had filed separate claims. The Assistant Settlement Commissioner was, however, not satisfied with this assertion and after holding an enquiry, by order dated March 3, 1960, he held that the four alleged co sharers were members of a Joint Hindu Family, and the whole agricultural land claim was to be treated as joint property. On August 29, 1960, a statement of account was issued to the respondent. This statement showed that his claim was assessed as Rs. 10,701/ gross compensation. This figure was arrived at, as stated in the affidavit of the Assistant Settlement Commissioner, thus: "The claim was assessed for 376 standard acres and 12 units out of which the petitioner had 1/4th share. The compensation on 376 Standard Acres and 12 Units works out to 108 Standard Acres 0 3/10 Units as per 80 scale indicated in Rule 51. This converted in terms of money as per Rule 56 comes to Rs. 42,806/ The petitioner 's 1/4th share would be Rs. 10,701/ ". The respondent then on October 28, 1960, served a notice on the Regional Settlement Commissioner calling upon him to rectify the statement of account, failing which he will be constrained to move the High Court under articles 226 and 227 of the Constitution. In this notice he claimed that r. 20 applied to his case; in the alternative he asserted that at least r. 19 should be applied to him. In reply, the Assistant Settlement Commissioner informed him that the calculation had been done correctly. Thereupon, he filed a petition under articles 226 and 227, in the Bombay High Court. The High Court allowed the petition and set aside the statement of account furnished to the petitioner on August 29, 1960, and directed that the respondent shall give the benefit of r. 19 and determine the amount of compensation payable to him in accordance with the provisions of rr. 19, 51 and 56 and other rules of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955. The appellant having obtained special leave, the appeals are now before us. We may mention at the outset that in the High Court the respondent 's counsel did not challenge the finding of the Assistant Settlement Commissioner that the respondent and his brothers were members of a joint family. The High Court came to the conclusion that r. 19 applied to agricultural land. It found nothing in the scheme of the Rules, or in the language of r. 19, to support the claim of the Department that r. 19 applied only to nonagricultural land. The learned Attorney General, on behalf of the appellant, challenges the conclusion of the High Court. He has taken us through various sections of the Compensation Act of 1954 and various rules to substantiate his contention. Let us then look at the Compensation Act and the Rules. The Compensation Act was enacted to provide for payment of compensation and rehabilitation grant to displaced persons and for matters connected therewith. 'Verified claim" is defined to mean, inter alia, a claim registered under the Displaced Persons (Claims) Act (XLIV of 1950). It is not disputed that the claim of the respondent verified by order dated October 7, 1952, is a verified claim. Section 4 provides for an application for the payment of compensation in the prescribed form to be made by a displaced person having a verified claim within a certain period. Section 5 provides that on receipt of an application under section 4, the Settlement Officer shall determine the amount of public dues, if any, recoverable from the applicant and shall forward the application and the record to the Settlement Commissioner. It will be noticed that a verified claim registered under the Claim Act, 1950, includes claims to urban as well as certain agricultural land. Therefore, both sections 4 and 81 5 apply to such agricultural land as has been made the subjectmatter of claim and verification under the Claims Act of 1950. Section 6 was referred to by the learned Attorney General but we have not been able to appreciate how it advances his case. Section 6 gives relief to certain banking companies in this way. If a banking company held a mortgage of an immovable property belonging to a displaced person in west Pakistan, and that mortgage was subsisting at the date when the claim of the banking company was registered under the Claim Act, 1950, and the displaced person is entitled to receive compensation in respect of any such property, the banking company was entitled to various reliefs, the appropriate relief depending on whether the compensation to the displaced person is payable (1) in cash or (2) in the form of transfer of any property, or (3) in any other form. In this section immovable property would include agricultural land and it cannot be denied that the respondent is entitled to compensation at least in one of the three forms mentioned in sub. section (2). Section 7(1).directs the Settlement Commissioner on receipt of the application trader section 5 to ascertain the amount of compensation having due regard to the nature of the verified claim and other circumstances of the case. Section 7(2) provides for the deduction of certain dues and the Settlement Commissioner then makes an order under section 7(3) ascertaining the net amount of compensation. Section 8 provides the form and manner of payment of compensation of the net compensation determined under section 7(3) as being payable to a displaced person. Subject to any rules that may be made, the net compensation is payable in cash, in government bonds, or by sale to the displaced person of any property from the compensation pool and setting off the purchase money against the compensation payable to him, etc. Section 8(2) enables rules to be made by the Central Government on various matters, inter alia, the scales according to which, the form and the manner in which and the installments by which compensation may be paid to different classes of displaced persons. Section 40 enables rules to be made to carry out by the purposes of the Compensation Act. It is not necessary to refer to other sections of the Compensation Act. Before we deal with the 1955 Rules, it is apparent that sections 4, 5, 6, 7 and 8 do not in any manner distinguish between urban land and agricultural land as long as the agricultural land is the subject matter of a verified claim. If a person holding a verified claim in respect of agricultural land owes.public dues and "public dues" is defined very widely in section 2(d) to include all kind of loans not only from the Central Government but from a State Government also this has to be deducted under section 7(3). It is suggested that the expression "net amount of compensation" in section 7(3) means only cash compensation but we are unable to limit the expression thus in view of the scheme of sections 4 to 8. 82 The Central Government in exercise of the power conferred by section 40 of the Compensation Act made the Displaced Persons (Compensation and Rehabilitation) Rules, 1955. Chapter I contains various definitions; Chapter II deals with procedure for submission of compensation application and determination of public dues. Rule 3 enables a displaced person having a verified claim to make an application for compensation. Rule 4 deals with the form of application and Appendix I is the form prescribed, and Appendix II is the questionnaire which has to be answered. One question is important for our purpose. Under the heading "11. Particulars of claims under Displaced Persons Claims Act, 1950" is mentioned: "(a) agricultural land, index no; Village/Tehsil/District; value assessed in standard acres; cosharers in each property with respective shares; if any property is mortgaged state mortgage money and name of the mortgagees". The rest of the rules, upto r. 9, in this Chapter deal with the scrutiny of the application and the determination of public dues. It is only necessary to notice r. 6(2) which requires a Settlement Officer to send a duplicate copy of the application to the Office of the Chief Settlement Commissioner for verification of the assessed value of the claim in respect of which the application has been made. Under r. 10 the Settlement Officer is required to pass an order and send a copy of the order and the original application along with the records of the case to the Regional Settlement Commissioner. It will be seen that Chapter II does not distinguish between verified claims relating to urban property and rural property. Then we come to Chapter III which contains r. 11. Under this rule the settlement Commissioner deals with the duplicate copy sent to him under r. 6(2). He verities the assessed value of the claim, as stated in the application, with the final order in respect thereof, in the claims record and returns the duplicate copy to the Regional Settlement Commissioner with such remarks as may be relevant for the determination of the amount of compensation. Chapter IV deals with determination of compensation. It will be remembered that section 5 of the Compensation Act requires the Settlement Officer to determine the amount of public dues and forward the application and the record of the case to the Settlement Commissioner, and r. 11, which we have just noticed, requires the Settlement Commissioner (Headquarters) to send the duplicate copy to the Regional Settlement Commissioner. Rule 12 directs the Regional Settlement Commissioner to consolidate all these papers. Rule 12 obviously applies to application in respect of verified claims to agricultural land. As we have already said, section 5 and r. 11 applied to such verified claims. Rule 13 deals with determination of certain dues to banking companies under section 6 and any unsecured debt payable by an applicant in respect of which a communication has been received from any Tribunal under section 52 of the Displaced Persons (Debt Adjustment) Act, 1951 (LXX of 1951). Rule 14 directs that the public dues and the amounts referred to in Rule 13 83 shall be deducted from the amount of compensation in a certain order of priority. Rule 15 reads as follows: "Determination of net compensation; After deducting the amount referred to in rule 14, the Regional Settlement Commissioner or an Assistant Settlement Commissioner or a Settlement Officer, or an Assistant Settlement Officer, having jurisdiction and duly authorised by the Regional Settlement Commissioner, shall pass an order determining the net amount of compensation payable to the applicant in respect of his verified claim and shall prepare a summary in the form specified in Appendix VII (Abstract of particulars). It is significant that Appendix Vii has a column for agricultural land and a column for remarks regarding application of r. 19. Pausing here, it is difficult to hold that rr. 12, 13 and 14 do not apply to applications for compensation in respect of agricultural lands which are the subject matter of a verified claim. There fore, we must reject the contention that Chapter IV, in which r. 19 occurs, does not deal with agricultural lands at all. It may be conceded that r. 16 does not apply to agricultural lands. The scale compensation in respect of agricultural lands which are the subject matter of a verified claim is expressly dealt with else where. Rule 51 which provides that the scale of allotment of land as compensation in respect of a verified claim for agricultural land shall be the same as in quasi permanent land allotment scheme in the State of Punjab and Patiala, and the East Punjab States Union, as set out in Appendix XIV. The explanation further provides that if any public dues are recoverable the allocable area shall be reduced correspondingly. Rule 49 read with r. 56 enables the compensation due on the verified claim for agricultural land to be converted into cash if a person wishes to have his claim satisfied against property other than agricultural land. Rule 18 expressly excludes agricultural land from its purview. What emerges from a consideration of these rules in Chapter IV is that we must consider each rule and see whether it has application to a claim for compensation in respect of agricultural land. Rule 19 reads thus: "Special Provision for payment of compensation to Joint families Where a claim relates to properties left by the members of an undivided Hindu family in West Pakistan thereinafter referred to as the joint family) compensation shall be computed in the manner hereinafter provided in this rule. (2) where on the 26th Sept. 1955 (hereinafter referred to as the relevant date) the joint family consisted of: (a) two or three members entitled to claim partition, 84 the compensation payable to such family shall be computed by dividing the verified claim into two equal shares and calculating the compensation separately on each such share, (b) four or more members entitled to claim partition, the compensation payable to such family shall be computed by dividing the verified claim into three equal shares and calculating the compensation separately on each such share. (3) For the purpose of calculating the number of the member of a joint family under sub rule (2), a person who on the relevant date: (a) was less than 18 years of age, (b) was a lenial descendant in the main line of another living member of joint Hindu family entitled to claim partition shall be excluded: Provided that where a member of a joint family has died during the period commencing on the 14th August 1947 and ending on the relevant date leaving behind on the relevant date all or any of the following heirs namely: (a) a widow or widows, (b) a son or sons (whatever the age of such son or sons) but no lenial ascendant in the main line, then all such heirs shall, notwithstanding anything contained in this rule, be reckoned as one member of the joint Hindu family. Explanation For the purpose of this rule, the question whether a family is joint or separate shall be determined with reference to the status of the family on the 14th day of August, 1947 and every member of a joint family shall be deemed to be joint notwithstanding the fact that he had separated from the family after the date". The heading "Special Provision for payment of compensation to joint families" is general. So is sub rule (1). The word properties ' is general and would include agricultural land. That this is the meaning is also borne out if we consider the word "claim". The word "claim" must have reference to the claim in the application to be made under section 4 read with rr. 3 and 4, and as we have already noticed, the application would include a claim in respect of agricultural land if it is the subject matter of a verified claim. The learned Attorney General has not been able to point to any principle of construction which would enable us to limit the scope of the general words in r. 19(1). His main argument that no rule in Chapter IV applies to claims in respect of agricultural land we have already rejected. 85 The learned Attorney General then urges that the scheme of the Rules is to provide in separate chapters for compensation in respect of various classes of properties, and he says that Chapter VIII provides for compensation in respect of verified claim for agricultural land situated in rural area and the rules contained in the chapter are the only rules that govern the grant of compensation. But none of the rules in this chapter deals with what is t9 happen if the agricultural land was held by a joint family in West Pakistan or if the agricultural land was held by co owners in West Pakistan. Even if a Joint Hindu Family is treated as a unit for some purposes in some laws, co owners are very rarely treated as a unit and it would require express language to treat co owners as a unit an.d award compensation to them as a unit. However, r. 20 recognises the general rule and provides that where a claim relates to property left in West Pakistan, which is owned by more than one claimant as co owners, the unit for the assessment of compensation shall be the share of each co owner and the compensation shall be payable in respect of each such share as if a claim in respect thereof has been filed and verified separately. The learned Attorney General, when asked, said that even r. 20 ' would not apply to a claim in respect of agricultural land, but we are unable to accede to this contention. It would be the height of ' inequity to hold this. In other words, rr. 19 and 20 enable the authorities to determine the unit for assessment of compensation. This subject is not dealt with in Chapter VIII, which deals with how the unit, be it an individual, a member of Joint Hindu Family or a co owner, is to be compensated. There is nothing in Chapter VIII which modifies or overrides rr. 19 and 20. Accordingly, in agreement with the High Court, we hold that r. 19 will apply to the claim of the respondent in respect of agricultural land left by him as a member of the Joint Hindu Family. In the result, the appeal fails and is dismissed with costs. As stated in the beginning, it is common ground that if this appeal fails the other appeals must also fail. They are accordingly dismissed with costs. There will be one hearing fee in them. Appeals dismissed. [/INST]The respondent who had a "verified claim" applied for compensation under the . He alleged that he was a co sharer along with his brothers in agricultural property in West Pakistan and claimed his share of the compensation. The Assistant Settlement Officer held that the alleged co sharers were members of a joint Hindu family and that t.he agricultural property was joint property. He then calculated the compensation on the joint property as per rr. 51 and 56 of the Displaced Persons (Compensation and Rehabilitation) Rules 1955. The respondent thereupon filed a petition in the High Court under articles 226 and 227 of the Constitution contending that on the finding that the respondent and his brothers constituted a joint family, the unit for assessment of compensation should first be determined according to r. 19, which makes special provision for payment of compensation to joint families, before compensation was calculated. The High Court allowed the petition. In the appeal to this Court it was contended that r. 19 was inapplicable as that rule does not apply to agricultural land. HELD: The High Court was right in holding that the rule applied to the claim of the respondent in respect of the agricultural land. Chapter IV of the Rules in which r.19 occurs contains some rules which apply to applications for compensation in respect of agricultural lands also. Therefore it cannot be said that the Chapter does not deal with agricultural lands at all. Each rule must be considered to see whether it has application to a claim for compensation in respect of agricultural land. So considered, there is no principle of construction by which the scope of the general words in r. 19 could be limited, so as not to apply to agricultural land. Chapter VIII of the Rules provides for compensation in respect of verified claims for agricultural lands in rural areas and only deals with how a unit that has been determined is to be compensated. There is nothing in that Chapter which modifies or overrides r.19 which enables the authorities to determine the unit for assessment of compensation in the case of joint families. [83 D E; 85 A F] </s>
<s>[INST] Summarize the judgementCivil Appeal No. 23 of 1958. Appeal by special leave from the decision dated September 29, 1956, of the Labour Appellate Tribunal, Bombay, in Appeal (Mad.) No. 96 of 1956, arising out of the Award dated April 9, 1956, of the Industrial Tribunal., Madras, in I.D. No. 52 of 1954. A. V. Viswanatha Sastri, and Naunit Lal, for the appellants. T. section Venkataraman and M. K. Ramamurth, for the respondents. February, 22. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. The appellant, the Tinnevelli Tuticorin Electric Supply Co., Ltd., Tuticorin, is an electric supply undertaking, and it carries on its business as a licensee under the State Government of 70 Madras subject to the provisions of the (Act 9 of 1910) and the Electric Supply Act, 1948 (Act 54 of 1948). This latter Act will hereinafter be called the Act. The business of the appellant consists of buying electric supply from the State Hydro electric Projects and of supplying the same to consumers within the areas specified in its licence; this area is in and around Tinnevelli and Tuticorin Municipalities. The appellant 's workmen (hereinafter called the respondents) made several demands in respect of their terms of employment. These demands gave rise to an industrial dispute which was referred by the Madras Government to the Industrial Tribunal at Madurai for adjudication under section 10(1)(c) of the (XIV of 1947). Amongst the items thus referred for adjudication was included the respondents ' claim for additional bonus for the year 1952 53. Without prejudice to its contention that the appellant was not liable to pay bonus it had in fact voluntarily paid two months ' basic wages by way of bonus to the respondents. The respondents, however, claimed additional bonus and this claim was one of the items of dispute referred to the tribunal for its adjudication. Before the industrial tribunal the appellant contended that since it was working as a licensee under the Act no claim for bonus was admissible outside the provisions of the Act. In support of this plea the appellant relied on the scheme of the Act which restricted the profit making of the electricity concerns to a prescribed limit with a possibility of a surplus only in cases of overcharging provided for in the rules. The appellant 's case was that, having regard to the scheme, object and the background of the Act under which the appellant was carrying on its busi ness, the respondent 's claim for additional bonus was wholly misconceived. No claim for bonus can be entertained, it was urged on behalf of the appellant, without reference to the provisions of the Act which governs the business of the appellant. The tribunal, however, rejected the appellant 's contentions and held that the appellant was liable to pay two months ' basic wages as additional bonus to 71 the respondents. This award was passed on March 4, 1955. Against this award the appellant preferred an appeal, No. 56 of 1955, to the Labour Appellate Tribunal, and contended that no additional bonus should have been awarded in the absence of proof of an excess of "clear profits over reasonable return" ; it was the appellant 's case that it was only from excess of clear profits over reasonable return as defined by the Act that bonus can be legitimately awarded to the respondents. It appears that about this time a number of appeals raising the same question were pending before the Labour Appellate Tribunal, and decisions given by the Labour Appellate Tribunal showed divergence of opinion on the question about the effect of the Act in respect of the claim for bonus made by employees of electricity concerns and undertakings. That is why the Chairman of the Labour Appellate Tribunal issued an administrative order that all appeals which raised the said question should be grouped together and posted for hearing before a specially constituted fuller bench of five members. The Chairman thought that a decision by a fuller bench would finally resolve the apparent conflict disclosed in several decisions pronounced thereto, and give proper guidance to the tribunals in future. The special bench of the appellate tribunal then heard the group of appeals including the appeal preferred by the appellant. It held that bonus could be ordered to be paid notwithstanding the limitations of the Act, and that the quantum of bonus should be determined even in the case of electricity concerns or undertakings by the application of the Full Bench formula laid down in that behalf. Having decided the question of law in this manner, the appeals were remanded to the respective benches of the Labour Appellate Tribunal for disposal in accordance with law. The appeal preferred by the appellant was in due course taken up by the Industrial Tribunal at Madras the Industrial Tribunal at Madurai having been in the meanwhile abolished and the appeals on its file transferred to the Industrial Tribunal at Madras. This latter tribunal considered the merits 72 of the contentions raised by the parties, applied the Full Bench formula, and ultimately passed an award on April 9, 1956, directing the appellant to pay 'an additional bonus of two months ' basic wages to the respondents. Thereupon the appellant preferred another appeal to the Labour Appellate Tribunal, and it was numbered as Appeal (Madras) No. 96 of 1956. Certain contentions were raised before the appellate tribunal on the merits, and it was urged that the direction to pay an additional bonus of two months basic wages was improper and unjustified. The appellate tribunal negatived most of the contentions raised by the appellant, but it was satisfied that the calculation made by the tribunal in regard to the quantum of available surplus was erroneous, and so, after rectifying the said error, it held that the additional bonus which the appellant should pay to the respondents was one month 's basic wage. It is against this decision of the appellate tribunal that the present appeal by special leave has been filed by the appellant before this Court. The main question which the appeal raises for our decision is whether the fuller bench of the Labour Appellate Tribunal was justified in holding that the Full Bench formula can and should be applied in adjudicating upon the respondents ' claim for bonus against the appellant. Incidentally, we may point out that the fuller bench of the Labour Appellate Tribunal in the case of U. P. Electricity Supply Co. Ltd. & Ors. vs Their Workmen (1) has decided two questions of law. The first was in regard to the applicability of the Full Bench formula to the employees ' claim for bonus against their employers carrying on the business of the supply of electricity, and the second was in regard to the extent of the statutory depreciation allowed by the Full Bench formula. The question was whether it should not include initial depreciation and additional depreciation which are given for the purpose of allowing relief in the matter of taxation under section 10(2) (vi b) of the Income tax Act. The fuller bench had decided that in allowing a prior charge in the (1) 73 working of the formula it is only the normal incometax depreciation (including multiple shift depreciation) that should be allowed. The correctness of this latter decision was challenged before this Court in Sree Meenakshi Mills Ltd. vs Their Workmen (1) but the challenge failed and the decision of the fuller bench was confirmed. In the present appeal it is the correctness of the fuller bench decision on the first question which is challenged before us. Let us being by stating briefly the appellant 's contention. It is urged on behalf of the appellant that it is only where the " clear profits " are in 'excess of the " reasonable return " under the Act that a case for the payment of bonus can really arise in regard to the electricity concerns and undertakings. The Act is a self contained code intended to regulate the business and affairs of electricity concerns including the claim of their employees for bonus, and as such an industrial dispute between such concerns and their employees in regard to bonus must be determined solely by reference to the provisions of the Act and and not by the application of the Full Bench formula. As to the quantum of bonus which should be awarded it would depend upon the circumstances in each case; but it is urged that it may as an ad hoe measure be decided that 1/4th of the excess between clear profits and the reasonable return may be taken as a fair quantum of bonus which electricity concerns should be ordered to pay to their employees. Before dealing with the validity of this argument it is necessary to examine the scheme of the Act. Let us first consider some of the provisions in the 9 of 1910 which may be relevant. Section 3(2)(d)(i) provides that the State Government may, on an application made in the prescribed form, and on payment of the prescribed fee (if any), grant, after consulting the State Electricity Board, a licence to any person, and that the said licence may prescribe such terms as to the limits within which and conditions under which, the supply ,of energy is to be compulsory or permissive, and generally as to such matters as the State Govern (1) 74 ment may think fit. Section 3(f) provides that the provisions contained in the Schedule shall be deemed to be Incorporated with, and to form part of, every licence granted under this Part, except as in the manner therein described. Section 4(1)(b) empowers the State Government inter alia to revoke the licence where the licensee breaks any of the terms or the conditions of his licence the breach of which is expressly declared by such licence to render it liable to revocation. Section 7(1) provides to the authorities specified in it option to purchase the undertaking. Section 11 requires the licensee to prepare and render to the State Government or to such authority as the State Government may appoint in that behalf, on or before the prescribed date in each year an annual statement of account of his undertaking made up to such date, in such form and containing such particulars, as may be prescribed in that behalf. Section 22 imposes on the licensee obligation to supply energy subject to the conditions prescribed ; and section 23 provides that a licensee shall not, in making any agreement for the supply of energy, show undue preference to any person. The licensee cannot also charge for such supply any rates higher than those permitted. The appropriate Government is authorised to fix the maximum charges, and by appropriate rules both the maximum and minimum charges have been prescribed. These are the relevant provisions of Act 9 of 1910. Let us now refer to some of the relevant provisions of the Act. Section 57 provides the licensee 's charges to consumers. According to it the provisions of the Sixth Schedule and the Seventh Schedule shall be deemed to be incorporated in the licence of every licensee, not being a local authority, in the manner specified by it. This section further provides inter alia that as from the specified date the licensee shall comply with the provisions of the said Schedules and not provisions of Act 9 of 1910, and the licence granted to him thereunder and of any other law, agreement or instrument applicable to the licensee shall, in relation to the licence, be void and of no effect in so far as they are inconsistent with the 75 provisions of section 57A and the said Schedules. Section 57 deals with the licensee 's charges to the consumers and lays down provisions which shall have effect in relation to the licence 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 said licence. These provisions relate to the appointment of the Board and the rating committee. Section 57A prescribes the principles and the procedure which has to be followed by the rating committee in making its report to the State Government regarding the charges for electricity which the licensee may make to any class or classes of consumers. This provision gives us an idea as to the object which the Legislature had in mind in ultimately fixing the minimum and maximum rates chargeable to the consumers. Sections 78 and 79 provide for power to make rules and regulations. Nine Schedules are attached to the Act. Schedule Six deals with the financial principles and their application; Schedule Seven deals with the depreciation of assets; Schedule Eight provides for the determination of cost of production of electricity at generating stations; and schedule Nine prescribes the method for allocation of costs of production at generating stations. It is necessary at this stage to refer briefly to some of the provisions contained in the Sixth Schedule, because Mr. Viswanatha Sastri, for the appellant, has relied on the scheme of the said Schedule in support of his principal argument. These provisions prescribe the financial principles which have to be followed by the electricity concerns and undertakings covered by the Act. It is urged by the appellant that these principles along with the rest of the Schedules and the provisions of the Act constitute a self contained code which govern the business and the financial affairs of electricity concerns, and as such even the claim of the appellant 's employees for bonus must be dealt with in the light of these provisions. Paragraph 1 of Sixth Schedule provides: " 1. Notwithstanding anything contained in the (9 of 1910) (except sub section (2) of section 22A), and the provisions In the 76 licence of a licensee, the licensee shall so adjust his rates for the sale of electricity whether by enhancing or reducing them that his clear profits in any year of account shall not, as far as possible, exceed the amount of reasonable return;". This provision is made subject to four provisos which it is unnecessary to mention. Paragraph 2 reads thus: " II. (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 Dividend 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. " Paragraph 3 provides for the creation from existing reserve or from the revenue of the undertaking a reserve to be called Contingencies Reserve. Paragraph 4 prescribes the manner in which the licensee shall appropriate to Contingencies Reserve from the revenues of each year of account. Paragraph 6 directs that there shall be allowed in each year in respect of depreciation of fixed assets employed in the business of electricity supply such an amount as would if set aside annually throughout the prescribed period and accumulated at compound interest at 4 per 77 cent. per anum, produce by the end of the prescribed period amount equal to 90 per cent. of the original cost of the asset after taking into account the sums already written off or set aside in the books of the undertaking; annual interest on the accumulated balance will be allowed as expense from revenue as well as the annual incremental deposit. Paragraph 7 deals with assets which have ceased to be avilable for use through obsolescence, inadequacy, superfluity or for any other reason, and it allows the licensee to describe the said assets as no longer in use, and no further depreciation in respect thereof shall be allowed as a charge against the revenue. Paragraph 8 prohi bits any further depreciation where an asset has been written down in the books of the undertaking to 10 per cent. or less of its original cost. Under paragraph 9, where a fixed asset is sold for a price exceeding its written down cost, the excess has to be credited to the Contingencies Reserve. Paragraph 10 requires the consent of the State Government to carry sums to a reserve or to declare a dividend in excess of 3 per cent. on share capital or other matters specified therein. Paragraph 13 imposes limitations in respect of ordinary remunerations of managing agents; whereas paragraph 14 provides that the Board of Directors shall not contain more than 10 directors; and paragraph 15 prescribes the way in which the licensee can make any capital expenditure which exceeds Rs. 25,000 or 2 per cent. of the capital base within three years before the next option of purchase under the licence arises. Paragraph 16 contains an arbitration clause. Paragraph 17 gives definitions for the purpose of this Schedule. Capital base is defined by paragraph 17(1); clear profit is defined by paragraph 17(2) as meaning the difference between the amount of income and the sum of expenditure plus specific appropriations made up in each case as prescribed in several sub clauses of clauses (a), (b) and (c). It is necessary to refer to two sub clauses under clause (b) : " (xi) other expenses admissible under the law for the time being in force in the assessment of, Indian Income tax and arising from and ancillary or incidental to the business of electricity supply; 78 (xii) contributions to Provident Fund, staff pension, gratuity and apprentice and other training schemes. " Paragraph 17(9) defines a reasonable return as meaning : " in respect of any year of account, the sum of the following: (a) the amount found by applying the standard rate to the capital base at the end of that year; (b) the income derived from invesments than those made under paragraph IV of this Schedule; (c) an amount equal to one half of one per centum on any loans advanced by the Board under subparagraph (2) of paragraph I of the First Schedule. " One of the points which we have to decide in the present appeal is whether an amount of bonus paid by the employer to his employees is included under paragraph 17 (2) (b)(xi) of the Sixth Schdule. It would thus be clear that the provisions of the Act in general and those of the Sixth Schedule in particular, are no doubt intended to control and regulate the rates chargeable to consumers and to provide the method and the machinery by which the electrical system of the country could be properly coordinated and integrated. The rates chargeable are fixed, so is a reasonable return provided for. But it is not as if the Act intends to guarantee a minimum return to the undertaking. What it purports to do is to prohibit a return higher than the one specified. Appropriations permissible under revenue receipts are also defined and enumerated and a clear profit as contemplated by the Act is also prescribed and defined. Large powers have been given to the Electricity Authority, Boards and Councils for the purpose of canalising the activities of the concerns as well as for adjusting their activities for changing conditions and circumstances. Just as the Act has made provision for the control of rates chargeable to consumers its policy also is to give a fair deal to the undertaking and persons engaged in the business of supplying electricity. 'It is with this twin object that a working sheet is required to be prepared under the provisions of the Act. It is, however, clear that the working sheet thus prescribed is essentially 79 different from the balance sheet and profit and loss account which companies keep under the provisions of the Companies Act. The determination of clear profits on the basis of the working sheet ::proceeds on the consideration of previous losses, contributions towards the arrears of depreciation and several appropriations authorised by the State Government, matters which have no relevance to commercial accounting. The principles of commercial accounting on which the balance, sheets are prepared and profit and loss account made are very different from the principles on which the working sheet as specified in the Act is required to be prepared. The question which arises for our decision is whether the appellant is right in contending that the present dispute arising from the respondents ' claim for bonus must be decided by the provisions of the Act alone and that the Full Bench formula is wholly inapplicable for the purpose. In dealing with this contention it is necessary to bear in mind that the fields covered by the Full Bench formula and by the provisions of the Act are entirely different. The Full Bench formula has been evolved by industrial adjudication for the purpose of doing social justice to workmen and it is. now well established that the workmen 's claim for bonus is justified on the ground that they contribute to the employer 's profit and are entitled to claim a share in the said profit with a view to fill the gap between their actual wages and the living wage which they aspire to earn. On the other hand, the Act does not purport to deal with this problem at all. It is significant that though the Act makes detailed provisions in respect of matters intended to be covered by it, it does not refer to the wages which the employer may have to pay to his employees. Can it be said that in fixing the wage. structure as between an electricity undertaking and its employees considerations of social justice would be irrelevant? In fixing such wage structure none of the provisions of the Act can afford the slightest assistance to industrial tribunals. That task must be attempted by the tribunals in the light of principles of social justice and other relevant considerations such as the capacity of the employer to pay and the wages 80 received by employees in comparable trades in the same region. Just as the problem of wage structure has to be solved in the case of electricity concerns apart from the provisions of the Act and in the light of the relevant industrial principles, so must the problem of bonus be resolved in the like manner. There is really no conflict between the Act and the principles of industrial adjudication. In fact they cover different fields and their relevance and validity is beyond question in their respective fields. As we have just indicated the method of accounting required by the Act in preparing the working sheet is substantially different from the commercial method of accounting which yields the gross profits in the form of profit and loss account. Determination of gross profit is the first step which industrial tribunals take in applying the Full Bench formula. Such gross profit cannot be ascertained from the working sheet prepared under the Act. It is not denied that the appellant has to keep accounts under the Companies Act on a commercial basis. That being so, in dealing with the respondents claim for bonus, it is the balance sheet and the profit and loss account , prepared by the appellant that must be taken as the basis in the present proceedings, and that is precisely what the tribunals below have done. Therefore, we are satisfied that the Labour Appellate Tribunal was right in coming to the conclusion that the respondents ' claim for bonus must be governed by the application of the Full Bench formula. In this connection it may be useful to refer to the decision of this Court in the case of Baroda Borough Municipality vs Its Workmen (1). One of the points raised on behalf of the Baroda Borough Municipality in resisting the claim for bonus by its workmen was that the scheme of the Bombay Municipal Boroughs Act 18 of 1925 by which the Municipality was governed did not permit the making of any claim for bonus : and so it was not open to the, labour court or tribunal to direct payment of bonus to municipal employees. This argument was rejected. "The demand for bonus as an industrial claim ", it was (1) ; 81 observed, "is not dealt with by the Municipal Act; it is dealt with by the . Therefore, it is not a relevant consideration whether there are provisions in the Municipal Act with regard to bonus. The provisions of the Municipal Act are relevant only for the purpose of determining the quality or the nature of the municipal property or fund; those provisions cannot be stretched beyond their limited purpose for defeating a claim of bonus ". That is why this Court came to the conclusion that the absence of provisions in the Municipal Acts for payment of bonus to municipal employees was not a consideration which was either determinative or conclusive of the question at issue before it. The next question which arises is whether a claim for bonus can be said to be included under paragraph 17 (2) (b) (xi). This provision includes under expenditure other expenses admissible under the law for the time being in force in the assessment of Indian Income tax and arising from. and ancillary or incidental to, the business of electricity supply. It is admitted that bonus paid by an employer to his employees constitutes expenses admissible under section 10(2)(vi) of the Income tax Act, but it is urged that it is not an expense which can be said to arise from, and ancillary or incidental to, the business of electricity supply. The argument is that cl. (xi) lays down two tests, one of which is satisfied viz., that it is expense admissible under the lndian Income tax Act, but the other is not satisfied, and so the clause is inapplicable to the amount paid by way of bonus. The appellate tribunal has held that even the other test is satisfied and that the expenditure in question can be said to arise from, or to be ancillary, or incidental to, the business of electricity supply. In our opinion, it is difficult to accept the appellant 's argument that the construction placed by the appellate tribunal on the latter part of this clause is not reasonably possible. Besides, it may be relevant to point out that by a subsequent amendment made in 1957 cl. (xiii) has been added under paragraph 17(2)(b) of the Sixth Schedule. This clause which is numbered (xiii) reads thus: " Bonus paid to the employees it 82 of the undertaking (a) where any dispute regarding such bonus has been referred to any tribunal or other authority under any law for the time being in force, relating to industrial or labour disputes in accordance with the decision of such tribunal or authority ; (b) in any other case, with the approval of the State Government ". After the insertion of this clause there can be no doubt that the amount paid by the employer to his employees by way of bonus would definitely be admissible expenditure under paragraph 17(2)(b). In our opinion, the insertion of this clause can be more reasonably explained on the assumption that the Legislature has thereby clarified its original intention. Even when cl. (xi) was enacted the intention was to include claims of bonus under expenses covered by the said clause, but in order to remove any possible doubt the Legislature thought it better to provide specifically for bonus under a separate category. Otherwise, it is difficult to appreciate how contributions to Provident Fund were treated as admissible expenditure all the time since they were covered by cl. (xii) and bonus could not have been treated as admissible expenditure under cl. That is why we are on the whole prepared to agree with the construction put upon cl. (xi) by the appellate tribunal. If that be the true position then bonus has always been an admissible expenditure under the scheme of the Act, and as such there is no conflict between the scheme of the Act and the claim made by the respondents in the present case. Incidentally, we may add that this point appears to have been conceded by the appellant before the appellate tribunal. We must accordingly hold that the appellate tribunal was right in coming to the conclusion that the Full Bench formula applied in adjudicating upon the respondents ' claim for bonus against the appellant in the present proceedings. As we have already indicated, before the fuller bench reached this decision there was a conflict of opinion in the decisions of the Labour Appellate Tribunals, but in view of our conclusion it is unnecessary to refer to the said earlier decisions. 83 That takes us to the merits of the award. The first point is in regard to the appellant 's claim for rehabilitation. Before the Labour Appellate Tribunal it was fairly conceded by the respondents that at least income tax at seven annas in a rupee on the gross profits less depreciation, and also a contingency reserve of Rs. 6,047 have to be allowed in arriving at the figure of net available surplus for the purpose of bonus payable to the respondents ; and that in regard to normal statutory depreciation the correct figure must be taken to be Rs. 99,038 instead of Rs. 90,393 as given by the industrial tribunal. Then, as to the rehabilitation the appellant has led no evidence at all and so the appellate tribunal refused to grant any sum by way of rehabilitation in addition to the total amount of Rs. 1,13,950. In our opinion, the appellate tribunal was right in holding that the adoption of a factor of 2 7 for all assets purchased before 1945 was not justified, and that the adoption of the figures of the estimated life of the assets from the Schedule to the Electric Supply Act without even deducting the respective portions of the life of the assets which had already expired was equally unjustified. In that view of the matter we do not see how ' the appellant can make any grievance against the finding of the appellate tribunal on the question of rehabilitation. The appellate tribunal has fairly observed that, in future if a dispute arises between the appellant and its employees, the appellant may substantiate its claim for rehabilitation by leading proper evidence. The claim of the appellant for the triple shift allowance in respect of the mains has been allowed by the appellate tribunal and there is no dispute in respect of it; but it is urged that rule 8 of the Incometax Rules justifies the appellant 's claim in respect of all its electric plant and machinery under Entry IIIE (1). Rule 8 provides that the allowance under section 10 (2) (vi) of the Act in respect of depreciation of buildings, machinery, plant or furniture shall be a percentage of the written down value or original cost, as the case may be, equal to one twelfth the number shown in the corresponding entry in the second column of the following statement. There are two 84 provisos to this rule which it is not necessary to set out. The appellant makes a claim under IIIE (1) which deals with electric plant, machinery and boilers, whereas, according to the respondents, the appellant 's case in this behalf falls under IIIC (4) and (5) which respectively deal with underground cables and wires and overhead cables, and wires. The argument for the respondents is that in respect of these items the appellant 's claim is inadmissible. In support of this argument the respondents rely upon the remark against item 3 on page 8 of the Rules. This remark would show that the benefit claimed by the appellant does not apply to an item of machinery or plant specifically excepted by the letters N, E, S, A being shown against it. These letters are the contraction of the expression " No Extra Shift Allowance ". There is no doubt that these letters are to be found against items in IIIC (4) and (5). Therefore, the point which arose for decision before the appellate tribunal was whether the appellant 's claim falls under IIIE (1) or IIIC (4) and (5). The appellate tribunal has observed that the appellant made no attempt to show that any such claim for shift depreciation in respect of its cables and wires had been put forward by it before the income tax authorities, or that it was held to be admissible by them. It has also observed that if the appellant 's case was true that the cables and wires fell under IIIE (1) it was difficult to understand why separate provision should have been made in respect of depreciation of cables and wires under IIIC (4) and (5). Besides, the appellate tribunal was not satisfied that such cables and wires would depreciate in value to a materially greater extent when electrical energy is allowed to pass through them for more than one shift. That is why, on the materials as they were available on the record, the appellate tribunal saw no reason why the appellant should be allowed any extra shift depreciation in respect of underground and overhead cables by way of a prior charge. The appellant 's claim for the provision of Rs. 23,516 in that behalf was ' therefore, rejected. It would thus be seen that the appellant seeks to claim this amount by way of prior charge; 85 and in substance this claim has been rejected by the appellate tribunal on the ground that sufficient material has not been placed before it by the appellant on which the claim could be examined and granted. In such a case we do not see how we can interfere in favour of the appellant. The present decision will not preclude the appellant from making a similar claim in future and justifying it by leading proper evidence. In the result the appeal fails and is dismissed with costs. Appeal dismissed. [/INST]In respect of a dispute between the appellant company and the respondent company which was referred to the arbitration of the Bengal Chamber of Commerce in terms of the arbitration clause contained in the contract entered into on April 6, 1951, an award was made on February 29, 1952, allowing the claim of the appellant. The respondent made an application in the High Court for having the award set aside on the ground, inter alia, that the contract was void under the provisions of the Raw jute (Central jute Board and Miscellaneous Provisions) Act, 1951, inasmuch as it had not been entered into in the manner specified in sections 5, 6 and 7 of the Act as required therein. On December 14, 1950, the Government of West Bengal had promulgated an Ordinance called the Raw jute (Central jute Board and Miscellaneous Provisions) Ordinance, 1950, for the better regulation of the trade, and on December 29,1950, a notification was issued specifying December 30, 1950, as " the appointed day for the purposes of sections 5, 6 and 7 Of the said Ordinance." Subsequently the Ordinance was replaced by the Act which by section 16, provided:. . . any notification issued. . under the Raw Jute (Central jute Board and Miscellaneons Provisions) Ordinance, 1950, shall, on the said Ordinance ceasing to operate, be deemed to have been issued under this Act as if this Act had commenced on the 14th day of December 1950. " It was contended for the appellant that the notification dated December 29, 1950, could not be read as having brought sections 5, 6 and 7 Of the Act into force, because, on a plain reading of it, the notification did not purport to bring any of the sections of the Act into force, but expressly brought sections 5, 6 and 7 of the Ordinance into force and that the said sections of the Act not having been brought into force, the contract in question was valid and, consequently, the award was binding and enforceable. Held, that in order to give full effect to the two legal fictions created in section 16 of the Act that the Act shall be deemed to have commenced on December 14, 195o, and that the notification issued under the Ordinance shall be deemed to have 80 been issued under the Act, the principle of mutatis mutandis has to be adopted and the word " Act " substituted for the word " Ordinance " used in the notification dated December 29, 1950. Consequently, the provisions of sections 5, 6 and 7 Of the Act were applicable to the contract in question. </s>
<s>[INST] Summarize the judgementCivil Appeal No. 185 of 1973. Appeal by special leave from the judgment and order dated the 25th April, 1972 of the Calcutta High Court in Second Appeal being appeal No. 859 of 1969. Sachendra Chowdhary, section K. Dholakia and R. C. Bhatia for the appellant. P. Chatterjee and Rathim Das, for the respondent. The Judgment of the Court was delivered by Goswami, J. In this appeal by special leave directed against the Judgment of the Calcutta High Court the only question that arises for 106 consideration is whether the respondent is a thika tenant under section 2(5) of the Calcutta Thika Tenancy Act 1949. On June 1, 1956, the predecessor in interest of the appellants (the latter, hereinafter to be described as the landlord) gave the land with which we are concerned in this appeal to the respondent (hereinafter to be described as the tenant) for occupation as a tenant on a monthly rent of Rs. 75/ for one year. One of the conditions of the tenancy was that "the premises shall not be used for any purpose other than keeping of the lorries as garage." Another condition of the tenancy was that "the lessee will on the expiration of one year peacefully surrender and yield up vacant possession to the lessor. " on July 29, 1958, the landlord 's advocate sent a notice of eviction to the tenant to vacate and deliver possession of the land on the expire of August 1958. The tenant through his advocate by a letter of August 29, 1958, denied liability for eviction asserting that there was no violation of any terms and conditions of the tenancy and since there was refusal to accept the rent by the landlord the tenant had been depositing the rent every month from March 1958 under the provisions of the Calcutta Thika Tenancy Act 1949 (briefly the Act) by which the tenancy was claimed to be governed. Thereafter a suit was filed by the landlord in the court of the 4th Munsif at Alipore on January 15, 1959. It is not necessary to trace the history of the litigation covering this long period. it is sufficient to state that the High Court by its judgment on April 25, 1972, allowed the tenant 's second appeal holding that he is a thika tenant within the meaning of section 2(5) of the Act. According to the High Court the tenant does not require any consent of the landlord to erect a structure on the land. The result was that the court of Munsif had no jurisdiction to entertain the suit, the matter being within the cognizance of the Controller appointed under the Act: Mr. Sachin Chowdhary appearing on behalf of the appellants fairly and, if we may say so, rightly confined his argument to the principal question of law as set out above Is the tenant a thika tenant under the Act ? If the answer is yes, the landlord is out of court. Before we proceed further we may briefly note that the tenant constructed certain structures on the land prior to the institution of the suit in 1959. Mr. Chowdhary, however, drew our attention to an observation in the judgment of the High Court to the effect that "admittedly the defendant (respondent herein) at his own cost constructed in 1962 structures upon the bare land which he took for the purpose of his business." Since the year of construction had not been particularly agitated in the courts below and there is evidence to show that the construction had commenced from 1957, we are not prepared to give undue importance to this observation about the year of construction mentioned in the judgment. This is particularly so in view of the fact that the tenant through his lawyer in reply to the notice of eviction asserted in August 1958 that 107 "my client has constructed the structures and has done such other things as are needful for the purpose of the keep in lorries and other vehicles in the garages and making of necessary repairs of the same as well as upkeep and main tenance of the same for carrying on his business in transport service ." Further, even so, although there is a reference to this reply of the advocate of August 29, 1958, in para 8 of the plaint, there is no denial of the construction of the structures as asserted in the said reply. Being: faced with this factual position Mr. Chowdhary strenuously contended that under section 2(5) of the Act erection of structures by the tenant must be with the permission of the landlord. In other words, says Mr. Chowdhary the erection should be lawfully done and if the tenant does not establish permission or consent of the landlord in the matter there is no erection in the eye of law within the meaning of section: 2(5) . We will, therefore, read that section. 2(5): " 'thika tenant ' means any person who holds whether under a written lease or otherwise, land under another person, and is or but for a special contract would be liable to pay rent, at a monthly or at any other periodical rate, for that land to that another person and has erected or acquired by purchase or gift any structure on such land for a residential, manufacturing or business purpose and includes the successors in interest of such person, but does not include a person . " As the definition shows (1) a thika tenant must be a person who holds land under another person; (2) it may be under a written lease or otherwise; (3) there is a liability to pay rent to the landlord but for a special contract to the contrary; and (4) he has erected or acquired by purchase or gift any structure on such land for a residential, manufacturing or business purpose. The tenant here fulfils the requisite ingredients of the above definition clause. There is no reference to landlord 's permission or consent for erection of structure by the tenant in the definition clause. Mr. Chowdhary submits that it is implicit in the definition that in order to be lawful erection of structure the tenant must take prior permission from the landlord. Counsel further submits that whatever is silent in the Act should be supplemented by reference to the Transfer of Property 108 Act (briefly the T.P. Act). In this context Mr. Chowdhary draws our attention to section 108(0) of the T.P. Act which may be set. Out: "the lessee may use the property and its products (if any) as a person of ordinary prudence would use them if they were his own; but he must not use, or permit another to use, the property for a purpose other than that for which it was leased, or fell or sell timber, pull down or damage buildings belonging to the lessor or work mines or quarries not open when the lease was granted, or commit any other act which is destructive or permanently injurious thereto." According to Mr. Chowdhary the purpose of the tenancy being that the premises shall not be used for any purpose other than keeping of lorries as garage, construction of structures for the purpose of running a workshop, which is the admitted factual position, would attract section 108(0) of the T.P. Act. He, therefore, submits that the case is squarely governed by the provisions of the Transfer of Property Act and the court of Munsif had jurisdiction to entertain and decree the suit. We may, however, note in passing that one of the grounds on which a thika tenant may be ejected under unmended section 3(ii) is that the tenant has used the land in a manner which renders it unfit for any of the purposes mentioned in clause (5) of section 2 or that he has broken a condition consistent with this Act on breach of which he is under the terms of the contract liable to be ejected. We are unable to agree that the particular condition of the tenancy referred to by Mr. Chowdhary militates against the construction of structures and the use of the land for the purpose of workshop for maintenance of the lorries by the` tenant. Without being too hypertechnical, ordinarily keeping of lorries as garage would connote the concept of construction of some structures for garaging the lorries. The Chambers Dictionary gives the meaning of garage as "the building where motor vehicles are housed or tended. " The Shorter oxford English Dictionary gives the meaning of garage as "a building for the storage or refitting of motor vehicles. " We are, therefore, unable to accept the submission that even on the terms of the tenancy, as pointed out, the tenant has used the land for a purpose other than that for which it was leased to attract the inhibition of section 108(0) of the T.P. Act. We are also unable to accede to the contention that section 2(5) of the Act requires a thika tenant under the law to secure prior permission of the landlord for erection of structures on the land. As the preamble shows the Act is for making better provision relating to the law of landlord and tenant in respect of thika tenancies in Calcutta. it is a piece of beneficial legislative conferring certain rights upon the tenants. In dealing with such provision of law we cannot read into the definition some thing which is not already there and the introduction of which will lead to imposing a restriction upon the rights of this class of tenants by judicial interpretation. This is not permissible in absence of express words to that effect or necessary manifest intendment. Besides, we do not find any vagueness or uncertainty. in the definition clause. The submission is, therefore, of no avail. 109 We are not required to deal with the question whether the structures which stand on the land are permanent or not as this point had not been agitated in the courts below. But we may in passing notice that in view of section 108(p) of the T.P. Act since the lessee must not, without the lessor 's consent, erect on the property any permanent structure, except for agricultural purposes, the State Legislature has by amending the Act by Act No. 29 of 1969 inserted section 10A conferring a right upon a thika tenant to erect a pucca structure for a residential purpose with the previous permission of the Controller. We are, however, not required to consider such a question in this appeal. Mr. Chowdhary also relied upon a contemporaneous letter written by the landlord to the tenant on June 1, 1956, which was found by the courts below to contain interpolation by the tenant with regard to the according of permission to construct structures on the land. We however, do not think that this would have any bearing on our. interpretation of section 2(5) . In the result the appeal fails and is dismissed with costs. P.H.P. Appeal dismissed. [/INST]The petitioner was carrying on business in diesel oil, an essential commodity, in two places. He was detained under section 3(1)(a)(iii) of the , on the basis of allegations in two grounds that as had committed sets prejudicial to the maintenance of supplies and services essential to the community. The allegation in the first ground was that he had stocked a large quantity of light diesel oil in one of the places without waiting for the licence to be cleared by the Chief Controller of Explosives in violation of the provisions of the Petroleum Act. It was also stated in the ground that a complaint had been lodged in the Magistrate 's court for the offence. The allegation in the second ground was that the petitioner violated the U.P. Sale of Motor Taxation Act and the rules made thereunder, in that the names and addresses of customers who had purchased light diesel from tho petitioner, had not been given in the cash memos. Allowing The petition, ^ HELD: (1)(a) There is no allegation by the detaining authority in the first ground that by storing the huge quantity of light diesel oil the petitioner had in any way affected the distribution or sale of that commodity; nor is there any allegation to show that the petitioner had refused to sell the oil to anybody who required it. Also there is no suggestion, far less any allegation, that the petitioner had tried to divert his ' stocks from one place to the other and thereby deprived the people of one place of their share of the oil. Therefore, there is absolutely no correlation between the act of the petitioner and the disruption of distribution of essential supplies to the community. [20D E, F G] (b) From the violation of the mandatory provisions of the Petroleum Act and the Rules made thereunder, no presumption can be drawn that there was disruption of supply of the essential commodity. [20G H] (c) The commission of an offence at a private place or a violation of a provision or a law by itself does not attract the unless, by the Act committed, the supply or an essential commodity to the community is disrupted or the even flow of the life of the community is disrupted. [21B] Manu Bhushan Roy Prodhan vs State of Bengal and others, A. I. R. , referred to. (2) The second Ground does disclose a clear overt act from which an inference can be drawn that the petitioner had made a number of fictitious sales. But, in view of the finding that the first ground is irrelevant it is not possible to determine to what extent the subjective satisfaction of the detaining authority was influenced or affected by the first ground. When out of 2 grounds one is ague or irrelevant, then the entire order of detention falls to the ground. [22C, F G] (3) The Court cannot go behind the subjective satisfaction the detaining authority but such satisfaction does not confer a blanket power which may authorise the detaining authority to act in a ruthless or arbitrary fashion. Judicial decisions have carved out an area though limited, within which, the subjective satisfaction of the detaining authority, which is a sine qua non for the exercise of the power, can be tested on the touchstone of objectivity. [24F G] 17 (a) The words "make an order directing that such person be detained" in Section 3 (1) of the Act postulates three conditions: (i) that the order must be made by the authority in the section; (ii) The order must be duly signed by the said authority; and (iii) that only one authority and one authority alone can pass the order of detention. Therefore, unless the order made and the grounds prepared are signed by the authority concerned, the order is not made as contemplated by the section. [25F G] (b) Further, since the order is based on grounds to be served on the detenu, he order of detention could be passed only if the grounds are in existence and are prepared contemporaneously, otherwise the order of detention becomes illusory. [25H 26A] In the present case, the District Magistrate who filed the counter affidavit was acting in place of the permanent District Magistrate. In the High (court which was moved in the first instance for a writ of habeas corpus, the District Magistrate stated that the order of detention was passed by him after being satisfied of the grounds of detention, that he also framed the draft of the grounds and that the permanent District Magistrate, who took over from him merely signed and served those grounds on the detenu. But, in this Court he stated that the order of detention was passed by the two detaining authorities, namely, both the District Magistrates, after they had fully satisfied themselves about the existence of the grounds. It is, therefore. not possible to determine as to who in fact made the order of detention. and in view of the contradictory stand taken in the counter affidavits filed by the detaining authorities, the exercise of the jurisdiction to detain the petitioner has not been made with due care and caution or in a proper and fair manner. [23B 24F] Khudiram Das vs The state of West Bengal and Other, A. 1. R. 1975 section C. 550, referred to. The Court also expressed strong disapproval of the careless and irresponsible manner in which the counter affidavit had been filed by the District Magistrate because the date on which reference was made to the advisory Board was in correctly stated in the counter affidavit which created unnecessary confusion and controversy over a simple issue] [18F G] </s>
<s>[INST] Summarize the judgementivil Appeal No. 2789 of 1980. From the Judgment and Order dated 29.5.1980 of the Punjab and Haryana High Court in Civil Revision No. 2 16 of 1980. R.F. Nariman and D.N. Misra for the Appellant. 989 Rakesh Sahney, K.M.M. Khan and Vineet Kumar for the Respondent. The Judgment of the Court was delivered by section RATNAVEL PANDIAN, J. This appeal by special leave under Article 136 of the Constitution is against the judg ment and order dated 29.5.1980 in Civil Revision No. 216 of 1980 passed by the High Court of Punjab and Haryana at Chandigarh. The respondent herein being the owner of the tenanted premises (i.e. two sheds) filed a petition for ejectment before the Rent Controller against the tenant, the appellant herein on the ground that the tenant had not paid the rent from 1.5.74. The monthly rent for the premises was orginally Rs.950. According to the landlord under the provisions of Haryana Urban (Control of Rent and Eviction) Act, 1973 (hereinafter referred to as the 'Act ') the rent of the demised premises was liable to be increased from Rs.950 to Rs. 1142 per mensem. The landlord gave notice to the tenant to pay the rent at the enhanced rate of Rs. 1142 per mensem with effect from 26th June 1974 but the tenant defaulted in making the payment of rent and as such he was liable to be ejected from the premises on the ground of nonpayment of rent. The tenant resisted the application stating that the landlord was not entitled to claim enhanced rent at the rate mentioned in the ejectment application under the provisions of the Act and no legal notice was served on him claiming the arrears of rent and he had already paid the rent upto March 1975 by means of cheques and he had tendered the arrears of rent together with interest and cost as assessed by the Rent Controller on 5th December 1977 and hence the sole ground of his ejectment from the demised premises was no longer available to the landlord. In the replication the landlord denied that the tenant had paid the rent to him for the period from May 1974 to 30th November 1977 @ Rs.1142 per mensem. In the alternative, he claimed that the rent to the extent of Rs.36,100 was due to him from the tenant @ Rs.950 per mensem for the period 1st May 1974 to 30th June, 1977 and that the tenant having defaulted in making the payment was liable to be ejected. It may be stated that the applica tion for eviction was filed on 7.6.77. The Rent Controller held that the landlord was not entitled to recover the rent @ Rs. 1142 p.m. but only @ Rs.950 p.m. as agreed between the parties and he had failed to pay the rent from 1.4.75. On the basis of the above finding the Rent Controller directed the eject 990 ment of the tenant from the premises by granting two months ' time. This order of the Rent Controller, on appeal, was con firmed by the Appellate Authority. On being aggrieved with the Order of the Appellate Authority, the tenant preferred a Civil Revision Petition before the High Court under Sub section (6) of Section 15 of the Act. On behalf of the tenant, it was urged before the High Court on the strength of Clause 'C ' of Rule 4 and Clause (1) of Rule 5 of the Haryana Urban (Control of Rent and Eviction) Rules 1976 framed under Section 23 of the Act that since in the appli cation for ejectment no specific amount of arrears due was mentioned, the application was not maintainable. The High Court rejected this plea observing thus: "Admittedly, no such objection as to the non compliance of the said rules was taken either in the written statement or before the Rent Controller, inasmuch as it was not raised even before the Appellate Authority. Moreover, it has not been shown that any prejudice was caused to the tenant on account of this non compliance on the part of the landlord. Under these circumstances, no such plea can be available to the tenant in this revision petition for the first time particularly when it does not affect the merits of the case nor has it caused any prejudice to him. " Thereafter, coming to the question of arrears of rent, the High Court found thus: "Moreover, the tenant clearly stated on 5th December 1977 that according to him, the total amount, due from him at the rate of Rs.950 p.m. from 1st April 1975 to 31st May 1977 was Rs.24,700 out of which Rs.21,696 had already been paid by him to the landlord, which he subsequently failed to prove by leading evi dence. Under these circumstances, since the tenant failed to prove the payment of the arrears of rent as claimed by him in his statement recorded on 5th December 1977 he was liable to ejectment on the ground of non payment of rent as provided under Section 13(2)(i) of the Act. " On the above finding, the Revision Petition was dis missed. Hence this present appeal. We shall point out at this juncture that the amount of Rs.21,696 991 which the tenant claims to have paid includes a sum of Rs. 18,844.14 which was found by the Rent Controller and the Appellate Authority as arrears of rent. Mr. R.F. Nariman, learned counsel appearing on behalf of the appellant/tenant assails the impugned judgment of the High Court on two legal grounds; firstly, that the High Court has ignored to note that the statutory obligation cast on the Rent Controller as per the proviso attached to Sec tion 13(2)(i) of the Act requiring him to calculate and determine the quantum of arrears of rent even at the first instance has not been complied with and secondly that the application for ejectment was not in accordance with the mandatory provisions of Rule 4(c), 5(1) and 6 of the Rules framed under the Act and as such the impugned judgment is liable to be set aside on both the grounds. We shall now take the first ground of attack. Before dealing with the point of law involved, it may be necessary to extract the relevant portion of Section 13(2)(i) of the Act with its first proviso with which we are concerned. "13(2) A landlord who seeks to evict his tenant shall apply to the Controller, for direction in that behalf. If the Controller, after giving the tenant a reasonable opportu nity of showing cause against the application, is satisfied (i) that the tenant has not paid or tendered the rent due from him in respect of the building or rented land within fifteen days after the expiry of the time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement by the last day of the month next following that for which the rent is payable. Provided that if the tenant, within a period of fifteen days of the first hearing of the application for ejectment after due service, pays or tenders the arrears of rent and inter est, to be calculated by the Controller, at eight percenturn per annum on such arrears together with such costs of the application, if any, as may be allowed by the Controller, the tenant shall be deemed to have duly paid or tendered the rent within the time aforesaid. " The answer to the first legal question mainly turns on the 992 interpretation of the proviso to Section 13 which refers to the following essential conditions namely: 1. There must be an application for ejectment before the Court; 2. The tenant, within a period of fifteen days of the first hearing of the application after due service, pays or tenders: (a) the arrears of rent; and (b) the interest to be calculated by the Controller at eight per cent per annum on such arrears together with such costs of the application, if any as may be allowed by the Controller; If the above said two conditions are satisfied, then the tenant shall be deemed to have duly paid or tendered the rent within the time required by law. The last paragraph of Section 13(2) enjoins that where the above second condition of the proviso is not fulfilled the Controller shall make an Order directing the tenant to put the landlord in possession of the building and where he is satisfied that the rent has been paid the application of the landlord must be rejected. Therefore, the sole question which has to be determined in the case on hand is whether or not the deposit made by the appellant was legally valid. On facts, the Rent Control ler, the Appellate Authority and the High Court found that the appellant/tenant has not deposited the actual rent due payable by him except a part of it namely Rs.2902.96 along with the interest of Rs.261.27 and the cost of Rs.35 totall ing to Rs.3199.23 which deposit was less by Rs.18844.14 even calculated at the rate of Rs.950 per mensem. In fact, the learned counsel who appeared for the appellant/tenant before the Appellate Authority has conceded the arrears of rent which fact is found in paragraph 6 of the Order of the Appellate Authority reading thus: "The learned counsel for the appellant frankly conceded before me that he did not challenge the finding of the Court below that the re spondent was in arrears of rent in the amount of Rs. 18,844 on the date he tendered the arrears of rent together with interest and costs assessed by the Rent Controller. " 993 An attempt on the part of the tenant that he had paid that amount has been totally rejected by all the Courts. Only on the above finding, the Courts below held that the tenant had not deposited the full and valid rent actually due but only a small part of it and as such it is manifest that the second condition enjoined by the proviso was not fulfilled at all and on that ground alone it could be held that the deposit was not valid one. The learned counsel, Mr. R.F. Nariman drew our attention to two judgments of this Court in Sheo Narain vs Sher Singh, ; and Sham Lal (dead) by Lrs. vs Atme Nand Jain Sabha (Regd.), Dal Bazar, ; In our considered view both these decisions cannot be of any as sistance to the appellant in the present case because the points for determination that arose in those two cases were different. Mr. R.F. Nariman then advanced an argument that a statu tory duty is cast under Section 13(2)(i) of the Act on the Rent Controller to calculate and determine the arrears of rent as well as the interest to be paid by the tenant within a period of 15 days of the first hearing of the application for ejectment after due service, but since the Controller has failed to discharge that obligation no eviction can be ordered particularly when there is a dispute with regard to the quantum of arrears of rent. From the judgment on appeal, it seems that a contention substantially identical to the one presently made was advanced before the High Court which repelled the same holding thus: "Going through the whole scheme of the Act, there is no provision that the Rent Controller should decide at the first date of hearing the amount due as arrears of rent . . . . . If this argument of the learned counsel for the peti tioner is accepted, in that situation the tenant will have another opportunity for making the payment of the arrears due from him, which, as stated earlier, is neither the scheme of the Act nor is in consonance with the language used in the proviso to Section 13(2)(i). On the first date of hearing, it is the duty of the tenant to calculate the ar rears of rent, which according to him are due from him and which he intends to tender on the first date of hearing . . . . . . Since payment of rent is obligatory on the tenant and that too within the time prescribed in Section 13(2)(i) of the Act, it is for him to calculate the rent which is in arrears and pay the same as provided by the statute. " 994 After a careful scrutiny of the Section 13(2)(i) and the first proviso annexed thereto, we see no force in the sub missions of the learned counsel that there is any statutory duty cast on the Rent Controller even in the first instance to determine and calculate the arrears of rent and the interest but on the contrary the proviso requires the tenant to pay or tender the actual arrears of rent within 15 days of the first hearing of the application for ejectment after due service alongwith the interest to be calculated by the Controller at 8 per cent per annum on such arrears together with such costs of the application, if any, as may be al lowed by the Controller. What the proviso requires is that the Controller has to calculate the interest at 8 per cent per annum on such arrears of rent and determine the costs of the application, if any. If the argument of the learned counsel is to be accepted then in every case the Rent Con troller has to hold an enquiry at the first instance and determine the arrears of rent even on the first date of hearing which is in the nature of things not possible with out any evidence, nor is it contemplated under the scheme of the Act. When there is a statutory obligation on the tenant either to pay or tender the arrears of rent within a period of 15 days of the first hearing of the application for ejectment after due notice it is for him to calculate the exact arrears of rent due and to pay or tender the same and if the tenant tails to do so he is deemed to have not paid or made the valid tender of the rent. Hence we hold that this argument advanced on behalf of the appellant is miscon ceived and fallacious. For the reasons aforementioned, we hold that there is no merit in the first contention. We shall now examine the second legal contention with reference to Rules 4(c), 5(1) and 6 of the Rules under the Act which rules read as follows: 4. Application for eviction. Section 13 Application under section 13 of the Act, shall besides the particulars mentioned in Rules 5 and 6 contain the following particulars name ly: (emphasised) (a) xxxxxxxxxx (b) xxxxxxxxxx (c) The amount of arrears due and the period of default. 995 5(1) Applications Section 4 and 13(1) In addition to the particulars mentioned in rules 3, 4 and 6 as far as these may be applicable, every application made under this Act shall contain simple and concise narrative of the facts which the party by whom or on whose behalf the statement of pleading is made, believes to be material to the case and which he either admits or believes that he will be able to prove. (emphasised) 6. Particulars to be furnished to the Controller Section 21(1) Every landlord and every tenant of a building or rented land shall furnish to the Controller, or any person authorised by him in that behalf, the follow ing particulars namely: (emphasised) (a) name and number of the building or rented land, if any, or its description and bound aries sufficient to identify it; (b) street and municipal ward or division in which the building or rented land is situated; (c) name and address of the landlord, if the particu lars are furnished by the tenant and name of the tenant, if the particulars are furnished by the landlord; (d) whether the building is a residential, non residential or a scheduled building; and (e) nature of amenities provided by the land lord to the tenant Mr. R.F. Nariman laid stress on the word "shall" occur ring in the above rules particularly Rule 4(c) and contended that these rules are mandatory in character and so the non compliance would amount to violation of the imperative (i.e. mandatory) provisions of these rules. According to him the respondent/landlord has not specified the 'amount of arrears due ' in strict substantial compliance of Rule 4(c) and as such the present application for ejectment has to be thrown.out. The answer to the above contention depends upon whether these rules are mandatory or directory which ques tion has to be adjudged in the light of the intention of the legislature as disclosed by the object, purpose and scope of the statute. No doubt, if the statute is mandatory , 996 the things done not in the manner or form prescribed have no effect or validity, but if it is directory, the non compli ance may not lead to any serious and adverse consequence. A valuable guide for ascertaining the intention of the Legis lature is found in Maxwell "The Interpretation of Statutes" (Twelfth Edition) Chapter 13 at page 3 14) under the caption "Intentions attributed to the legislature when it expresses none" reads thus: "Passing from the interpretation of the lan guage of statutes, it remains to consider what intentions are to be attributed to the legis lature on questions necessarily arising out of its enactments and on which it has remained silent. . . . . . . It is impossible to lay down any general rule for determining whether a provision is imperative or directory." Lord Cambell in Liverpool Borough Bank vs Turner, ; at pp. 507,508 observed: "No universal rule can be laid down for the construction of statutes as to whether manda tory enactments shall be considered directory only or obligatory with an implied nullifica tion for disobedience. It is the duty of Courts of Justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed. " Lord Penzance in Howard vs Bodington, at p. 211 said: "I believe, as far as any rule is concerned, you cannot safely go further than that in each case you must look to the subject matter; consider the importance of the provision that has been disregarded, and the relation of that provision to the general object intended to be secured by the Act; and upon a review of the case in that aspect decide whether the matter is what is called imperative or only directo ry." In 'Craies on Statute Law ' (Sixth Edition) at page 63, the following quotation is found: 997 "When a statute is passed for the purpose of enabling something to be done, and prescribes the formalities which are to attend its per formance, those prescribed formalities which are essential to the validity of the thing when done are called imperative or absolute; but those which are not essential and may be disregarded without invalidating the thing to be done, are called directory" See Montreal Street Rly. Co. vs Normandin, ; With reference to non compliance of the directory enact ment in 'Craies on Statute Law ' it is said at page 261: "But on the other hand, if a statute is merely directory, it is immaterial, so far as relates to the validity of the thing to be done, whether the provisions of the statute are accurately followed out or not. " See also 'On the Construction of Statutes ' by Crawford. In Woodward vs Sarsons, at page 746 it is explained as to what is called an absolute enactment or mandatory enactment as follows: "An absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled substantially. " In Seth Bikhraj Jaipuria vs Union of India, [1962] 2 SCR p. 880 a question arose whether Section 175(3) of the Government of India Act, 1935 which requires that contracts on behalf of the Government of India shall be executed in the form prescribed is mandatory or directory. The Supreme Court at page 893 expressed its view as follows: "Where a statute requires that a thing shall be done in the prescribed manner or form but does not set out the consequences of non compliance, the question whether the provision was mandatory or directory has to be adjudged in the light of the intention of the legisla ture as disclosed by the object, purpose and scope of the statute. If the statute is manda tory, the thing done not in the manner or form prescribed can have no effect or validity; if it is directory, penalty may be incurred for non compliance, but the act or thing done is regarded as good." 998 In Raza Buland Sugar Co. Ltd. vs Municipal Board, Ram pur; , , certain questions arose for consider ation whether the whole of Section 131(3) of U.P. Municipal ities Act was mandatory or the part of it requiring publica tion in the manner laid down in Section 94(3) of the said Act i.e. in a Hindi Newspaper was merely directory; Wancboo, J as he then was speaking for the majority said: "The question whether a particular provision of a statute which on the face of it appears mandatory, inasmuch as it uses the word "shall" as in the present case is merely directory cannot be resolved by laying down any general rule and depends upon the facts of each case and for that purpose the object of the statute in making the provision is the determining factor. The purpose for which the provision has been made and its nature, the intention of the legislature in making the provision, the serious general inconvenience or injustice to persons resulting from whether the provision is read one way or the other, the relation of the particular provision to other provisions dealing with the same subject and other considerations which may arise on the facts of a particular case including the language of the provision, have all to be taken into account in arriving at the conclu sion whether a particular provision is manda tory or directory. " See also K. Kamaraja Nadar vs Kunju Thevar and Others, and Ch. Subbarao vs Member, Election Tibunal, Hyderabad, 13. It is apposite to refer to the observation of this Court in Hari Vishnu Kamath vs Syed Ahmad Ishaque, ; dealing with this problem: "It is well established that an enactment in form mandatory might in substance be directory and that the use of the word "shall" does not conclude the matter. " Reference may be had to (1) State of U.P. & Ors. vs Babu Ram Upadhya, ; and (2) Ajit Singh vs State of Punjab, ; The word "shall" in its ordinary import is obligatory. Nevertheless, the word "shall" need not be given that conno tation in each and 999 every case and the provisions can be interpreted as directo ry instead of mandatory depending upon the purpose which the legislature intended to achieve as disclosed by the object, design, purpose and scope of the statute. While interpreting the concerned provisions, regard must be had to the context, subject matter and object of the statute in question. On a close scrutiny of the relevant rules referred supra in the light of the above principles of statutory interpre tation, we are of the view that the non compliance of rule 4(c) i.e. the non mentioning of the quantum of arrears of rent, does involve no invalidating consequence and also does not visit any penalty. From the above discussion we hold that the rules 4(c), 5(1) and 6 are not mandatory but only directory. In that view, we see no force in the contention of the learned counsel that the non mentioning of the amount of arrears of rent due in the application for ejectment has adversely affected the proceedings of this case and as such the appli cation for ejectment is liable to be dismissed on that score. Accordingly, we reject this contention also. In the present case, the tenant himself was well aware of the amount of arrears of rent due about which we have already mentioned in the earlier portion of this judgment. The present objection as to the non compliance of the rules admittedly was not taken either in the written statement or before the Rent Controller or before the Appellate Authori ty. For the first time such a contention was raised before the High Court which has tightly rejected the same, observ ing thus: "It has not been shown that any preju dice was caused to the tenant on account of this non compliance on the part of the land lord. " We are in full agreement with the above view of the High Court as no prejudice is writ large in the present case because proof of prejudice is also one of the necessary criteria besides non compliance of the provision to invali date the Act complained of as held by Chinnappa Reddy, J in Dalchand vs Municipal Corporation, Bhopal and Another, In the result, both the contentions raised by the appellant fail. For the reasons hereinbefore mentioned, the appeal is dismissed with costs. Y.L. Appeal dis missed. [/INST]This is a tenant 's appeal filed after obtaining Special Leave from the Court. The Respondent landlord of tenanted premises (i.e. two sheds) filed a petition for ejectment of the appellant from the premises in question before the Rent Controller. According to the Respondent landlord the monthly rent payable by the appellant was Rs.950 p.m. which was liable to be enhanced under the provisions of Haryana Urban (Control of Rent and Eviction) Act, 1973 from Rs.950 to Rs.1142 p.m. Accordingly, the respondent caused a notice to be given to the appellant claiming rent @ Rs. 1142 w.e.f. 26.6.1974 till June 1977 and since the appellant defaulted in making payment of the rent, he was liable to be ejected from the demised premises. The tenant denied that the rent was liable to be enhanced as claimed by the landlord. He further asserted that he had already paid rent upto March 1975 by means of cheques and that he had tendered the ar rears of rent together with interest and costs as assessed by the Rent Controller on 5.12.1977. On this reasoning he urged that he was not liable to be evicted on the ground taken in the Petition. The landlord in the replication denied the receipt of rent for the period from May 1974 to November, 1977 @ Rs.1142 p.m. Alternatively he claimed that the rent to the extent of Rs.36,100 was due to him from the appellant @ Rs.950 p.m. from 1st May, 1974 to June 30, 1977. The Rent Controller held that the landlord respondent was not entitled to recover the rent @ Rs.1142 p.m. but only Rs.950 p.m. as agreed between the parties and the appellant has failed to pay the rent from 1.4.1975. Accordingly, the Rent Controller directed the ejectment of the appellant from the premises by granting him two months time. 987 The appellate authority having affirmed the order of the Rent Controller, the appellant filed a Civil Revision before the High Court under Sub section (6) of Sec. 15 of the Act. Before the High Court it was urged by the appellant that since in the application for ejectment no specific amount of arrears of rent due was mentioned as contemplated by CI. (c) of Rule 4 and Clause (1) of Rule 5 of the Haryana Urban (Control of Rent and Eviction) Rules he could not be evict ed. Finding no substance in the said contention, the High Court rejected the Civil Revision. Hence this appeal. The appellant raised two contention before this Court viz., that the High Court has ignored to note the statutory obligation cast on the Rent Controller as per the proviso attached to Sec. 13(2)(1) of the Act requiring him to calcu late and determine the quantum of arrears of rent; even at the first instance has not been complied with and (ii) that the application for ejectment was not in accordance with the mandatory provisions of Rule 4(c) 5(1) and 6 of the Rules framed under the Act. Dismissing the appeal, this Court, HELD: The proviso to Sec. 13(2)(i) requires the tenant to pay or tender the actual arrears of rent within 15 days of the first hearing of the application for ejectment after due service alongwith the interest to be calculated by the Controller at 8 per cent per annum on such arrears together with such costs of the application, if any, as may be al lowed by the Controller. [994B] When there is a statutory obligation on the tenant either to pay or tender the arrears of rent within a period of 15 days of the first hearing of the application for ejectment after due notice it is for him to calculate the exact arrears of rent due and to pay or tender the same and if the tenant fails to do so he is deemed to have not paid or made the valid tender of the rent. [994D] The non compliance of Rule 4(c) i.e. the non mentioning of the quantum of arrears of rent, does involve no invali dating consequence and also does not visit any penalty. [999B C] Rules 4(c), 5(1) and 6 are not mandatory but only directory. [999C] If the statute is mandatory, the things done not in the manner or form prescribed have no effect or validity. But if it is directory, the non compliance may not lead to any serious and adverse consequence. [995H; 996A] 988 The word "shall" in its ordinary import is obligatory. Nevertheless the word "Shall" need not be given that conno tation in each and every case and the provisions can be interpreted as directory instead of mandatory depending upon the purpose which the legislature intended to achieve as disclosed by the object, design, purpose and scope of the statute. [998H; 999A B] No prejudice is writ large in the present case because proof of prejudice is also one of the necessary criteria besides non compliance of the provision to invalidate the Act. [999G] Sheo Narain vs Sher Singh, ; , Not applicable. Sham Lal (dead) by Irs. vs Atme Nand Jain Sabha (Regd.) Dal Bazar, ; , Not applicable. Montreal St. Rly. Co. vs Normandin, ; , re ferred to. Seth BikhrajJaipuria vs Union of India, ; , referred to. Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur, ; , referred to. K. Kamraj Nadar vs Kunju Thevar and Others, , referred to. Subbarao vs Member, Election Tribunal, Hyderabad, ; , referred to. State of U.P. & Others vs Babu Ram Upadhya, ; , referred to. Ajit Singh vs State of Punjab, ; , referred to. </s>
<s>[INST] Summarize the judgementAppeals Nos. 416 and 417 of 1947. Appeals from the judgment and decree dated May 1, 1956, of the Punjab High Court in Regular First Appeal No. 45 of 1950. 276 A.V. Viswanatha Sastri, Gopal Singh and R. N Sachthey, for the appellants (in C.A. No. 416/1962), and respondent (in C.A. No. 417/62). S.T. Desai, Hardayal Hardy and J. P. Agarwal, for the, respondent (in C.A. No. 416 of 1962) and appellants (in C.A. No. 417 of 1962). May 8, 1964. The following Judgments were delivered by the Court. SARKAR J.I agree with the orders proposed by my brother Hidayatullah. These appeals arise out of a suit brought by a firm called the Modern Cultivators against the State of Punjab to recover damages for loss suffered by flooding of its lands as a result of a breach in a canal belonging to the State of Punjab. Both the Courts below have held in favour of the plaintiff but the High Court reduced the amount of the damages awarded by the trial Court. Both parties have appealed to this Court. The Modern Cultivators contend that the High Court is in error in reducing the amount of the damages. The State of Punjab contends that it had no liability forthe loss caused by the flooding. The breach and the floodingof the plaintiff 's lands are not now denied. In regard to the appeal by the Modern Cultivators I have nothing to add to what has been said by Hidayatullah J. For the reasons mentioned by him I agree that the damages had been correctly assessed by the trial Court. In its appeal the State of Punjab first contended that the plaintiff could not succeed as it had failed to prove that the breach had been caused by the defendant 's negligence. I am unable to accept this contention. The trial Court inferred negligence against the defendant as it had failed to produce the relevant documents and with this view agree. The defendant had produced no documents to show how the breach was caused. It had been asked by the trial Court to do so by an order made on May 12, 1949 but failed to produce them. The defendant bad a large number of canal officers and according to Mr. Malhotra, the,Executive Engineer in charge of the canal at the relevant time, 277 there was a regular office and various reports concerning the breach had been made. None of these was produced at the hearing. It is obvious that in an Organisation like the canal office, reports and other documents must have been kept to show how the breach occurred and what was done to stop it. If such documents are not produced, an inference can be legitimately made that if produced, they would have gone against the case of the defendant, that is, they would have proved that the defendant had been negligent: Murugesan Pillai vs Manickavasaka Pandara(1). It was suggested in this Court. that the documents had been destroyed. It may be that they are now destroyed. One of the defendant 's officers called by the High Court in view of the unsatisfactory nature of the documentary evidence said that documents Were destroyed after three lo seven years. The breach occurred in August 1947, the suit was filed in October 1948 and the trial was held about August 1949. So it would appear that at the time ,of the trial the relevant documents had not been destroyed. Nor was it said that they had then been destroyed. Furthermore, in view of the pendency of the suit the documents must have be en preserved. It is, clear that they bad not been produced deliberately. An inference that the defendant was negligent in the management of the canal arises from the non production of the documents. There is therefore, evidence that the defendant was negligent. Furthermore it seems to me that the rule of res ipsa loquitur applies to this case. The canal was admittedly in the management of the defendant and canal banks are not breached if those in management take proper care. In such ,cases the rule would apply and the breach itself would be prima facie proof of negligence: see Scott vs London Dock Co.(1). No doubt the defendant can show that the breach was due to act of God or to act of a third party or any ,other thing which would show that it had not been negligent, but it did not do so. It may be that the rule of res ipsa loquitur may not apply where it is known how the thing which caused the damage happened as was held in Bankway vs South Wales Transport Co., Ltd.(1). But that is not the (1) L.R. 44 I.A. 98. (2) (3) 278 case here. No reason has been advanced why the rule should not apply. Therefore I think that the first contention of the defendant that there is no evidence of negligence must be rejected. I do not think it necessary in the present case to consider whether the rule in Rylands vs Fletcher(1) applies to make the defendant liable for I have already held that it is liable as negligence has been proved. The second point raised by the defendant was one of limitation. It was contended on behalf of the defendant that the case was governed by article 2 of the first schedule of the Limitation Act. It is not in dispute that if that article applies, the suit would be out of time. That article relates to a suit "for compensation for doing or omitting to do an act alleged to be in pursuance of any enactment". It was said that the imposed a duty on the defendant to take care of the canal banks and its failure to do so was the omission to do an act in pursuance of an enactment within the article. I have very grave doubt if this interpretation of article 2 is correct. There is authority against it: see Mohammad Saadat Ali Khan vs The Administrator, Corporation of City of Lahore(1). But apart from that I find nothing in the Canal Act imposing any duty on the defendant to take care of the banks. We were referred to sections 6 and 51 of that Act. Both are enabling sections giving power to the State Government to do certain acts. Under section 6 it has power to enter on any land and remove any obstruction and close any channels or do any other thing necessary for the application or use of the water to be taken into the canal. This obviously does not impose any duty in connection with the canal bank. Section 15. gives the power to the canal autho rities in case of accident happening or being apprehended to a canal to enter upon lands of others and to do all things necessary to repair the accident or prevent it. This section again has nothing to do with taking care of the canal banks. Therefore, even assuming that the defendant 's interpretation of article 2 is correct, this is not a case to which it may apply. I wish however to make it clear that nothing that I have said (1) ; (2) [1945] L.R 26 Lah. 523 279 here is to be read as in any way approving the defendant 's interpretation of article 2. Therefore the defendant '& conten tion that the suit was barred by limitation also fails. The defendant 's appeal must, therefore, be dismissed and the plaintiff 's appeal allowed. Costs will naturally follow the result. HIDAYATULLAH, J.On August 15, 1947 the Western Jamna Canal at R.D. No. 138000 near Sangipur and Jandhrea villages burst its western bank. The canal water inundated the neighbouring fields where crops of sugar cane, maize, urud etc. grown by the plaintiff firm were damaged. The plaintiff brought this action alleging that the breach in the bank was caused by negligence on the part of the canal authorities who were guilty of further negligence in not closing the breach without delay. The plaintiff estimated its loss at Rs. 60,000 in respect of the standing crop and a further loss of Rs. 10,000 in respect of the deterioration of the land for future cultivation. It however, limited its claim to Rs. 20,000. The State Government denied negligence on the part of the canal authorities. Government admitted that a breach did occur in an old inlet channel of Chhalaundi Silting Tank on August 15, 1947 and some canal water escaped through the breach which, it was said, flowed back to the canal through the outlet of the silting tank lower down the canal. Government claimed that the site was immediately inspected by the Executive Engineer and no damage to the crops was discovered and that the breach was promptly closed and the bank was strengthened. Government stated that there were heavy rains on the 8th September and again from 23rd to 28th September, 1947 causing floods in the nullahas but as the canal was running full supply, water brought by the nullahas to the silting tank could not get to the canal and over flowed to the adjoining areas. Shortly stated, plaintiff 's case was that there was a breach in the western bank of the canal owing to the negligence of the defendants and canal water escaped to the fields causing them to be flooded; while the case of the Government was that a breach did take place but it was promptly repaired 280 and the fields were flooded not by the canal water but by heavy rains in the month of September. The trial judge passed a decree for Rs. 20,000 against Government, but it was reduced by the High Court to Rs. 14,130. These two cross appeals have thus been filed by the rival parties by special leave of this Court. The High Court and the court below have a, reed in holding that there was a break in the canal. The size of the breach has been variously described, but it was certainly not less than 30 feet wide and the depth of the water at the breach was about 15 feet. It is admitted that the canal was then running full supply 2, 5,000 Cusecs. As the width of the canal was 400 feet, the out flow would be at the rate of 5,00OX30/400 Cusecs if the breach was 30 feet wide. This would mean extensive flooding of the low lying areas unless the breach was immediately closed. Some of the witnesses say that it was as much as 70 to 80 feet wide and that would make the out flow even greater. The High Court held that the floods were not caused by the rains. Prior to the break in the canal there was only I inch of rainfall. The heavy rains took place much later. The inundation of the fields was thus by water from the canal and not from the nullahas. This much has already been held. It ,is admitted that the breach occurred at a place where there was an old nullah through which silting operations were carried out in the past and this exit was closed in the previous years and the breach was at that very site. The breach was noticed on the morning of the 16th. No attempt was made by either side to establish the exact duration of time before the breach was repaired. Mr. Malhotra (Executive Engineer) stated that it was repaired by the 18th but was re opened (one does not know why) on the 20th and again closed on the 21st. Evidence on behalf of the plaintiff established that water continued pouring out as late as the month of October. This was apparently an exaggeration. There is no evidence to show that the flow of water in the canal was reduced from the headworks the breach occurred. It apparently continued on full The High Court attempted to secure the documents from the canal Office which had not been produced earlier. The 281 Executive Engineer, then in charge was summoned to bring all the papers in his office and he produced the telegrams received by and copies of telegrams issued from the head office between August 16, 1947 and September 5, 1947. From these documents it is now established that the breach was not repaired at least upto August 27, 1947 and the evidence that it was repaired on the 18th was therefore not accurate. It has also been established that the case of the plaintiff that water continued to flow right upto October was also false. It may thus be assumed that repairs were completed by the 27th August but not earlier. It is admitted that the area into which water flowed was used as a silting tank. The silting operations comprise the opening of the bank of the canal at a selected place to let out turbid water which passing through the silting tank drops the sediment and flows back to the canal at a lower reach free of the silt, and closing of the bank. It is now admitted that at the exact spot where the breach took place there was previously an opening for silting purposes which was recently closed. There is no evidence to show negligence on the part of Government. Curiously enough Government said that it had not preserved the papers connected with this mishap. We can hardly believe this. Government led evidence to establish that the banks of the canal were periodically inspected and claimed that the breach was an act of God without any negligence on the part of the canal authorities. It is an admitted fact that crops of the plaintiff were destroyed if not wholly at least substantially. The only question, therefore, is whether Government can be held responsible for the damage caused to the plaintiff and, if so what should be the compensation. Two points were urged on behalf of Government: the first was that the suit filled by the plaintiff was out of time inasmuch as article 2 of the Indian Limitation Act which pres cribes a period of three months was applicable and not article 36 which prescribes a period of two years. This wag held against Government by the High Court and the court below. The second point urged on behalf of Government was that there was no proof of negligence whatever by the plaintiff and the plaintiff must therefore fail. The High 282 Court in dealing with this point held that, in the circum stances res ipsa loquitur and that it was not necessary for the plaintiff to prove negligence and it must be so presumed. The High Court differed from the court below in assessing damages. In the appeal of the Government both these points are urged. On behalf of the plaintiff, in the companion appeal, it is contended that the High Court omitted to give proper compensation for the loss of maize and urud crop. It is submitted that the High Court adopted the formula that in respect of sugar cane crop which needs plenty of water the damages should be assessed at 1/3 of the value of the crop and in respect of maize and urud crops at 1/2 the value. The plaintiff contends in its appeal (that the whole of the maize and urud crop was completely destroyed and the decree of the court of first instance allowing 3/4 of the value of the crop as compensation was unassailable. It is pointed out that evidence disclosed that water in the fields was 4 to 5 feet deep and the maize and urud plants were less than 2 feet high. In other words, the plants remained submerged during all the time the fields were mandated. It is obvious that the crop must have been entirely destroyed and the allowance of 1/4 was because the destroyed crop had some value as chari. On the facts, as found, there was hardly any justification for reducing the amount of the decree for damages passed by the court of first instance. The High Court itself, in more than one place, stated in its judgment that the maize and urud crops were completely destroyed. It is, therefore, clear that unless Government succeeds in its appeal the. decree of the court of first instance must be restored in this case. Mr. Vishwanatha Sastri on behalf of Government asked for a remit, but in view of the slight difference and the fact that the High Court itself remarked that the maize and urud crops were completely destroyed there would not be any necessity to order a remit in case the appeal of the Government fails. I shall now turn to that appeal. The facts as found in this case are that in 1946, the land which got flooded, was used for silting operations. An opening in the western bank was made in that year and the 283 bank was restored in June 1946. Till the month of August in the following year there was no complaint. Evidence discloses that the banks were regularly inspected. A special Engineer and a Special Sub Divisional Officer were in charge and there were watchmen also. There is no evidence of wilful conduct. The plaintiff has not led evidence to establish any particular act of negligence. There is no evidence that the breach was caused by the act of a third party or even of God. Sastri, therefore, contends that as there was no foreseable danger against which precautions could be taken beyond making periodical inspections, and this was done, there can be no liability. He submits that in this view of the matter the plaintiff must fail in the absence of proof of negligence. The High Court applied to the case the rule in Donoghue vs Stavenson(1) reinforcing it with what is often described as the doctrine of res ipsa loquitur. This case is first of its kind in India and needs to be carefully considered. Before us reliance was placed upon the rule in Rylands vs Fletcher(1). That rule, shortly stated, is: that any occupier of land who brings or keeps upon it anything likely to do damage if it escapes is bound at his peril to prevent its escape, and is liable for all the direct consequences of its escape, even if he has been guilty of no negligence: Per Salmond, Law of Torts 13th Edu. p. 574. The rule in Rylands vs Fletcher was derivatively created from the rule of strict liability applicable to the acts of animals but, in my opinion, it is hardly applicable here. Canal systems are essential to the life of the nation and land that is used as canals, is subjected to an ordinary use and not to an unnatural use on which the rule in Rylands vs Fletcher rests. The words of Lord Cairns "non,natural use" of land and of Blackburn, J. "special use bringing with it increased danger to others" are sometimes missed. There is difficulty in distinguishing non natural and natural user but perhaps the best test to apply is slated by Lord Moulton in Richards vs Lothian(1): (1) [1932] A.C. 562 (2) L.R 3 H.L. 300 (3) ; , 280 284 "Some special use bringing with it increased danger to others, and must not merely be the ordinary use of the land or such a use as is proper for the general benefit of the community. " They formed the basis of observation of Viscount Maugham in Sedleigh Denfield vs V. O 'Callaghan and Ors.(1). As was pointed out by Holmes in his Common Law (1963) at p. 93: "It may even be very much for the public good that dangerous accumulations should be made. " Cases of breaks in canals resulting in danger to neigh bouring lands are rare but some are to be found in law reports from the United States of America. I need not refer to them because the following passage from American Jurisprudence Vol. 9 page 340 para 38 gives an adequate summary of the principles on which they had been dealt with: "A canal company is also liable for flooding private property where it has not acquired the legal right to do so; it is answerable in damages for all loss occasioned by a neglect on its part to use reasonable care and precaution to prevent the waters of its canal from escaping therefrom to the injury and detriment of others. A canal proprietor is not, however, liable for damages to adjoining lands resulting from a mere accidental break in his canal which human foresight and vigilance could not have anticipated, and against which proper prudence and judgment could not be expected to provide. Although it has been held that a canal company is not liable for damages occasioned by the per colation of waters through the banks of its canal, in the absence of proof of negligence on its part in want of skill or care in the construction and maintenance of its canal, such holdings are maintenance of its canal. such holdings (1) ; at 889 285 are opposed to the weight of reason and autho rity. " Perhaps the liability is viewed strictly as an inducement to care Safety is best secured when. it is made the responsi bility of the person who must not only take precautions to avoid accident but who alone decides what those precautions should be. In this connection the rule that is most often quoted was stated by Erle C.J. in Scott vs London and St. Katherine Docks Co. (1) thus: "There must be reasonable evidence of negligence. But where the thing is shown to be under the management of the defendant or his servants, and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care, it affords reasonable evidence, in the absence of explanation by the defendants that the accident arose from want of care. " In subsequent cases it has been customary to regard this as a statement of the principle of res loquitur. But the principle, if it be one, cannot always be safely applied where the facts before the court are not the whole facts. In a vast canal system constructed with great care and attention to detail it may be difficult to prove negligence but it may sometimes be equally difficult to explain how the defect arose. The principle of res ipsa loquitur had its origin in the failing of a barrel of flour from a first floor window on a passerby but it has been extended to situations quite different. It is not very much in favour and if applied it must be correctly understood. It is not a principle which dispenses with proof of negligence. Rather it shifts onus from one party to another. It is rule of evidence and not of liability. A too ready reliance on the maxim reinforces a fault liability and makes it into an absolute liability. If absolute liability is to give way to fault liability, some fault must be established by evidence or must be capable of being reasonably inferred from the circumstances. It is not (1) ; : 286 sufficient to say res ipsa loquitur because the danger is that facts may not always tell the whole story and if there is something withheld how can the thing be said to speak for itself ? The principle which I consider reasonable to apply where fault has to be inferred from circumstances was best stated by Lord Porter and I respectfully adopt it. Speaking of res ipsa loquitur it was observed by Lord Porter in Barkway vs South Wales Transport Co. Ltd.(1) : "The doctrine is independent on the absence of explanation, and, although it is the duty of the defendants, if they desire to protect themselves, to give an adequate explanation of the cause of the accident, yet, if the facts are sufficiently known, the question ceases to be one where the facts speak for themselves, and the solution is to be found by determining whether, on the facts as established, negligence is to be inferred or not. " I have made these observations so that the principle may not be applied too liberally. It must also be remembered that what is said in relation to it in one case cannot indiscriminately be applied to another case. It should not be applied as legal rule but only as an aid to an inference when it is reasonable to think that there are no further facts to consider. I shall now consider the facts as they stand in this case to discover if the canal authorities can be said to be at fault. The facts show that the water escaped into the Chillaundi Silting Tank through the nallah which had previously been used for silting operations and had been sealed in the previous year. If the plug were sound it would have withstood the pressure of water as it did after it was repaired on the 27th August even though 28" of rainfall fell within 20 days. There is nothing to show that the outflow was due to rainfall or a storm so exceptional that it could be regarded as an act of Good. Nor was it due to any disturbance of the earth 's crust or interference by a stranger. There is thus ,sufficient evidence, in the absence of reasonable explanation (1) at 394,395 287 (which there is not), to establish negligence. Further, there was inordinate delay and negligence in sealing the breach. Even the flow in the canal was not reduced for repairs to be carried out quickly. In such circumstances, the facts prove negligence and government was rightly held responsible. Whether the defect was patent or latent is not much to the purpose. It was not an inevitable accident, and the Government must be held liable. It remains to consider the question of limitation. The high Court and the court below have applied article 36 of the indian Limitation Act. Government claims that the proper Article to apply was article 2. These Articles may be set down here: Description of Period of limitation Time from which suit. period begins to run. For compensation Ninety days When The act or for doing or for omission takes omitting to do an place. act alleged to be in pursuance of any enactment in force for the time in India 36. For compensation Two years (now When the malfeasance for any mal feas one year) misfeasance or non ance, misfeasance feasance takes place. or nonfeasance independent of contract and not herein specially provided for. It is not denied that if article 2 was not applicable, the proper Article would be article 36 and the suit would also be within time. In contending that the second article applies reliance is placed on a decision of the Privy Council in Punjab Cotton Press Co. Ltd. vs Secretary of State(1). But that case is clearly inapplicable. There the canal authorities cut the bank of a canal at a selected point to let the water away with a view to protecting a railway track passing close by ,on a high embankment and in this way flooded and injured the plaintiff 's mills. The Judicial Committee held that if the act was done, as was said, under section 15 of the (8 of 1873), article 2 was applicable and not article 36. The case was thus remanded (1) I.L.R. to Lah. 171 P.C. 288 to find the fact necessary for the application of the. right article. In relying upon this case, Mr. Viswanatha Sastri claims that section 15 of the Canal Act covers the present facts. Mr. Gopal Singh, who followed, also refers to section 6. These, sections read: "6. Powers of Canal Officer. At any time after the day so named, any Canal Officer, acting under the orders of the State Government in this behalf, may enter on any land and remove any obstructions, and MaY close any channels, and do any other thing necessary for such application or use of thE said water." "15. Power to enter for repairs and to prevent accidents. In case of any accident happening or being apprehended to a canal, any Divisional Canal. Officer or any person acting under his general or special orders in this behalf may enter, upon any lands adjacent to such canal, and may execute all works which may be necessary for the purpose of repairing or preventing such accidents. Compensation for damage to land. In every such case, such Canal Officer or person shall tender compensation to the proprietors or occupiers of the said lands for all damage done to the same. If such tender is not accepted, the Canal Officer shall refer the matter to the Collector, who shall proceed to award compensation for the damage as though the State Government had directed the occupation of the lands under section 43 of the Land Acquisition Act, 1870. " In regard to section 6 it is sufficient to say that it has no application here. It refers to the day named in section 5 and 289 that section provides for a notification to be issued declaring that water would be applied after a particular date for purpose of any existing or projected canal or drainage work or for purposes of Government. On such notification issuing any Canal Officer, acting under the orders of the State Government, may enter on any land and remove obstructions or close any channels so that water may be applied to those purposes. This is an entirely different matter and it is no wonder that Mr. Viswanatha Sastri did not rely upon section 6. Section 15 no doubt confers a power to enter lands and property of others to affect repairs or to prevent accidents. One can hardly dispute that it is the normal duty of canal authorities to make repairs and execute works to prevent accidents. But article 2 cannot apply to omissions in following the statutory duties because it cannot be suggested that they are 'in pursuance of any enactment '. Cases of malfeasance, misfeasance or nonfeasance may or may not have statutory protection. Act or omission which can claim statutory protection or is alleged to be in pursuance of a statutory command may attract article 2 but the act or (mission must be one which can be said to be in pursuance of an enactment. Here the suit was for compensation for damage consequent on a break in the canal on August 15, 1947. The only act or omission could be the opening and closing of the channel for silting operations. That was before June 1946. The third column of article 2 provides the start of the limitation of 90 days" when the act or omission takes place. " The period of limitation in this case would be over even before the injury if that were the starting point. This subject was elaborately discussed in Mohamad Sadaat Ali Khan vs Administrator Corporation of City of Lahore(1) where all rulings on the subject were noticed, Mahajan J. (as he then was) pointed out that "the act or omission must be those which are honestly believed to be justified by a statute". The same opinion was expressed (1) I.L.R. F.B. 51 S.C. 19. 290 by Courtney Terrell C.J., in Secretary of State vs Lodna Colliery Co. Ltd. (1) in these words : "The object of the article is the protection of public officials, who, while bona fide purporting to act in the exercise of a statutory power, have exceeded that power and have committed a tortious act; it resembles in this respect the English Public Authorities Protection Act. If the act complained of is within the terms of the statute, no protection is needed, for the plaintiff has suffered no legal wrong. The protection is needed when an actionable wrong has been committed and to secure the protection there must be in the first place a bona fide belief by the official that the act compalined of was justified by the statute; secondly, the act must have been performed under colour of a statutory duty, and thirdly, the act must be in itself ,a tort in order to give rise to the cause of action. It is against such actions for tort that the statute gives protection. " These cases have rightly decided that Art.2 cannot apply to cases where the act or omission compalained of is not complained of is not alleged to be in pursuance of statutory authority. It is true that in Commissioners for the Port of Calcutta vs Corporation of Calcutta(1) the Judicial Committee, while dealing with section 142 of the Calcutta Port Act (3 of 1890) which reads: No suit shall be brought against any person for any done or purporting or professing to be done in pursuance of this Act, after the expiration of three months from the day on which the cause of action in such suit shall have arisen", pointed to the presence of the words "purporting or profess ing to be done in pursuance of this Act" and observed that (1) I.L.R. 1 5 Pat. 510 (2) 64 I.A. 36 291 they regarded the words as of 'pivotal importance ' and that their presence postulated "that work which is not done in pursuance of the statute may nevertheless be accorded its protection if the work professes or purports to be done in pursuance of the statute". But they were giving protection to an act which could legitimately claim to be in pursuance of the Port Amt. Here the break in the bank was not that kind of act or omission. It could not claim to be in pursu ance of the Canal Act. Nor could the opening or closing of the channel for silting operations, though in pursuance of the Canal Act, be the relevant act or omission because they were more than a year before the cause of action and to apply a limitation of 90 days to that cause of action is not only impossible but also absurd. article 2, therefore, does not apply here. It was not contended before us that the suit was otherwise time barred and we accordingly confirm the finding that the suit was within time. The result thus is that the appeal filed by the State Government fails and I would dismiss it with costs and allow the appeal filed by the plaintiff with costs. I would modify the judgment and decree of the High Court by altering the amount of Rs. 14,130 to Rs. 20,000 as ordered by the trial judge. MUDHOLKAR, J.I agree with my brethren Sarkar and Hidayatullah that the appeal preferred by the defendant, the Stale of Punjab, be dismissed and the appeal preferred by the plaintiff, the Modern Cultivators, be allowed and the decree for damages be restored to the sum awarded by the trial court. I also agree with the order for costs as proposed. I wish to add nothing with regard to the plaintiff 's appeal to what has been said by my brother Hidayatullah nor to what he or my brother Sarkar has said regarding the question of limitation raised on behalf of the defendant. They have both held that article 2 of the Limitation Act is not attracted to a case like the present where the damages sustained by the plaintiff are not the result of anything done by the State 292 in pursuance of a statutory power exercised by it or by reason of an act which could properly be said to have been performed in the purported exercise of a statutory power. If article 2 is out of the way, it is not disputed on behalf of the State that the suit will be within time. My learned brother Hidayatullah has referred to the rule of common law as to strict liability with respect to damages resulting from the escape of deleterious substances or cattle from the land which have been accumulated or brought on the land by its owner for his use and which were not natural there. The rule was stated thus in Rylands vs Fletcher(1) by Blackburn, J. "We think that the true rule of law is that the person who for his own purposes brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and if he does not do so is prima facie answerable for all the damage which is the natural consequence of its escape. " It was approved by the House of Lords, but Lord Cairns laid down a new principle distinguishing the natural from the non natural user of land and holding that in the latter case only was the liability absolute. (see Salmond on Torts, 13th ed. p. 579). This rule has been adopted in this country in several cases (see Gooroo Churn vs Ram Dutt(2); Dhanusao vs Sitabai(3) and several other cases) and can, therefore, be regarded as a part of the common law of the land. In the country of its origin, this rule has been subjected to certain exceptions. The present case falls in one of the exceptions recognised in some, though not, all cases. It has been held in some cases that where the owner or occupier of land accumulate,,, a deleterious substance thereon by virtue of an obligation imposed upon him by a statute or in exercise of statutory authority he will not be rendered liable for damages resulting therefrom to other persons unless it is established that he was guilty (1) 18681 ; (2) 293 of negligence in allowing the deleterious substance to escape. In a recent decision Dunne vs Horth Western Gas Board(1) the Court of Appeal has recognised this exception and the controversy may be said to have been set at rest subject, of course, to what the House of Lords may have to say hereafter. Indeed, the liability to pay damages to another resulting from an act of a person is laid upon him by the law of torts upon the basis that his act was wrongful and that he was a wrong doer. Where, therefore, the act consists of something which the law enjoins upon that person to do or which the law permits him to do, it cannot possibly be said that his mere act in doing that something was in itself wrongful and that he was a wrong doer. He will, however, be liable if he performed the act in a negligent manner or if the escape of the deleterious substance subsequent to accumulation of that substance in exercise of a statutory authority was the result of his negligence. There is nothing here to show that in constructing the canal under the powers conferred by the State did anything other than what the law permitted. Therefore, by constructing the canals and allowing water to flow along it the State merely exercised its statutory authority. Further, there is nothing to show that there was any want of care in constructing the canal and so no question of negligence will arise in constructing the canal and allowing water to flow along the canal in question. Here, what has happened is that at the point where prior to 1946 the water from the canal was allowed to flow into the silting tank through a nallah, there was an opening which was plugged in that year. Here, it is established that over a year after that opening was plugged by the State a breach of about 30 or 40 feet was caused. This occurred on August 15, 1947. It has not been shown that the breach could have been caused by an act of God or an act of third party. The contention of the State that it was caused by heavy rains in the catchment area has not been found to be true If, therefore, there is material from which it could be inferred that the breach was caused by reason of negligence on the part of the State in inspecting the banks of the canal and in (1) 294 particular that portion of it where the breach had been caused the State would be liable in damages. This would be, so not by the operation of the rule in Rylands vs Fletcher(1) but by reason of negligence. The sole ground upon which the liability of the State could be established in this case would be negligence of the State in properly maintaining the banks of the canal. For this purpose it would be relevant to consider whether there were periodical inspections, whether any breaches or the development of cracks were noticed along the banks of the canal and in particular at the place where the breach ulti mately occurred or whether any erosion of the banks parti cularly at the place where one of the banks had been plugged had been noticed and no action or timely action had been taken thereon. There is evidence to show that the canals were being regularly inspected. That, however, is not the end of the matter. Immediately after the breach occurred some reports were made and as pointed out by my brethren in their judgments they were not placed before the court despite its order requiring their production. When the matter went up before the High Court it was said that the records had been destroyed in the year 1958 or so and therefore they could not be furnished. This action on the part of the State is manifestly unreasonable and the legiti mate inference that could be drawn from it is that if the documents had been produced they would have gone against the State and would establish its negligence. In it could legitimately be presumed that the State was negligent inasmuch as it had deliberately suppressed evidence in its possession which could have established negligence. In the circumstances of this case I do not think it appropriate to refer to the rule of evidence res ipsa loquitur. [/INST]Under Section 7 of the , the appropriate Government has ample power to constitute an industrial tribunal for a fixed period of time and to constitute a new tribunal on the expiry of that period, to hear and dispose of all references made to the previous. tribunal which had not been disposed of by that tribunal. </s>
<s>[INST] Summarize the judgementNo. 77 of 1972. Under Article 32 of the Constitution of India for a writ in the nature of habeas corpus. section K. Dhingra, for the petitioner. Dilip Sinha and G. section Chatterjee, for the respondent. The Judgment of the Court was delivered by Shelat, J. The District Magistrate, Howrah passed on June 12, 1971 the impugned order of detention under sub section (1) read with sub section (3) of section 3 of the West Bengal (Prevention of Violent Activities) Act, 1970 directing the petitioner 's detention thereunder. The order stated that the District Magistrate was satisfied that it was necessary to do so in order to prevent the petitioner from acting in a manner prejudicial to the maintenance of public order. On June 13, 1971, the petitioner was accordingly arrested and detained in Dum Dum Central Jail. 676 The grounds of detention served on the petitioner at the time of his arrest read as follows : (1) On 17 8 70 at about 02.00 hours, you and your associates Bhaja alias Tarapada Ghosh, Bablu, Kartic and others attacked the members of R.G. Party who were on duty near Jatadhari Park by hurling bombs towards them. When chased by them, you and your associates again hurled bombs towards them and managed to escape and thereby disturbed public order. (2) On 10 4 71 at about 16.00 hours, you and your associates being 'armed with sword assaulted one Basudeb Laha of 56/18, Banarjee Bagan Lane. at Sambhu Halder Lane near Jatadhari Park causing injuries on his person. When objected by the members of the public, you also terrorised them by brandishing the sword. (3) On 1 5 71 at 15.00 hours, you and your associates Tapan, Kartic and others being armed with bombs and other deadly weapons demanded money from one Banshi Show of 28, Haraganj Road, P.S. Malipanchghora. When refused, you and your associates assaulted him. The local people and the neighbouring shop keepers objected. At this you and your associates became more violent and terrorised them by throwing bombs towards them. Con sequently they became panicky and fled away. Sub section (1) read with sub s, (3) of section of the Act authorises inter alia a District Magistate to direct detention of any person in respect of whom be is satisfied that such detention should be ordered with a view to prevent him from acting prejudicially to the security of the State of West Bengal, or the maintenance of public order. Sub section (2) of section 3 contains a special definition of the expression "acting in any manner prejudicial to the security of the State or the maintenance of public order" to mean the acts enumerated in cls. (a) to (e) thereof. (d), which is the only relevant clause for purposes of this petition provides as follows: "(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 disturbed, or is likely to disturb, public order. " 677 It is not disputed that the petitioner 's alleged activities set out in grounds ( 1 ) and (3) of the said grounds of detention fell under cl. (d) being offences under the , and also being such that they did or were likely to disturb public order. The only contention raised for our determination was that activities set out in ground No. (2), namely, causing injuries with a sword. would constitute an offence under section 324 of the Penal Code, an offence neither punishable with death, nor life imprisonment, nor imprisonment for a term of seven years. Therefore, ground No. (2) would be, it was urged, a ground which would not fall under the said definition, and would, therefore, be an extraneous ground rendering the impugned order invalid. The contention in our view has no substance as the offence alleged in ground No. (2) would fall under cl. (d) of section 1 (2) of the Act inasmuch as it will be one, punishable under the , LIV of 1959. Under section 2(1) (c) of the , the word 'arms ' inter alia means articles of any description designed or adapted as weapons for offence or defence, and includes firearms, sharpedged and other deadly weapons. A sword is thus arms I within the meaning of this definition. 3 of the Act then prohibits, among other things, possession of firearms or ammunition except under a licence issued under the Act or the rules made thereunder. So far as arms, other than firearms, are concerned, section 4 empowers the Central Government, if it is of opinion that having regard to the circumstances prevailing in any area it is necessary or expedient in the public interest, that acquisition,. possession or carrying of arms, other than firearms, should also be regulated, it may by notification direct that this section shall apply to the area specified in such notification, and thereupon no person shall acquire, have in his possession or carry in that area arms of such class or description as may be specified in that notification, except under a licence issued under the provisions of the Act or the rules made thereunder. Once, therefore, such a notification is issued under the Act or the rules made thereunder, and that notification specifies any arms, e.g. a sword, possession of or carrying such a sword without licence in the specified area would be an offence under the . 25 (1) (b) provides that whoever acquires, has in his possession or carries in any place specified by notification under section 4 'any arms of such class or description as have been specified in that notification in contravention of that section shall be punishable with imprisonment for a term which may extend to three 1 years, or with fine or with both. It, however, appears that no such notification as contemplated by section 4 of the 1959 Act has been issued. But, in 1923 such a 678 notification bearing reference No. Political (Police) Department Notification No. 787 PL, dated March 9, 1923 was issued under section 15 of the earlier Indian , XI of 1878, which was in terms similar to section 4 of the present Act. The question is, whether Act XI of 1878 having been repealed, the said notification issued under section 15 thereof can still be said to be operative ? Sec. 46(1) of the repealed the preceding Act of 1878. Its sub section (2) provides that notwithstanding such repeal and without prejudice to sections 6 and 24 of the General Clauses Act, X of 1897 a licence granted under the repealed Act and in force immediately before the commencement of the new Act shall continue, unless sooner revoked, for the unexpired period for which it had been granted or renewed. 46(2) thus saves only licences issued under the . Sec. 6(b) of the General Clauses Act, however, provides that where any Central Act or regulation made after the commence ment of the Act repeals any earlier enactment, then, unless a different intention appears, such repeal shall not "affect the previous operation of any enactment so repealed or anything duly done or suffered hereunder". 24 next provides that where any Central Act is repealed and re enacted with or without modification, then, unless it is otherwise expressly provided, any notification issued under such repealed Act shall, so far as it is inconsistent with the provisions re enacted, continue in force and be deemed to have been made under the provisions so re enacted unless it is superseded by any notification or order issued under the provisions so re enacted. The new Act nowhere contains an intention to the contrary signifying that the operation of the repealed Act or of an notification issued thereunder was not to continue. Further, the new Act re enacts the provisions of the earlier Act, and section 4 in particular, as already stated, has provisions practically identical to those of section 15 of the earlier Act. The combined effect of sections 6 and 24 of the General Clauses Act is that the said notification of 1923 issued under section 15 of the Act of 1878 not only continued to operate but has. to be deemed to have been enacted under the new Act. Possession of arms, such as a sword without a licence or contrary to the terms and conditions of such a licence would thus be an offence punishable with imprisonment under the . Though the possession of and carrying a sword were alleged to have been committed in 1970, that is, after the repeal of the Arms Act, 1878, the said notification of 1923 issued under the repealed Act would, despite its repeal, continue to be in force and its provisions would be deemed to have been enacted under the new Act by virtue of section 24 of the General Clauses Act. 679 This was the construction placed upon these two sections by this Court in the Chief Inspector of Mines vs Lala Karam Chand Thapar,(1) where the question as to the meaning of section 24 of the General Clauses Act arose. In that case, the directors of a colliery company and its managing agents were prosecuted under the for violation of Coal Mines Regulations of_ 1926 made under Mines Act, 1923, which was repealed by 1952 Act. Repelling the contention that the prosecution in respect of the violation of those Regulations made under the repealed Act was unauthorised and invalid, the Court construed section 24 of the General ' Clauses Act to mean that when an earlier Act is repealed by a later Act, which re enacted the provisions of the earlier Act, Regulations framed under the repealed Act continue in force and are deemed to have been made under the provisions so re enacted, and must be so construed as to have continuity of force, and are to be regarded as laws in force at the date of the offence within the meaning of article 20(3) of the Constitution. In that case, the breach of those Regulations took place before the commencement of the new Act. Even then the prosecution under the new Act was held to be valid on the ground that the Regulations were deemed to have, been made under the new Act. In the present case, the offence of being in possession of and carrying a sword without licence took place after the commencement of the new Act of 1959. The said notification, by virtue of section 24 of the General Clauses Act having to be deemed to have been made under section 4 of the , the notification was in force on the date of the alleged offence. The offence thus fell under the , and that be ing so, acts set out in ground No. (2) were covered by cl. (d) of section 3(2) of the Act. Consequently, that ground cannot be said to be extraneous to the Act. This being the only contention arising for our consideration and it having failed, the petition fails and is dismissed. K.B.N. Petition dismissed. [/INST]Section 3(2) (d) of the West Bengal (Prevention of Violent Activities, ' Act, 1970, amongst other things, provides that the committing of any offence punishable with imprisonment for a term extending to 7 years of more, where the commission of such offence disturbs or is likely to disturb public order would be within the definition of the expression "acting in any manner prejudicial to the maintenance of public order". In pursuance of an order under a. 3(1) and (3) of the Act, the petitioner was arrested on August 6, 1971, with a view to preventing him from acting in any manner prejudicial to the maintenance of public order One of the grounds furnished to him was that he threatened to kill a person on account of his refusal to rub out the anti naxalite slogan, written on the wall of his house, that the threat terrorised the common public and as such they could not pursue their normal avocations, and that he disturbed public order. The State Government confirmed the order on October 28, 1971, after receipt of the opinion of the Advisory Board (Dismissing the petition under article 32 Challenging the order of detention. HELD : (1) Under section 506 I.P.C., a threat to commit an offence punish able with death or imprisonment for life shall be punish able with imprisonment of either description for a term which may extend to 7 years. Hence the ground furnished was not extraneous or irrelevant since the petitioner. had committed an offence enumerated in section 3(2) (d) and there was disturbance of public order. [716A C] (2) There was no delay in passing the order of confirmation, since it was passed before the expiry of three months from the date of detention. [716H] Deb Sadhan Rov vs West Bengal, and Ujjal Manda vs West Bengal, ; followed. </s>
<s>[INST] Summarize the judgementivil Appeal No. 1837 of 1990. From the Judgment and Order dated 17.1.1989 of the Patna High Court in C.W.J.C. No. 4276 of 1988, A. Sharan for the Appellants. Pankaj Kalra and Pramod Swarup for the Respondents. The Judgment of the Court was delivered by AHMADI, J. Delay condoned. Special leave granted. This appeal arises out of the decision of the Patna High Court 470 whereby it struck down the selection made for appointments in the junior teaching posts in medical colleges in the State and directed a fresh selection list to be prepared after shifting the last date for receipt of applications to 30th June, 1988. The facts giving rise to this appeal, briefly stated, are as under. The State of Bihar published an advertisement inviting applications for appointment to the posts of (i) Assistant Professor (clinical subject); (ii) Registrar; (iii) Assist ant Clinical Pathologist; (iv) Anesthetist; (v) Resident Medical Officer and (vi) Demonstrator (Tutor) in non clini cal subject for different Medical Colleges and Medical College Hospitals in the State of Bihar. For the post of Assistant Professor only such officers who had worked as Resident or Registrar in Medical Hospital 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 the application was fixed as 31st January, 1988. Pursuant to the said adver tisement applications were received from eligible candidates and the select list or panel was prepared for appointments to the respective posts. The respondents and some interven ors who held appointments as junior teachers in one or the other Medical Colleges in the State questioned the validity of the State 's action of inviting applications for prepara tion of a list for appointments to the advertised posts mainly on the ground that the last date for receipt of applications fixed as 31st January, 1988 (hereinafter called 'the cut off date ') deprived them of the opportunity to compete for the posts as they did not complete the requisite experience criterion of three years by that time. It was contended that this 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 had deviated from its usual practice of fixing the cut off date as 30th of June of the relevant year. This is clear from the following observation made by the High Court: " . . advertisement in the past including one in the year 1983 (Annexure 1) always fixed 31st June as the date " . (Emphasis supplied) The use of the word 'always ' indicates that the High Court was under the impression that in the past the cut off date was always fixed as 31st June (it should be 30th June) for the preparation of the panel for appointments to the posts in question. Elsewhere also in the judgment there are obser vations which disclose that the High Court laboured 471 under the belief that the cut off date was always fixed as 30th of June of the relevant year. This becomes obvious from the following criticism also: "If the State is determined to achieve such a goal and is ready to make its activity predictable it is a welcome sign but such desired predictability can equally be achieved by adhering to the schedule of the past and maintaining 30th June of the years as the last date for the application. If they had not followed any rule in the past and they propose to follow a rule in this regard in future, they can do so without causing any violation to any legal right of any incumbent by at least showing adherence to the reckoning date which until now had been the last date of the month of June of the year." (Emphasis supplied) On this line of reasoning the High Court came to the conclu sion 'that the State Govermnent had acted arbitrarily in fixing the last date fox receipt of applications as 31st January, 1988 under the advertisement published on 29th December, 1987. The High Court while upholding the conten tion based on Article 14 further observed "we would have ignored the arbitrariness in taking 31st January of the year as the reckoning date had we not taken notice of recalci trance of the, respondents in taking no step in the years intervening the selection in the year 1983 and the present selection". The High Court, therefore, felt satisfied that there was no rationale in departing from the past practice and selecting 31st January, 1988 as the last date. It is felt that in all fairness 30th of June of the year would be 'the .preferable date ' for reckoning the eligibility of the candidates. The State Government was, therefore, directed to shift the last date for receipt of the applications from 3 1st January 1988 to 30th June, 1988 and to prepare a fresh panel thereafter and make appointments to the posts in question therefrom. The State of Bihar feeling aggrieved by this order has approached this Court by special leave. The learned counsel for the State submitted 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. In order to dispel this assumption made by the High Court without examining the past advertisements the State Government has placed before us the advertisements issued from 1974 to 1980 which shows that different cut off dates were fixed under these different advertisements and at no time in the past between 1974 and 1980 was 30th of June fixed as the 472 relevant date. It is true that the High Court did not have the benefit of the earlier advertisements but it is equally true that there was no material on the record of the High Court for concluding that in the past the cut off date was 'always ' fixed as 30th of June of the relevant year. From the copies of the advertisements from 1974 to 1980 it tran spires that generally the cut off date was fixed between one to one and a half months after the date of issuance of the advertisement. In the year 1983 for the first time the cut off date was fixed as 30th June, 1983. On some occasions in the past the cut off date was extended, depending on the facts and circumstances obtaining at the relevant point of time. It, therefore, becomes obvious from this documentary evidence that the factual premise on which the High Court has based its judgment is clearly erroneous. The High Court was in error in thinking that in the past the cut off date was always fixed as 30th of June of the relevant year. In fact except for a solitary occasion in 1983 when the cut off date was fixed as 30th June, 1983, at no other time in the past was that date fixed as the last date for receipt of the applications. No advertisements were admittedly issued after 1983 and before the advertisement in question. The present advertisement was published on 29th December, 1987 and the last date for receipt of applications was fixed thereunder as 3 ist January, 1988 leaving a time gap of a little over a month. As pointed out earlier, on a perusal of the adver tisements issued from 1974 to 1980 it becomes obvious that normally the cut off date was fixed one or one and a half months after the date of advertisement. It was, therefore, not the uniform practice of the State Government to fix the cut off date for eligibility purposes as 30th of June of the relevant year as was assumed by the High Court. Once it is found that the High Court has based its decision on an erroneous assumption of fact, the decision cannot be allowed to stand. It was, however, argued by the learned counsel for the respondents that the State Government should not be permit ted to introduce new facts in the form of advertisements issued from 1974 to 1980. We do not think that such a tech nical approach would be justified for the simple reason that the assumption of fact made by the High Court is not borne out from record. No material was placed before the High Court to justify the conclusion that 30th of June of the relevant year was 'always ' fixed as the cut off date in the past. The High Court 's assumption of fact is, therefore, based on no evidence at all. We have, therefore, thought it fit to permit the State Government to place material on record to justify its contention that the High Court had committed a grave error in assuming that in the past the cut off date was always fixed as 30th of June of the rele vant year. 473 It was next contended that this Court should not inter fere in exercise of its extra ordinary Jurisdiction under Article 136 of the Constitution. In support of this conten tion reliance was placed on the observations of this Court in Municipal Board. Pratabgarh & Anr. vs Mahendra Singh Chawla & Ors., wherein this Court while correcting an error of law refused to interfere with the decision of the High Court directing reinstatement of the workman on the finding that the termination order was in valid. That was, however, a case where the Court came to the conclusion that the employee was a capable hand and his services were actually needed by the appellant Municipal Board. It was in those special circumstances that this Court while correcting the error refused to interfere with the order of reinstatement. The decision, therefore, turned on the special facts of that case. The appellant invited our attention to two decisions of this Court, namely, Union of India & Anr. vs M/s. Pararnes waran Match Works & Ors., [1975]1 SCC 305 and Uttar Pradesh Mahavidyalaya Tadarth Shikshak Niyamitikaran Abhiyan Samiti, Varanasi vs State of U.P. & Ors. in sup port of its contention that the High Court was in error in holding that the State had acted arbitrarily in fixing the cut off date. In the first mentioned case by Notification No. 162 dated 21st July, 1967, which superseded the earlier notifications, provision was made that if a manufacturer gave a declaration that the total clearance from the factory will not exceed 75 million matches during a financial year, he would be entitled to a concessional rate of duty. This Notification was amended by Notification No.205 dated 4th September, 1967, clause (b) whereof confined the concession, inter alia to factories whose total clearance of matches during the financial year 1967 68, as per declaration made by the manufacturer before 4th September, 1967, was not estimated to exceed 75 million matches. Thus, the conces sional rate of duty could be availed of only by those who made the declaration before 4th September, 1967. The re spondent was not a manufacturer before 4th September, 1967 as he had sought for a licence on 5th September, 1967 and was therefore, in no position to made the declaration before 4th September, 1967. The respondent, therefore, challenged the cut off date of 4th September, 1967 as arbitrary. Deal ing with the contention, this Court observed as under: "In the matter of granting concession or exemption from tax, the Government has a wide latitude of discretion. 1t need not give exemption or concession to everyone in order 474 that it may grant the same to some. As we said, the object of granting the concessional rate of duty was to protect the smaller units in the industry from the competition by the larger ones and that object would have been frustrated, if, by adopting the device of fragmentation, the larger units could become the ultimate beneficiaries of the bounty. " While pointing out that a classification could be rounded on a particular date and yet be reasonable, this Court observed that the choice of a date as a basis for classification cannot always be dubbed as arbitrary even if no particular reason is forthcoming for the choice unless the circum stances show it to be capricious or whimsical. When it is necessary for the legislature or the authorities to fix a line or a date and there is no mathematical or logical way of fixing it precisely, the decision of the legislature or authority must be accepted unless it is shown to be capri cious or whimsical or wide off the reasonable mark. In the second mentioned case this Court, while upholding the con stitutional validity of section 31 B of the U.P.Higher Educational Service Commission Act, 1980, answered two contentions, namely, (1) adoption of the cut off date in the said section as 3rd January, 1984 for the purposes of regu larisation of the services of ad hoc teachers appointed by the management of the affiliated colleges was arbitrary and irrational and violative of Article 14 inasmuch as equals were treated as unequals, and (ii) the Legislature could not arbitrarily adopt 3rd January, 1984 as the cut off date for regularisation of the services of ad hoc teachers merely because that was the date on which the 1983 order expired. Agreeing with the High Court that the fixation of the date for the purposes of regularisation was not arbitrary or irrational, this Court observed that the object of section 3 I B was to regularise the services of ad hoc teachers ap pointed under the 1983 order till 3rd January, 1984.Ad hoc teachers who had been appointed prior to that date had legal sanction and therefore they constituted a distinct class. This Court, therefore, felt that the legislature could not have adopted any other basis for purposes of regularisation and refused to interfere with the High Court 's order. In the present case as pointed out earlier the past practice was to fix the last date for receipt of applica tions a month or one and a half months after the date of actual publication of the advertisement. Following the past practice the State Government fixed the last date for re ceipt of applications as 31st January 1988. Those who had . the required experience of three years by that date were, therefore, eligible to apply for the posts in question. The respondents and some 475 of the intervenors who were not completing the required experience by that date, therefore, challenged the fixation of the last date as arbitrary and violative of Article 14 of the Constitution. It is obvious that in fixing the last date as 31st January, 1988 the State Government had only followed the past practice and if the High Court 's attention had been invited to this fact it would perhaps have refused to inter fere since its interference is based on the erroneous belief that the past practice was to fix 30th of June of the rele vant year as the last date for receipt of applications. Except for leaning on a past practice the High Court has not assigned any reasons for its choice of the date. As pointed out by this Court the choice of date cannot be dubbed as arbitrary even if no particular reason is forthcoming 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 posts 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. It is not the case of any one that experienced candi dates were not available in sufficient numbers on the cut off date. 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. We are, therefore, of the opinion that the High Court was clearly in error in striking down the Government 's action of fixing the last date for receipt of applications as 31st January, 1988 as arbitrary. It was lastly contended that the State Government had given an undertaking to the High Court that 'no appointment shall be made from any previous panel and that, as decided by this Court, if the panel, which is likely to be prepared pursuant to the advertisement in question, is allowed, appointments shall be made from the same panel or if that panel is not allowed and a new panel is required to be prepared, as directed by this Court, appointments shall be made from the same panel '. This undertaking, in our opinion, cannot preclude the State from challenging the decision of the High Court. In the result, this appeal succeeds. The impugned deci sion of the High Court is set aside and the Writ Petition which has given rise to this appeal will stand dismissed with no order as to costs throughout. Y. Lal Appeal allowed. [/INST]These appeals arose as a sequel to certain directions of this Court in the famous Sanchaita Investment Company case, which by dint of tremendous advertisement campaign collected deposits amounting to several crores of rupees from thou sands of depositors spread all over India. The firm pros pered and thereafter tied up and siphoned away a sizeable portion of its funds from its coffers for the benefit of the management personnel by acquiring movable and immovable properties in the names of the firm, relatives and benami dars. Then they started making defaults in its obligations to the depositors. The depositors approached the High Court and eventually the matter came up to this Court in 1983. With a view to safeguard the interests of the depositors and ensure that the properties of the firm be duly identified and full and due benefit of the funds be diverted to its coffers, this Court by its order appointed a Commissioner to take charge of all the assets, documents, papers of the firm, agents, sub agents, transferees and benamidars. Further to enable the Commissioner to gather all the assets of the firm, he was given powers to attach all assets and properties which in his prima facie opinion are of the ownership of the firm or any of its partners. Such assets were to be put to sale if no objections are received there to within one month from the date of attachment. All objections thus received in respect of such properties were to be forwarded to the Prothonotary of Calcutta High Court, and a Division Bench of the High Court was to dispose of the objections on merits. By a further order dated 23rd September, 1985 this Court empowered the Commissioner to remove all unauthorised 283 persons or trespassers from possession of the property proposed to be sold, and the Commissioner to hand over vacant possession to the rightful purchasers. One of the properties thus attached by the Commissioner by a public notice was house N. 52/1/1B Surendra Nath Baner jee Road, Calcutta. It was subsequently brought to sale on "as is and where is basis". Asit Kumar Mandal and two others purchased this property and requested the Commissioner to give them vacant possession. Since the sale was on "as is and where is basis", the Mandais moved an application before the High Court Division Bench praying for the vacant posses sion of the said property and the same was granted. Hence the appellants i.e. Paul Bros and Others, moved two Special Leave Petitions in this Court and claimed that they were bona fide tenants in the property even under the predecessors in interest of Mahamaya Devi in whose name the property was purchased by Sanchaita firm and therefore could be evicted only in accordance with due process of law after full contest, and could not be thrown out in summary pro ceedings just as if they were persons in unauthorised pos session of the property, or as if they were mere trespass ers. On the other hand the Mandais contended that in terms of the orders of this Court, and of the Calcutta Division Bench they purchased the property only on the basis that they would get a perfect title and speedy possession. Allowing the Special Leave Petitions, this Court, HELl): That the contention of the Mandais is not main tainable either in principle or on the terms of the direc tions of this Court. The attachment and sale in pursuance of this Court 's order of the present property in question did not have the legal effect of invalidating any interests created or subsisting in the property by sale, transfer encumbrance or alienation prior to the attachment. Even the sale was on "as is and where is basis". The Courts order of 27th September, 1983 only empowered the Commissioner to remove all unauthorised persons and trespassers but persons who are in lawful possession of the 284 property could not be evicted forcibly or summarily. The said order could not be interpreted to mean that the pur chasers would be entitled to vacant possession through the commissioner even by evicting bona fide tenants or other encumbrancer or independent out siders who had acquired interest for consideration in the property. The object of the directions was to cut short the proliferation of litiga tion and to gather in expeditiously the assets of Sanchaita. [292D E; 295H; 296B] Having regard to the large scale dealings, the special circumstances and the desperate situation, the Court made an exception and made it possible for the Commissioner to get false and frivolous claimants out of the way by a quick procedure because even normally the trespassers and unautho rised persons cannot be thrown out except by recourse to legal proceedings. So this order could not be availed of to ride rough shod over the rights and interests of others in the properties which had been created bona fide. Even third parties who have acquired real interests in the property either independent of, or even through Sanchaita could not be called upon to give up their rights which would mean to do more than merely realise what rightfully belongs to Sanchaita that is by conferring a better title than it had in fact acquired while purchasing those properties, [297B, G] So in the instant case, considering the materials and evidence and the records placed before the Court by the claimants/objectors, to prove that they are not stooges or false claimants but have bona fide right to possession, it was held that the auction purchaser could not evict Paul Brothers and Phani Bhushan Ghose except eviction proceedings in the normal course and in accordance with law as may be available to them against the claimants/objectors. The claim 's of the other appellant was rejected. [297C D] </s>
<s>[INST] Summarize the judgementCivil Appeal No. 1837 of 1974. Appeal by Special Leave from the Judgment and Order dated 4 9 74 of the Calcutta High in Civil Rule No. 5547 (N) of 1974. Civil Appeals Nos. 1838 1842/74 Appeals by Special Leave from the Judgments and Orders dated 18 9 74, 29 7 74, 9 8 74, of the Allahabad High Court (Lucknow Bench) in Civil Writ Nos. 4398, 400, 4397 of 1974 and C.W.A. 3344/74 and W.P. No. 947/74. Civil Appeal No. 485/75 Appeal by Special Leave from the Judgment and Order dated 24 10 74 of the Gujarat High Court in L.P.A. No. 208/74. Civil Appeal No. 1246/75 Appeal by Special Leave from the Judgment and Order dated 1 4 75 of the Andhra Pradesh High Court in W.A. No. 900/75. Civil Appeal No. 2041/74 Appeal by Special Leave from the Judgment and Order dated 15 10 74 of the Gujarat High Court in L.P.A. No. 205/74. Niren De, Attorney General for India (In all appeals) Devakinandan. (In a11 appeals) P.P. Rao (In C. As. 1245/75 and C.A. 2041/74), R.N. Sachthey for the appellants in CAs. 1837 42 of 74, 1246/75 and 2041/74 and R. 2 in C. As. 1839, 1840/74 and RR. 1 and 2 in C.A. 485/75. 33 A.K. Sen, (In CA 1837/74), I. N. Haldar (In CA 1837/74), K.K. Singhvi (In CA 2041/74), Yogeshwar Prasad; S.K. Bagga and (Mrs.) section Bagga for RR. 1, 3, 7, 11, 12 and 14 in CA 1837/74 and R. 1 in CA Nos. 1839 1841/74 and 2041./74 and RR 2 and 3 in CA. No. 1246/75. Yogeshwar Prasad and (Miss) Rani Arora for R. 1 in C.A. 1838 74. Yogeshwar Prasadand (Miss) Rani Arora for R. 1 in C.A. 1842/ 74. Ram Panjwani, Bishamber Lal, S.K. Gupta and Dayal for Appellant in CA. 485/75 and RR 5, 6 and 7 in CA 2041/74 for the Interverners in CA 1838, 1841, 2041/74 and CA No. 1246/75. The Judgment of the Court was delivered by Ray, C.J. The principal question in these appeal is whether the selection list for promotion of Income Tax Officers Class Service to the post of Assistant Commission ers of Income Tax is correct or not. The selection list was prepared by the Departmental Promotion Committee on 23, 24 and 25 July, 1974. It may be stated here that on 16 August 1972 this Court set aside the Seniority List which had been impugned in Civil Appeal No. 2060(N) of 1971 and gave directions on which the Seniority List was to be prepared. (See Bishan Sarup Gupta vs Union of India(1). This selection list was prepared on the basis of the seniority list approved by this Court on 16 April, 1974 in Bishan Sarup Gupta etc. vs Union of India & Ors. etc. The basis of the preparation of the selection list is the field of choice. The principles for promotion to selec tion posts are set out in a Memorandum dated 16 May 1957 issued by the Central Board of Revenue. The principles are these: First, greater emphasis should be placed on merit as criterion for promotion. Appointments to selection posts and selection grades should be made on the basis of merit having regard to seniority only to the extent indicat ed there Second, the Departmental Promotion Committee or other selecting authority should first decide the field of choice, namely, the number of eligible officers awaiting promotion who should be considered for inclusion in the selection list provided, however, that an officer of outstanding merit may be included in the list of eligible persons even if he is outside the normal field of choice. Third, the field of choice wherever possible should extend to five or six times the number of vacancies expected within a year. Fourth, from among such officers those who are considered unfit for promotion should be excluded. The re maining officers should be classified as "outstanding", "very good" and "good" on the basis of merit as determined by their respective records of service. The selection list should then be pre (1)[1975]Supp. S.C.R.491 (2) ; 4 1458SCI/76 34 pared by placing the names in the order of these three categories without disturbing the seniority inter se within each category. Fifth, promotions should strictly be made from the selection list in the order in which their names are finally arranged. The selection list should be periodi cally reviewed. The names of those officers who have already been promoted otherwise than on a 'local or purely temporary basis and continue to officiate should be removed from the list and the rest of the names along with others who may now be included in the field of choice should be considered for the selection list for the subsequent period. Several persons, mainly promotees from Class II to Class I as Income Tax Officers challenged in writ petitions field before several High Courts the correctness of the field of choice so determined by the Departmental Promotion Committee hereinafter referred to as the Committee on the basis of which the said selection list was prepared. The Gujarat and the Andhra Pradesh High Courts delivered judg ments. The other High Courts gave interim orders staying the operation of the selection list. There are two appeals by special leave from the judgments of the Gujarat and the Andhra Pradesh High Courts. There are also appeals by special leave from the interim orders of the High Courts because the questions involved are the same. There were 112 vacancies of Assistant Commissioners. The Government of India sent 336 names in the running order of seniority for consideration of the field of choice. Out of those 336 names the Committee took 276 names in the running order of seniority. The principal question for consideration is whether the field of choice determined by the Committee on the basis of which the Committee prepared the selection list is correct or not. The Gujarat High Court held that the requirement of 10 years ' experience as Income Tax Officer for promotion to the post of Assistant Commissioner as laid down in the Govern ment of India letter No. C. 33(17) Admn. I.I./49 dated 16 January 1950 prevailed while the Committee determined the field of choice and this requirement was violated because the Committee considered persons with 8 years ' experi ence for the field of choice. The High Court further held that even if the requirement of 10 years ' experience was not a statutory rule the requirement was to be complied with in determining the field of choice unless people with such experience were not available in the seniority list of Class I Income Tax Officers. What the High Court said was that if such people with 10 years ' experience were available in the seniority list only such people should be considered in the field of choice ignoring those in the seniority list who are senior to such persons but have less than 10 years ' experi ence as Income Tax Officers. The second reason given by the High Court for holding the selection list to be incorrect is that under the letter dated 16 May 1957 the field of choice should have been 5 times the number of vacancies whereas the actual field of choice contained a much lesser number. The third ground given by the High Court for holding the selec tion list 35 to be incorrect is that in the field of choice of Com mittee did not properly evaluate the merit of persons in the field of choice. The section of persons in the selection list was to be selection on merit only and not seniority cum merit. The fourth reason given by the High Court is that the date for determining the eligibility of officers for promotion to the post of Assistant Commissioner of Income Tax should be decided by the Committee by bearing in mind the two dates, namely, 21 December 1972 when this Court permitted provisional promotions and 29 November 1973 when Government made the second batch of ad hoc promotions, as the two terminals. The principal contentions on behalf of the respondents are these. First, promotions from amongst Income Tax Offi cers Class I Service to the post of Assistant Commissioner of Income Tax have to be made solely on the basis of merit. The respondents relied on rule 18 of Chapter II(c) section 1 Vol. II of the Office Manual in support of their contention. Broadly stated rule 18 is that the promotion shall be strictly on merit and further that no one should ordinarily be considered for promotion unless he has com pleted at least 10 years ' service as income Tax Officer. The respondents amplified their contention to mean that promotion to a selection post is to be made solely on the basis of merit and not on the basis of seniority cum merit. The second contention of the respondents is that only such of the Income Tax Officers in Class I Service who had put in at least 10 years ' service as Income Tax Officers are eligible for being considered for promotion to the post of Assistant Commissioners. This contention. is also based on rule 18 and according to the respondents rule 18 means that the condition precedent for eligibility to be consid ered for promotion to the post of Assistant Commissioner is that an Income Tax Officer in Class I Service must have put in at least 10 years ' service as Income Tax Officer. The respondents further contended that rule 18 was framed on 16 January 1950 and the letter dated 21 July 1950 addressed by the Central Board of Revenue to all Commission ers of Income Tax shows that the Government of India framed the rule with the approval of the Union Public Service Commission and the Ministry of Home Affairs. The Govern ment case is that the rule was abrogated. The respondents ' answer to the Government contention is that the entire correspondence relied on by the Government shows that the Ministry of Finance wanted to frame new rules of seniority. The respondents also contend that the Ministry of Home Affairs gave approval to the framing of new rules of senior ity but gave No. direction with regard to the rule relating to the recruitment except stating that the said rule might be appropriately included in the relevant recruitment rules. Therefore the respondents contend that the recruitment rule regarding 10 years ' experience continued whereas the senior ity rule stood modified in terms of the letter of M.C. Thomas dated 4 April 1964. The respondents also rely on the affidavit dated 8 March, 1968 flied by M.C. Thomas in the Gujarat High Court in application No. 1365 36 of 1965, an affidavit of M.C. Thomas dated 21 May 1970 filed in the Delhi High Court in writ petition No. 196 of 1970, an affidavit of the respondents dated 5 August 1974 filed in the Gujarat High Court in support of the contention that the rule relating to 10 years ' service was in force at least from 21 May, 1970. The respondents further contend that promotions to the post of Assistant Commissioners in the year 1964 and 1970 show that all promotees except 2 had completed at least 10 years ' service before being selected for promotion. Even with regard to those two promotees the respondents submitted that both of them joined on 24 Octo ber, 1960 but they had been selected along with others in May 1960. Therefore, those two officers were promoted along with their batch mates of May, 1960. The third contention of the respondents is that rule 18 has the force of law. It is said that under section 241 of the Government of India Act 1935 the Government was empow ered to make rules. Pursuant to that power the Government of India made the rule. The letters dated 16 January 1950 and 21 July 1950 written by the Government to the Commissioners of Income Tax referring to rule 18 were relied on by the respondents in support of their contention. In the alterna tive, the respondents contended that the decision of the Government contained in the letter dated 16 January, 1950 was made by the Government of India in exercise of executive powers under section 8 of the Government of India Act 1935 read with item 8 of List I of the Seventh Schedule. This order which had the backing of law was an existing law within the meaning of clause 10 of Article 366 of the Constitution. In the further alternative the respondents contended that the rule contained in the letter dated 16 January, 1950 was incorporated in the Office Manual issued by the Government of India in exercise Of its executive power under Article 53 of the Constitution and therefore these instructions have the force of law. It is also said by the respondents that the rule which affects promotions of the persons constitutes the conditions of service. The fourth contention on the part of the respondents is that the use of the word "ordinarily" in rule 18 imposes an obligation on the Union Government not to consider an Income Tax Officer Class I who has not completed at least 10 years ' service as Income Tax Officer for promotion as Assistant Commissioner unless there are extraordinary circumstances. It is said that the word "ordinarily" does not vest in the Government unfettered condition to follow or not to follow the rule. It is also said that the use of the word "at least 10 years ' service" shows that the word "ordinarily" has been used to enable the Government to consider such of the Income Tax Officers who have put in more than 10 years ' service. The respondents also contend that the Government proceeded on the basis that the rule relating to 10 years ' service did not exist after April 1964; and, therefore, it cannot be said that the Government departed from rule 18 because of extraordinary circum stances. The fifth contention is that the selection has been made in complete violation of the rule framed by the Government of India for promotion to selection post as contained in the Office Memorandum 37 of the Ministry of Home Affairs dated 16 May, 1957. This contention is expanded by submitting that the list should have contained names of at least 5 or 6 times the number of vacancies existing within a year and in view of the fact that there were 112 existing and 10 anticipated vacancies the Government of India should have sent to the Committee names of at least 560 officers. The Committee should then have removed such names which were unfit for promotion and thereafter have classified the rest as outstanding, very good, and good on the basis of merit. The respondents contend that the Government sent only 336 names for con sideration when the vacancies were more than 120 and the Government also ignored the rule of 10 years ' experience. It is also said that the Committee ignored the names of 59 officers from consideration and classified only 144 officers out of the remaining 277 and prepared the list of 122 out of 144 officers. The respondents further contend that though respondents No. 2 and 3 in Civil Appeal No. 2041 of 1974, namely, R.K. Desai and B. Srinivasan completed 10 years ' experience they were not included within the field of choice as officers senior to them had not completed 8 years of service as Income Tax Officers. Therefore, rule 18 was violated. The sixth contention of the respondents is that the entire selection was arbitrary and in violation of Article 16 of the Constitution. It is said that if the rule re quiring 10 years ' experience had been followed only such of the persons who had put in 10 years ' service would have been in the field for selection. It is said that the Government included Income Tax Officers who were direct recruits and who had put in less than 8 years ' service in the list but excluded promotees Income Tax Officers who had put in more than 8 years ' service as Income Tax Officers. It is further said by the respondents that out of 122 per sons selected 111 are direct recruits and only 11 are promo tees. Reference was made to the junior most person in the selection list Madan Mohan Joshi. It is said that Madan Mohan Joshi was appointed as Income Tax Officer Class I on 5 July, 1965, and, therefore, he completed 9 years ' service at the time of selection. The last person considered by the Committee is a direct recruit Rajeswar Rao Gnutam who was appointed on 8 July, 1966. Again, it is said that from amongst the promotees Raghubir Singh the promotee who joined Class I Service on 1 May 1964 and had more than 10 years ' service was not placed in the field of choice. The respondents, therefore, contend that promotee Officers who had put in more than 8 years ' service as Income Tax Officers were not included in the field of choice whereas direct recruits who had not completed 8 years ' service were in cluded in the field of choice. The seventh contention of the respondents is that the eligibility of Income Tax Officers for the purpose of promo tion to the post of Assistant Commissioner should be consid ered either as on 21 October, 1972 or 21 March 1973 or 29 November 1973. In support of that contention it is said that when the Government of India made an application for filling up certain posts this Court by order dated 21 Decem ber 1972 permitted the Government to fill in the posts on ad 38 hoc basis from amongst the eligible officers on the basis of continuous, length of service in Class I. Accordingly, by orders dated 21 March 1973, and 29 November, 1973, 59 and 48 officers respectively were promoted on ad hoc basis. These officers were to, be replaced by regular selection. The seniority list was confirmed by this Court by judgment dated 16 April 1974. The respondents, therefore, contend that the Committee had to regularise aforesaid 107 promo tions, and the regularisation had necessarily to be done from the dates of original promotions on ad hoc basis. It is said in this context that the eligibility of officers for the purpose of promotion must be considered either on 21 December 1972 or on 21 March 1973 or on 29 November, 1973. The respondents also submit that the eligibility has refer ence to the date of vacancy and therefore only such of the persons who had the qualified service on the date of vacancy ought to be considered by the Committee. Reliance was placed on the observations of this Court in Bishan Sarup Gupta 's case(1) that after the finalisation of the seniority list the department should consider the cases of all eligi ble officers for promotion on the basis of their records as on the date when they ought to have been considered by selection but who were not so considered. The first question for consideration is whether the rule of 10 years ' experience was modified to 8 years ' expe rience. The correspondence between the Central Government and the Union Public Service Commission between 30 January 1963 and 26 June 1969 shows that the principle for promotion as Assistant Commissioner is that no Income Tax Officer should ordinarily be considered unless he has completed 8 years ' service as Income Tax Officer. The proposal for this change from 10 years to 8 years emanated from the Finance Ministry. The Home Ministry stated that the rule does not strictly relate to the seniority rules in respect of As sistant Commissioners of Income Tax and should thus be included in the relevant Recruitment Rules, that is, Rules for selection for the post of Assistant Commissioner of Income Tax. The Union Public Service Commission as will appear from the letter dated 31 May, 1963 agreed subject to proposed modification regarding the seniority of Assistant Commissioners of Income Tax. It thus appears that the Finance Ministry, the Home Ministry and the Union Public Commission concurred with the change from the requirement of experience for 10 years to that of 8 years. The requirement of 10 years ' experience as laid down in the letter dated 16 January, 1950 and the Office Manual published ' in 1955 thus came to be modified. The only thing which is to be noticed is that no Rules under Article 309 were made. The change from 10 years to 8 years ' experience was recorded by means of correspondence as an administrative instruction. It is explicable that the letter dated 16 January, 1950 as well as the Office Manual published in 1955 was an administrative instruction. The change from 10 years to. 8 years ' experience was not only given effect to in the field of choice but also, recog nized in the Committee meetings of September 1968, April/May 1970 and February, 1972. In September 1968, 16 persons were over 9 years ' experience (1) [1975] supp. S.C.R.491,506 39 but less than 10 years ' experience. None of these persons was however selected to be placed on the selection list. In April/May 1970, 14 persons were over 9 years experience but less than 10 years ' experience, and 24 persons were over 8 years ' experience only. Out of those only 7 who were all over 9 years ' experience were selected to be placed in the selection list. In 1972 the Committee considered 25 persons over 9 years ' experience but less than 10 years ' in experi ence, and 27 persons over 8 years ' experience. Out of these only 10 persons who were all over 9 years ' experience were selected to be placed in the selection list. In the Committee meeting of July, 1974 the selection list prepared did not have any person except 4 emergency commissioned officers who had less than 9 years ' experience. The last person in the seniority list selected was M.M. Joshi bearing No. 967 in the seniority list. 8 years ' experience as a working rule for promotion was publicly announced by the Minister in Parliament on 11 June 1971. It is rightly said by the Attorney General that administrative instructions are followed as a guide line on the basis of executive policy. It is not necessary to put the same on record in so many words. In Bishan Sarup Gupta vs Union of India & Ors. 1975 Supp. SCR 491 when the quota rule which was statutory ceased to have statutory effect after 5 years but the Government followed the principles as a guide line it was upheld by this Court in the application of the principle from 1957 to 15 January, 1959. In the present case the requirement of 8 years was not only followed as a guide line in practice but was also recorded in the correspondence between the Finance and the Home Ministries. The High Court said that the requirement of 8 years ' experience was to be included in the appropriate Recruitment Rules and until that was done the High Court held that 10 years ' experience held the field. The High Court failed to consider the true effect of the correspondence between the finance and the Home Ministries and the Union Public Service Commission. The Ministry of Finance by its letter dated 30 January 1963 stated that the condition of 8 years ' service for promotion was proposed to be retained. The Home Minis try by its letter dated 20 February, 1963 pointed out that the requirement of 8 years ' experience for promotion did not strictly relate to seniority rules relating to Assistant Commissioners of Income Tax and should be delinked from such rules and should be appropriately included in the relevant Recruitment Rules. Thus the Home Ministry and the Union Public Service Commission agreed in principle to the re quirement of 8 years ' experience and the Finance Ministry in practice changed the requirement of 10 years ' to 8 years ' experience. The letter of the Finance Ministry proposing the retention of the requirement of 8 years experience was only in Grade I. The minimum experience in Grade I proposed by the Board was approved by the Secretary as well as the Minister. The High Court referred to the affidavits filed by M.G. Thomas in other proceedings. In one of the affidavits affirmed by Thomas 40 on 8 March 1968 and referred to by the High Court in Special Civil Application No. 1365 of 1965 in the Gujarat High Court in paragraph 5 thereof Thomas said as follows: "The Depart mental Promotion Committee which met sometime in August, 1949 recommended that no officers should be promoted as Assistant Commissioners of Income Tax until he had worked for not less than 10 years as Income Tax Officers. The Government of India agreed with the recommendation of the Departmental Promotion Committee that it was necessary in the interest of efficiency that the Assistant Commissioner of Income Tax should at least have 10 years of service as Income Tax Officer so that for the post ok Assistant Commissioner of Income Tax matured and seasoned officer may be obtained. For arriving at the decision, the Govern ment of India was also influenced by the recommendation of Income Tax Investigations Commission". The High Court also referred to paragraph 9 in the said affidavit of Thomas where he said as follows: "It can thus be seen that the seniority rules for Assistant Commissioner of Income Tax were mainly framed due to the situation created by the introduction of Income Tax Service Class I on an All India basis and the requirement of a minimum period of 10 years of service (later on reduced to. 8 years ' service) (as a requi site condition for promotion) this requirement of minimum service resulted in a senior Income Tax Officer who had not completed the required length of service being passed over by a junior Income Tax officers, who had completed the. required service. To safeguard the interest of such senior Income Tax Officer rule 1 (iii) (b) meaning thereby 10 years ' rule was introduced which enabled the senior officers to regain their seniority on subsequent promotion". The High Court also referred to the affidavits of Thomas in Civil Writ Petition No. 196 of 1970 in the Delhi High Court. M.G. Thomas was an Under Secretary in the Ministry of Finance in 1964. In the affidavit affirmed by Thomas in Writ Petition No. 196 of 1970 in the Delhi High Court he dealt with paragraph 39 of the petition of Bishan Sarup Gupta where it was said that paragraph 18, of section 1, Volume 1 of the Office Manual clause (b) mentioned about the eligibility of 10 years of minimum service before an Income Tax Officer would be considered for promotion to the post of Assistant Commissioner. The High Court said that Thomas in his affidavit in reply had admitted the said statements and concluded that of 8 years ' rule had been introduced Thomas would not have missed to mention the same in his affidavit. The High Court also referred to two features. First, that it was not a proposal of anew rule of 8 years in place of existing rule of 10 years; secondly, it was an assumption that the existing rule prescribed the minimum period of 8 years ' service. The High Court further referred to the Delhi High Court proceedings in Writ Petition No. 196 of 1970 where Counsel for the Union said that the Government expected new rules to be framed under Article 309 to limit the field of choice to those who had 8 years ' service to their credit as Income Tax Officers. The High Court read this argument of counsel for the Union in the High Court to concede that no change in the rule of 10 years ' service as Income. Tax Officer was made so as to reduce the period from 10 years to 8 years. 41 The Central Board of Revenue as appears in No. F. 1/19/60 Ad. II at a meeting on 2 May, 1959 approved the idea of laying down the. minimum period of service uniformly for the three wings of the Central Board of Revenue for purposes of determining the eligibility of officers for promotion. It was decided that before an officer was promoted to a higher post he must have put in a period of minimum service as follows: For promotion to Deputy Collector/Assistant Commissioner (Grade Rs. 1000 1400) minimum service pre scribed was 8 years ' service in Class I posts. For promo tion to Collector (Grade Rs. 1300 1600) the minimum serv ice prescribed was 12 years in Class I post out of which at least two years should be in the grade of Deputy Collector. For promotion to. the post of Collector (Grade Rs. 1600 1800) the minimum service prescribed was 14 years in Class I posts provided that for promotion as Collector of Central Excise (scale Rs. 1600 1800) the officers should have worked at least two years in the scale of Rs. 1300 1600. For promotion to Collector Grade I/Commissioner Grade I (scale Rs. 1800 2000) the minimum service prescribed was 16 years in Class I posts. For promotion to Selection Grade posts of Collectors/Commissioners the minimum service prescribed was 20 years in Class I posts. The Secretary in the note mentioned that he would prefer the alternative of keeping the rule and relaxing it in suitable cases. This note of the Secretary shows that he preferred the retention of the rule in the other 4 grades, namely. Collector Grade Rs. 1300 1600, Collector Grade Rs.1600 1800, Collector Grade I/Commissioner Grade I Grade Rs.1800 2000 and Selection Grade Posts of Collectors/ Com missioners. That is apparent from the fact that the Board suggested the retention of minimum service in Grade 1(Assistant Commissioners) but not in the other four grades including the Selection Grade. The Minister preferred the deletion of the rule about Selection Grade. Thus the mini mum experience in Grade I proposed by the Board was approved by the Secretary as well as the Minister. The minutes of the meeting of the Central Board of Revenue of 22 October 1960 show that the Board of Revenue decided 'that the minimum service of 8 years in Class I Service may be prescribed in the case of Deputy Collector/Assistant Commissioners (Grade Rs.1100 1400). The affidavit evidence of Thomas shows that the minimum period of 10 years was later reduced to 8 years. The affi davit does not show that the requirement of 10 years ' serv ice was maintained. In the Delhi High Court proceedings Bishan Sarup Gupta in his petition made reference to cer tain administrative instructions. Thomas in answer to those paragraphs did not have any occasion to say anything otherwise. Further counsel for the Union in the Delhi High Court merely stated that the Government was expecting rules to be framed under Article 309. This does not mean that the requirement of 8 years ' experience as an administrative practice did not prevail. The High Court was in error in treating the affidavit evidence of Thomas in other proceed ings as a statement of fact that 8 years ' rule had not been introduced. This affidavit evidence in other proceedings is torn 42 out of context and is misread by the High Court without going into the question as to whether such affidavit evi dence is admissible in evidence. It is apparent that the entire affidavit evidence as well as the submission on behalf of the Union is that the requirement of 10 years ' experience be replaced by 8 years. Administrative practice as indicated in the Department Promotion Committee meetings and the Minister 's statement in Parliament supported that contention of the Union. It is a question of construction of correspondence as to whether 10 years ' rule was replaced by 8 years ' rule. The fact that no rules under Article 309 were framed does not detract from the position that the previous administrative instruction of 10 years ' experience was modified to 8 years ' experience. It was suggested on behalf of the respondents that the various affidavits and documents asserted that the require ment of 10 years ' experience had been abrogated and it was not open to the Government to take the stand that require ment of 10 years ' rule was modified or changed. The conten tion is without any substance because the consistent posi tion on behalf of the Union has always been that the re quirement of 10 years ' experience was modified to 8 years and the Gujarat High Court considered the question whether 10 years ' experience was abrogated or modified. The second question is whether the requirement of 10 years ' experience was a statutory rule. The High Court held that the requirement of 10 years ' experience is not a statutory rule. Counsel for the respondents contended that the requirement of 10 years ' experience is statutory because the letter dated 16 January 1950 is by the Government of India and the Government of India has authority to frame rules and one of the letters dated 21 July, 1950 referred to it as a formal rule. The contention is erroneous because there is a distinction between statutory orders and adminis trative instructions of the Government. This Court has held that in the absence of statutory rules executive orders or administrative instructions may be made. (See Commissioner of Income Tax Gujarat vs A. Raman & Company(1). The letter dated 16 January 1950 written by an Under Secretary in the Ministry of Finance does not prove that the requirement of 10 years ' experience for promotion to the post of Assistant Commissioner was a rule made by the Gover nor General or any person authorised by him under section 241 (2) of the Government of India Act, 1935. Furthermore, there is no basis for any authentication under section 17 of the 1935 Act in the letter of 16 January, 1950. In the preface to the Manual published in 1955 it is specifically stated that Vol. I of the Manual contains statutory rules and Vol. II contains administrative instructions. The requirement of 10 years ' experience is in Vol. II of the Manual. In S.G. Jaisinghani vs Union of India & Ors.(2) it is stated at pp. 717 718 that the quota fixed by the Government in its letter dated 18 October, 1951 must be deemed to be fixed in exercise of the statutory (1) (2) ; 43 power under Rule 4 of the Recruitment Rules. There is no such statutory rule under which the letter of 16 January, 1950 was written, Counsel on behalf of the respondents contended that the requirement of 10 years ' experience laid down in the letter dated 16 January, 1950 had the force of law because of Article 313. Article 313 does not change the legal charac ter of a document. Article 313 refers to laws in force which means statutory laws. An administrative instruction or order is not a statutory rule. The administrative in structions can be changed by the Government by reason of Article 53(1)(a) itself. The High Court said that even if the requirement of 10 years ' service is not statutory, it is binding on the Gov ernment and is a condition of service. Counsel for the respondents contended that the word "ordinarily" in the rule imposes an obligation on the Government not to consider any Income Tax Officer with less than 10 years ' experience for promotion except in extraordinary circumstances. The requirement of 10 years ' experience on the face of it con fers a discretion on the authorities to consider Income Tax Officers if according to. the authorities the circumstances so require. What the circumstances are or should be are left entirely to the decision of the authorities. The Central Board of Revenue by a letter dated 21 July, 1950 a few months after the letter dated 21 July, 1950 a few months after the letter dated 16 January, 1950 which spoke of 10 years ' experience stated that the insistence on a minimum period of experience, cannot be regarded as affecting the conditions of service. In the letter dated 21 July, 1950 it was said that the requirement as to 10 years ' experience is sufficiently elastic and all Income Tax Officers with more than 9 years ' experience could be considered for promotion. The letter dated 21 July, 1950 was referred to by this Court in Union of India vs Vasant Jaygram Kamik & Ors(1). It appears in that case that in November, 1951 the case of officers who had completed 9 years ' gazetted service were considered and the Committee further decided to consider for promotion in the near future officers who had completed 8 years of service before 31 December, 1951. In 1953 officers who had completed 8 years ' service were considered for promotion. The expression "ordinarily" in the requirement of 10 years ' experience shows that there can be a deviation from the requirement and such deviation can be justified by reasons. Administrative instructions if not carried into effect for good reasons cannot confer a right. (See P.C. Sethi & Ors. vs Union of India & Ors. The requirement of 10 years ' experience cannot be considered by itself. It is to be read along with administrative instructions of 16 May, 1957. The reason is that the requirement of 10 years ' experience is for being considered for promotion. In para graph 2 of the letter of 16 May, 1957 containing the said instructions it is said that the Committee should first decide the field of choice. namely, the number of eligible officers awaiting promotion who should be considered to be included in the seniority list provided that an officer of outstanding merit may be included in the list even.if he is outside the normal List. (1) ; (2) ; 44 For the foregoing reasons our conclusions are these: First 10 years ' experience was modified to 8 years ' experi ence. Second there was no statutory rule requiring 10 years ' experience. Third the facts and circumstances merit ed the exercise of discretion which was bona fide exercised by determining the field of choice. Fourth there was no deviation from 10 years ' experience because of the modifica tion to 8 years ' experience. Fifth there could not be insistence on 10 years ' experience as conditions of service. The next question is what should have been the field of choice. The two groups of Income Tax Officers in Class I, namely, the direct recruits and the promotees have always found that the field of choice has been prepared strictly on the basis of running seniority in the seniority list of Income Tax Officers Class I. In the three decisions of this Court relating to these officers Jaisinghani 's case, Bishan Sarup Gupta 's case and Bishan Sarup Gupta 's case (supra) it will be seen that since 1962 there has been a long fight between direct recruits and promotees mainly in respect of seniority list of income Tax Officers Class I. This strug gle regarding seniority would have hardly any meaning unless the two groups fought to gain higher positions in the Seniority List only for the purpose of being in the field of choice for consideration for promotion to the post of As sistant Commissioner. if this was not so and if only a cer tain number of years ' requirement was the only consideration for being in the field of choice, this requirement would have. been fulfilled in any case without a higher place in the seniority list. From 1963 the field of choice has always been in a running order of seniority. This has been the administrative practice for over 10 years. There were 112 vacancies and 10 anticipated vacancies in 1974. The Committee was to make a select panel of 122 offi cers. If the field of choice has to be prepared on the basis of running seniority, and if 10 years ' experience had been adhered to, there would not have been more than 95 officers in the field of choice although the number of vacancies was 122. This fact alone will entitle the author ities to deviate from the rule of 10 years ' experience. By reason of the violation of the quota rule since 1952 benefiting the promotees this Court issued the mandamus in Jaisinghani 's case (supra). The collapse of the quota rule and seniority rule from 16 January, 1959 led to the judgment of this Court dated 16 August 1972 in Bishan Sarup Gupta 's case (supra). The introduction of the roster system of 1 direct recruit and 1 promotee being placed alternately in the order of seniority with effect from 16 January, 1959 was upheld by this Court in the judgment dated 16 April, 1974 in Bishan Sarup Gupta 's case (supra). As a result oF the seniority list being upheld by this Court by the deci sion dated 16 April, 1974 many promotees lost their earlier places in the Seniority List. This Court on 16 April, 1974 in Bishan Sarup Gupta 's case (supra) at page 114 of the report said "In the case before us in the absence of a rule determining inter se seniority between the two classes of Income Tax Officers, there is really no integration of the service, which is unavoidably necessary for the purpose of effective promotions. One cannot speak 45 of promotions from a cadre unless it is fully integrated. " There was a change in the seniority list from what prevailed at least in 1952. The requirement of 10 years ' experience could not be given effect to in such a changed situation and the expression "ordinarily" would hardly apply to such a changed situation without destroying the integration and restoring to the promotees the position which they had enjoyed in the past with the Quota Rule and the Seniority Rule and which they lost as a result of the last decision of this Court dated 16 April, 1974. If the respondents ' contention that the field of choice shall be restricted to 10 years ' experience only and the field of choice should have been at least five times the number of vacancies, the result would have been that out of 560 persons in the field of choice, 474 persons would have been promotees and 86 persons would have been direct re cruits and the last direct recruit in the seniority list would have been No. 873 and No. 874 to No. 1922 would have been all promotees. If the above basis suggested by the respondents were followed 429 persons all direct recruits and all senior officers in the seniority list would have been ignored in the field of choice. That would be unjust, unfair and upsetting the decision of this Court dated 16 April, 1974. In the letter of 16 May 1957 it is stated that the field of choice wherever possible should extend to 5 or 6 times the number of vacancies expected within a year. The letter contained administrative instructions from the Home Ministry generally to all Ministries and was not meant specially for the Board of Revenue. These administrative instructions have been changed in the matter of promotions from Income Tax Officers to Assistant Commissioners at least from 1963 by the administrative practice of having in the field of choice generally three times the number of vacancies. In the Committee meeting held on 16 March, 1963 the Committee considered the names of first 33 eligible Income Tax Offi cers in order of existing seniority for 11 vacancies. In the meeting of the Committee held on 26 and 27 August, 1963 the Committee decided to consider the cases of 30 officers in order of seniority for 10 vacancies. In the Committee meeting held on 3 March, 1964 the Committee considered for 21 vacancies the names of 60 persons in order of seniority. At the Committee meeting held on 5 and 7 December, 1964 for 18 vacancies the Committee decided to consider the cases of 60 officers in order of seniority,. At the meeting held on 4 July, 1965 the Committee considered 60 Income Tax Officers in order of seniority for promotion to 20 vacancies. At the Committee meeting held on 4 and 6 December, 1965 the Commit tee considered 122 persons in order of seniority for 45 vacancies. In December, 1965 the Committee considered 114 senior most Income Tax Officers and 48 were promoted as Assistant Commissioners. At the meeting held on 17 May, 1966 the Committee considered the case of 65 officers and approved the promotion of 48 officers. At the meeting held on 16 and 17 September, 1968 the Committee considered 240 persons for promotion to 90 posts. In September, 1968 the Committee considered the cases of 16 officers who had less than 10 years ' experience. The Committee in February 1969 considered 61 persons for 20 posts. In September, 1969 the Committee considered 105 persons for promotion to 35 posts. 46 There is a note made by Thomas in the month of February, 1970 in F. No. 20/2170 Ad. VI to the effect that if officers with less than 8 years ' service and their juniors are ex cluded from the list of officers to by considered by the Committee for 90 vacancies arising during the year only 193 officers will be available. This is said to be less than three times the number of vacancies but this could not be helped unless junior officers are considered over the head of their seniors. The number of such juniors officers with 8 years ' service is also limited, namely, 11. In the circum stances, the selection was made from 193 officers. In April, 1970 the Committee had to select 80 persons for promotion. They desired that 240 names should normally be considered. The Members however stated that the. Ministry had already furnished the names of 193 eligible officers and there were no more eligible officers who could be consid ered. The Committee accordingly considered those 193 offi cers in order of seniority. In April and May 1970 the Committee considered the cases of 38 persons with less than 10 years ' experience. In 1972 there were 84 vacancies and 10 more vacancies were likely to arise. Therefore for 94 selection posts the field of choice should normally have been 3 to 5 times the number of vacancies. It was found that there should have been at least 300 officers. There were 213 officers with 8 years ' experience. There were some promotees with more than 8 years ' experience but they were junior to the direct recruits. As the direct recruits had not completed 8 years ' service their juniors were not considered for promotion over them. In the background of these facts and circumstances it was not possible to have 5 or 6 times the number o.f vacan cies in the field of choice for the simple reason that the Committee required 8 years ' experience for promotion to the post of Assistant Commissioner. If the field of choice had to be based on running seniority the Committee could rightly only have 276 officers in the field of choice in the present case. The next question is whether the Committee evaluated the merit of persons in the field of choice. The High Court held that in the field of choice the evaluation of merit of persons was not properly done. The decision of the High Court is wrong for the following reasons. The letter dated 16 May, 1957 indicates that the Committee was first to decide the field of choice. The cardinal feature which is to be kept in the forefront is that the field of choice is based on running seniority in the seniority list and evalua tion of merit does not come into picture for deciding the field of choice. Paragraph 3 of the said letter states that those in the field of choice who are considered unfit should excluded from consideration. Under paragraph 4 of the letter evaluation of the remaining officers on the basis of merit has to be done by classifying the officers under three different categories,namely, 'outstanding ', 'very good ' and 'good '. Paragraph 4 of the letter states that the selection list is to be prepared by placing the names of officers in the said three categories, without disturbing the seniority inter se within each category. 47 In the present case in view of 112 actual vacancies the Government sent 336 names for the field of choice, that is, three times the number of vacancies. Since 1963 the Commit tee has been receiving from the Government the names of persons forming three times the number of vacancies. The 336 names sent by the Government were in the running order of seniority between S.M. Islam No. 155 in the seniority list and R.N. Dave No. 1186 in the seniority list. Under paragraph 2 of the letter dated 16 May, 1957 it is the function of the Committee to decide the field of choice. The Committee proceeded on the basis of 8 years ' experience and thus could not possibly have in the field of choice any name from No. 1131 onwards because every alternate number thereafter had less than 8 years ' experience. The Committee stopped at No. 1123. The Committee at the meeting held on 23, 24 and 25 July 1974 assessed the merits of 145 persons in order of seniori ty first. After such assessment the Committee found three officers No. 1, 30 and 109 in the list as not yet fit and excluded them. The Committee also excluded 4 officers whose findings were in sealed cover or whose reports were not yet complete (No. 2, 3, 6 and 138 in the Committee List). These 7 officers were excluded from further consid eration for the selection list. In accordance with para graph 3 of the letter 16 May, 1957 the Committee considered the remaining 138 officers and assessed their merits and put them in three categories. The Committee found only one officer "outstanding", namely No. 16 in the list, 114 offi cers "very good" and 7 Scheduled Castes/Scheduled Tribes officers were 'good '. These 7 Scheduled Castes and Sched uled Tribes officers were No. 21, 24, 26, 90, 91, 93 and 94 in the list. The respondents contended that these 7 Sched uled Castes/Scheduled Tribes officers should have been given a grade higher than the grade assessed by the Committee because of the Home Ministry Instructions dated 11 July, 1968. The respondents ' contentions are incorrect for these reasons. In paragraph 2 of the Home Ministry instructions dated 26 March, 1970 on the subject "Concessions to Sched uled Castes and Scheduled Tribes in posts filled by promo tion Class I Services/ posts" it was laid down inter alia that the Scheduled Castes/Scheduled Tribes officers, who were senior enough in the zone of consideration for promo tion so as to be within the number of vacancies for which the selection list has to be drawn, would be included in that list provided they are not considered unfit for promo tion. In paragraph 1 of these instructions, reference was made to the Home Ministry instructions dated 11 July, 1968. It would be found from those instructions as 'also the Home Ministry instructions dated 26 March, 1970 that the July, 1968 instructions applied in the case of promotions from Class III to Class II and Within Class II and from Class II to the lowest rank or category to Class I but had no appli cation in respect of promotion within Class I. The Committee found No. 16 to be 'outstanding ', 114 (No. 2 to 115) 'very good ' and 7 Scheduled Castes/Scheduled Tribes officers 'good. ' and they were to be included in the selection list vide Home Ministry instructions dated 26 March, 1970. The Committee next assessed the merit of the rest of the 276 officers to ascertain whether 48 any of them was 'out standing '. If any one among these remaining officers was not found 'outstanding ' but was only 'very good ' he would not come within the selection list because the selection list was prepared, after evaluating the merits of the officers on the basis of seniority in the seniority list in accordance with the fetter dated 16 May, 1957. Paragraph 4 of that letter was followed by the Committee along with the Home Ministry instructions. It would not be necessary for the Committee after having con sidered 145 to put the others in the category of 'very good ' when the Committee assessed their merits and found them to be not 'outstanding '. After 122 senior officers were as sessed and the Committee found that no other officers junior to them could be assessed to the higher category namely, 'outstanding ' it would be fruitless exercise to find out who among these officers were very good ' or 'good ' or 'not yet fit '. The reason is obvious. Those in the selection list of 122 who had been found to be 'very good ' could not be supplanted by others who were 'very good ' Only 'outstand ing ' persons who would be junior to the category of 122 'very good ' would surpass the category of 'very good '. Therefore the Committee rightly considered the cases only to find ' out whether there was any one outstanding and the Committee found none of them to be 'outstanding '. The Government sent the names of 336 officers in the running order of seniority. Out of 336 the Committee found 276 to be fit for the field of choice. The Committee found 1 'outstanding ', 114 'very good ' and 7 Scheduled Castes/Tribes 'good '. The respondents contended that the rest 59 were not at all considered by the Committee. This contention is not acceptable for these reasons. From No. 1131 in the seniority list every alternate number was an officer with less than 8 years ' experience. Under the letter of 16 May 1957 it is the Committee and not the Gov ernment which decides the field of choice. When the Commit tee found according to the running seniority No. 1131 onwards could not be in the field of choice the Committee did not put the names of the 59 officers in the field, of choice. The question of the evaluation of the merits of these 59 officers did not, therefore, arise because first the seniority list was Considered by the Committee and second the Committee took into consideration only those who were in the seniority list and fulfilled 8 years ' experi ence. It is wrong to hold that because the Government sent the names of 336 persons for consideration by the Committee the field of choice consisted of 336 persons. The field of choice is to be determined by the Committee. The Committee considered 276 names as fit to be included in the field of choice. It is erroneous to suggest that there were 336 names in the field of choice. The field of choice consist ed. of 276 names as determined by the Committee whose juris diction it was to determine. The Committee considered upto No. 1123 in the seniority list to be in the field of choice. Officers from 1124 to 1130 were not included by the Commit tee either because they had retired or joined the Indian Administrative Service and in any event no complaint has been made on their behalf. The Committee found that from 49 No. 1131 onwards every alternate officer had not completed 8 years ' service and therefore they could not be put in the field of choice according to the Committee. The contention of the respondents that there were 336 officers in the field of choice and the Committee did not consider all the 336 persons unmeritorious. The respondents next contended that persons bearing No. 877, 879, 881 and 883 in the seniority list had been put on the selection list although they had less than 8 years ' experience. There is no substance in the ' contention for the following reason. These 4 officers were taken on the ground that they were ex military officers recruited to the Income Tax Department in 1968 and were deemed to have been recruited in 1964 by virtue of the Ministry of Home Affairs Notification dated 4 October, 1967. Another submission was made on behalf of the respondents that after the Committee had put different persons in three categories 'outstanding ', 'very good ' and 'good ' the Commit tee should have further evaluated the merit of all officers inter se within each of the said three categories. This submission is contrary to the specific provision of para graph 4 of the letter dated 16 May, 1957. Further within the category of 'very good ' there could not be any further intra specific assessment of those who were 'very good '. A criticism was made by the respondents that the assess ment was to be only on merit and not seniority cure merit. This contention is wrong. Paragraph 2 of the letter of 16 May, 1957 states that the field of choice is to be decided by the Committee. No question of merit arises in deciding the field of choice. The field of choice is only on the basis of running seniority. The question of merit arises after the field of choice is decided. The selection was correctly done strictly on merit in accordance with para graphs 3 and 4 of the letter dated 16 May. 1957. The Commit tee decides the field of choice in the running order of seniority. The Committee excludes names from the field of choice who are considered unfit for promotion. The remaining officers are classified as 'outstanding ', 'very good ' and 'good ' on the basis of merit. The selection list is pre pared by placing the names in the order of these three categories. That inter se seniority of officers in the selection list under each category is not disturbed. These are the instructions in the aforesaid letter. It will thus be. seen that seniority is the sole criterion for determin ing the field of choice in the running order of seniority and merit is the sole criterion for putting the officers in the selection list in each category according to merit. Finally the contention of the respondents is that the date for determining the eligibility of officers for promo tion to the posts as Assistant Commissioners should have been decided by the Committee by bearing in mind the two dates namely, 21 December 1972 and 29 November 1973. 21 December 1972 is the date when this Court permitted the Union Government to make ad hoc promotions. 21 March 1973 and 29 November 1973 are the two dates when the Central Board of Direct Taxes promoted 59 and 48 officers respec tively. This Court in the order dated 21 December, 1972 stated that the Government would be entitled to appoint people in order of seniority determined according to the date 5 1458SCI/76 50 Of continuous officiating appointment in Class I subject to the suitability which would be decided by the Central Board or Direct Taxes. This order was made without prejudice to the contentions of the parties or their rights in the ap peals. Pursuant to the interim order of this Court the Government made two orders dated 21 March 1973 and 29 Nov ember 1973 provisionally promoting 59 and 48 officers re spectively. In each of the Government orders it is specifi cally stated as follows: "The above promotions are purely ad hoc and have been made on the basis of the suitability as decided by the Central Board of Direct Taxes in terms of directions issued by this Court in their order dated 21 December 1972. These promotions will not confer any claim for continued "officiation" (sic) in the grade of Assistant Commissioner of Income Tax or for seniority in that grade. Appointments against these posts will eventually be made on the basis of the revised list of seniority of Income Tax Offices Class I as finally approved by this Court and on selection by a duly constituted Departmental Promotion Committee to be convened in accordance with the prescribed procedure. The promotions ordered will not establish any claim for eligibility or for selection on merit by a proper ly constituted Departmental Promotion Committee when the same is convened". It is manifest from the order of this Court and the two orders made by the Government pursuant to this Court 's order that these 107 promotions were purely provisional or ad hoc and were made by the Central Board of Direct Taxes and not by the Committee which is the authority for determining promotions. Further these provisional promotions were not made in conformity with the letter of 16 May 1957. It is distinctly stated in the aforesaid two Government orders that appointments against these posts will eventually be made on the basis of revised seniority of Income Tax Offi cers Class I as finally approved by this Court and on selec tion by a duly constituted Departmental Promotion Committee to be convened in accordance with the prescribed procedure. On 9 February 1973 the Income Tax Officers (Class I) Service (Regulation of Seniority) Rules, 1973 were made under Article 309 See Bishan Sarup Gupta 's case (supra). The revised seniority list of Income Tax Officers Class I was made on the basis of the Income Tax Officers (Class I) Service (Regulation of Seniority) Rules, 1973 and was ap proved by this Court on 16 April, 1974. See Bishan Sarup Gupta 's case (supra). The selection list was made by the Committee after it met on 23, 24 and 25 July, 1974. Under paragraph 2 of the letter dated 16 May, 1957 the Committee was to decide the field of choice by including therein eligible officers awaiting promotion. This means that whether an officer is eligible or not should be decided with reference to the date of the Committee meeting. This has always been done at all the Committee meetings. The respondents contended that the regularisation of 107 promotees had to be done from the date of original promo tions on ad hoc basis. In this connection, the respondents relied on the observations of this Court in Bishan Sarup Gupta 's case (supra) at p. 506 of the report. The observa tions relied on are that after the fresh seniority 51 list is made in accordance with the directions given by this Court in Bishan Sarup Gupta 's case (supra) it would be open to any direct recruit or promotee to point out to the de partment that in the selection made to the post of Assistant Commissioner from 1962 onwards he, being otherwise eligible, is entitled on account of the new seniority given to him to be considered for promotion to the post of Assistant Commis sioner. The observations of this Court in Bishan Sarup Gupta 's case (supra) are that if as a result of the fresh seniority list it is found that any officer was eligible for promotion to the post of Assistant Commissioner on account of his place in the new seniority list, the department might have to consider his case for promotion on his record as on the date when he ought to have been considered, and if he would be selected his position will be adjusted in the seniority list of Assistant Commissioners. The object is to see that the position of such a person is not affected in the senior ity list of Assistant Commissioners because he is actually promoted later pursuant to the new seniority list, although according to the new seniority list itself he should have been promoted earlier. The observations do not mean that although the Committee can meet for the selection of offi cers for promotion to the post of .Assistant Commissioner only after the seniority list is approved by this Court, the selection would be deemed to be made at the time when a vacancy in the post of Assistant Commissioner occurred and the eligibility of officers for selection will be determined by such deemed date of selection. No employee has any right to have a vacancy in the higher post filled as soon as the vacancy occurs. Government has the right to keep the vacancy unfilled as long as it chooses. In the present case, such a position does not arise because of the controversy between two groups of officers for these years. The seniority list which is the basis for the field of choice for promotion to the post of Assistant Commissioner was approved by this Court on 16 April, 1974. Promotions to the post of Assist ant Commissioners are on the basis of the selection list prepared by the Committee and are to be made prospectively and not retrospectively. For the foregoing reasons the judgments and orders appealed against are set aside. The selection list made by the Departmental Promotion Committee forming the subject matter of these appeals is held to be correct, lawful and valid. Parties will pay and bear their own costs. V.P.S. Appeals allowed. [/INST]Section 16(1)(a)(i) of the , provides inter alia that, if any person whether by himself or by another person on his behalf stores or sells any article of food, which is adulterated or misbrand ed,he shall, in addition to the penalty he may be liable under section 6, be punishable which imprisonment for a term which shall not be less than 6 months, etc. The first proviso to the sub section provides that if the offence is under sub clause (i) of clause (a) and is with respect to an article of food which is adulterated under section 2(i)(1) or misbranded under section 2(ix)(k), the Court may, for any ade quate and special reasons, impose a sentence of imprisonment for a term less than 6 months. Section 17(1) provides that where an offence under the Act has been committed by a firm every person who at the time the offence was committed was incharge of or responsible for the conduct of the business of the firm shall be deemed to be guilty of the offence. The proviso to the sub section states that nothing contained in the sub section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent its commission. Under section 17(2) notwithstanding anything contained in sub section (1) where an offence under the Act has been committed by a firm and it is proved that the offence has been committed with the consent or connivance or is attributable to any neglect on the part of a partner, such partner shall be deemed to be guilty of the offence. In the present case accused 2 and 3 were partners carry ing on the business of a small restaurant (accused 1). The Food Inspector visited the restaurant and noticing some milk kept for sale enquired about its quality. Accused 3 told him that it was cow 's milk. The 2nd accused was then not present in the restaurant. The Food Inspector then bought some of the milk from the 3rd accused and sent it to the Public Analyst after complying with the statutory formali ties. The Public Analyst reported that the milk was buffa lo 's milk, that there was deficiency of fat and that the milk contained added water. The three accused were charged with the offence punishable under section 7(i) and (ii) and section 16(1A)(ii). They pleaded guilty and were sentenced to pay a fine. On appeal by the State, the High Court, holding that the accused cannot invoke the proviso to section 16(1)(a)(i) enhanced the sentence on the 2nd and 3rd accused to the minimum term of imprisonment of 6 months. Dismissing the appeal to this Court, HELD: (1) The Probation of Offenders Act is not applica ble to the accused in the circumstances of the case. [109 G] (2) Addition of water amounts to adulteration within the meaning of section 2 (i) (b) (c) or (d). [108 E] (3) To earn the eligibility to the benefit of the provi so to section 16(1)(a)(i) the accused must establish not only that his ease fails positively under the offences speci fied in the said proviso, but negatively, that his acts do not attract any of the non proviso offences in section 16(1). The application of the proviso depends on whether the adultera tion or misbranding of the article is of the species exclu sively covered by section 2(i)(1) or section 2(ix)(k). In judicial construction, the consumers ' understanding of legislative expressions is relevant and so viewed, 'Cow 's milk ' is different from 'buffalo 's milk '. The misbranding therefore falls under section 2(ix)(c) which provides that an article shall be deemed to be misbranded if it is sold by a name which belongs to another article of food, 103 and does not fall under section 2(ix)(k). Therefore, the exclu sion of the first proviso and the conviction of all the accused under section 16(1)(a) are justified. [106 C; 107C; 109D] Murlidhar vs State of Maharashtra and Prem Ballabh vs State (Delhi Admn.) Criminal Appeal No. 287 of 1971 decided on 15 9 76, followed. (4) The 2nd accused however is not guilty of selling the misbranded article. The liability of a partner depends on the application of section 17(1) or (2). Section 17(2) is not applicable to the absent 2nd accused as there is no evidence to prove the required mens rea set out in the sub section. Though section 17(1) applies, the second accused would not be guilty of this charge because of the proviso to that sub section. The evidence shows that the second accused was absent at the time of the sale, that the milk was bought from the bazar by the servant in the restaurant and that it was not as if the two accused were palming off buffalo 's milk and Cow 's milk, but the particular representation by the 3rd accused was an adventitious One, made by him on his own on the spot. [109E F; 110 B] [The Public Analysts report should not be prefunctory giving a few mechanical data. It should help the Court with something more of the process by which his conclusion has been arrived at]. </s>
<s>[INST] Summarize the judgementCivil Appeal No. 2860 of 1987. From the Judgment and order dated 8.7.1987 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. 1311 of 1983 and Suppl. A. No. 1798 of 1987 BI. Soli J. Sorabjee, S.R. Grover and K.J. John for the Appellant. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This is a statutory appeal from the decision and order of the Customs Excise and Gold (Control) Appellate Tribunal (briefly referred to as 'CEGAT ') under section 35L of the Central Excise and Salt Act, 1944 (hereinafter called 'the Act '). It appears that the appellant is a manufacturer of Hospital and Pharmaceutical Appliances and Heavy Duty Industrial Canteen Equipment. The following 14 items were classified by him under Tariff Item No. 68 of the said Act in his Classification List No. 106 dated 27:3.1979: "(1) Storage Tank, (2) Cooking Range (Electric opera 734 tion and gas operated), (3) Baking oven, (4) Deep Fat Fryer, (5) Bain Mafie, (6) Sterilizing Sink, (7) Expresso Coffee Machine, (8) Steam Jacketed Vessel (Steam operated), (9) Bread Toaster, (10) Bulk Cooker & Fryer, (11) Chappatty Plate/Chappatty Puffer and Chappatty Plate/Puffer, (12) Dish Washing Machine, (13) Potato Pooler and (14) Masala Grinder. " The Assistant Collector held the view that products 2 to 14 were classifiable under Tariff Item No. 33C in view of the Explanation thereof. After giving notice the Assistant Collector demanded differential duty amounting to Rs.1,91,622.20 for the period Ist of March, 1979 to 30th June, 1980. The Assistant Collector confirmed the demand except in respect of Item No. 8, namely, Steam Jacketed Vessel. Being aggrieved from these orders, the appellant filed appeals before the Collector. The Collector accepted the appellant 's contentions and came to the conclusion that these were to be classified under Tariff Item No. 68 and not under Tariff Item No. 33C. Tariff Item 33C at the relevant time contained the Explanation I, which is as follows: "Explanation I 'Domestic electrical appliances ' means electrical appliances normally used in the household and similar appliances used in hotels, restaurants, hostels. offices, educational institutions, hospitals, train kitchens. aircraft or ship 's pantries, canteens, tailoring establish ments, laundary shops and hair dressing saloons". The revenue went up in appeal before the CEGAT. The Tribunal noted that the equipments in question were used in industrial canteens, Five Star Hotels, big hospitals etc. The nature of the items such as deep fat fryer, Expresso coffee machine, bread toaster, chap patty plate, etc. were all electrically operated machines. The Tribunal further noted that Tariff Item 33C was in respect of "domestic electrical appliances not elsewhere specified". According to the Tribunal the intention of the legislature in respect of "domestic electrical appliances" was clear from the Explanation. It is apparent that the above named items are specially designed for use in big canteens attached to industrial units, big hotels, hospitals etc. where food in bulk quantity for hundreds of people is required to be prepared and served. These required electric power exceeding 230 volts in order to have considerable capacity for preparing and serving food. Their prices ranged from 735 Rs.7,000 to Rs.1.5 lakhs. It was submitted that these are important and relevant factors for distinguishing the said items as distinct and different from those appliances which are used normally in the household. It was submitted that these heavy duty items fall outside the purview of Tariff Item No. 33C. The Tribunal was of the view that though considerable space is required for these items but space was not any criteria for determining this question. According to the Tribunal that these items could not be classified under Tariff Item No. 68. We are of the opinion that the Tribunal is right. It is manifest that these equipments were electrical appliances. There was no dispute on that. It is also clear that these are normally used in household and similar appliances are used in hotels etc. The expression "similar" is a significant expression. It does not mean identical but it means corresponding to or resembling to in many respects; somewhat like; or having a general likeness. The statute does not contemplate that goods classed under the words of 'similar description ' shall be in all respects the same. If it did these words would be unnecessary. These were intended to embrace goods but not identical with those goods. If the items were similar appliances which are normally used in the household, these will be taxable under Tariff Item No. 33C. It appears that the Gujarat High Court in the case of Viswa & Co. vs The State of Gujarat, (17 Sales Tax Cases 581) had occasion to consider whether electric fans are domestic electrical appliances for the purpose of Bombay Sales Tax Act, 1953. Bhagwati, J. as the learned Chief Justice then was, speaking for the Gujarat High Court observed as follows: "A domestic electrical appliance, in our opinion, would be an electrical appliance of a kind generally used for domestic purposes. It may also be used at places other than the home or the house, but that would not destroy the character of a domestic electrical appliance which attaches to it by reason of its being a kind of an electrical appliance generally used for the household. There are several electrical appliances which are generally used in the household, such as electric irons, electrical sewing machines and electrical cooking ranges which are also used in other establishments. But these electrical appliances do not therefore cease to be domestic electrical appliances. It is of course not necessary that an electrical appliance, in order to 736 satisfy the description of a domestic electrical appliance, must be actually used in the home or the house. What is necessary is that it must be of a kind which is generally used for household purposes and if that test is applied, there is no doubt that electric fans are domestic electrical appliances and the Tribunal was therefore right in holding that they fall within entry 52 of Schedule B." We agree that it is not necessary to be a domestic electrical appliance that it must be actually used in the home or the house. It must be of a kind which is generally used for household purposes. It appears to us that the types of items concerned in this appeal are generally used for household purposes and that is sufficiently good test for classification in the light of the explanation to Tariff Item No. 33C. In view of the fact that the Tribunal recognised that the appellant had set out all the details in the classification list and the revenue had assessed him under Tariff Item 68, the Tribunal came to the conclusion that there was no intention to evade payment of duty. Therefore, the Tribunal directed that the modification of the classification list could only be prospective and not retrospective. The Tribunal was just and right in so doing. The Tribunal was also right in holding that in the absence of any proof of suppression of fact, section 11 A of the said Act would not be applicable. The show cause notice raising a demand of duty was issued on 8th of September, 1980 and the Tribunal sustained the demand for the period 9th March, 1980 to 30th June, 1980 in respect of items 3 to 7 and 9 to 14. We are of the opinion that the Tribunal was right and the decision of the Tribunal therefore, does not call for interference. In that view of the matter the appeal is rejected. There will be no order as to costs N.P.V. Appeal dismissed. [/INST]% Words and Phrases: 'Similar description ' meaning of. The appellant, manufacturer of Hospital and Pharmaceutical Appliances and Heavy Duty Industrial Canteen Equipment, classified certain items like cooking range, deep fat fryer, express coffee machine, bread toaster etc. , numbering 14, under Tariff Item No. 68 of the Central Excise and Salt Act, 1944. The Assistant Collector held that products 2 to 14 were classifiable under Tariff Item No. 33C, in view of the Explanation thereof, and demanded differential duty for the period of 1st March, 1979 to 30th June, 1980. The Collector, on appeal, held that these items were to be classified under Tariff item No. 68 and not under Tariff item 33C . On appeal by the Revenue, the Central Customs Excise and Gold (Control) Appellate Tribunal, while noting that the equipment in question, some of which were electrically operated machines, were used in industrial canteens, five star hotels, big hospitals, etc. held that the intention of the Legislature was clear from the Explanation to Tariff Item No. 33C, and the items in question could not be classified under Tariff Item No. 68. Dismissing the appeal by the manufacturer. ^ HELD: The statute does not contemplate that goods classed under the words of "similar description" shall be in all respects the same. If it did, these words would be unnecessary. These were intended to embrace goods but not identical with those goods. If the items were 732 similar appliances which are normally used in household, these will be taxable under Tariff Item No. 33C. [73CD] It is not necessary, to be a domestic appliance, that it must be actually used in the home or the house. It must be of a kind that they are generally used for household purposes. [736B] The types of items concerned in the instant case are generally used for household purposes and that is sufficiently good test for classification in the light of explanation to tariff item No. 33C. The Tribunal was. therefore, right in holding that these items could not be classified under Item 68. [736C] Since the appellant had set out all the details and the Revenue had assessed the appellant under Tariff Item No. 68, the Tribunal was right in holding that there was no intention to evade payment of duty and in directing that the modification of the classification list could only be prospective and not retrospective. In the absence of any proof of suppression of fact, it was also right in holding that section l 1 A of the Act would not be applicable. [736D E] </s>
<s>[INST] Summarize the judgementN: Writ Petition Nos. 5370 74 of 1980 (Under article 32 of the Constitution) M. K. Ramamurthi, J. Ramamurthi and Miss R. Vaigai for the petitioners in WPs. 5370 74 R. K. Garg and V. J. Francis J. P. Cama & Mukul Mudgal for Intervener in WPs. 5370 74. K. Parasaran, Attorney General, M. K. Banerjee, Additional Solicitor General, Miss A. Subhashini and C. V. Subba Rao, for the respondent (Union of India) P. R. Mridul, O. C. Mathur, section Sukumaran, D. N. Mishra & Miss Meera Mathur for respondent No. 2 in WPs. 5370 74 & 5434. Hemant Sharma & Indu Sharma for the respondent in WPs. 5370 74. r. Vineet Kumar, Lalit Bhasin, Vinay Bhasin & Miss Arshi singh?, for Respondent Nos. 3 to 6 in WPs. 5434 & 5370 74. Ambrish Kumar for Intervener in WP. Chandidus Sinha Intervener in person in WPs. 5370 74. The Judgment of the Court was delivered by 259 SABYASACHI MUKHARJI J. These petitions under Article 32 of the Constitution are filed by the employees of the General Insurance Companies and the All India Insurance Employees Association. The respondents are, Union of India, the General Insurance Corporation of India and four General Insurance companies. The petitioners challenge the Notification dated 30th September, 1980 of the Ministry of Finance (Department of Economic Affairs) (Insurance) introducing what is called General Insurance (Rationalization and Revision of Pay Scales and other Conditions of Service of Supervisory, Clerical and Subordinate Staff) Second Amendment Scheme, 1980 as being illegal and violative of their fundamental rights under Articles 14, 19(1)(g) and 31 of the Constitution of India. Prior to 1972, there were 106 General Insurance companies Indian and foreign. Conditions of service of these employees were D, governed by the respective contracts of service between the companies and the employees. On 13th May, 1971, the Government of India assumed management of the general insurance companies under the General Insurance (Emergency Provisions) Act, 1972. The general insurance business was nationalised by the (Act 57 of 1972). The preamble of the Act explains the purpose of the Act as to provide for the acquisition and transfer of shares of Indian insurance companies and undertakings of other insurers in order to serve better the needs of economy in securing development of . general insurance business in the best interest of the community and to ensure that the operation of the economic system does not result in the concentration of wealth to the common detriment, for the regulation and control of such business and for matters connected therewith or incidental thereto. Act 57 of 1972, by Section 2, declared that it was for giving effect to the policy of the State towards securing the principles specified in clause (c) of Article 39 of the Constitution. Under Section 3(a) of the Act, 'acquiring company ' has been defined as any Indian insurance company and, where a scheme had been framed involving the merger of one or more insurance companies in another or amalgamation of two or more such companies, means the Indian insurance company in which any other company has 260 been merged or the company which has been framed as a result of . the amalgamation. Section 4 provides that on the appointed day all the shares in the capital of every Indian insurance company shall be transferred to and vested in the Central Government free of all trusts, liabilities and encumbrances affecting these. Section S provides for transfer of the undertakings of other existing insurers. Section 6 provides for the effect of transfer of undertakings. Section 8 provides for the Provident Fund, superannuation, welfare or any other fund existing. Section 9 stipulates that Central Government shall form a Government company in accordance with the provisions of the Companies Act, to be known as the General Insurance Corporation of India for the purpose of superintending, controlling and carrying on the business of general insurance. Section 10 stipulates that all shares in the capital of every Indian insurance company which shall stand transferred to and vested in the Central Government by virtue of Section 4 shall immediately after such vesting, stand transferred to and vested in to Corporation . Chapter IV deals with the amounts to be paid for acquisition and as such we are not concerned in this case with that chapter in view of the controversy involved. Chapter V of the aforesaid Act deals with "Scheme for reorganisation of general insurance business" Section 16 and 17 of the Act in this chapter are as follows: "16. (1) If the Central Government is of opinion that for the more efficient carrying on of general insurance business it is necessary so to do, it may, by notification, frame one or more schemes providing for all or any of the following matters: (a) the merger in one Indian insurance company of any other Indian insurance company, or the formation of a new company by the amalgamation of two or more . Indian insurance companies; (b) the transfer to and vesting in the acquiring company of the undertaking (including all its business, properties, 261 assets and liabilities) of any Indian insurance company which ceases to exist by reason of the scheme; (c) the constitution, name and registered office and the capital structure of the acquiring company and the issue and allotment of shares; (d) the constitution of a board of management by what ever name called for the management of the acquiring company; (e) the alteration of the memorandum and articles of association of the acquiring company for such purposes as may be necessary to give effect to the scheme, (f) the continuance in the acquiring company of the services of all officers and other employees of the Indian insurance company which has ceased to exist by reason of the scheme, on the same terms and conditions which they were getting or, as the case may be, by which they were governed immediately before the commencement of the scheme; (g) the rationalisation or revision of pay scales and other terms and conditions of service of officers and other employees wherever necessary; (h) the transfer to the acquiring company of the provident, superannuation, welfare and other funds relating to the officers and other employees of the Indian insurance company which has ceased to exist by reason of the scheme; (i) the continuance by or against the acquiring company of legal proceedings pending by or against any Indian insurance company which has ceased to exist by reason of the scheme, and the initiation of such legal proceedings, civil or criminal, as the Indian insurance company might have initiated if it had not ceased to exist; (j) such incidental, consequential and supplemental matters as are necessary to give full effect to the scheme. 262 (2) In framing schemes under sub section (1), the object of the Central Government shall be to ensure that ultimately there are only four companies (excluding the Corporation) in existence and that they are so situate as to render their combined services effective in all parts of India. (3) Where a scheme under sub section (1) provides for the transfer of any property or liabilities, than, by virtue of the scheme, the property shall stand transferred to and vested in, and those liabilities shall be transferred to and be come the liabilities of the acquiring company. (4) If the rationalization or revision of any pay scales or other terms and conditions of service under any scheme is not acceptable to any officer or other employee, the acquiring company 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. Explanation. The compensation payable to an officer or other employee under this sub section shall be in addition to, and shall not affect, any pension, gratuity, provident fund of other benefit to which the employee may be entitled under his contract of service. (5) Notwithstanding anything contained in the or in any other law for the time being in force, the transfer of the services of any officer or other employee of an Indian insurance company to the acquiring company shall not entitle any such officer or other employee to any compensation under that Act or other law, and no such claim, shall be entertained. by any court, tribunal or other authority. (6) The Central Government may, by notification add to, amend or vary any scheme framed under this section. (7) The provisions of this section and of any scheme. framed under it shall have effect notwithstanding anything to the contrary contained in any other law or any agreement, award or other instrument for the time being in force. 263 17. A copy of every scheme and every amendment , thereto framed under section 16 shall be laid, as soon as may be after it is made, before each house of Parliament." The object of any scheme under this chapter, according to the petitioners, was clear from the main part of Section 16(1) of the said Act, i.e. a scheme made under this chapter was only for the purpose of providing for the merger of Indian insurance companies, and this was made clear by Section 16(2) of the Act. Section 16(4) of the said Act, it was contend on behalf of the petitioners, implied that any scheme of rationalization or revision of pay scales and other terms could only be in the context of merger and amalgamation of a one or more of the companies. In this connection mention was made in the petition of the "Memorandum regarding delegated legislation" submitted to the Parliament along with the General Insurance Business (Nationalisation) Bill, 1972 (Bill No. 60 of 1972), which later became the aforesaid Act. It was made explicit, according to the petitioners, that clause 16 of the Bill, later Section 16 of the Act "empowers the Central Government to frame one or more schemes for the . merger of one Indian insurance company with another or for the amalgamation of the two or more Indian insurance companies and for matter consequential to such merger or amalgamation, as the case might be. " It was in the aforesaid context of merger of companies that Section 16(1)(g) provided for rationalisation and revision of pay scales and other terms and conditions of service of officers and other employees wherever necessary. In exercise of the powers contained in the aforesaid Section ] 6(1) of the said Act, four merger schemes were framed in 1973 by the Central Government and the four companies, oriental Fire and General Insurance Company Ltd., National Insurance Company Ltd., New India Assurance Company Ltd., and United India Insurance Company Ltd., into one or the other of which several general insurance companies in the country were merged, were alone allowed to carry on the business of general insurance. The preamble of the scheme, called the New India Assurance Company Limited (Merger) Scheme, 1973, had stated that the Central Government was of the opinion that for the more efficient carrying on of the general insurance business, it was necessary to frame scheme for the merger of certain Indian Insurance companies in the New India Assurance Company Limited. The preambles of the merger schemes in respect of the other three companies were on similar 264 lines. These four companies are subsidiaries of the General Insurance Corporation of India. The companies started functioning from 1st January, 1973 and the process of merger of the various companies into one of the other four companies was completed by I st January, 1974, when the said four schemes came into force. The said schemes provided for the transfer of officers and employees of the merged companies to the transferee Company. The memorandum and the articles of association of the four Companies were also suitably altered by the said schemes. Thereafter there had been no merger or amalgamation of any insurance company. The petitioners stated that there had been no reorganisation of general insurance business either. This position is not in dispute. By a notification dated 27th May, 1974, the Ministry of Finance (Department of Revenue and Insurance Government of India, framed a 'scheme ' called the General Insurance (Nationalisation and Revision of Pay Scales and other Conditions of Service of Supervisory, Clerical and Subordinate Staff) Scheme, }974, and the preamble of the scheme stated that "whereas the Central Government is of the opinion that for the more efficient carrying on general insurance business, it is necessary to do", therefore, in exercise of the powers conferred by Section 16(1)(g) of the aforesaid Act, the Central Government framed the 'scheme ' to provide for the rationalisation and revision of pay scales and other terms and condition of service of employees working in supervisory, clerical and subordinate position under the insurers. The said scheme governed the pay scales, dearness allowance, other allowances and other terms. and conditions of the general insurance employees. It dealt, inter alia, with nature and hours of work, fixation, retirement, provident fund and gratuity. Paragraph 23 of the 1974. scheme provided that the 'New scales of pay ' shall remain in force initially upto and inclusive of 31st December, 1976 and thereafter. shall continue to be in force unless modified by the Central Government. The scheme was framed after negotiations with the parties concerned. The petitioners further state that the scheme was purported to have been made under Section 1611)(g) of the said Act and it was treated as one made under Section 16(1) as part of the four merger schemes. The petitioners state that otherwise, it would have been invalid. The petitioners further state that the employees of the insu 265 rance companies serving throughout the country were, however, subsequently not satisfied with the pay scales, dearness allowance, other terms and conditions available to them on account of several. factors. Through their associations, they submitted their charters of demands to the General Insurance Corporation of India in 1977 for the revision of terms and conditions of their service. Negotiations were held between the management and the unions for the upward revision but according to the petitioners, nothing happened. Industrial dispute was raised between the management of General Insurance Corporation of India and the class III and IV employees. On the demand of revision of pay scales, dearness allowance and other allowances and service conditions. The Chief Labour Commissioner (Central), Government of India, Ministry of Labour, issued conciliation notice dated 11th September, 1980 under the to the Chairman of the General Insurance Corporation and the general secretaries of the employees ' associations. There were several meetings. It was decided, according to the petitioners, that in the meanwhile until the talks were resumed the employees would not resort to strike. There was representation to the respondents not to change the conditions of service pending the conciliation proceedings. It is not necessary to refer in detail to all these, which have been set out in the petition. But nothing fruitful happened. The Labour Commissioner in the circumstances sent a failure report under the to the Secretary, Government of India, Ministry of Labour, stating that there was failure to bring about amicable settlement of disputes. The petitioners contend that no further action was taken and according to them the conciliation proceedings were still pending. This, however, is not accepted by the respondents, according to whom there was failure report and the conciliation proceedings ended thereafter. The scheme mentioned hereinbefore, which is under challenge was issued thereafter. We will have to deal with the scheme in great detail as the same is the subject matter of challenge is these petitions under Article 32 of the Constitution. After the 1974 scheme, in 1976, the Board of Directors approved of promotion policy. On 1st June, 1976 another scheme by which there were amendments with regard to Provident Fund, was introduced. As mentioned before in 1977, major unions submitted charters of demands to the respondent No. 2, seeking revision in the terms and conditions of service of the employees with retrospective 266 effect. Between 10th March, 1977 to 30th March, 1977, memorandum was addressed by the employees of all India Association to the Union Finance Minister. In the memorandum addressed, it was stated that in the normal circumstances on the expiry of the prescribed period of operation of an agreement, settlement of award, the unions usually submitted charters of demands and the said charters of demands were settled either through mutual negotiations or as a result of award of an industrial tribunal, built as the pay scales and other conditions of service of the employees in general insurance industry were, however, governed by a scheme or scheme to be formulated by the Central Government and it was the Central Government which could amend these, the unions submitted that there was justification for making upward revision the scheme and shifting the base years from 1960 to 1970 71 for the purpose of prescribing pay scales. This point was stressed by counsel appearing for the General Insurance Company, in order to emphasis that the unions always accepted the position prior to the present petitioner that the government had the power to amend or make further schemes under the provisions of the Nationalisation Act. On 30 July, 1977 scheme amending the provisions regarding sick leave was introduced. 1978 Promotion Policy was revised by General Insurance Company. Between 1979 80 there were discussions between the management of the Corporation and the representatives of the Trade Unions which were held on 8th, 9th, 10th October, 1979, 7th, 8th, 9th, April, 1980, 12th and 13th June and 1st August 1980. The management of the Corporation after several rounds of discussions with the Unions sought to narrow down the area of differences and submitted to the Government the demands made by the Unions and the managements recommendations. The General Insurance Corporation submitted before us that the Central Government after finally considering the demands and recommendations of the management of the Corporation framed and notified the scheme under challenge on 30th September, 1980. It was contended on behalf of the petitioners that the said notification had been issued by the Government suddenly and unilaterally, without any notice to the parties concerned. The employees were taken unawares. It was contended that from the provisions of the said notification the service conditions of the employees including the petitioners employees, particularly with regard 267 to dearness allowance, stagnation increments, retirement age and other increments had become worse than before and detrimental to the employees. While the employees were eagerly awaiting improvement in their service conditions, this notification had unilaterally altered the service conditions to their prejudice petitioners in their petitions had alleged certain facts by certain illustrations, which according to them, indicated that employees had been affected adversely, inter alia, in gross starting salary of different group of employees, salary on confirmation of assistants who are graduates etc. It was further stated that retirement age was 60 years for all the employees under the 1974 scheme. But under the new scheme, retirement age was reduced to 58 years for employees joining on or after I st January, 1979. Clause 7 of the impugned notification prescribed different ages of retirement, though the employees were of the same class and similarly situated according to the petitioners. Para 12(1) of the impugned scheme provided that an employee who was in service before the commencement of the said scheme would retire at the age of 60 years but provided that an employee joining the service on or after the commencement of the said scheme would retire from service on attaining the age of 58 years. This was discriminatory, according to the petitioners, being violative of Article 14 of the Constitution. lt was further alleged that stagnation increments that is increments after reaching the maximum of the grade to all cadres up to maximum of 3 for every two years of service were given before, but now under the present notification clause S substituted paragraph 7 and provided for no stagnation increment except only one increment for two years to the employees in record clerk cadre. Previously, there was no maximum limit on salary. Now maximum limit was fixed at Rs. 2750. Earlier, according to the petitioners, House Rent Allowance was given to all employees irrespective of Having official accommodation, under the new scheme, house rent ; allowance was withdrawn for employees having official accommodation. Earned leave earlier could have been accumulated upto 180 days, but the new scheme limited the accumulation of earned leave upto 180 days tor the employees retiring at the age of 58 years and 120 days for the employees retiring at the age of 60 years. It was stated in the petitions that this had substantially reduced the emoluments of the general insurance employees, and it had adversely affected the employees throughout the country. 268 The main ground of the challenge is that the impugned notification is illegal as the Central Government has no power to issue it under Section 16 of the said Act and such as the notification framing the present "scheme" is ultra vires Section 16(1) of the . According to the petitioners, once the merger of the insurance companies took place and the process of reorganisation was complete on 1st January, 1974 as mentioned before by forming the four insurance companies by the four schemes already framed in 1973, there could be no further schemes except in connection with further reorganisation of general insurance business and the merger of more. insurance companies as mentioned in sub section (1) of Section 16 of the said Act. By the present alleged scheme there was no merger or reorganisation contemplated, unlike 1974 scheme, according to the petitioners. The petitioners contend that merely making amendment to the terms and conditions of service of the employees unconnected with or not necessitated by the reorganisation of the. business or merger or amalgamation of the companies would not fall within Section 16(1)(g) of the Act. According to the petitioners, the only properly called schemes sanctioned under Section 16(1) are those four merger schemes of 1973 as would be evident from the preamble to the Act. The petitioners further contend that under the life Insurance Corporation Act, Banking Companies Act. there were power to frame regulations independently of reorganisation. But there is no such power, according to the petitioners, under the . The said notification therefore is without the authority of law. It is, further, submitted. that the present service conditions of the employees unrelated to reorganisation of general insurance business merger or amalgamation of insurance companies, could not form part of any scheme or notification under section 16 of the aforesaid Act. Section 16(7) of the Act would not come into play and the provisions or the Industrial disputes Act, 1947 including section 94 were applicable to the general insurance industry. Therefore if the companies wanted to change the service condition of their employees affecting them adversely, they should have given, the petitioners contend, notice of changes under section 9A of the , negotiated with the employees and arrived at some settlement or had the dispute adjudicated upon under the said Act. Since. this has not been done, particularly when the conciliation proceed 269 ings were still pending in the absence of Government 's acknowledgement of failure report of the conciliation officer, the action of the Government in issuing the unilateral notification is bad in law. It is submitted further that impugned notification is ultra vires being violative of Article 14 of the Constitution because it discriminated between employees similarly situated, particularly in the matter of dearness allowance and retirement age. The petitioners contend that under the Sick Textile Undertakings (Nationalisation) Act, 1974, the etc., separate companies had been formed on nationalisation. The employees of those companies were entitled to have their service conditions regulated under . In the present case, the employees have been deprived of the existing benefits without following the procedures prescribed under the . Therefore. there was discrimination and violation of article 14 of the Constitution. The petitioners therefore contend that the terms and conditions of service enunciated in 1974 being as a result of bilateral agreement, could not be changed unilaterally, to the detriment of the employees ' fundamental rights to carry on their employment for gain and as such violative of article 19(1) (g) of the Constitution. It is stated that the notification was illegal, being ultra vires section 16 of the Act. Since, according to the petitioners, such notification deprived the rights of the employees to receive dearness allowance etc. with the rise in the cost of living index without any limit, it is deprivation of property without providing for compensation and is thus also violative of article 31(2) of the Constitution. The petitioners, further, contend that the Constitution 44th amendment deleting 1 Articles 31 and 19(1) (f) cannot save the scheme since that Amendment came into force only on 20th June, 1979, whereas the impugned notification affecting the rights of the employees to emoluments takes effect from 1st January, 1979. It was further urged that the protection of article 31 read with Ninth Schedule of the Constitution was not available to any scheme or notification much less the present one, The present notification, according to the petitioners, disregarded the directive principles enunciated in Article 43 of the Constitution. The petitioners therefore ask for quashing the said notification by these petitions under Article 32 of the Constitution. The second batch of Writ applications (Writ Petition Nos. 5434 37 of 1980) are on behalf of the employees as well as the 270 General Insurance Employees All India Association challenge the scheme of 1980 more or less on the same though not identical grounds mentioned in Writ Petition Nos. 5370 74 of 1980. Interim order was passed in the said application regarding payment of dearness allowance as would appear from the Court 's order dated 25.8.1981. In the said order, directions were given for payment of dearness allowance payable under the old scheme from the beginning of 1981 with quarter April, as well as quarter beginning from July, 1981 within certain time mentioned in the said order. lt was further, directed that subsequent dearness allowances will be paid in accordance with the directions to be given at the time of disposal of these writ applications. In the Writ Petitions Nos. 5370 74 of 1980, there is a petition on behalf of All India National General Insurance Employees Association for intervention. It represents a Trade Union of workmen working in the offices of General Insurance Corporation of India, Bombay as well as its subsidiaries. They, inter alia, allege that the main petitions have challenged the scheme of 1980 on purely technical grounds and though it would be correct to say that the scheme of 1980 does not meet the aspirations of the workers wholly as reflected in the various charters of demands submitted to the management, they are of the opinion that the same is not completely bereft of any merit so that the same may be quashed by this Court. They mentioned certain additional benefits available in the said scheme of 1980 in paragraphs 15, 16, 17, 18 and 19 of the said application. They therefore claim right to intervene in the said Writ application Nos. 5370 74 of 1980. There is also an application by Senior Assistants of the New India Assurance Company Ltd. and National Confederation of General Insurance Employees, represented by its Vice president under order XLVII Rule 6 of the Supreme Court Rules of 1966 praying, for permission to intervene in these petitions. Upon this an interim order was passed on 24.10.1580 staying the operation of the scheme (operation of the Notification dated 30th September, 1980) and notice was issued in the stay application. All these will be disposed of by this judgment. It will, therefore, be necessary, before we examine the contentions raised in these petitions, to briefly consider the scheme of 1980. As mentioned before, this scheme is called the General Insurance 271 (Rationalisation and Revision of Pay Scales and other Conditions of Service of Supervisory, Clerical and Subordinate Staff) Second Amendment Scheme, 1980. Some new definitions have been provided by paragraph 2 of 1980 scheme which included the meaning of the 'Company ' and under the scheme it mentioned that the 'Company ' would mean the four nationalised companies, National Insurance Company Limited, the New India Assurance Company Limited, the oriental Fire and General Insurance Company Limited and the United India Insurance Company Limited. Sub paragraph (ii) of paragraph 2 of the said scheme defines 'Net monthly emoluments '. By sub paragraph (ii), the amended definition of 'Revised terms ', (Revised Scales of Pay) was inserted. By paragraph 3, adjustment of pay was stipulated on the coming into effect of operation of 1980 scheme. How the basic pay is to be fixed is provided by 1980 scheme. lt also makes detailed provisions as to how the adjustment allowance is to be dealt with so far as Dearness Allowance, overtime allowance, Contribution to Provident Fund and other retirement benefits are concerned. Paragraph 5 deals with the 'Increments. Paragraph 6 deals with Earned Leave and other Encasement of leave at the time of retirement and death. Paragraph 7 deals with 'Retirement ' and ' stipulates that an employee who was in service of the Corporation before the commencement of the scheme of 1980 should retire from service when he attains the age of 60 years. But an employee, who joins the service of the Corporation after the commencements of the scheme will retire on his attaining the age of 58 years. It further stipulates that an employee would retire on the afternoon of the last day of the month in which he attains the age of 60 years or 58 years as the case might be. Clause 8 deals with 'Gratuity '. Clause 10 provides the duration of revised terms and stipulates that the revised terms should be continued to be in force unless modified by the Central Government. Then the Second Schedule of 1974 scheme which dealt with Travelling Allowance category, Travel by Road and different allowances for the same, transfer grant were amended and the new Fourth Schedule included scales of pay to be fixed, on the revised scales of pay indicated therein. It is not necessary to set out further details of the actual provisions of 1980 scheme. While on behalf of the petitioners, it was contended that the revised scales of pay and the terms included therein were highly detrimental to the employees concerned, on the other hand, it was contended on behalf of the Union of India as well 272 as the General Insurance Company that on the whole, the revised scales of pay provided for better pay and allowances and better opportunities to the employees concerned. One of. the intervener unions also states that the 1980 scheme is not completely devoid of Merit. Parties have taken us through in detail by help of charts and other figures in support of the respective cases and contentions. It is not necessary, in view of the nature of the contentions raised before us, to express any opinion on the merits or demerits of the rival contentions of the parties in respect of the details of either or both the schemes. It may, however, be stated that there has been a ceiling on increase of pay automatically with the increase of the rise in the cost of index. The respondents, namely, the union of India as well as the General Insurance Company, contended that in comparison with other employees is governmental sectors or public sectors, the employees of the general insurance companies were 'High wage islanders ' and it was necessary to put a ceiling on the emoluments and other amenities in order to facilitate better functioning of the insurance companies concerned as well as subserve the object and purpose of the nationalisation policy. The various detailed items of the scheme of 1974 and 1980 have to be viewed in this background. The basic and, in our opinion, the main questions are has the Government and the respondents power in law to introduce the 1980 scheme and if they have that power, have they exercised that power in any arbitrary and whimsical manner to deny to the petitioners any of the fundamental rights and whether the petitioners have been discriminated against? These, therefore, are the questions and it is not necessary, in our opinion, to detain ourselves with lengthy extracts from the scheme of 1974 and 1980 to examine which is better or which is detrimental and if so, to what extent. On these, there will be and are divergent views. The scheme of 1980 has been framed by the Central Government under the authority given to it by the Act under . The scope of that authority has, therefore, to be found under Chapter V containing Sections 16 & 17 of the Act. We have set out hereinbefore the terms of Sections 16 & 17. Sub section (1) of Section 16 authorises the Central Government, if it is of the opinion that "for the more efficient carrying on of general insurance business, it is necessary to do so, may, by notification, frame one or more schemes" providin for 273 all or any of the matters enumerated in the different clauses of Section 16(1) of the said Act, and the matters have been set out in the different clauses of the said sub section. For the present purpose, clause (g) is relevant, which gives authority to the Central Government to frame scheme for rationalisation or revision of pay scales and other terms and conditions of service of officers and other employees wherever necessary. Clause (j) of the said sub section gives authority to the Central Government also to frame scheme for such incidental, consequential and supplemental matters as are necessary to give full effect to the scheme. Therefore, the question that is necessary for this purpose to determine, is, whether the power given to the Central Government by clause (g) for the rationalisation or revision of pay scales and other terms and conditions of service a of officers and other employees, wherever necessary can be said to authorise the Central Government to frame the present scheme under consideration. This must be judged in conjunction with sub section (6) of Section 16 which authorises the Central Government, by notification, to add, to amend or to vary any scheme framed under section 16. The point at issue, is, whether rationalisation or revision of pay scales and other terms and conditions of service of officers and other employees wherever necessary can authorise the Central Government to frame scheme like the scheme of 1980, which is unconnected with or unrelated to the merger of one Indian insurance company with another insurance company or the formation of a new company by the amalgamation of two or more Indian insurance companies. In order to find that out, it is necessary to read the provisions of this Act as a whole. Primarily, if the words are intelligible and can be given full meaning, we should. not cut down their amplitude. Secondly, the purpose or object of the conferment of the power must be borne in mind. The first indication of the said object in this case, as is often in similar statutes, can be gathered from the preamble to the Act. We have noticed the preamble of the present Act. This preamble has also to be read in the light of sub section (2) of Section 16 which provides that the object of the Central Government in framing the schemes under sub section (1) was to give authority to the Central Government to frame schemes, to ensure that ultimately there are only four insurance companies (excluding the Corporation) in existence and that they are so situate as to render their combined services effective in all parts of India. Sub section (2), therefore, to a large extent circumscribes the amplitude of the power given under sub section (1) of Section 16 of the Act As framing of the scheme is an exercise of the delegated 274 authority by the Central Government, the memorandum regarding delegated legislation submitted to the Parliament along with the General insurance Business (Nationalisation) Bill, 1972 will provide. some guidance also. As we have noticed that clause 16 of the said Bill which later on became Section 16 of the Act explained the need for delegated authority and stated the object as 'to frame one or more scheme for the merger of one Indian insurance company with another or for the amalgamation of the two or more insurance companies and for matters consequential to such merger or amalgamation as the case might be '. Bearing in mind that this is a delegated legislation and keeping in mind that the authority to frame the scheme must be found within the object of the power given under Chapter V of the Act and reading the entire connected provisions together, it appears to us, that the only authority or power to frame scheme given was for the purpose of merger of one Indian insurance company with another for amalgamation of two or more Indian insurance companies and for matters consequential to such merger or amalgamation as the case might be. Any scheme though, it might come within the wide expressions used in sub section (6) or Section 16 as well as clause (g) or clause (j) of sub section (1) of Section 16 which is unrelated to or unconnected with the amalgamation of the insurance companies or merger consequent upon nationalisation would be beyond the authority of the Central Government. This has to be so if read in conjunction with sub section (2) of Section 16 of the Act. It is evident from the scheme of 1980 that it is not connected with or is not for the purpose to ensure that ultimately there are only four insurance companies existing and they are so situate as to render combined services effective in all parts of India. It is true that subsequent to the merger of the four insurance companies, scheme as indicated herein before, dealing with Provident Fund, Gratuity etc. have been framed but these, in our opinion, are irrelevant when judging the question of the authority to frame a particular scheme which is impugned. It is also true that the scheme of 1974 so far as pay scale was concerned as indicated in the scheme as we have set out herein before provided that the scheme would remain in force initially for a period upto 31st December, 1976 and thereafter shall continue to be in force unless modified by the Central Government. It is also true that the employees themselves, as indicated herein before, wanted revision of pay scales and claimed through their numerous charters of demands amending or framing of a fresh scheme by the Government on the basis that the Central Government alone had the authority to frame the scheme under the Act. Certain amount of revision of pay scale and other terms and 275 conditions become inevitable from time to time in all running business or administrations. Clause (g) of sub section (1) of Section 16 authorises the Central Government to frame scheme for rationalisation and revision of pay scales and other terms and conditions of services of officers and other employees wherever necessary. But it is evident that the scheme of 1980 impugned in these petitions is not related to the object envisaged in sub section (2) of Section 16 of the Act. In order to be warranted by the object of delegated Legislation as explained in the memorandum to the Bill which incorporated Section 16 of the Act, read with the preamble of the Act, unless it can be said that the scheme is related to sub section (2) of Section 16 of the Act, it would be an exercise of power beyond delegation. The duty of the Court in interpreting or construing a provision is to read the section, and understand its meaning in the context. Interpretation of a provision or statute is not a mere exercise in semantics but an attempt to find out the meaning of the legislation from the words used, understand the context and the purpose of the expressions used and then to construe the expressions sensibly. There is another aspect which has to be kept in mind. The scheme is an exercise of delegated authority. The scope and ambit of such delegated authority must be so construed, if possible, as not to make it bad because of the vice of excessive delegation of legislative power. In order to make the power valid, we should so construe the power, if possible, given under Section 16 of the Act in such manner that is does not suffer from the vice of delegation of excessive legislative authority. It is well settled that unlimited right of delegation is not inherent in the legislative power itself. This Court has reiterated the aforesaid principle in Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. vs The Asstt. Commissioner of Sales Tax & Ors. The growth of Legislative power of the executive is a significant development of the 20th century. The theory is iaissez faire has been given a go by and large and comprehensive powers are being assumed by the State with a view of improve social and economic well being of the people. Most of the modern socioeconomic legislations passed by the legislature lay down the guiding principles of the Legislative policy. The legislatures, because of limitation imposed upon them 276 and the time factor, hardly can go into the matters in detail. The practice of empowering the executive to make subordinate legislation within he prescribed sphere has evolved out of practical necessity and pragmatic needs of the modern welfare State. Regarding delegated legislation, the principle which has been well established is that legislature must lay down the guidelines, the principles of policy for the authority to whom power to make subordinate legislation is entrusted. The legitimacy of delegated legislation depends upon its being used as ancillary which the legislature considers to be necessary for the purpose of exercising its legislature power effectively and completely. The legislature must retain in its own hand the essential legislative function which consists in declaring the legislative policy and lay down the standard which is to be enacted into a rule of law, and what can be delegated is the task of subordinate legislation which by very nature is ancillary to the statute which delegates the power to make it effective provided the legislative policy is enunciated with sufficient clearness a standard laid down. The courts cannot and do not interfere on the discretion that undoubtedly rests with the legislature itself in determining the extent of the delegated power in a particular case. lt is true that in this case under Section 16(1)(g), rationalisation or revision of pay scales and other terms and conditions of service of officers and other employees wherever necessary is one of the purpose for which scheme can be, framed under Section 16(1) of the Act. It is also true that incidental, consequential and supplementary matters as are necessary to give full effect to the scheme are also authorised under clause (j) of sub section (1) of Section 16. It has also to be borne in mind that scheme and every amendment to a scheme framed under section 16 shall be laid as soon as may be after it is made before each House of Parliament. The last provision is indicative of the power of superintendence that the legislature maintains over the subordinate legislation of scheme framed by the delegate under the authority given under the Act. From that point of view, it is possible to consider as indeed it was argued on behalf of the respondents in this case, that having regard to the fact that one of the objects of the Preamble is regulation and control of general insurance business and other matters connected therewith or incidental thereto and having regard to the fact that rationalisation and revision of pay scales whenever necessary was one of the objects envisaged under sub section (1) alongwith clause (j) of sub section (1) of Section 16 of Section 16 read with the safeguards of section 277 17 as we have set out herein before in case of revision and rationalisation of pay scales whenever it becomes necessary as in this case, according to the respondents, it had become necessary, the scheme of 1980 was permissible within the delegated authority. But we must bear in mind the observations of Mukherjea, J. in The Delhi Laws case to the following effect: "The essential legislative function consists in the determination or choosing of the legislative policy and of enacting that policy into a binding rule of conduct. 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 of the details within the framework of that policy". But as explained before the Act must be read as a whole. The Act must be read in conjunction with the preamble to the Act and in conjunction with the memorandum in Clause No. 16 of the Bill which introduced the Act in question. But above all it must be read in conjunction with sub section (2) of Section 16 of the Act which clearly indicated the object of framing the scheme under Section 16(1) of the Act. The authority and scope for subordinate legislation can be read in either of the two ways; namely one which creates wider delegation and one which restricts that delegation. In our opinion, in vies of the language of sub section (2) of Section 16 and the memorandum to the Bill in the peculiar facts of this case the one which restricts the delegation must be preferred to the other. So read, in our opinion, the authority under Section 16 under the different clause of sub section (1) must be to subserve the object as envisaged in sub section (2) of Section 16 of the Act, and if it is so read than framing of a scheme for purposes mentioned in different clause of sub section (1) of Section 16 must be related to the amalgamation or merger of the insurance companies as envisaged both in the memorandum on delegated legislation as well as sub section (2) of Section 16. We may mention in this connection that in the case of A.V. Nachane & Another vs Union of India & Another, this contention of delegated legislation was adverted to. In that case the Court was concerned with Life 278 Insurance Corporation (Amendment) Act, 1981 where the policy of the Act as stated in the preamble of the Amendment Act was 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 condition of service applicable to the employees and agents of the Corporation should be undertaken expendiously. That was the object of the Act in question. Unfortunately that is not the object indicated as the object of the power to frame scheme under Section 16 of the present Act. In view of that object mentioned in the said decision and for other reasons in the case of A.V. Nachane & Another vs Union of India & Another (supra), this Court held that the Act in question did not suffer from the vice of excessive delegation. In view of what we have stated herein before, the scheme of 1980 so far as it is not related to the amalgamation or merger of insurance companies, it is not warranted by sub section (1) of Section 16. If that be so, the scheme must be held to be bad and beyond authority. This being the position, it is not necessary to examine the various other contentions raised in this case. Various contentions have been made. Both sides relied on various decisions in support of their respective contentions. Both sides relied on the decisions dealing with the employees of the Life Insurance Corporation and the Acts and the amendments in connection with their terms of employment. We will just note the decisions. Reliance was placed on the decision in the case of Madan Mohan Pathak vs Union of India & Ors, Etc. The question in that decision was that the validity of Section 3 of the Life Insurance Corporation (Modification of Settlement) Act, 1976. The questions involved in that decision, in the view. we have taken as well as in the facts of the instant case, are not relevant. In last mentioned case there was a writ petition which was allowed by the learned single Judge of the High Court and appeal was preferred from that decision. During the pendency of the appeal, there was an amendment to the Act namely, the Life Insurance Corporation (Modification of Settlement) Act, 1976. In the Letters Patent Appeal, the Corporation stated that in view of the impugned Act, there was no necessity for proceeding with the appeal and the Division Bench of Calcutta High Court made no order on the said appeal. This 279 Court held among other things that the rights of the parties had crystalized in the judgment and became the basis of a Mandamus of the High Court and it could not be taken away by indirect fashion proposed by the Act under challenge before this Court. Chandrachud, J., as the learned Chief Justice then was, speaking for himself and Fazal Ali and Shinghal, JJ. concurred with the majority view on the basis that the impugned Act violated Article 31(2) of the Constitution and was therefore void. Bhagwati, J. speaking for himself and on behalf ' of Iyer & Desai, JJ. was of the view that irrespective of whether the impugned Act was constitutionally valid or not, the Corporation was bound to obey the writ of Mandamus issued by the High Court and to pay the bonus for the year 1975 76 to class III and Class IV employees. The said learned judges held that writ of Mandamus was not touched by the impugned Act. The other observations of the said Judges as well as the other learned Judges are not relevant in the view we have taken. In instant case before us we do not have any case of settlement which was the subject matter there between the workers and the employers and the rights flowing therefrom. Reliance was also placed on the decision in the case of The Life Insurance Corporation of India vs D.J. Bahadur & Ors as well as the decision in the case of A.V. Nachane Another vs Union of India & Another (supra). In the view we have taken, it is not necessary to examine these decisions in detail. In those cases, the question under consideration was the and the subsequent amendments thereto as well as certain orders in respect of the same. The basis upon which the aforesaid two decisions proceeded were (a) a right had crystalized by the directions in D.J. Bahadur 's case (supra) and this could not be altered or taken away except by a fresh industrial settlement or award or by relevant legislation and (b) the relevant legislation which was the subject matter of challenge in A. V. Nachane 's case (supra) can not take away the rights which had accrued to the employees with retrospective effect. As is evident from the facts of the case before us, the situation is entirely different. We are concerned here with the question primarily whether the scheme is authorised by the Act and if it is so authporis 280 ed, the question is whether the Act in question is constitutionally valid in the sense it had taken away any rights which had crystalized or whether it infringed Article 14 of the Constitution. These decisions also deal with the question whether a special legislation would supersede a general legislation and which legislation could be considered to be a special legislation. It may be noted that we are not concerned with any settlement or award. In that view of the matter, it is not necessary to detain ourselves with the said decisions. and the various aspect dealt with in the said decisions. Another aspect that was canvassed before us was whether Section 16 of the 1972 Act with which we are concerned in any way affected any industrial dispute and whether the provisions of sub section (5) of Section 16 or sub section (7) of Section 16 in any way curtailed any right. in respect of any industrial dispute and if so whether the is a special legislation or whether the is a special legislation in respect of adjudication of rights between the employees and the employer. If we had held that the scheme of 1980 was permissible within the power delegated under Section 16 of the , it would have been necessary for us to discuss whether there is any conflict between the provisions of the said Act and the and if so, which would prevail. Section 16(5) of the 1972 Act, as we have noticed earlier, stipulates that notwithstanding anything contained in the or in any other law for the time being in force, the transfer af the services of any officer other employee of an Indian insurance company to the acquiring company shall not entitle any such officer or other employee to any compensation under that Act or other law, and no such claim shall be entertained by any court, tribunal or other authority. This, to a certain extent, clearly excludes the operation of the in respect of disputes arising on the transfer of the business of general insurance. There is no such question before us. Had it been possible to hold that the scheme of 1980 was valid in proper exercise of the authority under Section 16 of the Act, a question would have arisen as to whether the ceiling and other conditions on emoluments could be imposed on the employees in the manner proposed to be done under the scheme of 1980 without reference to the procedure for adjudication of these matters under the 281 . Then the question had to be judged h by reference to sub section (5) and sub section (7) of Section 16 of the 1972 Act. Section 16 empowered the Government by notification to add to, amend or very any scheme framed under Section 16(1) Sub section (7) provides that the provisions of this section, namely Section 16 of the 1972 Act and of any scheme under it shall have effect notwithstanding anything to the contrary contained in any other law or any agreement, award or other instrument for the time being in force. We have noticed the scheme of 1980. That scheme puts certain new conditions about retirement, about emoluments and other benefits of the employees. It may be noted that the application of as such in general is not abrogated by the provisions of 1972 Act, nor made wholly inapplicable in respect of matters not covered by any provisions of the scheme. This aspect is important and must be borne mind. Wrongful dismissal, other disciplinary proceedings, unfair labour practices, victimization etc. would still remain unaffected by any scheme or any provision of the Act. The only relevant and material question that would have arisen, is, whether in case where a statutory ceiling which one of the counsel for the petitioners tried to describe as "statutory gherao" on rise of increase in emoluments and other benefits with the rise in the cost of index of prices" affected the position under the . It may be noted as we have noted before that this is not a case where any dispute was pending before any tribunal or before any authority under the between the workmen concerned and he insurance companies. Though there was conciliation proceedings, the Conciliation proceedings could ' not reach to any successful solution and the conciliation officer has made a report failure of conciliation. The Government had the report. Thereafter the Government has not referred the dispute to any industrial tribunal hut has framed a scheme which is the subject matter of challenge before us. It cannot, in our opinion, be said that conciliation proceedings or any proceeding under the were pending and therefore in the middle of the proceedings under the , the Government had acted and framed the scheme and as such the same was bad and illegal. There were no proceedings pending under the . With the finding of the Conciliation officer, the Government 282 had two options, either reaching a settlement or framing a scheme on the one hand or to make a reference to the tribunal of the dispute regarding the points mentioned in the demands of the workmen. There is one factual dispute which, in our opinion, is not very material. According to the petitioners, the Government had not acknowledged the receipt of the failure report of the Conciliation officer. According to the respondents, the receipt was acknowledged; the failure of the conciliation proceedings, however, is admitted. No further steps or proceedings were required as such. The Government had to assess on the failure of tile conciliation proceedings either to refer the matter to the tribunal or to take such steps as it considered necessary. If the Government had not taken any of the steps, then it was open, if the employees concerned were in any way aggrieved, to take appropriate proceedings against the Government for doing so. As mentioned hereinbefore if the scheme was held to be valid, then the question what is the general law and what is the special law and which law in case of conflict would prevail would have arisen and that would have necessitated the application of the principle . "Gener alia specialibus non derogant". The general rule to be followed in case of conflict between two statutes is that the later abrogates the earlier one. In other words, a prior special law would yield to a later general law, if either of the two following conditions is satisfied. (i) The two are inconsistent with each other. (ii) There is some express reference in the later to the earlier enactment. If either of these two conditions is fulfilled, the later law, even though general, would prevail. From the text and the decisions, four tests are deducible and these are: (i) The legislature has the undoubted right to alter a law already promulgated through subsequent legislation, (ii) A special law may be altergated or repealed by a later general law by an express provision, (iii) A later general law will override a prior special law if the two are so repugnant to each other that they cannot co exist even though no express provision in that behalf is found in the general law, and (iv) It is only in the absence of a provision to the contrary and of a clear inconsistency that a special law will remain wholly unaffected by a later general law. See in this connection. , 283 Maxwell on "The Interpretation of Statutes" Twelfth Edition, pages 196 198. The question was posed in the case of The Life Insurance Corporation of India vs D.J. Bahadur & Ors. (supra) where at page 1125, Krishna Iyer, J. has dealt with the aspect of the question. There the learned Judge posed the question whether the LTC Act was a special legislation or a general legislation. Reference in this connection may also be made on Craies on "Statute Law" Seventh Edition (1971) paras 377 382, but it has to be brone in mind that primary intention has to be given effect to. Normally two aspects of the question would have demanded answers, if the scheme of 1980 was held to be valid on the first ground as we have discussed, one is whether the is a special statute and the is a general Act or vice versa, and secondly whether there is any express provision in the which deals with the subject. Now in this case we have categorical reference to the in sub section (5) and sub section (7) of Section 16 of the . There is, however, one aspect w here it would have been necessary had we held the scheme to be valid otherwise, if there had been no General insurance Business (Nationalisation) Act, 1972, then the employees would have been entitled to raise a dispute on the question of increase of emoluments and revision of pay scale with rise in the cost of index of the prices under the . In such a situation, the Government, after conciliation proceedings, was empowered to make a reference if it considered so necessary having regard to the nature of the disputes raised. Though it cannot be said that reference was a matter of right but it was within the realm of power of the Government and the Government has a duty to act with discretion on relevant considerations to make or not to make a reference taking into consideration the facts and circumstances of each case. To that limited extent it could have been said That this right or power has been curtailed by the , if the scheme was otherwise valid Having regard to the context in which the question now arises before us, in our opinion, there is no question as to whether the provisions of would prevail over the provi 284 sions of . There is no industrial dispute pending as such. The has not abrogated the Industrial Disputes Act, 1957 as such. The question of the application of the principle of "Generalia specialibus non derogant" has been dealt with in the case of J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs State of U.P. & Ors. Some of these aspects were also discussed in the case of U.P. State Electricity Board & Ors. vs Hari Shanker Jain and Ors. Had it been possible to uphold the scheme of 1980 as being within the power of 1972 Act, it would have been also necessary for us to consider whether such a scheme or Act would have been constitutionally valid in the context of fundamental rights under Article 14, article 19(1)(g) and article 31 of the Constitution and the effect of the repeal of article 31 by the 44th amendment of the Constitution. The was put in the Nineth Schedule of the Constitution as item 95 on 10th August, 1975. The effect of putting a particular provision in the Nineth Schedule at a particular time has been considered by this Court in the case of Prag Ice & Oil Mills & Anr. vs Union of India. It was held by the learned Chief Justice in the said decision that on a plain reading of article 31A, it could not be said that the protective umbrella of the Nineth Schedule took in not only the. acts and regulations specified therein but also orders and notifications issued under those acts and regulations. Therefore if any rights of the petitioners had been affected by the scheme of 1980 then those rights would not enjoy immunity from being scrutinised simply because the Act under which the scheme was framed has been put in the Ninth Schedule. In any event any right which accrued to the persons concerned prior to the placement of the Act in the Nineth Schedule cannot be retrospectively affected by the impugned provisions. It was contended that the rights of the petitions under article 19(1)(g) have been affected by the impugned legislation and the scheme framed thereunder. Empowering the Government to frame schemes for carrying out the purpose of the Act, does not, in our 285 opinion, in the facts and circumstances of the case, in any way, affect or abridge the fundamental rights of the petitioners and would not attract article 19(1)(g). The other aspect which was canvassed before us was whether the Act and the scheme in question violated article 14 of the Constitution. This question has to be understood from two aspects, namely whether making a provision for salary and emoluments of the petitioners who are the employees of the General Insurance Corporation specifically and differently from the employees of other public section undertakings is discriminatory in any manner or not and the other question, is, whether making a provision for the employees of General Insurance Corporation for settlement of their dues by schemes and not leaving the question open to the general provisions of is discriminatory and violative of the rights of the employees. It is true that sometimes there have been rise in emoluments with the rise in the cost of index in certain public sector corporations. The legislature however is free to recognise the degree of harm or evil and to make provisions for the same. In making dissimilar provisions for one group of public sector undertakings does not per se make a law discriminatory as such. It is well settled that courts will not sit as super legislature and strike down a particular classification on the ground that any under inclusion namely that some others have been left untouched so long as there is no violation of constitutional restraints. It was contended that the application of the not having been excluded from the Nationalised Textile Mills, Nationalised Coal and Coking Coal Mines and Nationalised Banks but if and is so far as it excluded the application of the , in case of general insurance companies, the same is arbitrary and bad. In this connection reliance may be placed on the observations of the learned Chief Justice in the case of 'Special Courts Bill 1978 '. The same principle was reiterated by this Court in the case of State of Gujarat and Anr. vs Shri Ambica Mills Limited, Ahmedabad etc. In that case, this Court was of the view that in the matter of economic legislation or reform, a provision would not be struck down on the vice of underinclusion, inter alia, for the reasons that the legislature could not be 286 required to impose upon administrative agencies task which could not be carried out or which must be carried out on a large scale at a single stroke. It was further reiterated that piecemeal approach to a general problem permitted by under inclusive classifications, is sometimes justified when it is considered that legislatures deal with such problems usually on an experimental basis. It is impossible to tell how successful a particular approach might be, what dislocation might occur, and what situation might develop and what new evil might be generated in the attempt. Administrative expedients must be forged and tested. Legislators recognizing these factors might wish to proceed cautiously, and courts must allow them to do so. This principle was again reiterated in the Constitution Bench decision of this Court in the case of R. K. Garg etc. vs Union of India & Ors. etc As there was no industrial dispute pending, we are of the opinion that on the ground that the petitioners have been chosen out of a vast body of workmen to be discriminated against aud excluding them from the operation of , there has been no violation of Article 14 of the Constitution. This question, however, it must be emphasised again, does not really arise in the view we have taken. Before us it was contended that sick mills which have been nationalised have been treated differently than general insurance employees under 1972 Act in Section 16(5) and Section 16(7) and in the scheme framed under the . The object and purpose of the Sick Textile Undertakings (Nationalisation) Act, 1974, was "reorganising and rehabilitating such sick textile undertakings so as to subserve the interests of general public by augmentation of the products and distribution at fair prices of different varieties of cloth and yarn". The basic objective of the said Act was rehabilitation of the sick textile mills. That was different from the purpose of the present Act. The sick textile units had under them the bulk of their employees as workmen those who came under the provisions of . Section 14 of the said Act statutorily recognises the special position of the workmen as contra distinguished from the other employees by enacting separate provisions in this respect thereon. Further more it has to be borne in mind that the aforesaid 287 Act was concerned with the ensuring; augmentation of production and distribution of certain cloth and yarn which are commodities essential to the national economy being important consumer items Therefore the case of the employees of sick textile undertakings which has been mentioned by the petitioners and argued before us cannot be compared on similar lines in respect of this aspect with the present petitioners. We would have rejected this submission on behalf of the petitioners, had it been necessary for us to do so but in the view that has been taken, it is not necessary. Another item mentioned before us was the employees or Coking Coal Mines Nationalisation Act, 1972. lt has to be borne in mind that the object covered by the scheme of the Act was entirely different from the . The was enacted to provide for the transfer of the interest of the owners of such mines and also the transfer of the interest of owners of coke oven plants with a view to "reorganising and re constructing such coal mines and plants for the purpose of protecting, serving and permitting scientific development of resources of coking coal needed to meet the growing requirement of iron & steel industry". According to the normal prevalent view, the workmen of Coking Coal Mines were sweated labour. These workmen constituted very large percentage of the employees. The act in question namely the recognised the independent existence of the said workmen as a class. It has also to be kept in mind that coking coal is a commodity very vital to the national economy and prime raw materials of iron & steel industry which is a basic industry. The workmen employed in the coal mines were also sweated labour. Their special position was also statutorily recognised in the said Act. Coal is also one of the basic materials required to sustain growth. The provisions of have been considered in detail and the special feature has been taken note of in the case of Tara Prasad Singh etc. vs Union of India & Ors. According to the respondents, Class III and Class IV employees of the General Insurance Company are high wage earners. They are islanders by themselves according to the respondents. It is true that judges should not bring their personal knowledge into action in deciding the controversy before the Courts but if common knowledge is any guide, then undoubtedly these 288 employees are very highly paid in comparison to many others. The object of the is to run the business efficiently so that the funds available might be utilised for socially viable and core projects of national importance. From one point of view the Nationalised Banks and the Insurance Companies for the purpose of applicability or otherwise of the provisions of the cannot be treated as belonging to one class. Historical reasons provide an intelligible differentia distinguishing Nationalised Insurance Companies from the Nationalised Banks. The reason suggested by the respondents was that prior to Banks Nationalisation, Industrial disputes between workmen and the Banks were treated since 1950 on All India basis with the totality of the banks being involved therein. Several awards have been made treating them as such like Shastri Award, 1953. Shastri Award Tribunal was constituted with a view to settle the disputes of the workmen of the Banks with all commercial Banks (excluding Co operative Banks etc.) on the one hand and the employees on the other. Desai Award, 1962 bipartite settlement between Indian Banks Association and the Exchange Banks Association on the one hand and All India Bank Employees Association and All India Bank employees Federation on the other, are some of the examples. As against this, prior to the Act in question before us, disputes between insurance companies and their workmen were settled on independent company basis with no All India projections involved. It may also be noted that unlike the case of some banks, there is no existing award or settlement with the petitioners employees of the general insurance companies and the four insurance companies. The financial resources, structures and functions of the Banks are different from those of the insurance companies. It may also be noted as was pointed out to us on behalf of the respondents that Bank 's Class III and IV employees are about 4,58,000 in 1982 as compared to insurance companies which employ about 25,000 Class Ill and Class IV employees. Therefore for the purpose of rationalisation, the insurance companies wanted to curtail their emoluments on a small scale. It cannot be said that there are no distinguishing factors and that for choosing a particular group for experiment, the respondents should be found guilty of treating people differently while they are alike in all material respects Differentiation is not always discriminatory. If there is a rational nexus on the basis of which differentiation has been made with the object sought to be achieved by particular provision, then such differentiation is not discriminatory and does not 289 violate the principles of article 14 of the Constitution. This principle is too well settled now to be reiterated by reference to cases. There is intelligible basis for differentiation. Whether the same result or better result could have been achieved and better basis of differentiation evolved is within the domain of legislature and must be left to the wisdom of the legislature. Had it been held that the scheme of 1980 was within the authority given by the Act, we would have rejected the challenge to the Act and the scheme under article 14 of the Constitution. It was also urged before us on behalf of the respondents that the petitioners being employees of public sector undertakings, and these are economic instrumentalities of the State and having regard to the contents and contour of the concept of public employment as developed in the Indian legal system, an employee in a public sector can be approximated with and treated as a government servant. Having regard to the principles which govern the employer and employee relationship in the governmental sectors, the conditions of service of employees in public employment should be exclusively governed by the statute and by the rules and regulations framed thereunder. Predication of such power would necessarily exclude the provisions of and the principles of collective bargaining just as these would exclude the principles of contractual relationship in such matters. The point is interesting. However,, in the view we have taken, we need not discuss this aspect any further. It was further submitted on behalf of the respondent that the rationale justification and the genesis of the law of nationalisation being the creation of economic instrumentalities to subserve the constitutional and administrative goals of governance in a social welfare society, the running of public sector undertakings is neither for profit earning of the management nor for sharing such profits with the workmen alone but to utilise the investible funds available as a result of such ventures and undertakings for socially oriented goals laid down by the governmental policies operating on the said sectors. In this connection reference was made before us to the decision in the case of State of Karnataka & Anr. vs Ranganatha Reddy & Anr. etc 290 Employment is the public sector undertakings enjoys a statuh. It was submitted that both historically as well as a matter of law, the public sector undertakings being the economic instrumentalities of the State and discharging the obligations which the State have, the employees of such undertakings in principle cannot be distinguished. from the employees in the government services. In this connection our attention was drawn to the case of Sukhdev Singh & Ors. vs Bhagat Ram Sardar Singh Raghuvanshi & Anr. It was urged that in all constitutional democracies. the relationship between the government and the civil service is exclusively governed by the statutory provisions with the power in the Government to unilaterally alter the conditions of service of the government employees. Reference was made to "The Law of Civil Service " by Kaplan. It was further submitted that in India the law is that origin of the Government service might be. contractual but once appointed to a post under the Government, the government servant acquires a status and the rights and obligations are no longer dependent on the consent of both the parties but by statute. We would have considered these aspects had it been necessary for us to do so but it is not necessary in the view taken. We may reiterate that article 14 does not prevent legislature from introducing a reform i.e. by applying the legislation to some institutions or objects or areas only according to the exigency of the situation and further classification of selection can be sustained on historical reasons or reasons of administrative exigency or piece meal method of introducing reforms. The law need not apply to all the persons. in the sense of having a universal application to all persons. A law can be sustained if it deals equally with the people of well defined class employees of insurance companies as such and such a law is not open to the charge of denial of equal protection on the ground that it had not application to other persons. In the view we have taken of the matter, these applications succeed and the impugned scheme of 1980 must be held to be bad as beyond the scope of the authority of the Central Government under the . The operation of the scheme has been restrained by the order passed as inter in order in these cases. The impugned scheme is therefore quashed, and will not be given effect to. The parties will be at 291 liberty to adjust their rights as if the scheme had not been framed. The application for intervention is allowed. Let appropriate writs be issued quashing the scheme of 1980. This, however, will not prevent the Government, if it so advised, to frame any appropriate legislation or make any appropriate amendment giving power to Central Government to frame any scheme as it considers fit and proper. In the facts and circumstances of these cases and specially in view of the fact that petitioners had themselves at one point of time wanted that new scheme be framed by the Central Government, we direct that parties will pay and bear their own costs in all these matters. The rules are made absolute to the extent indicated above. N.V.K. Petitions allowed. [/INST]The respondents who were working in different capacities in the factory of India Security Press at Nasik, an establishment of the appellant, filed an application before the Central Government Labour Court, Bombay under section 33 C(2) of the claiming overtime wages at double the ordinary rate of wages under section 59 of the Factories Act read with section 70 of the Bombay Shops and Establishments Act, 1948. The Labour Court dismissed the contentions of the appellant and granted relief. Hence this appeal. Dismissing the Appeal ^ HELD: The contention that the respondents were not workers within the meaning of section 2(1) of the Factories Act and therefore not entitled to the benefit of section 59 of that Act read with section 70 of the Bombay Shops and Establishments Act 1948 must fail on the plain language of section 70. The main provision of section 70 which is relevant consists of two parts; the first part states that if there be a factory the Shops and Establishment Act will not apply and the second part states that to such a factory 'the provisions of the Factories Act shall, notwithstanding anything contained in that Act, apply to all persons employed in or in connection with the factory". Clearly, the underlined portion (the non obstante clause and the phrase 'all persons employed ') has the effect of enlarging the scope of Factories Act by making it applicable to all persons employed in such factory irrespective of whether employed as workers or otherwise. Therefore although the respondents have not been 'workers ' within the meaning of section 2(1) they will get the benefit of section 59. [298 C F] B.P. Hira, Works Manager, Central Railway, Parel, Bombay, etc. vs C.M. Pradhan etc ; referred to. The contention that by reason of rule 100 made by the State Govern 293 ment under section 64 of the Factories Act the benefit under section 59 was not available to the respondents falling within the exempted category by reason of their holding posts of supervision, has no force. [300F and 295E] It is well known that a non obstante clause is a legislative device which is usually employed to give over riding effect to certain provision over some contrary provision that may be found either in the same enactment or some other enactment, that is to say, to avoid the operation and effect of all contrary provisions. Thus the non obstante clause in section 70, namely, "notwithstanding anything to the contrary contained in that Act and as such it must refer to the exempting provisions which would be contrary to the general applicability of the Act. Just as because of the non obstante clause the Act is applicable even to employees in the factory who might not be workers ' under section 2(1), the same non obstante clause will keep away the applicability of exemption provisions quarrel those working in the factory The Labour Court was therefore right in taking the view that because of the non obstante clause s 64 read with Rule 100 itself would not apply to the respondents and they would be entitled to claim overtime wages under section 59 of that Act read with section 70 of the Bombay Shops and Establishments Act, 1948. [300 C G] The contention that the respondents were not workmen under the and as such their application was not maintainable, must be rejected. The contention depends upon the appreciation of evidence led by the parties on the nature of duties and functions performed by the concerned respondents and it was on an appreciation of the entire material that the Labour Court recorded a finding that having regard to the nature of their duties and functions all respondents, other than those who were holding the posts of Senior Supervisors and supervisors, were industrial employees, i. e. workman under the and it is not possible for this Court to interfere with such a finding of fact recorded by the Labour Court. Even otherwise after considering some of the important material on record the court is satisfied that the Labour. Court 's finding is correct. [301 C F] </s>
<s>[INST] Summarize the judgementON: Criminal Appeal No. 50 of 1979. From the Judgment and Order dated 23.12.1977 of the Delhi High Court in Criminal Appeal No. 162 of 1975. R.K. Garg, R.K. Jain, Ranjan Mahapatra and P.K. Jain for the Appellant. V.C. Mahajan, Ashok Bhan (NP) and Ms. A. Subhashini (NP) for the Respondent. The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J. The appellant, the sole accused in this case, has been convicted under Section 302 I.P.C. and sentenced to imprisonment for life by the High Court of Delhi for causing the murder of one Champat Rai, the deceased in the case. The prosecution case mainly rests on the evidence of P.W. 2, the sole eye witness. Learned counsel for the appellant contended that the uncorroborated testimony of P.W. 2 is not wholly reliable and therefore the conviction cannot be sustained. However, we may at this stage point out that the main submission has been that even if the prosecution case is to be accepted, an offence of murder is not made out as the accused was entitled to the right of private defence. Even otherwise, according to the learned counsel, having regard to the fact that as the appellant is alleged to have inflicted only a single injury which proved fatal, the offence committed would be one amounting to culpable homicide. To appreciate these submissions in a proper perspective, we 205 think it necessary to state the facts of the case. The deceased was married to Agya Devi examined as P.W. 3. He lived with his wife in a house in East Azad Nagar, Shahdra, Delhi. In the adjoining house were living his mother, P.W. 1 and his two brothers P.Ws 2 and 5. The appellant was married to a cousin of Agya Devi, P.W. 3 and he used to visit the house of the deceased ostensibly as a relative. The deceased, P.Ws 1,2 and 5 objected to the appellant 's visit as they suspected illicit relation between the appellant and Agya Devi P.W. 3, wife of the deceased. On August 18, 1973 at about 11 P.M. when the deceased was not in the house , the appellant came to visit Agya Devi. A few minutes later the deceased also came home and he objected to the presence of the appellant. On this there was an altercation and exchange of hot words. Then the appellant took out a kirpan (churra) from his waist and stabbed the deceased in the chest. The deceased fell down crying that the appellant has killed him. The appellant with the weapon ran out of the house. The incident was witnessed by P.W. 2 from the roof where he had retired for sleeping during the night. P.W. 2 and his another brother P.W. 5 chased the appellant but as the appellant who was armed with a lethal weapon threatened them and made good his escape. On return they found the deceased dead. P.W. 3 was sitting next to the body and was crying. The information was sent to the police and P.W. 18, the Sub Inspector, Kotwali Police Station came to the scene of occurrence and recorded the statement of P.W. 2 on the basis of which the case was registered against the appellant. He seized certain incriminating articles, held the inquest and sent the dead body for post mortem. He also recorded the statement of the material witness. One of the recoveries made by him consisted of a sheath of the kirpan. The Doctor, P.W. 17, examined the dead body and conducted the post mortem. He found one incised stab wound on the left chest which proved fatal. The particulars of the injury are: (1) One incised stab wound, horizontally placed on the (L) side of the chest 1" lateral to the left side and 2" below and medial to the (L_) Nipple size 1" x 1/2" x with spindle shaped appearance and with either margins pointed. The margins of the wound were smooth and the collection of blood in the soft tissues. (2) One incised wound over right little finger at the base of second phalynx on dorcal surface size 3/4" x 4/10" x bone deep. There is collection of blood in the soft tissues and there was cut 206 mark on the base of second phalnyx right little finger. The wound was bandaged with a piece of bandage and cotton soiled in blood. The wound is not spindle shaped in appearance. The margins were smooth. This injury was a simple one and not due to a separate blow. The Doctor opined the injury NO.1 was sufficient to cause death in the ordinary course of nature. The cause of death was haomorrhage and shock due to injuries. The accused was arrested on 28.8.73 and at his instance the kirpan was recovered. After completion of the investigation, the charge sheet was laid. The accused pleaded not guilty and denied the recoveries. The prosecution examined P.W. 2, the brother of the deceased and P.W. 3 Agya Devi, wife of the deceased. But P.W. 3 turned hostile. Consequently the prosecution was left with the testimony of P.W. 2, the remaining eye witness. Both the courts below relied on the evidence of P.W. 2 and they also held that his evidence was corroborated by that of P.Ws 1 and 5. As hereinbefore mentioned, the learned counsel for the appellant submitted that the evidence of P.W. 2 on which the case entirely rests, cannot be accepted. We have gone through his evidence carefully as well as that of P.Ws. 1 and 5. The evidence of P.W. w does not suffer from any serious infirmity. At any rate there is other corroborative evidence also. We see absolutely no reason to disagree with the findings of the courts below regarding their evidence. The learned counsel, however, submitted that the accused must have acted in right of self defence. According to the learned counsel, P.W. 2 himself has deposed that there was exchange of hot words between the appellant and the deceased which would have resulted in a fight and the appellant having reasonably apprehended danger to his life, inflicted the injury on the deceased in self defence. We see no basis for this submission. P.W. 2 has no doubt stated that there was exchange of hot words between the appellant and the deceased but he did not speak about any fight between the two. On the other hand his evidence shows that when the deceased came and questioned the accused then there was exchange of hot words. The accused immediately took out a kirpan (churra) from his waist and stabbed the deceased. Both the courts below also have rightly rejected this plea. Therefore we see absolutely no grounds to come to a different conclusion. 207 The next and rather the main submission is that the offence committed by the appellant would only amount to culpable homicide inasmuch as he has inflicted only one injury. In support of his submission, he relied on some of the decisions of this Court. In Tholan vs State of Tamil Nadu, the accused who dealt a single knife below on the chest found to be sufficient to cause death, was convicted under Section 304 Part II I.P.C., disagreeing with the contention on behalf of the State that Clause III of Section 300 I.P.C. would be attracted in such a case. In arriving at such a conclusion, this Court took into consideration various surrounding circumstances namely that the presence of the deceased at the scene of occurence was wholly accidental and that the accused dealt only one blow. It must also be mentioned that the deceased, who was a stranger in that case, came out of his house and cautioned the accused not to indulge in abusive language as ladies were present in that area. The accused thereupon questioned him and when both were remonstrating, he took out a knife from his waist and stabbed the deceased on the right side of the chest. On these facts, this Court held: "We are satisfied that even if Exception I is not attracted, the requisite intention cannot be attributed to the appellant. But in the circumstances herein discussed he wielded a weapon like a knife and therefore he can be attributed with the knowledge that he was likely to cause an injury which was likely to cause death. In such a situation, he would be guilty of committing an offence under Section 304 Part II of the Indian Penal Code. " In support of this view, reliance is placed on some earlier decision of this Court in Jagrup Singh vs State of Haryana, ; ; Randhir Singh vs State of Punjab, ; Kulwant Rai vs State of Punjab, ; Hari Ram vs State of Haryana, ; Jagtar Singh vs State of Punjab, and Ram Sunder vs State of U.P., Criminal Appeal No. 555/83 decided on 24.10.1983. The learned counsel submitted that the observations made in these cases apply on all fours to the facts of this case. According to him, there was an altercation and during the same the appellant suddenly whipped out a kirpan and inflicted only one injury and it is therefore reasonable to infer that he would not have intended to cause that particular injury and consequently Clause Thirdly of Section 300 is not attracted. The submission though put forward in a simple way leads to an important legal quandary regarding the interpretation of Clause Thirdly Section 300 I.P.C. which is considered be a 208 difficult and interact issue by the courts. However, Virsa Singh vs State of Punjab, ; is considered to be an authoritative pronouncement in this regard. But perhaps inspired by some of the decisions rendered thereafter both by the High Courts and the Supreme Court there is a marked change in the trend of the contentions regarding the scope of Clause Thirdly Section 300 I.P.C. It has reached a stage over simplification and it is very often argued that whenever death is due to a single blow the offence would be a culpable homicide and not murder. Somewhat to the same effect is the contention in the instant case. In our view it is fallacious to contend that when death is caused by a single blow Clause Thirdly is not attracted and therefore it would not amount to murder. The ingredient `Intention ' in that Clauses is very important and that gives the clue in a given case whether offence involved is murder or not. For the purpose of considering the scope of Clause 3 it is not necessary for us to embark upon an examination of the entire scope of Section 299 and 300 I.P.C. It is enough if we start with Virsa Singh 's case. Clause Thirdly of Section 300 I.P.C. reads thus: "3rdly If it is done with the intention of causing bodily injury to any person and the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death, or " We may note at this stage that `intention ' is different from `motive ' or `ignorance ' or `negligence '. It is the `knowledge ' or `intention ' with which the act is done that makes difference, in arriving at a conclusion whether the offence is culpable homicide or murder. Therefore, it is necessary to know the meaning of these expressions as used in these provisions. Before doing so we shall first refer to the to the ratio laid down in Virsa Singh 's case and the meaning given to the expression `intention '. The appellant Virsa Singh was sentenced to imprisonment for life under Section 302 I.P.C. There was only one injury on the deceased and that was attributed to him. It was caused as a result of the spear thrust and the Doctor opined that the injury was sufficient in the ordinary course of nature to cause death. The Courts also found that the whole affair was sudden and occurred on a chance of meeting. Peritonit is also supervened which hastened the death of the deceased. It was contended that the prosecution has not proved that there was an intention to inflict a bodily injury that was sufficient to cause death in 209 the ordinary course of nature and therefore the offence was not one of murder. This contention was rejected. After analysing the Clause Thirdly it is held the Court that the prosecution must prove: "First, it must establish, quite objectively, that a bodily injury is present; Secondly, the nature of the injury must be proved; there are purely objective investigations. Thirdly, it must be proved that there was an intention to inflict that particular bodily injury, that is to say, that it was not accidental or unintentional, or that some other kind of injury was intended. Once these three elements are proved to be present, the enquiry proceeds further and, Fourthly, it must be proved that the injury of the type just described made up of the three elements set out above is sufficient to cause death in the ordinary course of nature. This part of the enquiry is purely objective and inferential and has nothing to do with the intention of the offender. " The Court Further added thus: "One of these four elements is established by the prosecution (and, of course, the burden is on the prosecution throughout) the offence is murder under Sec. 300, 3rdly. It does not matter that there was no intention even to cause an injury of a kind that is sufficient to cause death in the ordinary course of nature (not that there is any real distinction between the two). It does not even matter that there is no knowledge that an act of that kind will be likely to cause death. Once the intention to cause the bodily injury actually found to be present is proved, the rest of the enquiry is purely objective and the only question is whether, as a matter of purely objective inference, the injury is sufficient in the ordinary course of of nature to cause death. No one has a licence to run around inflicting injuries that are sufficient to cause death in the ordinary course of nature and claim that they are not guilty of murder. If they inflict injuries of that kind, they must face the consequences; and they can 210 only escape if it can be shown, or reasonably deduced that the injury was accidental or otherwise unintentional. " (emphasis supplied) The learned Judge also observe thus: "In the absence of evidence, or reasonable explanation, that the prisoner did not intend to stab in the stomach with a degree of force sufficient to penetrate that far into the body, or to indicate that his act was a regrettable accident and that he intended otherwise, it would be perverse to conclude that he did not intend to inflict the injury that he did. Once that intent is established (and no other conclusion is reasonable possible in this case and in any case it is a question of fact), the rest is a matter for objective determination from the medical and other evidence about the nature and seriousness of the injury. " Adverting to the contention that there is only a single blow, it is further held: "The question is not whether the prisoner intended to inflict a serious injury or a trivial one but whether he intended to inflict the injury that is proved to be present. If he can show that he did not, or if the totality of the circumstances justify such an inference, then, of course, the intend that the section requires is not proved. But if there is nothing beyond the injury and the fact that the appellant inflicted it, the only possible inference is that he intended to inflict it. Whether he knew of its seriousness, or intended serious consequences, it neither here nor there. The question, so far as the intention is concerned, is not whether he intended to kill, or to inflicit an injury of a particular degree of seriousness, but whether he intended to inflict the injury in question; and once the existence of the injury is proved the intention to cause it will be presumed unless the evidence or the circumstances warrant an opposite conclusion. But whether the intention is there or not is one of fact and not one of law. Whether the wound is serious or otherwise, and if serious, how serious, is a totally separate and distinct question and has nothing to do with the question whether the prisoner intended to inflict the injury in question. " 211 At another passage which has to be noted in this context reads thus: "It is true that in a given case the enquiry may be linked up with the seriousness of the injury. For example, if it can be proved, or if the totality of the circumstances justify an inference, that the prisoner only intended a superficial scratch and that by accident his victim stumbled and fell on the sword or spear that was used, then of course the offence is not murder. But that is not because the prisoner did not intended the injury that he intended to inflict to be a serious as it turned out to be but because he did not intend to inflict the injury in question at all. His intention in such a case would be to inflict a totally different injury. The difference is not one of law but one of fact; and whether the conclusion should be one way or the other is a matter of proof, where necessary, by calling in aid all reasonable inferences of fact in the absence of direct testimony. It is not one for guesswork and fanciful conjecture. Referring to these observations, Divisional Bench of this Court in Jagrup Singh 's case observed thus: "These observations of Vivian Bose, J. have become locus classicus. The test laid down in Virsa Singh 's case for the applicability of clause Thirdly is now ingrained in our legal system and has become part of the rule of law. " The Division Bench also further held that the decision in Virsa singh 's case has throughout been followed as laying down the guiding principles. In both these cases it is clearly laid down that the prosecution must prove (1) that the body injury is present, (2) that the injury is sufficient in the ordinary course of nature to cause death, (3) that the accused intended to inflict that particular injury that is to say it was not accidental or unintentional or that some other kind of injury was intended. In other words the 3rd Clause consists of two parts. The first part is that there was an intention to inflict the injury that is found to be present and the second part that the said injury is sufficient to cause death in the ordinary course of nature. Under the first part the prosecution has to prove from the given facts and circumstances that the intention of the accused was to cause that particular injury. whereas the second part whether it was sufficient to cause the death is an objective enquiry and it is a matter of inference or deduction from the particulars of the injury. The language of Clause Thirdly of Section 300 212 speaks of intention at two places and in each the sequence is to be established by the prosecution before the case can fall in that Clause. The `intention ' and `knowledge ' of the accused are subjective and invisible state of mind and their existence has to be gathered from the circumstances, such as the, weapon used, the ferocity of attack, multiplicity of injuries and all other surrounding circumstances. The framers of the code designedly used the words `intention ' and `knowledge ' and it is accepted that the knowledge of the consequences which may result in doing an act is not the samething as the intention that such consequences should ensue. Firstly, when an act is done by a person, it is presumed that he, must have been aware that certain specified harmful consequences would or could follow. But that knowledge is bare awareness and not the same thing as intention that such consequences should ensue. As compared to `knowledge ', `intention ' requires something more than the mere foresight of the consequences, namely the purposeful doing of a thing to achieve a particular end. Kenny in "Outline of Criminal Law" (17th Edition at page 31) has observed: "Intention: To intend is to have in mind a fixed purpose to reach a desire objective; the noun `intention ' in the present connexion is used to denote the state of mind of a man who not only forsees but also desires the possible consequences of his conduct. Thus if one man throws another from a high tower or cuts off his head it would seem plain that the both foresees the victim 's death and also desires it: the desire and the foresight will also be the same if a person knowingly leaves a helpless invalid or infant without nourishment or other necessary support until death supervenes. It will be noted that there cannot be intention unless there is also foresight, since a man must decide to his own satisfaction, and accordingly must foresee, that to which his express purpose is directed. Again, a man cannot intend to do a thing unless he desires to do it. It may well be a thing that he dislikes doing, but he dislikes still more the consequences of his not doing it. That is to say he desires the lesser of two evils, and therefore, has made up his mind to bring about that one." Russel on Crime (12th Edition at Page 41) has observed: 213 "In the present analysis of the mental element in crime the word `intention ' is used to denote the mental attitude of a man who has resolved to bring about a certain result if he can possibly do so. He shapes his line of conduct so as to achieve a particular end at which he aims. " it can thus be seen that the `knowledge ' as contrasted with `intention ' signify a state of mental realisation with the bare state of conscious awareness of certain facts in which human mind remains supine or inactive. On the otherhand, `intention ' is a conscious state in which mental faculties are aroused into activity and summoned into action for the purpose of achieving a conceived end. it means shaping of one 's conduct so as to bring about a certain event. Therefore in the case of `intention ' mental faculties are projected in a set direction. Intention need not necessarily involve premediation. Whether there is such an intention or not is a question of fact. In Clause Thirdly the words "intended to be inflicted" are singnificant.l; As noted already, when a person commits an act, he is presumed to expect the natural consequences. But from the mere fact that the injury caused is sufficient in the ordinary course of nature to cause death it does not necessarily follow that the offender intended to cause the injury of that nature. However, the presumption arises that he intended cause that particular injury. In such a situation the Court has to ascertain whether the facts and circumstances in the case are such as to rebut the presumption and such facts and circumstances cannot be laid down in an abstract rule and they will vary from case to case. However, as pointed out in Virsa Singh 's case the weapon used, the degree of force released in wielding it, the antecedent relation of the parties, the manner in which the attack was made that is to say sudden or premeditated, whether the injury was inflicted during a struggle or grappling, the number of injuries inflicted and their nature and the part of the body where the injury was inflicted are some of the relevant factors. These and other factors which may arise in a case have to be considered and if on a totality of these circumstances a doubt arises as to the nature of the offence, the benefit has to go to the accused. In some cases, an explanation may be there by the accused like exercise of right of private defence or the circumstances also may indicate the same. Likewise there may be circumstances in some cases which attract the first exception. In such cases different considerations arise and the Court has to decide whether the accused is entitled to the benefit of the exception, though the prosecution established that one or the other clauses of Section 300 I.P.C. is attracted. In the present enquiry we need not advert to that aspect since we are concerned only with scope of clause Thirdly of Section 300 I.P.C. 214 The decision in Virsa Singh 's case has throughout been followed in a number of cases by the High Courts as well as by the Supreme Court. Such decisions are too numerous and it may not be necessary for us to refer to all those cases. However, it would be useful to refer to a few decisions which have a bearing to the point in issue. In Chahat Khan vs State of Haryana, the deceased was waylaid by the accused who were armed with lathis. The accused had both gun and a lathi but he used only the lathi and struck a blow on the head with sufficient force and the solitary below with the lathi was found to be sufficient in the ordinary course of nature to cause death and it was held that the case fell within clause Thirdly as there was clear intention to cause such bodily injury which in the ordinary course of nature was sufficient to cause death. In Chamru Budhwa vs State of Madhya Pradesh, AIR 1954 SC 652 there was exchange of abuses between the two parties armed with lathis and in the course of the fight, the accused struck one lathi blow on the head of the deceased which causes a fracture of the skull resulting in death, and it was held that he had given the blow with the knowledge that it was likely to cause death. In Willie (Williams) Slaney vs State of Madhya Pradesh, there was a sudden quarrel leading to an exchange of abuses and in the heat of the moment a solitary blow with a hockey stick had been given on the head. It was held that the offence amounted to culpable homicide punishable under Section 304 Part II I.P.C. In Harjinder Singh (alias Jinda) vs Delhi Admn. , ; the facts are that there was a sudden commotion and when the deceased intervened in the fight, the accused took out a knife and stabbed the deceased and the deceased was in crouching position presumably to intervene when he received the blow. Though the injury was found sufficient in the ordinary course of nature to cause death. , he was convicted for the offence of culpable homicide. The intention to cause that particular injury was not present. To the same effect is the decision in Laxman Kalu Nikalji vs State of Maharashtra; , where the accused lost his temper and took out a knife and gave one blow during a sudden quarrel. In all these cases the approach has been to find out whether the ingredient namely the intention to cause the particular injury was present or not and it is held that circumstances like a sudden quarrel in a fight or when the deceased intervenes in such a fight, would create a doubt about the ingredient of intention as it cannot definitely be said in such circumstances that the accused aimed the blow at a particular part of the body. When an accused inflicts a blow with a deadly weapon the presumption is that he intended to inflict that injury but 215 there may be circumstances like those, as mentioned above, which rebut such presumption and throw a doubt about the application of clause Thirdly. Of course much depends on the facts and circumstances of each case. Now let us examine some of the cases relied upon the learned counsel for the appellant. In Kulwant Rai 's case a Bench consisting of D.A. Desai and R.B. Misra, JJ. held in a hit and run case that where it cannot be said that the accused intended to inflict the very fatal injury, clause Thirdly is not attracted. That was a case were only one blow was given with the dagger in the epigastrium area and the facts would go to show that there was no pre meditation, no prior enmity and a short quarrel preceded the assault. However, we do not find any discussion about the scope of clause Thirdly. Randhir Singh 's case was decided by a Bench consisting of D.A. Desai and Baharul Islam, JJ. In that case, a single head injury was inflicted by a college student on the deceased with a weapon supplied by his father and the deceased died after six days and there also an assault was preceded by a quarrel between the father of the accused and the deceased. The Bench observed that: "Merely because the blow landed on a particular spot on the body divorced from the circumstances in which the blow was given it would be hazardous to say that the accused intended to cause that particular injury. The weapon was not handy. He did not possess one. Altercation took place between his father and the deceased and he gave blow with kassi. In our opinion in these circumstances it would be difficult to say that the accused intended to cause that particular injury. " Before the same Bench, in Gurmail Singh and others vs State of Punjab, this question again came up for consideration. In that case, an indecent joke cut by the accused with the wife of a P.W. led to a quarrel and the deceased who was nowhere in the picture tried to intervene, two of the accused gave some blow on him. Then Gurmail Singh, the appellant therein, gave a single blow with spear on the chest which proved fatal. It was contended by the State that clause Thirdly of Section 300 I.P.C was attracted. it is observed that: "But it was said that the case would be covered by Para 3 of Section 300 in that Gurmail Singh intended to cause an injury and the injury intended to be inflicted was proved to 216 be sufficient in the ordinary course of nature to cause death. This argument is often raised for consideration by this Court and more often reliance is placed on Virsa Singh vs State of Punjab; , We would have gone into the question in detail but in Jagrup Singh vs State of Haryana ; , Sen. J. after examining all the previous decisions on the subject, observed that in order to bring the case within Para 3 of Section 300, I.P.C., it must be proved that there was an intention to inflict that particular bodily injury which in the ordinary course of nature was sufficient to cause death. This view was further affirmed in a decision rendered in Randhir Singh vs State of Punjab, We are of the opinion that in the facts found by the High Court it could not be said that accused 1 Gurmail singh intended to cause that particular bodily injury which in fact was found to have been caused. May be, the injury inflicted may have been found to be a sufficient in the ordinary course of nature to cause death. What ought to be found is that the injury found to be present was the injury that was intended to be inflicted. It is difficult to say that with confidence in the present case keeping in view the facts found by the High Court that accused 1 Gurmail Singh intended to cause the very injury which was found to be fatal." Therefore this decision also affirms the view taken in Virsa Singh 's case. Then came the decision in Jagtar Singh 's case rendered by a Bench consisting of D.A.Desai and Amarendra Nath Sen, JJ. In that case a single knife blow was inflicted in the chest and it was found to be sufficient in the ordinary course of nature to cause death. The Bench held that clause Thirdly was not attracted in view of circumstances i.e. there the accused was a young man and inflicted the injury on the spur of the moment and some extent on deceased 's provocation in a sudden chance quarrel and on a trivial issue. The Bench observed that: "The cause of quarrel though trivial was just sudden and in this background the appellant, a very young man gave one blow. He could not be imputed with the intention to cause death or the intention to cause that particular injury which proved fatal. " In this case, there is no reference to Virsa Singh 's case but there is a 217 references to Jagrup Singh 's case which decision, as noted already, has followed the ratio in Virsa singh 's case. Then came the decision in Tholan 's case on which the counsel has heavily relied upon. In that case also the appellant inflicted only a single knife blow on the chest of the deceased sufficient to cause death but it was on the spur of the moment. The Division Bench, consisting of D.A. Desai and R.B.Misra, JJ. took into the consideration that the deceased had nothing to do with the chit organised by one K.G. Rajan in respect of which there was a quarrel between the appellant and the organisers of the chit and when the accused was abusing the organisers, the deceased seemed to have told the accused not to misbehave in the presence of the ladies and not to use vulgar and filthy language. The presence of the deceased was wholly accidental and the appellant on the spur of the moment inflicted the fatal injury on the chest. The Division Bench relying on the earlier decision under similar circumstances convicted the accused under Section 304 Part II. A reference is also made to the decision in Jagrup Singh 's case. Therefore in this case also, the ratio laid down in Virsa Singh 's case is presumably followed. In all these cases, injury by a single blow was found to be sufficient in the ordinary course of nature to cause death. The supreme Court took into consideration the circumstances such as sudden quarrel, grappling etc. as mentioned above only to assess the state of mind namely whether the accused had the necessary intention to cause that particular injury i.e. to say that he desired expressly that such injury only should be the result. It is held in all these cases there was no such intention to cause that particular injury as in those circumstances, the accused could have been barely aware i.e only had knowledge of the consequences. These circumstances under which the appellant happened to inflict the injury it is felt or atleast a doubt arose that all his mental faculties could not have been roused as to form an intention to achieve the particular result. We may point out that we are not concerned with the intention to cause death in which case it will be a murder simpliciter unless exception is attracted. We are concerned under clause Thirdly with the intention be cause that particular injury which is subjective inquiry and when and when once such intention is established and if the intended injury is found objectively to be sufficient in the ordinary course of nature to cause death, clause Tirdly is attracted and it would be murder, unless one of the exceptions to Section 300 is attracted. If on the otherhand this ingredient of `intention ' is not established or if a reasonable doubt arises in this regard then only it would be reasonable to infer that Clause Thirdly is not 218 attracted and that the accused must be attributed knowledge that in inflicting the injury he was likely to cause death in which case it will be culpable homicide punishable under Section 304 Part II I.P.C. Bearing these principles in mind, if we examine the facts in the present case, clause Thirdly of Section 300 I.P.C. is fully attracted. The appellant was having illicit relation with Agya Devi, wife of the deceased and his visits to her house were resented and objected. On the day of occurence, the accused visited the house when the deceased was not there and he went there armed with a kirpan. When the deceased came and objected to his presence there was only an altercation and exchange of hot words, and not a fight. Thereupon he took out a knife and stabbed on the chest of the deceased resulting instantaneous death of the deceased. The above circumstances would show that the accused intentionally inflicted that injury though it may not be pre mediated one. All the above circumstances would certainly indicate such a state of mind namely he aimed and inflicted that injury with a deadly weapon. As observed in Virsa Singh 's case in the absence of evidence or reasonable explanation show that the appellant did not intend to stab in the chest with a kirpan with that degree of force sufficient to penetrate the heart, it would be perverse to conclude that he did not intend to inflict that injury that he did. When once the ingredient `intention ' is established then the offence would be murder as the intended injury is found to be sufficient in the ordinary course of nature to cause death. Therefore an offence of murder is made out. Accordingly the appeal is dismissed. Y.Lal Appeal dismissed. [/INST]The appellant, had illicit connection with Agya Devi (P.W. 3), wife of the deceased and in that connection he used to visit her house quit frequently to which the deceased and his two brothers & mother living separately in the adjacent house used to object. It may be pointed that the Agya Devi was related to the appellant 's wife. On August 18, 1973, at about 11 p.m. when the deceased was not in house, the appellant came to visit Agya Devi. A shortwhile later, the deceased also came home and he objected to the presence of the appellant whereupon an altercation and exchange of hot words ensued between the appellant and the deceased. The appellant took out a kirpan (chhurra) from his waist and stabbed the deceased in the chest. The deceased fell down crying that the appellant has killed him and the appellant fled away with the weapon. the incident was witnessed by Agya Devi (P.W. 3) and P.W. 2, deceased 's brother from the roof of the house. The deceased died as a result of the injury. The prosecution was thereupon launched against the appellant and the prosecution examined and amongst others P.W. 2 and P.W. 3. P.W. 3 turned hostile, with the result the prosecution was left with only P.W. 2 (brother of the deceased) as eye witness. The trial court relied on the evidence of P.W. 2 and also held that his evidence was corroborated by the P.Ws. 1 and 5 and recorded the conviction under section 302, I.P.C. and sentenced him to imprisonment for life for causing the death of Champat Rai, the deceased, which order was later affirmed by the Delhi High Court. Hence this appeal by the appellant, after obtaining special leave. The main contention of the appellant is that even if the prosecution case is to be accepted, an offence of murder is not made out as the accused was entitled to the right of private defence; even otherwise the accused having inflicted only one injury which proved fatal, the offence would be one amounting to culpable homicide. 203 Dismissing the appeal, this Court, HELD: `Intention ' is different from ``motive ' or ignorance or ``negligence '. It is the `knowledge ' or `intention ' with which that act is done that makes difference, in arrival at a conclusion whether the offence is culpable homicide or murder. [208 E] The language of Clause Thirdly of Section 300 speaks of intention at two places and in each the sequence is to be established by the prosecution before the can can fall in that Clause. The `intention ' and `knowledge ' of the accused are subjective and invisible states of mind and their existence has to be gathered from the circumstances, such as the weapon used, the ferocity of attack, multiplicity of injuries and all other surrounding circumstances. The framers of the Code designedly used the words `intention ' and `knowledge ' and it is accepted that the knowledge of the consequences which may result in doing an act is not the same thing as the intention that such consequences should ensue. Firstly, when an act is done by a person, it is presumed that he , must have been aware that certain specified harmful consequences would or could follow. But the knowledge is bare awareness and not the same thing as `intention ' that such consequences should ensue. As compared to `knowledge ', `intention ' requires something more than the mere foresight of the consequences, namely the purposely doing of a thing to achieve a particular end.[211H 212C] `Knowledge ' as contrasted with `intention ' signify a state of mental realisation with the bare state of conscious awareness of certain facts in which human mind remains supine or inactive. On the other hand, `intention ' is a conscious state in which mental faculties are aroused into actively and summoned into action for the purpose of achieving a conceived end. [213B C] The circumstances would show that the accused intentionally inflicted that injury though it may not be pre mediated one. All the circumstances would certainly indicate such a state of mind namely that he aimed and inflicted that injury with a deadly weapon. In the absence of evidence or reasonable explanation to show that the appellant did not intend to stab in the chest with kirpan with that degree of force sufficient to penetrate the heart, it would be perverse to conclude that he did not intend to inflict that injury that he did. When once the ingredient `intention ' is established then the offence would be murder as the intended injury is found to be sufficient in the ordinary course of nature to cause death. Therefore an offence of murder is made out. [218D E] 204 Tholan vs State of Tamil Nadu, ; Jagrup Singh vs State of Haryana, ; ; Randhir Singh vs State of Punjab ; Kulwant Rai vs State of Punjab, ; Hari Ram vs State of Haryana, ; Jagtar Singh vs State of Punjab, ; Ram Sunder vs State of U.P., Crl. Appeal No. 555/83 decided on 24.10.1983; Chahat Khan vs State of Haryana ; Chamru Budhwa vs State of Madhya Pradesh, AIR 1954 SC 652; Willie (William) Slaney vs State of Madhya Pradesh, ; ; Harjinder Singh alias Jinda vs Delhi admn. ; , ; Laxman Kalu Nikalji vs State of Maharashtra, ; ; Gurmail Singh and Ors. vs State of Punjab, , referred to. Virsa Singh vs State of Punjab, ; , followed. </s>
<s>[INST] Summarize the judgement: Criminal Appeal Nos. 285 & 286 of 1986. From the Judgment and Order dated 7/10.2.86 of the Madhya Pradesh High Court in Criminal Appeal Nos. 1403 to 1404 of 1985. U.R. Lalit, G.K. Sharma and S.K. Sabharwal for the Appel lants. T.C. Sharma for the Respondent. The Judgment of the Court was delivered by KHALID, J. The appellants Ram Narayan and his son Mahesh have been convicted under Section 302 I.P.C. and sentenced to death. They are the residents of Village Hinota. They are alleged to have committed five murders on 21 6 1984 at about 6.30 P.M. The deceased are Puran Baraua, his wife, Narbad Bai, his mother, Mula Bai, his daughter Kumar Nanhi Bai and his neighbour Gulab. The learned counsel for the appellants tried to take us through the evidence to persuade us to re appreciate it. The evidence has been considered minutely by the Courts below. Then he put forward a feeble right of private defence which has no substance. Then he made a fervent appeal before us regarding the sentence imposed. It is useful to advert to one fact which has come out the evidence in the case. The root cause of the gruesome murder appears to be the marriage of a lady belonging to a higher caste with a Harijan boy. The High Court deals with it in paragraph 19 as follows: "19. It may be pointed out that it is clear from the evidence that the incident occurrence when the appellant Mahesh had broken the earthen pot of the deceased Narbad Bai at the well on the ground that the appellents 712 treated Pooran and his inmates of the lower caste because Jankibai, one of the daughters of Pooran had taken a Harijan as her husband. " The High Court felt compelled to express its concern about the evil of untouchability in paragraph 18, at page 46, as follows: "It is unfortunate that evil of untouchability was still prevalent in some parts of our country even after 38 years of independence and 30 years of coming into force of the untouchability Act, 1955, which evident by the facts of the instant case. Indeed it is a matter of great concern that very often there occur grave occurrences including group mur ders resulting into untimely death of innocent persons by those who still believe in toucha bility as their way of life. The present case is one of those gravest killings, and ghastly murders of five persons by the appellants who deserve condemnation by awarding severest punishment provided under the law. " The evidence shows that Mahesh axed Narbadbai without any provocation, from any member of his family. Thereafter, Pooran was assaulted and axed by Mahesh. When the assault of these two persons, by the father and son, was on, the mother of Pooran came from inside and questioned as to why they were doing this. She too was killed by giving her axe blows by the appellants. When the neighbour Gulab asked the appel lants as to why they were murdering these people, he was also axed to death by the appellants. A young girl aged about 14 years standing near the bathing place at the corner of the house was also not spared. Mahesh gave her an axe blow, on receipt of which she fell down at some distance and died. The evidence further shows that the blood thirst of the accused was so intense that they knocked and tried to break open the door of the room where Nandram, P.W. 1 and his wife Savithri Bai, P.W. 2 were hiding to save themselves and they left the place only when the door could not be broken. It is against this background that the request of the appellants ' counsel for interference with the sentence has to be considered. The High Court observes that the act of the appellant: "was extremely brutal, revolting and gruesome which shocks the judicial conscience." And again as "in such shocking nature of crime as the one before us which is so cruel, barbaric and revolting, it is necessary to impose such maximum punishment under the law as a measure of social necessity 713 which work as a deterrent to other potential offenders. " We share the concern of the High Court. We also feel that it will be a mockery of justice to permit these appel lants to escape the extreme penalty of law when faced with such evidence and such cruel acts. To give the lesser pun ishment for the appellants would be to render the justicing system of this country suspect. The common man will lose faith in courts. In such cases, he understands and appreci ates the language of deferrence more than the reformative jargon. When we say this, we do not ignore the need for a reformative approach in the sentencing process. But here, we have no alternative but to confirm the death sentence. Accordingly, we dismiss the appeals. P.S.S. Appeals dismissed. [/INST]Section 3 of the Bihar Land Reforms Act, 1950 provides for vesting of an estate or tenure in the State by notifica tion. Under section 9 from the date of such vesting all mines comprised in the estate or tenure, as were in operation at the commencement of the Act and were being worked directly by the intermediary were deemed to have been leased to the intermediary and he was entitled to retain possession there of. Section 10 provides for vesting of subsisting leases of mines and minerals. Section 25 provides for computation of compensation payable to the intermediary in respect of royalties on account of mines and minerals or directly working mines comprised in the estate or tenure. Rule 25 E of the Bihar Land Reforms Rules, 1951 deals with the proce dure for determination of the amount of compensation or annuity. The estate of the ex landlord comprising vast areas of mineral bearing lands was vested in the State by virtue of a notification under section 3 of the Act with effect from 4th November, 1951. Some part of the said area was being worked by the lessees under the leases granted to them, who paid royalty to him. The ex landlord died in 1969. His successors in inter est, the appellants herein, filed writ petition before the High Court claiming compensation in respect of the coal bearing area having coal reserves vested in the State. The High Court came to the conclusion that the ex intermediary was not entitled to the compensation as claimed, and dis missed the petition. 225 In this appeal by certificate, it was contended for the appellants that where there are minerals which were not tapped and not exploited by the ex intermediary, acquisition of the source of income for the intermediary would be acqui sition of property, that there was no provision for compen sation for this purpose in the Act, and the statute was, therefore, exproprietary in nature. For the respondents, it was contended that there was no question of expropriation. The property being not in existence, it was acquisition of a right which might be a source or ' income and property it ' tapped, but it was not an existing right. Dismissing the appeal, the Court, HELD 1. A statute must be read as a whole, fairly and reasonably. It must be so read, if possible, and warranted by the context to give effect to the manifest intent of the framer. So read, it cannot be said that the Bihar Land Reforms Act, 1950 provides for any compensation for the minerals not exploited. That does not make the Act unconsti tutional. [232D] 2. The Rules and the sections must be harmoniously construed. In the instant case, the legislature was acquir ing the estate of an ex intermediary. For all the existing sources of his income and which were being exploited, com pensation has been provided for. But for a right which might become a source of income which had not been exploited, no compensation has been provided. Where a statute provides for the assumption and enforcement of an existing right or liability, it will not be construed as extending that li ability or creating a new one unless it does so in clear terms. [231F] Halsbury 's Laws of England, 4th Edition, Vol. 44, page 556, paragraph 904, referred to. In the instant case there is no question of interpreting any law which will expose the Act to constitutional infirmi ty. The right was not existing at the time of vesting, no question therefore, arises of depriving the ex intermediary of any right without compensation. [231G] 3. The basic principle of construction of every statute is to find out what is clearly stated and not to speculate upon latent imponderables. The scheme of the Act does not support the appellant that it is exproprietary in nature. Section 25(1)(a) and (b) deal with independent items and section 25(1)(c) is a combination of the two. The other sub sections make it quite clear. Compensation for the acquisition of a source which 226 when exploited might become property or income is not neces sary. Ownership is a bundle of rights and for the existing bundle of rights compensation has been provided lot. [231 H 232B] 4. It is not for the court to provide for compensation where legislature has thought it fit not to do so. The fact that compensation for existing rights has been provided for would not expose the statute to the vice of unconstitution ality as exproprietary. Had there been such a possibility, other considerations might have been there. The Act has been incorporated in Item 1 of the 9th Schedule of the Constitu tion.] [232C] </s>
<s>[INST] Summarize the judgementCivil Appeal Nos. 1988 1989 of 1970. From the Judgment and order dated the 29th day of October, 1968 of the Kerala High Court in W.P. No. 156 of 1967. V. A. Seiyed Muhamad and K. M. K. Nair, for the appellant (In C.A.No. 1988/70. K. M. K. Nair, for the appellant (In C.A. No. 1989/70) G. B. Pai, A. G. Meneses, for the respondent. The Judgment of the Court was delivered by KHANNA, J. This judgment would dispose of civil appeals No. 1989 and 1989 of 1970, Filed on certificate against the judgment of the Kerala High Court, whereby that court held that it was beyond the competence of the State Legislature to enact law contained in sub section (3) of section 22 of the Kerala General Sales Tax Act, 1963 (Act 15 of 1963) (hereinafter referred to as the Act) in so far as it related to payment of an amount collected as tax on transactions not liable to tax under the Act or in excess of the tax leviable under the. We may now set out the facts giving rise to one of the appeals. Both the learned counsel are agreed that the decision in that would also govern the other appeal. Under section 5 of the Act, tax is payable by a dealer on his tax able turnover. "Taxable turnover` ' is defined in section 2(xxv) of the Act as the turnover on which a dealer is liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed by the rules under the Act. It does not, however, include the turnover of purchase or sale in the course of inter State trade or commerce or in the course of export or import of goods. The Kerala General Sales Tax Rules have been framed be the State Government in exercise of the powers conferred by section 57 of the Act. According to clause (i) of rule 9 of the sail rules. in determining the taxable turnover the following amount shall be deducted from the total turnover of the dealer: "the excise duty, if any paid by the dealer to the Government of Kerala or the Central Government in respect of the goods sold by him". It may be stated that clause (i) was omitted subsequently but we are concerned with the period when that clause was an integral part of the rule. The respondent is an incorporated company engaged in the manufacture and sale of soaps, toilets and other goods. The respondent 's accounts disclosed that it had collected from the persons to whom it sold goods a sum of Rs. 30,591.71 as sales tax in excess of the tax which the respondent was liable to pay under the Act. The respondent, it would appear, paid Rs. 6,62,958 as excise duty and deducted the same from its total turnover for the purpose of determining the taxable turnover. When, however, the respondent company sold the 154 goods it collected sales tax from the purchasers on the invoice price without deducting there from the excise duty paid in respect of the said goods. This resulted in the respondent company realising Rs. 30,591.71 in excess of the sales tax payable in respect of the goods sold by it: The sales tax officer held that the respondent was liable to pay the aforesaid amount of Rs. 30,591.71 to the Government under section 22(3) of the Act. The respondent then filed writ petition in the Kerala High Court to challenge its liability to pay the aforesaid amount on the ground that the provisions of section 22 in so far as they imposed a liability on a dealer to pay over to the Government any amount collected by him as sales tax, even though that amount was not payable as tax, was unconstitutional. The learned single Judge dismissed the petition filed by the respondent. On appeal, however, the Division Bench held, as already mentioned earlier, that the impugned provision was beyond the legislative competence of the State Legislature. Sub section (3) of section 22 of the Act reads as under: "(3) If any dealer or person collects tax on transactions not liable to tax under this Act or in excess of the tax leviable to under this Act, such dealer or person shall, unless it is established to the satisfaction of the assessing authority that the tax so collected has been refunded to the person who had originally paid tax, pay over to the Government, in addition to the tax payable the amount so collected within such time and in such manner as may be prescribed. " The learned Judges of the High Court in holding the above provision. in so far as it related to payment of an amount collected as tax on transactions not liable to tax under the Act or in excess of the tax leviable under the Act to he beyond the legislative competence of the State Legislature, referred to entry 54 of the State List in the Seventh Schedule to the Constitution upon which reliance had been placed on behalf of the State. It was held that the State Legislature was incompetent to enact the impugned provisions contained in sub section (3) of section 22 of the Act under the above entry. In appeal before us Dr. Seiyed Muhammad on behalf of the appellants has assailed the judgment of the Division Bench of the High Court. As against that, Mr. Pai on behalf of the respondent has canvassed for the correctness of the said judgment. After hearing the learned counsel, we are of the opinion that there is no merit in these two appeals. A State Legislature is competent to make a law under entry 54 of List II in Seventh Schedule to the Constitution in respect of "taxes on the sale or purchase of goods other than newspapers subject to the provisions of entry 92A of List I". Entry 92A of List I relates to taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter State trade or commerce, and we are not concerned with this entry. 155 Entry 54 enpowers State Legislatures to make law, except i certain cases with which we are not concerned, in respect of taxes on the sale or purchase of goods. As long as the law relates to taxes on the sale or purchase of goods, it would be within the competence of the State Legislature to enact such a law. It would not, however, b permissible for the State Legislature to enact a law under entry 54 for recovery by the State of an amount which could not be recovered as sales tax or purchase tax in accordance with the law on the subject and which was wrongly realised by a dealer as sales tax or purchase tax. Such a law plainly would not be a law relating to tax on the sale or purchase of goods but would be one in respect of an amount wrongly realised by a dealer as sales tax or purchase tax. It looks perhaps odd that a dealer should recover in the course of business transactions certain sums of money as sales tax or purchase tax payable to the State and that he should subsequently decline to pay it to the State on the ground that the same amount is not exigible as sales tax or purchase tax. Whatever might be the propriety of such a course, the question with which we are concerned is whether the State Legislature is competent to enact a law under entry 54 for recovery by the State of an amount, which though not exigibie under the State law as sales tax or purchase tax was wrongly realised as such by a dealer. The answer to such a question has to be in the negative. The matter indeed is not res integra and is concluded by two decisions of this Court. A Constitution Bench of this Court examined in the case of R. Abdul Quader & Co. vs Sales Tax officer, Hyderabad(1) the validity of section l l (2) of the Hyderabad Sales Tax Act, 1950 which reads as under: "(2) Notwithstanding anything to the contrary contained in any order of an officer or tribunal or judgment, decree or order of a Court, every person who has collected or collects on or before 1st May, 1950, any amount by way of tax otherwise than in accordance with the provisions of this Act shall pay over to the Government within such time and in such manner as may be prescribed the amount so collected lay him, and in default of such payment the said amount shall be recovered from him as if it were arrears of land revenue. " The appellant in that case collected sales tax from the purchasers of betel leaves in connection with the sales made by it. The appellant however, did not pay the amount collected to the government. The Government directed the appellant to pay the amount to the Government. The appellant thereupon filed a writ petition in the High Court questioning the validity of section 11(2). The main contention of the appellant before the High Court was that section 11(2) which authorised the Government to recover a tax collected without the authority of law was beyond the competence of the State Legislature because a tax collected without the authority of law would not be a tax levied under the law and it would therefore not be open to the State to collect (1) ; 156 under the authority of a law enacted under entry 54 of List II of the Seventh Schedule to the Constitution any such amount. The High Court upheld the validity of section 11(2). On appeal to this Court it was observed by the Constitution Bench as under: "The first question therefore that falls for consideration is whether it was open to the State legislature under its powers under entry 54 of List II to make a provision to the effect that money collected by way of tax, even though it is not due as a tax under the Act, shall be made over to Government. Now it is clear that the sums so collected by way of tax arc not in fact tax exigible under the Act. So it cannot be said that the State legislature was directly legislating for the imposition of sales or purchase tax under entry 54 of List II when it made such a provision, for on the face of the provision. the amount, though collected by way of tax, was not exigible as tax under the law." An attempt was made on behalf of the State in that case to sustain the validity of section 11(2) of the Hyderabad Act on the ground that the Legislature had enacted that law as part of the incidental and ancillary power to make provision for the levy and collection of sales or purchase tax. This contention was repelled and it was observed that the ambit of ancillary or incidental power did not go to the extent of permitting the legislature to provide that though the amount collected may be wrongly by way of tax is not exigible under the law. as made under the relevant taxing entry, it shall still be paid over to Government, as if it were a tax. The question again arose in this Court before a Bench consisting of six Judges in the case of Ashoka Marketing Ltd. vs State of Bihar & Anr.(1). In that case in determining the appellant 's turnover for assessment to sales tax for the year 1956 57, the Superintendent of Sales Tax included an amount representing Railway freight in the appellant 's sales of cement. The appellate authority set aside the orders directing the inclusion of the Railway freight in the turnover. After the introduction of section 20 A of the Bihar Sales Tax Act the Assistant Commissioner issued a notice under section 20 A(3) of the Act requiring the appellant to show cause why an amount representing sales tax on the Railway freight which became refundable under the orders of assessment be not forfeited. The appellant 's contention that section 20 A was ultra vires the State Legislature was rejected by the Assistant Commissioner as well as by the High Court in a writ petition under article 226 of the Constitution. On appeal filed by the assessee this Court held that sub sections (3), (4) and (5) of section 20 A were ultra vires the State legislature. As a corollary thereto, sub sections (6) and (7) of that section were also held to be invalid. Subsection (3) of section 20 A of the Bihar Sales Tax Act read as under: "(3)(a) Notwithstanding anything to the contrary contained in any law or contract or any judgment, decree or order of (1) 157 any Tribunal, Court or authority, if the prescribed authority has reason to believe that any dealer has or had, at any time, whether before or after the commencement of this Act, collected any such amount, in a case in which or to an extent to which the said dealer was or is not liable to pay such amount, it shall serve on such dealer a notice in the prescribed manner requiring him on a date and at a time and place to be specified therein neither to attend in person or through authorised representative to show cause why he should not deposit into the Government treasury the amount so collected by him. (b) On the day specified in the notice under clause (a) or as soon thereafter as may be, the prescribed authority may. after giving the dealer or his authorised representative a reason able opportunity of being heard and examining such accounts and other evidence as may be produced by or on behalf of the dealer and making such further enquiry as it may deem necessary, order that the dealer shall deposit forthwith into the Government treasury, the amount found to have been so collected by the dealer and not refunded prior to the receipt of the, notice aforesaid to the person from whom it had been collected. " In holding sub section (3) and other impugned provisions of section 20 A to be beyond the legislative competence of the State Legislature, this Court in the case of Ashoka Marketing Ltd. (supra) relied upon the decision of this Court in Abdul Qadar 's case (supra). Dr. Muhammad has, however, tried to distinguish the above two cases on the ground that the present case relates to an amount realised in excess of the tax leviable under the Act and not to an amount which was not payable at all as tax under the Act. This fact, in our opinion, would not prevent the applicability of the principle laid down in the cases of Abdul Qadar and Ashoka Marketing Ltd. (supra). Any amount realised by a dealer in excess of the tax leviable under the Act stands, for the purpose of determining the legislative competence under entry 54, on the same footing as an amount not due as tax under the Act. Dr. Muhammad 's argument involves inventing a category of a "deemed tax" which is not there in the Act. The provisions of the Act contain a definition of "tax". This necessarily means that every thing outside it collected by the dealer would be an exaction not authorised by the Act. "Tax", according to section 2(xxiv) of the Act, means the tax payable under the Act. The amount which was realised by the respondent in excess of what was due as tax cannot 158 be held to be "tax", because such excess amount was not tax payable under the Act. If the State Legislature cannot make a law under entry 54 of List II of the Seventh Schedule to the Constitution directing the payment to the State of any amount collected as tax on transactions not liable to tax under the Act, it would likewise be incompetent to make a law directing payment to the State of an amount realised be a dealer in excess of the tax payable under the Act. The amount realised in excess of the tax leviable under the Act would not stand for this purpose on a footing different from that of the amount realised as tax, even though the same could not be recovered as tax under the Act. We would, therefore, dismiss the two appeals with costs. One hearing fee. V.P.S. Appeals dismissed. [/INST]Section 13 of the Karnataka Municipalities Act, 1964, provides that for the purpose of election of councillors of a town municipality at a general election the State Government shall, after previous publication by notification, determine, (a) the number of territorial divisions into which the municipality shall be divided. (b) the extent of each territorial division; (c) the number of seats allotted to each territorial division. and (d) the number of seats reserved for the Scheduled Castes and women. Section 14 provides that the electoral roll of the State Legislative Assembly for the territorial area comprised in the division, shall be deemed to be the list of voters of such division Rule 75 of the Mysore Municipalities (Election of Councillors) Rules, 196 empowers the State Government to make such orders as it deems fit for ensuring that the elections are held in accordance with the provisions of the Act. For holding a general election with respect to a town municipal council, the State Government issued the notification under section 13. Thereafter the Returning officer issued a notice fixing the calendar of events for holding the election. The list of voters for each division was prepared exactly according to the Electoral Roll, and kept open for inspection In the office of the municipal council. A list of the contesting candidates was also published and the poll date was also fixed as January 10, 1975. At that state it was found that some voters residing in the border of one division had been included in the voters ' list of an adjoining division and the State Government, in purported exercise of the power under r. 75, cancelled the calendar of events published by the Returning officer and directed a fresh preparation of the voters ' list as per the divisions notified. In a writ petition filed by the respondents, who were residents of the town, the High Court held that the State Government had no power to cancel the calendar of events and quashed the direction of the State Government. Dismissing the appeal to this Court, ^ HELD: (1) What is required by section 14(1) is that the list of voters of a division should correspond ipsissima verba with the Electoral Roll for the territorial area included in the division. of there is any mistake in the Electoral Roll in the some voters residing in one area or house number are shown as residing in another, it cannot be corrected by the Returning officer while preparing the list of voters for that division. The only way in which such mistake can be corrected is by applying for rectification of the Electoral Roll under section 22 of the Representation of the People Act, 1950, but of such rectification is not made the entries in the Electoral Roll would stand and they would necessarily be reflected in the list of voters for the division. But that would not constitute a mistake so far as the preparation of the list of voters for the division is concerned. It is only if the list of voters for the division does not correspond" with the concerned Electoral Roll in the sense that the voters shown in the Electoral Roll as residing in the territorial are omitted to be included in the list of voters of that division or voters shown In the Electoral Roll as residing in the territorial area of one division are included in the list of voters of another. that it can be said that the List is defective and not in accordance with the provisions of the Act [64D H] 58 (2) The scheme of the Act and particularly sections 14 and 15 show that it is only one list of voters that is contemplated to be in force during the entire process of election, and there is no question of correcting the list of voters according to the revised Electoral Roll which had come into being in February, 1975. [65G H] The list of voters is to be prepared for the election tnd 'election ' means the entire process consisting of the several stages and embracing the several steps by which an elected member is returned. [65H] Section 14(1) does not contemplate a list of voters which keeps on changing from time to time during the election process. It deems the Electoral Roll for the territorial area of the division in force at the relevant time to be the list of voters for the division for the purposes of the Act that is, for the purposes of the 'election '. Section 14(3) enacts that every person whose name is in the list of voters referred to in sub section (1) shall be qualified to vote at the election of a member for the division to which such list pertains. Section 15 (2) also says that the list of voters shall be conclusive evidence for the purpose of determining under this section whether the person is qualified or not qualified to vote or to be elected. The sub sections refer to the same list of voters and it is, therefore, clear that the legislature did not intend that the list of voters should change from time to time during the process of election and the relevant Electoral Roll for the purpose of preparation of the list of voters must consequently be taken to be the Electoral Roll in force at the date when the election process commenced, that is when the calendar of events was published. [66A F] Chief Commissioner, Ajmer vs Radhey Shyam Dani, ; , explained . N. P. Ponnuswami vs Returning officer, Namakkal Constituency & Ors, ; , followed Shivappa Chanamallappa jogendra vs Basavannappa Gadlappa Bankar, [1965] Mysore L.J. 289. approved. Obiter: Till the election process has commenced by the issue of a notice fixing the calendar of events. there is no reason why the designed officer should not be entitled to rectify the list of voters for a division if it can be shown that the list of voters does not correspond exactly with the Electoral Roll for the territorial area and bring the list of voters in conformity with the Electoral Roll, but once the calendar of events is published and the election process has begun it is extremely doubtful whether any changes can be made in the list of voters for the purpose of setting right any such defect. [67 C] </s>
<s>[INST] Summarize the judgementCivil Appeal No. 2601 of 1969. Appeal by Special Leave from the Judgment dated 21 8 1069 of the Allahabad High Court in Second Appeal No. 2693/63. W.S. Barlingay and R.C. Kohli for the Appellant. S.L. Aneja and K.L. Taneja for the Respondent. The Judgment of the Court was delivered by SARKARIA, J. This appeal by special leave is directed against a judgment, dated August 21, 1969, of the High Court of Allahabad, affirming on second appeal the judgment of the Civil Judge, Dehra Dun. It arises out of these facts: Umrao Singh, respondent herein, who died during the pendency of proceedings in this Court and is substituted by his legal representatives, instituted a suit on September 26, 1961 against Ram Deo, appellant herein, for damages and for eviction from House No. 122B, Choharpur, District Dehra Dun. Umrao Singh was the landlord of the suit premises. Ram Deo was occupying the premises at a monthly rent of Rs. 25. On June 13, 1960, a sum of Rs. 600 was due to the respondent from the appellant as arrears of rent and an agreement was executed between the parties on that date, according to which the tenant had to pay Rs. 50 every month to the respondent, to wit Rs. 25 towards liquidation of the compounded arrears of rent, and Rs. 25 per month towards the current rent falling due. The appellant fell in arrears again. Thereupon, the respondent served a notice of demand upon the plaintiff on August 21, 1961, requiring him to pay Rs. 380 as the arrears of rent (Rs. 5 being balance due from the period April 10, 1960 to May 9, 1960 and Rs. 370 for the period from May 10, 1960 to August 9, 1961) within one month from the receipt of the notice. The tenant appellant pleaded that the parties had acted upon the said agreement dated June 12, 1960, and on settlement of accounts in April 1961, a sum of Rs. 305 was alleged to be due to the respondent. Thereafter the appellant made another payment of Rs. 50 to the respondent on June 6, 1961. On September 27, 1961 appellant tendered to the respondent a sum of Rs. 200. The respondent did not 69 accept this tender, and instead, instituted the suit for damages and eviction of the appellant from the said premises. The tenant further pleaded that the arrears of rent due at the date of notice was Rs. 75 only which did not exceed three months ' rent, that the rest of the amount (Rs. 75) demanded represented only past arrears covered by the agreement in respect of which the landlord had waived his right of ejectment. The trial court held that from exhibit A 2, it was clear that only three months ' rent was in arrears and therefore, no ground for eviction had been made out under Section 3(a) of the U.P. (Temporary) Control of Rent and Eviction Act No. III of 1947 (hereinafter referred to as the Act). With this reasoning, the trial court dismissed the respondent 's petition for eviction. On appeal, the Additional Civil Judge, Dehra Dun, by his judgment dated May 29, 1963, reversed the finding of the Munsif and held that the rent which was in arrears upto June 13, 1960 and which was the subject matter of the agreement of that date, did not lose its character as "arrears of rent" merely because there was an agreement to pay the same in instalments. On these premises, he allowed the appeal and directed eviction of the tenant. The tenant carried a further appeal to the High Court. The High Court affirmed the finding of the Civil Judge and dismissed the appeal. Hence this appeal by the tenant. Dr. Barlingay, learned counsel for the appellant has advanced two contentions. First, that out of the amount of Rs. 150 due to the respondent at the date of the notice, Rs. 75 was due under the agreement dated June 12, 1960, and that amount could not be treated as arrears, of rent and tacked on to three months current rent in arrears, for the purpose of clause (a) of Section 3(1) of the Act. It is argued that the liability to pay the past amount of Rs. 75 arises out of the aforesaid agreement which furnished an independent cause of action different from that founded on the rent note or the lease of the premises. Second, that Section 114 of the Transfer of Property Act will be applicable to the situation because this is a matter on which the Rent Act is silent. Since the tenant has cleared all the arrears of rent on the first hearing of the suit, he could not be evicted in view of the provisions contained in Section 114 of the Transfer of Property Act. In reply, Mr. Aneja submits that the pre agreement arrears of rent did not lose their original character as arrears of rent, merely because the landlord had agreed to allow the tenant to clear them in instal 70 ments. It is emphasised that what was intended to be an accommodation could not be turned into a handicap for the landlord. It is argued that since on the date of the demand notice served upon the appellant, the latter was admittedly liable to pay Rs. 150; Rs. 75 towards the rent of 3 months prior to August 12, 1961 and Rs. 75 towards the rent of three months preceding the demand notice, he was in arrears of rent for a period of "more than three months" within the meaning of clause (a) of Section 3 of the Act, and, as such, was liable to be evicted. We will now deal with the first contention canvassed by Dr. Barlingay. The material part of Section 3 of the Act reads as follows: "3(1). Subject to any order passed under sub section (3) no suit shall, without the permission of the District Magistrate, be filed in any civil court against a tenant for his eviction from any accommodation, except on one or more of the following grouds: (a) That the tenant is in arears of rent for more than three months and has failed to pay the same to the landlord within one month of the service upon him of a notice of demand. (b) to (g). . . . ." In order to make out a ground for eviction under clause (a) of Section 3(1) the landlord must establish three facts: (i) that the tenant is in arrears of rent; (ii) that such arrears are of rent for more than three months, and (iii) the tenant has failed to pay the same to the landlord within one month of the service upon him of a notice of demand. If any one of these factual ingredients is not established, no order of eviction can be passed under this Clause. In the present case, there is no dispute that at the date of the notice, the tenant owed an amount of Rs. 150 to the landlord, out of which Rs. 75 represented three months ' rent preceding the notice. There is also no dispute that the balance of Rs. 75 due from the tenant related to the period prior to the agreement, dated June 12, 1960, and under the agreement, the tenant was bound to pay the same in three monthly instalments, which he had, in breach of the agreement, failed to pay. Controversy centres round the question, whether this balance of Rs. 75 could also be treated as "arrears of rent" and tacked on to the arrears of rent relating to the three months preceding the notice for the purpose of clause (a) of Section 3(1) of the Act. In our opinion, the answer to this question must be in the negative. As a result of the aforesaid 71 agreement, the pre agreement arrears lost their original character as "arrears of rent" and assumed the character of a consolidated debt which, under the terms of the agreement, was payable by the debtor (appellant) in monthly instalments. The agreement had in respect of the past arrears, brought into being a new cause of action and created a liability against the tenant, independent and distinct from that founded on the rent note or the lease of the premises. Consequently if the appellant, in breach of the agreement, defaulted to pay any instalment, the remedy of the respondent (creditor) would be to file a suit for the recovery of the amount due on the basis of the agreement, dated June 12, 1960. Thus, the arrears of three instalments due under the agreement had ceased to be "arrears of rent" and could not be tacked on to the arrears of three months rent due at the date of the notice, for the purposes of clause (a) of Section 3(1). The proposition can be tested by taking an example. Supposing, the appellant had defaulted to pay four monthly instalments of Rs. 25 each in accordance with the aforesaid agreement, but had regularly paid the rent as it fell due every month for the post agreement period. Will the respondent in such a situation be entitled to sue for the eviction of the tenant on the ground that he has committed four successive breaches and defaults under the said agreement ? The answer is an obvious 'No '. The respondent 's remedy in such a situation, will only be to sue for the recovery of the amounts due on the foot of the aforesaid agreement. In the light of the above discussion the conclusion is inescapable that for the purposes of clause (a) of Section 3(1) the appellant was in arrears of rent for three months, only. In other words, he was not in "arrears of rent for more than three months" within the meaning of clause (a) and, as such, was not liable to be evicted under that clause. The High Court and the first appellate court were in error in holding to the contrary. In the view we take, it is not necessary to deal with the second contention canvassed by Dr. Barlingay. In the result, we allow this appeal, set aside the decree of the High Court and dismiss the respondent 's suit. In the circumstances of the case however, we leave the parties to pay and bear their own costs in this Court. P.B.R. Appeal allowed. [/INST]The first respondent owned certain Land forming part of a town planning scheme, situated within the city limits. At the request of the second respondent, a Corporative Housing Society, the State Government issued a Notification under section 4 of the Act on August 3, 1960 stating that the land was likely to be needed for a public purpose and it was followed by a further notification of the State Government under Section 6 of the Act dated August 21, 1961 that the land was to be acquired at the expense of the Cooperative Housing Society for the public purpose specified in column 4 of the Schedule to the notification. The entire expense of the acquisition was to be borne by the second respondent. The first respondent moved the High Court under Article 226 of the Constitution challenging the validity of the notification under section 6 of the Act. During the pendency of the Writ Petition, the appellant by a notification dated May 27, 1963 cancelled the earlier notification under section 6 and issued a fresh notification. The High Court struck down the second notification dated September 10, 1964 issued under section 6 of the Act. In the appeal to this Court, on the question of the validity of the 2nd notification dated September 10, 1964. ^ HELD: (i) The High Court was in error in striking down the second notification under section 6 of the Act issued on September 10, 1964. (ii) This Court in Valjibhai Muljibhai Soneji vs State of Bombay has held that the Government has no power to issue a notification for acquisition of land for a public purpose, where the compensation is to be entirely paid by a company. [287 C D] In the instant case the first notification issued by the Government for acquisition of land for a public purpose at the expense of the second respondent, the cooperative society was therefore, invalid and the Govt. was justified in issuing the second notification under section 6 after removing the lacuna by providing for acquisition of the land for public purpose, at public expense. [287 D E] (iii) The acquisition of land for cooperative housing society is a public purpose. The Govt. is the best judge to determine whether the purpose in question is a public purpose or not. It cannot be said that a Housing Scheme for a limited number of persons cannot be construed to be a public purpose. When a notification under section 6 of the Act is invalid, the Govt. may treat it as ineffective and issue a fresh notification under section 6 of the Act 2nd nothing in section 48 of the Act precludes the Government from doing so. [291 C E] 285 Girdharilal Amratlal Shodan & Ors. vs State of Gujarat Madhya Pradesh & Ors. ; , Pandit Jhandu Lal & Ors. vs The State of Punjab & Ors. ; Ratilal Shankarbhai & Ors. vs State of Gujarat & Ors. A.I.R. , Ram Swarup vs The District Land Acquisition Officer, Aligarh & Ors. , referred to. (iv) In the instant case, tho Respondent had not taken any ground in the Writ Petition with regard to the delay in the issuance of the second notification. The High Court was therefore, not justified in observing that "the appellant had not explained the delay by filing any affidavit. " If there was no ground taken, there could be no occasion for filing of any such affidavit. [292 B C] (v) There is nothing in the Act which precludes the Govt. from issuing a fresh notification under section 6 of the Act if the earlier notification is found to be ineffective. The delay of one year and four months between the date of cancellation and the issue of the second notification cannot be regarded to be unreasonable. [292 E F] Gujarat State Transport Corpn. vs Valji Mulji Soneji </s>
<s>[INST] Summarize the judgementivil Appeal No. 3087 of 1991. From the Judgment and Order dated 23.11. 1990 of the Delhi High Court in F.A.O. (O.S.) 123 of 1989. Kapil Sibal, D.D. Thakur, Ms. Lira Goswamy, A.K. Mahajan, A.S. Chandhoik, Ms. Meera Chibar and Dinesh Agnani for the appearing parties. 414 The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. We grant special leave and proceed to dispose of the appeal. The General Electric Technical Services Company (`GET SCO ') had entered into a contract with Indian Airlines which included, inter alia, the construction and fabrication of air craft testing centre/engine repair centre in Delhi. The GETSCO in turn entered into a contract with M/s Punj Sons (P) Ltd. respondent 1 for getting that work done for Indian Airlines. As per the contract respondent I was required to provide performance bond equal to 30 per cent of the total value of contract price which was to be split up into two performance bonds partly to be released on completion of the project, and the balance upon the expiration of the warran ty. The respondent I was also required to furnish a bank guarantee to secure the mobilisation advance of 25 per cent of the contract value. On 28 October, 1986 respondent 1 furnished the bank guarantee to secure the mobilisation advance of Rs. 1,86,00,000. The guarantee was furnished by Hongkong & Shanghai Bank ( 'the Bank ') respondent 2. Respondent I instead of furnishing the two performance bonds, as agreed upon, wrote a letter dated 3 September, 1987, as follows: ". . Sub: Jet Engine Test & Repair Centre at Palam Finance September 3, 1987 Dear Sir, In terms of above contract we have to submit two separate Bonds for Mobilisation advance & performance guarantee & 25% and 30% of the Contract value. Bank Guarantee for mobilisation advance has already been submit ted and we have not to submit the Performance Bonds for 30% of the Contract value. Since the amount of Performance Bond shall be progres sively utilised over the contract period, in order to reduce Bank charges and marginal money, we would like to suggest alternative proposals to meet with your requirements: 415 AA. We propose to submit performance guaran tees for 30% of the contract value duly signed by two directors in their personal capacity and countersigned by Punj Sons (Pvt) Ltd. This Performance bond shall include identical terms & conditions, as desired in your format. Similar Bond has already been accepted by M/s Hindustan Petroleum Corporation Ltd. Bombay for their Bombay Pune Pipeline Project valued at Rs.7.05 crores. Alternatively, we would suggest submission of a Composite Bank gurantee where amount vacated by Mobilisation advance shall be utilised by Performance Bank Guarantee amount. This Guarantee shall at any time be valid for equivalent to 30% of the contract value, to cover unrecovered mobilisation advance and Performance Guarantee amount of the work certified. We have submitted similar Bonds to a number of our customers to their entire satis faction. May we request you to look into the above arrangement and allow us to submit the above Bond or Composite Bank Guarantee under this Contract. Thanking you and assuring you of our best services at all times. " GETSCO has accepted the revised proposal contained in the aforesaid letter. Consequently, on 25 January 1988, the Bank furnished a composite bank guarantee for Rs.2, 12,25,000. Out of this composite bank guarantee 15 per cent being Rs. 1,06,12,500 would remain in force until 30 June, 1988 and the balance 15 per cent would remain valid till final acceptance certificate i.e. till 30 June 1989. It seems respondent 1 failed to complete the project within the stipulated time as per contractual specifications despite repeated opportunities to rectify defects and defi ciencies prior to August 1988 and thereafter. GETSCO termi nated respondent 1 's right to continue the project and wrote a letter dated 17 April 1989 to the Bank seeking encashment of the bank guarantee dated 25 January 1988 for Rs. 1,06, 12,500. On the same day the bank issued a cashier 's order No. 2605 for Rs. 1,06, 12,500 in favour of GETSCO. On 18 April 1989 the respondent 1 filed a suit for injunction against GETSCO and the Bank in the High Court and obtained an ex parte injunction at the residence 416 of learned Single Judge restraining the Bank and GETSCO from encashing the bank guarantee. On 11 July 1989 the ex parte injunction was vacated. On the same day respondent 1 preferred an appeal to the Division Bench of the High Court and obtained stay of encashment of he bank guarantee. On 23 November 1990, the Division Bench allowed the appeal, set aside the order of learned Single Judge and stayed the encashment of the bank guarantee till the disposal of the respondent 's suit. It seems to us that the Division Bench of the High Court has misconstrued the terms of the bank guarantee and the rights and liabilities of the parties thereunder. The first bank guarantee dated 28 October, 1986 is in these terms: "1. In consideration of General Electric Technical Services co. Inc. Cincinnati, Ohio, U.S.A. C/o M/s P.L. Jaitly & co. IE/12, Jhandewalan Extension, New Delhi (hereinafter called the owner) having agreed to grant mobilisation advance of Rs.18,600,000 [Rs. Eighteen million six hundred thousand only] to M/s Punj Sons Pvt. Ltd., Industrial Area, Kalkaji, New Delhi 110019 (hereinafter called Contractor) under the terms and conditions of Tender No. HB 040 I made by and between, owner and Contractor for Indian Airlines Jet Engine Repair and Test Facilities Phase II Construc tion being undertaken at the Indira Gandhi International Airport, New Delhi (here in called the Agreement) on the production of Bank Guarantee for Rs.18,600,000 [Rupees eighteen million six hundred thousand only] we, Hongkong & Shanghai Banking Corporation, 28 Kasturba Gandhi Marg, New Delhi 110001 (hereinafter called Bank) do hereby undertake to pay to the Owner an amount not exceeding Rs. 18,600,000 [Rs. eighteen million six hundred thousand only], against any loss or damage caused to or suffered or would be caused to or suffered by the owner by reason of any breach by the Contractor of the terms and conditions contained in the Agreement. We, the Bank do hereby undertake to pay the amount due and payable under this Guarantee with demur, merely on demand from the owner stating that the amount claimed is due by way of loss or damage caused to or would be caused to or suffered by the owner by reason of any breach 417 by the Contractor of any of the terms or conditions contained in the Agreement or by reason of the Contractor 's failure to perform the Agreement. Any such demand made on the Bank shall be conclusive, as regards the amount due and payable by the Bank under this Guarantee. However, our liability under this Guarantee shall be restricted to an amount not exceeding Rs.18,600,000 [Rupees eighteen million six hundred thousand only]. We, the Bank further agree that the Guaran tee herein contained shall remain in force and effect during the period that would be taken for the performance of the Agreement and that it shall continue to be enforceable till all the due of the owner under or by virtue of the Agreement have been fully paid and its claims satisfied or discharged or till the owner certifies that the terms and conditions of the Agreement have been tully and properly carried out by the Contractor and accordingly dis charges the Guarantee. Unless a demand or claim under this Guarantee is made on us in writing on or before the date (named in the Agreement as the end of the warrant/mainte nance period) we shall be discharged from all liability under this Guarantee thereafter. We, the Bank further agree with the Owner that the owner shall have the fullest liberty without our consent and without affecting in any manner our obligations hereunder to vary any of the terms and conditions of the Agree ment or to extend time of performance by the Contractor from time to time or to postpone for any time or from time to time any of the powers exercisable by the owner against the Contractor and to forbear or enforce any of the terms and conditions relating to the Agreement and we shall not be relieved from our liability by reason of any such variation, or extension being granted by the owner or any indulgence by the owner to the Contractor or by any such matter or thing whatsoever which under the law relating to sureties would but for this provision have effect of so relieving us. We, the Bank lastly undertake not to revoke this Guarantee during its currency except with the previous consent of the owner in writing. 418 Notwithstanding anything stated above, our liability under this Guarantee is restricted to a sum of Rs. 18,600,000 [Rs. eighteen million six hundred thousand only]. Our Guar antee shall remain in force until the (date named in the Agreement as the end of the warrant/maintenance period). Unless a demand is lodged with us on or before that date 13 day of February 1988, all your rights under the said guarantee shall be forfeited and we shall be relieved and discharged from all liabilities thereafter. " The relevant terms of the second composite bank guarantee dated 25 January 1988 are as follows: "Bank Guarantee No. 86 NDH 918 dt. 28.10.1986 for Rs. 1,86,00,000 favouring M/s General Electric & Technical Services Co. Inc. Under the instructions from our clients M/s Punj Sons (Pvt) Ltd. M 13, Connaught Place, New Delhi 110001, we hereby enhance the value of the above Bank Guarantee upto Rs.21,225,000 [Rupees twenty one million two hundred twenty five thousand only] being 30% of the revised Lumpsum Contract value of Rs.70,750,000 [Rupees seventy million seven hundred fifty thousand only]. This Bank Guarantee shall act 'Composite Bank Guarantee ' for Mobilisation Advance and Performance Bond where in Bank Guarantee, to the extent of amounts of Mobilisation Advance so recovered, shall be utilised towards Two Performance Bonds of 15% of the Contract value each valid upto 30th June, 1988 and 30th June, 1989, respectively. All the other terms and conditions of the original Guarantee will remain unchanged. We, the Hongkong & Shanghai Banking Corpora tion, 28, Kastruba Gandhi Marg, New Delhi 110001, hereby undertakes not to revoke the Guarantee during the currency except with the previous consent of the General Electric 419 and Technical Services Company Inc. Notwithstanding, anything contained herein before our liability under this Guarantee is restricted to Rs.21,225,000 [Rupees Twenty One Million Two Hundred Twenty five thousand only] and the recovery of Mobilisation advance from Running Bills Account will be in accordance with the contract, the Guarantee against such amounts of Mobilisation Advance as so recov ered shall be treated towards performance Guarantee with the intent that after recovery of Mobilisation Advance in full, the Guarantee shall operate against the full value of Per formance Bond. Out of the said guarantee amount, the Bank Guarantee amount of Rs.10,612,500 [Rupees ten million six hundred twelve thousand & five hundred only] being the 15% of lumpsum value of the contract shall remain in force till the completion of the Project i.e. upto 30th June 1988 and the Bank Guarantee for the balance amount i.e. Rs.10,612,500 [Rupees ten million six hundred twelve thousand five hundred only] being 15% amount shall remain in force till final ac ceptance certificate till 30th June, 1989. NOTWITHSTANDING anything contained hereinbe fore our liability under this Guarantee will be restricted to Rs.21,225,000 [Rupees twenty one million two hundred twenty five thousands only] until 30th June 1988 and will automati cally stand reduced from Rs.21,225,000 to Rs.10,612,500 (Rupees ten million six hundred twelve thousand and five hundred only) on 30th June, 1988 without further reference to you. Our liability will continue only to the extent of the balance amount of Rs.10,612,500 [Rupees ten million six hundred twelve thousand and five hundred only] after 30th June, 1988 and will be conditional upon a claim being filed with us in writing on or before 30th June 1989. Thereafter our liability under this guarantee shall stand extinguished and we shall be relieved and discharged from all liabilities thereunder. " The second bank guarantee with which we are concerned makes a reference to the first guarantee. It states that the guarantee is a composite bank guarantee for mobilisation of advance and performance bond. It further states that all the other terms and conditions of 420 the original Guarantee will remain unchanged. The liability of the Bank shall automatically reduce from Rs.2,12,25,000 to Rs. 1,06, 12,500 on 30 June 1988, which will continue even after 30 June, 1988 and will be condi tional upon a claim being filed with the Bank in writing on or before 30 June 1989. In the first guarantee, the Bank has undertaken to pay to GETSCO the amount guaranteed without any demur merely on demand stating that the amount is due by way of loss or damage caused to or would be caused to or suffered by GETSCO by reason of any breach committed by the respondent on any of the terms or conditions contained in the agreement or by reason of respondent 's failure to per form the agreement. It is also provided that any such demand by GETSCO made on the Bank shall be conclusive as regards the amount due and payable by the Bank under the guarantee. The GETSCO has only sought to enforce the bank guarantee for the balance amount of Rs. 1,06, 12,500 on a complaint that respondent 1, has failed to perform the contract as per the terms and conditions. The Bank has undertaken to pay this sum of money and it is a commitment of the Bank. The Bank must honour its commitment when demand is made. Indeed, the Bank was prepared to pay and has in fact issued the Cash ier 's order as per demand from GETSCO, but the Court has directed the Bank not to pay under the guarantee. The question is whether the Court was justified in restraining the Bank from paying to GETSCO under the bank guarantee at the instance of respondent 1. The law as to the contractual obligations under the bank guarantee has been well settled in a catenae of cases. Almost all such cases have been considered in a recent judgment of this Court in U.P. Cooperative Federation Ltd. vs Singh Consultants and Engineers (P) Ltd., wherein Sabyasachi Mukherji, J., as he then was, observed (at 189) 'that in order to restrain the operation either of irrevocable letter of credit or of confirmed letter of credit or of bank guar antee, there should be serious dispute and there should be good prima facie case of fraud and special equities in the form of preventing irretrievable injustice between the parties. Otherwise, the very purpose of bank guarantees would be negatived and the fabric of trading operations will get jeopardised '. It was further observed that the Bank must honour the bank guarantee free from interference by the Courts. Otherwise, trust in commerce internal and interna tional would be irreparably damaged. It is only in excep tional cases that is to say in case of fraud or in case of irretrievable injustice, the Court should interfere. In the concurring opinion one of us (K. Jagannatha Shetty, J.) has observed that whether it is a 421 traditional bond or performance guarantee, the obligation of the Bank appears to be the same. If the documentary credits are irrevocable and independent, the Bank must pay when demand is made. Since the Bank pledges its own credit in volving its reputation, it has no defence except in the case of fraud. The Bank 's obligations of course should not be extended to protest the unscrupulous party, that is, the party who is responsible for the fraud. But the banker must be sure of his ground before declining to pay. The nature of the fraud that the courts talk about is fraud of an "egre gious nature as to vitiate the entire underlying transac tion". It is fraud of the beneficiary, not the fraud of somebody else. The High Court has observed that failure on the part of GETSCO to make a reference to mobilisation advance in the letter seeking encashment of the bank guarantee would be tantamount to suppression of material facts, in the sense that the mobilisation advance was, under the contract to be recovered from the running bills. It was further observed that disclosure of such facts would have put the bank to further inquiry as to what was the amount covered by those bills and what was the corresponding amount of the mobilisa tion advance and to what extent the amount covered by the bank guarantee remained payable. In any event, the High Court said, that GETSCO could not demand full amount of the bank guarantee on 17 April 1989. It seems to us that the High Court has misconstrued the terms of the bank guarantee and the nature of the inter se rights of the parties under the contract. The mobilisation advance is required to be recovered by GETSCO from the running bills submitted by the respondent. If the full mobilisation advance has not been recovered, it would be to the advantage of the respondent. Secondly, the Bank is not concerned with the outstanding amount payable by GETSCO under the running bills. The right to recover the amount under the running bills has no rele vance to the liability of the Bank under the guarantee. The liability of the Bank remained intact irrespective of the recovery of mobilisation advance or the non payment under the running bills. The failure on the part of GETSCO to specify the remaining mobilisation advance in the letter for encashment of bank guarantee is of little consequence to the liability of the Bank under the guarantee. The demand by GETSCO is under the Bank guarantee and as per the terms thereof. The Bank has to pay and the Bank was willing to pay as per the undertaking. The Bank cannot be interdicted by the Court at the instance of respondent 1 in the absence of fraud or special equities in the form of preventing irre trievable injustice between the parties. 422 The High Court in the absence of prima facie case on such matters has committed an error in restraining the Bank from honouring its commitment under the bank guarantee. In the result, we allow the appeal, set aside the im pugned judgment and order of the High Court. The appellant is entitled to costs in this Court. S.L.P. (Civil) No. of 1991 (In CC 13 153/91) Since we have set aside the order of the Division Bench of the High Court this Special Leave Petition does not survive and is accordingly dismissed. No costs. V.P.R. Appeal allowed. [/INST]The appellant, an Advocate practising in the High Court was earlier working in the Defence Accounts Department, on re employment, after retiring from the Army. He had filed a Writ Petition before the High Court, claiming certain benefits like pension, gratuity, pay and allowances etc., pertaining to the service rendered by him in the Defence Accounts Department and the Army. The High Court dismissed the Writ Petition. It also dismissed the appellant 's review application. This Court also dismissed his Special Leave Petition against the High Court 's order. Thereafter, the appellant, moved a Contempt Petition under Section 16 of the making some serious allegations against the two Judges of the High Court, who dismissed his Writ Petition and also the Review Petition. A Division Bench of the High Court summarily dismissed the contempt petition. 865 Meanwhile, the Registry of the High Court examined the allegations made in the affidavit filed by the appellant under Rule 5 of the Rules regarding contempts framed by the High Court. A Division Bench of the High Court, before which the matter was placed on the order of the Chief Justice, took cognizance of the criminal contempt and directed issue of notice to the appellant directing him to show cause as to why he should not be punished for contempt of Court. The appellant filed his reply raising certain preliminary objections, contending that the notice was bad for the reasons that (1) the Section of the Act under which cognizance had been taken was not specifically mentioned; (2) the notice did not show sufficient cause as to why the words and expressions used in the offending portions marked had been construed as contemptuous (3) the procedure followed by the High Court was contrary to the rules framed by it; and (4) no consent of the Advocate General had been obtained, and prayed for discharge of the rule of contempt. Meanwhile, on the basis of the High Court 's Order, the appellant inspected the Court records relating to this matter, and thereafter, he was also informed that the proceedings were under the provisions of Article 215 of the Constitution of India. After examining the remarks made by the appellant in his contempt petition the High Court rejected the objections of the appellant/contemner and held that the contemner was guilty of criminal contempt of not only scandalising the Court and lowering its authority but also substantially interfering with the due course of justice. Taking note of the defiant attitude of the contemner who even did not think it necessary to apologise but tried to justify the aspersions, the High Court sentenced the contemner to suffer simple imprisonment for two months. In the appeal before this Court, the contemner who appeared before the Court in person, contended that the order of the High Court should be set aside on the ground of procedural irregularities in that (1) that the offending remarks had not been communicated to him as per Rules 5 and 9 framed by the High Court; (2) that the cognizance of the criminal contempt had not been taken in conformity with Section 15 of the Act; (3) that the procedure, after cognizance as prescribed under Section 17 of the Act had not been followed; and (4) that Article 215 of the Constitution of India did not prescribe any procedure to be followed. He 866 also contended that he had not been given a fair and full hearing and that the Judges had browbeaten and unjustly convicted him ignoring the well settled principle that every person had an inalienable right of making fair criticism, and that the order in question was pre conceived and pre judged one. In his written statement also he made certain remarks about the Judges of the High Court, in attempting to justify his action which had led to the initiation of proceedings for contempt of Court before the High Court. Dismissing the appeal, this Court, HELD: 1.1 The power conferred upon the Supreme Court and the High Court, being Courts of Record under Articles 129 and 215 of the Constitution respectively, is an inherent power and the jurisdiction vested is a special one not derived from any other statute, but derived only from Articles 129 and 215 of the Constitution of India. Therefore, the constitutionally vested right cannot be either abridged by any legislation including or abrogated or cut down. Nor can they be controlled or limited by any statute or by any provision of the Code of Criminal Procedure or any Rules. The special feature of the procedure to be followed in a contempt proceeding being summary procedure, which is recognised not only in India but also abroad, the caution that has to be observed in exercising this inherent power by summary procedure is that the power should be used sparingly, that the procedure to be followed should be fair and that the contemner should be made aware of the charge against him and given a reasonable opportunity to defend himself. [883B D] Sukhdev Singh Sodhi vs The Chief Justice and Judges of the PEPSU High Court, ; ; R.L. Kapur vs State of Madras, ; ; Delhi Judicial Service Association vs State of Gujarat, ; ; section Mulgaokar; , ; Brahma Prakash Sharma and Others vs The State of Uttar Pradesh, ; and D.N. Taneja vs Bhajan Lal, ; relied on. Hira Lal Dixit vs State of U.P., ; ; Advocate General, Bihar vs M.P. Khair Industries, ; ; Ashram M. Jain vs A.T. Gupta, and M.B. Sanghi vs High Court of Punjab and 867 Haryana; , , referred to. State of Bombay vs P. 1958 Bom. Law Reporter, (60) Page 873, referred to. Clements and the Republic Costa Rica vs Erlanger, page 383, Ex parte Terry, ; , 307; , 80 (1888); Matsusow vs United Sates, ; , 339 (5th Cir.) 1956; Sukhdev Singh Sodhi, C.K. Daphtary; Re Abdool vs Mahtab, (1867) 8 WR Cr. 32 page 33; at 40; Andre Paul vs Attorney General, AIR 1936 PC 141, Attorney General vs Butterworth, (1963) 1 Q.B. 696; Reg. vs Odham 's Press Ltd. Ex parte A.G., (1957) 1 Q.B. 73; Morris, vs The Crown Office, , 1081, Offutt vs U.S., ; Jennison vs Baker, 1006, referred to. Belchamber 's Practice of the Civil Court, 1884 Ed. P. 241; Contempt of Court. By Oswald and Halbury 's Law of England (4th Edition) by Lord Hailsham page 3, referred to. 1.2. In the instant case, the offending criticism and the scandalising allegations made by the appellant/contemner are most fatal and dangerous obstruction of justice shaking the confidence of the public in the administration of justice and calling for a more rapid and immediate punitive action. These calculated contemptuous remarks and the sweeping allegations are derogatory in character, not only to the dignity of the Judges and casting aspersions on their conduct in the discharge of their judicial functions but also wounds the dignity of the Court. It is highly painful to note that the appellant/contemner who is none other than an Advocate practising in the same highest Court of the State after having failed to wrench a decision in his favour in his own cause which he prosecuted as party in person has escalatingly scandalised the Court by making libellous allegations which are scurrilous, highly offensive, vicious, intimidatory, malacious and beyond condonable limit. Even a cursory reading of the remarks made against the Judge of the High Court unambiguously show that the potentially prejudicial utterances and the outrageous allegations rumbustiously and invectively made by the contemner with malicious design of attempting to impair the administration of justice have struck a blow on the judiciary and also seriously sullied the image, dignity and high esteem which the office of the Judge of the High Court carried with it and thus impeded the course of justice by fouling its source 868 and stream. The incident in question is a flagrant onslaught on the independence of the judiciary, destructive of the orderly administration of justice and a challenge to the supremacy of the Rule of Law. The maxim "Salus populi suprema lex", that is, "the welfare of the people is the supreme law" adequately enunciates the idea of law. This can be achieved only when justice is administered lawfully, judicially, without fear or favour and without being hampered and thwarted, and this cannot be effective unless respect for it is fostered and maintained. [888E H,889A C] 1.3.To punish an Advocate for Contempt of Court, no doubt, must be regarded as an extreme measure, but to preserve the proceedings of the Courts from the being deflected or interfered with, and to keep the streams of justice pure, serene and undefiled, it becomes the duty of the Court, though painful, to punish the contemner in order to preserve its dignity. No one can claim immunity from the operation of the law of contempt, if his act or conduct in relation to Court or Court proceedings interferes with or is calculated to obstruct the due course of justice. In view of the heinous type of scandalising the Court, the finding of the High Court that the appellant/contemner has made himself guilty of criminal contempt is confirmed. [889D E] 1.4 As regards the sentence, it is clear from the order of the High Court that the appellant had adopted a defiant attitude and tried to justify the aspersions made by him even without thinking it necessary to apologise. Before this Court also, the appellant has neither expressed any contrition nor has he any repentance for the vicious allegations made against the Judges of the High Court. But, on the other hand, he has exhibited a dogged determination to pursue the matter, come what may. A reading of his memorandum of grounds and the written and signed arguments show that he was ventured into another bout of allegations against the High Court Judges and persisted in his campaign of vilification. His conduct in this Court has aggravated rather than mitigating his offence. [889F H] 1.5. Therefore, having regard to the sentencing policy that punishment should be commensurate with the gravity of the offence, the sentence of 2 months ' imprisonment in no way calls for interference and is accordingly confirmed. [890A] </s>
<s>[INST] Summarize the judgementAppeal No. 1641 of 1966. Appeal from the judgment and decree dated March 10, 11, 1965 of the Bombay High Court in Appeal No. 26 of 1958 from Original Decree. L10Sup Cl (NP)/70 14 922 L. M. Singhvi and B. D. Sharma, for the appellant. H. R. Gokhale, Y. section Chitale, Janendra Lal and B. R. Agarwala, for respondent No. 1. The Judgment of the Court was delivered by Bhargava, J. The Union of India, as the owner of the Central Railway, instituted a suit for refund of Rs. 2,76,967/ collected as tax from the Railway Administration by the respondent Municipality during the period from 1931 till the institution of the suit in November, 1954. The facts leading up to the suit are that the G.I.P. Railway, which was a Private Company, had land situated within the limits of the respondent Municipality. On this land, stood the railway station, their Water Reservoir at Bhusi, bungalows of Officers, and certain other buildings. There were also vacant lands and some lands on which railway lines were laid out. In this area, which belonged to the G.I.P. Railway, the Railway Company itself built roads, supplied water from its Bhusi Reservoir, arranged for the lighting, and provided other services. In fact, up to the year 1916, the Railway used to supply water even to the Municipality from its Bhusi Reservoir on payment. The Municipality was governed, at that time, by the Bombay District Municipal Act No. 3 of 1901 (hereinafter referred to as "the Act of 1901") under which a tax on lands and buildings situated within the municipal limits used to be charged @ 4 per cent of the annual rental value, but no tax was levied on the buildings and lands of the G.I.P. Railway in view of section 135 of the Indian Railways Act No. 9 of 1890. In the year 1914, the Government of India issued a notification under section 135 of the Railways Act declaring that the Administration of the G.I.P. Railway shall be liable to pay, in aid of the funds of the local authorities set out in the Schedule, the taxes specified against each of those authorities. Against the 'lame of Lonavla Municipality, which is the respondent in this case, the tax mentioned was house tax. Thus, the exemption granted to the Railway Administration was taken away by this notification in respect of house tax and house tax became payable by the G.I.P. Railway to the respondent. In 1916, the respondent constructed its own water reservoir and became independent of the Railway for water supply, but no water rate was charged from the Railway even thereafter, though water charges for actual quantities of water supplied in three of the bungalows was charged from the occupants of the bungalows. The rest of the Railway Colony continued to be supplied with water from the Railway Reservoir at Bhusi. On 4th May 1916, the respondent promulgated new rules for taxation and, instead of charging separate house tax and water rate it decided to charge a consolidated tax assessed as a rate on 923, buildings and lands in accordance with clause (c) of the proviso to section 59(1) of the Act of 1901. Thereafter, it appears that the respondent demanded this consolidated tax from the Railway in respect of the Railway lands and buildings. The Railway felt that, since, under the notification of 1914, house tax only was payable by the Railway Administration, there was no justification for the respondent to charge consolidated tax from it and, consequently, protested against this payment. Thereafter, on 26th July, 1917, the Government of India issued a fresh notification tinder section 135 of the Railways Act, whereby the Railway Administration was rendered liable to pay what was described as "tax on lands and buildings". On the issue of this notification, the respondent started charging the G.I.P. Railway this consolidated tax and this continued until some time in the year 1927 by which time the G.I.P. Railway was taken over by the Government and became a Government undertaking. In the Rules promulgated on 4th May, 1916, the consolidated tax described as a general rate on buildings and lands was not chargeable on government property. Relying on this provision in the Rules, an objection was raised that the charge of the tax was illegal when the Railway had become government property. Subsequently, the respondent Municipality amended its Rules and promulgated fresh Rules on the 6th October, 1931. By this time, the respondent Municipality had been constituted into a Borough under the Bombay Municipal Boroughs Act No. 18 of 1925 (hereinafter referred to as "the Act of 1925"). These new Rules were thus promulgated under this Act of 1925. Under these Rules, the exemption in respect of government property to the charge of the general rate on buildings and lands, which was contained in the Rules of 1916 was deleted and all lands and buildings within the Municipal Borough became chargeable irrespective of their being owned by the Government. A separate clause was incorporated giving certain exemptions, but, since they do not affect the case before us, they need not be mentioned. In pursuance of these Rules of 1931, the respondent started collecting the consolidated tax assessed as a rate on buildings and lands of the Railway from it. In the year 1940, the Railway Administration preferred an appeal under section 110 of the Act of 1925 against one of the demand notices issued in respect of this tax on the 6th October, 1940. This appeal came up before the Sub Divisional Magistrate Western Division, Poona, who held that the levy of this consolidated tax was ultra vires and set aside the demand notice. On a revision by the respondent under section 111 of the Act of 1925, the District and Sessions Judge set aside the order of the Sub Divisional Magistrate, holding that the imposition of the tax was valid. Against this decision, the Railway Administration filed a revision 924 before the High Court of Bombay under section 115 of the Code of Civil Procedure. The High Court, on 12th February, 1945, refused to exercise its special powers under section 115, C.P.C., with the further remark that the proper remedy to be sought was by means of a suit. Under these circumstances, the Union of India, which had come to be the owner of this Railway under the name of the Central Railway, filed the suit on 27th November, 1954 for refund of the entire amount which was collected by the respondent from the Railway in pursuance of the Rules of 193 1. The trial court held that the levy of this tax was void inasmuch as, under the notification issued on the 26th July, 1917, only the rate on lands and buildings was payable by the Railway Administration. The suit for the refund filed by the Union of India was, on this ground, decreed. On appeal, the ' High Court disagreed with the trial court and held that even the consolidated tax was payable in view of the notification of 26th July, 1917, so that the tax had been rightly collected. The High Court, thereupon, set aside the decree of the trial court and dismissed the suit. It is against this decree that the Union of India has come up in this appeal by certificate under Article 133 of the Constitution. In order to appreciate the submissions made by counsel for parties in this appeal, it is necessary to set out the relevant provisions of section 59 of the Act of 1901 and of section 73 of the Act of 1925 which are as follows : "Section 59 of the Act of 1901. (1) Subject to any general or special orders which the State Government may make in this behalf, any Municipality many impose, for the purposes of this Act, any of the following taxes, that is to say, (i)a rate on buildings or lands or both, situate within the municipal district; (vii) a general sanitary cess for the construction or maintenance, or both construction and maintenance, of public latrines, and for the removal and disposal of refuse; (viii) a general water rate or a special water rate or both for water supplied by the Municipality, which may be imposed in the form of a rate assessed on buildings 925 and lands, or in any other form, including that of charges for such supply, fixed in such mode or modes, as shall be best adapted to the varying circumstances of any class of cases or of any individual case; (ix) a lighting tax; . . Provided further that . . (c) the Municipality in lieu of imposing separately any two or more of the taxes described in clauses (i), (vii), (viii) and (ix) may impose a consolidated tax assessed as a rate on buildings or lands, or both situate within the municipal District. " "Section 73 of the Act of 1925 73. (1) Subject to any general or special orders which the State Government may make in this behalf and to the provisions of sections 75 and 76, a municipality may impose for the purposes of this Act any of the following taxes, namely: (i) a rate on buildings or lands or both situate within the municipal borough; . . (viii)a general sanitary cess for the construction and maintenance of public latrines, and for the removal and disposal of refuse; . . (x) a general water rate or a special water rate or both for water supplied by the municipality, which may be imposed in the form of a 'rate assessed on buildings and lands or in any other form, including that of charges for such supply, fixed in such mode or modes as shall be best adapted to the varying circumstances of any class of cases or of any individual case; (xi) a lighting tax; . . 926 Provided further that . . (c) the municipality in lieu of imposing separately any two or more of the taxes described in clauses (i), (viii), (x) and (xi) may impose a consolidated tax assessed as a rate on buildings or lands or both situated within the municipal borough. " In the year 1914, the respondent Municipality had only levied a rate on buildings an& lands under clause (i) of section 5 9(1) of the Act of 1901. There was no question of imposing a general or special water rate as the respondent had no water works of its own and was taking water supply from the G.I.P. Railway. It was in these circumstances that the notification was issued by the Central Government dated the 13th May, 1914 making the Railway Administration liable to pay house tax to the Municipality of Lonavla. The notification was obviously intended to make the Railway liable to pay the tax which had been imposed as a rate on buildings and lands under section 59(1)(i) of the Act of 1901 by the respondent. Subsequently,, in the year 1916, the respondent Municipality not only arranged for water supply and imposed a general water rate, it proceeded to make rules for imposition of a consolidated tax assessed as a rate on buildings and lands under clause (c) of the second proviso to section 59(1) in lieu of the existing tax imposed as a rate on buildings and lands under clause (i) as well as the water rate, imposed under clause (viii) of section 59(1). Thereafter, the Central Government issued the notification dated 26th July, 1917 under section 135(1) of the Railways Act making the G.I.P. Railway liable to tax on buildings and lands imposed by the Lonavla Municipality. It is to be noted that, in this notification, the Government used the word "tax" and not the word " rate". The tax imposed under section 59(1) was described as "a rate on buildings and lands". If the intention of the Government had been that the G.I.P. Railway should be liable to that tax only, it could have used the word "rate" instead of the word "tax ' in the notification. In fact, if the, notification had been left untouched, the liability of the G.I.P. Railway would have continued to be in respect of the rate on buildings or lands because of the earlier notification of 1914, under which the Railway had been made liable to House tax. The notification of 26th July, 1917 made the Railway liable to tax on buildings and lands obviously because the Government intended that the Railway should be liable to the consolidated tax under clause (c) of the second proviso to section 59(1). Clause (c) permits the imposition of a consolidated tax assessed as a rate on buildings or lands, or both. The moment a tax is assessed as a rate on buildings or lands, it naturally becomes a tax 9 2 7 on building and lands. The fact that it was a consolidated tax was immaterial. It was this consolidated tax which was intended to be made payable by the G.I.P. Railway when the Central Government used the expression "tax on buildings and lands" in place of the earlier words "House Tax" and chose not to refer to the liability being in respect of a rate on buildings and lands. It is true that all taxes are not rates but all rates are taxes. A rate on buildings and lands is 'a tax on buildings, so also any other tax ' assessed as a rate on buildings and lands becomes a tax on buildings and lands. We are unable to accept the submission made by counsel for the appellant that the expression "tax on buildings and lands" used in the notification of 26th July, 1917 could only refer to a rate on buildings and lands under clause (i) of section 59(1) and would not cover the con solidated tax referred to in clause (c) of the second proviso. It is true, as urged by him, that the tax under clause (c) of the second proviso is not identical with, and is different in nature from, the rate on buildings and lands imposed under clause (i), but that circumstance does not imply that it is not a tax on buildings and lands. The mere use of the word "consolidated" cannot make any difference to this interpretation. It is also significant that clause (c) of the second proviso does not purport to lay down that the consolidated tax will be the sum total of the taxes described in clauses (i), (vii), (viii) and (ix). The consolidated tax envisaged by that clause is in lieu of separate imposition of any two or more of the taxes described in clauses (i), (vii), (viii) and (ix) which means that the power to impose. this consolidated tax has been given for the purpose of substituting it for the multiple taxes which could be imposed under those clauses. This consolidated tax cannot, therefore, be held to be of the same nature as the taxes in all those clauses. The intention appears to be that, though the Municipality was empowered to impose four different kinds of taxes, it was permitted under clause (c) of the second proviso to simplify matters by having a single tax on buildings and lands in lieu of those multiple taxes. Such a single tax had to be assessed as a rate on buildings and lands. This being the nature, it obviously becomes a tax on buildings and lands, so that the notification of 26th July, 1917 clearly makes the Railway liable to payment of this tax. The position under the Act of 1925 is exactly the same where also the language of clause (c) to the second proviso is identical with that contained in the Act of 1901, so that the liability imposed on the Railway by the notification of the Government dated 26th July, 1917 under s.135(1) of the rail ways Act continued even under the Act of 1925. It is also significant to note that the Rules, which we 're framed by the Municipality under the Act of 1901 and by the Municipal .Borough later under the Act of 1925 which were promulgated on 928 the 4th May, 1916 and the 6th October, 1931 respectively, described the tax as a general rate on buildings and lands in rule 1. It is true that, in the heading of the Rules, the expression used was that "the Rules were for the levy of a consolidated rate on buildings and lands", but, in the main provision, the tax was described only as "a general rate on buildings And lands". A general rate on buildings and lands is obviously a tax on buildings and lands and would, therefore, be covered by the notification of the Central Government dated 26th July, 1917. Apart from this interpration which we have arrived at on the basis of the language used in the two Acts, the Rules, and the notification of the Central Government, there are two circumstances which indicate that this must be the correct construction of the notification issued by the Central Government. The first circumstance is that, when this notification was issued, the only tax which was being imposed by the Lonavla Municipality which the Central Government could have intended should become payable by the, G.I.P. Railway was the consolidated tax under clause (c) of the second proviso. There was no other tax which could have been covered by this notification. In fact, the notification would be meaningless if we were to hold that this consolidated tax is not covered by the expression "tax on buildings and lands". This notification was issued while the earlier notification of 1914 was ,already in existence and, if the intention was to cover only the rate mentioned in clause (i) of section 59(1), there was no need to issue this fresh notification as the liability of the Railway to pay that tax already existed under that notification of 1914. The second circumstance that we can take notice of is the historical background in which this notification of 26th July, 1917 was issued. It appears that, after the Rules for imposition of this consolidated tax came into force in 1916, the Municipality demanded payment of this consolidated tax from the G.I.P. Railway. Thereupon, the Agent of the G.I.P. Railway Company wrote a letter to the Secretary, Railway Board, Simla, on the 1st December, 1916, stating that the Company did not agree that it should pay the new consolidated tax as it comprised a house tax and a water rate. The Company had its own arrangements for the supply of water and it was obviously unfair that it should be called upon tO pay any tax which includes a water rate, when no municipal water was being consumed by the Railway at Lonavla. The Secretary, Railway Board, forwarded this letter to the Secretary to the Government of Bombay, General Department, with a letter dated 12th December, 1916, enquiring whether the Agent 's information was correct and, if so, whether the Bombay Government had any remarks to offer on the, Agent 's 92 9 contentions. On 11th May, 1917, the Secretary to the Government of Bombay replied to the Secretary, Railway Board, pointing. out that, originally, the Municipality, proposed to levy a general water rate on all houses, in addition to the existing house tax, but, on representations from property owners of Lonavla and Khandalla, it had decided to. impose a consolidated rate on buildings and lands in lieu of the house tax and the proposed general water rate. Consequently, they were, levying, in lieu of house tax, a consolidated rate, which included a general water rate, on a sliding scale, on all properties situated within the municipal limits. The water rate imposed was not intended to cover expenses on any service rendered in the nature of a general tax as opposed to a service tax. In equity, the Railway Company 's property in Lonavla had no better right to exemption than the properties of private individuals who, although they did not take private pipe connections, were paying the general water rate. In these circumstances, a request was made to the Secretary, Railway Board, to move the Government of India to declare the Administration of the G.I.P. Railway liable to pay to the Lonavla Municipality the consolidated tax on buildings and lands in lieu of the, housetax in respect of the railway properties situated within the municipal limits. It was suggested that the Schedule annexed to the notification dated 13th May, 1914 may be amended accordingly. It was in pursuance of this move by the Bombay Government that the notification of 26th July, 1917 was issued by the Central Government. That the notification of 26th July, 1917 was issued in pursuance of this correspondence is clarified by the Memorandum dated 17th August, 1917, with which a copy of the new notification was forwarded by the Government of India, Railway Department (Railway Board) to the Secretary to the Government of Bombay. These circumstances, in which the notification of 16th July, 1917 was issued, make it plain that the Government of India, when they used the expression ' 'tax on buildings and lands" in the notification, intended to make the G.I.P. Railway liable to the consolidated tax which had been imposed by the Municipality under the Rules of 1916. The decision of the Bombay High Court in Borough Munici . pality, Ahmedabad vs Ahmedabad Manufacturing and Calico Printing Co. Ltd. (1) on interpretation of, section 73 and 1 1 0 of the Act, of 1925 also supports the view that we have taken above. The, question that arose in that case was whether the right of an appeal ' envisaged by using the expression "in the case of a rate on buildings or lands or both" in section 110 could be availed of in respect of, a general water rate imposed under clause (x) of section 73(1) which described that tax as a general water rate imposed in the form of a. (1) , 930 rate assessed on buildings and lands. It was held that there was no distinction between a rate on buildings or lands and a tax in the form of a rate assessed on buildings or lands. In the case before us, ,on that analogy, a consolidated tax assessed as a rate on buildings and lands cannot be distinguished from a tax on buildings and lands. Reference may also be made to a decision of the Allahabad High Court in Raza Buland Sugar Co., Ltd. Rampur vs Municipal Board, Rampur(1) where it was held that a water rate is a tax on buildings and lands and is not, in fact, a service tax chargeable in respect of water supplied. Counsel for the appellant referred to a decision of the Madras High Court in Municipal Council, Cuddappah vs M & section M. Ry. Co. Ltd.(1); but that case is of no assistance as it turned on the special language which had been used in the Act and the notification which came up for consideration in that case. In fact, the expression that had to be interpreted was "property tax" and not "tax on buildings and lands". We agree with learned counsel for the appellant that much assistance cannot be derived from the decision of this Court in Patel Gordhandas Hargovindas vs Municipal Commissioner, Ahmedabad ( 3 ) which was relied upon by the High Court. However, as we have held ,above, on the proper interpretation of the language used in the two Acts, the Rules, and the notification, and taking into account the circumstances under which the notification of 1917 was issued, the only conclusion that can be arrived at is that the Railway was made liable to this consolidated tax, so that the decision of the High Court is perfectly correct. The appeal fails and is dismissed with costs. R.K.P.S. Appeal dismissed. (1) A.I.R. 1962 Alld. (2) A.I.R. 1929 Mad. 746. [/INST]The respondent Municipality, which at the time was governed by the Bombay District Municipal Act 3 of 1901 levied a tax on lands and buildings situated within its municipal limits at 4 per cent of the annual rental value. However, no such tax was levied on the buildings and lands of the G.I.P. Railway situated within its limits in view of section 135 of the Indian Railways Act, 9 of 1890. In 1914,the Government of India issued a notification under section 135 persuant to which the G.I.P. Railway administration was required to pay house tax to the respondent. Upto 1916 the respondent municipality used to draw water from the Railway 's reservoir but constructed its own reservoir during that year. Both prior to and after this date, no water rate was charged by the respondent municipality from the railway. On 4th May, 1916 the respondent promulgated new rules for taxation and instead of charging separate house tax under section 59(1)(i) or a general water rate under section 59(1) (viii) of the Act of 1901, it decided to charge a consolidated tax assessed as a rate on buildings and lands in accordance with clause (c) of the proviso to section 59(i). Although the respondent demanded this consolidated tax from the railway in respect of its lands and buildings, the railway resisted payment contending that under the notification of 1914, house tax only was payable by it. On 26th July, 1917, the Government of India issued a fresh notification under section 135 of the Railways Act whereby the railway administration was rendered liable to pay what was described as "tax on lands and buildings". Thereafter the respondent charged the railway the consolidated tax until some time in 1927 when the G.I.P. railway was taken over by the Government. In the rules promulgated on 4th May, 1916, the consolidated tax was not chargeable on Government property. Relying on this provision, an objection was raised that the charge of tax was illegal when the railway had become Government property. The respondent Municipality amended its rules and promulgated fresh rules on 6th October, 1931 under the provisions of the Bombay Municipal Boroughs Act 18 of 1925 under which enactment the respondent municipality had by that time been constituted into a Borough. Under these rules the exemption in respect of Government property was deleted. In pursuance of these amended rules the respondent started collecting from the railway the consolidated tax assessed as a rate on its buildings and lands which was by then being levied under the provisions of s.73 of the Act of 1925 that were similar to those of s.59 of the Act of 1901. In 1940 the railway administration preferred an appeal under section 110 of the Act of 1925 against one of the demand notices. Although the 921 First Court set aside the demand notice, an appeal was eventually dismissed by the High Court with the remark that the proper remedy to be sought was by means of a suit. The Union of India which had become the owner of the railway, field a suit in November 1954 for refund of the entire amount which was collected by the respondent from the railway in pursuance of the rules of 1931. The, Trial Court granted a decree holding that the levy of this tax was void inasmuch as, under the notification issued on the 26th July, 1917, only the rate on lands and buildings was payable by the Railway Administration. On appeal, the High Court disagreed with the trial court and set aside the decree. , Oil appeal to this Court by a certificate under article 133 of the Constitution. HELD : Dismissing the appeal, On the proper interpretation of the language used in two Acts, the Rules, the notification, and taking into account the circumstances under which the notification of 1917 was issued, the only conclusion that could be arrived at was that the Railway was made liable to the consolidated tax. It is true that all taxes are not rates; but all rates are taxes. A rate on buildings and lands is a tax on buildings; so also any other tax assessed as a rate on buildings and lands becomes a tax on buildings and lands. It was not possible to accept the submission of the appellant that the expression "tax on buildings and lands" used in the notification of 26th July, 1917 could only refer to a rate on buildings and lands under clause (i) of section 59(1) and would not cover the consolidated tax referred to in clause (c) of the second proviso. Although the tax under clause (c) of the second proviso is not identical with and is different in nature from,the rate on buildings and lands imposed under clause (i), that circumstance does not imply that it is not a tax on buildings and lands. The mere use of the word "consolidated" cannot make any difference to this interpretation. The intention appears to be that, though the Municipality was empowered to impose four different kinds of taxes, it was permitted under clause (c) of the second proviso to simplify matters by having a single tax on buildings and lands in lieu of those multiple .axes. Such single tax had to be assessed as a rate on buildings and lands. This being the nature, it obviously becomes a tax on buildings and lands, so that the notification of 26th July, 1917 clearly makes the Railway liable to payment of this tax. The position under the Act of 1925 is exactly the same where also the language of clause (c) to the second proviso is identical with that contained in the Act of 1901, so that the liability imposed on the Railway by the notification of the Government dated 26th July, 1917 under section 135(1) of the Railways Act continued even under the Act of 1925. [927 B H] Borough Municipality, Ahmedabad vs Ahmedabad Manufacturing and Calico Printing Co. Ltd., ; Raza Buland Sugar Co. Ltd. Rampur vs Municipal Board, Rampur, A.I.R. 1962 Alld. 83, Municipal Council, Cuddappah vs M.,& S.M. Ry. Co. Ltd., A.IR and Patel Gordhandas Hargovindas vs Municipal Commissioner, Ahmedabad, ; ; referred to. </s>
<s>[INST] Summarize the judgementAppeal No. 347 of 1966. Appeal by special leave from the judgment and order dated December 11, 1963 of the Allahabad High Court in second Appeal No, 3809 of 1958. 1008 C. B. Agarwala, O. P. Rana and Ravindra Rana, for the appellants. Denial Latifi and M. 1. Khowaja, for respondent No. 1. The Judgment of the Court was delivered by Grover, J. This is an appeal by special leave from a judg ment of the Allahabad High Court in which the principal question for determination is whether section 9 of the Indian , hereinafter called the "Act", which came into force on December 30, 1955, would be applicable to a suit which was pending on that date. Respondent No. 1 was born on July 3, 1934. He went to Pakistan in October 1950. In March 1953 he obtained a visa from the Indian High Commission in Pakistan for coming to India. He came to India on July 22, 1953. On July 20, 1954 the period of authorised stay expired and respondent No. 1 applied for permanent settlement in India. He, however. filed a writ petition in the High Court on July 15, 1954 but the same was dismissed on February 10, 1955 and respondent No. 1 was directed to file a suit. He instituted a suit on May 6, 1955. He claimed that he was born in India of parents who were residing here and that he was a minor when he was persuaded by two muslim youths to accompany them on a trip to Pakistan. He went there without any intention to settle there permanently. Later on he made efforts to return but due to certain restrictions he was unsuccessful. He had no alternative but to obtain a passport from the Pakistan authorities in order to come to India. He had thus never changed his nationality and continued to remain a citizen of India. He sought a permanent injunction res training the Union of India, the State of U.P., District Magistrate, Kanpur and the Superintendent of Police. Kanpur. who were impleaded as defendants from deporting him. The suit was contested and on the, pleadings of the parties the appropriate issues were framed. The learned Munsif held that respondent No. 1 had gone to Pakistan for settling there permanently and had ceased to be an Indian citizen. The suit was dismissed. Respondent No. 1 appealed to the First Additional Civil Judge, Kanpur. The Teamed Judge was of the view that respondent No. 1 had gone to Pakistan when he was a minor and when his father, who was his guardian, was in India. By his departure to Pakistan, respondent No. 1 could not change his nationality. Even on a consideration of the evidence it could not be held that he had shifted to Pakistan with the intention of settling there permanently. His appeal was allowed and a permanent injunction as prayed was issued. The Union of India and other appellants preferred an appeal to the High 1009 Court. Before the High Court a preliminary objection was taken that the civil court had no jurisdiction to try the question whether respondent No. 1 had acquired the citizenship of Pakistan which matter had to be referred to the Central Government under Rule 30 of the Citizenship Rules framed under the Act. This objection was repelled in view of another decision of the High Court according to which section 9 of the Act and Rule 30 could not operate retrospectively and affect pending litigation. Before the High Court the finding that respondent No. 1 did not go to Pakistan with the intention of settling there permanently was not challenged by the appellants. The High Court was inclined to agree with the lower appellate court that so long as respondent No. 1 was a minor he could not change his Indian domicile because his parents were domiciled in this country. The High Court proceeded to say that since respondent No. 1 had spent one year in Pakistan after he had ' obtained majority it was necessary to investigate whether he had acquired, during that period, the citizenship of Pakistan. An appropriate issue was framed and remitted to the lower appellate court for its determination. The appellate court held that respondent No. 1 had not acquired the citizenship of Pakistan since it was not legally possible for him to do so for the reason that according to laws of Pakistan he could become a major only on attaining the age of twenty one. On December 11, 1963 the High Court disposed of the appeal of the present appellants by dismissing it in view of the findings which were in favour of respondent No. 1. Learned counsel for the appellants had contended before us that the civil court had no jurisdiction to decide the question of citizenship after the enforcement of the Act towards the end of the year 1955 in view of the provisions of Rule 30 of the Citizenship Rules 1956 promulgated in exercise of the Dower conferred by section 1 8 (2) (h) of the Act. Section 9 is in the following terms "section 9(1) Any citizen of India who by naturalisation, registration or otherwise voluntarily acquires, or has at any time between the 26th January 1950 and the commencement of this Act, voluntarily acquired the citizenship of another country, shall upon such acquisition or, as the case may be, such commencement, cease to be a citizen of India : Provided that nothing in this sub section shall apply to a citizen of India who during any war in which India may be engaged, voluntarily acquires the citizenship of another country, until the Central Government otherwise directs. 1010 (2) If any question arises as to Whether, when or how any person has acquired the citizenship of another country, it shall be determined by such authority in such manner and having regard to such rules of evidence, as may be prescribed in this behalf. " Rule 30 provides: "Authority to determine acquisition of citizenship of another country. (1) If any question arises as to whether, when or how any person has acquired the citizenship of another country, the authority to determine such question shall, for the purpose of section 9(2) by the Central Government. The Central Government shall in determining any such question have due regard to the rules of evidence. specified in Schedule III. " The validity of the provisions of the Act and the Rules is no longer open to challenge. 'It has not been disputed by learned counsel for respondent No. 1 that after the enforcement of the Act and promulgation of Rule 30 the only authority which is competent to determine whether citizenship of Pakistan has been acquired by him is the Central Government. But it has been strenuously urged that the suit in the present case had been instituted prior to the date of enforcement of the Act and therefore respondent No. 1 was entitled to get this question determined by the Courts and not by the Central Government. In other words section 9 of the Act cannot be given 'retrospective operation so as to be made applicable to pending proceedings. Thus the first point which has to be decided is whether section 9 either expressly or by necessary implication has been made applicable to or would govern pending proceedings. The language of sub section (1) is clear and unequivocal and leaves no room for doubt that it would cover all cases where an Indian citizen has acquired foreign nationality between January 26, 1950 and its commencement or where he acquires such nationality after it ; commencement. The words "or has at any time between the 26th January 1950 and the, commencement of this Act. voluntarily acquired the citizenship of another country" would become almost redundant if only prospective operation, is given to section 9 (1) of the Act. This according to the settled rules of intepretation cannot be done. It must be remembered that Article 9 of the Constitution provides that no person shall be a Citizen of India by virtue of article 5 or be deemed to be a citizen of India by virtue of article 6 or article 8 if he has voluntarily acquired the citizenship of any foreign State. , This. means that if prior to the commencement of the Constitution a person ' had voluntarily acquired the citizenship of any foreign State he was not entitled ' to ' 'claim the citi 1011 zenship of India by virtue of articles 5 and 6 or 8. This article thus deals with cases where the citizenship of a foreign State had been acquired by an Indian citizen prior to the commencement of the Constitution (vide Izhar Ahmed Khan vs Union of India) (1). Article 11, however, makes it clear that Parliament has the power to make any provision with respect to the acquisition and termination of citizenship and all other matters relating to citizenship. The Parliament could thus regulate the right of citizenship by law. As pointed out in the above decision of this Court it would be open to the Parliament to affect the rights of citizens and the provisions made by the Parliamentary statute cannot be impeached on the ground that they are inconsistent with the provisions contained in other Articles, in Part II of the Constitution. The Act has been enacted under the powers of the Parliament preserved by article 11 in express terms. The Parliament had also legislative competence under Entry 17, List I of Seventh Schedule. It could thus make a provision about the forum where the question as to whether a person had acquired citizenship of another country could be determined and this is what has been done by Rule 30. The cases that would ordinarily arise about loss of Indian citizenship by acquisition of foreign citizenship would be of three kinds: (1) Indian citizens who voluntarily acquired citizenship of a foreign State prior to the commencement of the Constitution; (2) Indian citizens who voluntarily acquired the citizenship of another State or country between January 26, 1950 and December 30, 1955 i.e. the date of commencement of the Act and (3) Indian citizens who voluntarily acquired foreign citizenship after the date of commencement of the Act i.e. December 30, 1955. As regards the first category they were dealt with by article 9 of the Constitution. The second and the third categories would be covered by the provisions of section 9 of the Act. If a question arises as to whether, when or how an Indian citizen has, acquired the citizenship of another country that has to be determined by the Central Government by virtue of the provisions of sub section (2) of section 9 read with Rule 30 of the Citizenship Rules. Counsel for respondent No. 1 has relied on a decision of a learned Single Judge of the Allahabad High Court in Abida Khatoon & Another vs State of U.P. & Ors. (2) which was followed in the present case. There it was observed that a litigant, after filing a suit, acquired a vested right to have all questions determined by the court in which the suit was filed and that the institution of the suit carried with it all the rights of appeal then in force. Referring to the normal principle that an Act is ordinarily not retrospective, that vested rights are not disturb (1) [1962] Supp 3 section R. 235, 244, 245, (2) A.I.R. 1963 All. 1012 ed and that the jurisdiction of the civil courts in pending cases is not taken away by the creation of a new tribunal for the determination of a particular question, the learned judge held that there was nothing in the language or the scheme of the Act to suggest that Parliament wanted to depart from these principles. We are unable to agree. In our judgment from the amplitude of the language employed in section 9 which takes in persons in category (2) mentioned above the intention has been made clear that all cases which come up for determination where an Indian citizen has voluntarily acquired the citizenship of a foreign country after the commencement of the Constitution have to be dealt with and decided in accordance with its provisions. In this view of the matter the entire argument which prevailed with the Allahabad court can have no substance. It has next been contended that retrospective operation should not be given to section 9 of the Act because loss of Citizenship is a serious and grave matter and it involves loss of personal liberty. Under article 21 no person can be deprived of his life or personal liberty except according to procedure established by law. The procedure established by law before the commencement of the Act was the ordinary procedure of determination by civil courts whenever a question arose about loss of Indian citizenship by acquisition of citizenship of a foreign country or State. It is suggested by learned counsel for respondent No. 1 that by giving retrospective operation to section 9 so as to make it applicable to pending proceedings the provisions of article 21 win be contravened or violated. This would render section 9 of the Act unconstitutional. It is somewhat difficult to appreciate the argument much less to accede to it. If the Parliament was competent under article 11, which is a constitutional provision read with the relevant Entry in List 1, to legislate about cases of persons belonging to categories 2 and 3 referred to at a previous stage it could certainly enact a legislation in exercise of its sovereign power which laid down procedure different from the one which obtained before. The new procedure would itself become the "procedure established by law" within the meaning of article 21 of the Constitution. Therefore even on the assumption that loss of Indian citizenship with consequent deportation may involve loss of personal liberty within the meaning of article 21, it is not possible to hold that by applying section 9 of the Act and Rule 30 of the Rules to a case in which a suit had been instituted prior to the commencement of the Act there would be any contravention or violation of that Article. In conclusion it may be mentioned that this could, in several cases, has consistently held that questions falling within section 9(2) have to be determined to the extent indicated therein by the 1013 Central Government and not by the courts. Such matters as are not covered by that provision have, however, to be determined by the courts; (see Akbar Khan Alam Khan & Anr. vs The Union of India & Ors. (1) and lzhar Ahmed Khan vs Union of India) (2) and The Government of Andhra Pradesh vs Syed Mohd. Khan) (3). In the present case the High Court ought not to have called for a decision of the lower appellate court on the issue of the plaintiff having acquired or not acquired the citizenship of Pakistan between July 3, 1952 and the date of his return to India. The appeal is, consequently, allowed and the order of the High Court is hereby set aside. It will be for the High Court now to make appropriate orders for determination of the aforesaid question by the Central Government after which alone the High Court will be in a position to dispose of the appeal finally. Costs will abide the result. G.C. Appeal allowed. (1) [1962] 1 S.C.R.779. (2) [1962] Supp. 3 S.C.R. 235. (3) (1962] Supp. 3 S.C.R. 288. LlISup C.1/69 2,500 31 3 70 GIPF. [/INST]Applications, in which the claim of the workmen of the appellant for computation of their benefit in respect of over time work and work done on weekly off days, were entertained by the Labour Court, under section 33C(2) of the . The Labour Court computed the amounts due to the various workmen and directed the appellant to make the payments. Writ petitions filed by the appellant in the High Court challenging the decision of the Labour Court were dismissed. In appeal to this Court, it was contended that : (1) The jurisdiction of the Labour Court to proceed with the applications was barred by the provisions of the ; and (2) Even if the applications were competent and not barred by the , they were time barred under article 137 of the . HELD : (1) The is concerned with the fixing of rates rates of minimum wages, overtime rates, rates for payment of work on a day of rest and is not intended for enforcement of payment of wages. Under section 20(1) of the, , in which provision is made for seeking remedy in respect of claims arising out of payment of less than minimum rates, or in respect of remuneration for days of rest, or for work on such days, or of wages at the overtime rates, the Authority is to exercise jurisdiction for deciding claims which relate to rates of wages, rates for payment of work done on days of rest and overtime rates. The power under section 20(3) of the given to the Authority dealing with an application under section 20(1) to direct payment of the actual amount found due, is only an incidental power for working out effectively the directions under section 20(1) fixing various rates under the Act. That is, if there is no dispute as to rates between the employer and the employee and the only question is whether a particular payment at the agreed rate is due or not, then section 20(1) of the would not be attracted at all, and the appropriate remedy would only be either under section 15(1) of the , or under section 33C(2) of the . [59 D G; 60 B C] In the present case, there was no dispute by the appellant about the rates put forward by the workmen; and a pleading by the, appellant in one ' of the applications that the State Government had not prescribed any rates under the , did not mean that there was a dispute as to the rates claimed by the workmen. Therefore, the remedy under section 20(1) of the could not have been sought by the workmen, and hence, the question of the jurisdiction of the Labour Court to entertain the applications under section 33C(2) of the industrial Disputes Act being barred because of the, provisions of the , could not arise.[61 A D] 52 (2) (a) Though the question of limitation under article 137 of the 1963Act was not raised either in the Labour Court or the High Court, it could be allowed to be raised in this Court, because, a question of limitation raises a plea of want of jurisdiction and is a pure question of law, when it could be decided on the basis of the facts on the record, and the respondents had sufficient notice of the question. [55 G H] (b) Article 137 of the governs only applications presented to courts under the Civil and Criminal Procedure Codes. The use of the word 'other ' in the first column of the article giving the description of the application as 'any other application for which no period of limitation is provided elsewhere in this division ', indicates that the Legislature wanted to make it clear that the interpretation put by this Court in Mulchand vs Gopal Bhiva; , , 722 723 on article 181 of the 1908 Act on the basis of ejusdem generis should be applied to article 137 of 1963 Act also, the language of which, is only slightly different from that of article 181 of the 1908 Act. That is, in interpreting article 137 of the 1963 Act regard must be had to the provisions contained in the earlier articles. These articles refer to applications under the Code of Civil Procedure, to two cases of applications under the Arbitration Act, and to two cases of applications under the Code of Criminal Procedure. This Court in Mulechand & Co. Ltd. case held that the reference to applications under the Arbitration Act had no effect on the interpretation of article 181 of the 1908 Act and that, that article applied only to applications under the Code of Civil Procedure. On the same principle, the further alteration made in, the articles in 1963 Act containing reference to applications under the Code of Criminal Procedure could not alter the scope of article 137 of the 1963 Act. Moreover even the applications under the Arbitration Act were to be presented to courts whose proceedings are governed by the Code of Civil Procedure. The further amendment including applications governed by the Criminal Procedure Code still shows that the applications must be to courts. The alterations in the 1963 Act, namely, the inclusion of the words 'other proceedings ' in the long title to the 1963 Act, the omission of the, preamble and change in the, definition so as to include 'petition ' in word 'application ', do not show an intention to make article 137 applicable to proceedings before bodies other than courts such as quasi judicial tribunals and executive bodies. [63 D H; 64 A G; 65 B F] In the present case, since the applications were presented to the Labour Court, a tribunal which is not a court governed by the Civil or Criminal Procedure Codes, the applications are not governed by article 137 of 1963 Act. [65 G H] Manager Mls. P. K. Porwal vs The Labour Court at Nagpur, 70 B.L.R. 104, overruled. </s>
<s>[INST] Summarize the judgementAppeal No. 34 of 1957. Appeal from the judgment and order dated August 31, 1955, of the Labour Appellate Tribunal of India, Calcutta in Appeal Nos. Cal 187 & Cal 188 of 1954, arising out of the Award dated May 15, 1954, of the 328 Industrial Tribunal, Assam in Reference No. 20 of 1953 published in the Assam Gazette dated June 16, 1954. C.B. Aggarwala and K. P. Gupta for the appelants. P.K. Goswami, section N. Mukherjee and B. N. Ghosh, for the respondent. March 31. The Judgment of the Court was delivered by KAPUR J. In this appeal brought by special leave against the order of the labour Appellate Tribunal, Calcutta dated August 31, 1955, the controversy between the parties is confined to the question of bonus. The appellants are the workmen including members of the Indian staff and artisans employed by the respondent, the Assam Co. Ltd., a company incorporated in the United Kingdom and engaged in tea, industry in the State of Assam. The appellants claimed bonus for the years 1950, 1951 and 1952 at the rate of 6 months ' wages per year. The respondent offered to the Indian staff excluding the artisans Rs. 51,061 as bonus for 1950, Rs. 48,140 for 1951 and Rs. 15,493 for 1952 which works out at 2.3% of the net profit for the year 1950, 3.1 % for the year 1951 and 3.9 % for the year 1952. This dispute was referred to the Industrial Tribunal by a notification of the Assam Government dated August 27, 1953. The Industrial Tribunal allowed depreciation as given in the company 's balance sheets for the three years and allowed as return on the paid up capital and on the reserve 7% and 5% respectively and held the artisans also to be entitled to bonus. For the purpose of mode of payment the Industrial Tribunal accepted the " unit scheme" under which the company had been paying bonus since the year 1926. It was of the opinion that the scheme was fair and rational and gave incentive to industrial efficiency and to production. Both the appellants and the respondent appealed against this order, the former as to the correctness of 329 the accounts, the amount of the return on capital and reserves and the " unit scheme " and again claimed six months ' wages per year as bonus. The latter appealed against the percentages allowed on the capital and the reserves and claimed 10% and 8% respectively as a fair return. It objected to the inclusion of the artisans amongst the workmen eligible for bonus and also to the application of what is known as the Bombay formula to Tea industry. The Labour Appellate Tribunal varied the Tribunal 's award and allowed depreciation at the rate allowable under the Indian Income Tax Act, confirmed 7% on the paid up capital but raised the return on the reserves from 5% to 6% in order to meet the claim of the company for rehabilitation which though not claimed before the Industrial Tribunal, was put forward before it as a basis for increase in return on reserves. In this Court the appellants again repeated their objection to the amount of depreciation, the return on capital and on reserves and to the " unit scheme " but were prepared to confine their claim to two months ' was as bonus. Counsel for the respondent objected to the applicability of the formula to an industry like the 'tea industry, his contention being that circumstances and considerations applicable to the textile industry cannot apply to Tea industry which, being connected with agriculture, is affected by various factors which must be taken into consideration in the matter of depreciation, return oil capital and return on reserves. The principles on which the ascertainment of the surplus on the basis of which bonus becomes determinable and distributable have been laid down by this Court in Sree Meenakshi Mills vs Their Workmen The formula there laid down is: " Distributable surplus has to be ascertained after providing from the gross profits for (1) depreciation, (2) rehabilitation, (3) return at 6 per cent. on the paid up capital (4) return on the working capital at a lesser but reasonable rate, and (5) for an estimated amount in respect of the payment of income tax." (1) ; 42 330 Under this formula the depreciation allowable in cases arising under the Industrial Disputes Act is the normal depreciation including shift depreciation. We did not understand counsel for the respondent to contend that there was anything in the formula which was wrong in principle but that it had to be adjusted to suit the circumstances of the Tea industry. No circumstances, were however, given by him which would make it unfair to apply the formula nor were any figures or particulars furnished for varying it in regard to depreciation. The Industrial Tribunal allowed 7% return on capital as against 6% held allowable under the formula. Its reasons for this increase were : That the tea industry here may have often to face various adverse circumstances more adverse than those that may come upon other industries and may have more risks than other industries. It may however be noted that the company in the instant case is more than a Century old one faring well all through and has thus been so far a prosperous one and on a sound footing and as such it is expected to have built up a substantial reserve. " The Labour Appellate Tribunal maintained this higher rate of return on capital on the ground " of its being exposed to greater risks than any other industry namely weather, pests in the plants and gradual deterioration of the soil over which no man has any control These additional risk factors are no doubt present in an industry connected with agriculture like the tea industry and in our opinion they justify the giving of a higher rate of return on capital. Instead of 4% allowed by the formula the industrial Tribunal fixed the return on reserves at 5% on the ground of its being sufficient to guard the interests of the company but the Labour Appellate Tribunal increased it to 6% to meet replacements and rehabilitation charges since the " usual method of calculating these charges is not possible in the present case " and, " we are to see that the industry does not. suffer for want of replacement and rehabilitation funds and must 331 provide such funds in some other way, namely, by allowing a return on the working capital at higher rates ". In the absence of any claim in the respondent 's Written Statement for rehabilitation or any figures for determining this amount, this extra one per cent. is insupportable. It is not a case where a claim could not be made or figures could not have been given at the proper stage. The additional one per cent. cannot therefore be allowed. In our opinion the reasons given by the Industrial Tribunal sufficiently support the giving of 5% on the reserves as being fair considering the risks of the tea industry which is exposed to various adverse circumstances and elements. The Industrial Tribunal has not acted unreasonably nor in disregard of any accepted principles in calculating the return on reserves at 5% and we see no cogent 'reason for varying this rate. The respondent has, since 1926, been paying bonus to its employees according to a scheme called the " unit scheme " which according to the Industrial Tribunal has the merit of being more rational and gives incentive to industrious habits and efficiency loading to more production. The Labour Appellate Tribunal did not go into the merits of the scheme but ordered payment according to it. Under this scheme units are credited to each workman, taking into consideration the importance of the job he holds, the wages he gets and the number of years he has been employed in that particular job. The value of units so awarded thus vary commensurate with considerations of efficiency and experience. The establishment is divided into twelve categories and the medical staff into three each based on the relative importance of the nature of work done by a workman. Thus in the descending order of their importance the jobs are classified as: 1. Head Mohori; 2. Head Clerk; 3. Divisional Mohori ; 4. Land Mohori; Hazaria Mohori; 5. Kamjari Mohori; 6. Godown Mohori; 7. 2nd Tea House Mohori; 2nd Kerani; 2nd Hazaria Mohori; 8. 2nd Godown Mohori; 9.Gunti Mohori; 10. 3rd Tea House Mohori; 11.Mondal; 12. Apprentices. Units would thus be awarded to workmen in the 332 particular category they are in and the more qualified the worker the better his work and the higher his wage, the higher the number of units he would be entitled to. The amount available for distribution as bonus is divided by the aggregate number of units of all the workmen participating in the scheme and each worker would be entitled to a multiple of the amount payable on one unit and the units to his credit. It appears to us that the estimate of the Industrial Tribunal as to the suitability of the scheme was fully justified and payment of bonus in accordance with this scheme will not only result in fair distribution of bonus but would also lead to improvement in the quality and quantity of work. This scheme is not to be confused with production bonus though it has the merit of combining the fair distribution of the surplus available and the maintenance of efficiency in the establishment. Taking the figures on the basis of the award made by the Industrial Tribunal we find that Rs. 7,64,608 would be the surplus for the year 1950, Rs. 77,823 for 1951 and a deficit of Rs. 10 lacs for the year 1952. The total sum available for three years will be nil. On the basis of the claim which counsel for the appellant has made before us, i. e., two months ' wages, we find that the amount of bonus required for the members of the staff for the year 1950 will be one sixth of Rs. 4,63,095 and for the year 1951, one sixth of Rs. 4,83,893 and for 1952 one sixth of Rs. 5,31,202 which works out to Rs. 77,182 for 1950, Rs. 80,647 for 1951 and Rs. 88,533 for 1952. The amounts required for the artisans further increase these figures. No doubt on the calculations which have now been made the appellant may justify the claim of two months ' bonus for the year 1950 but the same cannot be said in regard to It )he claim for the years 1951 and 1952 because of the available surplus which is only Rs. 77,823 for 1951 and there is a deficit of about 10 lacs of rupees for the year 1952. Taking all these figures into consideration, we are of the opinion that the amounts awarded by the Industrial Tribunal are fair and proper. As the Labour Appellate Tribunal 333 allowed depreciation and rehabilitation on an erroneous basis, we would set aside the order of the Labour Appellate Tribunal and would restore that of the Industrial Tribunal with this modification that the Respondent shall make available the additional amount required for payment of the proportional bonus to the artisans. The appeal is, therefore, allowed to this extent, the order of the Labour Appellate Tribunal set aside and the award of the Industrial Tribunal restored with this modification that the respondent shall also provide an additional amount for these three years for payment to the artisans of proportionate bonus on the basis of the " Unit System ". As neither of the parties have succeeded in their main contentions, the fair order in regard to costs should be that the parties do bear their respective costs throughout. [/INST]The appellants claimed bonus for the years 1950, 1951 and 1952 at the rate of six months ' wages per year. The Industrial Tribunal to which the dispute was referred allowed, in calculating the surplus available for payment of bonus, inter alia return on paid up capital and on the reserves at 7% and 5% respectively and accepted the " unit scheme " of payment of bonus which the company had been following since 1926. Under this scheme units were credited to each workman taking into consideration the importance of the job he held, the wages he got and the number of years he had been employed in that particular job, and each workman was paid bonus in proportion to the units to his credit. On appeal the Labour Appellate Tribunal modified the award and raised the return on the reserves from 5% to 6% : Held, that the formula laid down in Sree Meenakski Mills vs Their workmen, ([1958] S.C.R. 878 at 884) for ascertaining the surplus on the basis of which bonus becomes determinable and distributable could be applied to the tea industry with suitable adjustments. The allowing Of 7% return on capital as against 6% held allowable under that formula was justified by the additional risk factors in the tea industry. The allowing Of 5% return on reserves by the Industrial Tribunal as against 4% allowed by the formula was not unreasonable, it being sufficient to safeguard the interests of the company. But the increasing of this to 6% by the Appellate Tribunal was insupportable in the absence of any claim in the respondent 's written statement for rehabilitation or ,of any figures for determining this amount. The " unit scheme " was suitable for the payment of bonus and would result not only in the fair distribution of bonus but would also lead to improvement in the quality and quantity of work. </s>
<s>[INST] Summarize the judgementAppeal No. 118 of 1955. Appeal from the judgment and order dated May 26, 1954, of the P.E.P.S.U. High Court in Misc. Case No. 31 of 1953. G. N. Joshi and R. H. Dhebar, for the appellant. The respondent did not appear. May 17. The Judgment of the Court was delivered by 149 1162 KAPUR J. This is an appeal under certificate of the Pepsu High Court and the question for decision relates to the applicability of the Indian Incometax Act, 1922, to the erstwhile Pepsu area in the years of assessment 1948 49 and 1949 50. The assessee company (the respondent before us), was incorporated in the Patiala State and had its registered office at Surajpur in Pepsu. For the year of assessment 1948 49 the company failed to deduct from out of the remuneration paid to its managing agents, who were non residents, the income tax and the supertax which, it, under the law, was required to do. It also paid to its auditors auditing fees and from out of this sum also it did not deduct the income tax and super tax under the provisions of the Patiala Incometax Act. The two sums in dispute were Rs. 59,787 1 0 and Rs. 581, 40 respectively. For the assessment year 1949 50 also the assessee company failed to make the deduction from the remuneration paid to its managing agents and the income tax deductible was Rs. 52,484 14 0 and super tax Rs. 21,611 6 0. The Income tax Officer took action against the assessee company under sections 18(3A) and 18(7) of the Patiala Income tax Act and consequently issued two demand notices for the amounts above mentioned. Against this order of the Income tax Officer the assessee company took an appeal to the Appellate Assistant Commissioner who reduced the amount demanded but did not decide the question whether the assessee company was bound to make the deductions or not. The assessee company then appealed to the Income tax Appellate Tribunal and it held that under section 18(7) of the Patiala Incometax Act no order was required to be passed by the Income tax Officer and that no appeal lay to the Appellate Assistant Commissioner against the order under section 18(3A) as there was no provision for it under the Patiala Income tax Act. Before the Tribunal it was contended that at the time when the appeals were decided by the Appellate Assistant Commissioner, the Patiala Income tax Act had ceased to be in force and therefore the appeals were sustainable under the provisions of the Indian Income tax Act which had been 1163 extended to all Part B States by section 13 of the Indian Finance Act of 1950 (XXV of 1950) but this contention was repelled and the Tribunal held that the only remedy for the assessee company was to take a revision under section 33 of the Patiala Income tax Act to the Commissioner. The Tribunal at the request of the assessee company referred the following three questions for the opinion of the High Court: (1)Whether the appeals before the Appellate Assistant Commissioner fell to be decided in accordance with the provisions of the Patiala Income tax Act or the Indian Income tax Act ? (2)Whether the appeals before the Appellate Tribunal fell to be decided in accordance with the provisions of the Patiala Income tax Act or the Indian ]Income tax Act ? (3)Whether, on the assumption that the assessee company was not bound to deduct tax, its appeals before the Appellate Assistant Commissioner were competent in law ? The High Court decided that in regard to the assessment year 1948 49, the law applicable was the Patiala Income tax Act and therefore no appeal Jay to the Appellate Assistant Commissioner but in regard to the assessment year 1949 50 the Indian law became applicable and therefore the order of the Income tax Officer was appealable. The Revenue have come up in appeal under a certificate of the High Court and the submission is that to the assessment year 1949 50 also the Patiala Income tax Act applied and not the Indian Income tax Act and therefore the order of the Incometax Officer was not appealable. In order to resolve the controversy, reference may be made to certain provisions of the Indian Income tax Act, 1922, and the Finance Act of 1950. Section 13 of the Finance Act provides: section 13 " If immediately before the Ist day of April, 1950, there is in force in any Part B State other than Jammu and Kashmir or in Manipura, Tripura or Vindya Pradesh or in the merged territory of Cooch Behar any law relating to income tax or super tax or tax on profits of business, that law shall cease to have effect except 1164 for the purpose of the levy, assessment and collection of income tax and super tax in respect of any period not included in the previous year for the purpose of assessment under the Indian Income tax Act, 1922, for the year ending on the 31st day of March, 1951, or. for any subsequent year or, as the case maybe, the levy, assessment and collection of tax on profits of business for any chargeable accounting period ending on or before the 31st day of March, 1949 ; " Section 13 of the Finance Act of 1950 shows that the Indian Income tax Act became applicable to the assessees residing, in any Part B State as from the assessment years 1950 51 or the accounting year 1949 50. The provisions of section 2(14A) of the Indian Income tax Act, 1922, show that the Act became applicable to Part B States as from April 1, 1950. The relevant provisions of this section are: S.2(14A) " taxable territories " means (d) as respects any period after the 31st day of March, 1950, and before the 13th day of April, 1950, the territory of India excluding the State of Jammu and Kashmir and the Patiala and East Punjab States Union. Provided that the " taxable territories " shall be deemed to include (b) the whole of the territory of India excluding the State of Jammu and Kashmir (i). . . . . . . (ii) as respects any period after the 31st day of March, 1950,for any of the purposes of this Act and (iii) as respects any period included in the previous year for the purpose of making any assessment of the year ending on the 31st day of March, 1951, or for any subsequent year; It will be noticed that the language used in section 2(14A) proviso (b) (iii) is the same as the language under section 13 of the Finance Act of 1950. The effect of the Finance. Act of 1950 is that as regards assessment for the year ending March 31, 1951, the Indian Income tax Act 1165 would be applicable accounting year being the year ending March 31, 1950, and for any assessment year previous to that the Patiala Income tax Act would be applicable. The effect of section 2(14A) proviso (b) (ii) & (iii) is that taxable territories would comprise the whole of India excluding the State of Jammu and Kashmir as respects any period included in the previous year for the purpose of making an assessment for the year ending March 31, 1951, i.e., for the assessment year 1950 51 or the accounting year 1949 50. The application of the Indian Income tax Act as a result of section 13 of the Finance Act of 1950 was decided in The Union of India V. Madan Gopal Kabra (1) which was a case from Rajasthan where there was no income tax in the previous year but the assessee was sought to be assessed for the year 1950 51 under the Indian Income tax Act. It was held 'that under sub cl. (1) of cl. (b) of the proviso to section 2(14A) the whole of the territory of India including Rajasthan would be deemed " taxable territory " for the purpose of section 4A of the Indian Income tax Act " as respects any period " meaning any period before or after March 31, 1950, and the assessee was therefore ' liable to income tax. Patanjali Sastri, C.J., who delivered the judgment of the court said: " A close reading of that provision will show that it saves the operation of the State law only in respect of 1948 49 or any earlier period which is the period not included in the previous year (1949 50) for the purposes of assessment for the year 1950 51. In other words, there remained no State law of income tax in operation, in any Part B State in the year 1949 50." This passage from the judgment supports the contention of the appellant that as regards income of the accounting year 1949 50 or the year of assessment 1950 51 no State law of income tax was operative in any Part B State. It appears that the error which has crept in the judgment of the High Court has been due to misreading the year 1949 50 as being assessment year and not accounting year. In another case D. B. Madhavakri shnaiah vs The Income Tax Officer (1) (1) ; , 552. (2) ; 150 1166 section 13 of the Finance Act of 1950 was similarly interpreted. Therefore both for the assessment years 1948 49 and 1949 50 the law applicable would be the Patiala Income tax law and not the Indian Income tax Act and consequently no appeal against the order of the ' Income tax Officer was competent. The answers to the questions would be as follows:Questions Nos. 1 & 2: The Patiala Income tax Act was in operation and no appeals lay. Question No. 3 In the negative. The appeal is, therefore, allowed but as the respondent I company has not appeared and contested the appeal, there will be no order as to costs, in this court. Appeal allowed. APPENDIX Reference to the memory of Shri N. Chandrasekhara Aiyar, Ex Judge of the Supreme Court of India, by the Judges and members of the Bar of the Supreme Court of India, assembled at a meeting on April 1, 1957. Shri section R. DAS, Chief Justice of India. Solicitor General, it is with a heavy heart that I mention to you and the members of the Bar the passing away of Nagapudi Chandrasekhara Aiyar, who was an esteemed colleague and a very dear friend. The melancholy news reached me yesterday evening. Nagapudi Chandrasekhara Aiyar was born on January 25, 1888. He was educated at Conjeevaram, Tirupati and Madras and was a student of the Christian College and the Madras Law College. During his college days he was a keen sportsman, interested chiefly in Cricket. This interest in sport he kept up even after he became a District Judge. After a brilliant academic career, he was enrolled as a vakil of the Madras High Court in 1910. He worked in the chambers of Dr. C. P. Ramaswami Aiyar whom he used to refer to as his master and for whom he had very high regard. He picked up an extensive practice on the Original Side of the Madras High Court. In July 1927 he became the City Civil Judge and in December of the same year he was appointed as a District and Sessions Judge. He was raised to the Madras High Court Bench in July 1941 and worked there as a Judge until January 25, 1948. The State utilised his mature experience in different spheres. He was appointed as a member of the All India Industrial Tribunal (Bank Disputes). He was later appointed as a member of the Indo Pakistan Boundary Disputes Tribunal. Shortly thereafter he was appointed a Judge of this Court and was sworn in on September 23, 1950. Immediately after his retirement from this Court on January 24, 1953, he was chosen as the Chairman of the Delimitation Commission. Towards the end of his term in this Court he fell ill very 151 1168 seriously. He responded to medical treatment and the devoted nursing of his good wife brought him round. That illness, however, had undermined his otherwise robust health and had left him weak. But undaunted by his physical ailments and in a true spirit of service he moved about from place to place all over India and successfully completed the work of the Commission. Just at that time Chief Justice Mukherjea fell ill and on his advice Nagapudi Chandrasekhara Aiyar was called upon by the President to assist this Court as an ad hoe Judge. This burden he cheerfully accepted and efficiently discharged to the satisfaction of all concerned. Even after this he had to undertake, as Chairman, further work of delimitation consequent upon the re organisation of the States. Nagapudi Chandrasekhara Aiyar was well grounded in legal principles. To his legal acumen he added his deep insight into human nature and psychology and a robust common sense. On all intricate legal problems presented before the Court he brought to bear a mental freshness, which often contributed to their solution. The judgments written and delivered by him, which will be found reported in the Law Reports, will bear testimony to his legal learning and human sympathies. In his behaviour towards the members of the Bar he was always kind and considerate. Towards his colleagues he was systematically courteous. Nagapudi Chandrasekhara Aiyar 's interest in life was not confined to law or within the cloistered compound of a court of law. While he was a sound lawyer and a learned Judge, he was also a man of great erudition in Sanskrit and English literature. He was, on the one hand, the editor of the latest edition of Mayne 's Hindu Law, he was, on the other hand, the author of " Anjaneya " which he had dedicated to his master and of Valmiki Ramayana. For those of us, who came into close contact with him, his ready quotations from our ancient scriptures and literary works of our classical poets were indeed a matter of joy. The Convocation addresses delivered by him were thoughtful and incisive, 1169 Nagapudi Chandrasekhara Aiyar above all was a warm hearted man, a man of genial temperament and a very friendly person. His bubbling cheerfulness and refreshing sense of humor inevitably dispelled dullness and he had the kindly knack of putting everybody at ease. He was a lively conversationalist, full of sparkling humor, and cheerful bon homie. Those of us, who had the privilege of coming close to him, will always miss the glow and the warmth of his kind friendliness. The passing away of an erstwhile esteemed colleague and a friend certainly brings to one 's mind a sense of loss and sadness. We remember with gratitude the consideration, courtesy and kindness that we always received from him. We request you to convey to his companion in life our sense of admiration for the constant care and devoted attention which she daily bestowed on him and our heartfelt sympathy for her in her dark and dismal day of sorrow. We pray with her for the peace of his soul. Shri C. K. DAPHTARY, Solicitor General of India. My Lord, the news of the passing away of Shri Chandra. sekhara Aiyar has come to most of us as an unexpected shock. After his miraculous and seemingly complete recovery from illness a few years ago, it was hoped that he would be spared for many years to come, to continue his distinguished services to the State. When he came to the Supreme Court Bench, he had behind him a record of work in the High Court and in other fields of public life and had won that admiration which is the just due of one who reaches the highest rung of the judicial hierarchy. When he left he had won also respect and confidence by his forthright and robust dealing with problems uncluttered by oversubtlety. He won too, affection by his hearty good fellowship and kindliness which embraced all alike, senior, junior and beginner. By his death, the law has lost a notable personality and the state a citizen of outstanding quality, who laboured in its service, and had death not snatched him away would have continued to render valuable service. 1170 One behalf of the Bar and myself, I associate myself with the expression of regret and the tribute to Shri Chandrasekhara Aiyar 's memory which your Lordship the Chief Justice has so feelingly expressed. Reference to the memory of late Justice ' Shri P. Govinda Menon, Judge of the Supreme Court of India by the Judges and members of the Bar of the Supreme Court of India, assembled at a meeting on October 17, 1957. Shri section R. DAS, Chief Justice of India. Additional Solicitor General and Mr. Vice President of the Supreme Court Bar Association, we have met here again under the shadow of death. All of you must have read in the papers of the sudden demise of Mr. Justice P. Govinda Menon. When I was with him yesterday afternoon, I never thought that his end was so near. P. Govinda Menon was born in September 1896. He received his early education in Ganpat High School, then in the Zamorin 's College, Kozhikode, and then in the Presidency College and the Law College in Madras. He was enrolled as an Advocate in September 1920 and joined the Madras Bar and practised before the High Court. In December 1940 he was appointed Crown Prosecutor. He proceeded to Japan in April 1946 as the Indian representative before the International Military Tribunal for the Far East at Tokyo. He acted as the Chief Indian Prosecutor from April to September 1946. He ' was elevated to the Bench of the Madras High Court in 1947 and was there just over nine years before he was elevated to this Court in August 1956. As a practitioner at the Bar, as Crown Prosecutor and as a Judge P. Govinda Menon acquitted himself with remarkable success. His suavity of manners and his sweet and amiable disposition endeared him to the members of the Bar and to the Judges. He had a wide circle of friends both at the Bar and outside the Bar. As a Judge of the Madras High Court he presided over almost all the divisions of the Court and had to deal with various typos of cases, civil and 1171 criminal. His work as Crown Prosecutor brought him valuable experience and insight into human nature and helped him to acquire a firm grasp of the principles of criminal law and jurisprudence. While upholding the dignity and the majesty of the law, he had the capacity and courage of tempering justice with mercy. He did not permit mere technicalities or senseless formalities to stand in the way of dispensing justice. He also heard and disposed of heavy civil appeals and revisions. He had a deep knowledge of Hindu Law and in particular, the Marumakattayam and Aliyasantana branches of it. Indeed, the chapters on those subjects in the latest edition of Mayne 's Hindu Law were written by him. He was generally helpful to the members of the Bar and in particular, to the junior section of it, who always would appear before him and make their submissions without fear or nervousness. He was a man of studious habits and took interest in literary and cultural subjects. When he came to this Court, he brought with him his mature judicial experience and learning and his sense of justice and fairplay. My colleagues and I, who sat with him in Court, had his assistance and advice in dealing with matters coming up for decision before us. 'He was uniformly courteous lo the members of the Bar as well as to his colleagues on the Bench. He was a conscientious worker, which is exemplified by the fact that although he felt definitely out of sorts for about a week before his death, he did not take rest lest the work in Court should be dis located and his colleagues and the members of the Bar engaged in the part heard cases should be inconvenienced. Although I assured him that all arrangements had been made for carrying on the Court work, he kept on worrying for he did not feel at ease in his mind. It was certainly a strain which, I am afraid, told upon his health. My colleagues and 1, therefore, mourn the passing away of a sound lawyer, a good Judge, a loyal friend and a conscientious worker ' We shall be grateful if you will convey through his son, who fortunately was at his bedside at the time of his 1172 death, our sincerest condolences to the members of the bereaved family. Shri H. N. SANYAL, Additional Solicitor General of India. My Lords, the Indian Bar most respectfully associates itself with what has fallen from Your Lordship. It expresses profound sympathy for the members of the family of Mr. Justice Menon. It expresses its deepest sorrow and grief at the sudden death of Mr. Justice Menon. In 1920, he became an Advocate of the Bar at Madras and within a short time he became one of its leading members. In 1940, he was appointed Crown Prosecutor in Madras. His name is remembered and will always be remembered that he acted with utmost fairness in conducting cases. In 1946, he went to Tokyo on behalf of India. There he discharged his duties with great ability. He became a Judge in 1947 and within a short time he made himself very popular and won the respect and admiration of the profession. Thereafter he came here as a Judge of the Supreme Court. He had been here only for a short time but in this short time he had made a tremendous impression on the members of the Indian Bar by his unfailing courtesy and his keen desire of doing justice. My Lords, Mr. Justice Menon was equipped with all the qualities which are essential for the discharge of the great judicial duties of the highest Tribunal in India. In these days, when criticisms are so often made I feel it is my duty to point out that here was a Judge who died in harness and never spared himself in spite of illness for one day and up to the last moment when it was physically impossible for him to discharge the heavy duties of his office, he attended the Court and gave his very best for the sacred cause, that is to say, the administration of justice. On behalf of the Indian Bar, I am offering our condolence and heart felt sym pathy to the members of his family, to his friends and to everyone near and dear to him. Shri N. C. CHATTERJEE, Vice President, Supreme Court Bar Association. My Lords, on behalf of the members of the Supreme Court Bar Association, it is my duty to voice the sentiments and feelings of the 1173 members of the Supreme Court Bar on this solemn occasion. The unexpected and sudden demise of a great and good Judge is a great loss to this Court. It ' is also a great loss to the State and to the Nation. The Country has been deprived by the cruel hand of death of the services of an eminent and upright Judge, who maintained a very high reputation as a Judge of one of the most important High Courts of India and also a Judge of this august Tribunal. As members of the legal profession we look upon an independent Judiciary as a symbol of sovereignty. If there is one bulwark that guards the freedom of the average citizen, it is the Courts of Justice. We are pledged to a strict adherence of the Rule of Law and in these days, when the work of the Judiciary is not properly appreciated, it gives us some comfort to remember that there are men like Mr. Justice Govinda Menon in India who sacrificed his health and life and fell a victim to the sacred cause of Law and Justice. Those of us who had the privilege of enjoying his friendship should remember with gratitude that he was much greater as a man. Unostentatious, gentle and kind hearted he won the affection of all who came into contact with him. I am happy to bear testimony to his kindness, sympathy and consideration for myself and for many of my colleagues of the Bar. A few years back when I had the privilege of associating myself with an important Bar function in South India, I discovered that Mr. Justice Menon 's courtesy, sweet temper and amiable disposition had endeared himself not only to his colleagues on the Bench but also to the members of the Bar. I am happy to say that he maintained the same reputation as a Judge. of this Court. The Law Reports of Madras bear eloquent testimony to his erudition, his clear mind and his keen sense of justice. Those of us, who had the privilege to appear in his Court, would bear testimony to his grasp of principles and the quiet and courteous attention he has bestowed on the cases argued before him. His 1174 judgments were not mere collections of precedents but he dealt with principles with clarity and precision. The highest tribute that I would like to pay to his memory to day is that the juniormost member of the Bar never felt uneasy for a single moment before him. On behalf of the Supreme Court Bar we offer our sincere condolences to the members of the bereaved family. We mourn his death and we pay our homage and tribute of appreciation and affection to the memory of this great Judge and this great gentleman. May his soul rest in peace. [/INST]The respondent was a company incorporated in the former Patiala State with its registered office in the territory of Pepsu, a Part B State. For the assessment years 1948 49 and 1949 50 in respect of the amounts of income tax and super tax which it failed to deduct from out of the remuneration paid to its managing agents, the Income tax Officer took action under the provisions of section 18 of the Patiala Income tax Act. The Act did not provide for an appeal against the orders of the Income tax Officer under that section and the question for determination was whether an appeal lay under the provisions of the Indian Income tax Act, 1922, which was extended to all Part B States with effect from April 1, 1950, by section 13 of the Finance Act, 1950, and section 2(14A) of the Indian Income tax Act, 1922: Held, that the result of the extension of the Indian Income tax Act, 1922, to Part B States was that that Act was applicable to the assessment years 1950 51 and subsequent years and that for the assessment years 1948 49 and 1949 50 the law applicable was the Patiala Income tax Act. Accordingly, an appeal against the order of the Income tax Officer in question was not competent. The Union of India vs Madan Gopal Kabra, ; and D. R. Madhavakyishnaiah vs The Income Tax Officer, ; , followed. </s>
<s>[INST] Summarize the judgementetition No. 348 52 of 1985. Under Article 32 of the Constitution of India. Shanti Bhushan G.L. Sanghi, Prashant Bhushan, Madan Lokur, R. Satish, V.K. Pandita, and E.C. Agarwala for the Petitioners. Kapil Sibbal, Mr. Awad Behari, Mrs. Shobha Dikshit, R.K Mehta, B.R. Agarwala. Miss V. Menon, Ravindru Bana, A.K. Sanghi, A.K. Srivastava and J.R. Das for the Respondents. G. Rath. Advocate General for the State of Orissa. Badri Das Sharma, for the State of Rajasthan, and A.V. Rangam, for the State of Tamil Nadu. The Judgment of the Court was delivered by BHAGWATI, J. This writ petition is an offshoot of the decision rendered by us in Dr. Pradip Jain & Ors. vs Union of India and others. The main judgment in that case was delivered by us on 22nd June, 1984 and we held in that judgement that "wholesale reservation made by some of the State Governments on the basis of 'domicile ' or residence requirement within the state or on the basis of institutional preference for students who have passed the qualifying examination held by the University or the State, excluding all students not satisfying this requirement, regardless of merit" was unconstitutional and void as offending the equality clause of the Constitution. But after condemning such wholesale reservation, we proceeded to observe that the very mandate of the equality clause viewed in the perspective of social justice, would justify some extent of reservation based on residence requirement within the State or on institutional preference for students passing the qualifying examination held by the University or the State and addressing ourselves to the question as to what extent such reservation might be regarded as constitutionally permissible, we said: "It is not possible to provide a categorical answer to this question, for as pointed out by the policy statement of the Government of India, the extent of such reservation would depend on several factors including opportunities for professional education in that particular area, the extent of competition, level of education development of the area and other relevant factors. It may be that 47 in a State where the level of educational development is woefully low, there are comparatively inadequate opportunities for training in the medical speciality and there is large scale social and economic backwardness there may be justification for reservation of a higher percentage of seats in the medical colleges in the State and such higher percentage of seats in the medical colleges in the State and such higher percentage may not militate against "the equality mandate viewed in the perspective of social justice". So many variables depending on social and economic facts in the context of educational opportunities would enter into the determination of the question as to what in the case of any particular State, should be the limit of reservation based on residence requirement within the State or on institutional preference. But, in our opinion, such reservation should in no event exceed the outer limit of 70 per cent of the total number of open seats after taking into account other kinds of reservations validly made. The Medical Education Review Committee had suggested that the outer limit should not exceed 75 per cent but we are of the view that it would be fair and just to fix the outer limit at 70 per cent. We are laying down this outer limit of reservation in an attempt to reconcile the apparently conflicting claims of equality and excellence". We pointed out that in the result "at least 30 per cent of the open seats shall be available for admission of students on All India basis irrespective of the State or University from which they come" and directed that "such admissions shall be granted purely on merit on the basis of either All India Entrance Examination or entrance examination to be held by the State". This was the decision given by us in regard to admissions to the MBBS and BDS courses. We proceeded to discuss the question of admissions to post graduate courses such as MD, MS and the like. We I earned heavily on the observations made by Krishna Iyer J. in Jagdish Saran vs Union of India(1) as also on the recommendation by the Indian Medical Council and the opinion expressed by the Medical Education Review Committee where an opinion was clearly expressed that admissions to post graduate courses in any institution should be guided strictly by merit and should be open to candidates on all India basis. We also referred to the policy statement of the Government of India filed by the learned Attorney General where 48 the view was expressed categorically by the Government of India that so far as admissions to the institutions of post graduate colleges and such professional colleges are concerned, they should be entirely on the basis of all India merit, subject only to Constitutional reservations in favour of scheduled castes and scheduled tribes However, taking into account broader considerations of equality of opportunity and institutional continuity in education which has its own importance and value, we took the view that though residence requirement within the State should not be a ground for reservation in admissions to post graduate courses, a certain percentage of seats may in the present circumstances, be reserved on the basis of institutional preference "in the sense that a student who has passed M.B.B.S. course from a medical college may be given preference for admission to post graduate course in the same medical college or University but such reservation on the basis of institutional preference should not in any event exceed 50% of the total number of open seats available for admission to the post graduate course. " This Judgment was delivered on 22nd June, 1984, but by that time, admissions had already been made in the medical colleges attached to some of the Universities in the country and moreover it was felt that sometime would be required for the purpose of achieving uniformity in the procedure relating to admissions in various Universities. Some of the students seeking admission to the M.B.B.S. course in the academic year 1984 85, therefore, made an application to the Court in Civil Appeal No. 6392 of 1983, Rita Nirankari vs University of Delhi, that the Judgment delivered by us may be given effect only from the academic year 1985 86 We accordingly issued notice on the application to the learned advocates who had appeared on behalf of the various parties at the hearing of Dr Pradip Jain 's case as also to the Attorney General and after hearing them we came to the conclusion that "in view of the fact that all formalities for admission, including the holding of entrance examination. have been completed in some of the States prior to the Judgment dated 22nd June 1984 and also since sometime would be required for making the necessary preparations for implementing the Judgment "it was not practicable to give effect to the judgment from the academic year 1984 85. We therefore directed that the judgment shall be implemented with effect from the academic year 1985 86. This order was made by us on 26th July 1984 and it was directed to form part of the main judgment dated 22nd June 1984. 49 Since it was made clear as far back as 26th July, 1984, that our Judgment dated 22nd June, 1984, shall be given effect from the academic year 1985 86, we should have thought that the Government of India and Indian Medical Council would make the necessary arrangements for holding an All India Entrance Examination well in time for admissions to the M.B.B.S. course for the academic year 1985 86 so far as the minimum 30% open seats not reserved on the basis of residence requirement or institutional preference (hereinafter referred to as the minimum 30% non reserved seats) were concerned. But it seems that so far nothing has been done either by the Government of India or the Indian Medical Council and the fate of the students seeking admissions to the M.B.B.S. course for the academic year 1985 86 is in a state of total uncertainty. The State Governments have also been equally guilty of indifference and inaction in not taking any steps for the purpose of holding an entrance examination which would test the relative merits of the students seeking admission to the minimum 30% non reserved seats in the M.B.B.S. course in the medical colleges. Some of the State Governments and Universities, we are informed, are proposing to fill up the minimum 30% non reserved seats for the M.B.B.S. course on the basis of the marks obtained by the students at the qualifying examinations held by different States and or Universities, total ignoring the fact that the standard of judging at these different qualifying examinations cannot, by its very nature be uniform. Some Universities may be very liberal in their marking while some other may be strict. These would be no comparable standards on the basis of which the relative merits of the students can be judged. It would be wholly unjust to grant admissions to the students by assessing their relative merits with reference to the marks obtained by them, not at the same qualifying examination where standard of judging would be reasonably uniform but at different qualifying examinations held by different State Governments or Universities where the standard of judging would necessarily vary and not be the same. That would indeed be blatantly violative of the concept of equality enshrined in Article 14 of the Constitution. We must, therefore, make it clear that no State Government or University or Medical College shall grant admission to students to fill the minimum 30% non reserved seats for the M.B.B.S. course, on the basis of comparison of the marks obtained by them at different qualifying examinations. The admissions must be based one valuation of relative merits through an entrance examination which would be open to all qualified candidates through out the country. Such entrance examination should 50 in our opinion be held by the Government of India or the Indian Medical Council on an all India basis and admissions should be granted to the various medical colleges in the country on the basis of the marks obtained at such entrance examination and while granting admission any preference expressed by the students for any particular State or University or Medical College or Colleges shall be kept in mind, and as far as possible, effort shall be made to conform to such preferences so that the students who secure admissions are least inconvenienced and they are able to carry on their studies near their place of residence. There can be no constitutional impediment in the way of the Government of India or the Indian Medical Council for holding such entrance examination, because the topic of education is in the Concurrent List. We are of the view that such entrance examination must be held by the Government of India or the Indian Medical Council because then there will be only one examination in which the students seeking admission to the M.B.B.S course will have to appear, irrespective of the place where or the University or Medical College in which, they are seeking admission is located. Today we are witnessing the highly distressing spectacle of students rushing from place to place to appear at entrance examinations which are being held in Delhi, Chandigarh, Bangalore and various other places. So much time, money and energy of the students is wasted and in addition there is a gnawing anxiety at the almost chaotic uncertainty in regard to admission. It is therefore absolutely essential that there should be only one entrance examination common to all the medical colleges in the country and such entrance examination can be held only by the Government of India or the Indian Medical Council. That is why at the last hearing of the present writ petition, we directed the Indian Medical Council to come forward with a positive scheme for holding an all India entrance examination for regulating admissions to the minimum 30% non reserved seats for the M.B.B.S. course. We hope and trust that at the next hearing of this writ petition, the Indian Medical Council will produce a will thought out scheme for holding an all India entrance examination so that the necessary directions can be given by the court in regard to the holding of such entrance examination well in time before the next academic year begins in June/July 1985. Much time has already been lost and we are anxious that no further delay should occur, because any delay now will jeopardise the future of the students seeking admissions to the M.B.B.S. course for the academic year 1985 86. 51 We would also like to clear up one misunderstanding which seems to prevail with some State Governments and Universities in regard to the true import of our judgment dated 22nd June, 1984. They have misinterpreted our judgment to mean that 30% of the total number of seats available for admission to M.B.B.S. course in a medical college should be kept free from reservation on the basis of residence requirement or institutional preference. That is a total mis reading of our judgment. What we have said in our judgment is that after providing for reservation validly made, whatever seats remain available for non reserved categories, 30% of such seats at the least, should be left free for open competition and admission to such 30% open seats should not be based on residence requirement or institutional preference but students from all over the country should be able to compete for admissions to such 30% open seats. To take an example, suppose there are 100 seats in a medical college or University and 30% of the seats are validly reserved for candidates belonging to scheduled castes and scheduled tribes. That would leave 70 seats available for others belonging to non reserved categories. According to our judgment, 30% of 70 seats, that is, 21 seats out of 70 and not 30% of the total number of 100 seats, namely, 30 seats, must be filled up by open competition regardless of residence requirement or institutional preference. So far admissions to 50% open seats not reserved on the basis of institutional preference (hereinafter referred to as 50% non reserved seats) for post graduate courses such as M.D., M.B. and the like are concerned, we may point out that these admissions also cannot be made on the basis of marks obtained by the students at different M.B.B.S. examinations held by different universities, since there would be no comparable standards by reference to which the relative merits of the students seeking admission to post graduate courses can be judged. It would not only be unfair and unjust but also contrary to the equality clause of the Constitution to grant admissions to 50% non reserved seats in the post graduate courses by mechanically comparing the marks obtained by the students at the M.B.B.S. examinations held by different Universities where the standard of judging would necessarily vary from University to University and would not be uniform. If admissions were to be made on this basis, a less meritorious student appearing in the M.B.B.S. examination held by a University where the standard of evaluation is liberal would secure a march over a more meritorious student who appears in the M.B.B.S. examination where the standard of marking 52 is strict. We cannot therefore approve of admissions to 50% non reserved seats for the post graduate courses being made on the basis of marks obtained by the students at the different M.B.B.S. examinations held by different Universities. Such admissions would be clearly invalid as constituting denial of equality of opportunity. There can be no doubt that in order to meet the demands of the equality clause, the admissions to 50% non reserved seats for the post graduate courses must be made on the basis of comparative evaluation of merits of the students through an entrance examination. Such entrance examination must be held by the Government of India or the Indian Medical Council sufficiently in advance before the term is due to commence for the post graduate courses. Here again the students seeking admission to post graduate courses can express their preference for any particular University or medical college or colleges as also for any speciality or specialities which they wish to take up for the post graduate course and admissions should be granted to the post graduate courses in various medical colleges in the country on the basis of marks obtained at such entrance examination and while granting admissions, the preferences expressed by the students must be kept in mind and as far as possible, effort should be made to conform to such preferences. We have directed the Government of India and the Indian Medical Council to put forward a positive scheme for holding an all India entrance examination for regulating admissions to the post graduate courses at the next hearing of the writ petition so that we can give necessary directions to the Government of India for holding such All India Entrance Examination which would be conducted in at least one centre in each State and which would be open to the students from all over the country. We may point out that having regard to the size of the population the number of students seeking admission and the extent of the geographical area of a State, it might be desirable to have more than one centre in some State or States both in regard to admissions to the post graduate courses as also in regard to admissions to M.B.B.S. course. If for any reason the Government of India and the Indian Medical Council are unable to organise such All India Entrance Examination for admissions to the post graduate courses on account of paucity of the time now available to them, a situation for which they are almost entirely to blame, we may have to direct as the only possible alternative for the coming academic year, an entrance examination to be held by each State Government or University for regulating admissions to 50% non reserved seats for the post graduate courses in the medical colleges situate within 53 that State or attached or affiliated to that University. But unquestionably no admissions can be allowed to be made on the basis of marks obtained at different M.B.B.S. examinations held by different universities. That takes to a consideration of the main question arising in the present writ petition. The question relates to the admissions to 50% non reserved seats for the post graduate courses in the Motilal Nehru Medical College, Allahabad. Now in all the Medical Colleges in the State of Uttar Pradesh a student who wishes to join a post graduate course namely M.D., M.S. or like has necessarily to do house job for a period of one year after completion of internship and the house job has to be in a speciality which the student wishes to take up for the post graduate course. There are a few exceptions to this general rule, as for example, a student who has done house job in medicine is qualified for admission to the post graduate course in radiology. That is how petitioner No. 5 who had done house job in medicine could secure admission in the post graduate course for radiology. Then there are also cases where a student who has done house job in a particular speciality for six months and in another allied speciality for the remaining six months, may be qualified for admission to the post graduate course in the former speciality. But, by and large, barring these few exceptional situations, a student cannot qualify for admission to the graduate course in a particular speciality unless he has done house job in that speciality. A student therefore, according to the rules prevailing in all the medical colleges in the State of Uttar Pradesh, has to do house job for one year and then seek admission to the post graduate course which is of two years ' duration and he can take admission to the post graduate course only in the speciality in which he has done his house job. We are informed that this situation prevails also in the medical colleges of one or two other States. This system under which a student is first required to do house job in a speciality of his choice and then seek admission to the post graduate course which can be only in that speciality and in no other, is likely to cause considerable hardship to the students, because it is quite possible that a student who has done house job in a particular speciality may not come within the quota of 50% seats reserved on the basis of institutional preference and even so far as 50% non reserved seats are concerned, he may be left out, if he gets less marks at the entrance examination than another student who has chosen the same speciality for his house job. He obviously cannot get admission to the post graduate course 54 in another speciality even if he does better in the entrance examination than a student who has done house job in that speciality. His admission to the post graduate course would become dicey and one year spent by him in doing house job may turn out to be futile. That is why we find that in most of the States, the post graduate course is of three years ' duration and during the first year, the student is expected to do house job in the speciality in which he has been admitted to the post graduate course. This system is more advantageous to the students since it given an opportunity to the students to secure admission to the post graduate course in any speciality that is available, on the basis of the marks obtained at the M.B.B.S. examination in case of 50% seats reserved on the basis of institutional preference and on the basis of marks obtained at the entrance examination in case of 50% non reserved seats. We would therefore recommend to the Indian Medical Council as also to the State of Uttar Pradesh and other States which follow the system of one year house job followed by two year post graduate course to uniformly adopt the system of three year post graduate course with house job in the first year. It is desirable that so far as post graduate education in the Medical Faculty is concerned there should, as far as possible, be uniformity throughout the country. The petitioners belong to a batch of students who did the M.B.B.S. course in Motilal Nehru Medical College, Allahabad and who passed the M.B.B.S. examination held by the University of Allahabad in July 1982. The internship of one year which is obligatory in the case of every student passing the M.B.B.S. examination was completed by them in July 1983. The petitioners thereafter took up house job in the Motilal Nehru Medical College, Allahabad. The case of the petitioners is that at the time when they took up their house job in July 1983, the admissions to the post graduate courses were governed by the old rules which provided for reservation of 75% seats for students passing the M.B.B.S. examination from the same institution in which admission is sought that is, on the basis of institutional preference with the remaining 25% seats open for students who had passed the M.B.B.S. examination from any Medical College in the State of Uttar Pradesh and who satisfied the residence requirement in the State of Uttar Pradesh. The petitioners said that so far as admissions to the post graduate courses for the academic year 1984 85 were concerned which academic year commenced in January 1984 the petitioners knew that having regard to the number of students who had completed their house 55 job in 1983 and who would therefore be eligible for admission to the post graduate course in the academic year 1984 85, some seats in the post graduate courses for the academic year 1984 85 would remain vacant and would be available to the petitioners on completion of their house job in July 1984. These seats in the post graduate courses for the academic year 1984 85 would be available to the petitioners in addition to the seats in the post graduate courses for the academic year 1985 86 commencing from January 1985. The petitioners contended that on the basis of 75% of the seats for the academic years 1984 85 and 1985 86 being available to students passing the M.B.B.S examination from Motilal Nehru Medical College, Allahabad an assumption which according to the petitioners they were entitled to make before the Judgment of this Court dated 22nd June 1984 the petitioners reasonably anticipated that if they took a particular speciality, they would able to secure admission to the post graduate course in that speciality on the basis of institutional preference and basing themselves upon this anticipation, they selected their speciality for the house job. The petitioners claimed that if the old rule of 75% and 25% had continued to prevail for the academic year 1985 86 and had not been set at naught by the Judgment of this Court dated 22nd June 1984, they would have been able to secure admission to the post graduate course in the speciality chosen by them for the house job. But by reason of the reduction of the percentage reserved for institutional candidates from 75 to 50 commencing from the academic year 1985 86, the petitioners could not secure admission to the post graduate course for the academic year 1985 86. The petitioners therefore urged that in those cases where the system of post graduate education adopted is to have house job for one year followed by a two year post graduate course, it would be fair and just to give effect to our Judgment dated 22nd June 1984 so as to be applicable at the point of time when house job is taken up by the students with a view to securing admission to the post graduate course on completion of the house job. It was not the contention of the petitioner that the applicability of our Judgment dated 22nd June 1984 should be postponed beyond the academic year 1985 86 and they conceded that the Judgment may be given effect to from the academic year 1985 86 but they submitted that for the applicability of the Judgment the post graduate course should be deemed to commence from the time when the students take up house job in any particular speciality so that no injustice is done to them. 56 There is considerable force in this contention urged on behalf of the petitioners. We have directed by our order dated 26th July, 1984 that the Judgment delivered by us on 22nd June 1984 shall become effective from the academic year 1985 86 and we do not propose to postpone the operation of the Judgment beyond that academic year. But the question is as to how the principle laid down by us in the Judgment for regulating admissions to the post graduate courses is to be applied. So far as three year post graduate courses are concerned and in most of the Universities in the country we have three years post graduate courses there is no difficulty in giving effect to the Judgment from the academic year 1985 86. Whatever admissions are made to the three year post graduate courses for the academic year 1985 86 will be governed by the principle laid down in the Judgment. But difficulty of application arises in cases where, as in the State of Uttar Pradesh and one or two other States, the students do house job for one year and then seek admission to one or the other of the post graduate courses which are of two years ' duration. The admissions to the post graduate courses in such cases take place after the completion of the house job. Now if the principle laid down by us in the Judgment were to govern such admissions from the academic year 1985 86, it would cause considerable hardship to the students who have selected house job in a particular speciality prior to the delivery of the Judgment on 22nd June, 1984, on the basis of reasonable anticipation that, according to the old rules governing admissions which prevailed prior to the date of the Judgment, they would be able to secure admission to the post graduate course in the speciality chosen by them but who may now, as pointed out in the paragraphs, be unable to secure such admissions under the principle governing admissions laid down in the Judgment. Some of these students may legitimately complain that if they know that admissions to the post graduate courses for the academic year 1985 86 were going to be made on the basis of the new principles laid down in the Judgment and that only 50% of the seats were going to be available for institutional students, they would have selected for their house job a speciality which would have brought them within the 50% quota of seats reserved on the basis of institutional preference. Now having chosen a particular speciality for the house job, they cannot obtained admission to the post graduate course in any other speciality and consequently they can hope to get admission to the post graduate course only if an entrance examination is held and they secure better marks at the entrance examination then other students who have done house job in the same speciality. It is quite possible that in 57 the circumstances some less meritorious students might get admission to the post graduate course because they have done house job in some other speciality, while more meritorious students may be left out on account of choice of the speciality. It would not therefore be fair and just to hold that in case of students who have taken up house job in a particular speciality prior to the delivery of the Judgment dated 22nd June, 1984, their admissions to the two year post graduate course during the academic year 1985 86 should be governed by the new principle laid down in the Judgment. We would accordingly direct, in order to meet the demand of equality and justice, that in case of Universities and Medical Colleges, where the system in vogue is to have one year house job in a particular speciality followed by admissions to a two year post graduate course in the same speciality, the admissions to the two year post graduate courses for the academic year 1985 86 should be governed, not by the new principle laid down in the judgment, but the old rules which prevailed prior to the delivery of the Judgment, provided the students seeking admissions had commenced their house job prior to the delivery of the Judgment on 22nd June 1984. If, however, the house job was commenced subsequent to the delivery of the Judgment on 22nd June 1984, the admissions to the two year post graduate courses for the academic year 1985 86 would be governed by the new principle laid down in the Judgment. Now let us once again turn to the facts of the present case. The academic year 1984 85 commenced in January 1984 and on the basis of 75% seats being reserved for institutional candidates according to the rules of admission then prevailing in the State of Uttar Pradesh, the students who completed their house job before January 1984 were admitted to the post graduate courses for the academic year 1984 85, but since the number of students eligible for admission in that academic year were few, some seats for the post graduate courses for the academic year 1984 85 remained unfilled. Some of the students belonging to the batch of the petitioners who completed their house job in July 1984 there upon filed writ petition No. 8362 of 1984 in the High Court of Allahabad contending that a large number of seats reserved for institutional students in the post graduate courses for the academic year 1984 85 were lying vacant and that they should be directed to be filled. The High Court by an order dated 28th September, 1984 gave interim direction that applications should be invited for the vacant seats for the academic year 1984 85. Pursuant to this interim direction, applications were invited in September, 1984. Thereafter another direction was given 58 by the High Court on 13th November 1984 that the State Government shall "complete the admissions to the post graduate courses for the academic year 1985 86 on or before 2nd January 1985 in accordance with the rules" applicable to such admissions. It seems that following upon the earlier direction given by the High Court on 28th September 1984, the State Government passed an order on 15th December 1984 directing that the admissions to the vacant seats in the post graduate courses for the academic year 1984 85 be made by 31st December 1984. This direction was carried out by the Principal of the Motilal Nehru Medical College and on the basis of 75% of the seats being reserved for institutional candidates and 25% being open to students from all medical colleges in the State of Uttar Pradesh subject to residence requirement, the Principal granted admissions to the vacant seats in the post graduate courses for the academic year 1984 85. Unfortunately, the petitioners could not secure admission in these vacant seats since there were more meritorious students who had done better in the M.B.B.S. examination than the petitioners. The admissions to these vacant seats were completed by 31st December 1984 as directed by the State Government by its order dated 15th December 1984. The petitioners do not complain against these admissions But their grievance is in regard to the admissions made to the post graduate courses for the academic year 1985 86. These admissions were purported to be made on the basis of the new principle laid down in the Judgment dated 22nd June 1984 as understood by the Principal. What the Principal did was to grant admissions to 50% of the seats reserved on the basis of institutional preference by selecting institutional students on the basis of merit and having regard to the speciality in which they had done their house job and so far as the remaining 50% open non reserved seats were concerned, the Principal admitted students coming from different parts of the country on the basis of the marks obtained by them at the different M.B.B.S. examinations in which they had appeared and passed. The result was that the petitioners could not secure admission to the seats in the post graduate courses even for the academic year 1985 86. It was under these circumstances that the petitioners filed the present writ petition challenging the admissions made for the academic year 1985 86. Now there can be no doubt that the grievance made by the petitioners is justified. The petitioners are right when they contend that having regard to the fact that the house job was started by them prior to the delivery of the Judgment on 22nd June 1984, their admissions to the post graduate courses for the academic year 59 1985 86, that being the academic year for which they became due to be considered, should have been governed by the old rules which prevailed prior to the date of the Judgment and not by the new principle laid down in the Judgment. We have already started our reasons for taking this view and we need not reiterate those reasons. Of course the Principal of the Motilal Medical College cannot be blamed for granting admissions for the academic year 1985 86 in accordance with the new principle laid down by us in the Judgment, since we had said in our order dated 26th July 1984 that the Judgment shall be effective from the academic year 1985 86 and on a literal interpretation of that order even, admissions to the two year post graduate courses for the academic year 1985 86 would have to be in accordance with the new principle laid down in the judgment. But, as pointed out above, it would work considerable hardship and injustice if, in case of students who have started house job prior to the delivery of the Judgment on 22nd June 1984, admissions to the two year post graduate courses for the academic year 1985 86 were to be made on the basis of the rule enunciated in the Judgment. We must therefore hold that in the State of Uttar Pradesh and other States where the system of post graduate medical education adopted, is to have one year house job followed by two year post graduate course, students who started their house job prior to the delivery of the Judgment on 22nd June 1984 should be governed by the old rules prevailing prior to the date of the Judgment when seeking admission to the post graduate courses for the academic year 1985 86 but in case of students who started their house job after the date of the Judgment, their admissions to the post graduate courses for the academic year 1985 86 should be governed by the new principle laid down in the Judgment. On this view, 75% of the seats in the post graduate courses for the academic year 1985 86 should have been made available to the institutional students and the case of the petitioners was that, if that had been done, the petitioners would have been able to secure admission as falling within the 75% quota. It was not seriously disputed on behalf of the respondents that if the old rules governing admissions had been applied, the petitioners would, save perhaps in a solitary case, have been able to get admission to the post graduate courses. The petitioners were thus unjustly and improperly left out of the quota for institutional students on what was turned out to be erroneous view of the legal position. The petitioners also complained that even in regard to the 50% non reserved seats, the petitioners were denied an opportunity of competing for them, because no entrance examination was held either by the Government of India or by the State Government or 60 even by the concerned University for testing the relative merits of the students seeking admission to the post graduate courses. This complaint was made in the alternative on the premise that the admissions were governed by the new principle laid down in the Judgment. We have already pointed out that this premise was unjustified and the admissions were governed not by the new principle laid down in the Judgment but by the old rules which prevailed prior to the delivery of the Judgment. But even if the admissions were governed by the new principle laid down in the Judgment, the Principal could not grant admissions to 50% non reserved seats in the post graduate courses without judging the relative merits of the candidates through a common entrance examination. The Principal was clearly wrong in granting admissions to 50% non reserved seats on the basis of the marks obtained by the candidates at the different M.B.B.S. examination held by different Universities. No admissions could be granted to 50% non reserved seats except through a common entrance examination where the relative merits of the candidates could be tested and a comparative evaluation could be made on the basis of a common standard. It is quite possible that if a common entrance examination had been held, the petitioners or at least some of them might have been able to establish their superior merit as against those who happen to have been admitted on the basis of the marks obtained at the different M.B.B.S. examinations. We are therefore of the view that the admissions purported to have been made to 50% non reserved seats in the post graduate courses were invalid and the admissions should have been made in accordance with the old rules prevailing prior to the delivery of the Judgment on 22nd June 1984. But we are not inclined to strike down the admissions which have already been made. There are two reasons why we do not wish to disturb these admissions. In the first place, the students who have already been admitted are not parties to the present writ petition and it would not be right to make any order striking down their admissions without giving them an opportunity of being heard. Secondly, the admissions have been made as far back as January 1985 pursuant to an order of the High Court and the students who have been admitted have been prosecuting their studies since the last about three months and it would cause them immense hardship if their admissions were none to be disturbed. We do not therefore propose to strike down the admissions already made to the post graduate courses for the academic year 1985 86. But at the same time we must not allow any injustice to be perpetrated on the petitioners. It would in 61 our opinion be fair and just that the petitioners should be able to get admission to the post graduate courses in the Motilal Nehru Medical College being the institution in which they did their M.B.B.S. course, the reason being that if the old rules had been applied they would have been able to secure such admission. The State of Uttar Pradesh, however, contended that the number of students admitted to the post graduate courses in the various specialities was already in excess of that permitted by the Indian Medical Council and apart from any objection which may be raised by the Indian Medical Council, the interest of higher education would suffer if the petitioners were directed to be admitted to the post graduate courses in the specialities respectively chosen by them for their house job. Now it is necessary to point out that the number of students admitted to the post graduate courses has turned out to be in excess of that authorised by the Indian Medical Council simply because the students admitted to the vacant seats in the post graduate courses for the academic year 1984 85 pursuant to the order of the High Court dated 28th September 1984 and the order of the State Government dated 15th December 1984 could commence their post graduate study only from January 1985 and the students admitted to the post graduate courses for the academic year 1985 86 also commenced their post graduate study at the same time with the result that both sets of students, one admitted for the academic year 1984 85 and the other admitted for the academic year 1985 86 started and continued their post graduate study simultaneously and together and this resulted in the total number of students being in excess of that authorised by the Indian Medical Council. But if we take into account only the number of students admitted for the academic year 1985 86, we do not think that by admitting the petitioners, the teacher student ratio prescribed by the Indian Medical Council would be substantially breached. We may point out that even if the teacher student ratio is violated by granting admissions to the petitioners, we would direct that this may be allowed to be done as an exceptional case, because otherwise injustice would result to the petitioners and neither the Court nor the Indian Medical Council can be so insensitive as to shut its eyes to injustice. We would therefore direct that the petitioners shall be admitted to the post graduate courses in the specialities respectively chosen by them for their house job, for the academic year 1985 86 either in the Motilal Nehru Medical College or in any of the other five medical colleges in the State of Uttar Pradesh, at the option of the State Government. We are not finally disposing of the writ petition with this Judgment since directions have yet to be given by us in regard to the 62 holding of entrance examination both for admission to the M.B.B.S. course as also for admissions to the post graduate courses. We have already directed the Indian Medical Council to come forward with a positive scheme in regard to the holding of both these entrance examinations and we shall finally dispose of the writ petition after considering the scheme put forward by the Indian Medical Council and issuing the necessary directions to the Government of India and the State Governments and/or Universities for holding the necessary entrance examinations. A.P.J, Petitions Partly allowed. [/INST]Prior to this judgment of the Supreme Court in Dr. Pradeep Jain 's case delivered on 22nd June, 1984, admissions to the post graduate medical courses in the State of Uttar Pradesh were governed by the old rules which provided for reservation of 75% seats for students passing the MBBS examination from the same institution in which admission is sought, that is on the basis of institutional preference with the remaining 25% seats open for students who had passed the MBBS examination from any medical college in the State of Uttar Pradesh and who satisfied the residential requirements in that State. In Dr. Pradeep Jain 's case the Supreme Court held that admission to post graduate course, such as MD, MS and the like, should be entirely on the basis of all India merit, subject only to Constitutional reservations in favour of scheduled castes and scheduled tribes. However, keeping in view equality of opportunity and institutional continuity in education a certain percentage of seats may be reserved on the basis of institutional preference "in the sense that a student who has passed MBBS course from a medical college may be given preference for admission to post graduate course in the same medical college or University but such reservation should not in any event exceed 50% of the total number of open seats available for admissions to the post graduate 42 course". Subsequently, on 26th July, 1984 it was directed that the aforesaid judgment shall be implemented with effect from the academic year 1985 86. According to the rules prevailing in all the medical colleges in the State of Uttar Pradesh, a student has to do house job for one year and then seek admission to the two year post graduate course, barring some exceptions, only in the speciality in which he has done his house job. The petitioners passed their MBBS examination in July 1982 from Motilal Nehru Medical College and completed obligatory internship of one year in July 1983. At that time admission to the post graduate medical courses were governed by the old rules. The petitioners could not secure admission to the post graduate medical courses for the academic year 1984 85 on the basis of the old rules. For the academic year 1985 86, the Principal of the College granted admissions to 50% of the seats reserved on the basis of institutional preference by selecting institutional students on the basis of merit and having regard to the speciality in which they had done their house job and so far as the remaining 50% open non reserved seats were concerned, he admitted students coming from different parts of the country on the basis of the marks obtained by them at the different MBBS examinations. Thus the petitioners could not secure admissions in the post graduate courses even for the academic year 1985 86. Therefore, they filed the present Writ Petitions challenging the admissions made for the academic year 1985 86. The petitioners contended: (i) that when they completed their internship in July 1983 the admissions to post graduate courses were governed by the old rules and so far as admissions to academic year 1984 85 were concerned they knew that having regard to the number of students, who had completed their house job in 1983 and would be eligible for admission to the post graduate courses in the academic year 1984 85, some seats in the post graduate courses for the academic year 1984 85 would remain vacant and would be available to them on completion of their house job in July 1984 in addition to the seats in the post graduate courses for the academic year 1985 86. On the basis of 75% seats for the academic years 1984 85 and 1985 86 being available to the students passing MBBS examination from Motilal Nehru Medical College they reasonably anticipated that if they took a particular speciality, they would be able to secure admission to the post graduate course in that speciality on the basis of institutional preference and basing themselves upon this anticipation, they selected their speciality for the house job. If the old rule of 75% and 25% had continued to prevail for the academic year 1985 86 and had not been set at naught by the judgment dated 22nd June 1984, they would have been able to secure admission to the post graduate course in the speciality chosen by them for the house job. But by reason of the reduction of the percentage reserved for institutional candidates from 75 to 50 commencing from the academic year 1985 86, they could not secure admission to the post graduate course for the academic year 1985 86. Therefore, in those cases where the system of post graduate education adopted is to have house job for one year followed by a two year post graduate course, the applicability of the judgment to the post graduate course should be deemed to commence from the time when the students take up house job in any particularly speciality and (ii) that even in regard to the 50% non reserved seats they were denied an opportunity 43 of competing for them, because no entrance examination was held either by the Government of India or by the State Government or even by the concerned University for testing the relative merits of the students seeking admission to the post graduate courses. Partly disposing of the petitions, ^ HELD: 1. Admissions to 50% open seats not reserved on the basis of institutional preference for post graduate courses can not be made on the basis of marks obtained by the students at different MBBS examination held by different Universities, since there would be no comparable standards by reference to which relative merits of the students seeking admission to post graduate courses can be judged. In order to meet the demands of the equality clause, the admissions to 50% non reserved seats for the post graduate courses must be made on the basis of comparative evaluation of merits of the students through an entrance examination, to be held by the Government of India or the Indian Medical Council sufficiently in advance. The students seeking admission in MBBS course as well as in post graduate courses can express their preference for any particular University of Medical College or colleges as also for any speciality or specialities which they wish to take up for the post graduate course and admissions should be granted on the basis of marks obtained at such entrance examination and while granting admissions, the preferences expressed by the students must be kept in mind and as far as possible, effort should be made to conform to such preferences. [51 E F; 52 B D] 2. The Principal of the Motilal Nehru Medical College cannot be blamed for granting admissions for the academic year 1985 86 in accordance with the new principle since the order dated 26th July 1984 says that the judgment dated 22nd June 1984, shall be effective from the academic year 1985 86 and on a literal interpretation of that order even admissions to the two years post graduate courses for the academic year 1985 86 would have to be in accordance with the new principle.[59 B C] 3. The grievance of the petitioners that even in regard to the 50% non reserved seats, they were denied an opportunity of competing for them because no entrance examination was held for testing the relative merits of the students seeking admission to the post graduate courses, is based on the premise that the admissions were governed by the new principle. This premise was unjustified and the admissions were governed not by the new principle but by the old rules. Even if the admissions were governed by the new principle, the Principal was clearly wrong in granting admissions to 50% non reserved seats on the basis of the marks obtained by the candidates at the different MBBS examination held by different universities, without testing the relative merits of the candidates on the basis of a common standard. The admissions purported to have been made to 50% non reserved seats in the post graduate courses were invalid.[59 H; 60 A B] 4 The admissions already made cannot be struck down because the students who have already been admitted are not parties to the present writ petitions and without giving them an opportunity of being heard their 44 admissions cannot be struck down. Secondly, such admissions were made in January 1985 and since then the students are prosecuting their studies. Striking down their admissions at this stage would cause immense hardship to them. It would be fair and just if the petitioners are also allowed admission to post graduate courses in the Motilal Nehru Medical College on the basis of institutional preference according to old rules. The petitioners shall be admitted to the post graduate courses in the specialities respectively chosen by them for their house job, for the academic year 1985 86 either in the Motilal Nehru Medical College or in any other five medical colleges in the State of Uttar Pradesh at the option of the State Government.[60 G H; 61 A; G H] 5. The judgment in the case of Dr. Pradeep Jain has been misinterpreted to mean that 30% of the total seats available for admission to MBBS course in a Medical College should be kept free from reservation on the basis of residence requirement or institutional preference. That is a total mis reading of that judgment. True import of that judgment is that after providing for reservation validly made, whatever seats remain available for non reserved categories, 30% of such seats at the least, should be left free for open competition and admission to such 30% open seats should not be based on residence requirement or institutional preference but students from all over the country should be able to compete for admissions to such 30% open seats. [51 A C] 6. Some of the State Governments and universities are proposing to fill up the minimum 30% non reserved seats for the MBBS course on the basis of marks obtained by the students at the qualifying examinations held by the different States and or Universities, totally ignoring the fact that the standard of judging at these different qualifying examinations cannot, by its very nature be uniform. It would be wholly unjust to grant admissions to students by assessing their relative merits with reference to the marks obtained by them, not at the same qualifying examination where standard of judging would be reasonably uniform but at different qualifying examinations held by different State Governments or Universities where the standard of judging would necessarily vary and would not be the same. That would indeed be blatantly violative of the concept of equality enshrined in Article 14 of the Constitution. Therefore, no State Government or University or Medical College shall grant admission to students to fill the minimum 30% non reserved seats for the MBBS course, on the basis of comparison of the marks obtained by them at different qualifying examinations. The admissions must be based on evaluation of relative merits through an entrance examination which would be open to all qualified candidates throughout the country. Such entrance examination should be held by the Government of India or the Indian Medical Council on an all India basis and admissions should be granted to various Medical Colleges in the country on the basis of marks obtained at such entrance examination and while granting admission any preference expressed by the students for any particular State or University or Medical College or Colleges shall be kept in mind and; as far as possible, efforts should be made to conform to such preferences so that the students who secure admission are least inconvenienced and they are able to carry on their studies near their place of residence. [49 D H; 50 A B] 45 7. There is no difficulty in giving effect to the judgment from the academic year 1985 86 so far as three year post graduate courses are concerned and the admissions will be governed by the principle laid down in the judgment. But in cases where students seek admissions to the post graduate courses of two years duration after the completion of the house job, if the principle laid down in that judgment were to govern such admissions from the academic year 1985 86, it would cause considerable hardship to the students who have selected house job in a particular speciality prior to the delivery of the judgment on 22nd June, 1984. In order to meet the demand of equality and justice it is directed, that in case of Universities and Medical Colleges, where the system in vogue is to have one year house job in a particular speciality followed by admissions to a two year post graduate course in the same speciality, the admissions to the two year post graduate courses for the academic year 1985 86 should be governed, not by the new principle laid down in the judgment, but by the old rules which prevailed prior to the delivery of the judgment, provided the students seeking admissions had commenced their house job prior to the delivery of the judgment on 22nd June 1984. If however, the house job was commenced subsequent to the delivery of the judgment on 22nd June 1984, the admissions to the two year post graduate courses for the academic year 1985 86 would be governed by the new principle laid down in the judgment. [57 A D] 8. In most of the States, the post graduate course is of three years ' duration and during the first year, the student is expected to do house job in the speciality in which i e has been admitted to the post graduate course. This system is more advantageous to the students since it gives an opportunity to the students to secure admission to the post graduate course in any speciality that is available, on the basis of the marks obtained at the MBBS examination in case of 50% seats reserved on the basis of institutional preference and on the basis of marks obtained at the entrance examination in the case of 50% non reserved seats. It is, therefore, recommended to the Indian Medical Council as also to the State of Uttar Pradesh and other "states which follow the system of one year house job followed by two years post graduate course to uniformly adopt the system of three years post graduate course with house job in the first year. So far as post graduate education in the Medical Faculty is concerned there should, be uniformity throughout the country. [54 B D] 9. All India Entrance Examination should be conducted in at least one centre in each State. Having regard to the size of population, the number of students seeking admission and the geographic area of a State, there may be more than one centre in some States both in regard to admissions to the post graduate courses and MBBS course. As directed earlier the Indian Medical Council should submit a positive scheme for holding an all India entrance examination for regulating admissions to the minimum 30% non reserved seats for MBBS course on the next hearing so that necessary directions could be issued for holding such entrance examination well in time before the next academic year begins in June or July, 1985. The writ petitions shall be finally disposed of after such directions are issued. [52 F; 50 E. 62 B] Dr. Pradeep Jain and Ors vs Union of India & Ors. ; explained and Jagdish Saran vs Union of India ; referred to. 46 </s>
<s>[INST] Summarize the judgementl Appeals Nos. 1133 and 11 34 of 1965. Appeal by special leave from the judgment and order dated November 18, 1964 of the Mysore High Court in T. R. C. No. 4 of 11964. R. Venkataram and R. Gopalakrishnan, for the appellant. S.V. Gupte, Solicitor General, R. Ganapathy Iyer, R. H. Dhebar and R. N. Sachthey, for the respondent. The Judgment Of WANCHOO and SIKRI JJ. was delivered by SIKRI J. SHAH J. delivered a dissenting Opinion. Sikri, J. These appeals by special leave are directed against the judgment of the Mysore High Court in a reference under section 27(1) of the Wealth Tax Act (27 of 1957) hereinafter referred to as the Act answering the question "whether the sums of 421 Rs. 4,30,684 and Rs. 4,13,353 being the value of the shares transferred by the assessee to the Sandur Ruler 's Family (Second) Trust could be included in the net wealth of the assessee for the assessment years 1958 59 and 1959 60 under the provisions of Section 4(1)(a) (iii) of the Wealth Tax Act" in favour of the Revenue. The question arose in the following circumstances: The ap pellant. His Highness Yeshwant Rao Ghorpade, hereinafter referred to as the assessee, held 12,750 shares in Sandur Manganese & Iron Ores Ltd. on March 31, 1957. On August 24, 1957, he created two Trusts, one may be called the Charitable Trust and the other the Sandur Rulers Family (Second) Trust may hereinafter be referred to as the Second Trust. The assessee transferred some shares to the Second Trust under conditions contained in the Trust Deed. The Wealth Tax Officer and the Appellate Assistant Commissioner, in computing the net wealth of the assessee on March 31, 1958, and March 31, 1959, the valuation dates respectively for the assessment years 1958 59 and 1959 60, included the value of these shares held by the Trustees under the Second Trust. On appeal, the Appellate Tribunal reversed the decisions of the authorities below and came to the conclusion that the value of the shares could not be taken into consideration in computing the net wealth of the assessee. The Tribunal, however, at the instance of the Department referred the question of law already set out above for the opinion of the High Court. The High Court, as mentioned earlier, answered the question against the assessee. The assessee having obtained special leave, the appeals are now before us. The short question that arises is whether the shares in question held by the Trustees under the Second Trust are held for the benefit of the three minor children mentioned in the Second Trust deed. The answer to this question depends, first, on the interpretation of the words "for the benefit of. . minor child" in section 4(1) (a)(iii) of the Act, and secondly, on whether on the true interpretation of the Second Trust, these assets are held for the benefit of the minor children. Section 4(1)(a)(iii) reads as follows: "4. (1) In computing the net wealth of an individual, there shall be included, as belonging to him. (a)the value of assets which on the valuation date Eire held. (iii)by a person or association of persons to whom such assets have been transferred by the individual otherwise than for adequate consideration for the benefit of the individual or his wife or minor child or". The learned Solicitor General, Mr. Gupte, on behalf of the Revenue, contends that the word "benefit" in this section means A the immediate or deferred benefit. He says that the amendment of the section made by the Wealth Tax (Amendment) Act, 1964 (46 of 1964), which came into force on April 1, 1965, is in 422 effect declaratory. Section 4 of the Amending Act substituted a new clause for the clause set out above. The new clause is: "(iii) by a person or association of persons to whom such assets have been transferred by the individual otherwise than for adequate consideration for the immediate or deferred benefit of the individual, his or her spouse or minor child (not being a married daughter ) or both, or". We are unable to regard the new amendment as declaratory. The amendment makes a deliberate change and the addition of the words "the immediate or deferred benefit" before the words "of the individual", apart from other changes, cannot be called a mere declaratory legislation, and we must construe the word 'benefit ' apart from the amendments made by Act 46 of 1964. It seems to us that the word 'benefit ' in the context means for the immediate benefit of the individual or his wife or minor child. If a property is transferred to Trustees to hold in trust for the life of A and then for B. we cannot hold that the property is held for the benefit of B, during the life time of A. As will appear later, under the Second Trust, the Trustees hold the trust property for the benefit of the Charitable Trust for a number of years before they start holding it for the benefit of the minor children. It is difficult to say that while the property is being held for the benefit of the Charitable Trust, it is also being held for the benefit of the minor children. Coming to the second point, namely, whether the trust pro perty is held for the benefit of the minor children within section 4(1)(a) (iii), it is necessary to carefully consider the terms of the Second Trust Deed, because the High Court has differed from the interpretation placed upon it by the Income Tax Appellate Tribunal. It is common ground that the Trust Deed must be considered as a whole. The preamble to the deed reads as follows: "This Deed of Settlement and Trust is made this 24th day of August 1957 between His Highness Maharaj Shri Yeshwant Rao Hindu Rao Ghorpade, Ruler of Sandur, now residing at Sandur House, Palace Road, Bangalore, hereinafter called the SETTLOR, of the one part, and His Highness Maharaj Shri Yeshwant Rao Hindu Rao Ghorpade, Ruler of Sandur, and Captain Sardar Dattaji Rao Chander Rao Ranavare, both of whom are hereinafter collectively called the TRUSTEES, of the other part: Whereas the SETTLOR is absolutely entitled to the shares, set out and described in Schedules A, B and C hereto as sole and absolute owner thereof; Whereas the SETTLOR had been and is desirous of making a settlement on his two minor sons namely, 423 Rajkumar Shri Shivarao Yeshwantrao Ghorpade, aged 16 years and Rajkumar Shri Venkatrao Yeshwantrao Ghorpade, aged 6 years hereinafter referred to as the First and the Second Beneficiary and on his minor daughter Rajkumari Shri Vijayadevi Yeshwantrao Ghor pade, aged 10 years, hereinafter referred to as the Third Beneficiary, out of natural love and affection towards them of the shares set out in Schedules A, B and C hereto respectively, and with a view to make provision for them; Whereas the SETTLOR intends and desires to give to his aforesaid minor sons and minor daughter, from time to time, further shares or other assets, with the intention that such further shares or other assets be given, should be held in Trust for the said minor sons and minor daughter in the manner in which they have respectively taken the shares set out and described in Schedules A, B and C hereto, as if the further shares or other assets had formed part of the said Schedules. " It is not necessary to set out the last para in the preamble. The learned Solicitor General attaches importance to the recitals in the preamble, but, in our view, the recitals do not assist us in any manner. There is no doubt that the intention of the settlor was to make a settlement on his minor children, but the whole question which arises in this case is whether the settlement made by him is for the benefit of the minor children within section 4(1)(a)(iii). The word "settlement ' is neutral, and the question is what has been settled on the minor children. But there is no doubt that the assessee out of natural love and affection for his minor children created the Trust in question, and that the minor children are the beneficiaries under the Trust. Clauses 1, 2 and 3 of the Trust Deed grant, transfer and convey the shares mentioned in the Schedules. A, B and C to the Trustees. Clause 1 deals with the shares settled for the ultimate benefit of the first beneficiary; clause 2 deals with the shares settled for the ultimate benefit of the second beneficiary, and clause 3 deals with the shares settled for the ultimate benefit of the third beneficiary. These clauses are couched in the same language and it is only necessary to set out clause 1, which is in the following terms: The Settlor doth hereby grant, transfer and convey upto the Trustees the shares set out and described in Schedule A hereto, to have and to hold the same in Trust, both as to the corpus and income therefrom, for a period of two years from the date of this Indenture for the benefit of Shri Yeshwantrao Maharaj Charitable Trust and on the expiry of the said period of two years, to have and to hold the shares set out and described in Schedule A 424 nereto in Trust both as to the corpus and income received after the expiry of the aforesaid period of two years from the date of this Indenture, for the benefit of Rajkumar Shri Shivarao Yeshwantrao Ghorpade, the First Beneficiary herein, as the full absolute and beneficial owner thereof, but subject to the terms and conditions hereinafter set forth. Clause I thus purports to vest the shares in the Trustees and directs, first, that they shall hold the same in trust, both as to corpus and income therefrom, for a period of two years from August 24, 1957, for the benefit of the Charitable Trust, and secondly, that on the expiry of the said period of two years to hold the shares in trust, both as to corpus and income received after the expiry of the aforesaid period of two years from August 24, 1957 for the benefit of the first beneficiary. It seems to us clear from reading this clause in isolation from the other clauses. which will be referred to later, that for the first two years the beneficiary is the Charitable Trust and not the RaJkumar, the first beneficiary. For the first two years there is an express direction that the corpus and the income should be held for the benefit of the Charitable Trust. There was some discussion as to why both the corpus and income are mentioned. The word "income" has been defined in clause 31 of the Deed as follows: "In these presents, the expression 'income ' with reference to any Beneficiary shall mean the income derived from the shares set out and described in the Schedule appropriate to such beneficiary and any income that may be derived from the investment of such income including any income that may be derived from any further shares or other assets that may be transferred either by the Settlor or by any other persons for the benefit of any such beneficiary, including bonus shares, if any. " It appears to us that in view of this definition it was perhaps necessary to mention the word "income" in Clause 1 because the idea of the settlor was that income accruing in the first year should be invested and further returns secured from it. But it is manifest that the Rajkumar, the first beneficiary, had no interest whatsoever in the income accruing during the first two years from the trust properties. It is true that clause I does not direct that the income during the first two years should be handed over to the charitable Trust, but this is made clear in clause 21, which we shall presently consider. The next relevant clause is clause 9 which reads as under: "This Settlement and Trust is hereby declared to be irrevocable and shall take effect immediately and all trusts, settlements and interests granted or created by these presents shall vest in the respective Beneficiaries immediately." 425 Mr. Gupte relied on this clause to show that the interest of the minor children was a vested interest and not a contingent interest. Assuming that it is so, it still does not assist us in answering the question which we have posed above. Assuming the interest to be vested we still have to consider whether the Trustees hold the shares for the benefit of the minor children as on the valuation dates, i.e., March 31, 1958 and March 31, 1959. Clause 21 to which reference was made a short while ago, and the provisos thereto, are as follows. We may mention that the High Court thought that the provisos were irrelevant but in our view they throw a great deal of light on the question before US. The Trustees may, in their absolute discretion, accumulate the income accruing under this settlement to the benefit of Shri Yeshwantrao Maharaj Charitable Trust for a period of two years from the date of this Indenture as respects the shares set out and described in Schedule A hereto and for a period of twelve years from the date of this Indenture as respects the shares set out and 'des cribed in Schedule B hereto and for a period of eight years from the date of this Indenture as respects the shares set out and described in Schedule C hereto. Provided that: (a)The Trustees may, at any time and from time to time, during the aforesaid period of two years from the date of this Indenture, pay to the Trustees of, Shri Yeshwantrao Maharaj Charitable Trust the whole or any part of the income accruing under this settlement in res pect of shares set out and described in Schedule A hereto, during the said period of two years as the Trustees may, from time to time, deem fit and on the expiry of the said period of two years, the Trustees shall pay over to the Trustees of the said Shri Yeshwantrao Maharaj Charitable Trust t he whole or the balance of the said in come as the case may be, and thereupon the Trustees shall stand discharged of all their obligations to the aforesaid Charitable Trust and thereafter the said Chantable ' Trust shall. have no right or claim whatsoever either to the income or the corpus of the said shares set out and described in Schedule A hereto. " Provisos (b) and (c) are in similar terms and deal with the shares set out in Schedule B and Schedule C, respectively, the only difference being about the period during which the income accruing could be paid to the Charitable Trust and the period after which the Trustees 'were under an obligation to pay to the Charitable Trust the whole or the balance of the said income. It seems to us quite clear from clause 21 that the intention of the settlor was that the income from the shares mentioned in 426 Schedule A should be either paid over to the Charitable Trust during the period of two years, or if it is not paid over during the two years, it should be paid over to the Charitable Trust on the expiry of the said two years. Now reading clause 1 and clause 21 with proviso (a) it seems to us that it is the charitable trust which is entitled to the income of the shares in Schedule A during the first two years. Reading clause 2 and clause 21 with proviso (b) it is equally clear that it is the charitable trust which is entitled to the income from the shares set out in Schedule B for a period of 12 years. Further it is manifest that reading clause 3 and clause 21 with proviso (c) it is the charitable trust which is entitled to the income from the shares set out in Schedule C during the first eight years. During these periods the first, second and third beneficiary had no interest whatsoever in that income. The learned Solicitor General says that this may be so if we only consider clauses upto 21, but if we consider clauses 22, 23. 24, 25 and 26, they override the intention manifested until now. Clauses 22, 23 and 24 enable the Trustees to accumulate the income accruing under the settlement to the first, second and the third beneficiary respectively till July 31, 1975. We may only set out clause 22 which deals with the first beneficiary. Clause 22 reads as follows: "The Trustees may in their absolute discretion accumulate the income accruing under this Settlement and Trust to the First Beneficiary herein until the 31st July 1975 and on the aforesaid date shall make over to him all the Trust funds in the possession of the Trustees as may belong to the said Beneficiary. " In our view, clause 22 enables the Trustees to accumulate only the income accruing to the first beneficiary, does not say what income accrues to the first beneficiary. For that we have to look to the other clauses. It is only under the latter part of clause 1 of the Trust Deed that income accrues to the first beneficiary. Clause 25 deals with the eventuality of the first, second or the third beneficiary dying before July 31. It does not really throw much light on the question. The next clause 26, Is important, and Mr. Gupte strongly relies on this clause. This clause reads as follows: "Notwithstanding anything contained in clause 21 to 25 supra, the Trustees shall have full power during the currency of this Settlement and Trust to expend from out of the income accruing under this Settlement to each of the Beneficiaries herein such amount as the Trustees may in their discretion deem fit for, the maintenance, education. health, marriage and advancement of each of the Beneficiaries herein. " 427 Mr. Gupte says that this clause shows that all the previous clauses are a smoke screen to enable the Trustees to spend the money for the benefit of the beneficiaries even during the aforementioned periods of 2, 12 and 8 years, and he says that the non obstante clause overrides everything contained in clauses 21 to 25. There is no doubt that clause 21 is mentioned in the non obstante clause, but we agree with Mr. Venkataraman, the learned counsel for the assessee, that the mention of clause 21 seems to be a typographical mistake, for the meaning of the clause is quite clear that the Trustees cannot under this clause expend from out of the income accruing under the settlement to the charitable trust for their power to spend is limited to the income accruing under the settlement to each of the beneficiaries, and as we have mentioned before while dealing with clause 21, the only income that accrues to the three beneficiaries under the settlement is after it ceases to be accumulated for or given to the Charitable Trust. If we were to accept Mr. Gupte 's argument we would have to omit the words "to each of the Beneficiaries herein" occurring in the clause. Mr. Gupte contends that the word 'beneficiary ' would include the Charitable Trust. We are unable to agree because the latter portion of the clause deals with education, marriage, etc., and these can have reference only to the first, second and the third beneficiary, ie., his minor children. Mr. Gupte urges that it would be natural on the part of the settlor to provide for the maintenance, education, health, marriage and advancement of each of the beneficiaries during their minority, and it would be unnatural to attribute intention to him to leave them without any means of sustenance during their minority. There is no force in this contention. The settlor may well have thought that he would look after the minor children during ,heir minority, and what he wanted to provide was for their expenses after they had attained the age of about 18. It would be recalled that the effect of the earlier provisions is that income starts accruing under the settlement to each of the minor children when they reached the age of about 18. We are accordingly of the opinion that clause 26 does not cut down the interest which had been settled on the Charitable Trust. We may mention that in this connection Mr. Venkataraman drew our attention to the rule of construction laid down by this Court in Sahabzada Mohammed Kamgar Shah vs Jagdish Chandra Deo Dhabal Deo (1) and Ramkishore Lal vs Kamal Narain. (2) In the latter case Das Gupta, J., speaking for the Court, observed as follows: "Sometimes it happens in the case of documents as regards disposition of properties, whether they are testamentary or non testamentary instruments, that there is a clear conflict between what is said in one part of the docu ment and in another. A familiar instance of this is where in an earlier part of the document some property is given (1) ; ,611. (2) [1963] Supp. 2 section C.R. 417, 425. 423 absolutely to one person but later on other directions about the same property are given which conflict with and take away from the absolute title given in the earlier portion. What is to be done where this happens? It is well settled that in case of such a conflict the earlier disposition of absolute title should prevail and the later directions of disposition should be disregarded as unsuccessful attempts to restrict the title already given. (See Sahabzada Mohd. Kamgar Shah vs Jagdish Chandra Deo Dhabal Deo(1) It is clear, however, that an attempt should always be made to read the two parts of the document harmoniously, if possible. It is only when this is not possible, e.g., where an absolute title is given is in clear and unambiguous terms and the later provisions trench on the same, that the later provisions have to be held to be void. " In our opinion these observations would apply to the facts of this case if it is held that there is conflict between clauses 1 and 21 on the one hand and clause 26 on the other. But, in our view, all these clauses can be read harmoniously by holding that the mention of clause 21 in clause 26 is a typographical mistake, and clause 26 deals only with the income which accrues to the first, second and third beneficiary after the interest of the Charitable Trust has ceased. In conclusion we hold that considering the document as a whole the shares were not held for the benefit of the three minor children as on March 31, 1958 and March 31, 1959. Accordingly the answer to the question referred by the Appellate Tribunal and set out above must be against the Revenue. The appeals are accordingly allowed, judgment of the High Court set aside and the question referred to the High Court answered in the negative. The assessee will be entitled to costs here and in the High Court. One hearing fee. Shah, J. The High Court of Mysore answered the following question referred under section 27(1) of the Wealth Tax Act 27 of 1957 in the affirmative: "Whether the sums of Rs. 4,30,684 and Rs. 4,13,353 being the value of the shares transferred by the assessee to the Sandur. Ruler 's Family (Second) Trust could be in cluded in the net wealth of the assessee for the assessment years 1958 59 and 1959 60 under the provisions of section 4(1)(a)(iii) of the Wealth Tax Act?" The Wealth Tax Bill was moved before the Parliament on May 15, 1957, and was enacted as law after receiving the assent of the President. on September 12, 1957. The two trust deeds which fall to be construed in these appeals were executed on August 24, 1957. The object of the settlor of the two deeds of trust was to (1) ; ,611. 429 evade the charge of wealth tax on the properties covered thereby. It was so found by the High Court, and that was not denied before us. But it is open to a taxpayer to so order his affairs that incidence of tax may lawfully be avoided. Attempts at evading incidence of taxation though not commendable are not illegal. In each case the Court must take the taxing statute as it stands, subject to all its imperfections: If a transaction does not fairly fall within the letter of the law, the Court will not 'Seek to put a strained construction to bring it within the law. The Court will not also stretch a point in favour of the taxpayer to enable him to get by his astuteness the benefit which other taxpayers do not obtain. The two trust deeds were executed on August 24, 1957. One is a trust deed styed "Shri Yeshwant Rao Maharaj Charitable Trust" hereinafter called 'the Charitable Trust ' and the other is styled "The Sandur Ruler 's Family (Second) Trust" hereinafter called 'the Family Trust '. Of both these Trusts, Yeshwant Rao Ghorpade, Ruler of Sandur, is the settlor and the trustees are the settlor and Captain Sardar Dattaji Rao Chender Rao Ranavare. Under the Charitable Trust the income and all the assets of the Trust funds are liable to be utilised for advancement of knowledge, education, health, safety or any other object of general public utility or beneficial to mankind. The settlor is to be the Chairman of the Board of Trustees during his lifetime and he has power to fill up the vacancy in the office of a trustee. In case of his death, the Ruler of Sandur for the time being, is entitled to fill the vacancy of the office of trustee. Under this deed no property is settled for the Trust. By cl. 3 the assets and the funds of the Trust are to be such sums as the Founder Trustees may contribute or in any manner provide to the Trust, such sums or assets as may be contributed, gifted or donated by any person or company to the Trust, all interest or income arising out of the said sums and assets, all assets, that may be purchased or acquired from out of the said funds or otherwise acquired for. the Trust, all investments and realisations therefrom out of the said funds, and assets, and all sums and assets which have by any means become the property of the Trust. By cl. 4 the trustees are authorised to accept any donation or other sums of money or other assets from any person or company subject to any special conditions as may be agreed upon, but not so as to be inconsistent with the intent and purposes of the Trust. Simultaneously with the Charitable Trust, the Family Trust was executed. Initially the settlement was to operate in respect of 30 ordinary shares of the Sandur Manganese and Iron Ores (Private) Ltd., ten shares described in Sch. A to be held in trust for the benefit of Rajkumar Shivarao, the First Beneficiary, ten shares described in Sch. B to be held in trust for the benefit of Rajkumar Venkatrao, the Second Beneficiary and the remaining ten shares described in Sch. C to be held in trust for the benefit of Rajkumari Vijayadevi, the Third Beneficiary. By paragraph 2 of the preamble it is declared that the settlor was desirous of making a settlement "on his 430 two minor sons, namely Rajkumar Shri Shivarao Yeshwantrao Ghorpade, aged 16 years, and Rajkumar Shri Venkatrao Yeshwantrao Ghorpade, aged 6 years and on his minor daughter Rajkumari Shri Vijayadevi Yeshwantrao Ghorpade, aged 10 years out of natural love and affection towards them and with a view to make provision for them", and by the third paragraph of the preamble it was declared that the settlor intended and desired to give to his minor sons and daughter from time to time further shares or other assets, with the intention that such further shares or other assets should be held in trust for the minor sons and daughter to be taken by them as set out and described in Schedules A, B & C. as if such shares or other assets had formed part of the said Schedules. The primary intention disclosed by the preamble of the deed of trust was that the settlor settled properties described in Schedules A, B & C and declared his intention to settle other properties in future with the object of making provision for his three named children. The quantum of the estate settled must undoubtedly be determined by the habendum clause, but the preamble may in case of ambiguity be resorted to for ascertaining the object of the deed and the intention of the executant. By the first clause the settlor conveyed to the trustees the shares described in Sch. A, and to hold the same in trust "both as to the corpus and income therefrom for a period of two years from the date of this Indenture for the benefit of" the Charitable Trust "and con the expiry of the said period of two years, to have and to hold the shares set out and described in Sche dule A in Trust both as to the corpus and income received after the expiry of the period of two years for the benefit of" the First Beneficiary "as the full, absolute and beneficial owner thereof, but subject to the terms and conditions hereinafter setforth". Similarly the shares described in Sch. B were conveyed for twelve years for the benefit of the Charitable Trust and thereafter for the benefit of the Second Beneficiary, and by cl. 3 the settlor conveyed the shares described in Sch. C for a period of eight years for thebenefit of the Charitable Trust and thereafter to the Third Beneficiary By cl. 4 it is declared that other shares or assets given to all or any of the beneficiaries and transferred to the trustees will be held in trust for all or any of the beneficiaries as may in accordance with the settlement and trust be specified, and subject to the same limitations, interests and conditions as relate to the shares specified in Schedules A, B & C, as if those other shares or assets so transferred had formed part of the Schedule A, B & C as may be specified by the settlor or such other person. Clause 31 of the deed of trust dens tie expression "income" with reference to any beneficiary as meaning income derived from the shares set but and described in the Schedule appropriate to such beneficiary and any income that may be derived from the investment of such income including any income that may be derived from any further shares or other assets that may be transferred for the benefit of any such beneficiary. 431 The scheme of cls. 1, 2, 3 & 4 of the Family Trust may first be examined. The shares initially settled and any other shares or assets subsequently settled for the benefit of the beneficiaries or any of them are by cl. 4 to be dealt with as if they formed part of the three Schedules. The Charitable Trust is to obtain the benefit of the property in Schs. A, B & C both as to the corpus and income,, approximately for the periods during which the three beneficiaries do not attain their respective ages of eighteen years, and income therefrom is to be held for the benefit of the Charitable Trust and on the expiry of the periods mentioned, the shares and the assets are to be held in trust both as to the corpus and income therefrom for the benefit of the First, Second or the Third Beneficiary. The scheme devised by the settlor is that during the minority of each beneficiary the property in Schedules A, B & C qua each beneficiary is to remain vested in the trustees for the benefit of the Charitable Trust, and after expiry of the period specified the corpus and income is to be held for the full, absolute and beneficial ownership of the respective beneficiaries. By cls. 6, 7 & 8 provision is made for appointment of trustees. It may suffice to mention that the settlor during his lifetime is to be the trustee and has in case of vacancy power to appoint new trustee by writing or by will, and by cl. 10 the custody of the Trust assets and every portion thereof is to remain with the settlor and the trustees have full power to alter the investments in their absolute discretion. Clause 9 reads as follows: "This Settlement and Trust is hereby declared to be irrevocable and shall take effect immediately and all trusts, settlements and interests granted or created by these presents shall vest in the respective beneficiaries immediately. " It is not clear whether in cl. 9 the charity is intended to be designated as a beneficiary. From the Schedules and cls. 1, 2 & 3 it appears that the beneficiaries were to be the three children of the settlor. Even granting that charity was intended to be a beneficiary within the meaning of cl. 9, the instrument vests the interests granted or created in the respective beneficiaries immediately on execution, and therefore the interest which endures to the three children of the settlor under the instrument vests in them immediately. By cl. 21 it is directed that the trustees may, in their absolute discretion. accumulate the income accruing under the settlement for the benefit of the Charitable Trust for a period of two years from the date of the indenture as respects the shares set out and described in Sch. A, for a period of twelve years as respects the shares set out and described in Sch. B and for a period of eight years as respects the shares set out and described in Sch. The direction is not obligatory, but permissive. By the first proviso the trustees are authorised to pay at any time, and from time to time, during the period of two years, to the trustees of the charity the whole or any part of the income accruing under the settlement in respect of shares 432 set out in Sch. A. and on the expiry of the said period the trustees are enjoined to pay over to the trustees of the charity the whole or the balance of the income as the case may be, and thereupon the trustees stand discharged of all their obligations to the charity. Similar provision is made by provisos (b) & (c) with regard to payment of income from the shares during the period (A twelve years in respect of shares set out in Sch. B and during the period of eight years in respect of shares described in Sch. C. Prima facie this may indicate that the income to be received from the shares is to be applied for the benefit of charity in respect of the shares set out in Schedules A, B & C during the specified periods and that the children of the settlor are not to have any interest in that income. By cls. 22, 23 and 24 an absolute discretion is conferred upon the trustees to accumulate the income until July 31, 1975 in respect of the shares mentioned in each of the Schedules and on the expiry of that period to make over to the Trust funds as may belong to the beneficiaries. This is clearly intended to maintain the control of the settlor over the properties settled in trust till July 31, 1975. By cl. 25 it is directed that the trustees shall have control over the trust funds and the income, even if any of the beneficiary dies before July 31, 1975. Clause 26 provides: "Nothwithstanding anything contained in clauses 21 to 25, supra, the Trustees shall have full power during the currency of this Settlement and Trust to expend from out of the income accruing under this Settlement to each of the Beneficiaries herein such amount as the Trustees may in their discretion deem fit for the maintenance, education, health, marriage and advancement of each of the Beneficiaries herein. " Clause 26 confers upon the trustees full power during the currency of the settlement and trust to expend the income accruing under the settlement to each of the beneficiaries therein for the maintenance, education, health, marriage and advancement of the beneficiaries. This power is exercisable notwithstanding any provision to the contrary made in cls. 21 to 25. It may be recalled that cl. 21 confers upon the trustees power either to use the income accruing under the trust for the benefit of Trust during the period prescribed, or to accumulate the income and deliver it on the expiry of the periods specified to the trustees of the Charitable Trust. But by cl. 26 the trustees under this trust are competent to expend the income not for charity, nor to pay it over to the trustees of the Charitable Trust, but for maintenance, education, health, marriage and advancement of the beneficiaries. The relevant provisions of the Wealth Tax Act may now be surmmarised. By section 3 wealth tax is charged for every financial year commencing on and from April 1, 1957, on the net wealth on the 433 corresponding valuation date, on every individual, Hindu undivided family. and company. By section 4, net wealth is to include certain assets. Clause (1)(a)(iii) of section 4 provides that: "In computing the net wealth of an individual, there shall be included, as belonging to him (a) the value of assets which on the valuation date are held. (iii)by a person or association of persons to whom such assets have been transferred by the individual otherwise than for adequate consideration for the benefit of the individual or his wife or his minor child. " Section 5 provides for exemptions of certain assets in the computation of net wealth. It provides insofar as it is material that: "Wealth tax shall not be payable by an assessee in respect of the following assets and such assets shall not be included in the net wealth of the assessee (i)any property held by him under trust or other legal obligation for any public purpose of a charitable or religious nature in India." Under the instrument of Family Trust the assets included in the Schedules A, B & C were on the valuation date held by an association of persons and those assets were transferred by the settlor otherwise than for adequate consideration ' But says the settlor, on the valuation date the assets were not held for the benefit of himself, his wife or minor children, since, they were held both as to corpus and income for the benefit of charity during the minority of his children. If on a true interpretation of the deed this plea be correct, the assets are not liable to be included in the net wealth of the settlor for the levy of wealth tax. I agree with counsel for the settlor that the amendment made in section 4(1) (a) (iii) by Act 46 of 1964 which sought to include in the computation of net wealth, assets transferred for "the immediate or deferred benefit of the individual, his or her spouse, or minor child" is not declaratory of preexisting law. Under the clause as originally enacted, assets transferred for the immediate benefit of the individual, his wife or minor children alone may be included in the net wealth of the individual, and the liability of the settlor must be determined under the provision as it stood enacted in 1957. The question then is: Are the assets transferred by the settlor under the Family Trust instrument for the immediate benefit of his minor children? That question can only be answered on a determination of the total effect of the instrument in the light of the diverse clauses. By the Family Trust the primary intention of the settlor as disclosed in the preamble is to make provision for his children, and 434 for that purpose property is set apart by the Schedules read with cls. 1, 2 & 3. By cl. 4 it is contemplated that other property will also be settled for the benefit of the children of the settlor. By cl. 9 the interest created under the deed vests immediately in the beneficiaries and by cl. 26 notwithstanding the provisions made in cls. 21 to 25 directing application of the income from property set out in Schedules A, B & C for limited periods in favour of charity, the trustees have the power during the currency of the settlement to expend from out of the income accruing under the settlement to each of the beneficiaries such amount as the trustees may in their discretion deem fit for their maintenance, education, health, marriage and advancement of each of the beneficiaries therein. If by this clause power is conferred upon the trustees to direct the income of the property in Schdules A, B & C for the benefit of the children even during the periods specified in cls. 1, 2 & 3 the assets are unquestionably transferred for the immediate benefit of the children. But it was urged that the inclusion of figure "21" in cl 26 is the result of a typographical error and it should have read as cl. 22. But even cl. 25 refers to the application of the income for limited periods in the event of death of any of the beneficiaries and thereafter for the heirs of the beneficiary, and that is not said to be an efforts typographical or otherwise. Again the argument that reference to cl. 21 was due to an error was never raised before the High Court: if there was any substance in that agreement, the settlor would have executed a deed of rectification correcting the error after setting out the circumstances in which that error came to be made. It was urged that the power which the trustees could exercise is to expend the income accruing under the settlement for each of the beneficiaries under the Trust, and since no income accrued to the beneficiaries during the periods for which the income was to be applied or accumulated for the benefit of charity, reference to cl. 21 in cl. 26 had no meaning. It is implicit in this submission that the settlor intended that the income arising from the Trust property was to be utilized after the children attained the age of majority for their maintenance, education, health, marriage and advancement and not during their minority. The children stood in greater need of provision for maintenance, education, health and advancement during their minority than after they attain their majority, but it is said contrary to the plain terms of cl. 26 that the interest was intended to be given to them after they attained the age of majority, and not during their minority. In the deed of settlement charity is not directly mentioned as one of the beneficiaries, and the income is directed to be given for limited periods to charity and thereafter to the beneficiaries named therein. Clause 26 in terms confers power upon the trustees to expend from out of the income accruing under the settlement to each of the beneficiaries, such amounts for the maintenance, education, health, marriage and advancement of the beneficiaries or any of 435 them as the Trustees deem fit, and there is nothing in that clause which implies that this power is to be exercised after expiry of the periods specified in cls. 1, 2 & 3. The expression "beneficiary" in cl. 26 clearly refers not to charity, but to the three children of the settler, because the trustees are invested with power to expend from out of the income accruing under the settlement for the maintenance. education, health, marriage and advancement of each of the beneficiaries therein. Reading cls. 9 & 26 together it appears that the settlor intended that the trustees shall have power, notwithstanding other provisions in the deed of Trust, that the income of the property settled may be applied during the currency of the settlement for the benefit of the beneficiaries named therein, and in the event of death of any of the beneficiaries, for the benefit of his or her heirs. There was therefore a vested interest immediately arising on the execution of the instrument, and the children of the settlor were the real beneficiaries. In seeking to evade the application of the Wealth Tax Act, clumsy and inconsistent directions are made in the Family Trust: the trustees are initially directed to apply the income accruing from the shares for certain specified periods to charity, and if the income is not so applied during the periods the accumulated income is directed to be handed over to charity, but the direction is immediately followed by the clause that the trustees may apply the income, notwithstanding the provision relating to the application of the income in favour of charity, for the benefit of the minor children of the settlor. The High Court has held that the case fell clearly within section 4(1) (a) (iii) of the Wealth Tax Act and during the periods specified in cls. 1, 2 & 3 the property mentioned in Schedules A, B & C was liable to be included in the computation of wealth tax of the appellant, and in my view the High Court is right in so holding. The appeals fail and are dismissed with costs. ORDER In accordance with the opinion of the majority, the appeals are allowed with costs here and in the High Court. One hearing fee. [/INST]The plaintiff tendered in evidence a plaint in an earlier suit and relied on an admission made by the defendants with regard to a fact in issue in the later suit. The High Court ruled that the plaint was not admissible in evidence on two grounds, viz., (i) the plaintiff could not rely on a state ment in the plaint as an admission, as she was not prepared to accept the correctness of the other statements in the plaint and (ii) an admission in a pleading could be used only for the purposes of the suit in which the pleading was filed. On appeal to this Court. HELD : (1) All the statements in the plaint are admissible in evidence. The plaintiff can rely upon a statement in the plaint with regard to a matter in issue as an admission, though she is not prepared to accept the correctness of the other statements in the plaint. Nor is the Court bound to accept all the statements as correct. The court may accept some of the statements as correct and reject the rest. [3 F] (2) Section 17 of the makes no distinction between a admission made by a party in a pleading and other admissions. An admission made by a party in a plaint signed and verified by him may be used as evidence against him in other suits. In other suits, this admission cannot be regarded as conclusive and it is open to the party to show that it is not true. [4 D] D. section Mohite, vs section I. Mohite, A.I.R. 1960 Bom. 153, Marianski vs Cairns, and Ramabai Shriniwas vs Bombay Government,A.I.R. , referred to, </s>
<s>[INST] Summarize the judgementAppeal No. 635 of 1965. Appeal by special leave from the Award dated January 8. 1963 of the First Industrial Tribunal, West Bengal in Case No. VIH 354 of 1961. B. Sen, Janardan Sharma, P.K. Ghosh and S.K. Nandy, for the appellants. Niren De, Solicitor General, M. Mukherjee and Sardar Bahadur. for respondent No. 1. The JUdgment of the Court was delivered by Bhargava, J. This appeal by special leave has been filed by ' the workmen of Messrs Hindustan Motors Ltd. against the decision of the First Industrial Tribunal, West Bengal in a dispute relating to payment of bonus for the year 1960 61. The respondent, M/s Hindustan Motors Ltd., (hereinafter referred to as 315 "the Company") was established in the year 1942 and, initially, the work taken up by the Company was that of assembling of motor cars from components imported from foreign countries. Later on, manufacture of components of motor cars was started and gradually the Company developed this work of manufacture of components by increasing the number of components manufactured by it until, at the present time, the Company is manufacturing more than 70% of the components utilised in the cars put on the market by the Company. The work of manufacturing components was taken in hand for the first time in the year 1949, according to the reply of the Company filed on 10th January, 1962, to the statement filed on behalf of the workmen. before the Tribunal. At the initial stages of its existence, the Company was running at a loss and even, as late as the year 1956. the Tariff Commission 's Report on the Automobile Industry mentioned that this Company was making a loss of Rs. 833 per car on the Hindustan Landmaster which was the car put on the market by the Company at that time. Even Subsequently, for several years. no profit was shown in the profit and loss account and, consequently, no bonus was paid to the workmen until the dispute about it was raised for the first time in respect of the year 1959 60. We were informed that the dispute relating to the payment of bonus for the year l 959 60 is still pending before the Industrial Tribunal, while the dispute with respect to bonus for the next year 1960 61 has been decided and is now before us in this appeal. In this year 1960 61, the profit and loss account of the Company showed a net profit of Rs. 249.71 lacs. Out of this, a sum of Rs. 59.53 lacs was allocated for payment of dividend on ordinary shares @ 12% and a sum of Rs. 27.55 lacs for dividend on preference shares @8.57%. The total amount allocated for payment of dividends was thus Rs. 87.08 lacs. In view of the fact that, in this year, the Company had earned a net profit of over Rs. 249 lacs. the workmen demanded bonus equivalent to six months ' wages. The monthly wage bill of the workmen is about Rs. 4 lacs, so that the total amount claimed towards bonus by the workmen came to Rs. 24 lacs. It was also stated on behalf of the workmen that, if this bonus to the extent of Rs. 24 lacs is awarded, the actual amount which the Company would have to pay will only be 55% of this amount, because 45% representing income tax on this amount would be refundable to the Company from the Government. Before the Tribunal, there was no dispute between the parties that, in order to find out whether any surplus was available for distribution of bonus, calculations must be made on the basis of the Full Bench Formula approved by this Court in The Associated Cement Companies Ltd., Dwarka Cement Works, Dwarka vs Its 316 Workmen & Another(1). The Tribunal, after making all other deductions from the surplus which have to be made in accordance with the Full Bench Formula and without taking into account provision for rehabilitation, arrived at a figure of Rs. 87.80 lacs as the amount of surplus available. Thereafter, the Tribunal held that a sum of Rs. 373.62 lacs every year was needed for rehabilitation purposes and, since this amount very much exceeded the surplus otherwise available, there was no scope for granting, any bonus at all. Consequently, the Tribunal decided the reference against the workmen and held that no bonus was payable for this year. The workmen have come up to this Court against this decision of the Tribunal. In this appeal also, there is no dispute that the principles to be applied for working out the surplus available for distribution of bonus must be those approved by this Court in the case of Associated Cement Companies Ltd.(1). On behalf of the workmen, however, it was urged that the Tribunal committed an error in applying the Formula in respect of five different items involved in the calculation. These are: (1) Rehabilitation, (2) Return on reserves used as working capital, (3) Return on paid up capital, (4) Interest on fixed deposits, and (5) Home delivery commission. Of these items, the most controversial is the first item of rehabilitation and that is also the most material one, because, if the figure of annual rehabilitation arrived at by the Tribunal is accepted, it is clear that no surplus can possibly remain out of the profits earned during the year for distribution of bonus. In the calculation of rehabilitation, various factors are involved which have been indicated by this Court in the case of Associated Cement Companies(1). The factors in calculation of rehabilitation accepted by the Tribunal which have been challenged by the workmen are: (i) the divisor, which depends upon the life of the plant, machinery and buildings, the year of their installation or erection, and the residuary life which must be taken into account when working out the divisor, (ii) the calculation of the multiplier for arriving at the replacement cost of the old machinery which requires rehabilitation. and (1) 317 WORKMEN V. HINDUSTAN MOTORS LTD. (Bhargava, 1.) 317 (iii) the deductions which should be made when working out the annual rehabilitation. We shall now proceed to deal with these points. When the dispute was taken up for adjudication by the Tribunal, the Company, on 3 l st May, 1962 filed statements showing calculations of rehabilitation provision required for rehabilitating the plant, machinery and buildings. Amongst these statements was a statement described as Schedule IA (hereinafter referred to as "the first Schedule IA") and in that statement it was claimed on behalf of the Company that the average total life of its machinery was 6 years. On behalf of the workmen, it was urged that the life of the machinery should be taken to be 30 years and on this basis, ,after the arguments were over a rehabilitation cost calculation was filed on 21st November, 1962. Thereafter, in the course of arguments on 22nd November, 1962, some fresh statements were filed by the Company. These statements in respect of the machinery had two new Schedules, both marked as Schedule IA. In one of these Schedules IA filed on 22nd November. 1962, the multiplier taken for replacement of the machines installed in various years was higher than the multiplier in the first Schedule 1A. This Schedule shall be referred to. as "the second Schedule 1A". At the same time, as mentioned earlier, another Schedule IA was filed and, in this Schedule IA, the multipliers were the same as in the first Schedule 1A. This shall be referred to hereinafter as "the third Schedule 1A". In none of these Schedules filed, either on behalf of the Company or on behalf of the workmen, was there any classification of plant and machinery into precision or non precision machinery. Some statements for the purpose of calculation of rehabilitation were again filed on behalf of the Company on 28th December, 1962 under the directions of the Tribunal and it appears that, taking into account the evidence which had been led before the Tribunal, the Tribunal at this stage asked the Company to give separate Charts for precision machinery and non precision machinery. Consequently, the statements flied on 28th December. 1962 classified the machinery into precision and non preCision machinery. It seems that the Tribunal, in making this direction was also influenced by the circumstance that, under the Income tax Law, the depreciation allowed in respect of precision and non precision machinery is different, from which the Tribunal. inferred that precision machinery will have a shorter life than non precision machinery. In fact, the Tribunal was of the view that the proportion between the life of precision and non precision machinery can be safely taken to be the same as the proportion between the depreciation allowed in respect of the two. Proceeding on this basis, the Tribunal, in the statements prepared for and annexed as. part of the LISup. C.I./68 6 318 Award, classified the machinery into precision and non precision machinery and worked out different life for the two kinds of machinery. In the course of arguments before us, it was urged on behalf of the workmen that the Company not having claimed that machinery classified as precision had a shorter life than machinery classified as non precision either in the written statements or at the stage of filing the first Schedule 1A or even the second or third Schedule IA, there was no justification for the Tribunal to. accept this. classification and work out different periods of life for different classes. of machinery. Mr. Niren De, counsel appearing on behalf o.f the Company, in his argument before us also urged that the Company at No. stage put forward the Case that the machinery should be classified into precision and non precision machinery and different life should be attributed to the two classes of machinery. According to him, the Company 'section case throughout has been that all machinery installed m the. factory of the Company has an economic life of 6 years only, so that the Company is not prepared to justify the decision given by the Tribunal on the basis of this classification. Since both parties before us challenge the adoption of this classification by the Tribunal, we consider that it will be right to ignore this. classification and to proceed on the basis that the total life of the machinery must be worked out on an average for all the machines installed in the factory of the Company, without making any distinction between precision machinery and non precision machinery. As we have mentioned earlier, the contention on behalf of the workmen was that the life of the whole machinery should be taken to be 30 years. Mr. B. Sen, counsel appearing on behalf of the workmen, drew our attention to a number of cases, in which the life of the machinery came up for consideration either before the Labour Appellate Tribunal or before this Court in connection with calculation of rehabilitation provision. first case brought to our notice was Saxby & Farmer Mazdoor Union, Calcutta vs M/s. Saxby & Farmer (India) Ltd., Calcutta(1), in which, for purposes. of calculation of rehabilitation, the life of machinery was taken to be 30 years. Another case between the Workmen of M/s. Saxby & Farmer (India) Pvt. Ltd. vs M/s. Saxby & Farmer (India) Private Ltd.(2) in respect of a subsequent year came up before this Court. In that case, the Tribunal, in its Award, fixed the life of the machinery at 20 years and on behalf of the, workmen it was urged that it should have been 30 years as accepted by the Labour. Appellate Tribunal in respect of the earlier year in the of Saxby & Farmer Mazdoor Union, Calcutta(1). This Court held that the life of 30 years. had been taken at a time when (1) (2) Civil Appeal No. 152 of 1964 decided on 12 4 1965. 319 the machinery was. being worked in two, shifts, while, in the subsequent case, it was shown that the machinery was working in three shifts, so that it could not be said that the Tribunal was wrong in fixing the life in this subsequent case at 20 years. Relying on these cases, Mr. Sen urged that, in the present case also, we should take the life of the machinery to be 30 years. In The Millowners Association, Bombay vs The Rashtriya Mill Mazdoor Sangh,Bombay(1), the Full Bench of the Labour Appellate Tribunal, when laying down the formula that was later approved by this Court, appears to. have accepted the life of textile machinery as 25 years, while this Court, in the case of the Associated Cement Companies Ltd. (2), proceeded on the basis that the life of the machinery was 30 years. In the Honorary Secretary, South India Millowners Association and Others vs The Secretary, Coimbatore District Textile Workers ' Union(1), this Court confirmed the finding of the Tribunal that the estimated life of the textile machinery of the Company concerned in that case should be taken. to be 25 years. It is on the basis of these decisions that the claim was put forward that the life of the machinery in the present case should also. be taken to be 30 years or at least 25 years. In our opinion.this argument proceeds on an entirely incorrect basis. The life of a machinery of one particular factory need not necessarily be the same as that of another factory. Various factors come in that affect the useful life of a machinery. There is, first, the consideration of the quality of machinery installed. If the machinery is purchased from a country producing higher quality of machines,it will naturally have longer life, than the machinery purchased from another country where the quality of production is lower. Again, the articles on which the machinery operate.s may very markedly vary the life of a machine. If, for example, a machine is utilised for grinding of cement, the strain on the machine will necessarily not be the same as on a machine which operates on steel o.r iron. We are, therefore, unable to accept the suggestion that the: life of the machinery in the present case should have been fixed on the basis of the life accepted in other cases in which decisions were given on bonus disputes either by the Labour Appellate Tribunal or by this Court. The Tribunal, in its decision, worked. out the life of the machinery on 'the basis of the percentage of depreciation allowed under the Income tax Act. The application of this principle has been attacked before us by both the parties. It is urged that the artificial rule laid down in the Income tax Act for calculation of notional depreciation can provide no criterion at all for determining the life of the machinery. We think that the parties are (1) (2) (3) [1962] 2 Supp. S.C.R. 926. 320 correct and that the Tribunal committed an error in proceeding on this basis. Though, in the case of the Honorary Secretary, South India Millowners ' Association(1), this Court, on the facts of that case, accepted the life of the textile machinery as 25 years; the Court also laid down the principle for.finding out the life of machinery in the following words : "We are not prepared to accept either argument because, in our opinion, the life of the machinery in every case has to be. determined in the light of evidence adduced by the parties." (p. 933) Obviously, this is the correct principle, because it is only when the life of machinery is determined in the light of evidence adduced by the parties in a particular case that the authority determining the life can take into account all the factors applicable to the particular machinery in question. As we have indicated earlier, when determining the life of a machinery, factors, such as the quality of the material used in the machines and the nature of the material on which the machines are to operate, very materially affect their life. Further, the life of a machine will also depend on the. manner in which it is handled in a particular factory. We, consequently, in this case proceed to examine the evidence given by the parties. in this behalf. In order to prove the life of machinery, one method usually adopted by the Companies is to tender evidence of experts. In the. present case, the Company tendered in evidence the statement of an expert, Gerald Waplington, which was recorded earlier on 5th November, 1961 by the Fifth Industrial Tribunal in a dispute pending before it. That dispute was also between this very Company and its workmen. In giving the life of machinery, Waplington first classified the machines into two classes general purpose machine tools and special or single purpose machine tools and expressed the opinion that a general purpose machine tool used for one single operation is likely to have a shorter economic life than special or single purpose machine tool. According to him, a general purpose machine carrying on work of high accuracy will have an economic life of the: order of 2 to 3 years only, while a special purpose machine doing similar work of high accuracy working 400 hours a month will have an economic life of 5 to 6 years. If the work taken. from the machines is of less accuracy. then, in his opinion, a general purpose machine may have an,economic life up to 5 years, and a special purpose machine an econoevidence available in this case. It may however, be noted that (1) [1962] 2 Supp. S.C.R. 926. 321 tinction between economic life and useful life. He twice stated that economic life of a machine would be only 1/3rd of the useful life of the machine, so that if, on the basis of his evidence, the useful life of various classes of machines mentioned by him is to be worked out, the member of years given for each class by him above will have to be multiplied by 3. Thus, according to his evidence, the economic life of a machine will vary from 2 to 3 years as a minimum to 7 to 10 years at the maximum, and working out the useful life on the basis of his statement that economic life is only 1/3rd of the useful life, the machines would have a minimum of 6 to 9 years and a maximum of 21 to 30 years useful life. We shall consider what inferences can be drawn from his statement at a later stage when we have discussed the other evidence available in tiffs case. It may, however, be noted that Waplington is the only expert who can be held to. be entirely disinterested, because the other two experts examined are employed as Engineers by the Company itself. This independent witness, Waplington, was not asked whether he had seen the various machines in the factory of the Company, nor was he at any tune requested to indicate how many different machines in the factory of the Company would fail in the various classifications mentioned by him for which he has given different periods in respect of economic life. The Other two witnesses examined are Joseph Joyce, General Master Mechanic, and Girish Chandra Bansal, Master Mechanic, employed by the Company. Both of them have, in their statements given out their qualifications and experience which they. have in dealing with automobile manufacturing machinery. According to Joyce, the economic life of the machinery of the Company cannot go beyond 6 years, and this statement was. made on the basis of the machines working 16 hours a. day in two shifts of 8 hours each. Later on, he added that, applying American standard, the life of the machines can only be 6 to 10 years. In giving the life, he qualified that word with "economic" or "economic useful", so that he equated economic life with economic useful life and gave the figures on this basis. In cross examination, he, however, admitted that useful life of a machine is longer than its economic life. Thus, if various, statements of his are taken into account and it is kept in view that he is. an employee. of the Company, it may be accepted that, according to him, the maximum ,economic life of the machinery of the Company will be between 6 to 10 years and the useful life will be longer how much longer, he has not indicated. If we were to assume that he is using the expressions "economic life" and "useful life" in the same: sense in which they were used by Waplington, economic life would be 1/3rd of the useful life, with the result that, on his evidence, useful life of the machinery of the Company would work out to be 322 anywhere between 18 to 30 years. The third witness, Girish Chandra Bansal, estimated the efficient economic life, based on 16 hours per day working, at 6 to 10 years, which Coincides with the ' estimate by Joyce. In his case, however, no questions were put to. elicit from him whether he would make any distinction between efficient economic life and useful life, so. that his evidence does not appear to carry us any farther than the evidence of Joyce. It may be added that both these witnesses in their evidence stated that the workmen employed by the Company were not very skilled workers and this was a factor that had to be taken into account in considering the life of ' the machines in this company. It is obvious that, if a machine is handled by a more skilful worker, it will last longer and have a longer life. A Statement was also made by Joyce that machine.s running at high speed will have shorter life than those running at lower speeds; but this general statement made by him offers no assistance to us in this case, because he has not indicated in his evidence how many and which of the machines of the Company run at high speed and which at lower speed. Apart from this evidence of experts, the Company has attempted to provide some other data which can be of assistance in assessing the life ' of the machinery. In this connection, Mr. Niren De, arguing the case on behalf of the Company; drew our attention to the history of this Company which showed that, initially, this Company started the work of assembly of cars from parts imported from foreign countries. some time in the year 1942 43, but, later, the policy was. altered and manufacture of components was taken up and progressively increased so as to minimise foreign. import. He also pointed out that this policy of progressive production of indigenous parts was pressed Upon the Company by the Government and, for this purpose, drew our attention to the: first and the Second reports of the Tariff Commission in the years 1953 and 1956, as well as the report of the lid Hoc Committee on Automobile Industry known as the Report of the Jha Committee, because Sri L.K. Jha was its Chairman. This report came out in the year 1960. It was Urged by Mr. De that, due to. this policy of progressive increase in manufacture of new components, it was not possible for the Company to find money to rehabilitate old machinery and, consequently, the fact that the Company continued to use old machinery for a number of years should not be taken as indicating that machinery 'still had economic or useful life. It was argued. that the Company per force had to continue use of these 'old machines, because it was under pressure to expand its activities. by taking up manufacture of components and the Company was running at a loss. It has already been mentioned earlier ' that in the second report of the Tariff Commission in 1956 it was clearly stated that this Company was selling cars at a loss of 323 Rs. 833 per car. It is in this background that the evidence given by the Company should be judged to find out what is the life of the machinery possessed by the Company. He also drew our attention to the principles laid down in this connection by the Full Bench of the Labour Appellate Tribunal in the Millowners ' Association 's case (1), and by this Court in the Associated Cement Companies ' case(2). In the former case, when laying down the principle that provision should be ' made for rehabilitation replacement and modernization of the machinery, the Tribunal held that: "It is essential that the plant and machinery should be kept continuously in good working Order for the purpose of ensuring good return. and such maintenance of plant and machinery would also be to the advantage of labour, for. the better the machinery the larger the earnings, and the better the chance of securing a good bonus. " In the latter case, this Court, when examining the scope of claim for rehabilitation. held that: "this claim covers not only cases of replacement pure and Simple but of rehabilitation and modernisation. In the context, rehabilitation is distinguished from ordinary repairs which go into the working expenses of the industry. It is also distinguished from replacement. It is quite/conceivable that certain parts of machines which constitute a block may need rehabilitation though the block itself can carry on for a number of years; and this process of rehabilitation is in a sense a continual process. Unlike replacement, its date cannot always be fixed or anticipated. So with modernisation and all these three items are included in the claim for rehabilitation. That is why we think it is necessary that the Tribunals should exercise their discretion in admitting all relevant evidence which would enable them to ' determine this vexed question satisfactorily." Proceeding further to. distinguish between cases of replacement. modernisation and expansion, the Court held: "If it appears fairly 'on the evidence that the introduction of the modern plant or machine is in substance an item of expansion of the industry, expenses incurred in that behalf have to be excluded. On the other hand, if the employer had to introduce the. new plant essentially because the use of the old plant. though capable (1) (2) 324 of giving service was uneconomic and otherwise wholly inexpedient, it may be a case of modernisation. Similarly; if by the introduction of a modern plant or machine the production capacity of the industry has. appreciably increased, it would be relevant for the Tribunal to consider in an appropriate case whether it would be possible to apportion expenses on the basis that it is a case of partial modernisation and partial expansion. " It will thus. be seen that, when considering the question of rehabilitation, what is essentially to be taken into. account is that the old plant, though capable of giving service, was uneconomic and otherwise wholly inexpedient when provision for its replacement and rehabilitation, even though it will include modernisation would be fully justified. In this context, it may be worthwhile examining at this stage the difference between economic life and useful life on which emphasis has been laid by Mr. Sen on behalf of the workmen. We have already indicated earlier that even the expert examined behalf of the Company, Gerald Waplington, made a distinction between economic life of machinery and its useful life, Further, in giving the life, he applied American standards which may not be applicable in India. Court, in various cases where the question of rehabilitation has been discussed, has laid emphasis on useful life rather than on economic life and, oven in the Associated Cement Companies ' case(1) in the extract quoted above, the Court held that modernisation is justified when the use of the old plant becomes uneconomic and otherwise wholly inexpedient. Thus, two tests were laid down, first, that it should be uneconomic and, second, that it should be also otherwise wholly inexpedient. The economic life, as envisaged by Waplington, was not, therefore, considered the appropriate. test for determining when rehabilitation of the plant and machinery would be justified. In fact, one of the very major considerations, that should be taken into account is the actual practice of the manufacturers using the machinery and if evidence be available, to find out how long the manufacturers continue to use the machinery as a rule. It may be that, during the last few years of use, the machinery may.be continued to. be utilised because of want of resources and compulsion to retain the machinery, because replacement is not possible at all. It is in the light of this. situation that we proceed to examine the evidence given by the Company about the behaviour of its machinery and the steps taken by the Company to have the old machinery rehabilitated. (1) 325 In this connection, two statements filed on behalf of the Company are of significance. One of these is a list of obsolete and/or discarded machines prepared on 26th October, 1962 and marked as Ext. It is to be. noticed that, though 40 different machines were discarded by 26th October, 1962 when this statement was prepared, none of the machinery discarded was that installed up to. the year 1947 48. In fact, this situation is also borne out by the three Schedules IA which have been referred to earlier by us. In those Schedules 1 A, the machinery discarded and written off from books is shown as being worth Rs. 35,000/ out of machinery of the value of Rs. 89.75 lacs installed in the year 1947 48. Thus, the machinery of that year discarded was nominal in value. None of the machinery installed between 'the years 1948 49 to 1951 52 was discarded. Again, the machinery installed in 1952 53 was discarded to the extent of the nominal value of Rs. 39,000/ out of Rs. 11.06 lacs, and no machinery installed in 1953 54 was discarded. The machinery discarded was primarily that installed in the years 1954 55 to 1957 58, and its value was in the region of Rs. 46 lacs. Thus, right up to 1962, the old machinery purchased up to the year 1954 was almost all continued in use and was not discarded, even though machinery installed in the next four years was considered unfit for further use and. was discarded or written off, The second statement is Ext. 21 which bears the heading "replacement programme condition of machine tools" and which was prepared in March, 1960 in order to claim foreign exchange from the Government for replacement of machinery. That list contains more than 200 machines, but, again, the machines installed during the year 1947 48 or earlier included in it are only 5 in number, whereas the majority of machines. included in that list are those installed in later years,. Significance attaches to this factor, because the machines ins.tailed in the year 1947 48 were of very large value, their cost being. in excess of Rs. 89 lakhs. In fact, that is the year in which the investment on installation of machinery was highest, barring the year of bonus and the year immediately preceding it. This statement thus shows that, even though the Company wanted replacement of a number of machines which had been installed even in the year 1949 50 and some machines installed in later years, the replacement of those machines was given preference over the replacement of machines installed earlier in the year 1947 48. In this statement, in the remarks column,. it was mentioned that these machines are to be scrapped. but there was no statement that machines which had been installed in the year 1947 48 were also in such a condition that they required scrapping. Thus, these statements provide some indication of the life of machinery which point both ways. The fact that old machinery of 1947 48, though of large value, was not 326 considered to be in such a condition as to require immediate replacement in preference to machinery installed later would point towards that machinery having a fairly long life. On the other hand, there is the factor that machinery installed in later years was actually scrapped or was sought to be scrapped, and this necessarily means that later machinery was considered as having shorter life. In this connection, another statement of which notice may be taken is Ext. 29 which shows prices of certain machines originally purchased by. the Company which is to be rehabilitated, and the prices of the same machines, which were purchased in the two years preceding the time when Girish Chandra Bansal was examined before the Tribunal. Girish Chandra Bansal 's ,evidence was recorded on 14th November, 1962 'and in his statement before the Tribunal he stated that Ext. 29 was prepared to compare the prices of same machines in earlier years when they were purchased originally and again when similar machines were purchased a second time in the past two years. This statement has the significance that, though in the past two years the Company took the step of purchasing machines which would perform the identical functions which the old machines were performing, the Company chose to add these machines as new ones, as a part of its scheme of expansion rather than replace those old machines. In the year 1961 62, therefore, the Company was still of the opinion that it was preferable to add a new machine of the same type rather than replace an old machine doing the same work, and an inference would necessarily follow that old machine must have been considered to be sufficiently serviceable. This is the view that the Company appears to have held in respect of machinery which was installed 14 or 15 years earlier. On behalf of the Company, some statements were also. filed to show that there were very frequent break downs in the machinery of the Company and. as an illustration, our attention was drawn to the statement for the period January, 1960 to September, 1960. It is true that, if there are very frequent break downs in machinery, this would give an indication of the condition of the machinery and lead to the inference that their useful life is coming to an end. There is, however, one great difficulty in drawing any conclusion from the statistics of number of break downs of the machinery put forward on behalf of the Company. The Company has. no doubt, shown us statements that a number of machines had break downs during the last few years preceding the year of bonus. but no material was brought to our notice from which it might have been possible to compare how the same machinery was behaving in earlier years or within the first few years after it was installed. Unless it be possible to compare the number of 327 break downs. when their life is claimed to be over with the number of break downs when the machine was almost new ' or 'was running its economic or Useful life, no assistance is available for assessing the. life of the machinery from a mere table showing the number of break downs. Further, it was not possible from these statements ' to find out which of the machines installed in which year were subject to the break downs, nor did these statements give us any picture about the percentage of machines installed in different years which ' were included in these 'statements. Consequently, we have felt handicapped in drawing any inference from these statements. Reliance was also placed on some statements showing that, for purposes of granting incentive bonus, a rated time was prescribed for various machines and progressively this rated time in respect of a large number of machines has had to be increased in order to enable the workmen to earn bonus, because the machines themselves are not working efficiently and. if the rated time is not increased, the workmen would fail to qualify for incentive bonus for no fault of their own and simply because the machines on which they were required to work had deteriorated in condition. It is true that the statement given of increase of rated time gives some indication that the condition of the machinery in this factory has been going down and though this. factor is relevant in determining the useful life of machinery, it cannot carry us very far, because there is no evidence ' which would enable us to lay down a correlation between the increase in the rated time and the expiry of the useful life of the machinery. It is not possible on the evidence to discover how much the rated time is expected to increase before it can be said that the machinery has completely run out its useful life. Mr. De also drew our attention to the statements of some of the witnesses who. deposed that machinery running at high speed has a shorter life than that running at low speed. This general statement, however, is of no assistance, because the Company did not attempt to classify its machines between high speed and low speed ones and ' to give evidence in that behalf. Lastly, it was urged by Mr. Sen on behalf of the workmen that another factor which should be taken into account is that, according to the Full Bench Formula, for calculation of rehabilitation the machinery is treated as scrapped when its value is reduced to 5%, because the break down value of 5% is all that is deducted when calculating the requirements for rehabilitation. The argument was that the fact that the. break down value is taken at 5% indicates that the machinery 'for purposes of rehabilitation is treated as still useful unless its value is reduced to that low figure. 328 This is, no doubt, another aspect that must be taken into. account, though we are unable to accept the submission that a machinery should be deemed to have useful life until it reaches the stage of having a break down value of 5%. No such absolute rule can be inferred. In this case, the Tribunal, in fixing the life of the machinery, as we have mentioned earlier, proceeded to calculate it on the basis of the depreciation rate permitted under the Income tax Act. That basis was not acceptable to either of the parties before us. On behalf of the workmen, it was urged that it was an entirely wrong principle of calculating the life, and even o.n behalf of the Company no attempt was made to support this method adopted by the Tribunal. In the Honorary Secretary, South India Millowners, Association 's case(1), this Court also rejected the argument that the calculation of the life may be based on the depreciation rate permitted by the income tax Act. In these circumstances, we have to consider the cumulative effect of the various pieces of evidence and circumstances which we have discussed above and, on its basis, to estimate what should be considered to be the useful life of the machinery of this Company. Reference may briefly be made to the various conclusions arrived at. The evidence of the independent expert and of the engineer employees of the Company gives a figure. for useful life. of machinery which may be anywhere between 6 years to. 30 years. The lower figures given by them cannot be, accepted as they relate to economic life in the strict sense of that expression and are based on American standards. At the same time, the maximum life worked out from their evidence is on the hypothesis that the useful life stated by Waplington to be three times that of economic life is also the useful life in the same proportion to economic life as given in the evidence of Joyce. Then, there is the evidence that this Company itself has been running its old machinery for quite a large number of years and even after 13 or 14 years of use, the Company in quite a large number of cases preferred, when buying similar machines, to utilise them for expansion rather than for rehabilitation. On the face of it, replacement of old machinery would have been preferred to expansion, if the old machinery had really completed its useful life. In some cases, however, machinery purchased in later years had to be rehabilitated after much shorter periods, but no detailed information is available. why such early replacement became necessary. No. ' material was provided to show the comparative quality of machines which have been run for a long time and machines which were replaced or sought to be replaced after shorter periods of us. After tak (1) [1962] 2 supp. S.C.R. 926. 329 ing into consideration the various factors mentioned by us above, and on the evidence before us, we think that in this case, it would. be appropriate to hold that the average life of the machinery of this. Company in respect of different kinds of machines obtained from different sources may be appropriately taken as 15 years. This life of 15 years arrived at by us, it may be mentioned is on the basis that the machines of the Company have been running during most of the. period, to which the evidence relates, in two shifts only. Girish Chandra Bansal, one of the Engineers of the Company, examined as a witness, stated that the machines in this Company were working in two shifts only, until, for the first time in 1959 60, the factory started to run round the clock, i.e., in three shifts. He added that the factory had been working in two shifts from the time it was founded. It is also clear that; if the. factory had been working in only one shift, the life of the machinery would have been longer, and we think that in that case lit. would have been appropriate to take the life of the machinery as 25 years. On the other hand, after the machines are being worked in three shifts, the Life of the machinery is bound to be lower and, consequently, if the machines be worked in three shifts, it would be appropriate to take the life of the machinery at 10 years. In the present case, however, we are accepting the; average life as 15 years for all the machines requiring rehabilitation, because the evidence, as mentioned above, shows that the machines have been. working in two shifts only from the time when the factory started functioning, with the exception that, in the first few years, they were worked in only one shift while, from the year preceding the year of bonus, they have been worked in three shifts. Consequently, it may be taken that, up to the year of bonus, the machines have been worked on the average, in two shifts. In working out the divisor, however, it will have to be kept in view that future life of the machinery will have to be calculated on the basis of three shifts and, consequently, on the basis of the figure of 10 years as the useful life of the machinery. We may also incidentally mention that this Court, in the case of National Engineering 'Industries Ltd. vs The Workmen & Vice Versa(1), accepted the life of the precision machinery of the Company concerned in that case as 15 years, so that the conclusion arrived at by us on the evidence in the present case happens to coincide with the figure of life accepted in that case. In this connection, we may also take notice of one point urged by Mr. De on behalf of the Company. It appears that, when working out the divisor and finding out what machinery required rehabilitation, the Tribunal did not take into account machinery installed during the bonus year itself for making provision for mic life of 7 to 10 years. In his evidence, further, he made a dis (1) Civil Appeals Nos. 356 357 of 1966 decided on 6 10 1967. 330 any machinery is installed in bonus1 year, the Company would be justified in claiming that it must immediately start making provision for its rehabilitation, though the period for rehabilitation of that machinery would only start at the end of the bonus year. Once machinery has been installed and is in existence. in the bonus year, the Company is entitled. to say that it will require= rehabilitation in future and that provision should be made for rehabilitation of that machinery also and the Company should start keeping reserves. for that purpose from the year of bonus itself. Thus, in the present case, the machinery installed in the year 1960 61 should have been included in the rehabilitation statement, though the divisor in respect of that machinery will, on our decision given above, be 15 on the basis of two shifts and 10 on the basis. of three shifts, as the machines will still have a residuary life of 15 or 10 years, computing the period from the bonus year which is also the year of installation. The second factor entering the calculation of rehabilitation requirement about which there was controversy between the parties is the multiplier. We have already mentioned the fact that, in the first and the third Schedules 1A, the Company gave one set of multipliers, while in ' the second Schedule 1A higher multipliers were given. The Tribunal took both sets of multipliers into. account and worked out the average and accepted that as the correct multiplier, representing the rise in the price: rate of the machinery requiring rehabilitation. Thereafter, the Tribunal held that the machinery which was to replace the old one would have a larger production and proceeded to work out figures for reducing the multipliers on that account. The Tribunal held that it would be justified to reduce the average multipliers arrived at by 75 for machinery installed up to ' 1951 52, by 55 for machinery installed during the years 1952 53 to 1955 56, and by 35 for that installed during the years 1956 57 to 1960 61. Before us, this method adopted by the Tribunal was criticised by counsel ' for both parties. On behalf of the workmen, it was contended that there was no justification for the Tribunal to take the average of the multipliers in the first and the second Schedules IA and that the Tribunal should only have proceeded on the basis that the multipliers given in the first Schedule IA were proved and were correct ones. On behalf of the Company, it was urged that the Tribunal should have accepted the multipliers given in the second Schedule IA and should not have reduced them by taking into account those given in the first Schedule 1A, and, further, that there was no justification at all for the Tribunal to reduce the figures of the multipliers for the various blocks of machinery by 75, 55 or 35 on the ground that the machinery to be installed in replacement would have a higher production. 331 We were taken by learned counsel for parties into the evidence tendered on behalf of the Company to prove the multipliers. We nave found that the correctness of the multipliers shown in the first Schedule 1A has been very satisfactorily proved. It appears that those figures were arrived at by comparing the prices of the old machinery installed in various years with similar machinery purchased in subsequent years. That comparison was contained m statement Ext. The Company 's witness Bansal not only proved this statement, but also clearly stated that the machines originally purchased and those purchased later shown in, that statement Ext. 29 were the same machines. In cross examination, he further specifically arrested that the production capacity of these new machines mentioned in Ext. 29 was very much the same as that of the original machines which were to be replaced when they were new. It is also, significant that these figures of multipliers included in the first Schedule IA. were not challenged on behalf of the workmen before the Tribunal. So far as the figures contained in the second Schedule 1 A are concerned, it was suggested on behalf of the Company that they were ' based on subsequent quotations received for replacement machinery which formed part of a series Ext. Learned counsel for the Company was, however, unable to point out any statement in the evidence of any witness which would show that the figures for multipliers incorporated in the second Schedule IA were actually calculated from the quotations contained in Ext. In fact, no such evidence was possible, because the second Schedule IA was filed on behalf of the Company after the evidence of parties was over and that second Schedule IA not being a part of the record before the Tribunal when evidence was recorded, it was not possible for any witness to give evidence proving those figures for multipliers. In these circumstances, we must hold that the. Tribunal committed an error in taking into account the multipliers given in the second Schedule IA and that the only figures for multipliers that could have been and should be accepted are those in the first Schedule 1A. At the same time, we must also accept 'the contention on behalf of the Company that the Tribunal had No. justification fox reducing the multipliers by deducting 75, 55, and 35 in respect of the three blocks of machinery sought to be replaced. As we have indicated earlier, the Tribunal proceeded to hold that this deduction was justified on the ground that the new machines which had been purchased and which were being compared with the original machines sought to be replaced must necessarily have more productive capacity. We have not been able to find any evidence on the record of any witness which would support this conclusion. It is true that the statements. made by Company witnesses, particularly Bansal show that the new machines were 332 more efficient and were likely to produce better quality goods. no stage, however, in the cross;examination of Bansal was any statement made admitting that ' these new machines, whose. prices. were being compared with those of the old machines for rehabilitation, had a larger productive capacity than those original machines. In fact, as we have pointed out earlier, in his cross examination Bansal made a definite statement that these new machines will produce exactly the same number of pieces as the original machines when they were new. This Court in the case of the Associated Cement Companies Ltd.(1) had indicated that it is only if, by the introduction of a modern plant or machine, the production capacity of the industry has appreciably increased that it would be relevant for the Tribunal to consider in an appropriate case whether it would be possible to apportion expenses on the basis that it is a case of partial modernisation and partial expansion. If, however, the increased production is not of a significant order. it may be regarded as incidental to replacement or modernisation and the question of apportionment may not arise (p. 969). It is, of course, possible that Bansal, in stating that the new machines, the prices of which formed the basis of calculation of multipliers, have exactly the same capacity as the original machines to be replaced, may not be quite correct; but there was no material at all from which 'the Tribunal could have justifiably inferred that the increase in production would be so material as to attract the principle 'for apportionment laid down by this Court in the case cited above and, consequently, the Tribunal fell into an error in reducing the multipliers merely on the assumption that the new machines must necessarily have a larger production capacity than the original machines. In these circumstances, we hold that the rehabilitation, provision should have been calculated by the Tribunal on the basis of the. multipliers given by the Company in the first Schedule 1A, without taking an average of those multipliers and the multipliers given in the second Schedule IA and without decreasing the multipliers by 75, 55 and 35 in respect of various blocks. The third contested question with regard to rehabilitation relates to the deductions which have to. be made out of the total rehabilitation requirement to arrive at the annual provision for that purpose which must be allowed in working out the available surplus for distribution of bonus. In the Associated Cement Companies Ltd. case (1), when approving the Full Bench Formula this Court indicated how the calculations should be made. It was held : "Before actually awarding an appropriate amount in respect of rehabilitation for the bonus year certain (1) 333 deductions have to be made. The first deduction is made on account of the break down value of the plant and machinery which is usually calculated at the rate of 5 % of the cost price of the block in question. Then the depreciation and general liquid reserves available to the employer are deducted. The reserves which have already been reasonably earmarked for specific purposes of the industry are, however, not taken into account in this connection. Last of all the rehabilitation amount which may have been allowed to the employer in previous years would also have to be deducted if it appears that the amount was available at the time when it was awarded in the past and that it had not been used for rehabilitation purposes in the meanwhile. These are the broad features of the steps which have to be taken in deciding the employer 's claim for rehabilitation under the working of the formula. "(p.970). The dispute in the present case relates to the deduction of the depreciation and general liquid reserves. One aspect in controversy in this behalf raised on behalf of the Company is that even depreciation should not be deducted unless it is available to the employer for purposes of rehabilitation. The argument was that in the sentence "Then the depreciation and general liquid reserves available to the employer are deducted" the word "depreciation" should be read with the words "reserves available to the employer" and, consequently, the deduction should only be made of. depreciation reserves available to the employer. We are unable. to accept this submission, because the very principle on which rehabilitation provision is allowed when making calculations for awarding. bonus militates against this interpretation. This Court, in the:same case, in explaining why rehabilitation is granted, held: "We have already noticed that the object of providing depreciation of wasting assets in commercial "accounting is to recoup the original capital invested in the purchase of such assets; but the amount of depreciation which is allowed under the formula can hardly cover the probable cost of replacement. That is why ' the formula has recognised the industry 's claim for rehabilitation in addition to the admissible depreciation." (p. 966) It will thus be seen that the purpose of providing for rehabilitation charges is to enable the industry to cover the difference between the amount of depreciation which is recouped by making provision for it in accordance with the principles of commercial accounting and the amount that would be required to purchase the new machinery for replacement. Once the price of the new machinery sup. C.1./68 7 334 is known, the rehabilitation amount would, be the difference between that price and the amount provided as depreciation of wasting assets in accordance with the principles of commercial accounting. The deduction of depreciation provision made in ,the accounts is not, therefore, on the basis that amount must be available for purchasing the replacement machinery even in the year when provision for rehabilitation is being made. That amount is deducted from the price of the machinery Which will be required to be purchased in order to determine what amount the industry is going to require for rehabilitation in spite of having been allowed depreciation. In our view, therefore, this Court, when it later held that the depreciation and general liquid reserves available are to be deducted in calculating the rehabilitation amount, did not intend to lay down that the depreciation must also be available in the year of bonus. The words "available to the employer" were intended to qualify the expression "general liquid reserves" only and not the word "depreciation". General liquid reserves are to be deducted on the principle that if such reserves are in the hands of the industry and are not earmarked for binding purposes, the industry must utilise those reserves for rehabilitating the old machinery instead of asking for provision to be made out of profits in the year of bone and in future years. The principle adopted is that provision for rehabilitation is to be made only to the extent of the difference between the price of the machinery which will have to be paid for replacing the old machinery and the amount of depreciation provision shown in the accounts according to the commercial system of accounting and even that rehabilitation requirement must first be met by the industry out of available liquid reserves rather than by asking for provision to be made out of profits. In the present case, the Tribunal, when calculating the provision for rehabilitation, took the entire price of the replacement machinery as required to be provided out of profits and did not take into account that price should have been reduced to the extent of the depreciation provided for in the accounts. The annual report of this Company for the year of bonus 1960 61 was produced before us and at page 24 it showed that at the beginning of the year 1960 61 depreciation to the extent of Rs. 325.48 lacs had been provided in the balance sheet of the Company. This amount has, therefore, to be deducted from the price of the machinery which is to replace the original machinery when rehabilitation is resorted to. The second question on this aspect that arises is whether there were any liquid reserves available which should also have been deducted. In the balance sheet of the Company contained in the Annual Report, various kinds of reserves have been shown. There. was a reserve for contingencies to the extent of Rs. 10.00 lacs on 31 3 1960 and a development rebate reserve of Rs. 39.51 lacs on 335 the same date. On behalf of the workmen, it was urged that this amount of Rs. 39.51 lacs should at least be deducted when calculating the requirement for rehabilitation. From the balance sheet itself an inference was sought to be drawn that this reserve existed in the form of a liquid reserve available for rehabilitation. For this purpose reference was made to the entries on the assets side of the balance sheet which shows a sum of Rs. 220 lacs as lying in fixed deposit account. The argument was that if the Company had such a large sum as Rs. 220 lacs in the fixed deposit account, it could not possibly urge that the sum of Rs. 39.51 lacs in respect of development rebate reserve was not a part of it and was not available as a liquid reserve. It is but natural that in the balance sheet the Company could not show any correlation. between the amounts entered on the two sides, liabilities and ' assets, as that is not required by any principle of commercial accounting. The argument of learned counsel for the company was ,that this development rebate reserve had been used ' as a part of the working capital of the Company represented by various items shown on 'the assets side and this fact was proved by the affidavit of Satya Narayan Murarka, Commercial Manager of the Company, who categorically stated that all the reserves had been utilised as part of the working capital. It seems to us that a mere statement by the Commercial Manager that the reserves have been utilised in the working capital cannot be accepted as conclusive evidence of that fact. When the balance sheet itself shows that cash amounts in the form of fixed deposits were available which were far in excess of the development rebate reserve in question there would be no justification for holding that this development rebate reserve was not available as a liquid asset and had been included by the Company in its working capital. At the stage it is not necessary, therefore, to go into any further details to arrive at the conclusion that this development rebate reserve was a liquid asset available for rehabilitation and, consequently, liable to ' be deducted when calculating the rehabilitation requirement We shall deal in greater detail with the question of what items were included in the working capital at a later stage when dealing with the controversy relating to the claim of the Company for return on working capital which is allowed under the Full Bench Formula, when calculating the surplus available for distribution of bonus. On the question of calculation for provision for rehabilitation, the only point raised on behalf of the workmen with regard to buildings was that the Tribunal, in taking the life of the factory buildings at 25 years and non factory buildings at 40 years, was not correct and that the life of the two types of buildings should have been taken at 40 years and 50 years respectively. At the 336 time of the hearing before the Tribunal, the Company had claimed that factory buildings have a normal life of 25 years only and non factory buildings 30 years, while the claim of the workmen was that the factory buildings had a life of 40 years and the non factory buildings 50 years. In arriving at its decision, the Tribunal primarily took into account the provisions of Rule 9 of the Rules framed under the Income tax Act, 1922 which lays down the principle for calculation of depreciation in respect of buildings. That principle, no doubt, cannot be taken as giving any correct indication of the life of buildings for purposes of calculation of rehabilitation provision, but, in this case, there was the difficulty that the Tribunal did not accept the evidence given by the Company to prove the age of the buildings as claimed by it, while no evidence was given on behalf of the workmen in support of their claim that the life of the buildings should be taken at the figures contended on their behalf. In the course of arguments before us. all that learned counsel did was to refer to the decision of this Court in the Associated Cement Companies Ltd. case(1) at p. 993 where the calculations made in the Chart show that the life of the various buildings concerned in that case were taken to be between 30 and 35 years. We do not think that, in the absence of evidence showing that the buildings of the Company were similar to those buildings whose life came up for consideration in the case cited above, it is possible to derive any assistance from the figures accepted in that case. In these circumstances, the position before us is that neither on behalf of the Company, nor on behalf of the workmen is there any reliable evidence brought to our notice on the basis of which we can arrive at a correct estimate of the life of the buildings of the Company and, consequently, we do not think that there will be any justification for us to vary the decision given by the Tribunal in this behalf. The last controversy in the calculations for rehabilitation provision is on the question whether the depreciation and the liquid reserves available should be deducted from the total amount of rehabilitation requirement or whether it should be taken into account at the very first stage when the machinery or the buildings requiring earliest rehabilitation are taken into consideration and the annual requirement in respect of them is worked out. On behalf of the workmen, we think, it was rightly urged that, if depreciation and liquid reserves available are to be deducted, they must be incorporated in the accounts against the replacement cost of those items which required replacement earliest in time. It is obvious that if funds in the form of depreciation provision and other liquid reserves are available, the Company claiming provision for rehabilitation must utilise them in rehabilitating those (1) 337 machines and buildings which require rehabilitation at the earliest point of time. There is no principle at all that the depreciation in respect of a particular machinery must be deducted when calculating the rehabilitation requirement in respect of that machinery itself. The Full Bench Formula approved by this Court only recognises the industry 's claim to make provision out of profits for rehabilitation of machinery which might require replacement even in future only on the ground that the industry may not be able to meet those replacement cost out of funds available in its hands. The provision for future requirement of rehabilitation must at any time depend upon what is immediately available and what is going to be required in future. If some machines have fully run out their lives, they fast necessarily be replaced out of resources available immediately and there would be no justification for keeping the available resources in reserves for future rehabilitation, while not providing out of those available resources for immediate replacement of the machinery. Then, there is the second aspect that an employer in order to claim more and more rehabilitation provision, will have a tendency to keep old blocks of machinery running and to avoid adoption of such a device it would be fair that he is required to utilise available resources at the very first opportunity when the old blocks of machinery require replacement and claim annual provision for future only in respect of that machinery which will require replacement later on. It appears that this Court in The Associated Cement Companies Ltd. case(1) proceeded on this very basis when calculating the rehabilitation requirement, though without discussing this question in detail. In that case, reserves to the extent of Rs. 311 lacs were found to be available. The machinery which required to be rehabilitated was divided into four blocks, the earliest block consisting of machinery installed up to 1939 in respect of which the rehabilitation requirement was Rs. 1172.76 lacs. In respect of three later blocks, the rehabilitation requirement was Rs. 70.40 lacs, 270.37 lacs and Rs. 768.50 lacs. The total requirements for rehabilitation in respect of all the four blocks was thus Rs. 2282.03 lacs. When calculating the annual requirement the Court did not deduct the sum of Rs. 311 lacs in respect of available reserves 'out of this total of Rs. 2282.03 lacs, but instead deducted this amount from the cost of the machinery required to replace the pre 1939 block for which the amount arrived at was Rs. 1172.76 lacs. After deducting this amount of reserves from the replacement cost of that block, the balance was divided by the divisor 7 which was treated as the remainder life of the machinery falling within that block. This calculation adopted in that case, therefore, fully bears out our view that the depreciation and available reserves must be taken into account when calculating the annual (1) 338 provision in respect of that machinery which requires earliest replacement and should not be deducted out of the total rehabilitation cost as urged by learned counsel for the. Company. Mr. De in this connection drew our attention to a decision of the kabour Appellate Tribunal in Saxby & Farmer Mazdoor Union, Calcutta(1) at pp. 711 712. In that case, the Tribunal first worked out the total rehabilitation and replacement cost of 'the machinery at Rs. 43.81 lacs. From this amount were deducted a sum of Rs. 14.75 lacs in respect of available reserve, a sum of Rs 9, 03 lacs as the total depreciation on the plants and machinery and a sum of Rs. 0.737 lac in respect of the break down value of the machinery at 5 % of the cost price, leaving a balance of Rs. 19.364 lacs as the rehabilitation requirement. Then the Tribunal noticed that, on the basis of total requirement of Rs. 43.81 lacs over the several periods during which rehabilitation and replacement was to take place, the annual requirement was worked out at Rs. 8.04 lacs. Applying the simple arithmetic of ratio, the Tribunal held that the proportionate annual requirement would be Rs. 3.54 lacs, if the total requirements are reduced to Rs. 19.364 lacs. In that case, thus, the Tribunal proceeded on the basis which has been canvassed on behalf of the Company before us. The total rehabilitation requirement was first worked out, while the annual requirement was also worked out on the basis of that requirement,. without taking into account the depreciation, available liquid reserves and the break down value of the machinery to be replaced. Thereafter, the total rehabilitation requirement was reduced. by the amount of depreciation, liquid reserves available and break down value of the machinery, and the annual requirement was reduced in respect of each block of machinery in the same proportion as the proportion between the total requirement and the net amount available arrived at, after deducting depreciation, ,available liquid reserves and break down value. We do not think that the principle adopted by the labour Appellate Tribunal was correct and should be accepted. On the face of it, it introduces a very anomalous position. In a case where some machinery may require immediate replacement in the year of bonus in question and resources may be available for meeting the cost of the entire machinery required to replace it, the principle adopted by the Tribunal would still permit the industry not to replace that machinery, but claim future provision for its replacement on the basis that the available resources are to be proportionately allocated to machinery which may require replacement in much later years. We hold that in approving this course, the Tribunal did not adopt the correct principle according to which calculation should be made, when applying the, Full Bench (1) 339 Formula for calculation of bonus. Learned counsel also referred us. to the decision of this Court in M/s. Titaghur Paper Mills Co. Ltd. vs Its Workmen(1) to show that, in that case, this Court also, when calculating the rehabilitation provision, deducted the entire depreciation and reserves available from the total rehabilitation requirement and did not adopt the course of deducting it from different blocks of machinery requiring rehabilitation. That case, however, does not support the view taken by the Labour Appellate Tribunal, because in that case this Court had accepted the decision of the Tribunal that all the machinery in whichever year it may have been installed had a uniform residuary life of 10 years, so that all the machinery was to be rehabilitated simultaneously during the next 10 years. There was, therefore, no distinction between machinery installed in one year and that installed in other years insofar as the year in which it was to be replaced was concerned. It is true that, in some cases while describing the Full Bench Formula,this Court has mentioned that the total depreciation and liquid reserves available are to be deducted from the total rehabilitation requirement,but we do not think that it was intended to lay down in those cases that the method of deduction to be adopted is that laid down by the Labour Appellate Tribunal in Saxby and Farmer Mazdoor Union, Calcutta(2). On the other hand as we have already indicated this Court, in The Associated Cement Companies Ltd. case(a), very clearly proceeded to apply the principle which we are accepting in this case. Consequently, we hold that the depreciation provision of Rs. 325.48 lacs and available development rebate reserve of Rs. 39.51 lacs must be taken in to account when calculating the annual provision for rehabilitation required for replacement of the earliest installed machinery until it is exhausted, whereafter the annual requirement for the remaining blocks of machinery will have to be calculated, ignoring these available resources. The next contest between the parties in this appeal relates to the claim of the Company to return on reserves and other funds used as working capital during the bonus year when calculating the surplus available for distribution of bonus. That a Company is entitled to return on reserves used as working capital was recognised by the Full Bench of the Labour Appellate Tribunal in The Millowners ' Association 's(4) case, when laying down the formula for calculation of available surplus which was approved by this Court in the case of The Associated Cement Companies Ltd.(a). In the latter case in dealing with this aspect of the matter, the Court pointed out that no distinction has been made by Tribunals between reserves used as working capital and depre (13 [1959] Supp. 2 S.C.R. 1012 at p. 1042. (2) (3) (4) 340 ciation fund similarly used. The Court approved the decision of the Labour Appellate Tribunal in The Millowners ' Association Bombay vs The Rashtriya Mill Mazdoor Sangh(1), where the objection of the labour to depreciation fund earning any return, even if it was utilised for or about the business of the year, was ovre ruled and the Tribunal observed that "no essential difference could be made between the depreciation fund and any other fund belonging to the Company which could be invested so as to earn return. ' The Court further held: "It is thus clear that what is material is not the origin of the fund. It is the fact that the fund in the hands of the concern has been used as working capital that justifies the claim for an adequate return on it. We think it is common sense that if the concern utilises liquid funds available in its hands for the purpose of meeting its working expenses rather than borrow the necessary amounts, it is entitled to claim some reasonable return on the funds thus used." (pp. 964 65). In this appeal, it is not disputed that the Company is entitled to claim a return on reserves which were actually utilised as working capital during the year of bonus, but Mr. Sen on behalf of the workmen urged that this return must be allowed only on reserves used as working capital and not on any other funds used at such, ,On the face of it, this argument cannot be accepted in view of the decision of this Court in the case of The Associated Cement Companies Ltd.,(2) where it has been clearly held that the origin of the fund is immaterial, though with the qualification that the fund should be one which is available for investment before a claim can be made by the employer for a return on it. This principle has been affirmed or followed in a number of cases subsequently decided by this Court, but we do not consider it necessary to refer to them in view of the fact that Mr. De on behalf of the employer conceded that this is the settled law and only contended that, in this case, the Company has in fact discharged the burden of proving that all the reserves shown in the balance sheet for the year of bonus were actually utilised as working capital. Consequently, we proceed to examine this submission made on behalf of the Company. Mr. De, in support of this submission, drew our attention to the affidavit of Satya Narayan Murarka who is the Commercial 'Manager of the Company. In this affidavit, Murarka stated. that all the sums shown as reserves and surpluses in the balance sheet 'were available for being utilised as working capital and were, in (1) [1952] 1.L.L.J. 518, 522. (2) 341 fact, so utilised. Murarka was also tendered for cross examination, so that the workmen hand an opportunity of testing the correctness of his evidence by cross examining him. It was urged by Mr. De that there was nothing in the cross examination of Murarka which would justify rejection of the statements made by him in his affidavit that all the reserves and surpluses available had been employed as part of the working capital of the Company, and, in this connection, drew our attention to some decisions of this Court where the evidence given on behalf of the employer on affidavit has been accepted by this Court as sufficient proof. The first case cited by him is The Tara Oil Mills Co., Ltd. vs IIts Workmen and Others(1). In that case, a question arose whether the Company concerned was entitled to claim return on the amount of depreciation reserves used as working capital. Dealing with this claim, the Court held: "An affidavit was made on behalf of the Company that it had used its reserve funds comprising premium on ordinary shares, general reserve, depreciation reserve, workmen 's compensation reserve, employees ' gratuity reserve, bad and doubtful debt reserves and sales promotion reserve as working capital. The Tribunal, however, allowed return at 4 per centum on a working capital of Rs. 31.88 lacs. This excluded the depreciation reserve but included all other reserves which were claimed by the company and having been used for working capital. " Proceeding further, the Court held : "It is enough to say that the affidavit of the Chief Accountant filed on behalf of the company was not challenged before the Industrial Tribunal on behalf of the respondents. It would, therefore, be impossible for us now to overlook that affidavit, particularly when the Tribunal gave no reason why it treated the working capital as Rs. 31.88 lacs only. " The Court, thus, accepted the evidence of the affidavit, though it was added that it will be open to the workmen in future to show by proper cross examination of the Company 's witnesses or by proper evidence that the amount shown as the depreciation reserve was not available in whole or in part to be used as working capital and that whatever may be available was not in fact so used in the sense explained above. In Anil Starch Products Ltd. vs Ahmedabad Chemical Worker 's Union and Others(2) this Court, dealing with the ques (1) ; at p. 10. (2) A.I.R. 1963 S.C, 1346 at p. 1348. 342 tion of proof that depreciation reserve had been used as working capital, held: "It is enough to say in that connection that an affidavit was filed by the manager of the company to the effect that all its reserves including the depreciation fund had been used as working capital. The manager appeared as a witness for the company before the Tribunal and swore that the affidavit made by him was correct. He was cross examined as to the amount required for rehabilitation, which was also given by him in that affidavit; but No. question was put to him to challenge his statement that the entire depreciation reserve had been used as working capital. The Tribunal also did not go into the question whether any money was available in the depreciation reserve fund and had been actually used as working capital. It dismissed the claim for return on the depreciation reserve on entirely different grounds. In the circumstances, we must accept the affidavit so far as. the present year is concerned and hold that the working capital was Rs. 34 lacs. It will, however, be open to the workmen in future to show by proper cross examination of the company 's witnesses. or by proper evidence that the amount shown as depreciation reserve was not available in whole or in part as explained above to be used as working capital and that whatever was available was not in fact so used." In Khandesh Spg. & Wvg. Mills Co. Ltd. vs The Rashtriya Girni Kamgar Sangh, Jalgaon,(1) this Court, again dealing with the question of proof of working capital, referred to the earlier cases and held: "This judgment again reinforces the view of this Court that proper opportunity should be given to the labour to. test the correctness of the evidence given on affidavit on behalf of the management in regard to the user of the reserves as working capital. " On the basis of these views expressed by this Court, it was urged that, in the present case, the affidavit of Murarka should be accepted as sufficient evidence in proof of the company 's claim that all the reserves and funds mentioned in the affidavit were in fact used as working capital, so that the company is entitled claim a return on them. It appears to us that the affidavit of Murarka in the present case is not such that it can be held to have discharged the burden (1) ; at p. 850. 343 which lay upon the Company to prove that all the reserves and other funds had, in fact, been utilised as working capital. In the affidavit, Murarka referred to the balance sheet and stated that the various funds claimed as having been used as working capital were shown at the beginning of the bonus year as in existence and the further entries indicated that those amounts were still intact at the end of the bonus year and were carried forward to the next year. Such a statement was made by him in respect of reserve for contingencies amounting to Rs. 10 lacs, forfeited dividends amounting to Rs. 450 lacs, profit and loss account balance amount to Rs. 3.63 lacs, provision for depreciation amounting to Rs. 325.48 lacs, and development rebate reserve amounting to Rs. 39.51 lacs. It is to be noticed that the fact that these amounts were shown as in existence at the beginning of the bonus. year as well as at the end of that year can certainly lead to a reasonable inference that these funds were all available to the company for being utilised in its business during the year; but the mere fact of these entries showing the existence of these funds at. the beginning and at the end of the year cannot be the basis for a conclusion that these funds must have been utilised as part of the working capital of the Company. In order to claim a return, it is not enough for a Company to show that the amounts were available during the year for being utilised as working capital. The Company has further to discharge the burden of proving that those funds were in fact so utilised. This principle was clearly indicated by this Court in Bengal Kagazkal Mazdoor Union and Others vs Titagarh Paper Mills Company, Ltd. and Others(1). It was in that case that this Court gave an indication of how the availability of reserves and other funds for use as working capital can be inferred from the balance sheet. It was said: "What is usually done is to take into account the ' liquid assets of various kinds available at the beginning of the relevant year and the total of such assets available at the beginning of the year is considered as working capital for that year, if there is evidence that it has. been actually used during the year. But when we come to the end of the year and look at the balance sheet, we have to find out the liquid assets available at the end of the year from which the amount available as working capital for the next year may be arrived at. But the liquid assets available at the end of the year will usually be of two kinds firstly, there will be cash assets in the various reserves and secondly, there will be assets in the shape of raw materials, etc., and both together become the available working capital for the next year subject (1) at p. 364. 344 to necessary adjustments and also subject to the evidence that they were actually used as working capital. " Proceeding further, the Court, while dealing with the bonus year 1955 56, held : "Now the working capital is generally arrived at by finding the liquid reserves available on 1st April, 1955. These liquid reserves may be in the form of reserves of various kinds, i.e., depreciation reserves, general reserve, renewal reserve, and so on, and also in the form of investments, advances and raw materials, etc. in stock. All these have to be taken into account in arriving at the working capital after necessary adjustments. As we have already pointed out, the amount of working capital thus arrived at, if there is evidence that it was actually used as working capital for the year, may be allowed interest in accordance with the Full Bench Formula." In that case, thus, the two steps necessary for proving the claim were separately indicated. The first step in proving that reserves and other funds have been used as working capital is to show that they were available by proving the balance sheet in which those reserves and funds are shown in existence at the beginning of the year. The second step indicated is that evidence must be given to prove that these reserves and funds were actually utilised as working capital during the year. Obviously, this proof is needed, because, even though the reserves and funds may be available, they may not be utilised as part of the working capital and may form part of cash amounts kept by the Company or may be utilised for purposes other than that of working capital. The mere existence of the reserves and funds at the beginning of the year, even taken together with their existence at the end of the year, cannot lead to. any inference that these reserves and funds must have formed part of the working capital during the year and could not form part of other items such as fixed deposits, investments, etc. Murarka in his affidavit, as we have indicated above, gave his conclusion that the various reserves were used as part of the working capital only on the basis that these reserves and funds were in existence both at the beginning and at the end of the year. The conclusion drawn by Murarka had, therefore, no basis at all. The facts on which he relied could only justify an inference that these reserves and funds were available, but they could not exclude the possibility that they were utilised for purposes other than that of working capital. The affidavit of Murarka in this case cannot thus be held to be sufficient proof of this second ingredient that the reserves and 345 funds were in fact utilised as working capital. So far as the cases referred to by learned counsel are concerned, which we have discussed earlier, they do not, in our opinion, lay down the principle that, if in an affidavit filed on behalf of the employer a broad statement is 'made that all reserves and other funds were used as part of the working capital, that statement must be accepted as. sufficient proof, even when the statement is coupled with an admission that it is based on an inference from the balance sheet only and no other proof is furnished to show that these available reserves and funds were in fact brought in as working capital by the employer during the year in question. In these circumstances, even though in the cross examination of Murarka on behalf ' of the workmen nothing very material was elicited on this question, we have to hold that the affidavit given by Murarka is not sufficient discharge the burden which lay on the Company to prove that all the reserves and other funds shown in the balance sheet as in existence at the beginning and at the end of the bonus year in question were utilised as working capital. The balance sheet, it appears to us, itself gives an indication. that this claim made on behalf of the Company cannot be fully justified. In the balance sheet, the assets of the Company are shown under various heads and it seems to us that items falling under certain heads only can be treated as working capital of the Company during the year, while others have to be excluded. The items which cannot be treated as part of the working capital are: fixed assets of the value of Rs. 411.08 lacs, investments of the value of Rs. 14.48 lacs, fixed deposit amount of Rs. 220 lacs, loans and advances recoverable in cash or in kind or for value to be received or pending adjustment amounting to Rs. 11.74 lacs, and loans and advances from Trust and other authorities amounting to Rs. 8.09 lacs. On the other hand, the working capital would consist of current assets of the value of Rs. 31.34 lacs, Stock in Trade of the value of Rs. 337 lacs, sundry debts of the value of Rs. 69.82 lacs, bank and cash balances of the value of Rs. 37.98 lacs, loans and advances of the value of Rs. 14.27 laes, and insurance and other claims of the value of Rs. 7.61 lacs. Thus, in the present case, the balance sheet gives an 'indication that a sum of Rs. 498.02 lacs was the amount shown at the beginning of the year against items of assets which can be classified as part of the working capital, whereas the remaining sum of Rs. 665.38 lacs represent fixed assets, fixed deposits, investments and other loans and advances which cannot be classified as part of working capital. Similarly, an examination of the items entered on the side of liabilities in the balance sheet shows what were the sources from which moneys became available for acquisition of these assets. 346 Amongst these, the reserves shown are only Rs. 10 lacs for contingencies and Rs. 39.51 lacs as development rebate reserve. Though the balance sheet does not itself show the depreciation fund, it is also clear from the Schedule attached to the balance sheet that, up to the beginning of the year, a depreciation provision had been made to the extent of Rs. 325.48 lacs. In order not to show it as available development reserve or fund in the balance sheet, what the Company did was to show the depreciated value of the capital assets at Rs. 411.07 Iacs instead of the actual value of Rs. 736.56 lacs which was the amount paid in cash for acquiring those fixed assets. For purposes of dealing with the question whether any reserve was used as working capital, we must, therefore, proceed on the basis that there was a depreciation reserve of Rs. 325.48 lacs, while the investment on the fixed assets was Rs. 736.56 lacs and not merely Rs. 411.07 lacs. Taking this depreciation reserve also into account, it would thus appear that the reserves available at the beginning of the year Were of the amount of Rs. 374.99 lacs. The subscribed capital and capital available from forfeited shares was Rs. 819.57 lacs. Funds available from other resources, such as profit and loss account balance, unsecured loans, current liabilities and provisions, provision for taxation, proposed dividends and contingent liabilities not provided for, amounted to Rs. 294.33 lacs. The question that arises. is how much money from each of these ' sources had gone into the working capital and how much into fixed assets or other items of assets indicated by us above. In examining this position, the value of the fixed assets has to be taken as Rs. 736.56 lacs which was the actual amount spent in acquiring 'those assets and not at the written down value of those assets at Rs. 411.08 lacs. It seems to us that this being the position, there was no justification for Murarka to claim that all the amounts available in reserve had gone towards the working capital and did not represent other assets, such as the fixed deposit of Rs. 220 lacs and similar other items. In these circumstances, we have. to hold that no reliance can be placed on the affidavit of Murarka that all the reserves, including the depreciation reserve and the contingent anti development rebate reserve were actually used as part of the working capital during this year. The question that next arises on this conclusion of ours is whether any return at all should be allowed to the Company on reserves or other funds claimed as having been utilised as working capital during this year. The exact figure on which the Company could claim return has not been proved by it, but it seems to us that at least some part of the reserves must necessarily have been utilised in the working capital. The Company had a paid up capital of Rs. 819.57 lacs and it can safely be assumed that 'this money:was utilised for acquiring the fixed assets, as that will 347 be the primary purpose of obtaining capital from the share holders. A sum of Rs. 736.56 lacs must, therefore, have gone in cash into the fixed assets out of this sum of Rs. 819.57 lacs, leaving a balance of Rs. 83.01 lacs. The sum available from other resources was Rs. 294.33 lacs which, together with the balance of the subscribed capital left over, gives a figure of Rs. 377.34 lacs. Consequently, for purposes of the working capital, a maximum amount of Rs. 377.34 lacs could have been available from the subscribed capital or other resources and the balance of the amount must necessarily come out of the reserves. The items of assets classified as representing the working capital, as we have indicated above, have a total value of Rs. 498.02 lacs. Deducting from this amount the sum of Rs. 377.34 lacs available from subscribed capital or other resources, there remains a balance of Rs. 120.68 lacs which must have necessarily come out of the various reserves, including the depreciation reserve, and this amount at least must be held to represent reserves acually used as working capital during the year by the Company. We think that,since the information available from the balance sheet itself shows that at least Rs. 120.68 lacs out of the reserves did form part of the working capital of the Company, it would be fair to allow the Company 4% return on this amount, even though we are not inclined to accept the evidence of Murarka and have to hold that the Company on its part failed to prove that this amount or the whole of the amount of reserves had been utilised as part of them working capital during this year. Consequently, the amount which the Company has to be allowed as return on reserves utilised as working capital comes to Rs. 4.83 lacs. In this connection, we may also take notice of the claim made by the Company that return should also be allowed on certain other sums. used as working capital which have been described as working income. The Company claimed that it had money available from four different sources. The details given were Rs. 249.71 lacs from profit as worked out in the Profit and Loss Account at the end of the year, Rs. 63.07 lacs as reserve for depreciation for the year. Rs. 36.00 lacs as development rebate for this year and Rs. 4.71 lacs as value of discarded fixed assets written off. The claim was that at least half the amount represented by these figures should be treated as a fund which was available during the bonus year for being utilised as working capital. This submission, in our opinion, cannot be accepted. There is nothing to show whether any of these amounts became available to the Company during the year and if so, when they became available. In fact, the profit as worked out in the Profit and Loss. Account can be held to have accrued to the Company only when the Profit and Loss Account was worked out at the end of the year. We have already referred to the decision of this Court in 348 Bengal Kagazkal Mazdoor Union and Others(1) where it was held that amounts shown as liquid assets at the beginning of the year are the only amounts which can be held to be available for utilisation as working capital in that year. Amounts which accrue during the year or at the end of the year cannot be held to be available, unless evidence is led on the basis of which a positive finding can 'be recorded that those amounts became available on a particular date during the year and were thereafter actually utilised as part of the working capital. Profit for the year and reserve or development rebate for the year in question cannot be proved to have accrued on any particular date during the year and, therefore, it is also not possible to hold that they were utilised as part of the working capital during that very year. This claim which is a novel one put forward on behalf of the Company for the first time in applying the Full Bench Formula for calculation of available surplus for distribution of bonus, must, therefore, be rejected. A point that was raised on behalf of the workmen, but which was not seriously argued before us, was that the return on paid up capital should not be allowed at least to the extent to which money had been invested in the subsidiary or other companies. The amount in question is Rs. 14.48 lacs already noticed by us earlier when dealing with the question of proof of utilisation of reserves as working capital. In dealing with that question, we have already proceeded on the basis that the paid up capital was either invested in fixed assets, or must have been utilised as part of the working capital, and have not accepted the plea that this sum of Rs. 14.48 lacs of investment came out of the paid up capital. Consequently, no question can arise of reducing this amount from the paid up capital when allowing 6% return on it in accordance with the Full Bench Formula. Another deduction, while calculating the surplus out of the profits available for distribution of bonus, which has been challenged on behalf of the workmen relates to the income from home delivery commission. From the facts, it appears that this Company was manufacturing cars in collaboration with a foreign concern and the arrangement was that,if that foreign concern sold any of its goods in India, the Company would be entitled to its commission on those sales, even though the Company may not be a party to the transactions of those sales. This arrangement thus recognised the exclusive right of the Company in respect of sale of its cars and to reimbursement in case the foreign collaborator entered into transactions infringing that right. It seems to us that the income thus accruing to the Company has to be treated as extraneous income which was earned by the Company without (1) 349 any activities in which the workmen participated or contributed their labour. Learned counsel for the workmen referred us to the decisions of this Court in the Tata Oil Mills Co. Lid. Q) and Voltas Limited vs Its workmen(1). The situations that were discussed in those cases were different. In those cases, the principle laid down was that, if any income was earned in the course of the normal business of the Company in which the workmen were also engaged, that income must be included in the profits for calculation of surplus available for distribution of bonus. None of the instances that came up for consideration were similar to the one before us. The home delivery commission earned in the present case did not require any contribution of work or labour on the part of the workmen, and accrued to the Company simply because of its agreement with the foreign collaborator ' which entitled the Company to claim the commission without going through any process of manufacturing or selling the cars or their components. In the circumstances, the deduction of the home delivery commission from the profits was fully justified. The last point urged related to the interest on fixed deposits earned by the Company during the bonus year. We have already indicated earlier that a sum of Rs. 220 lacs was in fixed deposit account and the profit and loss account shows that a sum of Rs. 5.17 lacs was received as interest on it by the Company. This has also to be excluded when calculating the available surplus, because this income also accrued to the Company without any contribution on the part of the workmen. It was not the regular business of the Company to keep money in fixed deposits and earn interest thereon. ' At the same time, however, we feel that on equitable grounds, the Company should not be entitled to claim the sum of Rs. 2.16 lacs as an expenditure of the business of the Company in respect of interest paid to bank and others. When the Company was receiving interest on fixed deposits, it would be proper to hold that at least the interest paid by the. Company should come out of the interest earned by it. There seems to be no justification for permitting a Company to keep money in a fixed deposit and treat the interest accruing on it as extraneous income, while, at the same time permitting the Company to take loans, pay interest and treat that interest as business expenditure. Consequently, in this case, when calculating the available surplus, a sum of Rs. 5.17 lacs minus Rs. 2.16 lacs Rs. 3.01 lacs only will be deducted as extraneous income which was earned without any contribution from the workmen and which cannot therefore, be taken into account when calculating available surplus. On the basis of these decisions, we have worked out Charts bowing the amount of annual rehabilitation provision which (1) ; (2) ; LISupCl/688 350(a) CHART Year Original Cost Discarded Price Replace and Factor ment Cost written or Multi off from plier books 1 2 3 4 5 1942 43 to 1946 47 2.17 . 2.80 6.08 1947 48 89.75 0.35 2.80 250.32 1948 49 44.77 . 2.50 111.93 1949 50 37.60 . 2.30 86.48 1950 51 5.29 . 2.40 12.70 1951 52 14.63 . 2.70 39.50 1952 53 11.06 0.39 2.50 26.68 1953 54 9.09 . 1.50 13.64 1954 55 38.65 24.33 1.90 27.23 1955 56 30.05 8 01 1.80 39.69 1956 57 34.47 5.95 1.60 45 63 1957 58 75.32 7.79 2.00 135.06 ]958 59 53.74 . 1.25 67.17 1959 60 140.15 . 1.15 161.17 1960 61 98.52 . 1.10 108.37 350(b) (All figures in lacs of rupees) Less 5 % Balance Deduct Balance Resi Annual Cost deprecia require duary Rehabili tion & other ment Age tation reserve require available ment 6 7 8 9 10 11 0. 11 5.97 364.99 Nil Immaterial . 4.47 245.85 359.02 Nil " . 2.24 169.69 113.17 Nil " . 1.88 84 60 3.48 81.12 3 27.04 0.27 12.43 12.43 3 4.14 0 45 13.19 . 13.19 5 2.64 0 72 26.51 26.51 6 4.42 1.43 44.20 44.20 7 6.31 3.37 131.69 . 131.69 8 16.46 2.69 64.48 64 48 9 7.16 7.01 154.16 154.16 9 17.13 4.93 103.44 103.44 10 10.34 116.70 351 CHART II (All figures in lacs of rupees) Annual Requirement for Rehabilitation for all the Machinery 116.07 Less Depreciation Provision for the Year of Bonus 1960 61 63.07 Net Requirement for Rehabilitation of Machinery in the Year 1960 61 53.00 Requirement for Rehabilitation of Buildings 11.97 Total Rehabilitation Requirement 64,97 CHART III (All figures in lacs of rupees) Profit as per Profit&Loss Account 249 '71 Add : Provision for Depreciation 63.07 Reserve for Development Rebate 36.00 Charity and Donation 0.35 Expenses pertaining to previous years (Sales tax) 0,01 99 43 99,43 349,14 Less: Income pertaining to previous years and Provisions no longer required 5.70 Surplus on Sale of Fixed Assets 0,09 Home Delivery Commission 1.03 Interest on Fixed Deposits 3,01 Normal Notional Depreciation 69,26 Income tax Liability for the year 112,37* 6% Return on Ordinary Share Capital 29,77* 8.57% Return on Preference Share Capital 27,55 4%Return on Working Capital 4,83 Provision for Rehabilitation 64,97 318.58 318,58 Net Surplus Available for Payment of Bonus 30.56 *These figures have been corrected by us. In the statement filed by the Company they were wrongly entered as 12.18 lacs and 129 ' 89 lacs respectively. 359. must be allowed to the Company and, taking that into account, the amount of surplus available out of the profits for distribution as bonus. Chart 1 shows the annual rehabilitation requirement for machinery which works out at Rs. 116.07 lacs. Chart II gives the calculation, on the basis of this figure, of the net amount required for rehabilitation during the year of bonus for the machinery and buildings, after taking into account the depreciation provision for the year of bonus. This net amount is Rs. 64.97 lacs. Chart 111, based on these figures and on other figures arrived at by us in our judgment, shows that a net amount of Rs. 30.56, lacs would be available as surplus for payment of bonus during this year. The Tribunal was, therefore, not right in arriving at its decision that this Company was not in a position to pay bonus at all. As we have indicated earlier, the workmen have claimed bonus equivalent to 6 months ' wages which would amount to a sum of Rs. 24 lacs. We do not find any justification for granting bonus at such a high rate. Though the Company has earned a large amount of profit during the year of bonus, it is to be noticed that, for quite a large number of years, the Company has been running at a loss. The Company has an expanding business and the total amount of surplus available for allocation between the capital and the labour is Rs. 30.56 lacs. In all these circumstances, we consider it just and proper that bonus should be paid to the workmen. 20% of their annual wages, so that a total sum of Rs. 9.60 lacs out of this surplus will be paid out as bonus, leaving the balance of Rs. 21.03 lacs with the Company for being utilised for other purposes. The appeal is, consequently, allowed, the decision of the Tribunal is set aside and it is hereby ordered that the Company shall pay to the workmen a total amount of Rs. 9.60 lacs as bonus, representing 20% of the annual wage of the workmen. In the circumstances of this case, we direct parties to bear their own costs of this appeal. G.C. Appeal allowed. [/INST]After an enquiry under section 476 of the Code of Criminal procedure the Judicial Magistrate, Baroda, ordered that the appellant he prosecuted for offences under sections 205, 467 and 468 read with section 114 of the Indian Penal Code. In Appeal the Additional Sessions Judge held that the said complaint was justified but only in respect of the offence under section 205 read with section 114. The High Court dismissed the appellant 's revision pettion but granted a certificate under article 134(1)(c). The appellant came to this Court. On behalf of the respondent State it was contended that the High Court 's order dismissing the revision was not a final order as it, did not determine the complaint filed by the Magistrate nor did it decide the controversy between the parties viz., the State of Gujarat and the appellant.whether the appellant had committed the offence. Held : (Per Wanchoo C. J. and Shelat and Vaidialingam JJ.) (i) A judgment or order may be final for one purpose and interlocutory another or final as to part and interlocutory as to part. The meaning of the two words 'final ' and 'interlocutory ' his, therefore to be considered separately in relation to the particular purpose for which it is required However, generally speaking a judgment or order which determines the principal matter in question is termed final. It may be final although it directs enquiries or is made on an interlocutory application or reserves liberty to apply. [687 H; 688 A ,B] Salaman vs Warner , Standard Discount Co., vs La Grange, , A. Great Eastern Rail Co. [1879] 27 W.R,. 759, Shutrook vs Tufnell, , Bozson vs Altrincham Urban Council, , Abdul Rehman vs The King [1947] Cassim & Sons vs 60 IA. 76, S.Kuppusami Rao vs King, , Mohammad Amin Brothers Ltd. vs Dominion of India, Sardar Svedna Taher Saifuddin Saheb vs The State of Bombay , Jethainand and Sons vs The State of Uttar Pradesh ; , Premchand Satramadas vs State of Bihar ; , State of Uttar Pradesh vs Sujan Singh, [1964] 7 S.C.R. and State of Orissa vs Madan Gopal [1952] S.C.R. 28, referred to. (ii) The order of the High Court in the present case disposed of the controversy whether the filing of the complaint against the appellant was justified, The finality of that order was not to be judged by co relating that order with the controversy in the controversy viz., whether the appellant had committed the offence charged against him therein. The fact 686 that that controversy remained alive was irrelevant. Consequently the order passed by the High Court in the revision filed by the appellant was it final order within the meaning of article 134(1)(c). [693 D H] Ramesh vs Patni, ; , relied on. (iii) The High Court, before it certifies the case in cases not covered by clauses (a) and (b) of article 134(1)(c), must be satisfied that it involves some substantial question of law or principle. Only it case involving something more than mere appreciation of evidence is contemplated by the Constitution for the grant of a certificate under article 134(1) (c) The question in the revision petition before the High Court was whether the filing of a complaint against the appellant was expedient in the interest of justice. This was a question of fact and therefore the grant of certificate was not justified. [694 B F] Haripada Dey vs Slate of West Bengal, ; , and Babu State of Uttar Pradesh, relied on. Per Bachawat and Mitter, JJ. (dissenting) : Whatever test is applied,in order directing the filing of a complaint and deciding that there is a prima facie case for enquiry into an offence is not a final order. It is merely a preliminary step in the prosecution and therefore and, interlocutory order. As the order is not final, the High Court was not competent to grant a certificate under article 134(1)(c). [695 B] section Kuppuswamy Rao vs The King , relied on. </s>
<s>[INST] Summarize the judgementAppeals Nos. 2 and 4 of 1955. Appeal by Special Leave from the Order dated the 18th day of November 1954 of the Labour Appel 1243 late Tribunal of India, Bombay in Application (Misc.) Bombay No. 773 of 1954. H. M. Seervai, J. B. Dadachanji and Rajinder Narain, for the appellant in Civil Appeal No. 2 of 1955 and respondent in Civil Appeal No. 4 of 1955. D. H. Buch and I. N. Shroff, for the respondents in Civil Appeal No. 2 of 1955 and appellants in Civil Appeal No. 4 of 1955. M. C. Setalvad, Attorney General for India (G. N. Joshi and P. C. Gokhale with him), for the Intervener (Union of India). February 3. The Judgment of the Court was delivered by DAS J. This is an appeal by special leave from the order of the Labour Appellate Tribunal, Bombay Bench, dated the 18th November 1954 which was made on an application made by the appellant company on the 6th September 1954 under section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950 (Act XLVIII of 1950) which is hereinafter referred to as the 1950 Act. The appellant company carries on business as assemblers of motor vehicles from "completely knocked down" assemblies imported into India. There was some appeal pending before the Labour Appellate Tribunal arising out of disputes between the appellant company and its workmen. It is alleged that the name of the appellant company had been removed by the Government of India from the list of approved manufacturers maintained by them and that, in the result, it had been unable to secure further import licenses for the import of completely knocked down assemblies of motor vehicles and that consequently on and from the 1st November 1953 the company had to lay off a number of its workmen, for it had to operate the various departments of its factory at greatly reduced strength. As the appellant company saw no prospect of any increase in the scope of its present operation which would provide employment for the workmen who had been laid off, it had become necess 1244 sary to retrench the workmen named in Annexure A to the application. As those workmen were concerned with the appeal pending before the Labour Appellate Tribunal the company applied to the Appellate Tribunal under section 22 of the 1950 Act for permission to retrench them. The respondents through their Union, the Automobile Manufacturers ' Employees ' Association, Bombay, filed a written statement on the 1st November 1954 making diverse allegations against the company and contending that the company bad itself to blame for having brought about the lay off. It was contended that there was no immediate cause for making the application, that the company was motivated by ulterior motives to deprive the workmen of their dues which even according to the company would become due and payable to the workmen on the expiry of the one year of the said lay off period. It was further alleged that in or about April 1954 the company recalled some of the workmen out of those who had been laid off since November 1953 violating all principles on which a recall should have been made and that by such arbitrary and unscientific recall the company had imposed disproportionate work loads on the recalled workmen, thereby altering their conditions of service to their prejudice. The respondents maintained that the application was not maintainable in law, was mala fide and should be dismissed. In the penultimate paragraph of the written statement it was submitted that in the event of the Labour Appellate Tribunal granting the permission in whole or in part such permission should be granted subject to the following conditions: (1) Payment of full wages with dearness allowance for the entire period of lay off; (2) Payment of one month 's notice pay and retrenchment compensation at the rate of one month 's wages including dearness allowance for every completed year of service and part thereof in addition to the gratuity as per the scheme in force in the company; (3) Alternatively to (2) above and in cage the Labour Appellate Tribunal took the view that the 1245 lay off was governed by section 25 C of the , payment of compensation at 50 per cent. of their wages plus dearness allowance for the entire period of lay off to the date of discharge in addition to the notice pay and gratuity as claimed in (2) above; and (4)Payment of leave wages as per existing rules, taking the entire period of lay off as service. A number of documents were filed in support of the respective contentions. The Labour Appellate Tribunal at the very outset of its judgment under appeal states its finding on the merits of the action proposed to be taken by the company as follows: "There can be little doubt that the retrenchment has been occasioned by the failure of the concern to secure sufficient work owing to absence of licenses from Government and, therefore, retrenchment must be regarded as inevitable and the application before us bona fide. Permission to retrench cannot be refused but for the reasons that we shall state hereafter we make that permission conditional upon the fulfilment of certain terms by the concern". The company contended before the Labour Appellate Tribunal that its function, while dealing with an application under section 22 of the 1950 Act, was only to give or withhold permission. This contention was rejected by the Appellate Tribunal with the following observation: "That view is quite untenable as has been repeatedly held by this Tribunal. We are the authority to whom an application has to be made for permission to retrench, and when such an application is made we must of necessity exercise our judgment and discretion and satisfy ourselves that when the company retrenches it does justice by its employees". The Labour Appellate Tribunal was clearly influenced by the consideration which, stated in its own words, was as follows: "We do not think that we will be advancing the interest of the employees or of the concern by refusing 1246 retrenchment because the case for retrenchment has been established, and the sooner the workmen are allowed to leave and find for themselves other employment the better for them. But in order to assure ourselves that on retrenchment the employees receive what in justice they should have, we have decided to give permission to retrench subject to cer tain conditions which in our view are inherent under the Act. , and which apart from the Act we consider to be just and equitable in the particular circumstances of this case". In this view of the matter the Labour Appellate Tribunal definitely declined "to leave over the question of compensation for lay off as a legacy of the present troubles; the employees to be retrenched have enough to worry them without having to make claims and have them decided after contest before a Tribunal". In the result, the Labour Appellate Tribunal gave the appellant company permission to retrench "subject to the terms and conditions of Act XLIII of 1953, provided that each workman is paid at the rate of half basic wages and dearness allowance for the whole period from the date of lay off up to the date of retrenchment (less sums already received as lay off compensation)". Liberty was given to the company to set off the lay off compensation protanto against the retrenchment relief given by the Act. Aggrieved by this decision the appellant company applied for and obtained from this Court special leave to appeal against this order. The respondents subsequently filed an application for special leave to appeal against this decision in so far as the Labour Appellate Tribunal had not allowed their full claim as surmmarised above and in so far as the names of 17 persons had been struck off on the allegation of the company that they were not workmen. This application of the respondents was also acceded to and the two appeals have been heard together. The Union of India asked for leave to intervene as important questions of construction of the provisions of the (hereinafter referred to as the 1947 Act) and the 1950 Act were involved. Such 1247 leave was granted. and we have heard learned counsel for the Union of India along with learned counsel for the parties. The question as to the propriety of permitting the names of 17 workmen to be struck off from the application has not been seriously pressed before us. Only two questions have been canvassed at some length before us, namely . (1)Whether under section 22 of the 1950 Act the Tribunal has jurisdiction to impose conditions when granting the permission asked for; and (2)Whether the conditions imposed in this case are in conformity with law. It is plain, however, that in case the first question is answered in the negative, the second question will not call for any decision on the present occasion. In order to correctly answer the questions it will be necessary to bear in mind the general scheme of the two Acts. The purpose of the 1947 Act is, inter alia, to make provision for the investigation and settlement of industrial disputes. In order to achieve this avowed object different authorities have been constituted under this Act. Thus section 3 provides for the constitution of Works Committee whose duty is to promote measures for securing and preserving amity and good relations between the employers and workmen. The appropriate Government is authorised by section 4 to appoint conciliation officers charged with the duty of mediating in and promoting the settlement of industrial disputes and by section 5 to constitute a Board of Conciliation for promoting the settlement of industrial disputes. Section 6 empowers the appropriate Government to constitute a Court of Inquiry for enquiring into any matter appearing to be connected with or relevant to an industrial dispute. Finally, section 7 provides for the constitution of Industrial Tribunals for the adjudication of industrial disputes in accordance with the provisions of the Act. Section 10 of this Act provides for reference of disputes to a Board, Court or Tribunal. It will be noticed that under this section it is the appropriate 160 1248 Government which alone can make the reference and set the authority in motion. The procedure, powers and duties of conciliation officers, Boards, Courts and Tribunals are elaborately prescribed and defined in sections I 1 to 15. It is to be noted that the conciliation officer, Board, and Court are required to make a report to the appropriate Government while the Tribunal is enjoined to submit its award to the appropriate Government. The report of a Board or Court and the award of a Tribunal are under section 17 to be published by the appropriate Government within a month from the date of their receipt. Section 17 A provides that the award of a Tribunal shall become enforceable on the expiry of 30 days from the date of its publication and, subject to the provisions of sub section (1) shall come into operation from such date as may be specified therein and if no date is so specified from the date when the award becomes enforceable as aforesaid. Section 19 prescribes the period of operation of settlements and awards. Chapter deals with strikes and lock outs. Sections 26 to 31 which are grouped together under the heading "Penalties" prescribe punishments. Section 31 (I) provides that any employer who contravenes the provisions of section 33 shall be punishable with imprisonment for a term which may extend to 6 months or with fine which may extend to Rs. 1,000 or with both. Section 33, a contravention of which is made punishable by section 31, as it stood before 1950, forbade an employer, during the pendency of any conciliation proceedings or proceedings before a Tribunal, to alter, to the prejudice of the workmen concerned in the dispute, the conditions of service applicable to them immediately before such proceedings, nor, save with the express permission of the conciliation officer, Board or Tribunal, as the case may be, to discharge, dismiss or otherwise punish during the pendency of the proceedings any workman, except for misconduct not connected with the dispute. It may be noted that under this section the ban on the alteration of the conditions of service was absolute and that permission was necessary only in case of discharge or dismissal or 1249 punishment and even in such case no permission was necessary when the workman was guilty of misconduct not concerned with the pending dispute. The Only deterrent against a contravention by an employer of the provisions of section 33 was the prosecution of the employer under section 31. This was hardly any consolation for the workmen, for if an employer took the risk of a prosecution and acted in contra vention of section 33 the workmen could only raise an industrial dispute and ask the appropriate Government to refer the same to a Tribunal but if the Government declined to accede to their prayer the workmen were without any remedy. This was the position under the 1947 Act before it was amended in 1950. The 1950 Act was enacted for establishing an Appellate Tribunal in relation to industrial disputes. Chapter II of the Act deals with the constitution, composition and functions of the appellate tribunal. Section 7 formulates the jurisdiction of the appellate tribunal. Section 9 confers on the appellate tribunal all the powers which are vested in a Civil Court when hearing an appeal under the Code of Civil Procedure, 1908. Section 10 prescribes the period of limitation within which appeals are to be brought before the appellate tribunal. Under section 15 the decision of the appellate tribunal becomes enforceable on the expiry of 30 days from the date of its pronouncement, provided that where the appropriate Government is of opinion that it would be inexpedient, on public grounds, to give effect to the whole or any part of the decision the appropriate Government may, before the expiry of the said period of 30 days, by order in the Official Gazette either reject the decision or modify it. Section 22 of this Act provides: "22. During the period of thirty days allowed for the filing of an appeal under section 10 or during the pendency of any appeal under this Act, no employer sball (a) alter, to the prejudice of the workmen concerned in such appeal, the conditions of service applicable to them immediately before the filing of such appeal, or 1250 (b)discharge or punish, whether by dismissal or otherwise, any workmen concerned in such appeal, save with the express permission in writing of the Appellate Tribunal". Section 23 on which reliance is placed by learned counsel for the respondents and for the intervener, reads as follows: "23. Where an employer contravenes the provisions of section 22 during the pendency of proceedings before the Appellate Tribunal, any employee aggrieved by such contravention, may make a complaint in writing, in the prescribed manner to such Appellate Tribunal and on receipt of such complaint, the Appellate Tribunal shall decide the complaint as if it were an appeal pending before it, in accordance with the provisions of this Act and shall pronounce its decision thereon and the provisions of this Act shall apply accordingly". ' Section 29 of this Act provides for penalty for con travention of the provisions of section 22, namely, imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. From what has been stated so far four things are to be noted, namely, (i) that the ordinary and primary jurisdiction of the appellate tribunal is appellate, (ii) that section 22 of this Act confers on the appellate tribunal a special jurisdiction which is in the nature of original jurisdiction, (iii) that section 23 also vests in the tribunal an additional jurisdiction to decide the complaint as if it were an appeal pending before it; and (iv) that section 23 confers on the workmen an additional remedy which they did not have under the 1947 Act. To fill up the lacuna in the 1947 Act section 34 of the 1950 Act provided for certain amendments of the 1947 Act. Amongst other things, it substituted a new section for the old section 33 of the 1947 Act. The new section 33 runs as follows "33. During the pendency of any conciliation proceedings or proceedings before a Tribunal in respect of any industrial dispute, no employer shall 1251 (a)alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceedings; or (b)discharge or punish, whether by dismissal or otherwise, any workman concerned in such dispute, save with the express permission in writing of the conciliation officer, Board or Tribunal, as the case may be". It will be noticed that this section has made several changes. Thus under this section provision is made for obtaining permission as a condition precedent both for altering the conditions of service and for discharging or punishing the workmen and no exception is made for a case of misconduct unconnected with the pending dispute. Besides this, the following new section was added to the 1947 Act as section 33 A: "33 A. Where an employer contravenes the provisions of section 33 during the pendency of proceedings before a Tribunal, any employee aggrieved by such contravention, may make a complaint in writing, in the prescribed manner to such Tribunal and on receipt of such complaint that Tribunal shall adjudicate upon the complaint as if it were a dispute referred to or pending before it, in accordance with the provisions of this Act and shall submit its award to the appropriate Government and the provisions of this Act shall apply accordingly". It may be pointed out that the new sections 33 and 33 A thus inserted into the 1947 Act confer distinct benefits on the workmen and give some additional jurisdiction and power to the authorities mentioned therein. Section 33 A enjoins the Tribunal to decide the complaint "as if it were a dispute referred to or pending before it" and to submit its award to the appropriate Government and provides that the provisions of the Act shall apply to the award. It is quite clear that the provisions of these two new sections 33 and 33 A of the 1947 Act correspond to and are in pari materia with the provisions of sections 22 and 23 of the 1950 Act and are more or less in similar terms. The question for our conside 1252 ration is: What are the meaning, scope and effect of these sections. A cursory perusal of section 33 A of the 1947 Act as well as section 23 of the 1950 Act will at once show that it is the contravention by the employer of the provisions of section 33 in the first case and of section 22 in the second case that gives rise to a cause of action in favour of the workmen to approach and move the respective authority named in the section and this contravention is the condition precedent to the exercise by the authority concerned of the additional jurisdiction and powers conferred on it by the sections. The authority referred to in the sections is, as we have seen, a Court of limited jurisdiction and must accordingly be strictly confined to the exercise of the functions and powers actually conferred on it by the Act which constituted it. What, then, are the scope and ambit of the functions and powers with which it has been vested by these sections? When an employer contravenes the provisions of section 33 of the 1947 Act or of section 22 of the 1950 Act the workmen affected thereby obviously have a grievance. That grievance is two fold. In the first place it is that the employer has taken a prejudicial action against them without the express permission in writing of the authority concerned and thereby deprived them of the salutary safeguard which the legislature has provided for their protection against victimisation. In the second place, and apart from the first grievance which may be called the statutory grievance, the workmen may also have a grievance on merits which may be of much more seriousness and gravity for them, namely, that in point of fact they have been unfairly dealt with in that their interest has actually been prejudicially affected by the highhanded act of the employer. These sections give the workmen the right to move the authority by lodging a complaint before it. This is a distinct benefit given to them, for, as we have seen, apart from these sections, the workmen have no right to refer any dispute for adjudication. This complaint is required to be made in the prescribed manner. Form DD prescribed by rule 51 A of the Industrial 1253 Disputes (Central) Rules, 1947, framed under section 38 of the 1947 Act, like Form E prescribed under section 35 of the 1950 Act, requires the complaining workmen to show in their petition of complaint not only the manner in which the alleged contravention has taken place but also the grounds on which the order or the act of the management is challenged. This clearly indicates that the authority to whom the complaint is made is to decide both the issues, namely (1) the fact of contravention and (2) the merits of the act or order of the employer. It is also clear that under section 33 A of the 1947 Act the authority is to adjudicate upon the complaint "as if it were a dispute referred to or pending before it" and under section 23 of the 1950 Act the authority is to decide the complaint "as if it were an appeal pending before it". These provisions quite clearly indicate that the jurisdiction of the authority is not only to decide whether there has been a failure on the part of the employer to obtain the permission of the authority before taking action but also to go into the merits of the complaint and grant appropriate reliefs. The extreme contention that under section 33 A of the 1947 Act, on a finding that there has been a contravention of the provisions of section 33, the Tribunal 's duty is only to make a declaration to that effect, leaving the workmen to take such steps under the Act as they may be advised to do, has been negatived by the Labour Appellate Tribunal in Serampore Belting Mazdoor Union vs Serampore Belting Co., Ltd.(1) and by the Bombay High Court in Batuk K. Vyas vs Surat Borough Municipality(1). The same principle has been accepted and applied by a Full Bench of the Labour Appellate Tribunal to a case under section 23 of the 1950 Act in Raj Narain vs Employers ' Association of Northern India(1). We find ourselves in agreement with the construction placed upon section 33 A of the 1947 Act and section 23 of the 1950 Act by these decisions. In our view the scope and ambit of the jurisdiction conferred on the authority named in those (1) (2) (3) , 1254 sections is wider than that conferred on the Criminal Court by section 31 of the 1947 Act and section 29 of the 1950 Act. The Criminal Court under the two last mentioned sections is only concerned with the first issue herein before mentioned, namely, yea or nay whether there has been a contravention of the respective provisions of the sections mentioned therein, but the authority exercising jurisdiction under section 33 A of the 1947 Act and section 23 of the 1950 Act is to adjudicate upon or decide the complaint "as if it were a dispute referred to or pending before it" in the first case or "as if it were an appeal pending before it" in the second case. The authority is, therefore, enjoined to go into the merits of the act complained of under section 33 A of the 1947 Act and section 23 of the 1950 Act. In this sense the jurisdiction of the authority named in these two sections is certainly wider than that of the Criminal Court exercising jurisdiction under the penal sections referred to above. Having regard to the scope of the enquiry under section 33 A of the 1947 Act and section 23 of the 1950 Act it must follow that the power of the authority to grant relief must be co extensive with its power to grant relief on a reference made to it or on an appeal brought before it, as the case may be. The provision that the authority concerned must submit its award to the appropriate Government and that the provisions of the respective Acts would be applicable thereto also support the view that the decision of the authority is to partake of the nature of a decision on the merits of an industrial dispute which when published by the appropriate Government will become enforceable under the respective Acts. It follows, therefore, that the authority referred to in these sections must have jurisdiction to do complete justice between the parties relating to the matters in dispute and must have power to give such relief as the nature of the case may require and as is also indicated by the prayer clause mentioned in the two Forms DD and E referred to above. In short, these two sections give to the workmen a direct right to approach the Tribunal or Appellate Tribunal for the 1255 redress of their grievance without the intervention of the appropriate Government which they did not possess before 1950 and they provide for speedy determination of disputes and avoid multiplicity of proceedings by giving complete relief to the workmen in relation to their grievances arising out of the action taken by the employer in contravention of the provisions of the relevant sections. It is significant that this jurisdiction or power has been vested in the Tribunal or Appellate Tribunal whose normal duty is to decide or adjudicate upon industrial disputes and not on any conciliation officer or Board who are normally charged with the duty of bringing about settlement of dis putes. it is submitted by learned counsel for the Respondents and of the intervener that the scope of section 33 of the 1947 Act and of section 22 of the 1950 Act is precisely the same as that of section 33 A of the 1947 Act and section 23 of the 1950 Act. The argument is that the two last mentioned sections were enacted only in order to afford an opportunity to the workmen to do what they had been prevented from doing at the earlier stage by reason of the employer taking the law into his own hands and taking action against them without previously obtaining the sanction of the appropriate authority to do so. If the law permits the workmen to ventilate their grievances at a later stage under section 33 A of the 1947 Act and section 23 of the 1950 Act there can be no logical reason why the law should not permit them to do so at the earlier stage under section 33 of the 1947 Act and section 22 of the 1950 Act. It is submitted that the purpose of labour legislation being to maintain industrial peace and restore amity and goodwill between the employer and his workmen, it should be the attempt of the Tribunal or the Appellate Tribunal at every stage to try to resolve all disputes which are connected with the matter which is brought before it. Finally, it is urged that whenever an authority is vested with the power to do or not to do an act it must be regarded as having a discretion and 161 1256 that in exercise of such discretion the authority must be presumed to be vested with power to impose suitable conditions. Reliance is placed on the decision in The Queen vs County Council of West Riding of Yorkshire(1). The argument is that the authority concerned may under section 33 of the 1947 Act and section 22 of the 1950 Act grant by way of imposing conditions the same relief which it can grant to the workmen under section 33 A of the 1947 Act and section 23 of the 1950 Act. We are unable to accept this contention as correct for reasons which we now proceed to state. The object of section 22 of the 1950 Act like that of section 33 of the 1947 Act as amended is to protect the workmen concerned in disputes which form the subject matter of pending proceedings against victimisation by the employer on account of their having raised industrial disputes or their continuing the pending proceedings. It is further the object of the two sections to ensure that proceedings in connection with industrial disputes already pending should be brought to a termination in a peaceful atmosphere and that no employer should during the pendency of those pro ceedings take any action of the kind mentioned in the sections which may give rise to fresh disputes likely to further exacerbate the already strained relation between the employer and the workmen. To achieve this object a ban has been imposed upon the ordinary right which the employer has under the ordinary law governing a contract of employment. Section 22 of the 1950 Act and section 33 of the 1947 Act which impose the ban also provide for the removal of that ban by the granting of express permission in writing in appropriate cases by the authority mentioned therein. The purpose of these two sections being to determine whether the ban should be removed or not, all that is required of the authority exercising jurisdiction under these sections is to accord or withhold permission. And so it has been held we think rightly by the Labour Appellate Tribunal in Carlsbad Mineral Works Co. Ltd. vs Their (1) [1S96] 2, Q.B. 386. 1257 Workmen(1) which was a case under section 33 of the 1947 Act. Even a cursory persual of section 33 of the 1947 Act will make it clear that the purpose of that section was not to confer any general power of adjudication of disputes. It will be noticed that under section 33 of the 1947 Act the authority invested with the power of granting or withholding permission is the conciliation officer, Board or Tribunal. The conciliation officer or the Board normally has no power, under the 1947 Act, to decide any industrial dispute but is only charged with the duty of bringing about a settlement of dispute. It is only the Tribunal which can by its award decide a dispute referred to it. 'Section 33 by the same language confers jurisdiction and power on all the three authorities. Power being thus conferred by one and the same section, it cannot mean one thing in relation to the conciliation officer or the Board and a different and larger thing in relation to the Tribunal. There is no reason to think that the legislature, by a side wind as it were, vested in the conciliation officer and the Board the jurisdiction and power of adjudicating upon disputes which they normally do not possess and which they may not be competent or qualified to exercise. Further, if the purpose of the section was to invest all the authorities named therein with power to decide industrial disputes one would have expected some provision enabling them to make and submit an award to which the provisions of the Act would apply such as is provided in section 33 A of the 1947 Act or section 23 of the 1950 Act. There is no machinery provided in section 33 of the 1947 Act or section 23 of the 1950 Act for enforcing the decision of the authority named in those sections. This also indicates that those sections only impose a ban on the right of the employer and the only thing that the authority is called upon to do is to grant or withhold the permission, i.e. to lift or maintain the ban. And so it has been held by this Court in Atherton West & Co., Ltd. vs Suti Mill Mazdoor Union(1) which was a case under clause 23 of the U. P. Government Notification quoted on p. 785. (1) (2) ; , 786 7, 1258 Section 22 of the 1950 Act is in pari materia with section 33 of the 1947 Act and the above clause 23 of the U. P. Government Notification and most of the considerations noted above in connection with these provisions apply mutatis mutandis to section 22 of the 1950 Act. Imposition of conditions is wholly collateral to this purpose and the authority cannot impose any condition. And it has been so held we think correctly in G. C. Bhattacharji vs Parry & Co., Ltd., Calcutta(1). In view of the scheme of these Act summarised above and the language of these sections the general principle laid down in the case of The Queen vs The County Council of West Riding supra can have no application to a case governed by these sections. In our judgment the Labour Appellate Tribunal was in error in holding that it had jurisdiction to impose conditions as a prerequisite for granting permission to the company to retrench its workmen and the first question must be answered in the negative. In the view we have taken on the first question we do not consider it necessary on this occasion to express any opinion on the other question canvassed before us. The result, therefore, is that this appeal is allowed and the decision of the Labour Appellate Tribunal is set aside and the matter is remanded to the Labour Appellate Tribunal to deal with the application of the company and make the appropriate order according to law. In the circumstances of this case we make no order as to costs. Appeal No. 4 of 1955 is dismissed also without costs. [/INST]The respondent invited tenders for supplying country spirit to retail vendors. In the notification issued by the Commissioner, it was stated that preference will be given to manufacturers of spirit. Several persons submitted tenders including the appellant and the 5th respondent who was a manufacturer of spirit. The appellant offered to supply the spirit at 74 P and the 5th respondent at 95 P. The Government was not satisfied with any of the tenders and the tenderers were called upon to intimate to the Government whether they were willing to reduce their rate. None of the tenderers was willing to reduce the rate, except the 5th respondent who agreed to accept the rate fixed by tin Government, and the Government, reduced his rate to 74 P and accepted his tender. The appellant challenged the order granting the contract to the 5th respondent, but the High Court dismissed the petition. In appeal to this Court, it was contended that : (1) the impugned order could not be sustained because the Government nowhere stated that the tenders were not acceptable, on the ground that none of them, on due considerations, appeared to be satisfactory, as provided in r. 93 of the Rules framed under the Eastern Bengal and Assam Excise Act, 1910; ,and (2) under the rule, Government could not have entered into negotiations with :any of the tenderers. Dismissing the appeal, HELD : (1) It is clear from the letter to the tenderers asking them to reduce the price quoted that the respondent Government considered the tenders to be unsatisfactory and hence unacceptable. [205B C] (2) Rule 93 does not prohibit any negotiations with the tenderers. On the other hand, it authorises Government to negotiate even with persons who have not tendered. In the absence of any rule prohibiting Government from negotiating with the tenderers, Government can fall back on its powers under section 19. In order to get country spirit at the cheapest possible rates and to have regular supplies, Government can negotiate with the tenderers or others. [205F] (3) (a) No one has a fundamental right to get a Government contract. In matters like this no question of hearing parties arises. All that is required is fair play. The appellant bad an opportunity to submit its tender which was considered and rejected on grounds which ate not irrational. [306A] (b) Section 19 of the Act undoubtedly confers on the Government very wide powers in the matter of granting the exclusive privilege of manufacturing or of supplying to licensed vendors any country liquor or intoxicating drug within any specified local art a. in the absence of a rule prohibiting Government from preferring one set of sellers to others, LI208 Sup. CI/72 202 Government could rely on the section for such a power so long as the classification made by it is based on rational grounds. Therefore, the Government could exercise that power in the manner most advantageous to it provided it did not infringe any Constitutional guarantee. [205G] (c) It is true that the Government granted the contract to the 5th respondent at the rate quoted by the appellant and thus preferred the 5th respondent. But the Government, as the purchaser, can prefer 'One seller to another for good reasons, though, it cannot show any undue favour to any one. (d) In the notification calling for tenders it was mentioned that preference will be given to manufacturers; and there was justification for preferring a manufacturer to others, because, there would be a reasonable guarantee in the matter of supply of country liquor. [205C] </s>
<s>[INST] Summarize the judgementON: Criminal Appeal No. 169 of 1957. 771 Appeal by special leave from the judgment and order dated the April 9, 1956, of the Patna High Court in Cr. A. No. 445 of 1955. WITH Criminal Appeals Nos. 124 to 126 of 1958. Appeals from the judgment and order dated May 16, 1958, of the Allahabad High Court in Criminal Appeals Nos. 76 and 108 of 1955 and Cr. M. Writ No. 2371 of 1955. Janardan Sharma for appellant in Criminal Appeal No. 169 of 1957: The appellant has been convicted under sections 124A and 505 Indian Penal Code. Both these sections are ultra vires as they contravene the provisions of article 19(1)(a) of the Constitution. A speech may disturb public order or it may not, but both are made punishable under Section 124A. The section hits speeches of both varieties permissible speeches and impermissible speeches. The explanation to section 124A do not affect the interpretation of the main section. In a democratic set up a citizen is entitled to criticise the Government with a view to change it. Two questions arises in the cases, namely (i) does section 124A enact a law which is in the interest of public order and (ii) does this section impose reasonable restrictions in the interest of public order. The decision in I. L. R. (1958) 2 All. 84 which has declared s.124A to be ultra vires takes the correct law. R. C. Prasad, for respondent in Criminal Appeal No. 169 of 1957: Referred to the decision in Ramji Lal Modi vs State of U. P. [1957] S.C.R.860. Stated that he would adopt the submissions to be made by Shri C. B. Agarwala. C. B. Agarwala for the appellant in Criminal Appeals Nos. 124 to 126 of 1958: The correct meaning of the provisions of section 124A in the context 772 of the present set up and the Constitution is that given by the Federal Court in Niharendu Dutt 's case, and not the meaning given to them by the Privy Council in Bhalerao 's case 74 I. A. 89. Intepretation by Courts of words of statutes to a particular set of facts has been changing with the change in the social and political structure of society and the opinion of its reasonable members. Section 124A is in a chapter which deals with offencss against the State. Therefore, it is not a case of libel against any offioer but of an offence against the State. Words in the English law relating to sedition are the same as in section 124A vide Stephen 's Commentary on the law of England, Vol. 4, page 141, Halsbury 's Law of England 3rd Edition, Vol. 10, page 169 Jowitt 's Dictionary of English law, page 1605, Stephen 's History of Criminal Law, Vol. 2, page 298 and 301 Chapter 24. Under English Law a tendency to create tumult or disorder is an essential element of sedition. Russel on Crimes, Vol. 1, p. 229, R. vs Collins, ; R. vs Sullivan, 11 Cox. Section 124A has been taken from the English Law (see Section 124A must, therefore, be interpreted in the same manner as sedition is interpreted in England and it must be held that a tendency to disturb public order is an essential element of the offence under section 124A. Articles 133 and 133A of the Canadian Criminal Code which deal with sedition have been given the same interpretation, 1951, canadian section C. R. 265. The view taken in Tilak 's case , in Bhalerao 's case 74 I.A. 89 and in Wallice Johnsons case[1940] A. C. 231 that incitement to violence or a tendency to disturb public order was not a necessary ingredient of section 124A, is not the correct view. takes the correct view and lays down that the tendency to disturb public order is a necessary ingredient of the offence under section 124A. Devi Saran 's case 32 Pat. 1124 also takes the same view. 773 There are two interpretations of section 124A before the Court, one taken by the Federal Court and the other taken by the Privy Council. This Court should accept the interpretation given by the section Court, as that interpretation would make the section Constitutional. Even if the interpretation put by the Privy Council be accepted as correct one, section 124A will still be valid. The section certainly contemplates cases where the speech is likely to disturb public order and as such the section in the interest of public order as contemplated in article 19(2) and the mere fact that some cases in which the public order is not likely to be disturbed are also included therein, cannot invalidate the section. This court took a similar view in Ramjilal Modi 's case ; and in Virendra 's case [1958] section C. R. 308, the decision Lohia 's case [1960] 2 section C. R. 821 does not affect this case, as in that case it was found that that provisions curtailing freedom of speech were not in the interest of public order as the connection between the provisions and disturbance of public order as too remove. Even if the section be held according to the Privy Council view to include which threaten public order and those which the section can be held valid with respect s where public order is threatened as the two of case are severable. , [1951] section C. R. 682, [1953] 1059 and ; P. Verma for the Attorney General of Article 374(2) of the Constitution perversion of the Federal Court shall have the rect as the decision of the Supreme Court. Decision of the Federal Court in be deemed to be a decision of this Court and should be held binding. A tendency to disturb public order is inherent in section 124A itself. Gopal Behari for respondent in Criminal Appeal No. 124 of 1958: The interpretataion of section 124A by 774 the Privy Council has been accepted by the High Court. Even in English Law sedition does not necessarily include an intention to disturb public order; , Explanations (2) and (3) would be redundant if section 124A is interpreted to incorporate the English view of sedition. The Allahabad High Court as well as other High Courts have given the same interpretation of section 124A as the Privy Council has. See 1941 All. 156, 1930 Lah. 309, and 10 Luck. The decision in Lohia 's case also ; governs the present case also section 124A punishes such speeches also as have no tendency to disturb public order and contravenes article 19(1)(a). It is not saved by article 19(2) as placing of restriction on such speeches is not in the interest of public order. It is not open to the Court to rewrite the section by removing from its purview such speeches as have no tendency to disturb public order and to confine it to such speeches as have a tendency to disturb public order. The whole section must fail; it cannot be dissected. C. B. Agarwala in reply: In English law is a necessary ingredient of seditious intention it must have a tendency to cause tumult or di R. vs Alred, , R. vs Burdott, 101, 803; R. vs O 'Brien, The Council has only said that actual incite violence was not a necessary ingredient of It has not gone further and has not laid tendency to disturb public order was not a ingredient of section 124A. Even though public is not an ingredient of the offeence under there is a tendency to disturb public speeches or writings which bring or atte bring into hatered or contempt or excite or at to excite dissatisfaction towards the Government established by law. January 20. The Judgment of the court was delivered by 775 SINHA, C. J. In these appeals the main question in controversy is whether sections 124A and 505 of the Indian Penal Code have become void in view of the provisions of article 19(1)(a) of the Constitution. The constitutionality of the provisions of section 124A, which was mainly canvassed before us, is common to all the appeals, the facts of which may shortly be stated separately. In Criminal Appeal 169 of 1957, the appellant is one Kedar nath Singh, who was prosecuted before a Magistrate, 1st Class, at Begusarai, in the district of Monghyr, in Bihar. He framed the following charges against the accused person, which are set out in extenso in order to bring out the gravamen of the charge against him. "First. That you on 26th day of May, 1953 at village Barauni, P. section Taghra (Monghyr) by speaking the words, to wit, (a) To day the dogs of the C. I. D are loitering round Barauni. Many official dogs are sitting even in this meeting. The people of India drove out the Britishers from this country and elected these Congress goondas to the gaddi and seated them on it. To day these Congress goondas are sitting on the gaddi due to mistake of the people. When we drove out the Britishers, we shall strike and turn out these Congress goondas as well. These official dogs will also be liquidated along with these Congress goondas. These Congress goondas are banking upon the American dollars and imposing various kinds of taxes on the people to day. The blood of our brothers mazdoors and Kishanas is being sucked. The capitalists and the zamindars of this country help these Congress goondas. These zamindars and capitalists will also have to be brought before the peoples court along with these Congress goondas. 776 (b) On the strength of the organisation and unity of Kisans and mazdoors the Forward Communists Party will expose the black deeds of the Congress goondas, who are just like the Britishers. Only the colour of the body has changed. They have to day established a rule of lathis and bullets in the country. The Britishers had to go away from this land. They had aeroplanes, guns, bombs and other weapons with them. (c) The Forward Communist Party does not believe in the doctrine of vote itself. The party had always been believing in revolution and does so even at present. We believe in that revolution, which will come and in the flames of which the capitalists, zamindars and the Congress leaders of India, who have made it their profession to loot the country, will be reduced to ashes and on their ashes will be established a Government of the poor and the downtrodden people of India. (d) It will be a mistake to expect anything from the Congress relers. They (Congress rulers) have set up V. Bhave in the midst of the people by causing him wear a langoti in order to divert the people 's attention from their mistakes. To day Vinova is playing a drama on the stage of Indian politics. Confusion is being created among the people. I want to tell Vinova and advice his agents, "you should understand it the people cannot be deceived by this illusion and fraud of Vinova". I shall vinova not to become a puppet in the of the Congress men. These persons, understand the Yojna of Vinova, realise that Vinova is an agent to the Congress Government. (e) I tell you that this Congress Government will do no good to you. 777 (f) I want to tell the last word even to the Congress Tyrants, "you play with the people and ruin them by entangling them in the mesh of bribery, black marketing and corruption. To day the children of the poor are hankering for food and you Congress men are assuming the attitude of Nawabs sitting on the chairs. " Brought or attempted to bring into hatred or contempt or excited or attempted to excite disaffection towards the Government established by law in the Indian Union and thereby committed an offence punishable under section 124A of the Indian Penal Code and within my cognizance. Secondly. That you on the 26th day of May, 1953 at village Barauni, P. section Tegra (Monghyr) made the statement, to wit, (a) To day the dogs of the C. I. D. are loitering round Barauni. Many official dogs are sitting even in this meeting. The people of India drove out the Britishers from this country, And elected these Congress Goondas to the gaddi and seated them on it. To day these Congress Goondas are sitting on the gaddi due to the mistake of the people. When we have driven out the Britishers, we shall strike and turn out these Congress Goondas. These Congress Goondas are banking upon the American dollars and imposing various kinds of taxes on the people to day. The blood of our brothers Mazdoors and Kisans is being sucked. The capitalists and the zamindars of this country help these Congress Goondas. These zamindars and capitalists will also have to be brought before the people 's Court along with these Congress Goondas. 778 (b) On the strength of organisation and unity of kisans and mazdoors the Forward Communist Party will expose the black deeds of the Congress Goondas, who are just like the Britishers. Only the colour of the body has changed. They have, to day, established a rule of lathis and bullets in the country. The Britishers had to go away from this land. They had aeroplanes, guns, bombs, and other reasons with them. (c) The Forward Communist party does not believe in the doctrine of votes itself. The party had always been believing in revolution and does so even at present. We believe in that revolution, which will come and in the flames of which the capitalists, zamindars and the Congress leaders of India, who have made it their profession to loot the country, will be reduced to ashes, and on their ashes will be established a Government of the poor and the downtrodden people of India. (d) It will be a mistake to expect anything from the Congress rulers. They (Congress rulers) have set up V. Bhave in the midst of the people by causing him wear a langoti in order to divert the attention of the people from their mistakes. To day Vinoba is playing a drama on the stage of Indian politics. Confusion is being created among the people. I want to tell Vinova and advise his agents, "You should understand it that the people cannot be deceived by this Yojna, illusion and fraud of Vinova. I shall advice Vinova not to become a puppet in the hands of the Congress men. Those persons who understand the Yojna of Vinova, realise that Vinova is an agent of Congress Government. 779 (e) I tell you that no good will be done to you by this Congress Government. (f) I want to tell the last word even to Congress tyrants "you play with the people and ruin them by entangling them in the mesh of bribery, black marketing and corruption. To day the children of the poor are hankering for food and you (Congress men) are assuming the attitude of Nawabs sitting on the chairs". . With intent to cause or which was likely to cause fear or alarm to the public whereby any persons might be induce to commit an offence against the State of Bihar and against the public tranquility, and thereby committed an offence punishable under section 505(b) of the Indian Penal Code and within my cognizance. After recording a substantial volume of oral evidence, the learned Trial Magistrate convicted the accused person both under sections 124A and 505(b) of the Indian Penal Code, and sentenced him to under go rigorous imprisonment for one year. No separate sentence was passed in respect of the conviction under the latter section. The convicted persons preferred an appeal to the High Court of Judicature at Patna, which was heard by the late Mr. Justice Naqui Imam, sitting singly. By this judgment and order dated April 9, 1956, he upheld the convictions and the sentence and dismissed the appeal. In the course of his judgment, the learned Judge observed that the Judge observed of the charge against the appellant was nothing but a vilification of the Government; that it was full of incitements to revolution and that the speech taken as a whole was certainly seditionus. It is not a speech critising any of is measures. He held that the offences both under sections 124A 505(b) of the Indian Penal Code had been made out. 780 The convicted person moved this Court and obtained special leave to appeal. It will be noticed that the constitutionality of the provisions of the sections under which the appellant was convicted had not been convassed before the High Court. But in the petition for special leave, to this Court, the ground was taken that sections 124A and 505 of the Indian Penal Code "are inconsistent with article 19(1) (a) of the Constitution". The appeal was heard in this Court, in the first instance, by a Division Bench on May 5, 1959. The Bench, finding that the learned counsel vco the appellant had raised the constitutional issue as to the validity of sections 124A and 505 of the Indian Penal Code, directed that the appeal be placed for hearing by a Constitution Bench. The case was then placed before a Constitution Bench, on November 4, 1960, when that Bench directed notice to issue to the Attorney General of India under r. 1, O.41 of the Supreme Court Rules. The matter was once again placed before a constitution Bench on February 9, 1961, when it was adjourned for two months in order to enable the State Governments concerned with this appeal, as also with the connected Criminal Appeals Nos. 124 126 of 1958 (in which the Government of Uttar Pradesh is the appellant) to make up their minds in respect of the proseocuions, as also in view of the report that the Law Commission was considering the question of amending the law of sedition in view of the new set up. As the States concerned have instructed their counsel to press the appeals, the matter has finally come before us. In Criminal Appeals 124 126 of 1958 the State of Uttar Pradesh is the appellant, though the respondents are different. In Criminal appeal 124 of 1958, the accused person is one Mohd, Ishaq Ihahi. He was prosecuted for having delivered a speech at Aligarh as Chairman of the Reception Committee of the All India Muslim Convention on October 30, 781 1953. His speech on that occasion, was thought to be seditious. After the necessary sanction, the Magistrate held an enquiry, and finding a prima facie case made out against the accused, committed him to the Court of Session. The learned Sessions Judge, by his Judgment dated January 8, 1955, acquitted him of the charge under section 153A, but convicted him of the other charge under section 124A, of the Indian Penal Code, and sentenced him to rigorous imprisonment for one year. The convicted person preferred an appeal to the High Court. In the High Court the constitutionality of section 124A of the Indian Penal Code was challenged. In Criminal Appeal No. 125 of 1958, the facts are that on May 29, 1954, a meeting of the Bolshovik Party was organised in village Hanumanganj, in the District of Basti, in Uttar Pradesh. On that occasion, the respondent Rama Nand was found to have delivered an objectionable speech in so far as he advocated the use of violence for overthrowing the Government established by law. After the sanction of the Government to the prosecution had been obtained, the learned Magistrate held an enquiry and ultimately committed him to take his trial before the Court of Sessions. In due course, the learned Sessions Judge convicted the accused person under section 124A of the Indian Penal Code and sentenced him to rigorous imprisonment for three years. He held that the accused person had committed the offence by inciting the audience to an open violent rebellion against the Government established by law, by the use of arms. Against the aforesaid order of conviction and sentence, the accused person preferred an appeal to the High Court of Allahabad. In Criminal Appeal 126 of 1958, the respondent is one Parasnath Tripathi. He is alleged to have delivered a speech in village Mansapur, P.S. Akbarpur, in the district of Faizabad, on September 26, 1955, in which he is said to have 782 exhorted the audience to organise a volunteer army and resist the Government and its servants by violent means. He is also said to have excited the audience with intent to create feelings of hatred and enmity against the Government. When he was placed on trial for an offence under section 124A of the Indian Penal Code, the accused person applied for a writ of Habeas Corpus in the High Court of Judicature at. Allahabad on the ground that his detention was illegal inasmuch as the provisions section 124A of the Indian Penal Code were void as being in contravention of his fundamental rights of free speech and expression under article 19(1)(a) of the Constitution. This matter, along with the appeals which have given rise to appeals Nos. 124 and 125, as aforesaid, were ultimately placed before a Full Bench, consisting of Desai, Gurtu and Beg, JJ. The learned judges, in separate but concurring judgments, took the view that section 124A of the Indian Penal Code was ultra vires article 19(1)(a) of the Constitution. In that view of the matter, they acquitted the accussed persons, convicted at aforesaid in the two appeals Nos. 124 and 125, and granted the writ petition of the accused in criminal Appeal No. 126. In all these cases the High Court granted the necessary certificate that the case involved important questions of law relating to the interpretation of the Constitution. That is how these appeals are before by on a certificate of fitness granted by the High Court. Shri C. B. Agarwala, who appeared on behalf of the State of Uttar Pradesh in support of the appeals against the orders of acquittal passed by the High Court, contended that the judgment of the High Court (bow reported in Ram Nandan vs State (1) in which it was laid down by the Full Bench that section 124A of the Indian Penal Code was ultra article 19(1)(a) of the Constitution and, 783 therefore, void for the reason that it was not in the interest of public order and that the restrictions imposed there by were not reasonable restrictions on the freedom of speech and expression, was erroneous. He further contended that the section impugned came within the saving cl. (2) of article 19, and that the reasons given by the High Court to the contrary were erroneous. He relied upon the observations of the Federal Court in Niharendu Dutt Majumdar vs The King Emperor (1). He also relied on Stephen 's Commentaries on the Laws of England, Volume IV, 21st Edition, page 141, and the Statement of the Law in Halsbury 's Laws of England, 3rd Edition, volume 10, page 569, and the cases referred to in those volumes. Mr. Gopal Behari, appearing on behalf of the respondents in the Allahabad cases has entirely relied upon the full Bench decision of the Allahabad High Court in his favour. Shri Sharma appearing on behalf of the appellant in the appeal from the Patna High Court has similarly relied upon the decision aforesaid of the Allahabad High Court. Before dealing with the contentions raised on behalf of the parties, it is convenient to set out the history of the law, the amendments it has undergone and the interpretations placed upon the provisions of section 124A by the Courts in India, and by their Lordships of the judicial Committee of the Privy Council. The section corresponding to section 124A was originally section 113 of Macaulay 's Draft Penal Code of 1837 39, but the section was omitted from the Indian Penal Code as it was enacted in 1860. The reason for the omission from the Code is enacted is not clear, but perhaps the legislative body did not feel sure above its authority to enact such a provision in the Code. Be that as it may, section 124A was not placed on the Statute Book until 1870, by Act XXVII of 1870. There 784 was a considerable amount of discussion at the time the amendment was introduced by Sir James, Stephen, but what he said while introducing the bill in the legislature may not be relevant for our present purposes. The section as then enacted ran as follows: "124A. Exciting Disaffection Whoever by words, either spoken or intended to be read, or by signs, or by visible representation, or otherwise, excites, or attempts to excite, feelings of disaffection to the Government established by law in British India, shall be punished with transportation for life or for any term, to which, fine may be added, or with imprisonment for a term which may extend to three years, to which fine may be added, or with fine. Explanation Such a disapprobation of the measures of the Government as is compatible with a disposition to render obedience to the lawful authority of the Government and to support the lawful authority of the Government against unlawful attempts to subvert or resist that authority, is not disaffection. Therefore, the making of comments on the measures of the Government, with the intention of exciting only this species of disapprobation, is not an offence within this clause. " The first case in Indian that arose under the section is what is known as the Bangobasi case (Queen Empress vs Jagendra Chunder Bose (1)) which was tried by a Jury before Sir Comer Petheram, C J. while charging the jury, the learned Chief Justice explained the law to the jury in these terms: 785 "Disaffection means a feeling contrary to affection, in other words, dislike or hatred. Disapprobation means simply disapproval. It is quite possible to disapprove of a men 's sentiments or action and yet to like him. The meaning of the two words is so distinct that I feel it hardly necessary to tell you that the contention of Mr. Jackson cannot be sustained. If a person uses either spoken or written words calculated to create in the minds of the persons to whom they are addressed a disposition not to obey the lawful authority of the Government, or to subvert or resist that authority, if and when occasion should arise, and if he does so with the intention of creating such a disposition in his bearers or readers, he will be guilty of the offence of attempting to excite disaffection within the meaning of the section though no disturbance is brought about by his words or any feeling of disaffection, in fact, produced by them. It is sufficient for the purposes of the section that the words used are calculated to excite feelings of ill will against the Government and to hold it up to the hatred and contempt of the people, and that they were used with the intention to create such feeling. " The next case is the celebrated case of Queen Empress vs Balqanqaddhar Tilak (1) which came before the Bobay High Court. The case was tried by a jury before Strachey, J. The learned judge, in the course of his charge to the jury, explain the law to them in these terms: "The offence as defined by the first clause is exciting or attempting to excite feelings of disaffection to the Government. What are "feelings of disaffection" ? I agree with Sir Comer Petheram in the Bangobasi case that disaffection means simply the 786 absence of affection. It means hatred, enmity dislike, hostility, contempt and every from of ill will to the Government. "Disloyalty" is perhaps the best general term, comprehending every possible form of bad feeling to the Government. That is what the law means by the disaffection which a man must not excite or attempt to excite; he must not make or try to make others feel enmity of any kind towards the Government. You will observe that the amount or intensity of the disaffection is absolutely immaterial except perhaps in dealing with the question of punishment: if a man excites or attempts to excite feelings of disaffection, great or small, he is guilty under the section. In the next place, it is absolutely immaterial whether any feelings of disaffection have been excited or not by the publication in question. It is true that there is before you a charge against each prisoner that he has actually excited feelings of disaffection to the Government. If you are satisfied that he has done so, you will, of course, find him guilty. But if you should hold that charge is not made out, and that no one is proved to have been excited to entertain feelings of disaffection to the Government by reading these articles, still that alone would not justify you in acquitting the prisoners. For each of them is charged not only with exciting feelings of disaffection, but also with attempting to excite such feelings. You will observe that section places on absolutely the same footing the successful exciting of feelings of disaffection and the unsuccessful attempt to excite them, so that, if you find that either of the prisoners has tried to excite such feeling in others, you must convict him even if there is nothing to show that he succeeded. Again, it is 787 important that you should fully realise another point. The offence consists in exciting or attempting to excite in others certain bad feeling towards the Government. It is not the exciting or attempting to excite mutiny or rebellion, or any sort of actual disturbance, great or small. Whether any disturbance or outbreak was caused by there articles, is absolutely immaterial. If the accused intended by the articles to excite rebellion or disturbance, his act would doubtless fall within section 124A, and would probably fall within other sections of the Penal Code. But even if he neither excited nor intended to excite any rebellion or outbreak or forcible resistance to the authority of the Government, still if he tried to excite feelings of enmity to the Government, that is sufficient to make him guilty under the section. I am aware that some distinguished persons have thought that there can be no offence against the section unless the accused either counsels or suggests rebellion or forcible resistance to the Government. In my opinion, that view is absolutely opposed to the express words of the section itself, which as plainly as possible makes the exciting or attempting to excite certain feelings, and not the inducing or attempting to induce to any course of action such as rebellion or forcible resistance, the test of guilt. I can only account for such a view by attributing it to a complete misreading of the explanation attached to the section, and to a misapplication of the explanation beyond its true scope. " The long quotation has become necessary in view of what followed later, namely, that this statement of the law by the learned judge came in for a great deal of comment and judicial notice. We have omitted the charge to the jury relating 788 to the explanation to section 124A because that explanation has now yielded place to three separate explanations in view of judicial opinions expressed later. The jury, by a majority of six to three, found Shri Balgangadhar Tilak guilty. Subsequently, he, on conviction, applied under cl. 41 of the Letters Patent for leave to appeal to the Privy Council. The application was heard by a Full Bench consisting of Farran, C. J., Candy and Strachey, JJ. It was contended before the High Court at the leave stage, inter alia, that the sanction given by the Government was not sufficient in law in that it had not set out the particulars of the offending articles, and, secondly, that the judge misdirected the jury as to the meaning of the word "disaffection" insofar as he said that it might be equivalent to "absence of affection". With regard to the second point, which is only relevant point before us; the Full Bench expressed itself to the following effect: "The other ground upon which Mr. Russell has asked as to certify that this is a fit case to be sent to Her Majesty in Council, is that there has been a misdirection, and he based his argument on one major and two minor grounds. The major ground was that the section cannot be said to have been contravened unless there is a direct incitement to stir up disorder or rebellion. That appears to us to be going much beyond the words of the section, and we need not say more upon that ground. The first of the minor points is that Mr. Justice Strachey in summing up the case to the jury stated that disaffection meant the absence of affection". But although if that phrase had stood alone it might have misled the jury, yet taken in connection with the context we think it is impossible that the jury could have been misled by it. That expression was used in connection with the 789 law as led down by Sir Comer Petheram, in Calcutta in the Bangobashi case. There the Chief Justice instead of using the words "absence of affection" used the words "contrary to affection". If the words "contrary to affection" had been used instead of "absence of affection" in this case there can be no doubt that the summing up would have been absolutely correct in this particular. But taken in connection with the context it is clear that by the words "absence of affection" the learned Judge did not mean the negation of affection but some active sentiment on the other side. Therefore on that point we consider that we cannot certify that this is a fit case for appeal. " In this connection it must be remembered that it is not alleged that there has been a miscarriage of Justice. " After making those observations, the Full Bench refused the application for leave. the case was then taken to Her Majesty in council, by way of application for special leave to appeal to the Judicial Committee. Before their Lordships of the Privy Council, Asquith, Q. C., assisted by counsel of great experience and eminence like Mayne, W. C. Bonnerjee and others, contended that there was a misdirection as to the meaning of section 124A of the Penal Code in that the offence had been defined in terms to wide to the effect that "disaffection" meant simply "absence of affection" and that it comprehended every possible form of bad feeling to the Government. In this connection reference was made to the observations of Petheram, C.J. in Queen Empress vs Jogender Bose(1). It was also contended that the appellant 's comments 790 had not exceeded what in England would be considered within the functions of a Public journalist, and that the misdirection complained of was of the greatest importance not merely to the affected person but to the whole of the Indian Press and also to all her Majesty 's subjects; and that it injuriously affected the liberty of the press and the right to free speech in public meetings. But in spite of the strong appeal made on behalf of the petitioner for special leave, the Lord Chancellor, delivering the opinion of the Judicial Committee, while dismissing the application, observed that taking a view of the whole of the summing up they did not see any reason to dissent from it, and that keeping in view the rules which Their Lordships observed in the matter of granting leave to appeal in criminal cases, they did not think that the case raised questions which deserve further consideration by the Privy Council. (vide Gangadhar Tilak vs Queen Empress) (1). Before noticing the further changes in the Statute, it is necessary to refer to the Full Bench decision of the Allahabad High Court in Queen Empress vs Amba Prasad (2). In that case, Edge, C.J., who delivered the judgment of the Court, made copious quotations from the judgments of the Calcutta and the Bombay High Courts in the cases above referred to. While generally adopting the reasons for the decisions in the aforesaid two cases, the learned Chief Justice observed that a man may be guilty of the offence defined in section 124A of attempting to excite feelings of disaffection against the Government established by law in British India, although in a particular article or speech he may insist upon the desirability or expediency of obeying and supporting the Government. He also made reference to the decision of the Bombay High Court in the Satara (3) case. In that case a Full Bench, consisting of Farran, C.J., and Parsons and Ranade, JJ, 791 had laid it down that the word "disaffection" in the section is used in a special sense as meaning political alienation or discontent or disloyalty to the Government or existing authority. They also held that the meaning of word "disaffection" in the main portion of the section was not varied by the explanation. Persons, J., held that the word "disaffection" could not be construed as meaning 'absence of or contrary of affection or love '. Ranade J., interpreted the word "disaffection" not as meaning mere absence or negation of love or good will but a positive feeling of aversion, which is akin to ill will, a definite insubordination of authority or seeking to alienate the people and weaken the bond of allegiance, a feeling which tends to bring the Government into hatred and discontent, by imputing base and corrupt motives to it. The learned Chief Justice of the Allahabad High Court observed that if those remarks were meant to be in any sense different from the construction placed upon the section by Strachey, J., which was approved, as aforesaid, by the Judicial Committee of the Privy Council, the later observations of the Bombay High Court could not be treated as authoritative. As the accused in the Allahabad case had pleaded guilty and the appeal was more or less on the question of sentence, it was not necessary for their Lordships to examine in detail the implications of the section, though they expressed their general agreement with the view of the Calcutta and the Bombay High Courts in the first two cases, referred to above. The section was amended by the Indian Penal Code Amendment Act (IV of 1898). As a result of the amendment, the single explanation to the section was replaced by three separate explanations as they stand now. The section, as it now stands in its present form, is the result of the several A.O.S. of 1937, 1948 and 1950, as a result of the constitutional changes, by the Government of India Act, 1935, by the Independence Act of 1947 and by the Indian 792 Constitution of 1950. Section 124A, as it has emerged after successive amendments by way of adaptations as aforesaid, reads as follows: "Whoever by words, either spoken or written, or by signs or by visible representation, or otherwise, brings or attempts to bring into hatred to contempt, or excites or attempts to excite disaffection towards the Government established by law in India shall be punished with transportation for life or any shorter term to which fine may be added or with imprisonment which may extend to three years, to which fine may be added, or with fine. Explanation 1. The expression "disaffection" includes disloyalty and all feelings of enmity. Explanation 2. Comments expressing disapprobation of the measures of the Government with a view to obtain their alteration by lawful means, without exiting or attempting to excite hatred, contempt or disaffection do not constitute an offence under this section. Explanation 3. Comments expressing disapprobation of the administrative of other action of the Government without exciting or attempting to excite hatred, contempt or disaffection, do not constitute an offence under this section. " This offence, which is generally known as the offence of Sedition, occurs in chapter IV of the Indian Penal Code, headed 'Of offences against the State '. This species of offence against the State was not an invention of the British. Government in India, but has been known in England for centuries. Every State, whatever its form of Government, has to be armed with the power to punish those who, by 793 their conduct, jeopardise the safety and stability of the State, or disseminate such feelings of disloyalty as have the tendency to lead to the disruption of the State or to public disorder. In England, the crime has thus been described by Stephen in his Commentaries on the Laws of England, 21st Edition, volume IV, at pages 141 142, in these words. "Section IX. Sedition and Inciting to Disaffection We are now concerned with conduct which, on the one hand, fall short of treason, and on the other does not involve the use of force or violence. The law has here to reconcile the right of private criticism with the necessity of securing the safety and stability of the State. Sedition may be defined as conduct which has, either as its object or as its natural consequence, the unlawful display of dissatisfaction with the Government or with the existing order of society. The seditious conduct may be by words, by deed, or by writing. Five specific heads of sedition may be enumerated according to the object of the accused. This may be either 1. to excite disaffection against the King, Government, or Constitution, or against Parliament or the administration of justice; 2. to promote, by unlawful means, any alteration in Church or State; 3. to incite a disturbance of the peace; 4. to raise discontent among the King 's subjects; 5. to excite class hatred. It must be observed that criticism on political matters is not of itself seditious. The test is the manner in which it is made. Candid and honest discussion is permitted. The law 794 only interferes when the discussion passes the bounds of fair criticism. More especially will this be the case when the natural consequence of the prisoner 's conduct is to promote public disorder. " This statement of the law is derived mainly from the address to the Jury by Fitzerald, J., in the case of Reg vs Alexander Martin Sullivan (1). In the course of his address to the Jury the learned Judge observed as follows: "Sedition is a crime against society, nearly allied to that of treason, and it frequently precedes treason by short interval. Sedition in itself is a comprehensive term, and it embraces all those practices, whether by word, deed or writing, which are calculated to disturb the tranquility of the State, and lead ignorant persons to endeavour to subvert the Government and the laws of the empire. The objects of sedition generally are to induce discontent and insurrection and stir up opposition to the Government, and bring the administration of justice into contempt; and the very tendency of sedition is to incite the people to insurrection and rebellion. Sedition has been described, as disloyalty in action and the law considers as sedition all those practices which have for their object to excite discontent or dissatisfaction, to create public disturbance, or to lead to civil war; to bring into hatred or contempt the Sovereign or the Government, the laws or constitution of the realm, and generally all endeavours to promote public disorder. " That the law has not changed during the course of the centuries is also apparent from the following statement of the law by Coleridge, J., in the course of his summing up to the Jury in the case of Rex. vs Aldred (2): 795 "Nothing is clearer than the law on this head namely, that whoever by language, either written or spoken incites or encourages other to use physical force or violence in some public matter connected with the State, is guilty of publishing a seditious libel. The word "sedition" in its ordinary natural signification denotes a tumult, an insurrection, a popular commotion, or an uproar; it implies violence or lawlessness in some form. " In that case, the learned Judge was charging the Jury in respect of the indictment which contained the charge of seditious libel by a publication by the defendant. While dealing with a case arising under Rule 34(6) (e) of the Defence of India Rules under the Defence of India Act (XXXV of 1939) Sir Maurice Gwyer, C.J., speaking for the Federal Court, made the following observations in the case of Niharendu Dutt Majumdar vs The King Emperor (1); and has pointed out that the language of section 124A of the Indian Penal Code, which was in pari materia with that of the Rule in question, had been adopted from the English Law, and referred with approval to the observations of Fitzerald, J., in the case quoted above; and made the following observations which are quite apposite: ". generally speaking, we think that the passage accurately states the law as it is to be gathered from an examination of a great number of judicial pronouncements. The first and most fundamental duty of every Government is the preservation of order, since order is the condition precedent to all civilisation and the advance of human happiness. This duty has no doubt been sometimes performed in such 796 a way as to make the remedy worse than the disease; but it does not cease to be a matter of obligation because some on whom the duty rests have performed it ill. It is to this aspect of the functions of government that in our opinion the offence of sedition stands related. It is the answer of the State to those who, for the purpose of attacking or subverting it, seek (to borrow from the passage cited above) to disturb its tranquillity, to create public disturbance and to promote disorder, or who incite others to do so. Words, deeds or writings constitute sedition, if they have this intention or this tendency; and it is easy to see why they may also constitute sedition, if they seek, as the phrase is, to bring Government into contempt. This is not made an offence in order to minister to the wounded vanity of Government, but because where Government and the law cease to be obeyed because no respect is felt any longer for them, only anarchy can follow. Public disorder, or the reasonable anticipation or likelihood of public disorder, is thus the gist of the offence. The acts or words complained of must either incite to disorder or must be such as to satisfy reasonable men that is their intention or tendency. " This statement of the law was not approved by their Lordships of the Judicial Committee of the Privy Council in the case of King Emperor vs Sadashiv Narayan Bhalerao (1). The Privy Council, after quoting the observations of the learned chief Justice in Niharendu 's case (2), while disapproving of the decision of the Federal Court, observed that there was no statutory definition of "Sedition" in England, and the meaning and content of the crime had to be gathered from any decisions. 797 But those were not relevant considerations when one had to construe the statutory definition of 'Sedition ' as in the Code. The Privy Council held that the language of section 124A, or of the Rule aforesaid, under the Government of India Act, did not justify the statement of the law as made by the learned Chief Justice in Niharendu 's case(1) they also held that the expression "excite disaffection" did not include "excite disorder", and that, therefore, the decision of the Federal Court in Niharendu 's case(1) proceeded on a wrong construction of section 124A of the Penal Code, and of sub para (e), sub rule (6) of Rule 34 of the Defence of India Rules; Their Lordships approved of the dicta in the case of Bal Gangadhar Tilak (2), and in the case of Annie Basant vs Advocate General of Madras (3), which was a case under section 4 of the Indian Press Act. (I of 1910), which was closely similar in language to section 124A of the Penal Code. The Privy Council also referred to their previous decision in Wallace Johnson vs The Kinq(4) which was a case under sub section 8 of section 326 of the Criminal Code of the Gold Coast, which defined "seditious intention" in terms similar to the words of s.124A of the Penal Code. In that case, their Lordships had laid down that incitement to violence was not necessary ingredient of the Crime of sedition as defined in that law. Thus, there is a direct conflict between the decision of the Federal Court in Niharendu 's case (1) and of the Privy Counsil in a number of cases from Indian and the Gold Coast, referred to above. It is also clear that either view can be taken and can be supported on good reasons. The Federal Court decision takes into consideration, as indicated above, the pre exiting Common Law of England in respect of sedition. It does not appear from the report of 798 the Federal Court decision that the rulings aforesaid of the Privy Council had been brought to the notice of their Lordships of the Federal Court. So far as this Court is concerned, the question directly arising for determination in this batch of cases has not formed the subject matter of decision previously. But certain observations made by this Court in some cases, to be presently noticed, with reference to the interrelation between freedom of speech and seditious writing or speaking have been made in the very first year of the coming into force of the Constitution. Two cases involving consideration of the fundamental right of freedom of speech and expression and certain laws enacted by some of the States imposing restrictions on that right came up for consideration before this Court. Those cases, reported in Romesh Thappar vs The State of Madras(1) and Brij Bhushan vs The State of Delhi(2) were heard by Kania C.J., Pazl Ali, Patanjali Shastri, Mehr Chand Mahajan, Mukherjea and Das, JJ, and judgments were delivered on the same day (May 26, 1950). In Romesh Thappar 's case (1), the majority of the Court declared section 9(1 A) of the Madras Maintenance of Public Order Act (Mad. XXXIII of 1949), which had authorised imposition of restrictions on the fundamental right of freedom of speech, to be in excess of cl. (2) of article 19 of the Constitution authorising such restrictions, and, therefore, void and unconstitutional. In Brij Bhushan 's case (2), the same majority struck down section 7(1)(c) of the East Punjab Public Safety Act, 1949, as extended to the Province of Delhi, authorising the imposition of restrictions on the freedom of speech and expression for preventing or combating any activity prejudicial to the public safety or 799 the maintenance of public order. The Court held those provisions to be in excess of the powers conferred on the Legislature by cl. (2) of article 19 of the Constitution. Mr. Justice Patanjali Sastri, speaking for the majority of the Court in Romesh Thappar 's case (1) made the following observations with reference to the decisions of the Federal Court and the Judicial Committee of the Privy Council as to what the law of Sedition in India was: "It is also worthy of note that the word "sedition" which occurred in article 13(2) of the Draft Constitution prepared by the Drafting Committee was deleted before the article was finally passed as article 19(2). In this connection it may be recalled that the Federal Court had, in defining sedition in Niharendu Dutt Majumdar vs The King Emperor (2) held that "the acts or words complained of must either incite to disorder or must be such as to satisfy reasonable men that that is their intention or tendency", but the Privy Council overruled that decision and emphatically reaffirmed the view expressed in Tilak 's case to the effect that "the offence consisted in exciting or attempting to excite in others certain bad feelings towards the Government and not in exciting or attempting to excite mutiny or rebellion, or any sort of actual disturbance, great or small" King Emperor vs Sadashiv Narayan Bhalerao. Deletion of the word "sedition" from the draft article 13(2), therefore, shows that criticism of Government exciting disaffection or bad feelings toward it is not to be regarded as a justifying ground for restricting the freedom of expression and of the press, unless it is such as to undermine the security of or tend to overthrow the State. It is also significant that the corresponding 800 Irish formula of "undermining the public order or the authority of the State" (article 40(6)(i) of the Constitution of Fire, 1937) did not apparently find favour with the framers of the Indian Constitution. Thus, very narrow and stringent limits have been set to permissible legislative abridgement of the right of free speech and expression, and this was doubtless due to the realisation that freedom of speech and of the press lay at the foundation of all domocratic organisations, for without free political discussion no public education, so essential for the proper functioning of the processes of popular government, is possible, freedom of such amplitude might involve risks of abuse. But the framers of the Constitution may well have reflected, with Madison who was "the leading spirit in the preparation of the First Amendment of the Federal Constitution" that "it is better to leave a few of its naxious branches to their luxuriant growth, than, by prunning, them away to injure the vigour of those yielding the proper fruits" : (quoted in Near vs Minnesotta). Those observations were made to bring out the difference between the "security of the State" and "public order". As the latter expression did not find a place in article 19(2) of the Constitution, as it stood originally, the section was struck down as unconstitutional. Fazl Ali, J., dissented from the views thus expressed by the majority and reiterated his observations in Brij Bhushan 's case (1) In the course of his dissenting judgment, he observed as follows: "It appears to me that in the ultimate analysis the real question to be decided in this case is whether "disorders involving menace to the 801 peace and tranquillity of the Province" and affecting "Public safety" will be a matter which undermines the security of the State or not. I have borrowed the words quoted within inverted commas from the preamble of the Act which shows its scope and necessity and the question raised before us attacking the validity of the Act must be formulated in the manner I have suggested. If the answer to the question is in the affirmative, as I think it must be, then the impugned law which prohibits entry into the State of Madras of "any document or class of documents" for securing public safety and maintenance of public order should satisfy the requirements laid down in article 19(2) of the Constitution. From the trend of the arguments addressed to us, it would appear that if a document is seditious, its entry could be validly prohibited, because sedition is a matter which undermines the Security of the State; but if on the other hand, the document is calculated to disturb public tranquillity and affect public safety, its entry cannot be prohibited, because public disorder and disturbance of public tranquillity are not matters which undermine the security of the State. Speaking for myself, I cannot understand this argument. In Brij Bhushan vs The State. I have quoted good authority to show that sedition owes its gravity to its tendency to create disorders and authority on Criminal Law like Sir James Stephen has classed sedition as an offence against public tranquillity. " In Brij Bhushan case (1), Fazl Ali, J., who was again the dissenting judge, gave his reasons to greater detail. He referred to the judgment of the Federal Court in Niharendu Dutt Majumdar 's case (2) 802 and to the judgment of the Privy Council to the contrary in King Emperor vs Sada Shiv Narayan (1). After having pointed out the divergency of opinion between the Federal Court of India and the Judicial Committee of the Privy Council, the learned Judge made the following observations in order to explaim why the term "sedition" was not specifically mentioned in article 19(2) of the Constitution: "The framers of the Constitution must have therefore found themselves face to face with the dilemma as to whether the word "sedition" should be used in article 19(2) and if it was to be used in what sense it was to be used. On the one hand, they must have had before their mind the very widely accepted view supported by numerous authorities that sedition was essentially an offence against public tranquillity and was connected in some way or other with public disorder; and, on the other hand, there was the pronouncement of the Judicial Committee that sedition as defined in the Indian Penal Code did not necessarily imply any intention or tendency to incite disorder. In these circumstances, it is not surprising that they decided not to use the word "sedition" in clause (2) but used the more general words which cover sedition and everything else which makes sedition such a serious offence. That sedition does undermine the security of the State is a matter which cannot admit of much doubt. That it undermines the security of the state usually through the medium of public disorder is also a matter on which eminent Judges and jurists are agreed. Therefore, it is difficult to hold that public disorder or disturbance of public tranquillity are not matters which undermine the security of the State. " 803 As a result of their differences in the interpretation of Art.19(2) of the Constitution, the Parliament amended cl.(2) of article 19, in the form in which it stands at present, by the Constitution (First Amendment) Act, 1951, by section 3 of the Act, which substituted the original cl. (2) by the new cl. This amendment was made with retrospective effect, thus indicating that it accepted the statement of the law as contained in the dissenting judgment of Fazl Ali, J., in so far as he had pointed out that the concept of "security of the state" was very much allied to the concept of "public order" and that restrictions on freedom of speech and expression could validly be imposed in the interest of public order. Again the question of the limits of legislative powers with reference to the provisions of articles 19 (1)(a) and 19(2) of the Constitution came up for decision by a Constitution Bench of this Court in Ramji Lal Modi vs The State of U.P. (1). In that case, the validity of section 295A of the Indian Penal Code was challenged on the ground that it imposed restrictions on the fundamental right of freedom of speech and expression beyond the limits prescribed by cl.(2) of article 19 of the Constitution. In this connection, the Court observed as follows: "the question for our consideration is whether the impugned section can be properly said to be a law imposing reasonable restrictions on the exercise of the fundamental rights to freedom of speech and expression in the interests of public order. It will be noticed that language employed in the amended clause is "in the interests of" and not "for the maintenance of". As one of us pointed out in Debi Saron vs The State of Bihar, the expression "in the interests of" makes the ambit of the protection very wide. A law may not have 804 been designed to directly maintain public order and yet it may have been enacted in the interests of public order. " Though the observations quoted above do not directly bear upon the present controversy, they throw a good deal of light upon the ambit of the power of the legislature to impose reasonable restrictions on the exercise of the fundamental right of freedom of speech and expression. In this case, we are directly concerned with the question how for the offence, as defined in section 124A of the Indian Penal Code, is consistent with the fundamental right guaranteed by article 19 (1) (a) of the Constitution, which is in these terms: "19. (1) All citizens shall have the right. (a) to freedom of speech and expression. " This guaranteed right is subject to the right of the legislature to impose reasonable restrictions, the ambit of which is indicated by cl. (2), which, in its amended form, reads as follows: "(2) Nothing in sub clause (a) of clause (1) shall affect the operation of any existing law or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub clause in the interests of the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence. " It has not been questioned before us that the fundamental right guaranteed by article 19(1)(a) of the freedom of speech and expression is not an absolute right. It is common ground that the right is subject to such reasonable restrictions as would come within the purview of cl. (2), which comprises (a) security of the State, (b) friendly relations with foreign States, (c) public order, (d) decency or morality, etc. With reference to the constitutionality 805 of section 124A or section 505 of the Indian Penal Code, as to how far they are consistent with the requirements of cl. (2) of article 19 with particular reference to security of the State and public order, the section, it must be noted, penalises any spoken or written words or signs or visible representations, etc., which have the effect of bringing, or which attempt to bring into hatred or contempt or excites or attempts to excite disaffection towards the Government established by law" has to be distinguished from the person 's for the time being engaged in carrying on the administration. "Government established by law" is the visible symbol of the State. The very existence of the State will be in jeopardy if the Government established by law is subverted. Hence the continued existence of the Government established by law is an essential condition of the stability of the State. That is why 'sedition ', as the offence in section 124A has been characterised, comes under Chapter VI relating to offences against the State. Hence any acts within the meaning of section 124A which have the effect of subverting the Government by bringing that Government into contempt or hatred, or creating disaffection against it, would be within the penal statute because the feeling of disloyalty to the Government established by law or enmity to it imports the idea of tendency to public disorder by the use of actual violence or incitement to violence. In other words, any written or spoken words, etc., which have implicit in them the idea of subverting Government by violent means, which are compendiously included in the term 'revolution ', have been made penal by the section in question. But the section has taken care to indicate clearly that strong words used to express disapprobation of the measures of Government with a view to their improvement or alteration by lawful means would not come within the section. Similarly, comments, 806 however strongly worded, expressing disapprobation of actions of the Government, without exciting those feelings which generate the inclination to cause public disorder by acts of violence, would not be penal. In other words, disloyalty to Government established by law is not the same thing as commenting in strong terms upon the measures or acts of Government, or its agencies, so as to ameliorate the condition of the people or to secure the cancellation or alteration of those acts or measures by lawful means, that is to say, without exciting those feelings of enmity and disloyalty which imply excitement to public disorder or the use of violence. It has not been contended before us that if a speech or a writing excites people to violence or have the tendency to create public disorder, it would not come within the definition of 'sedition '. What has been contended is that a person who makes a very strong speech or uses very vigorous words in a writing directed to a very strong criticism of measures of Government or acts of public officials, might also come within the ambit of the penal section. But, in our opinion, such words written or spoken would be outside the scope of the section. In this connection, it is pertinent to observe that the security of the State, which depends upon the maintenance of law and order is the very basic consideration upon which legislation, with a view to punishing offences against the State, is undertaken. Such a legislation has, on the one hand, fully to protect and guarantee the freedom of speech and expression, which is the sine quo non of a democratic form of Government that our Constitution has established. This Court, as the custodian and guarantor of the fundamental rights of the citizens, has the duty cast upon it of striking down any law which unduly restricts the freedom of speech and expression with which we are concerned in this case. But the freedom has to be guarded again 807 becoming a licence for vilification and condemnation of the Government established by law, in words which incite violence or have the tendency to create public disorder. A citizen has a right to say or write whatever he likes about the Government, or its measures, by way of criticism or comment, so long as he does not incite people to violence against the Government established by law or with the intention of creating public disorder. The Court, has, therefore, the duty cast upon it of drawing a clear line of demarcation between the ambit of a citizen 's fundamental right guaranteed under article 19(1)(a) of the Constitution and the power of the legislature to impose reasonable restrictions on that guaranteed right in the interest of, inter alia, security of the State and public order. We have, therefore, to determine how far the sections 124A and 505 of the Indian Penal Code could be said to be within the justifiable limits of legislation. If it is held, in consonance with the views expressed by the Federal Court in the case of Niharendu Dutt majumdar vs The King Emperor(1) that the gist of the offence of 'sedition ' is incitement to violence or the tendency or the intention to create public disorder by words spoken or written, which have the tendency or the effect of bringing the Government established by law into hatred or contempt or creating disaffection in the sense of disloyalty to the State in other words bringing the law into line with the law of sedition in England, as was the intention of the legislators when they introduced section 124A into the Indian Penal Code in 1870 as aforesaid, the law will be within the permissible limits laid down in cl. (2) of article 19 of the Constitution, if on the other hand we give a literal meaning to the words of the section, divorced from all the antecedent background in which the law of sedition has grown, as laid down in the several decisions of the Judicial Committee of the Privy Council, it will be true to 808 say that the section is not only within but also very much beyond the limits laid down in cl. (2) aforesaid. In view of the conflicting decisions of the Federal Court and of the Privy Council, referred to above, we have to determine whether and how far the provisions of sections 124A and 505 of the Indian Penal Code have to be struck down as unconstitutional. If we accept the interpretation of the Federal Court as to the gist of criminality in an alleged crime of sedition, namely, incitement to disorder or tendency or likelihood of public disorder or reasonable apprehension thereof, the section may lie within the ambit of permissible legislative restrictions on the fundamental right of freedom of speech and expression. There can be no doubt that apart from the provisions of (2) of article 19, sections 124A and 505 are clearly violative of article 19(1)(a) of the Constitution. But then we have to see how far the saving clause, namely, cl.(2) of article 19 protects the sections aforesaid. Now, as already pointed out, in terms of the amended cl. (2), quoted above, the expression "in the interest of. public order" are words of great amplitude and are much more comprehensive than the expression "for the maintenance of", as observed by this Court in the case of Virendra vs The State of Punjab (1). Any law which is enacted in the interest of public order may be saved from the vice of constitutional invalidity. If, on the other hand, we were to hold that even without any tendency to disorder or intention to create disturbance of law and order, by the use of words written or spoken which merely create disaffection or feelings of enmity against the Government, the offence of sedition is complete, then such an interpretation of the sections would make them unconstitutional in view of article 19(1)(a) read with cl. It is well settled that if certain provisions of law construed in one way would make 809 them consistent with the Constitution, and another interpretation would render them unconstitutional, the Court would lean in favour of the former construction. The provisions of the sections read as a whole, along with the explanations, make it reasonably clear that the sections aim at rendering penal only such activities as would be intended, or have a tendency, to create disorder or disturbance of public peace by resort to violence. As already pointed out, the explanations appended to the main body of the section make it clear that criticism of public measures or comment on Government action, however strongly worded, would be within reasonable limits and would be consistent with the fundamental right of freedom of speech and expression. It is only when the words, written or spoken, etc. which have the pernicious tendency or intention of creating public disorder or disturbance of law and order that the law steps in to prevent such activities in the interest of public order. So construed, the section, in our opinion, strikes the correct balance between individual fundamental rights and the interest of public order. It is also well settled that in interpreting an enactment the Court should have regard not merely to the literal meaning of the words used, but also take into consideration the antecedent history of the legislation, its purpose and the mischief it seeks to suppress (vide (1)). The Bengal Immunity Company Limited vs The State of Bihar (1) and (2) R.M.D. Chamarbaugwalla vs The Union of India (2). Viewed in that light, we have no hesitation in so construing the provisions of the sections impugned in these cases as to limit their application to acts involving intention or tendency to create disorder, or disturbance of law and order, or incitement to violence. We may also consider the legal position, as it should emerge, assuming that the main section 124A is 810 capable of being construed in the literal sense in which the Judicial Committee of the Privy Council has construed it in the cases referred to above. On that assumption, it is not open to this Court to construe the section is such a way as to avoid the alleged unconstitutionality by limiting the application of the section in the way in which the Federal Court intended to apply it ? In our opinion, there are decisions of this Court which amply justify our taking that view of the legal position. This Court, in the case of R.M.D. Chamarbaugwalla vs The Union of India (1) has examined in detail the several decisions of this Court, as also of the Courts in America and Australia. After examining those decisions, this Court came to the conclusion that if the impugned provisions of a law come within the constitutional powers of the legislature by adopting one view of the words of the impugned section or Act, the Court will take that view of the matter and limit its application accordingly, in preference to the view which would make it unconstitutional on another view of the interpretation of the words in question. In that case, the Court had to choose between a definition of the expression 'Prize Competitions" as limited to those competitions which were of a gambling character and those which were not. The Court chose the former interpretation which made the rest of the provisions of the Act, Prize Competitions Act (XLII of 1955), with particular reference to sections 4 and 5 of the Act and Rules 11 and 12 framed thereunder, valid. The Court held that the penalty attached only to those competitions which involved the element of gambling and those competitions in which success depended to a substantial degree on skill were held to be out of the purview of the Act. The ratio decidendi in that case, in our opinion, applied to the case in hand in so far as we propose to limit its operation only to such activities as come within the ambit of 811 the observations of the Federal Court, that is to say, activities involving incitement to violence or intention or tendency to create public disorder or cause disturbance of public peace. We do not think it necessary to discuss or to refer in detail to the authorities cited and discussed in the reported case R.M.D. Chamarbaugwalla vs The Union of India (1) at pages 940 to 952. We may add that the provisions of the impugned sections, impose restrictions on the fundamental freedom of speech and expression, but those restrictions cannot but be said to be in the interest of public order and within the ambit of permissible legislative interference with that fundamental right. It is only necessary to add a few observations with respect to the constitutionality of section 505 of the Indian Penal Code. With reference to each of the three clauses of the section, it will be found that the gravamen of the offence is making, publishing or circulating any statement, rumour or report (a) with intent to cause or which is likely to cause any member of the Army, Navy or Air Force to mutiny or otherwise disregard or fail in his duty as such; or (b) to cause fear or alarm to the public or a section of the public which may induce the commission of an offence against the State or against public tranquillity; or (c) to incite or which is likely to incite one class or community of persons to commit an offence against any other class or community. It is manifest that each one of the constituent elements of the offence under section 505 has reference to, and a direct effect on, the security of the State or public order. Hence, these provisions would not exceed the bounds of reasonable restrictions on the right of freedom of speech and expression. It is clear, 812 therefore, that cl. (2) of article 19 clearly save the section from the vice of unconstitutionality. It has not been contended before us on behalf of the appellant in C.A. 169 of 1957 or on behalf of the respondents in the other appeals (No. 124 126 of 1958) that the words used by them did not come within the purview of the definition of sedition as interpreted by us. No arguments were advanced before us to show that even on the interpretation given by us their cases did not come within the mischief of the one or the other section, as the case may be. It follows, therefore, that the Criminal Appeal 169 of 1957 has to be dismissed. Criminal Appeals 124 126 of 1958 will be remanded to the High Court to pass such order as it thinks fit and proper in the light of the interpretation given by us. Appeal No. 169 of 1957 dismissed. Appeals Nos. 124 to 126 of 1958 allowed. [/INST]Under the C. P. and Berar Local Self Government Act 1920, the District Council of Bhandara. in 1925, imposed a terminal tax on the export of bidis and bidi leaves by rail out of Bhandara district. By the Government of India Act, 1935, terminal tax was included in the Federal Legislative List but section 143 (2) of the Act provided that such a tax which was being lawfully levied under a law in force on January 1, 1935, may continue to be levied until provision to the contrary was made by the Federal Legislature. The District Council continued to leavy and collect the tax. In 1948 the C P. and Berar Local Government Act, 1948, came into force which repealed the 1920 Act. It replaced the District Council, Bhandara, with three janapada Sabhas. Clause (c) ;of the proviso to the saving section section 192 provided that 'all rates, taxes and cesses due to the District Council shall be deemed to be due to the Sabha to whose area they pertained, 71 By an amending Act of 1949 the Provincial Legislature replaced cl. (b) of the proviso to section 192 by a new cl. (b) which, inter alia, continued in force all taxes which were in force immediately before the commencement of the 1948 Act, this amendment was given retrospective effect from the commencement of 1948 Act. The appellant contended that the 1948 Act which repealed the 1926 Act did not save the terminal tax, and once the tax was discontinued the Provincial Legislature had no power left to impose it afresh and that the amendment was accordingly beyond its legislative competence_. The respondent contended that section 143 (2) of the Government of India Act, 1935. vested in the Provincial Legislature plenary power to legislate in respect of every tax which was being lawfully levied in the province, that cl. (c) of the proviso to section 192 of the 1948 Act saved the tax and that the amendment was validly made and it saved the tax with retrospective effect from the date of the repeal of the 1920 Act. Held, that the terminal tax was validly continued by the retrospective amendment of cl. (b) to the proviso of section 192 of 1948 Act. Section 143 (2) of the Government of India Act, 1935, did not confer upon the Provincial Legislature any plenary power of legislation in respect of taxes which were being validly imposed. But it did confer upon the Provincial Legislature a limited legislative power to enact a law with reference to the tax levy so as to continue it. The power of the Provincial Legislature to repeal the 1920 Act which imposed the tax was co extensive with its power to enact such a law. In exercise of this limited legislative power the Provincial Legislature was competent to enact the Amending Act of 1949. Attorney General for Ontario vs Attorney General for the Dominion, , referred to. Clause (c) of the proviso to section 192 of the 1948 Act did not save the future imposition of the tax; it merely provided for the collection of taxes already accrued in favour of the District Councils by the successor Sabhas. The words in this clause "due to the District Council" referred only to taxes which had accrued on the date of the repeal of the 1920 Act and did not include taxes which accrued later and became payable subsequent to that date. The subsequent amendment of 1949 could not be take a into account in construing cl. (c) and for determining the intention of the legislature. </s>
<s>[INST] Summarize the judgementCivil Appeal No.1779 of 1991. From the Judgment and Order dated 10 4 1990 of the Bombay High Court in W.P.No.1944 of 1987. M.C.Bhandare, CPU Nair, Ms. Kamini Lao and M.N.Shroff for the Appellants. V.N.Ganpule, S.K.Agnihotri, A.S.Bhasme and Ms. H.Wahi for the Respondents. The Judgment of the Court was delivered by Sawant,J. Leave granted. Appellant No.1 is a Trust which runs and manages an Ayurveda College in Bombay. Appellant No.2, is the Principal of the College. There was a vacancy in the post of a lecturer in Sanskrit for the academic year 1983 84 which was admittedly reserved for a candidate from the backward classes. The Ist respondent had applied for the said post on 19th September, 1983 even before the appellant Trust had invited applications by advertising the vacancy as it was required 286 to do. Subsequently, on October 13, 1983, the appellant Trust issued an advertisement inviting applications for the post without mentioning for which academic year the appointment was to be made. The parties before us agree that it was for the academic year 1983 84. In the advertisement, it was specifically mentioned that the post was reserved for a backward class candidate and if no suitable candidate from the backward classes was available, a candidate from the non backward classes may be appointed for an year. It appears that within a month thereafter on the 12th November, 1983, a second advertisement was issued repeating the earlier advertisement. No application was received from any candidate from the backward classes in response even to this advertisement, and hence, the Ist respondent who had already applied as stated earlier, was appointed to the said post for the period from March 19, 1984 till April 30, 1984. The total period of service put in by the Ist respondent for the said academic year was 41 days. On April 28, 1984, the appellant Trust issued an advertisement for the same post repeating the contents of the earlier advertisement, but for the academic year 1984 85. The applications were invited by 30th April, 1984. No candidate from the backward classes applied in response to the said advertisement. The interview was held on June 30, 1984 and the Ist respondent was appointed for the period from 21st August, 1984 to 19th April, 1985. In the third academic year 1985 86, admittedly no advertisement was issued and no applications from the candidates including candidates from the backward classes were invited. However, the Ist respondent was appointed to the post from July 10, 1985 to April 30, 1986. Thereafter the Ist respondent 's services were terminated w.e.f. 30th April, 1986 by a notice dated March 12, 1986. No appointment was made to the said post for the academic year 1986 87. On May 1,1987, the Trust issued advertisement inviting applications to the said post from candidates belonging to all classes since, according to the Trust, the post was dereserved during the said period. Three candidates belonging to the non backward classes including the Ist respondent and the 5th respondent applied for the post and the 5th respondent was selected and appointed to the same. It appears that the Ist respondent was not paid salary for the summer vacations following the academic years 1984 85 and 1985 86. She was also not paid salary from November 1985 to April 1986. She approached the College Tribunal praying for salary for (i) November 1985 to April 1986, and (ii) for the summer vacations following 287 academic years 1984 85 and 1985 86, i.e., for the months of May and part of June 1985, and May and part of June 1986, and (iii) for setting aside her termination of service and for reinstatement. The Tribunal allowed her claim for the salary for the relevant periods, but dismissed her claim for reinstatement holding that her appointment was purely temporary and her claim that she should be deemed to have been confirmed because she had served for two academic years was not established in the circumstances of the case. This decision was delivered by the Tribunal on December 9, 1986. As stated earlier, during the academic year 1986 87, no appointment was made to the said post and it was subsequent to this decision that an advertisement was issued calling for applications from candidates belonging to all classes and 5th respondent was appointment to the said post. Against the decision of the Tribunal the Ist respondent approached the High Court under Article 226 of the Constitution, and the High Court held that notwithstanding the break in her actual appointment, she was continuously in employment from March 19, 1984 to April 30, 1986. She was, therefore, entitled to the benefit of the resolutions of the State Government and the University of Bombay dated September 29, 1986 and February 27, 1987 respectively which, according to the High Court, laid down that an employee who was appointed for two consecutive academic years must be deemed to have been on probation right from the time of the first appointment and, therefore, confirmed in the post. The High Court, therefore, allowed her petition and directed the appellants to reinstate her forthwith in the post and also to treat her as if she had been in continuous employment from March 19, 1984 with the benefit of full back wages, seniority etc. The High Court also directed the University, the Director of Ayurveda, Maharashtra and the State of Maharashtra who were respondents 3,4 and 5 respectively to the petition, and who are respondents 2,3 and 4 to the present appeal respectively, to make appropriate sanctions including grant of money, if necessary. The High Court further granted cost and directed compliance with the orders by the appellants within six weeks from the date of its order, which is April 10, 1990. Although various contentions have been raised we find that it is not necessary to go into them. According to us the appellant Trust has violated the directions of the Government as well as of the University in the appointments in question in two major respects, as a result of which neither the appointment of the Ist respondent nor that of the 5th respondent can be said to have been validly made. Unfortunately, these aspects of the matter which are evident from the record 288 were lost sight of both by the Tribunal and the High Court. The result has been that the illegalities which are patent on the face of the record have been perpetuated. The Government of Maharashtra had issued a Govt. resolution No. 1177/129387/XXXII (CELL) on October 25, 1977 prescribing conditions of service as shown in Appendix III to the resolution. By a further resolution of April 3, 1978, Government made it clear that the revised scales of pay which were sanctioned by the resolution of October 25, 1977 could be implemented only after statutes had been duly made by the University. Since the making of the statutes was to take some time and the revised scales of pay recommended of the University Grants Commission were to be effective from January 1, 1973 as laid down in the GR of October 25, 1977, the Vice Chancellor exercised his powers conferred upon him under Section 11(6)(b) of the Bombay University Act 1974 (hereinafter referred to as the "Act") and issued his direction No.192 of 1978 on 7th June, 1978. This direction, among other things, laid down the mode of recruitment of the teachers and principals, as follows: "Futuer recruitment to posts of Teachers and Principals of colleges shall be made through a Selection Committee, the composition of which is specified in the terms and conditions (Appendix II)." Appendix II states as follows: " Terms and conditions attached to the revised scales of pay. (i) x x x x x x x x (ii) All appointments of teachers in colleges shall be made on merit and on the basis of all India advertisement. The qualifications prescribed for the posts should essentially be related to the academic attainment in the subject concerned and should not be linked with language or other regional consideration. Appointment should not be made on communal or caste consideration. The constitution of Selection Committee for recruitment to the posts of lectures in a college should be as follows: (a) Chairman, Governing Body of the College or his nominee; 289 (b) a nominee of the Vice Chancellor. (c) one expert to be nominated by the University. (d) one nominee of the Director of Education (Higher Education). (e) Principal of the college; and (f) Head of the Department concerned of the college. No selection shall be considered valid unless at least one expert is present. The recommendations of the Selections Committee shall be subject to the approval of the Vice Chancellor. * * * * * * * * (Emphasis Supplied) 8. The effect of the aforesaid government resolutions and the University directions is (a) that all appointment of teachers in colleges have to be made on merit and on the basis of all India advertisement;(b) that the appointments have to be made by a Selection Committee which consists, among others, of nominee of the Vice Chancellor, an expert to be nominated by the University and a nominee of the Director of Education (Higher Education). No selection will be considered valid unless at least one expert is present for the selection. Admittedly, the selection of the 5th respondent was made by a committee where neither the nominee of the Vice Chancellor nor the expert nominated by the University nor the nominee of the Director of Education (Higher Education), i.e., in the present case of the Director of Ayurveda was present. The selection so made was, therefore, not valid. Shri Bhandare, the learned counsel for the appellant Trust Pointed out to us the letter of June 6, 1989 sent by the University of Bombay according approval to the appointment of the 5th respondent as a lecturer in Sanskrit on probation from 2nd July, 1987 and contended that in view of the said approval the invalidity of the appointment, if any, on account of the absence of the expert in the Selection Committee, should be deemed to have been condoned. We are not impressed by this contention. In the first instance, there is nothing on record to show whether when the appellant Trust forwarded its report on appointment of the 5th respondent, the Trust had apprised the 290 University of the absence of the expert at the time of his selection. Secondly, the University has not reserved the power to relax the rule and permit selection without the presence of the expert. There is nothing in the University 's letter to show why the University had condoned the absence of the expert. It is, therefore, obvious that the approval given by the University being in ignorance of the true state of affairs and in breach of the rule is legally ineffective and cannot validate the appointment. There is further a common illegality in the appointment of both the 1st and the 5th respondent which arises on account of the failure to follow the Government Resolutions and University directions in the matter of reservation of the seats for the backward classes, which are binding on the College. On 30th March 1981, the Government of Maharashtra passed a resolution in exercise of the powers conferred on it under sub Section (2) of Section 77 C of the Act issuing instruction to all the non agricultural Universities in regard to the reservation of posts to be made in favour of Scheduled Castes and Scheduled Tribes while making appointments to teaching and non teaching posts in the University affiliated colleges and recognized institutions. The reservation prescribed was as follows: (1) Scheduled Castes 13 p.c. (2) Scheduled Tribes 7 p.c. (3) Nomadic Tribes & Vimukta Jatis 4 p.c. Total 24 p.c. That resolution further says that the various orders contained in the booklet "Reservation and other concessions in Government service for backward classes" will be applicable for recruitment to the teaching and non teaching posts reserved for backward classes in the University and the affiliated colleges and recognized institutions subject to the following modifications in regard to recruitment to the teaching posts. The modifications, among other things, were as follows: "Similarly, at any given time of recruitment to the teaching posts, only the total number of reserved vacancies and the sections from which they are to be filled in should be 291 determined. It would be enough if the require percentage is fulfilled as a whole and not with reference to any particular post. If the reserved vacancies cannot be filled, then so many posts as cannot be filled in may be kept vacant for six months and should be again advertised thrice. Even after readvertising the posts 3 times if suitable candidates belonging to backward classes do not become available, they may be filled in by candidate belonging to the open category." "For giving effect to the aforesaid instructions, it will be necessary for the Universities to make statutes under Section 77C(1) under their respective Universities Acts of 1974. For ensuring immediate implementation, the Vice Chancellors of the Universities, under clause (b) of Section 11(6) of the respective Universities Act of 1974. " (Emphasis supplied) 12. By its subsequent resolution of October 20, 1983, the Government of Maharashtra clarified its earlier resolution of March 30, 1981 and stated as follows: "1. x x x x x x x x 2. After reconsideration of the above decision, it is now directed that if suitable candidates cannot be found to fill posts reserved for backward classes in Universities, affiliated colleges and recognized institutions, those posts should be temporarily filled with candidates belonging to non backward classes for one academic year. But as mentioned in the resolution the appointment of a non backward class candidate to a reserved vacancy should be made only in the event of failure to find a backward class candidate even after the post has been advertised thrice. x x x x x x x x" (Emphasis supplied) 13. Thereafter a further resolution was issued by the Government on September 29,1986 on the subject stating therein that it had come to the notice of the Government that some institutions had not 292 implemented the instructions contained in the earlier resolutions of March 30, 1981 and of October 30, 1983. The Government therefore directed that the said directions should be implemented strictly. This resolution further directed that the non backward class candidates who were being repented for the second and third academic years when backward class candidates were not found for appointment for the first academic year, should not be called for interview every year and that the candidates belonging to the non backward classes should be appointed for the second and third academic year also, without calling them for interview. It is further stated in the said resolution that, similarly, as soon as the reserved post is dereserved, the appointed candidate should be confirmed in that post from the date of dereservation subject to all other terms and conditions. It was also directed that necessary statutes should be made by the University in accordance with the provisions of the Act and for ensuring immediate implementation, the vice Chancellor should issue directions under clause (b) of Section 11(6) of the Act. Pursuant to the said resolution of the Government, the Vice Chancellor of the University issued direction on March 11, 1987 as follows: "x x x x x x x (1) That the reserved teaching post which is filled in by appointment of a suitable non backward class candidate in the first year by following the prescribed procedure of selection shall be advertised again for the second and third years for inviting applications only from persons belonging to Scheduled Castes, Scheduled Tribes, Denotified Tribes and Nomadic Tribes. However, applications may also be invited from persons belonging to non backward class if the suitable non backward class candidate already appointed in the first year is not available for reappointment in the second or third year and or his services are required to be terminated on account of unsatisfactory performance of work in the first year; (2) That if in the second year, in response to the advertisement, a backward class candidate is not available, then the suitable non backward class candidate already appointed in the reserved post shall not be required to appear for interview before the Selection Committee again for the second 293 and: or third year (s) but that he shall be reappointed in the reserved post, if he is available for reappointment; (3) That if in response to the third advertisement in the third year, no application is received for the reserved post from candidates belonging to SC, ST, DT, or NT, the college authorities shall start the process of dereservation of the reserved post. After the process of dereservation of the post is completed, the appointment of non backward class teacher shall be deemed to be on probation with retrospective effect from the date of his initial appointment if he has held continuous appointment for two years in the college or in any other college under the same management, and that his appointment shall be confirmed from the dates of completion of two years of continuous appointment. The aforesaid direction shall come into force with retrospective effective from the date of the Maharashtras Government Resolution, that is, of 29 9 1986, which means that non backward class teacher who is eligible to get the benefit of the above direction shall be confirmed in his post with effect from 29 9 1986 or from any later date on which he may become eligible for confirmation in accordance with the aforesaid directions. x x x x x x x x x" (Emphasis supplied) 14. According to these Government resolutions and University directions (a) whenever a post is reserved to be filled in by the candidates from the backward classes, the post is to be advertise thrice within 6 months in each academic year. The post is to be kept vacant for the said months 6 months if no suitable candidate from the backward classes is available; (b) the post is to be filled in temporarily for one academic year by a non backward class candidate only after the three advertisements have been given as above; (c) the aforesaid process is to be repeated for two more academic years; (c) the candidate from the non backward classes appointed temporarily in the first academic, year for want of a backward class candidate, is to be continued as a temporary appointee for the next two academic years without being interviewed afresh for the next two years; (d) if in spite of the third advertisement in the third academic year, no application is received from a backward class candidate, the College authorities are free to 294 start the process of dereservation of the reserved post; (e) after the process of dereservation of the post is completed, the appointment of non backward class teacher will be deemed to be on probation with retrospective effect from the date of his initial appointment and he shall be confirmed in the post on his completing two years of his continuous service. Admittedly, as pointed out earlier, the post was reserved for the academic year 1983 84. The Trust had not given three advertisements within six months for any of the academic years 1983 84, 1984 85 and 1985 86. On the other hand for the academic year 1983 84, it issued only two advertisements, viz., on October 30, 1983 and November 12, 1983. It is not known as to why even two advertisements were not issued at the beginning of the said academic year. The academic year admittedly begins from June. May that be, as it is. As regards the second academic year 1984 85, it issued only one advertisement and that was on April 28, 1984. It did not issue any advertisement for the academic year 1985 86. The initial appointment of the 1st respondent for the academic year 1983 84 and her continuation for the subsequent academic years, viz., 1984 85 and 1985 86 was thus in breach of the Government resolutions and the University directions and, therefore, illegal. Similarly, since the appointment of the 5th respondent was made without fallowing the procedure prior to dereservation, viz., three advertisements repeated every year for all the three academic years for which the post was to be reserved, his appointment to the post, as if the post stood legally dereserved was also illegal since in the facts and circumstances of the case, it is obvious that the post could not have been dereserved to make it available for non backward class candidate. Shri Bhandare, however, contended that in the meanwhile the appellant Trust had taken steps to shift the reservation from the post of a lecturer in Sanskrit to the post of lecturer in Sanhita. The Trust had written a letter on July 2, 1986 for the purpose to the Directorate had by its letter of July 11, 1986 accorded the sanction. It may, however, be pointed out the representation made by the lecturer in Sanskrit to the post of lecturer in Sanhita had proceeded on the basis that the Trust had made efforts to fill in the said post from the candidates of the backward classes as required by the Government resolutions and the University directions. As pointed out above, the Trust had not made the efforts as required by the said resolutions and directions. It had not issued the advertisements 295 as it was required to do. The sanction was obtained and granted obviously on the basis of inadequate information. The sanction was, therefore, defective in law. The High Court unfortunately did not notice these infirmities in the appointment of either of the respondents. Shri Ganpule, the learned counsel appearing for the 1st respondent contended that since the 1st respondent was appointed in the first academic year, viz., 1983 84 and continued for the next two academic years, viz., 1984 85 and 1985 86 she was entitled to the benefit of the directions of the University contained in Circular No. 98 of 1987 dated March 11,1987 which had stated that if the non backward class teacher is on probation continuously for two years he would be deemed to be on probation with retrospective effect from the date of ;his initial appointment. Although the services of the 1st respondent were terminated w.e.f. April 30, 1986, since she was entitled to the benefit of the vacation salary following the academic year 1985 86 she would be deemed to be in service after the completion of the vacation and, therefore, she may be said to be in service on September 29, 1986 from which date the said University direction was to be effective. The contention proceeds on the footing that her initial appointment and the continuation of service for the next two academic years was valid. We have already pointed out above that they cannot be considered to be valid. However, assuming that her initial appointment and subsequent continuation of service was valid, she would not be entitled to the b benefit of the University Direction of March 11, 1987 because her entitlement to the vacation salary does not extend her period of employment up to the end of the vacation. That is a perquisite which is conferred on every teacher who has served during the academic year. It has no connection with the continuation of the employment since even those teachers whose services are validly terminated before the beginning of the vacation period are given the benefit of the salary of the vacation period. Statute 424 of the University which is reproduced as Annexure 'C ' to the petition makes this position clear. The argument, therefore, has no merit. In the view we have taken the appointments of both 1st and the 5th respondents were not valid. The post was reserved for the academic year 1983 84. We are now at the end of the academic year 1990 91 A fresh appointment, therefore, will have to be made for the academic year 1991 92. In the meanwhile, several events have occurred. The appointment of the 1st 296 respondent has already been terminated w.e.f. April 30, 1986. The 5th respondent has been in service from July 2, 1987. We are informed across the bar that today he has become overaged. The 1st respondent was overaged even at the time of her initial appointment. Although the advertisemently had stated that the candidate should not be above 32 years, at the time of her initial appointment itself, she was about 40 years old. The advertisement had also not l;mentioned anywhere that the age was relaxable. But that is a matter of history. In the meanwhile. as pointed out above, on incomplete information, the Directorate of Ayurveda has allowed the appellant Trust to shift the reservation from the post to the post of a lecturer in Sanhita. Taking into account all the facts and circumstances, we are of the view that an opportunity should be given to the appellant Trust to cure the illegalities. While, therefore, we maintain the order of Tribunal and set aside the order of the High Court, we direct the appellant Trust to advertise the post three times sufficient in advance and in any case within six months from the close of the present academic year, viz. ,1990 91 as a post reserved for the backward class candidate, and if no application is received from a suitable backward class candidate, the post will be deemed to have been dereserved. The Trust will then proceed to fill in the same by a candidate belonging to non backward classes. This fact may be made clear in all the three advertisements. The 5th respondent will be entitled to apply for the post notwithstanding the fact that he has by this time become overaged. If he is selected on the basis of his other qualifications, the Selection Committee shall relax in his favour the condition with regard to the maximum age. If he is appointed to the post, his appointment will be a fresh one and his past service will not count for the probation period. The Trust shall for the purpose constitute a proper Selection Committee according to the rules. The appeal is allowed accordingly. The parties will bear their own costs. Before parting with this appeal, we must observe that our decision has proceeded on the basis of the Government resolutions and University directions placed before us. The resolutions and directions as pointed out above require that the posts reserved for backward class candidates should be kept vacant for six months and it is only after the third advertisement during the said six months in each academic year that they should be filled in by candidates belonging to 297 the non backward classes if suitable candidate from backward classes are not available. Literally interpreted, it would mean that in each academic year, there will be no teacher for the first six months, if the process of advertisement is to begin at the commencement of the academic year. This is bound to cause hardship to the students. It is, therefore, incumbent upon the institutions concerned to advertise the posts thrice within six months well before each academic year begins. Since in the present case the academic year begins in June, the process of advertisement must begin in December of the preceding year. This should be the normal practice. An exception has to be made in the present case because the decision is being given today. To overcome the hardship to the decision is being given today. To overcome the hardship to the students, we would recommend that the 5th respondent may be permitted to teach as a purely temporary teacher during the period that the process is not completed for the academic year 1991 92. However, the appellant Trust will take steps within two weeks from the receipt of this order to start the process of advertisement as directed above. G.N. Appeal allowed. [/INST]The appellant was tried for rape and murder of a girl aged five years. The entire evidence against him was circumstantial: (a) the accused and the deceased were last seen together; (b) false explanation given by the accused regarding the whereabouts of the deceased; (c) alleged recovery of the dead body of the deceased at the instance of the accused and (d) presence of abrasions on the genital of the accused as well as blood stains on his wearing apparels and nail clippings. Relying on the circumstantial evidence the Trial Court convicted him under Sections 302 and 376 and sentenced him to death for the offence of murder and seven years rigorous imprisonment for the offence of rape. The High Court confirmed the conviction and the sentence awarded by the Trial Court. In appeal to this court it was contended on behalf of the appellant that the circumstantial evidence is wholly insufficient to bring home the guilt of the accused. Allowing the appeal, this Court, HELD: 1. The circumstantial evidence in order to sustain the conviction must satisfy three conditions; (1) the circumstances from which an inference of guilt is sought to be drawn, must be cogently and firmly established; (ii) those circumstances should be of a definite tendency nerringly pointing towards the guilt of the accused; (iii) the circumstances, taken cumulatively, should form a chain so complete that there is no escape from the conclusion that within all human probability the crime was committed by the accused and none else, and it should also be incapable of explanation on any other hypothesis than that of the guilt of the accused [303E F]. 299 Hanumant and Anr.v. The State of Madhya Pradesh, ; Reg vs Hodfe, [1838] 2 Lew.227; Dharam Das Wadhwani vs State of Uttar Pradesh, and Jagta vs State of Haryana, ; , referred to. 2.In cases depending largely upon circumstantial evidence there is always a danger that the conjecture or suspicion may take the place of legal proof and such suspicion however so strong cannot be allowed to take the place of proof. The Court has to be watchful and ensure that conjectures and suspicions do not take the place of legal proof for sometimes unconsciously it may happen to be a short step between moral certainty and the legal proof. At times it can be case of 'may be true. But there is a long mental distance between 'may be true ' and 'must be true ' and the same divides conjectures from sure conclusions. The Court must satisfy itself that the various circumstances in the chain of evidence should be established clearly and that the completed chain must be such as to rule out a reasonable likelihood of the innocence of the accused. [304 G, 309E F] 3.In the instant case the circumstance that the deceased was last seen in the company of the accused is not established beyond reasonable doubt. This circumstance was not mentioned in the Inquest Report prepared by the Investigating Officer. Further the statement of the parents of the deceased that the accused took the deceased girl by itself is not enough to conclude that the deceased was last seen in the company of accused because even according to them on being inquired the accused told them that he had sent the girl back in a truck. [308C, 305F] 3.1 The prosecution has not conclusively proved the crucial circumstance of the recovery of the dead body of the deceased girl at the instance of the accused. No Panchnama was prepared for such a discovery under Section 27 of the Evidence Act and there is no mention in the Inquest Report as to how the body was discovered. On the other hand there is any amount of doubt and suspicion about the accused having shown the place of occurrence. Once it is held that the crucial circumstances namely the discovery of the body at the instance of the accused is not established, than the other circumstance are hardly sufficient to establish the guilt of the accused. [308B C D, 306B, 307C] 3.2 The explanation given by the accused that he sent the girl back to the village in a truck cannot be held to be not plausible and therefore false because it is not uncommon in villages for children to go about the fields and walk short distance while coming back to the village. [308E] 300 3.3 The prosecution has also not established that the accused had an intercourse on the day of the occurrence. When the doctor who examined the accused stated that he could not find any sign of sexual intercourse atleast within one hour of his examination then it is only a matter of conjectures as to when the accused had any intercourse. The presence of blood in the nail clippings and on the underpant does not also incriminate and do not connect the accused in any manner with the alleged offences. The accused also had given an explanation namely that his gums were bleeding and in wiping out the same he got these blood stains. Even otherwise this circumstance coupled with the circumstance of last seen in the company of the accused would ;not amount to legal proof of the guilt particularly when the crucial circumstance namely that the accused showed the dead body is held to be not established. When such a main link goes, the chain gets snapped and the other circumstances cannot in any manner establish the guilt of the accused beyond all reasonable doubts. Therefore there is a reasonable doubt about the guilt of the accused and the benefit of the same should go to him. Accordingly the conviction and sentence of the accused is set aside. [309B C, F G] </s>
<s>[INST] Summarize the judgementtition (Crl) No. 1792 of 1981. (Under article 32 of the Constitution of India) V.M. Tarkunde, G. C. Patel and K. Prasad for the Petitioner. M. K. Banerjee, Additional Solicitter General and Miss A, Subhashini for the Respondent. 984 The Judgment of the Court was delivered by SEN, J. This petition under article 32 of the Constitution raises a question of some nicety. The question is whether the 'right to be defended by a legal practitioner of his choice ' under article 22(1) of the Constitution comprehends the right of an accused to be supplied with a lawyer by the State. The petitioner is an advocate on record practising in this Court and has been arraigned along with four others to stand his trial for the commission of an alleged offence of murder in furtherance of criminal conspiracy punishable under section 302 read section 120 B of the Indian Penal Penal Code in what is known as the Samastipur Bomb Blast case in the Court of the Additional Sessions Judge, Delhi. Bawa Gurcharan Singh engaged by the main accused Santoshanand and Sudevanand as senior counsel was also appearing for the petitioner as a matter of professional courtesy to a fellow member of the Bar. The evidence of the first approver P.W. 1 Madan Mohan Srivastava @ Visheshwaranand was concluded on March 25, 1981 and he was cross examined by Bawa Gurcharan Singh on behalf of the main accused as well as the petitioner, and by P. P. Grover appearing on behalf of the other two accused Arteshanand and Gopalji. On the same day, Bawa Gurcharan Singh withdrew his appearance for the petitioner and thereafter the petitioner himself has been conducting the case. The recording of the evidence of the second approver P.W. 2 Jaldhar Dass @ Vikram has already commenced. The petitioner contends that although he is not an indigent person he as a struggling lawyer has neither the capacity nor the means to engage a competent lawyer for his defence. He com plains that under the rules framed by the Delhi High Court, a princely sum of Rs. 24 per day is fixed as fee payable to a lawyer a appearing in the Court of Sessions as amicus curiae, and as the sessions trial in which he is involved lasts three days on an average in a week, no lawyer of sufficient standing will find it possible to appear as counsel for his defence. He alleges that the prosecution is being conducted by a special public prosecutor assisted by a galaxy of lawyers specially engaged by the State and large amounts are being paid as their fees. As a matter of processual fair play it is incumbent on the State to provide him with a counsel for his defence on a basis of equal opportunity as guaranteed under Art, 985 39A of the Constitution. Upon this basis, he seeks the issuance of a writ in the nature of Mandamus and other appropriate writs, directions and orders to ordain the Union of India to give financial assistance to him to engage a counsel of his choice on a scale equivalent to, or commensurate with, the fees that are being paid to the counsel appearing for the State. During the pendency of the writ petition, the Court by its interim order dated June 4, 1981 having regard to the fact that the petitioner is a practising lawyer and is involved in a long drawn sessions trial, directed that the State should undertake to help him in the matter of his defence so far as the payment of fees to his counsel to defend him in the trial was concerned. It directed that the petitioner will inform the Court of Sessions the name of the counsel who would be appearing for him with a direction that the State would make necessary arrangement to pay the amount required to be expended on his fees subject to final accounting to be made depending on the result of the writ petition. By the subsequent order dated August 18, 1981 the Court in modification of the earlier order quantified that a sum of Rs. 500 per day will be paid by the State to the senior counsel and Rs. 250 per day to the junior for representing the petitioner. At the hearing it was urged by learned counsel for the petitioner that suitable directions be made in conformity with the interim orders passed by the Court for payment of a reasonable amount as fees to the amicus curiae who appears for the petitioner at the trial. The learned Additional Solicitor General on the other hand takes serious exception to the directions made by the Court and contends that the petitioner has no legal right to be supplied with a lawyer by the State nor is there any corresponding obligation cast on the State to give financial assistance to him to engage a counsel of his choice. According to him, the remedy of the petitioner is to make an application before the learned Additional Sessions Judge under sub section (1) section 304 of the Code of Criminal Procedure, 1973 to provide him with free legal aid and it is for the learned Additional Sessions Judge to be satisfied on material placed before him that the petitioner is not possessed of sufficient means to engage a counsel. The submission is that it is upon the fulfillment of this condition that a direction can be made to provide a counsel for his defence at the expense of the State. He accordingly contends that no petition under article 32 of the Constitution is maintainable. 986 The petition is virtually for the enforcement of the Directive Principle of State Policy enshrined in article 39A of the Constitution which reads: "39A. The State shall secure that the operation of the legal system promotes justice, on a basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities. " There can be no doubt that the petitioner is not entitled to the grant of a writ of Mandamus for the enforcement of the Directive Principle enshrined in article 39A by ordaining the Union of India to give financial assistance to him to engage a counsel of his choice on a scale equivalent to, or commensurate with, the fees that are being paid to the counsel appearing for the State. As is clear from the terms of article 39A, the social objective of equal justice and free legal aid has to be implemented by suitable legislation or by formulating schemes for free legal aid. The remedy of the petitioner, if any, lies by way of making an application before the learned Additional Sessions Judge under sub section (1) of section 304 of the Code of Criminal Procedure, 1973, and not by a petition under article 32 of the Constitution. The traditional view expressed by this Court on the interpretation of article 22(1) of the Constitution in Janardan Reddy & Ors. vs The State of Hyderabad & Ors.(1) that 'the right to be defended by a legal practitioner of his choice ' could only mean a right of the accused to have the opportunity to engage a lawyer and does not guarantee an absolute right to be supplied with a lawyer by the State, has now undergone a change by the introduction of the Directive Principle of State Policy embodied in article 39A by the Constitution (Forty Second) Amendment Act, 1976, and the enactment of sub section (1) of section 304 of the Code of Criminal Procedure. It was in this case that the Court observed that the American rule enunciated in the case of Powell. vs Aalbama(2) founded on the doc trine of 'due process ' was not applicable to India and that under article 22(1) there was no absolute right to an accused to be supplied 987 with a lawyer by the State. There has been a definite shift in the stance adopted by the Court by its decisions in Maneka Gandhi vs Union of India(1), E. P. Royappa vs State of Tamil Nudu(2) R.D. Shetty vs The International Airport Authority of India & Ors.(3) In Maneka Gandhi 's case, supra, the Court observed that the requirement of compliance with natural justice was implicit in article 21 and that if any penal law did not lay down the requirement of hearing before effecting him, that requirement would be implied by the Court so that the procedure prescribed by law would be reasonable and not arbitrary procedure. The procedure which was 'arbitrary ' oppressive or fanciful, was no 'procedure ' at all. A procedure which was unreasonable could not be said to be in conformity with article 14 because the concept of reasonableness permeated that Article and arbitrariness is the antithesis of equality guaranteed under article 14. It is difficult to hold in view of these decisions that the substance of the American doctrine of 'due process ' has not still been infused into the conservative text of Art 21. Although in the earlier decisions the Court paid scant regard to the Directives on the ground that the Courts had little to do with them since they were not justiciable or enforceable, like the Fundamental Rights, the duty of the Court in relation to the Directives came to be emphasized in the later decisions which reached its culmination in Keshavanand Bharti vs Union of India(4) laying down certain broad propositions. One of these is that there is no disharmony between the Directives and the Fundamental Rights because they supplement each other in aiming at the same goal of bringing about a social revolution and the establishment of a welfare State, which is envisaged in the Preamble. The Courts therefore have a responsibility in so interpreting the Constitution as to ensure implementation of the Directives and to harmonize the social objective Underlying the Directives with the individual rights. Primarily, the mandate in article 39A is addressed to the Legislature and the Executive but insofar as the Courts of Justice can indulge in some judicial law making within the interstices of the Constitution or any statute before them for construction, the Courts too are bound by this mandate. 988 Read with article 21, the Directive Principle in article 39A has been taken cognizance of by the Court in M. H. Hoskot vs The State of Maharashtra(1), State of Haryana vs Darshana Devi & Ors.(2) and Hussainara Khatoon & Ors. vs Home Secretary, State of Bihar, Patna(3) to lead to certain guidelines in the administration of justice. One of these is that when the accused is unable to engage a counsel owing to poverty or similar circumstances, the trial would be vitiated unless the State offers free legal aid for his defence to engage a lawyer whose engagement the accused does not object. This more or less echoes the moving words of Sutherland, J. in Powell 's case, (supra). 'The right to the aid of counsel ', wrote Sutherland, J., 'is of a fundamental character '. In this country (i e. United States of America) 'historically and in practice ', a hearing has always included 'the right to the aid of counsel when desired and provided by the party asserting the right '. Sutherland, J. went on to indicate why this should be so: "The right to be heard would be, in many cases, of little avail if it did not comprehend the right to be heard by counsel. Even the intelligent and educated layman has small and sometimes no skill in the science of law. If charged with crime, he is incapable, generally, of determining for himself whether the indictment is good or bad. He is unfamiliar with the rules of evidence. Left without the aid of counsel he may be put on trial without a proper charge, and convicted upon incompetent evidence, or evidence irrelevant to the issue or otherwise inadmissible. He lacks both the skill and knowledge adequately to prepare his defence, even though he have a perfect one. He requires the guiding hand of counsel at every step in the proceedings against him. Without it, though he be not guilty, he faces the danger of conviction because he does not know how to establish his innocence." But he did not stop there. If the accused were unable to get counsel, even though opportunity were offered, then the 'due process ' clause in the Fourteenth Amendment required the trial court 'to make 989 effective appointment of counsel '. This was new law, and so it was natural that the Court would set careful limits for the new principle; "Whether this would be so in other criminal prosecutions, or under other circumstances, we need not deter mine. All that it is necessary now to decide, as we do decide, is that in a capital case, where the defendent is unable to employ counsel, and is incapable adequately of making his own defence because of ignorance, feeble mindedness, illiteracy, or the like, it is the duty of the Court, whether requested or not, to assign counsel for him as a necessary requisite of due process of law; and that duty is not discharged by an assignment at such a time or under such circumstances as to perclude the giving of effective aid in the preparation and trial of the case," It must be stated that Powell 's case involved a capital punishment where the accused was unable to employ counsel due to his indigence and therefore was incapable adequately of making his own defence, and according to the Supreme Court, the failure of the trial court to give reasonable time and opportunity to secure counsel was a clear denial of due process. There was a clear departure by the Supreme Court of the United States in Betts vs Brady(1) where the Court made an abrupt break and held that the 'due process ' clause of the Fourteenth Amendment did not impose upon the States, as the Sixth Amendment imposed upon the Federal Government, an absolute requirement to appoint counsel for all indigent accused in criminal cases. It required the State to provide a counsel only where the the particular circumstance of a case indicated that the absence of counsel would result in a trial lacking 'fundamental fairness '. Ever since the decision in Bett 's case, the problem of the constitutional right of an accused in a State Court became a continuing source of controversy until it was set at rest in the celebrated case of Guideon vs Wainright.(2) Under the rule laid down in Bett 's case, the Court had to consider the 'special circumstances ' in each case to determine whether the denial of counsel had amounted to a constitutional 990 defect in the trial and in an era of constantly expanding federal restrictions on State criminal processes, it was hardly startling that the Court in Gideon 's case explicitly rejected the rule laid down in Bett 's case and held that 'Sixth Amendment 's (unqualified) guarantee of counsel for all indigent accused ' was a "fundamental right made obligatory upon the State by the Fourteenth Amendment". We are however not in the United States of America and therefore not strictly governed by the 'due process ' clause in the Fourteenth Amendment. We therefore need not dilate on the subject any further. In recent years, it has increasingly been realized that there cannot be any real equality in criminal cases unless the accused gets a fair trial of defending himself against the charge laid down and unless he has competent professional assistance. The Law Commission in its Fourteenth Report Volume I on the subject "Reform of Judicial Administration" made certain recommendations for State aid. One of those was that "representation by a lawyer should be made available at Government expense to accused persons without means in all cases tried by a Court of Sessions". This recommendation has now been codified in sub section (1) of section 304 of the Code of Criminal Procedure which reads . Legal aid to accused at state expense in certain cases: (1) Where, in a trial before the Court of Session, the accused is not represented by a pleader, and where it appears to the Court that the accused has not sufficient means to engage a pleader, the Court shall assign a pleader for his defence at the expense of the State. " The Law Commission in its Forty Eighth Report suggested for making provision for free legal assistance by the State for all accused who are undefended by a lawyer for want of means. This recommendation still remains to be implemented. Many a time, it may be difficult for the accused to find sufficient means to engage a lawyer of competence. In such a case, the Court possesses the power to grant free legal aid if the interests of justice so require. The remedy of the petitioner therefore is to make an application before the Additional Sessions Judge making out a case for the grant of free 991 legal aid and if the learned Additional Sessions Judge is satisfied that the requirements of sub section (1) of section 304 of the Code are fulfilled, he may make necessary directions in that behalf. While fixing the fee of counsel appearing for the petitioner, the learned Additional Sessions Judge shall fix the amount of fee having regard to the interim orders passed by this Court. But if he feels that he is bound by the constraints of the rules framed by the Delhi High Court prescribing scales of remuneration for empanelled lawyers, he shall make a reference to the High Court for suitable directions. On such reference being made, the High Court shall consider in its undoubted jurisdiction under article 227 (3) of the Constitution whether the scales of remuneration prescribed for empanelled lawyers appearing in sessions trials are not grossly insufficient and call for a revision. That however is a matter which clearly rests with the High Court and we wish to say no more. We only wish to impress that the contention advanced before us has been that the existing rules are wholly antiquated and do not take into account the realities of the situation. It was urged that under the present scales of fee as prescribed by the Delhi High Court for empanelled lawyers appearing in sessions trials, it is impossible for a person facing a sessions trial on a capital charge to get competent professional assistance. Surely, the High Court has ample power to fix a reasonable amount as fee payable to counsel appearing for the petitioner In the facts and circumstances of the present case. We direct that in case the amount so fixed is lower than the scales of fee fixed by this Court by its interim orders, the excess amount paid to the petitioner in terms thereof shall not be recoverable. With these observations, the writ petition must fail and is dismissed with no order as to costs. H.L.C. Petition dismissed. [/INST]The Committee of Management of a non Government aided school, by its resolution dated April 19,1981 appointed the appellant as Principal of the college run by it. The order was communicated to the appellant on April 27 198} and he assumed charge on May 1, 1981. In the meanwhile on April 7, 1981 the Secretary to the Government of U. P. Education Department communicated by radiogram to the various authorities the order of the Government stopping all fresh selections and appointments of principals in all non Government aided secondary schools. A copy of it was sent to the college by the District Inspector of Schools on May 1,1981. Though the appellant continued to function as Principal of the college the Committee of Management stopped payment of his salary on the ground that his appointment was not valid after the issue of the Government order dated April 7,1981. The appellant filed a writ petition under Article 226 of the Constitution praying for a writ of mandamus directing the Committees of Management of the College not to interfere with the discharge of his duties as Principal and also to pay him his salary. T he High Court, dismissing his petition, held that the appellant 's appointment as Principal of the college was invalid in that the Committee of Management had no power to set up the Selection Committee nor had the Selection Committee the power to make any appointment. In appeal to this Court it was contended on behalf of the appellant that on the date of his appointment as Principal the Committee of Management had the power to make the appointment notwithstanding the fact that the Government had withdrawn that power. Dismissing the appeal, ^ HELD: The order of the Government became effective the moment it was issued. The effect of that order was that the Selection Committee had no right to select the appellant nor did the Committee of Management have any power to make the appointment. [1979 A B] 972 The Board constituted under the Act had the power to make regulations and this power could be exercised only with the previous sanction of the State Government. Section 9(4) specifically confers power on the State Government without making any reference to the Board to make, modify or rescind any regulation. This power comprehend the power to stop all appointments for the time being. Exercising power under this section the State Government issued orders stopping all fresh selections and appointments of Principals in all non Government aided schools. The effect of the order was to rescind the regulation conferring power on the Committee of Management to make appointments of Principals. [978 B G] There was no merit in the submission that the letter dated May 1, 1981 had not been received by the Management. [979 D] If the order was valid and power to make the appointment was with drawn or suspended, it would not be open to the Selection Committee to select the appellant an issue the order of appointment to him. The appointment in that event would be by a body not authorised to make it and so it was in effective though not invalid. [979 E F] Section 16E (10) which provides that where the competent authority was satisfied that a person had been appointed as Principal in contravention of the provisions of the Act, it may cancel such appointment after affording him an opportunity of being heard has no application to the present case because power of appointment conferred by the regulation on the Committee of Management was withdrawn or suspended and therefore the Committee had no power to make the appointment. 1980 E Gl </s>
<s>[INST] Summarize the judgementvil Appeal No. 2347 of 1966. Appeal from the judgment and decree, dated June 3, 1966 of the Calcutta High Court in Appeal No. 251 of 1965. M.C. Chagla and S.N. Mukherjee, for the appellant. section V. Gupte, M.G. Poddar and D.N. Mukherjee, for the respondent. Clause 3(c) of the deed provided for a renewal of the lease and was in the following terms : "3 (c). The lessor will on the written request of the lessees made two calendar months before the expiry of the term hereby created and if there shall not at the time of such request be any existing breach or non observance of any of the covenants on the part of the lessees hereinabove contained grant to it one renewal of 10 years from the expiry of the said term at the same rent and containing the like convenants and provisos as are herein contained except that as regards the clause for renewal for further period the rent shall be as may be agreed between the lessor and the lessees. " On December 1, 1963, the time fixed for applying for the renewal of the lease expired. On December 13, the appellant made a written request for the renewal. On December 23, 1963 the respondent 's solicitors replied stating that the request being out of time was ineffective and asking the appellant to, vacate the land on the expiry of the lease. The appellant had erected structures on the land for the purpose of running a petrol delivery station and was a Thika tenant within the meaning of the Calcutta Thika Tenancy Act, 1949. In February 1964 the respondent filed an application before the Controller asking for eviction of 240 the appellant under sections 3(vi) and 5 of the Calcutta Thika ,,Tenancy Act. The Controller allowed the application. An appeal from this order was dismissed by the appellate Authority. A revision petition against the order was dismissed by the High Court. While dismissing the revision petition, the High Court stayed the execution of the order of eviction for a month and observed that the authorities under the Calcutta Thika Tenancy Act had no power to decide whether the appellant was entitled to a renewal of the lease. Thereafter the appellant filed the present suit on the Original Side of the Calcutta High Court asking for a declaration that it was entitled to a renewal of the lease, specific performance of the covenant for renewal, an injunction restraining execution of the order of eviction passed by the Controller and for other reliefs. In paragraphs 13 and 14 of the plaint the appellant alleged that the delay in giving notice of renewal should be excused in view of the following special circumstances: (a) the delay was due to oversight; (b) the respondent had not altered her position for the worse or to her detriment within the space of 12 days; (c) neither party had treated the matter of time as being as the essence of the transaction; (d) the appellant had constructed a service station for petroleum products of immense utility to the public of the locality; (e) the appellant was in possession of the land. The respondent contended that the application for renewal being made out of time was ineffective and that there was no ground for excusing the delay. S.P. Mitra, J. accepted the respondent 's contention and dismissed the suit. An appeal under clause 15 of the Letters Patent was dismissed by a Divisional Bench of the High Court. Both the courts concurrently held that the letter, dated December 13, 1963 was not a proper exercise of the option by the ,appellant under the lease, dated February 17, 1954 and that there were no special circumstances for excusing the delay in ,giving the notice. The appellant has filed the present appeal after obtaining a certificate from the High Court under article 133 ( 1 ) (a) and (b) of the Constitution. The appellant neglected to make the application for renewal of the lease within the stipulated time. Mr. Chagla has submitted that the time is not of the essence of the contract having regard to sec. 55 of the Indian Contract Act, 1877 as interpreted in the case of Jamshed Khodaram Irani vs Durjorji Dhunjibhai(1). Section 55 of the Indian Contract Act provides that "when a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified time, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the (1) L.R. 43 I.A. 26. 241 parties was that time should be of the essence of the contract. " In Jemshed 's case(1) Viscount Haldane observed that the section did not lay down any principle as regards contracts to sell land in India different from those which obtained under the law of England. It is well known that in the exercise of its jurisdiction to decree specific performance of contracts the Court of Chancery adopted the rule, especially in the case of contracts for the sale of land, that stipulations .as to time were not to be regarded as of the essence of the contract unless they were made so by express terms or unless a clear indication of a contrary intention appeared from the nature of the contract or the surrounding circumstances. In his well considered judgment Viscount Haldane carefully refrained from saying that time was not to be regarded as of the essence in all contracts relating to land. At common law stipulations as to time in a contract giving an option for renewal of a lease of land were considered to be of the essence of the contract even if they were not expressed to be so and were construed as conditions precedent. Equity followed the common law rule in respect of such contracts and did not regard the stipulation as to time as not of the essence of the bargain. As stated in Halsbury 's Laws of England, 3rd ed., vol. 3, article 281, p. 165 "An option for the renewal of a lease, or for the purchase or re purchase of property, must in all cases be exercised strictly within the time limited for the purpose, otherwise it will lapse. " This passage was quoted with approval by Danckwerts L.J. in Hare vs Nicoll(2). A similar statement of law is to be found in Foa 's General Law of Landlord and Tenant, 8th article 453, p. 310, and in Hill and Redman 's Law of Landlord and Tenant, 14th ed., p. 54. The reason is that a renewal of a lease is a privilege and if the tenant wishes to claim the privilege he must do so strictly within the time limited for the purpose. With regard to equitable relief against the failure of the tenant to give notice of renewal within the stipulated time. the law is accurately stated in Halsbury 's Laws of England, 3rd ed. ,vol. 23, p. 626, article 1329, footnote (u) thus : "Relief will not be given in equity against failure to give notice in time, save under special circumstances. The decided cases show that in such cases relief is not given in equity save upon the ground of unavoidable accident, fraud, surprise, ignorance not wilful or inequitable conduct on the part of the lessor precluding him from refusing to give the renewal. The limits of the equitable interference in such cases were clearly stated by the Master of the Rolls (Sir R.P.Arden) in Eaton vs Lyon.(3) He observed : "At law a covenant must be strictly and literally performed; in equity it must be really and substantially (1) L.R.43 I.A.26 (2) 145. (3) ; , 692 3=695 6 30 E.R. 1223, 1224,1225 6. 242 performed according to the true intent and meaning of the parties so far as circumstances will admit; but if unavoidable accident, if by fraud, by surprise or ignorance not wilful, parties may have been prevented from executing it literally, a Court of Equity, will interfere; and upon compensation bei ng made, the party having done everything in his power, and being prevented by means, I have alluded to, will give relief . I decide this case upon the principles on which, Lord Thurlow decided (Bayley vs The Corporation of Leominster , and I hope now, it will be known, that it is expected, these covenants shall be literally performed where it can be done; and that Equity will interpose, and go beyond the stipulations of the covenant at law, only where a literal performance has been prevented by the means, I have mentioned, and no injury is done to the lessor? ' We are of the opinion that the stipulation as to time in clause 3 (c) of .the indenture of lease dated February 17, 1954 should be regarded as of the essence of the contract. " The appellant not 'having exercised the option of renewal within the time limited by the 'clause is not entitled to a renewal. The appellant claims relief against the consequences of its default on the grounds enumerated in paragraphs 13 and 14 of the plaint. Grounds (b) and (e) cannot be regarded as special circumstances. to ground (d), it is. not shown that the service station is of immense public utility. The fact that the appellant constructed a service station is an irrelevant consideration. Ground (c) is not established and it is not 'shown that the time is not of the essence of the bargain. As to ground (a) there is some evidence to show that the delay in giving the notice of renewal was due to oversight. But it is not shown that the delay was due to any unavoidable accident, excusable ignorance, fraud or surprise. The delay arose from mere neglect on the part of the appellant and could have been avoided by reasonable diligence. As observed 'by the Master of the Rolls in Reid & Anr. vs Grave & Others(1): "The rule is now well established, that no accident will entitle a party to renew unless it be unavoidable. I am of opinion, that nothing but accident, which, could not have been avoided by reasonable diligence, will entitle the plaintiff to a renewal in this Court. " We may add that where no time is fixed for the purpose, an application for renewal for the lease may be made within a reasonable time before the expiry of the term (see Foa 's General Law of Landlord & Tenant, 8th ed., article 455, pp. 311 12, Ram Lal (1) , 248. 243 Dubey vs Secretary of State for India (1), Maharani Hemanta Kumari Devi vs Safatulla Biswas & Ors.(2). In the present case, the lease fixes a time within which the application for renewal is to be made. The time so fixed is of the essence of the bargain. The tenant loses his right unless he makes the application within the stipulated time. Equity will not relieve the tenant from the consequences of his own neglect which could well be avoided with reasonable diligence. The appeal is dismissed with costs. Y.P Appeal dismissed. [/INST]For the assessment years 1940 41 to 1943 44 the assessee company claimed to be an investor in shares and properties and not a dealer. The contention was rejected by the Income tax Officer, the Appellate Assistant Commissioner and the Tribunal. The company then applied to the Tribunal under section 66(1) of the Income tax Act, 1922 for a reference of the following questions of law for the opinion of the High Court: (i) whether on the facts and in the circumstances of the case the assessee company can rightly be treated as a dealer in investments and properties ? (ii) whether the profits and losses arising from the sale of shares, securities and immovable properties of the assessee company can be taxed as business profits. The Tribunal refused to make the reference and the High Court dismissed the application under section 66(2). On appeal by special leave this Court held that the question as to what were the characteristics of the business of dealing in shares or that of an investor was a mixed question of law and fact. It remanded the case to the High Court for directing the Tribunal to state a case under section 66(2) on the following questions: (i) whether there are any materials on the record to support the finding of the Income tax Officer that the assessee company was a dealer in shares. , securities and immovable property during the assessment year in question (ii) whether the profits and losses arising from the sale of shares, securities and immovable properties of the assessee company can be treated as business property ? On these questions being referred to the High Court by the Tribunal, the High Court decided them against the assessee company. The company again appealed to this Court. It was contended on behalf of the appellant that the questions as framed by this. Court did not reflect the real controversy 'and therefore the questions as originally framed in the company 's application under section 66(1) should be referred to the High Court in a fresh statement of case to be made by the Tribunal. HELD: (i) The questions framed by this Court and the form in which they were framed seemed to assume that the questions involved were questions of fact for it is only in regard to a question of fact that the question can properly be framed "as to whether there was material to support the said finding". This Court had itself held that the questions involved in the present case were mixed questions of law and fact. Therefore the questions framed by this Court were not appropriate and did not reflect the real controversy between the parties. It was therefore appropriate that the questions should be modified as suggested by the appellant in its petition under section 66(1) to the High Court. [53 G 54 B] (ii) The proper construction of statutory language is always a matter of law and therefore the claim of the assessee that the profits and losses arising from the sale of shares securities etc. cannot be treated as profits 47 of a business involves the application of law to the facts found in the setting of the particular case. In dealing with findings on such questions of law and fact the High Court must No. doubt accept the findings of the. Tribunal on the primary questions of fact; but it is open to the High Court to examine whether the Tribunal had 'applied the relevant legal principles correctly or not in reaching its final conclusion; and in that sense, the scope of enquiry and the extent of the jurisdiction of the High Court in dealing with such points is the same as in dealing with pure questions of law. [53 B D] G. Venkataswami Naidu & Co. vs C.I.T., , relied on. </s>
<s>[INST] Summarize the judgementAppeal No. 2338 of 1968. Appeal from the judgment and order dated March 31, 1965 of the Patna High Court in Misc. Judicial Case No. 1207 of 1964. Jagadish Swarup, Solicitor General and B. K. P. Sinha, for the appellants. B. C. Ghosh, P. K. Chatterjee and Rathin Das, for the respondent. The Judgment of the Court was delivered by Mitter, J. The question in this appeal is, whether the order of suspension passed on the respondent on July 31, 1964 was properly struck down by the Patna High Court. The facts are as follows. The respondent is a member of the Indian Police Service appointed on 25th January, 1937 and at the material time he was holding the substantive rank of Deputy Superintendent of Police in Bihar. In June 1962 he was posted at Ranchi. He was transferred to Patna and appointed as Special Officer, Political, General and Transport Department on July 23, 1964. The order of which the validity is in question ran as follows : "Whereas serious allegations of corruption and malpractices have been made against Shri T. N. Ghosh, 1. P., Deputy inspector General of Police, Southern Range, Ranchi; And whereas the said Shri T. N. Ghosh is also reported to have contravened certain provisions of the All India Services (Conduct) Rules, 1954; And whereas the enquiries made by the Government of Bihar ;Into these allegations have revealed that there is a prima facie case made out against him; And whereas disciplinary proceedings in respect of these matters are contemplated against the said Shri T. N. Ghosh; 717 And whereas the Government of India, after carefully consi dering the available material, and having regard to the nature of the charges and circumstances of the case, are satisfied that it is necessary and desirable to place the said Shri T. N. Ghosh under suspension Now, therefore, the Government of India hereby place the said Shri T., N. Ghosh, under suspension with immediate effect, until further orders, and direct that the said Shri T. N. Ghosh shall, during the period of suspension be paid such subsistence allowance as is admissible under the rules. By order and in the name of the President of India. Sd./ K. Sivaraj Deputy Secretary to the Government of India. " The respondent addressed a memorial to the Secretary to the Government of India, Ministry of Home Affairs on 24th August 1964 complaining against the above order on the ground that it was not sanctioned by the rules i.e. All India Service (Conduct) Rules, 1954. In particular his grievance was that as there were only allegations against him which had not crystallised into charges an order of suspension could not be made before departmental proceedings were actually started and while they were merely contemplated. He also asked for communication of the nature of the departmental proceedings which had been started against him within 14 days with a request that the order of suspension be withdrawn in default thereof. It appears that there was no response to this. The respondent filed his writ petition on September 14, 1964 praying for the quashing of the order particularly on the above grounds raised in his memorandum. A counter affidavit to the petition was filed on behalf of the Chief Secretary to the Government of Bihar who was the third respondent in the petition. The averments in the said affidavit were that a report had been made to the Central Government against the petitioner on July 6, 1964 and having regard to the activities of the petitioner it had become necessary to remove him from the field of activities and as such he had been transferred to, Patna after being relieved of his post on July 1 3, 1964. It was said further that even before the receipt of the suspension order the petitioner had been actually questioned by section P. Verma, the then Inspector General of Police, Bihar as early as February 8, 1964 apprising the petitioner that his activities had attracted the attention of Government. It was admitted that departmental enquiry and investigation into the conduct of the petitioner were still going on and as such charges had not been framed against 718 him. Finally, it was said that the order was not by way of punishment and had been passed pending departmental enquiry into his conduct. Another counter affidavit was filed on behalf of the Government of India and the Deputy Secretary to the Government of India, respondents 1 and 2 in the petition wherein substantially the same averments were made as in the counter affidavit on behalf of respondent No. 3. A large number of points were canvassed before the High Court which examined the provisions of different sets of rules and relying particularly on the difference in wording of rule 12 of the Central Civil Services Rules which empowered the appointing authority to place an officer under suspension inter alia, where a disciplinary proceeding against him was contemplated or was pending and rule 7 of the All India Services Rules (quoted in extensor hereinafter) it came to the conclusion that the order of suspension was not proper. Further, according to one of the Judges of that Court: "To allow a member of that (the AR India) service to be placed under suspension without the formal proceeding in started may cause humiliation to an officer of such high rank without any justification whatsoever. " According to the other learned Judge who took substantially the same view the order of suspension only indicated that disciplinary proceedings against the petitioner were in contemplation and this was not provided for in rule 7. In our view it would not be proper to interpret the provisions of the All India Service (Discipline and Appeal) Rules 1955 by reference to the provisions of other rules even if they were made by or under the authority of the President of India. The All India Services (Discipline and Appeal) Rules 1955 as they stood at the relevant time were a self contained code and we have to examine the provisions thereof to find out whether the order passed on the petitioner was justified. These rules were promulgated in exercise of the powers conferred by sub section ( 1 ) of section 3 of the All India Services Act 1951 by the Central Government after consultation with the Governments of the States concerned. They were applicable to members of the Indian Administrative Service and those of the Indian Police Service. 3 of the Rules provided for penalties which might for good and sufficient reasons be imposed on a member of the service. Suspension is not a penalty covered by this clause. Cl. 4 indicated the authorities who would institute proceedings and impose penalty against mem 719 bers of the Services. Cl. 5 which generally dealt with the procedure for imposing penalties provided by the first three sub clauses as follows "(1) Without prejudice to the provisions of the Public Servants Inquiry Act, 1850, no order shall be passed imposing any of the penalties specified in rule 3 on a member of the Service unless he has been informed in writing of the grounds on which it is proposed to take action and has been afforded an adequate opportunity of defending hims elf. (2) The grounds on which it is proposed to take action shall be reduced to the form of a definite charge or charges, which shall be communicated to the member of the Service charged together with a statement of the allegations on which each charge is based and of any other circumstances which it is proposed to take into consideration in passing orders on the case. (3) The member of the Service shall be required within such time as may be considered by the Government reasonably adequate in the circumstances of the case, to put in a written statement of his defence and to state whether he desires to be heard in person. (4) to (10) It was only after the written statement was received from the member that the Government might, if it considered necessary, appoint a Board of Enquiry or an Enquiry Officer to enquire into the charges framed against him. Other sub clauses of this rule laid down generally the procedure which was to be adopted in the enquiry. Rule 7 provided as follows : "Suspension during disciplinary proceedings. (1) If having regard to the nature of the charges and the circumstances in any case the Government which initiates any disciplinary proceedings is satisfied it is necessary or desirable to place under suspend the member of the Service against whom such proceedings are started that Government may (a) if the member of the Service is serving under it pass an order placing him under suspension, or (b)if the member of the Service is serving under another Government, request that Government to place him under suspension, pending the conclusion of the inquiry and the, passing of the final order in the case 100SupCI/71 7 2 0 Provided that in cases where there is a difference of opinion between two State Governments, the mater shall be referred to the Central Government whose decision thereon shall be final. (2) A member of the Service who is detained in official custody whether on a criminal charge or otherwise, for a period longer than forty eight hours, shall be deemed to have been suspended by the Government concerned under this rule. (3) A member of the Service in respect of or against whom an investigation, inquiry or trial relating to a criminal charge is pending may, at the discretion of the Government under which he is serving, be placed under suspension until the termination of all proceedings relating to that charge. ' if the charge is connected with his position as a Govt. servant or is likely to embarrass him in the discharge of his duties or involves moral turpitude. Under rule 8 a member of a Service who was placed under sus pension was to be entitled to receive payment from the Government suspending his subsistence allowance as specified therein. The crucial question in this case is, whether suspension of a member of the Service can only be ordered after definite charges have been communicated to him in terms of sub cl. (2) of rule 5 or whether the Government is entitled to place an officer under suspension even before that stage has been reached after a preliminary investigation has been made into the conduct of the officer concerned following allegations of corrupt or malpractice levelled against him. To determine this it is necessary to find out the object of placing a Government officer under "suspension" in terms of the said rule. 'Suspension ' according to the Oxford Dictionary means "the :action of suspending or condition of being suspended; the action of debarring or state of being debarred, esp. for a time, from a function or privilege; temporary deprivation of one 's office or position". A master can, subject to the contract of service, ask his servant not to render any service without assigning any reason but this would not be by way of punishment and the master would have to pay the servant his full wages or remuneration in such an eventuality. As Halsbury puts it : "Whether or not the master has power to suspend a servant during the duration of the contract of service depends upon the construction of the particular contract. In the absence of any express or implied term to the contrary, the master cannot punish a servant for alleg 72 1 ed misconduct by suspending him from employment and stopping his wages for the period of the suspension. " (See Halsbury 's Laws of England, Third Edition, Vol. 25, article 989 page 518). Rule 7 of the Service Rules expressly provides for suspending of a member of the Service for the purpose of disciplinary proceedings. When serious allegations of misconduct are imputed against a member of a Service normally it would not be desirable to allow him to continue in the post where he was functioning. If the disciplinary authority takes note of such allegations and is of opinion after some preliminary enquiries that the circumstances of the case justify further investigation to be made before definite charges can be, framed, it would not be improper to remove the officer concerned from the sphere of his activity inasmuch as it may be necessary to find out facts from people working under him or look into papers which are in his custody and it would be embarrassing and inopportune both for the officer concerned as well as to those whose duty it was to make the enquiry to do so while the officer was present at the spot. Such a situation can be avoided either by transferring the officer to some other place or by temporarily putting him out of, action by making an order of suspension. Government may rightly take the view that an officer against whom serious imputations are made should not be allowed to function anywhere before the matter has been finally set at rest after proper scrutiny and holding of departmental proceedings. Rule 7 is aimed at taking the latter course of conduct. Ordinarily when serious imputitions are made against the conduct of an officer the disciplinary authority cannot immediately draw up the charges : it may be that the Imputations are false or con cocted or gross exaggerations of trivial irregularities. A considerable time may elapse between the receipt of imputations against an officer and a definite conclusion by a superior authority that the circumstances are such that definite charges can be levelled against the officer. Whether it is necessary or desirable to place the officer under suspension even before definite charges have been framed would depend upon the circumstances of the case and the view which is taken by the Government concerned. There would be nothing improper per se if the rules were to provide for suspension even before definite charges of misconduct had been communicated to the officer concerned. The question is whether the language of rule 7 is so correlated to that of rule 5 as to lead us to hold that the word "charges" in sub cl. (1) of rule. 7 must mean a definite charge as mentioned in subcl. (2) of r. 5. It may be that even a case where definite charges have been raised against an officer he may satisfactorily explain the circumstances and the grounds alleged against him in his 722 written statement. It is also possible that after. the enquiry is conducted it is found that the charges are all baseless. In principle we can see no difference between the position of an officer against whom definite charges have been framed to which he is required to put in his written statement and a situation where on receipt of allegations of grave misconduct against him the Government is, of opinion that it would not be proper to allow the officer concerned to function in the ordinary way. The matter is however not res integra and there is a series of decisions of this Court which throw considerable light on the power of a master including a Government to suspend a servant or an officer under rules of service or even de hors such rules. The law of master and servant including Government servants with regard to suspension of an employee was discussed at some length in The Management of Hotel Imperial V. Hotel Workers ' Union(1). However rules of service of Government officers did not fall for consideration there. Champak Lal Chimanlal Shah vs The Union of India(1) was a case where a temporary Government servant 's services were terminated. The case shows, as is well known, that even More a formal departmental enquiry is launched a preliminary enquiry is usually held to find out whether a prima facie case is made out against a Government servant. This preliminary enquiry is directed to the collection of facts in regard to the work and conduct of a Government servant in which he may or may not be associated so that the authority concern may decide whether or not to subject the servant concerned to the enquiry under article 311 for inflicting one of the three major punishments mentioned therein and such a preliminary enquiry may even be held ex parte. In R. P. Kapur vs Union of India & another(3) the general principles governing a master and servant were discussed in some detail and it was said "If there is no express term in the contract relating to suspension and payment during such suspension or if there is no statutory provision in any law or rule, the employee is entitled to his, full remuneration for the period of his interim suspension; on the other hand if there is a term in this respect in the contract or there is a provision in the statute or the rules framed thereunder providing for the scale, of payment during suspension, the payment would be in accordance there with. On general principles therefore the authority entitled to appoint a public servant would be entitled to suspend him pending a departmental enquiry (1) ; , 482. (2) (3) ; , 445. 72 3 into his conduct or pending a criminal proceeding, which may eventually result in a departmental enquiry against him. " There is however a direct authority of this Court in section Govinda Menon vs The Union of India(1). The appellant before this Court was a member of the Indian Administrative Service. He was the First Member of the Board of Revenue, Kerala State and was holding the post of Commissioner of Hindu Religious and Charitable Endowments. On the basis of certain _ complaints containing allegations of misconduct against the appellant in the discharge of his duties as such Commissioner the Kerala Government instituted certain preliminary enquiries and thereafter started disciplinary proceedings against him and also placed him under suspension under rule 7 of the All India Services (Discipline and Appeal) Rules. One of the grounds urged by the appellant was that the order of suspension which was dated March 8, 1963 was not in compliance with rule 7 inasmuch as definite charges were framed against him only on 6th June, 1963. On the basis of rule 5(2) it was argued that the word "charges" which occurred in 'this rule and in rule 7 should be given the same meaning and no ,order of suspension could be passed under rule 7 before the ,charges in terms of r. 5(2) were tramed against him. This was turned down by this Court observing (at p. 582) : "Rule 5(2) prescribes that the grounds on which it is proposed to take action shall be reduced to the form of a definite charge or charges. The framing of the charge under Rule 5(2) is necessary to enable the member of the Service to meet the case against him. The language of rule 7(1) is however different and that rule provides that the Government may place a member of the Service under suspension "having regard to the nature of the charge/charges and the circumstances in any case" if the Government is satisfied that it is necessary to place him under suspension. In view of the difference of language in rule 5(2) and rule 7 we are of the opinion that. the word charges ' in rule 7(1) should be given a wider meaning as denoting the accusation or imputation against the member of the Service. " It is worthy of note, that in the order of suspension it was stated as follows "The Government have received several petitions containing serious allegations of official misconduct (1) [1967]2 S.C.R. 565. 724 against Shri section Govinda Menon . Prelimi nary enquiries caused to be conducted into the allegations have shown prima facie that the officer is guilty of corruption. The Kerala High Court has also occasion to comment on the conduct of the officer in their judgment in O.P. 2306 of 1962 delivered on, 12th February 1963. . The judgment in the above case and the preliminary report of the X Branch police have disclosed the following grave charges of serious irregularity and official misconduct on the part of the accused officer The detailed enquiry into 'the charges by the XBranch is in progress. The evidence in the case has to be collected from a large number of officers who are. subordinate to the accused officer in his capacity as First Member of the Board of Revenue. In the interest of the proper conduct of the enquiry it is necessary that the officer should not be allowed to continue in that post. Having regard to the nature of the charges against the officer and the circumstances the proper course would be to place him under suspension. Shri section Govinda Menon I.A.S. . is therefore placed under suspension under Rule 7 of the All India Services (Discipline and Appeal) Rules 1955 till the disciplinary proceedings initiated against him are completed. ', It was urged before us that the order of suspension there was different from the one before us. While there is no doubt that the order against the appellant in the above case was far more detailed both with regard to the nature of the charges and to the necessity of placing him under suspension, in substance there is little difference for the purpose of rule 7 of the Service Rules. The order in this case dated 31st July 1964 shows that serious allegations of corruption and malpractices had been made against the respondent and he was also reported to have contravened the provisions of the All India Service Conduct Rules and enquiries made by the Government of Bihar into the allegations had revealed that there was a prima facie case made out against him. Merely because the order mentioned that disciplinary proceedings were contemplated against the respondent, as compared to rule 7 which contains phrases like "the initiation of disciplinary proceedings" and the "starting of such proceedings" we cannot hold that the situation in the present case had not reached a stage which called for an order of suspension. In substance disciplinary proceedings can be said to be started against an 7 25 officer when complaints about his integrity or honesty are entertained and followed by a preliminary enquiry into them culminating in the satisfaction of the Government that a prima facie case has been made out against him for the framing of charges. When the order of suspension itself shows that Government was of the view that such a prima facie case for departmental proceedings had been made out the fact that the order also mentions that such proceedings were contemplated makes no difference. Again the fact that in other rules of service an order of suspension may be made when "disciplinary proceeding ', were, contemplated" should not lead us to take the view that a member of an All India Service should be dealt with differently. The reputation of an officer is equally valuable no matter whether he belongs to the All India Service or to one of a humbler cadre. It is the exigency of the conditions of service which requires or calls for an order of suspension and there can be no difference ,in regard to this matter as between a member of, an All India Service and a member of a State Service or a Railway Service. In the result the appeal is allowed but in the circumstances, of the case we direct the parties to pay and bear their own costs. V.P.S. Appeal allowed. [/INST]The respondent company holding leasehold rights in the appellant land went into liquidation. Accepting the. official liquidator 's report the company Judge (Rajasthan High Court) without hearing anyone or issuing notice to the appellant ordered auction of the lease hold right of the respondent company. The appellant sent a letter to the Official Liquidator revoking the licence granted to the company and calling upon him to, deliver possession of the land. The Official Liquidator claimed that the company was entitled to a further period of lease under the agreement. Notice was issued in respect of the proposed auction sale. The appellant filed an appeal before the High Court. The High Court held that since the appellant had not appeared before the company Judge, she was not entitled to maintain the appeal, and further that the only remedy of the appellant was by way of a suit after obtaining leave of the Company Judge under section 446 of the Indian Companies Act. In appeal to this Court, HELD : The High Court was in error in not entertaining and deciding the appeal preferred by the appellant who was the owner of the land in which lease hold rights said to have been created by her in favour of the company in liquidation were sought to be sold. An appeal lies under section 483 of the Act from any order made or decision given in the matter of winding up of a company by the Court and it lies to the same, court to which, in the same manner in which, and subject to the same conditions under which appeals lie from any order or decision of the Court in cases within its ordinary jurisdiction. Therefore an appeal was corn tent against the order of the company Judge. [249 D] It is implicit in Rule 103 of the Company Court Rules that if the directions which have to be given by the Court would affect any person prejudicially he must be served with a notice of the summons under the general rule of natural justice and that no order should be made affecting the rights of a party without affording a proper opportunity to it to represent its case. A] Further, the Official Liquidator as well as the, learned company Judge were bound by the rules of natural justice to issue a notice to the appellant and hear her before making the order appealed against. If there was default on their part in not following the correct procedure the appellant could not be deprived of her right to get her grievance redressed by filing an appeal. [250 C] 248 </s>
<s>[INST] Summarize the judgementAppeal No. 84 of 1954. Appeal from the judgment and order dated September 1, 1954, of the former Madhya Bharat High Court in Civil Misc. Case No. 11 of 1952. B. Sen, P. V. Sahasrabudhe, B. K. B. Naidu and I. N. Shroff, for the appellant. M. Adhikari, Advocate General for the State of Madhya Pradesh, H. J. Umrigar and R. H. Dhebar, for the respondents. 959 1960. October 3. The following Judgment of the Court was delivered by GAJENDERGADKAR. The question of law which arises for our decision in this appeal is whether the Kalambandis under which the appellant 's right to receive Rs. 21/8/ per month by way of Bachat (balance) is guaranteed constitute an existing law within the meaning of article 372 of the Constitution. This question arises in this way. The appellant Madhaorao Phalke describes himself as an Ekkan and claims that as such Ekkan he and his ancestors have been receiving the monthly payment of Rs. 21/8/ from the State of Madhya Bharat. It appears that the appellant 's ancestors had accompanied the Scindias to Gwalior from Maharashtra about 200 years ago, and had rendered military service in conquering the territory of Gwalior. In recognition of this service the appellant 's ancestors were granted a fixed amount of money per month, and this amount has been received by the appellant 's family for several generations past. The right to receive this amount has been ' recognised by the Rulers of Gwalior in several statutes, orders, rules or regulations having the force of statutes; amongst them are the Kalambandis of 1912 and 1935. On April 18, 1952, the Government of Madhya Bharat issued an executive order terminating the said payment to the appellant; that is why the appellant had to file the present petition in the High Court of Madhya Bharat against the State of Madhya Bharat and the Government of Madhya Bharat, Revenue Department, respondents 1 and 2 respectively under article 226 of the Constitution. In this petition the appellant bad prayed for an order that a writ in the nature of mandamus, or in the alternative an appropriate direction or order be issued calling upon the respondents to forbear from giving effect to the said executive order. In his petition the appellant challenged the said order on two grounds. It was urged that since the appellant 's right to receive the specified amount had been statutorily recognised by the State of Gwalior it was not open to respondent 1 960 to extinguish that right merely by an executive order. In the alternative it was contended that the right to receive the said amount from month to month was property to which the appellant was entitled, and he could not be divested of that property without the payment of compensation under article 31 of the Constitution. These pleas were denied by the respondents. The respondents ' case was that the payment made to the appellant 's ancestors and to him was by way of emoluments for military service and did not constitute property, and that the Kalambandis on which the appellant relied did not constitute an existing law under article 372. It appears that along with the appellant ten other persons had filed similar petitions making prayers for similar writs or orders against the respondents and their pleas were similarly challenged by the respondents. All the eleven petitions were accordingly tried together. These petitions were heard by a Full Bench of the Madhya Bharat High Court consisting of Shinde, C.J. and Dixit and Newaskar, JJ. All the three learned judges agreed in holding that the Kalambandis on which the petitioners had rested their case were orders issued by the Ruler for the purpose of reorganising the scheme of administration and that they did not amount to law or regulation having the force of law. Dixit, J., gave a specific reason in support of his conclusion that the Kalambandis did not amount to a statute. He held that in Gwalior there was a well recognised law making machinery or custom, and since the Kalambandis in question did not satisfy the requirements of the forms and solemnities specified in that behalf they could not claim the status of a statute. In the result all the petitions were dismissed. The appellant then applied for and obtained a certificate from the High Court under article 133(1)(c) of the Constitution, and it is with the said certificate that he has come to this Court in the present appeal. When this appeal was heard by this Court on March 31, 1958, it was conceded by both the parties that it would be better that they should be allowed to 961 adduce additional evidence before the question of law which was undoubtedly one of general importance, was decided by this Court. In fact an application ' bad been made by the appellant before this Court for leave to adduce additional evidence and no serious objection was raised to the additional evidence by the respondents. Therefore, by consent the matter was sent back to the High Court with a direction that parties should be allowed to adduce additional evidence and the High Court should record its finding on the issue remitted to it in the light of the said additional evidence. The issue remitted to the High Court was whether the Kalambandis in question were statutes or regulations having the force of statutes in the State of Gwalior at the material time or were they merely administrative orders. After remand parties have led evidence before the ' High Court, and the High Court has recorded its finding on the issue remitted to it. Abdul Hakim Khan and Newaskar, JJ., have found in favour of the appellant and have held that the Kalambandis in question were regulations having the force of law in the State of Gwalior at the material time; Krishnan, J., has taken a contrary view. After the finding of the High Court was thus recorded papers in the case have been submitted to this Court, and the appeal has now come before us for final disposal; and so we are called upon to decide the short question of law set out by us at the commencement of this judgment. At the outset it may be relevant to refer very briefly to the historical background of the claim made by the appellant and the other petitioners in all these matters. We have already stated that the appellant claims to be an Ekkan. These Ekkans, it appears, were a class of horsemen who formed part of the Peshwa 's Cavalry along with Silledars. They were single volunteers and they brought with them their own horses and accoutrements. The other petitioners claimed to be Silledars whose ancestors formed part of the Maharatta Cavalry. These Silledars were troopers who brought in their own horses and weapons. They brought bodies of troops armed and 962 equipped at their own expense. They were also known as Paigadars. It also appears that later on an account was made as to the expenses which the Ekkan may have to bear for the maintenance of his horse, and from the total amount payable to him the amount of expenses thus determined was deducted, and that presumably left the balance Rs. 21/8/ which was paid to him as Bachat or balance. Broadly stated this appears to be the position on the pleadings of the parties in the present proceedings. The question which calls for our decision is whether the right to receive this amount is a statutory right; in other words, whether the Kalambandis on which the right is based were rules or regulations having the force of law in the St ate of Gwalior? The two Kalambandis in question were issued in 1912 A. D. and 1935 A. D. respectively. The first Kalambandi was issued by the Ruler Sir Madhavrao himself, whereas the second was issued by the Council which was then in charge of the administration of the State subsequent to the death of Sir Madhavrao which took place in 1925. It is well known that the States of Gwalior, Indore and Malwa integrated and formed a Union in 1948. After the Union was thus formed Act No. 1 of 1948 was passed for the purpose of taking over the administration of the covenanting States. Section 4 of this Act provided for the application of local laws, and as a result all laws, ordinances, rules, regulations, etc., having the force of law in any of the covenanting States were to continue to remain in force until they were repealed or amended according to law. Thus the existing laws which were in force in the State of Gwalior continued even after the union ; and according to the appellant the operation of the Kalambandis continued under section 4. On September 19, 1950, a notification was issued by the Commissioner, Jagir Inams, Court of Wards, Madhya Bharat, declaring that in the case of army personnel described in paragraph 1, question of mutation, adoption. , arising in regard to the said personnel would be dealt with by the office of the Commissioner, and Bachat and other amounts payable to 963 the said personnel would be distributed by the same office. Members of the said army, personnel were accordingly asked to claim payment in respect of their Nemnook from the office of the Commissioner. Subsequently, under the new set up which came into existence after the formation of Madhya Bharat the armies of the covenanting States were amalgamated and reorganised by the Government of India so as to fit them into the overall plans of the defence of the country. The report of the general administration of Madhya Bharat shows how this reorganisation was carried out. As a result of this reorganisation the expenditure on account of hereditary military pensions of Bachat to Silledars and Ekkans was agreed to be charged to the Muafi department of the Madhya Bharat Government; that is how the Madhya Bharat Government continued to be liable to pay the amount to the appellant from mouth to month. Then followed the impugned order passed by respondent 1 on April 18, 1952. Clauses 1 to 4 of this order made provision for the continued payment to the persons specified thereunder. Clause 5, however, declared that the distribution of amounts to Silledars and Ekkans not covered by cls. 1 to 4 would be absolutely stopped from May 1, 1952. It is this order which has given rise to the present proceedings. Before dealing with the question as to whether the Kalambandis constitute an existing law or not it may be useful to refer very briefly to the constitutional position in regard to the Government of Gwalior at the material time. It appears that in 1905 Sir Madhavrao Scindia set up an advisory council known as Majlis Khas. He was himself the President of this Council and assumed the title of Mir Majlis. This Council was constituted as a sort of law making body, but in section 5 of the Quaid Majlis Khas it was expressly provided that the acceptance or rejection of any recommendations made by the majority of the Council would depend entirely on the discretion of the President. This was followed in 1916 by the establishment of Majlis Quanun for the purpose of making laws for 964 the State. With this body were associated some nominated public citizens. Section 4(a) of the Quaid Majlis Quanun, however, made it clear that its function was merely to advise His Highness on such matters as would be placed before it, and section 4(b) left it to the absolute discretion of His Highness either to accept or not the recommendations of the body. In 1918 the Constitutional Manual describing the functions of the members of the Ruler 's Cabinet was pub lished and Majlis Am which was the House of the People was established. It consisted mainly of nominated members though some members elected from recognised public bodies also were associated with it. According to section 31(6) of the relevant law creating this body, deliberations of the body were ultimately to be submitted to His Highness for his final orders, and it was his orders which alone could be executed. It would thus be seen that though Sir Madhavrao was gradually taking steps to associate the public with the government of the State and with that object he was establishing institutions consistent with the democratic form of rule, he had maintained all his powers as a sovereign with himself and had not delegated any of his powers in favour of any of the said bodies. In other words, despite the creation of these bodies the Maharaja continued to be an absolute monarch in whom were vested the supreme power of the legislature, the executive and the judiciary. In dealing with the question as to whether the orders issued by such an absolute monarch amount to a law or regulation having the force of law, or whether they constitute merely administrative orders, it is important to bear in mind that the distinction between executive orders and legislative commands is likely to be merely academic where the Ruler is the source of all power. There was no constitutional limi tation upon the authority of the Ruler to act in any capacity he liked; he would be the supreme legislature, the supreme judiciary and the supreme head of the executive, and all his orders, however issued, would have the force of law and would govern and regulate the affairs of the State including the rights of 965 its citizens. In Ameer un Nissa Begum vs Mahboob Begum (1), this Court had to deal with the effect of a Firman issued by the Nizam, and it observed that so long as the particular Firman issued by the Nizam held the field that alone would govern and regulate the rights of the parties concerned though it would be annulled or modified by a later Firman at any time that the Nizam willed. What was held about the Firman issued by the Nizam would be equally true about all effective orders issued by the Ruler of Gwalior (Vide also: Director of Endowments, Government of Hyderabad vs Akram Ali (2) ). It is also clear that an order issued by an absolute monarch in an Indian State which had the force of law would amount to an existing law under article 372 of the Constitution. Article 372 provides for the continuance in force of the existing laws which were in force in the territories of India immediately before the commencement of the Constitution, and article 366(10) defines an existing law, inter alia, as meaning any law, ordinance, order, rule or regulation passed or made before the commencement of the Constitution by any person having a power to make such law, ordinance, order, rule or regulation. In Edward Mills Co., Ltd., Beawar vs State of Ajmer (3), this Court has held that " there is not any material difference between the expressions 'existing law. ' and the 'law in force '. The definition of an, existing law in article 366(10) as well as the definition of an Indian law contained in section 3(29) of the General Clauses Act make this position clear ". Therefore, even if it is held that the Kalambandis in question did not amount to a quanun or law technically so called, they would nevertheless be orders or regulations which had the force of law in the State of Gwalior at the material time, and would be saved under article 372. The question which then arises is whether these Kalambandis were regulations having the force of law at the material time. In support of the conclusion that they are merely administrative orders it is urged by the learned (1) A.I.R. 1955 S.C. 352. (2) A.I.R. 1956 S.C. 6o. (3) ; 123 966 Advocate General of Madhya Pradesh that Sir Madhavrao was an enlightened Ruler and was fully conscious of the distinction between executive orders and statutory provisions, and so if the Kalambandis in question did not take the form of a quanun or a statute it would be safe to infer that they were intended to operate merely as executive orders. In support of this argument reliance has been placed on the obser vations made by Sir Madhavrao, in Volume 7 which deals with Durbar Policy. " Broadly speaking says Sir Madhavrao, " all orders and directions issued by the Ruler may be regarded as laws. In the technical sense, however, the latter term signified only commands whose fulfilment is accompanied by the conferment of a particular concession and whose con travention spells punishment or the extinguishment of a right. Orders issued for the purpose of regulating the working of a department generally take the form of Rules, Manual or Kalambandi and are superscribed as such ". It may be conceded that this statement does make a distinction between laws technically socalled and Rules, Manual or Kalambandi; but it is significant that the very statement on which this argument is founded ends with the observation that the differentiation in the Dames is merely intended to indicate the group to which a given set of orders be. longs. In other words, the name given to the order would not be decisive; its character, its content and its purpose must be independently considered. Then it is urged that the Kalambandis in question were not published in the Government Gazette as other laws are; they were published only in the military gazette, and it is argued that they are not called quanun or laws as they would have been, if they were intended to operate as laws. In this connection our attention was also drawn to certain acts passed in the State of Gwalior which are described as acts or laws. On the other hand, it is clear that the distinction between Kalambandi and quanun was not always strictly observed. In regard to the jurisdiction of the High Court and the functioning of the Civil and Criminal Courts rules were issued and yet they 967 were described as a Manual. There can be no doubt that the rules contained in this Manual which govern the jurisdiction, powers and authority of Courts in the State of Gwalior had the force of law, and yet they were included in a Manual which, judging merely by the description of the document, can be distinguished from a quanun. Similarly it appears from circulars collected in a book called Majmua Circulars (1971 to 1993 Samvat) that the notification issued under the said Circular had the effect of modifying the provisions of the Customs Law. There is also another instance that amendment of statutory provisions was made by Sir Madhavrao by giving directions in that behalf though such directions did not take the form of a quanun. In fact in section 39 of the Durbar Policy, Volume 3, Sir Madhavrao has described the Kalambandi of Samvat 1969 as quayada. To the same effect is the Durbar Order No. 5 dated April 14, 1923. It would thus be clear that the decision of the question with which we are concerned cannot rest merely on the description of the order. It would not be possible to accept the argument urged by the learned Advocate General that because the Kalambandi is not described as a quanun or was not published in the government gazette therefore it should be treated as an executive order. The words used in describing the several orders issued by the Ruler can afford no material assistance in determining their character. In this connection it is necessary to recall that all orders issued by the absolute monarch had the force of law. Therefore it would be necessary to consider the character of the orders contained in these Kalambandis. The first Kalambandi which was issued in 1912 consists of 54 clauses. No doubt it begins by saying that it has been issued for the purpose of arranging for the administration of the department of irregular unit of Shiledari, but the nature of the provisions contained in this document unambiguouly impresses upon it the character of a statute or a regulation having the force of a statute. It recognises and confers hereditary rights, it provides for the adoption of a son by the widow of a deceased silledar subject to the 968 approval of the State; it also provides for the maintenance of widows out of funds specially set apart for that purpose; it contemplates the offering of a substitute when a Silledar has become old or has other. Wise become unfit to render service; it makes detailed provisions as to mutation of names after the death of a Silledar, and it also directs that the Asami being for the Shiledari service it cannot be mortgaged for a debt of any banker, and it further provides that if a decree is passed against a Silledar and the decreeholder seeks to proceed against the amount payable to him the execution has to be carried out in accordance with the manner and subject to the limitations prescribed in that behalf. It would thus be seen that the detailed provisions made by this Kalambandi deal with several aspects of the amount payable to the recipient, and considered as a whole it cannot be treated as an administrative order issued merely for the purpose of regulating the working of the administration of the department of irregular forces. The second order which was issued by the Council is substantially on the same lines as the first order. It consists of 39 clauses. Its preamble shows that as per orders of the Durbar the department of irregulars was governed by the regulations issued in that behalf in 1912 A.D., and it adds that " because the aforesaid Bedas have now been amalgamated with the regular army and are made subject to all the laws that are in force in the Gwalior army, the Regulations of 1912 are repealed and orders are issued as under ". This clearly reads like a statutory provision whereby the earlier relevant statute is repealed. The scheme of this order follows the pattern of the earlier order. It provides for succession, for the regulation of adoption, for the mutation and heirship enquiry, for a substitute being given in case the Silledar is unable to work himself, prescribes a disqualification from service where the Ismdar is convicted, and imposes a similar limitation on execution against the amount of the Asami. Clause 22 of this order says that in case there is no legal heir or the widow of the deceased Ismdar his name will be struck off and the 969 Asami will at once be given to other person. In no case will the Asami be abolished. In our opinion,. having regard to the contents of the two orders and the character of the provisions made by them in such a detailed manner it is difficult to distinguish them from statutes or laws; in any event they must be treated as rules or regulations having the force of( law. That is the finding recorded by Abdul Hakim Khan and Newaskar, JJ., and we think that the said finding is correct. After the finding was recorded and submitted to this Court the appellant has made one more application for permission to lead another piece of additional evidence. This evidence consists of a book named " Guide Book Kalambandi " of October 1, 1899. It has been printed, published and issued under the signature of the Ruler, and it relates among other things to the administration of the Revenue Department of the State of Gwalior; it is written in Hindi. It contains a preface and introduction. According to the appellant the relevant portions of this document would clearly show that Kalambandi was treated as indistinguishable from quanun or law. This position in not seriously disputed by the respondents; but they contend that the appellant should not be allowed any further opportunity to lead additional evidence because by the order of remand he was given such an opportunity and he should have produced all the evidence on which he wanted to rely before the High Court. There is some force in this contention ; on the other hand it is clear that publications like the one on which the appellant now seeks to rely would be primarily within the knowledge of respondent I and respondent I should have produced all relevant and material documents to assist the High Court in determaining the issue sent to it after remand. However, in view of the conclusion which we have reached on the material that has already been adduced on the record we do not think it necessary to consider whether the additional evidence should be allowed to be adduced. It is not disputed that if the Kalambandis on which 970 the appellant 's right is based are rules or regulations having the force of law the impugned executive order issued by respondent 1 would be invalid. The right guaranteed to the appellant by an existing law cannot be extinguished by the issue of an executive order. In fact on this point there has never been a dispute between the parties in the present proceedings. That is why the only point Of controversy between the parties was whether the Kalambandis in question amount to an existing law or not. Since we have answered this question in favour of the appellant we must allow the appeal, set aside the order passed by the High Court and direct that a proper writ or order should be issued in favour of the appellant as prayed for by him. The appellant would be entitled to his costs throughout. Appeal allowed. [/INST]These petitions by certain stage carriage permit holders for appropriate writs quashing seven schemes for nationalisation of road transport services in West Godavari District, approved and enforced from different dates by the Government of Andhra Pradesh, called in question the constitutional validity of Ch. IVA of the , as amended by Act 100 of 1956, and the validity of r. 5 of the Andhra Pradesh Motor Vehicles Rules framed by the State Government under section 68(1) of the Act and the note in terms of the said rule appended to the schemes which was said to be inconsistent with the Act and was as follows: "The frequency of services of any of the notified routes or within any notified area shall, if necessary, be varied having regard to the traffic needs during any period. " Held, that in view of the decision of this Court in H. C. 643 Narayanappa vs The State of Mysore, it was no longer open to the petitioners to contend that the provisions of Ch. IVA of the (IV of 1939), as amended by the Central Act 100 of 1956, were ultra vires the powers of the Parliament. H. C. Narayanappa vs The State of Mysore, [1960] 3 S.C.R. 742, followed. Nor was it correct to contend that Ch. IVA of the Act was invalid on the ground that it infringed article 19(i)(g) of the Constitution and was not saved by article 19(6) as the powers conferred on the State by section 68C of the Act exceeded the limits of article 19(6)(ii) of the Constitution. Article 19(6)(ii) is couched in very wide terms, the word 'service ' used by it is wide enough to include all species of motor service and it does not in any way limit the States ' power to confer on itself a monopoly in respect any area in exclusion of any person or persons. The only classification that Ch. IVA of the Act makes is between the State Transport Undertaking and private transport undertakings, whether carried on by individuals or firms or companies, and that classification is reasonably connected with the object it has in view. It was not, therefore, correct to say that it contravenes article 14 of the Constitution. That Chapter does not confer any arbitrary and discriminatory power upon the State Transport Undertaking nor does the quasi judicial procedure prescribed by it seek to cover such power. Any mala fide or collusive exercise of the power, therefore, in deprivation of an individual 's rights can only be a ground for quashing a particular scheme alone but not for declaring the chapter void. Since that chapter provides a complete and satisfactory machinery for reasonably regulating the exclusion of all or some of the private operators from a notified area or route it requires no liberal construction. Gullapalli Nageswara Rao vs Andhra Pradesh Road Transport Corporation, [1959] SUPP. 1 S.C.R. 319, referred to. Saghir Ahmad vs The State of U. P., ; , considered. Official bias inherent in the discharge of a statutory duty, as has been pointed out by this Court, is distinct from personal bias for or against any of the parties. Since in the instant case, the State Road Transport Corporation was neither legally nor factually a department of the State Government and the State Government in deciding the dispute between the said undertaking and the operators of private buses was only discharging its statutory function, no question of official bias could arise. Gullapalli Nageswara Rao vs The State of Andhra Pradesh, ; and H. C. Narayanappa vs The State of Mysore, ; , considered. 644 The observations made by this Court in Srinivasa Reddy vs The State of Mysore, in regard to piecemeal implementation of a scheme were directed against any abuse of power by way of discrimination as between operators and operators in respect of a single scheme. Since the seven schemes in question were intended to avoid the vice inherent in piecemeal implementation of a single scheme and were meant to be implementated in their entirety from different dates, those observations did not apply to them. Srinivasa Reddy vs The State of Mysore, ; , explained. There can be no doubt that r. 5 of the Andhra Pradesh Motor Vehicles Rules in conferring on the State Transport Undertaking the power to vary the frequency of services, gave it the power to effect a substantial modification in the scheme permissible only under section 68E of the Act, and as such the rule must be declared void. But since the note appended to the schemes in pursuance of the rule is severable from the schemes, it should be deleted and the schemes must be declared valid. The word 'route ' in section 68C of the Act does not refer to a preexisting route. It is permissible under that section to frame a scheme in respect of any area or route or any portions thereof, or a new route, since there is no inherent inconsistency between an 'area ' and a 'route '. </s>
<s>[INST] Summarize the judgementivil Appeal No. 1451 of 1968. Appeal from the judgment and decree dated March 11, 1965 of the Andhra Pradesh High Court in A.S. Nos. 93 and 169 of 1957. Rajeshwara Rao and B. Parthasarathi, for the appellant. D. Munikanniah and A.V.V. Nair, for the respondent. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought by certificate from the judgment of the High Court of Andhra Pradesh dated March 11, 1965 in A.S. Nos. 93 and 169 of 1957. The appellant was a firm of dealers in pulses at Vijayawada. It was sending pulses like green gram and black gram to other States viz.: Bombay, Bengal, Madras and Kerala by rail in the course of their business. The consignments were addressed to 'self ' and the railway receipts were endorsed in favour of Banks for delivery against payments. The purchasers obtained the railway receipts after payments and took delivery of the goods. The total turnover of the business of the appellant for the year 1949 50 was Rs. 17,05,144 2 2. Of the said turnover a sum of Rs. 3,61,442 7 3 represented the turnover of sales effected outside the then Madras State. For the assessment year 1949 50 the Deputy Commercial Tax Officer collected sales tax on the total turnover without exempting the value of the sales effected outside the State. The appellant was permitted to pay sales tax under(r. 12 of the Madras General Sales Tax (Turnover and Assessment) Rules. The appellant submitted monthly returns and paid sales tax without claiming any such exemption till the end of January, 1950. But in, the returns for the months of February and March, 1950 the appellant claimed exemption on sales effected outside the State. The appellant submitted a consolidated return exhibit A 18 to the Deputy Commercial Tax Officer on March 30, 1950 claiming exemption in respect of a sum of Rs. 10,37,334 7 9 being the value of the sales effected outside the 745 State or the period commencing from April 1, 1949 and ending January 31, 1950. The Deputy Commercial Tax Officer fixed the taxable turnover of the appellant at Rs. 17,05,14 4 2 2 and issued a notice exhibit A 23 dated October 24, 1950 to show cause why the appellant should not be assessed accordingly. The appellant was thereafter held liable to pay tax amounting to Rs. 26,642 14 0 on a net turnover of Rs. 17,05,144 2 2. The appellant preferred an appeal to the Commercial Tax Officer and a revision petition to the Board of Revenue, Madras but was unsuccessful. The appellant, therefore brought a suit for the recovery of Rs. 21,270 13 0 being the amount of tax illegally collected from him together with interest, contending that the sales effected outside the State could not be taxed under article 285 (1)(a) of the Constitution of India. The State of Madras contested the suit on the ground that the sales were taxable as they fell within the purview of explanation 2 to section 2(h) of the Madras General Sales Tax Act, 1939 hereinafter referred to. as the Act). The Subordinate Judge held that for the period from April 1, 1949 to January 25, 1950 the appellant was not entitled to impeach the assessment on the turnover relating to sales outside the State. As regards the period from March 26, 1950 to March 31, 1950 the Subordinate Judge took the view that the past of the turnover relating to, outside sales was not liable to salestax but as there was a single order of assessment for the entire period the entire assessment was illegal. Again the judgment of the Subordinate Judge both the appellant and the respondent filed appeals A.S. No. 93 of 1957 and A.S. No. 169 of 1957 to the High Court of Andhra Pradesh. But its order dated April 18, 1960 in Appeal No. 169 of 1957 the High Court called for a finding from the trial court as to whether the appellant was able to prove the facts entitling him to invoke the explanation to article 286(1)(a). By its order dated July 21, 1962 the trial court submitted a finding to the effect that in view of the decision of the Supreme Court in India Copper Corporation Ltd. vs The State of Bihar(1) the burden of proof was not on the appellant and that the finding will have to be given in its favour. But by its order dated March 5, 1963 the High Court directed the Subordinate Judge to record a finding after considering the evidence adduced by the appellant as to whether the goods in question were delivered for consumption within the delivery States. In its order dated March 22, 1963 the trial court, after considering the evidence given by the appellant 's witnesses came to the conclusion that the deliveries were not made for purposes of consumption within the delivery States only. The High Court by a common judgment dated March 11, 1965 in A.S. No. 93 and 169 of 1957 held that the appellant could not claim the benefit under article 286(1)(a) of the Constitution in the (1) 12S.T.C. 56. 746 absence of evidence as to how the wholesalers disposed of the goods after obtaining delivery and therefore the entire turnover for the year 1949 50 would be assessable to tax. In the result A.S. No. 169 of 1957 flied by the respondent was allowed and A.S. No. 93 of 1957 filed by the appellant was dismissed. The Madras General Sales Tax Act, 1939 was enacted in exercise of the legislative authority conferred upon the Provincial Legislatures by Entry 48 of List II read with section 100(3) of the Government of India Act, 1935. The explanation to section 2(h) of this Act is as follows: "Notwithstanding anything to the contrary in the Indian the sale or purchase of any goods shall be deemed, for the purpose of this Act, to have taken place in this Province, wherever the contract of sale or purchase might have been made. (a) If the goods. were actually in this Province at the time when the contract of sale or purchase in respect thereof was made or, (b) in case the contract was for the sale or purchase of future goods by description, then, if the goods are actually produced in this Province at any time after the contract of sale or purchase in respect thereof was made." Under Entry 48 of List II of the Government of India Act, 1935the Provincial Legislatures could tax sales by selecting some fact or circumstances which provided a territorial nexus with the taxing power of the State even if the property in the goods sold passed outside the Province or the delivery under the contract of sale took place outside the Province. Legislation taxing sales depending solely upon the existence of a nexus, such as production or manufacture of the goods, or presence of the goods in the Province at the date of the contract of sale, between the sale and the legislating Province could competently be enacted under the Government of India Act, 1935. [see Tata Iron & Steel Ca. Ltd. vs The State of Bihar(1) and Poppatlal Shah vs The State of Madras ( 2 ) ]. By article 286 of the Constitution certain fetters were placed upon the legislative powers of the States as follows: "(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (1) ; (2) [19531 S.C.R. 677. 747 (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. Explanation. For the purposes of sub clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State. (2) Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter State trade or commerce; Provided that the President may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty first day of March, 1951. (3) No law made by the Legislature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent." Therefore, by incorporating section 22 of the Madras Act read with article 286, notwithstanding the amplitude of the power otherwise granted by the charging section read with the. definition of 'sale ', a cumulative fetter of triple dimension was imposed upon the taxing power of the State. The Legislature of the Madras State could not since January 26, 1950, levy a tax on sale of goods taking place outside the State or in the course of import of the goods into, or export of the goods out of, the territory of India, or on sale of any goods where such sale took place in the course of inter State trade or commerce. By the Explanation to article 286(1)(a) which is incorporated by section 22 of the Madras Act a sate is deemed to take place in the State in which the goods are actually delivered as a. direct result of such sale for the purpose 748 of consumption in that State even though under the law relating to sale of goods the property in the goods has by reason of such sale passed in another State. In the State of Bombay and Anr. vs The United Motors (India) Ltd.(1) it was held that since the enactment of article 286(1)(a) a sale described in the Explanation which may for convenience be called an "Explanation sale" is taxable by that State alone in which the goods sold are actually delivered as a direct result of sale for the purpose of consumption in that State. With a view to impose restrictions on the taxing power of the States under the pre Constitution statutes, amendments were made in those statutes by the Adaptation of Laws Order. As regards the Madras Act the President issued on July 8, 1952 the Fourth Amendment inserting a new section, section 22 in that Act. It runs as follows: "Nothing contained in this Act shall be deemed to impose or authorise the imposition of a tax on the sale or purchase of any goods where such sale or purchase takes place (a) (i) outside the State of Madras, or (ii) in the course of import of the goods into the territory of India or of the export of the goods out of such territory, or (b) except in so far as Parliament may by law otherwise provide, after the 31st March., 1951, in the course of inter State trade or commerce, and the provisions of this Act shall be read and construed accordingly. Explanation : For the purposes of cl. (a)(i) a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State. " By this amendment the same restrictions were engrafted on the pre Constitution statute as were imposed by article 286 of the Constitution upon post Constitution statutes. As regards the sales for the period from April, 1949 to January 25, 1950 it was admitted before the Deputy Commercial (1) ; 749 Tax Officer that the goods were actually in the Madras State at the time the contract of sale was concluded. It was for this reason that the Deputy Commercial Tax Officer negatived the claim which the appellant made in respect of those sales. It appears that in the trial court the appellant challenged the constitutional validity of explanation to section 2(h) of the Act. But in view of the decision of this Court in the Tata Iron & Steel Co 's case(1) and Poppatlal Shah 's case(2) counsel on behalf of the appellant did not seriously dispute the validity of the assessment in regard to sales from April 1, 1949 to January 25, 1950. With regard to the period from January 26, 1950 to March 31, 1950 the contention of the appellant ' is that the High Court was in error in holding that the burden of proof was on the appellant to show that there was not only delivery of goods for consumption within the delivery States but there was actual consumption of the goods in those States. In our opinion the argument is well founded and must be accepted as correct. In India Copper Corporation 's case(3) it was pointed out by this Court that if the goods were as a direct result Of a sale delivered outside the State of Bihar for the purpose of consumption in the State of first delivery, the assessee would be entitled to the exemption from sales tax by virtue of the Explanation to Art 286(1)(a) of the Constitution and it would not be necessary for the assessee to prove further that the goods so delivered were actually consumed in the State of first destination. In the present case the Subordinate Judge has, upon a consideration of the evidence adduced by the parties stated in his report dated June 27, 1962 that the intention of the appellant was that the sale and delivery should be for the purpose of consumption in the delivery States. It is true that in his subsequent report dated March 22, 1963 the Subordinate Judge gave a different finding. But it is obvious that the subsequent report of the Subordinate Judge is vitiated because the principle laid down by this Court in India Copper Corporation 's case(3) has not been taken into account. Having regard to the evidence adduced by the appellant in this case we are satisfied that the part of the turnover which related to sale from 2, January 26, 1950 to March 31, 1950 was not liable to sales tax and the levy of sales tax from the appellant to this extent is illegal. The next question arising in this appeal is whether the assessment order of the Deputy Commercial Tax Officer for the year 1949 50 is illegal in its entirety notwithstanding the fact that the State Government had a right to levy sales tax on outside sales (1) ; (2) ; (3) 12 S.T.C. 56. 750 which were effected prior to January 26, 1950. It was argued for the appellant that the assessment must be treated as one and indivisible and if a part of the assessment is illegal the entire assessment must be deemed to be infected and treated as invalid. In support of this argument reference was made to the decision of this Court in Ram Narain Sons Ltd. vs Assistant Commissioner of Sales Tax(1) in which this Court observed as follows: "The necessity for doing so; is, however, obviated by reason of the fact that the assessment is one composite whole relating to. the pre Constitution as well as the post Constitution periods and is invalid in toto. There is authority for the proposition that when an assessment consists of a single undivided sum in respect of the totality of the property treated as assessable, the wrongful inclusion in it of certain items of property which by virtue of a provision of law were expressly exempted from taxation renders the assessment invalid in toto." The Court cited with approval a passage from the judgment of the Judicial Committee in Bennett & White (Calgary) Ltd.and Municipal District of Sugar City No. 5(2). "When an assessment is not for an entire sum, but for separate sums, dissected and earmarked each of them to a separate assessable item, a Court can sever the items and cut out one or more along with the sum attributed to it, while affirming the residue. But where the assessment consists of a single undivided sum in respect of the totality of property treated as assessable, and when one component (not dismissible as 'de minimis ') as on any view not assessable and wrongly included, it would seem clear that such a procedure is barred, and the assessment is bad wholly. That matter is covered by authority. In Montreal Light, Heat & Power Consolidated vs City of Westmount(3) the Court (see especially per Anglin, C.J) in these conditions held that an assessment which was bad in part was infected throughout, and treated it as invalid. Here their Lordshis are of opinion, by parity of reasoning, that the assessment was invalid in toto. " Applaying the principle to the special facts are circumstances of the case the Court set aside the orders of assessment and directed that the case should be remanded to the Assessment Officer for reassessment of the appellants in accordance with law. The same principle was applied but with a different result in the later case (1) 6 S.T.C. 627 at 637. (2) at p. 816. (3) 751 the State of Jammu & Kashmir vs Caltex (India) Ltd. (1) in which the question arose as regards the validity of an assessment of sales tax of all retails sales of motor spirit. The Petrol Taxation Officer assessed the respondent to pay sales tax for the period January 1955 to May, 1959 under section 3 of the Jammu & Kashmir Motor Spirit (Taxation of Sales) Act, 2005. The respondent applied under section 103 of the Constitution of Jammu & Kashmir and a single Judge of the High Court held that the respondent was liable to pay sales tax only in respect of the sales which took place during the period January to September, 1955 and issued a writ restrainig the appellants from levying tax for the period October, 1955 to May, 1959. On appeal a Division Bench of the High Court quashed the assessment for the entire period. On appeal to this Court it was held that though there was one order of assessment for the period January 1, 1955 to May 1959 the assessment could be split up and dissected and the items of sale could be separated and taxed for different periods. It was pointed out that the sales tax was imposed in the ultimate analysis on receipts from individual sales or purchases of goods effected during the entire period, and, therefore, a writ of mandamus could. be issued directing the appellant not to realise sales tax with regard to transactions of sale during the period from September 7, 1955 to May, 1959. A similar question arose for determination in an American case [Frank Rattarman vs Western Union Telegraph Co.(2)]. The question in that case was "whether a single tax, assessed under the Revised Statutes of Ohio, section 2778, upon the receipts of a telegraph company which receipts were derived partly from inter state commerce and partly from commerce ' within the State but which were returned and assessed in gross and without separation or apportionment, is wholly invalid, or invalid only in the proportion and to the extent that the said receipts were derived ,from interstate commerce". It was held unanimously by the Supreme Court of the United States that the assessment was not wholly invalid but it was invalid only in proportion to the extent that such receipts were derived from interstate commerce. It was observed that where the subjects of taxation can be separated so that that which arises from interstate commerce can be distinguished from that which arises from commerce wholly within the State, the Court will act upon this distinction, and will restrain the tax on interstate commerce. while permitting the State to collect that upon commerce wholly within its own territory. The principle of this case has been consistetly followed in American cases: [see Bowman vs Continental Company(3)]. This case has been cited with approval by this Court in The State of Bombay (1) 17 S.T,C. 612. (2) ; (3) C.I./69 4 752 vs The United Motors (India) Ltd.(1) wherein it was observed that the same principle should be applied in dealing with taxing statutes in this country also. In the present case we are of opinion that though there is a single order of assessment for the period from April 1, 1949 to March 31, 1950 the assessment could be split up and dissected and the items of sale separated and taxed for different periods. It is quite easy in this case to ascertain the turnover of the appellant for the pre Constitution and post Constitution periods for these figures are furnished in the plaint by the appellant himself. It is open to the Court in these circumstances to sever the illegal part of the assessment and give a declaration with regard to that part alone instead of declaring the entire assessment void. For these reasons we hold that the appellant should be granted a declaration that the order of assessment made by the Deputy Commercial Tax Officer for the year 1949 50 is invalid to the extent that the levy of sales tax is made on sales relating to. goods which were delivered for the purpose of consumption outside the State for the period from January 26, 1950 to March 31, 1950. The result is that the appellant is entitled to a refund of the amount illegally collected from him for the period from January 26, 1950 to March 31, 1950. The trial court has already found that the appellant is entitled to claim exemption with regard to. turnover for this period to the extent of Rs. 3,34,107 15 6 and the tax payable on this sum is Rs. 5,220 7 0. The appellant is. therefore, entitled to a decree for the refund of Rs. 5,220 7 0. The appellant is also entitled to interest at 6% per annum from the date of suit till realisation of this amount. For these reasons we allow this appeal and set aside the judgment of the Andhra Pradesh High Court dated March 11, 1965 in A.S. Nos. 93 and 169 of 1957 and allow this appeal to the extent indicated above. There will be no order with regard to costs. R.K.P.S. Appeal allowed. (1) ; at 1097. [/INST]The first respondent entered into an agreement to sell his properties to the appellant. Disputes relating to completion of the sale were referred to arbitration. An award was made directing the first respondent to execute the documents in respect of the transfer by him within one month from the date of the receipt of the confirmation or approval according to law, failing which the appellant was at liberty to get it executed and registered through court. The award was made a rule of the court on November 30, 1949 and a decree on the basis of the award was granted. The first respondent left India 'for Pakistan so.me date after November 22, 1969. The appellant moved the Deputy Custodian of Evacuee Property for confirmation of the transfer under section 38 of the Administration of Evacuee Property Ordinance, 1949 or under section 40 of the . The Deputy Custodian accorded confirmation, but the Additional Custodian set aside the order of the Deputy Custodian. The appellant filed an application for execution of the decree on the 'basis of the award to which objections were filed by the Custodian. The District Judge held that on the date of the decree transfer of properties could not be effected unless confirmed by the Custodian, The appellant 's appeal to the High Court was dismissed. In appeal to this Court, it was contended that there could be No. bar to. the execution of the decree based on the award, since the respondent 's properties were never declared to be evacuee properties either under Central Ordinance 27 of 1949 or Central Act 31 of 1951 and that they did not vest in the Custodian unless they were so declared after appropriate proceedings. Dismissing the appeal, HELD: Under the provisions of section 38(1) of Central Ordinance 27 of 1949 and section 40(1) of Central Act 31 of 1951, transfer of property was ineffective unless confirmed by the Custodian even if a person became an evacuee after the date of transfer. It was not necessary that the property should have been declared or notified to be evacuee property before those provisions were attracted. [800 D] In the present case the respondent had become an evacuee within the meaning of section 2(d) of the Ordinance and the Act. The Additional Custodian declined to confirm the transfer made by the respondent and therefore the condition precedent for a valid transfer remained unsatisfied. Further, even according to the award the confirmation or approval of the Custodian had to be obtained before the transfer of documents were to be executed and completed in accordance with law. It was incumbent on the 797 appellant to obtain the confirmation order before he could ask for any further steps to be taken by the courts in the matter of execution and registration of the transfer deed. [800 H] </s>
<s>[INST] Summarize the judgementAppeal No. 367 of 1969. Appeal by special leave from the judgment and order dated October 28, 1968 of the Madhya Pradesh High Court in Misc. Civil Case No. 188 of 1967. I. N. Shroff, for the appellant. The respondent did not appear. The Judgment of the Court was delivered by Hegde, J. This appeal by special leave arises from the deci sion of the Madhya Pradesh High Court in a reference under section 44 of the Madhya Pradesh Sales Tax Act, 1959. The reference was made by the Board of Revenue. After stating the case, the Board of Revenue referred the following question to the High Court for its opinion. "Whether on the facts and circumstances of the case the Commissioner of Sales Tax acted illegally in exercising his powers ' of revision under section 39(2) of the Madhya Pradesh General Sales Tax Act, 1958 in respect of the assessment order dated 28 12 1,961 which was passed in respect of the returns submitted on 30 1 1958 and 17 6 1958 and on the basis of the notice in form XI issued on 29 8 1961 ?" The High Court answered that question in the affirmative and in favour of the assessee. Aggrieved by that order, the Commissioner of Sales Tax, Madhya Pradesh has come up in appeal to this Court. The assessee, M/s. Amarnath Ajitkumar was a registered dealer under the Madhya Bharat Sales Tax Act, Samv. 2007. For the period from July 1, 1957 to 31st March, 1958, the period with which we are concerned in this appeal, the assessee submitted its return for the second and third quarters on January 30 , 1958 and for the fourth quarter on 17th June 1958. These returns were made under section 9(3) of the . The sales tax concerned in the present case was that leviable under the . But the procedure to by adopted in the matter of assessment and collect ion was that prescribed in the Madhya Bharat Sales Tax Act Samv. The Madhya Bharat Act was repealed by the Madhya Pradesh General Sales Tax Act, 1959, which came into force on April 1, 1959. Thereafter the Assistant Commissioner of Sales Tax, issued a notice in form XI of the Madhya Pradesh Sales Tax (Central) Rules, 1959 on August 29, 1961. That Officer passed the assessment order on November 28, 1961. On October 30, 830 1964, the Commissioner of Sales Tax initiated proceedings under section 39(2) of the M.P. Sales Tax Act, 1959 for revising the assessment made. After notice to the dealer the Commissioner on April 15, 1965 revised the assessment and enchanced the same by a sum of Rs. 993.06 paise. The assessee 's appeal to the Board of Revenue was dismissed on June 20, 1966. Both before the Commissioner as well as the Board of Revenue, the assessee contended that as the assessment related to the period when Madhya Bharat Sales Tax Act, Samv. 2007 was in force, the revision of that assessment is governed by section 12(1) of that Act and not section 39(2) of the M.P. Act, 1959. It was urged on its behalf that under the Madhya Bharat Act, the Commissioner could not have revised the order of assessment after the expiry of two years after the assessment was made. Hence the Commissioner was not competent to revise the assessment. The Commissioner as well as the Board of Revenue rejected that contention. They came to the conclusion that it was open to the Commissioner to take action under S.39(2) of the M.P. General Sales Tax Act, 1959 in the matter of revising the assessment. The High Court did not agree with that view. It held that in view of section 52 of the 1959 Act, the governing provision in the matter of revising the assessment was section 12(1) of the Madhya Bharat Act. The only question that we have to decide is whether in the facts and circumstances of the case, the Commissioner could have exercised his power under section 39(2) of the M.P. Sales Tax Act, 1959. Section 12(1) of the Madhya Bharat Act provides "The, Commissioner may in his discretion at any time suo moto or being moved by the assessing authority, call for and examine the records of any proceedings under this Act and if he considers any order is illegal or improper or erroneous in so far as it is pre judicial to the interests of the revenue he may pass orders as he thinks fit : Provided that no order shall be passed prejudicial to a dealer without giving him an opportunity of hearing; Provided further that the Commissioner shall not revise an order which has been made more than two years previously." From the second proviso, it is clear that the Commissioner is precluded from revising an order which had been made more than two years previously. That proviso did not lay down any rule of limitation. But it took away the power of the Commissioner 831 to revise any assessment after the prescribed period. Thereafter the assessment became final and conclusive as against the Department as well as the assessee, unless it was liable to be changed under some other provision of the Madhya Bharat Act. Section 39(2) of the M.P. Sales Tax Act of 1959 says "The Commissioner may of his own motion or on information received call for and examine the record of any proceeding under this Act if he, considers that any order passed therein by any person appointed under section 3 to assist him is erroneous in so far as it is prejudicial to the interests of the revenue, he may after giving the dealer an opportunity of being heard and. after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment; Provided that no proceedings shall be initiated under this sub section after the expiry of three years from the date of the order sought to be revised. . The M.P. Sales Tax Act, 1959 which repealed the Madhya Bharat Act by section 52 therein provided the following repeal and saving provisions. "52(1). The Central Provinces and Berar Sales Tax Act, 1947, the Madhya Bharat Sales Tax Act, Samv. 2007, the Central Provinces and Berar Sales Tax Act, 1947 as extended to Vindhya Pradesh and Bhopal region and as in force in those regions immediately before the commencement of this Act and the Rajasthan Sales Tax Act, 1954, as in force in Sironj region, are hereby repealed : Provided that such repeal shall not affect the previous operation of the said Acts or any right, title, obligation or liability already acquired, accrued, or incurred thereunder, and subject thereto, anything done or any action taken (including any appointment, notification, notice, order, rule, form, regulation, certificate or licence) in the exercise of any power conferred by or under the said Acts shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken in the exercise of the powers conferred by or under this Act, as if this Act were in force on the date on which such thing was done or action was taken; and all arrears of taxes and other 832 amounts due, at the commencement of this Act may be recovered as if they had accrued under this Act. " The High Court came to the conclusion that in view of the ,decisions of this Court in The Sales Tax Officer Circle 1, Jabalpur vs Hanuman Prasad(1) and The Swastik Oil Mills Ltd. vs H. B. Munshi, Dy. Commissioner of Sales Tax, Bombay, (2) the Commissioner was incompetent to revise the order because of section 12(1) of the Madhya Bharat Act read with section 52(1) of the M.P. Sales Tax Act, 1959. Hanuman Prasad 's case (supra) arose out of M.P. Sales Tax Act, 1959. Therein in respect of a period governed by the Central Provinces and Berar Sales Tax Act, 1947, the assessee therein filed its return and a notice in form XII was issued to him on March 10, 1959. The assessee 's turnover was assessed by an order dated May 23, 1959. But in the meantime, M.P. Sales Tax Act, 1959 came into force on April 1, 1959. The Commissioner sought to revise the order of assessment on the ground that a portion of assessee 's turnover had escaped assessment. The question arose whether he had to exercise his powers within the time fixed by the Berar Sales Tax Act, 1947 or that fixed under M.P. Sales Tax Act, 1959. The specific question that arose for decision in that case was whether the Commissioner 's power to revise had to be exercised in accordance with section 11A(1) of the Central Provinces and Berar Sales Tax Act, 1947, as contended by the assessee or under section 19(1) of the M.P. Sales Tax Act, 1959 as contended by the Department. That question was examined by this Court from several angles. One of the tests applied was what is the effect of section 52 of the M.P. Sales Tax Act, 1959. Dealing with that aspect, this Court observed at p. 90 of the report "It was under section 52 of the new Act that the repealed Act was repealed, and that section itself, under the proviso laid down that such repeal shall not affect the previous operation of the said Act or any right, title, obligation or liability already acquired, accrued or incurred thereunder. There was also the further addition that subject thereto, anything done or any action taken (including any appointment, notification, notice, order, rule, form, regulation, certificate or licence) in the exercise of any power conferred by or under the said Act, shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken in exercise of the powers conferred by or under this Act, as if this Act were in force on the date on view of this proviso it has to be held that when this new which such thing was done or action was taken. In (1) 19 S.T.C. 87. (2) 21 S.T.C. 383, 833 Act came into force on 1st April, 1959, all rights, title, obligation or liability already acquired, accrued or incurred under the repealed Act by the respondent remained unaffected and intact. The rights and liabilities, which had been acquired or incurred under the repealed Act, included the right or liability to be assessed in accordance with the provisions of the repealed Act in respect of turnover of sales effected during the time when that Act was in force." Agreeing with the High Court this Court held in Hanuman Prasad 's(1) case that the Commissioner could not have revised the order of assessment after the period prescribed in the repealed Act. One of the reasons given in support of that conclusion is that "the rights and liabilities, which had been acquired or incurred under the repealed Act, included the right or liability to be assessed in accordance with the provisions of the repealed Act, in respect of turnover of sales effected during the time when that Act was in force". The expression assessment includes re assessment. Swastik oil MillS(2) case is a converse case. Therein the assessee was assessed to sales tax under the Bombay Sales Tax Act, 1946, for the periods 1st April 1948 to March 31, 1950 and April 1, 1950 to March 31, 1951. On January 7, 1963, Deputy Commissioner initiated proceedings under section 31 of the Bombay Sales Tax Act, 1 1953 proposing to revise the order of the Assistant Collector of Sales Tax in so far as he had allowed deduction in respect of the entire goods despatched by the assessee to its branches 'in other states overlooking the provisions of proviso (b) to rule 1 (ii) under section 6 (3) of the Act of 1946 as amended in 1949. The question was whether the Deputy Commissioner could take advantage of the longer period prescribed under the Bombay Sales Tax Act, 1946 or whether he was required to exercise his powers within the shorter period fixed under the 1953 Act. Bombay High Court as well as this Court came to the conclusion by applying the provisions in section 7 of the Bombay General Clauses Act (1 of 1904) that the Deputy Commissioner was entitled to exercise his power of revision within the period prescribed under the repealed Act. Section 7 of the Bombay General Clauses Act provides "where this Act or any Bombay Act or Maharashtra Act, made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not (c)affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed. (1) 19 S.T.C. 87. (2) 21 S.T.C. 383. 834 (e)affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act had not been passed" Dealing with the scope of those provisions this is what this Court observed : "Very clearly, the repeal of the Act of 1953 by the Act of 1959 did not affect the rights and liabilities of the assessee to tax under the Act of 1953 or the Act or 1946 in respect of the turnover which became liable to sales tax under the Act of 1946. The effect of clause (e) of section 7 of the Bombay General Clauses Act further is that any legal proceeding in respect of levy, imposition or recovery of that tax is to continue and any fresh investigation, legal proceeding or remedy could be instituted as if there had been no repeal by the Act of 1959. Consequently, the repeal of the Act of 1953 did not in any way affect the power of the Deputy Commissioner to institute proceedings for revision suo motu against the appellate order of the Assistant Collector which had been passed in exercise of his powers under the Act of 1946. It is true, as urged by Mr. Desai in the alternative, that, in fact, the proceedings should have been taken not under section 31 of the Act of 1953, but under section 22 of the Act of 1946. That is so, because, when the Act of 1946 was repealed by the Act of 1953, similar provisions were made in the Act of 1953 to continue in force the provisions of the Act of 1946 in respect of rights and liabilities which may have accrued or have been incurred under the Act of 1946. Section 48(2) and section 49(1) clearly contained provisions indicating that, in respect of a liability to tax under the Act of 1946, the rights and liabilities of the assessee had to be determined in accordance with the provisions of the Act of 1946 and all legal proceedings or remedies in respect thereof had also to be taken under the same Act. Consequently the Deputy Commissioner in seeking to exercise revisional powers against the order of the Assistant Collector passed under the Act of 1946, had to proceed under section 22 of the Act of 1946. That, however, is not at all material, because the provisions of section 22 of the Act of 1946 are quite similar to those of section 31 835 of the Act of 1953. The mere incorrect mention of section 31 of the Act of 1953 in the notice is immaterial. The Deputy Commissioner has the jurisdiction and power to revise the order under section 22 of the Act of 1946 and, consequently the proceedings initiated by him are not without jurisdiction. " Now coming back to section 52 of the M.P. Sales Act of 1959, the proviso to section 52(1) provides that the repeal of the Madhya Bharat Act shall not affect any right already acquired or accrued thereunder. The question is whether the bar on the power of the Commissioner from exercising the powers under section 12(1) of the Madhya Bharat Act after the prescribed period did create a right in favour of the assessee ? The effect of that provision is that after the time prescribed in that provision, the Commissioner could not revise the order of assessment to the prejudice of the assessee. Similarly he could not revise the order of assessment to the prejudice of the Revenue. Section 12(1) conferred a right both on the assessee as well as on the Department to see that an order of assessment is not revised to their prejudice after a particular date. We fail to see why section 12(1) of the Madhya Bharat Act should not be considered as conferring on the assessee a right to see that the assessment made against him is not altered to his prejudice after a particular date. That is a valuable right. The effect of section 52 (1) of M.P. Sales Tax Act, as seen earlier is that all assessments, which includes reassessments should be in accordance with the repealed Act. The second part of that proviso says that subject to what has been provided in the first part of the proviso, anything done or any action taken including an order in the exercise of any of the powers conferred by or under the repealed Act, shall, in so far as it is not inconsistent with the provisions of the M.P. Sales Tax Act, 1959 be deemed to have been done in the exercise of powers conferred by or under that Act as if that Act were in force on the date on which such thing was done. There is undoubtedly a conflict between section 12(1) of the Madhya Bharat Act and section 39(2) of the M.P. Sales Tax Act, 1959. The former provision prohibits the Commissioner from revising an order which has been made more than two years previously and the latter provision permits him to revise the order till the expiry of three years from the date of the order sought to be revised. Therefore the Revenue cannot call into aid the second part of the proviso. The resulting position is that the governing provision would continue to be section 12(1) of the Madhya Bharat Act. For the reasons mentioned above this appeal fails and the same is dismissed. Respondent is ex parte. No costs. L 3 Sup C.I./72 2500 5 10 72 GIPF. 835 of the Act of 1953. The mere incorrect mention of section 31 of the Act of 1953 in the notice is immaterial. The Deputy Commissioner has the I jurisdiction and power to revise the order under section 22 of the Act of 1946 and, consequently the proceedings initiated by him are not without jurisdiction. " Now coming back to section 52 of the M.P. Sales Act of 1959, the proviso to section 52(1) provides that the repeal of the Madhya Bharat Act shall not affect any right already acquired or accrued thereunder. The question is whether the bar on the power of the Commissioner from exercising the powers under section 12(1) of the Madhya Bharat Act after the prescribed period did create a right in favour of the assessee ? The effect of that provision is that after the time prescribed in that provision, the Commissioner could not revise the order of assessment to the prejudice of the assessee. Similarly he could not revise the order of assessment to the prejudice of the Revenue. Section 12(1) conferred a right both on the assessee as well as on the Department to see that an order of assessment is not revised to their prejudice after a particular date. We fail to see why section 12(1) of the Madhya Bharat Act should not, be considered as conferring on the assessee a right to see that the assessment made against him is, not altered to his prejudice after a particular date. That is a valuable right. The effect of section 52(1) of M.P. Sales Tax Act, as seen earlier is that all assessments, which includes reassessments should be in accordance with the repealed Act. The second part of that proviso says that subject to what has been provided in the first part of the proviso, anything done or any action taken including an order in the exercise of any of the powers conferred by or under the repealed Act, shall, in so far as it is not inconsistent with the provisions of the M.P. Sales Tax Act, 1959 be deemed to have been done in the exercise of powers conferred by or under that Act as if that Act were in force on the date on which such thing was done. There is undoubtedly a conflict between section 12(1) of the Madhya Bharat Act and section 39(2) of the M.P. Sales Tax Act, 1959. The former provision prohibits the Commissioner from revising an order which has been made more than two years previously and the latter provision permits him to revise the order till the expiry of three years from the date of the order sought to 'be revised. Therefore the Revenue cannot call into aid the second part of the proviso. The resulting position is: that, the governing provision would continue to be section 12 (1) of the Madhya Bharat Act. For the reasons mentioned above this appeal fails and the same is,dismissed. Respondent is ex parte. No costs. V.P.S. Appeal dismissed . [/INST]The respondent, who was the landlord under whom the appellant was a tenant, obtained a decree for eviction and damages against the appellant. The respondent filed an execution application on July 19, 1960. In answer to it the appellant flied objections by initiating proceedings under O. 21, r. 2(2) C.P.C. on September 3, 1960. In that application, the appellant alleged that there was a compromise between the parties on July 25, 1957 that in pursuance of the compromise he made various payments and that the last of the payments was made on June 16, 1960, and prayed for recording an adjustment of the decree. The trial court, however, held that as the compromise was entered into on July 25, 1957 the period of limitation for filing the application would start from that date, and since the application was filed beyond 90 days from that date, it was barred by limitation. The trial court dismissed the application on that sole ground, without investigating into the truth of the compromise or the payments. On appeal, the appellate court accepted the contention of the appellant that if he was able to establish that be bad made the last payment on June 16, 1960 the period of limitation of three months for filing an application under O. 21, r. 2 would begin to run only from that date and that his application would be in time. The appellate court therefore set aside the order of the trial court and remanded the proceedings for investigation into facts, namely, whether the compromise and the payments alleged to have been made by the appellant on the basis of the compromise and particularly the payment said to have been made on June 16, 1960, were true. After remand, the trial court accepted the plea of the appellant regarding the truth of the compromise as well as the payments said to have been made by him, including the payment of June 16, 1960, held that the application filed was within time, and ordered 'full adjustment and satisfaction of the decree. On appeal, the findings of the trial court were confirmed and the anneal was dismissed, in second appeal, the High Court accepted the findings on the questions of compromise and payments but held that as the appellant had not claimed to have made the payments in compliance with O. 21, r. 1, C.P.C., as amended and in force in Allahabad, it was not open to the appellant to ask for recording adjustment of the decree, and dismissed the application of the appellant filed under O. 21, r. 2. Allowing the appeal to this Court, HELD: In view of the decision of the appellate court when remanding the matter, it was not open to the respondent to raise the objection ,either of limitation or that the payments had not been made as per O. 21, T. 1, C.P.C. The parties and the courts had proceeded an the basis that 837 the entire question related to a controversy in respect of execution, discharge or satisfaction of the decree. Under section 47(2) C.P.C., the Court has power to treat the said proceeding as a suit. Under O. 41, r. 23, an appellant court has power to remand a proceeding when a suit has been disposed of on a preliminary point; and under O. 43, r. 1 (u) C.P.C. an appeal lies against an order remanding the case where an appeal would lie against the decree of the appellate court. The respondent should have filed an appeal against the order of the remand, and the consequence of his omission to file such an appeal is that under section 105(2), C.P.C., the decision of the appellate court, while remanding the matter, regarding the date from which the period of limitation is to commence, namely June 16, 1960, if payment on that date was established by the appellant, was final and binding on the parties. The High Court when dealing with the matter should have given due effect to the decision given in the order of remand and should have held that the respondent was precluded from raising either the plea of limitation or that it was not open to the appellant to rely upon the payments not made in accordance with O. 21, r. 1, C.P.C., as in force in Allahabad. The High Court had not differed on the concurrent findings recorded on facts in favour of the appellant and therefore, interference with the decision of the two subordinate courts was erroneous in law. [843 F G. 844 C H; 845 A E] </s>
<s>[INST] Summarize the judgement: Criminal Appeal Nos. 259 64 of 1987. From the Judgment and Order dated 20.4. 1987 of the Designated Court, Ahmedabad in Terrorist Criminal Case No. 3 of 1985 with Terrorist Criminal Case Nos. 13 of 1985 and 6 of 1986. T.U. Mehta, A.S, Quereshi, Salman Khurshid, S.H. Kureshi, Mrs. Vimla Sinha, Ifshad Ahmed, Imtiaz Ahmed, Gopal Singh and S.M. Qureshi for the Appellants. P.S. Poti, M.N. Shroff, Anip Sachthey, Bimal Roy, Kai lash Vasdev, Ms. A. Subhashini, Chava Badri Nath Babu, Girish Chandra, Biman Jad and Ashish Verma for the Respond ents. The Judgment of the Court was delivered by R.M. SAHAI, J. Tragic trauma of ghastly, in human and beastly behaviour of one community against another depicted for weeks and weeks, in this criminal appeal, forcefully, at times, emotionally still hangs heavily. What a tragedy? Eight human lives roasted alive. Five in waiting for gal lows. Neighbours residing peacefully for generations sharing common happiness and sorrow even playing cricket together suddenly went mad. Blood thirsty for each other. Burning, looting and killing became order of the day. Even ladies attempted to prevent fire brigade from extinguishing fire. How pathetic and sad. Still sadder was the manner in which the machinery of law moved. From accusation in the charge sheet that accused were part of unlawful assembly of 1500 to 2(100 the number came down to 150 to 200 in evidence and the charge was framed against sixty three under Terrorist and Disruptive Activities (Prevention) Act, 1985 (in brief TADA Act) and various offences including Section 302 under Indian Penal Code. Even from that fifty six were acquitted either because there was no evidence, and if there was evidence against some it was not sufficient to warrant their conviction. What an affront to fundamental rights and human dignity. Liberty and freedom of these persons was in chains for more than a year. For no reason. One even died in confinement. All this generated a little emotion during submissions. But sentiments or emotions, howsoever, strong are neither relevant nor have any place in a court of law. Acquittal or conviction depends on proof 111 or otherwise of the criminological chain which invariably comprises of why, where, when, how and who. Each knot of the chain has to be proved, beyond shadow of doubt to bring home the guilt. Any crack or loosening in it weakens the prosecu tion. Each link, must be so consistent that the, only con clusion which must follow is that the accused is guilty. Although guilty should not escape. But on reliable evidence truthful witnesses and honest and fair investigation. No free man should be amerced by framing or to assuage feelings as it is fatal to human dignity and destructive of social, ethical and legal norm. Heniousness of crime or cruelty in its execution howsoever abhorring and hateful cannot reflect in deciding the guilt. Misgiving, also, prevailed about appreciation of evi dence. Without adverting to submissions suffice it to men tion that credibility of witnesses has to be measured with same yardstick, whether, it is an ordinary crime or a crime emanating due to communal frenzy. Law does not make any distinction either in leading of evidence or in its assess ment. Rule is one and only one namely, if depositions are honest and true: Whether the witnesses, who claim to have seen the incident in this case, withstand this test is the issue? But before that some legal and general questions touching upon veracity of prosecution version may be dis posed of. Trial under TADA Act was assailed, both, because of the Act being ultra vires of the fundamental right guaranteed under Constitution and absence of circumstances justifying its extension to the State of Gujarat. For the latter no foundation was laid therefore it was not permitted to be raised. And the former is awaiting adjudication before Constitution Bench from where this appeal was got delinked. Invoking of provisions of TADA Act, in communal riot, was attacked and it was submitted that a combined reading of Sections 3 and 4 with explanation indicated that the Legis lative intention was to confine the applicability of the Act to secessionist or insurgency activities against the State and not to ordinary crimes for which provisions exist in the Penal Code. Since the Constitution Bench is already ceased of the matter we are of the opinion that these aspects too can, well be raised there. From acquittal of thirty seven accused for lack of evidence even though they were arrested in rounding off operation by the military, after cordoning off the area immediately after the incident, it was vehemently argued that it demonstrated that prosecution was not fair and there was deliberated attempt to rope in appellants who were well to do persons of the community not because they had any hand in 112 the crime but for extraneous reasons. It was emphasised that if persons arrested on the spot residing in the same locali ty could not be identified nor any evidence could be pro duced against them then it was clear that the case against the appellants was also not trustworthy and they were impli cated either because of enemity or for oblique motive. Although the argument did appear to be attractive on the first flush but it was dispelled soon by the learned counsel appearing for the State who submitted that the mistake in charge sheeting those accused along with appellant was bloated out of proportion. According to him the incident for which the appellants have been convicted and sentenced was part of a different transaction, although it took place on the same day, than the incident in which thirty seven per sons were rounded off. The learned counsel explained with help of Colonel Sudhakar PW 21 's statement and, in our opinion, rightly, that these arrests were made in conse quence of action taken by the military, on a different mob, as it included many ladies who did not form part of earlier mob, while attempting to bring situation under control after the incident. Therefore, it is not possible to draw any adverse inference against prosecution on this score. Time, place, background and manner in which dastardly crime was committed on 9th June, 1985 in broad daylight at 2.30 p.m. was by and large not in dispute. What started as agitation in February 1985 against government policy of reservation, in the State of Ahmedabad, turned into communal riots between Hindus and Muslims in March, 1985 which went on, continuously, for long spell resulting in enormous loss of life and property of both the communities. Situation deteriorated so much that military had to be called and stationed in sensitive areas, in April, 1985, including Dhabgarwad, a large area with Hindus and Muslims residing at places side by side and others exclusively. In March 1985 riot of shocking magnitude had taken place in this area resulting in mass exodus of Dabgars, a Hindu community, who earned their livelihood by manufacturing musical instruments such as drums and also umbrellas and kites. When calm was partially restored, due to the military being stationed, some of them returned and some used to visit their houses in day time to look after their property or business. Maniben, a dabgar, whose one of the daughters had married a muslim but was having strained relations with him, continued to live in her house either because she had no other place to go or she was confident that she shall not be harmed. Howev er despite stationing of military incidents went on whenever or wherever least opportunity was available with the result that curfew was clamped, continuously, in the area from 7th June, 1985. As ill luck would have it the military stationed in 113 the area left for some other place at about 1.30 p.m. on 9th June, 1985. Taking advantage of the vulnerability, due to absence of military. members of minority community converged from two sides and when they intermingled in the corner somewhere near the house of Maniben or electric power sub station they indulged in most cowardly and shameful act of pushing open the door of her house setting fire to it and then chaining it from outside resulting in death of the lady, her two daughters. four grand children and son of a neighbour. Next house set ablaze was of Navin and then many others. Prosecution version can thus be divided in three parts one, entry of mob from two sides one from Magadom Pole and other kalupur Panchpatti shouting 'kill ' 'cut ' pelting stones, throwing acid bulbs and flambeaus on houses of Hindus while approaching towards Nani Ali Pole. The second was meeting of the two groups on the corner of Nani Ali Pole and then pushing open the door of Maniben 's house by five appellants armed with burning flambeau, iron pipe, stick, kerosene and bottle of petrol sprinkling of kerosene or petrol inside the house setting it ablaze then coming out of the house closing and shutting the door and chaining it from outside. The third was entry of appellants thereafter in the house of Navin setting it on fire and then entering in Nani Ali Pole with other members of mob and attacking houses of Kantilal, Kalidas and others. To prove it the prosecution examined twenty two witness es which were grouped by the trial judge in seven '. One and the main group consisted of Navin PW 1, Ambalal PW 8, Rati lal PW 9, and Kalidas PW 13. These were the witnesses who were 'said to have collected at the house of Ambalal from where they witnessed the occurrence and the participation of the appellants in it. The second group consisted of Kalidas PW 7, Ramanlal PW 10, Manchharam PW 12, who were said to have witnessed the incident from the house of Kalidas Chha ganlal. The third group consisted of Arun Kumar PW I 1, Jaswantlal PW 14, Dilip Kumar PW 17 and Sanmukhbhai PW 20, who were witnesses who are said to have arrived on hearing the shouts and commotion and witnessed the occurrence from near Dabgarwad Police gate. The other groups comprised of official witnesses. No witness was examined from any of the house situated on either side of road from where the two mobs entered or from any of the houses ,situated on the route through which the. mob passed before it reached/the comer of Nani Ali Pole to establish identity of accused. Mod which entered from Magadom Pole side was admitted by 114 Ambalal to have passed from,the front of his house. But he stated that he could not recognise anyone out of them. Appellants according to prosecution were in the mob which came from Kalupur Panchpatti. From the place from where the mob entered and to the corner of Nani Ali Pole the mob had to pass from a long route which is inhabited by houses on both sides but not one witness was produced from any of these house nor it was clearly brought out that inmates of all these houses were of minority community only. For the second group of witnesses who according to prosecution, saw the occurrence from the house top of Kanti Lal the Judge himself found that they were not in a position to see the road in front of house of Navin nor they were in a position to see the road in front of house of Maniben. He, therefore, observed that so far evidence of these witnesses in respect of attack by the mob on house of Maniben and Navin was concerned it could be relevant only generally that they set fire to the house. That is they could not be taken to be witnesses to prove that appellants broke open the door of Maniben 's house or set fire to it or chained it from outside. Nor is the evidence of third group of witnesses helpful as they had collected near the gate of police outpost. Distance between the gate and place of incident appears to be not less than 200 to 250 feet. Moreover they collected after the house of Maniben was set on fire. And it was admitted by PW 1, 8, 9 and 13 that the house of Navin, Kantilal, Ambalal could not be seen from police outpost. Their testimony thus cannot be taken into account for prov ing second part of the incident which resulted in death of inmates of Maniben 's house. Fate of the appellants, therefore, hangs on credibility of first group of witnesses. For its better appreciation it is necessary to set out topography of the place of the incident. From the map it is clear that the house of Maniben alongwith cluster of six other houses in surrounded on all sides by lanes and roads. Immediately above her house is house of Navin in North. Then there are two houses, parallel to each other, in south of her house. There are three more houses one after the other, in south. On west side of these is lane. So is a lane in north side after which there is electric sub station. On the left of substation there is gap and then there is one house and in its north is the house of Kantilal. On the east of Maniben 's house is the Dabgarwad road which runs somewhat in semi circle running from Kalupur Panchpatti situated in extreme south east towards west, taking turn from near Dabgarwad Police outpost in the South moving up towards 115 north east in angle tilting slightly from somewhere near cluster of houses round Maniben 's house and then proceeding towards Daryapur. House of Ambalal from where first set of witnesses had seen the occurrence is on this road from where the road tilts. It was admitted by PW 1 that house of Amba lal was obliquely situated. That is clear from the map as well. If from the two ends of the house, south and north facing the road straight lines are drawn towards west they shall pass through the lane in front of Navin 's house and power station respectively. Navin PW 1 whose house is situ ated in north of Maniben 's house admitted that electric sub station was in front of Ambalal 's house. Rati Lal PW 9 stated that on one side of the road was his house and on other of Ambalal. The house of Ambalal was thus above Mani ben 's house towards north east. To bring home the guilt the prosecution was required to prove the presence of witnesses, possibility of seeing the incident by them and identification of the appellants. Importance of first arose as due to riots in March 1985 there was mass exodus of Hindus from Dabgatwad. Therefore presence of these witnesses was attempted to be challenged as curfew having been imposed from 7th June and Col. Sudha kar, PW 21, incharge of Military stationed, in the area, having stated that no passes were issued to anyone it was not probable that any of the witnesses who claim to have seen the occurrence could have been present. But it appears to be devoid of any merit in view of unimpeachable testimony of the witnesses that they were present in their houses either because they had come earlier after restoration of partial calm or they had come on the day of occurrence to see their business and they were not prevented by the police even if they did not have any pass. The Judge had examined this aspect in detail and found from various circumstances, namely, restoration of partial calm due to presence of military personnel, death of eight persons in Maniben 's house including children, rescuing of many persons trapped in the house of Kalidas Chhagan which too was set on fire, admission by accused in their statements under section 313 Criminal Procedure Code etc. that presence of these witness es could not be doubted. Further if the Dabgads had not returned and the area was deserted then where was the occa sion for the mob to indulge in this vendetta. But mere presence of witnesses was not sufficient. More important was if they saw the incident. It assumed impor tance due to two reasons one because entire set of witnesses saw the incident from house of Ambalal which was situated upwards on the road towards north east as compared to the house of Maniben, and second that each 116 of the witnesses including Ambalal admitted that the exteri or of Maniben 's or even Navin 's house could not be seen from interior of the house. From the location of Ambalal 's house it is clear that one could see front of Maniben 's house only if he stood in front of it with face towards west south. But that is not the prosecution case. In fact prosecution is silent on this aspect. There is no whisper of the place from where the incident was seen by the witnesses. Was it front of house of Ambalal or inside or roof. Prosecution did not make any effort to remove this defect, obviously, because the investigation itself suffered from this flaw. Although the defence, also, did not make any attempt to get it clari fied, may be as a part of clever design as to from where these witnesses saw the occurrence but the disadvantage, if any is of prosecution. As stated earlier, this was very relevant as every witness admitted that from interior of Ambalal 's house the front of neither Maniben 's nor Navin 's house could be seen. Evidence thus regarding possibility of seeing the appellant from house of Ambalal is very shaky. The prosecution left an important lacuna. Unfortunately, each witness ' not only stated that he saw the appellants but they went on to describe with remarkable similarity in detail the article which each accused had in his hand: What is surprising is that accused had come from Kalupur side therefore they could not have been seen prior to their arrival near electric sub station before which everyone had entered house of Ambalal yet it is they and they alone who could be identified from the entire mob. PW 1 admitted that when he rushed from his house in fear the mob of Kalupur side was 40 or 50 feet away. He also admitted that he saw these accused for the first time from the house of Ambalal from a distance of 20 feet. No subsequent witness tried to explain it. Others had reached admittedly prior to Navin. Therefore, they could not have had occassion to see the Kalupur mob and if they saw then it must have been at a longer distance. Statement of PW 9, therefore, that the appellants were leading the mob is very difficult to be accepted. And if they saw for the first time from house of Ambalal, as stated by Navin and not improved upon by others, then it is very difficult to accept that they could have identified these appellants. PW 1 further admitted that if anyone stood with his face towards house of Maniben his then his back only could be visible from Ambalal 's house. That is clear from map as well. Therefore identification of accused from out of the mob even if they were known from before becomes highly doubtful. Out of persons who had collected at house of Ambalal only four were examined. It was admitted by every witness that the last to enter 117 the house were Navin and his father. Time of entry as given by witnesses was before mixing of the mob at the corner except Ambalal who stated that he came after the mob had collected. But that appears to be improbable as he was so scared that he ran with his father without even closing door of his house. And if he would have come out when mob had collected then it is difficult to believe that he would have been spared when his house too was burnt. Navin was the first witness to be examined. He stated, categorically, that when he entered the house of Ambalal it was closed from inside. It was attempted to be improved upon by Ambalal who stated that he kept the door ajar. But apart from normal human behaviour to close the door, for protection in the background of incident of March and fear generated by shout of 'kill ', and 'cut ', the other witnesses PW 9 and PW 13 too stated that the door was closed after entry of Navin. In any case the incident having taken place after entry of Navin and the door having been closed thereafter or even ajar or half closed it was necessary for prosecution to establish how did the witnesses see the occurrence when they admitted that the exterior of Maniben 's house or even of Navin could not be seen from inside of Ambalal 's house. The deficiency in prosecution version was attempted to be explained by the judge by adverting to evidence of PW 13 that Ambalal was opening and closing the door every now and then, therefore there was nothing improbable in witnesses having seen the occurrence. But the approach was, both, faulty and illegal. The conclusion by picking up isolated sentence without adverting to other parts of his statement where he admitted that after entry, of all, the doors of the house were closed, and, he was able to identify the appellants when they were effecting entry in house of Maniben and that he did not identify anyone out of the mob till he entered the house of Ambalal was contrary to rule of appreciation of evidence. Reading the whole statement together makes it consistent with evidence of other witnesses and leaves no room for doubt that opening and closing the door was resort ed to let in the persons who were reaching house of Ambalal due to fear of mob. And the exercise of opening and closing being over after entry of Navin seeing the mob or identify ing the accused in process of opening and closing was out of question. The finding of the judge, thus, that 'it is not as if that once the door of the house of Ambalal was closed it was never opened again at any time before these persons escaped from the house of Ambalal . . Therefore, even though the house of Ambalal is slightly obliquely situated as compared to the house of Maniben, it would not at all be difficult for these witnesses who had hid themselves in the house of Ambalal to have correctly identified the accused ', is not based on appreciation of evidence but on imagination. 118 Thus prosecution version suffered from serious infirmi ty. Its failure to bring on record evidence which could establish the possibility or even probability of the witness seeing the occurrence demolishes the whole structure. Since it was admitted to all the P.W.s that the exterior of Mani ben 's house could not be seen from interior of Ambalal 's house the prosecution could succeed in establishing its case only if it could prove that witnesses even then could have seen the occurrence. The only possibility of seeing the occurrence could be either from the road or standing in front of Ambalal 's shop or if there was any source from inside house of Ambalal. Evidence is lacking for either. Possibility of the first two alternative from where incident could have been seen is out of question. Witnesses were so terrified due to incident of March 1985 that they could not remain outside. PW 1 was so afraid that he rushed with his father without even closing door of his house. And if he would have come out when mob had reached house of Maniben was stated by Ambalal then there would have been every possibility of his being attacked. PW 9 and 13 too were afraid and rushed to Ambalal 's house. Every time these witnesses reached the door was opened and after entry it was closed. Last man to enter was Navin Chandra. No witness has stated that it was opened thereafter even once to look outside. How did then these witnesses see pushing open of Maniben 's door by appellants, setting fire to her house and chaining from outside. It was for prosecution to explain. It could not be taken for granted merely because each witness repeated that they knew the appellant from childhood and each of them was armed with articles mentioned in their hand. Ambala1 did state that the door of his shop had seven planks joined by hinges. But the prosecution stopped there. It did not dare to come out with the case that the witnesses saw from the crevices. Therefore the prosecution version suffered from a lacuna which was fatal. The doubt thus created if the witnesses saw the occurrence at a11 is strengthened by subsequent conduct and behaviour of these witnesses. The prosecution version was that the moment the mob moved from house of Maniben to house of Navin Chandra towards Nani Ali Pole side the witness came out of Ambalal 's house and dashed towards police gate where large number of persons had collected. But strangely not one of them told it to anyone present there or even to police personnel that Maniben 's house was burnt by appellants. It was against normal human behaviour as all the appellants were known from before. The incident had taken place due to communal frenzy. It is, therefore, difficult to believe that once these witnesses reached Dabgarwad Police gate they would not have shouted at top of their voice that the appellants known as Lallewallas had killed Maniben. What is further surprising is that they did not disclose the 119 names even to Manchharam whose son had been burnt alive in house of Maniben, nor to anyone in the hospital and kept their mouth sealed till 11th June 1985 and opened it for the first time in the Police Station when their statement was recorded giving graphic description step by step. Not only that the PW 9 and 13 broke down in cross examination and admitted that they had not seen the appellants setting fire to the house of either Maniben or Navin. They were saying so by inference as they had seen smoke coming from the houses. Thus witnesses and circumstances both are against prosecu tion version. Although there are contradiction on material aspects in statement of these witnesses and arguments were addressed on late recording of evidence, failure to produce the Chief Fire Officer, to establish if house was chained 'from outside, delay in preparation of panchnama of Mani ben 's house etc. but we consider it unnecessary to discuss them as the prosecution, in our opinion, failed to prove beyond shadow of doubt that the dreadful crime was committed by appellants. There is thus no option but to acquit these accused. We, however, hope that our order shall bring good sense to members of both the communities residing in Dabgar wad and make them realise the disaster which such senseless riots result in and they shall in future take steps to avoid recurrence of such incidents and try to resort to the atmos phere that prevailed before March 1985. For the reasons stated above all these appeals succeed and are allowed. Reference No. 1 of 1987 for confirmation of death sentence is discharged. The conviction and sentences of appellants herein under section 3(2)(i) of Terrorist and Disruptive Activities (Prevention) Act, 1985 read with section 34 of the Indian Penal Code, 302 Indian Penal Code read with sections 34,436/149, 449, 143 and 148 of Indian Penal Code are set aside. The conviction and sentence of Haroon S/o Kalubhai Laliwala, under section 3(2)(ii) of the TADA Act 1985 is also set aside. The appellants shall be set at liberty forthwith unless they are required in any other connection. R.S.S. Appeals allowed. [/INST]Respondents No. 2 to 4, regular employees of the appel lant Delhi Transport Corporation, were served with termina tion notices under Regulation 9(b) of the Delhi Road Trans port Authority (Conditions of Appointment & Service) Regula tions, 1952 by the appellant Corporation on the ground that they became inefficient in their work and started inciting other members not to perform their duties. The three respondents and their Union, respondent No. 1 filed writ petition in High Court, challenging the constitu tional validity of Regulation 9(b), which gave the manage ment right to terminate the services of an employee by giving one month 's notice or pay in lieu thereof. The Divi sion Bench of the High Court struck down the Regulation, holding that the Regulation gave absolute, unbridled and arbitrary powers to the management to terminate the services of any permanent or temporary employee, and such power was violative of Article 14 of the Constitution. Hence, the Corporation filed the appeal before this Court, by special leave. The validity of similar provisions in Para 522 of the Shastri Award, rule 1(i) of the District Board Rules 1926, Part V, Regulation 13 of Indian Airlines Employees ' Service Regulations, Regulation 48 of Air India Employees ' Service Regulations and also the clause in the contract of appoint ment in respect of employees of Zilla Parishad and the New India Assurance Company, also came up for consideration in the connected appeals and applications filed before this Court. It was contended on behalf of the Delhi Transport Corpo ration that there was sufficient guideline in Regulation 9(b) and the power of termination, properly read, would not be arbitrary or violative of Article 14 of the Constitution, that the Court would be entitled to obtain guidance from the preamble, the policy and the purpose of the Act and the power conferred under it and to see that the power was exercised only for that purpose, that even a term like 'public interest ' could be sufficient guidance in the matter of retirement of a government employee, and such a provision could be read into a statute even when it was not otherwise expressly there, that it was well settled that the Court would sustain the presumption of constitutionality by con sidering matters of common knowledge and to assume every state of facts which could be conceived and could even read down the section, if it became necessary to uphold the validity of the provision, that the underlying 144 rationale of this rule of interpretation, or the doctrine of reading down of a statute being that when a legislature, whose powers were not unlimited, enacted a statute, it was aware of its limitations, and in the absence of express intention or clear language to the contrary, it must be presumed to have implied into the statute the requisite limitations and conditions to immunise it from the virus of unconstitutionality, that since every legislature intended to act within its powers, in a limited Government, the legislature would attempt to function within its limited powers and it would not be expected to have intended to transgress its limits, that the guidelines for the exercise of the power of termination simpliciter under Regulation 9(b) could be found in the statutory provisions of the 1950 Act under which the regulations had been framed, the pream ble; Sections 19, 20 and 53, the context of Regulation 9(b) read with Regulations 9(a) and 15, that even for the exer cise of this power, reasons could be recorded although they need not be communicated which would ensure a check on the arbitrary exercise of power and effective judicial review in a given case, ensuring efficient running of services and in public interest and the regulations in question were paral lel to, but not identical with, the exceptions carved out under proviso to Article 311(2), that even the power of termination simipliciter under Regulation 9(b) could only be exercised in circumstances other than those in Regulation 9(a), i.e. not where the foundation of the order was 'mis conduct ', the exercise of such power could only be for purposes germane and relevant to the statute, that the principles of natural justice or holding of an enquiry is neither a universal principle of justice nor inflexible dogma and the principles of natural justice were not incapa ble of exclusion in a given situation, if importing the right to be heard has the effect of paralysing the adminis trative process or the need for promptitude or the urgency of the situation so demands, natural justice could be avoided; that the words "where it is not reasonably prac ticable to hold an enquiry" may be imported into the regula tion, that where termination took place by the exclusion of audi alteram partem rule in circumstances which were circum scribed and coupled with the safeguard of recording of reasons which were germane and relevant, then the termina tion would not render the regulation unreasonable or arbi trary, and if the regulation was read in this manner it could not be said that the power was uncanalised or unguid ed, that under ordinary law of "master and servant" the Corporation was empowered by the Contract of Service to terminate the services of its employees in terms thereof; the Declaration in Brojo Nath 's case that such a contract was void under section 23 of the Indian Contract Act or opposed to public policy offending the Fundamental Rights and the Directive Principles was not sound in law; as a master, the Corporation had unbridled right 145 to terminate the contract in the interests of efficient functioning of the Corporation or to maintain discipline among its employees, and if the termination, was found to be wrongful, the only remedy available to the employees was to claim damages for wrongful termination but not a declaration as was granted in Brojo Nath 's case. On behalf of the workmen/intervenors, it was submitted that provision of any rule that service would be liable to termination on notice for the period prescribed therein contravened Article 14 of the Constitution, as arbitrary and uncontrolled power was left in the authority to select at its will any person against whom action would be taken; that Articles 14, 19 and 21 were inter related and Article 21 did not exclude Article 19 and even if there was a law providing a procedure for depriving a person of personal liberty and there was, consequently no infringement of fundamental right conferred by Article 21, such law in so far as it abridged or took away any fundamental right under Article 19 would have to meet the challenge of that Article, that violation of principle of natural justice by State action was viola tion of Article 14 which could be excluded only in excep tional circumstances, and, therefore, a clause which autho rised the employer to terminate the services of an employee, whose contract of service was for indefinite period or till the age of retirement, by serving notice, and which did not contain any guidance for the exercise of the power and without recording reasons for such termination, violated the fundamental rights guaranteed under Articles 14, 19(1)(g) and 21 and principles of natural justice and was void under Section 2(g) of the , and unforce able under Section 2(hi; that since audi alteram partem was a requirement of Article 14. and conferment of arbitrary power itself was contrary to Article 14, the rule in ques tion could not be sustained as valid; that the Constitution al guarantees under Articles 14 and 21 were for all persons and there could be no basis for making a distinction between 'workmen ' to whom the Industrial Disputes Act and other industrial laws applied and those who were outside their purview, and the law applicable to the former could only add to and not detract from the rights guaranteed by Part 111 of the Constitution; that the power to terminate the services of a person employed to serve indefinitely or till the age of retirement could be exercised only in cases of proved misconduct or exceptional circumstances having regard to the Constitutional guarantee available under Article 14, 19(1)(g) and 21 and unless the exceptional circumstances were spelt out, the power to terminate the services would cover both permissible and impermissible grounds rendering it wholly invalid, particularly because, the requirement of audi alteram partem which was a part of the guarantee of 146 Article 14 was sought to be excluded, and there could be no guidance available in the body of the law itself, since the purpose for which an undertaking was established and the provisions dealing with the same in the law could provide no guidance regarding exceptional circumstances under which alone the power could be exercised, that the question in volved, in the instant cases was not the exercise of power which an employer possessed to terminate the services of his employee, but the extent of that power; that provisions of Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952, could not be rendered constitutional by reading the require ment of recording reasons and confining it to cases where it was not reasonably practicable to hold an enquiry and read ing it down further as being applicable to only exceptional cases would not be permissible construction and proper; that the Regulation conferred arbitrary power of leaving it to the DTC Management to pick and choose, either to hold an enquiry or terminate the services for the same misconduct and there was nothing in the provisions of the Act or the regulations from which the Management could find any guid ance and, therefore, in order to conform to the constitu tional guarantees contained in Articles 14, 19(1)(g) and 21, the regulation would have to make a distinction between cases where services were sought to be terminated for mis conduct and cases of termination on grounds other than what would constitute misconduct; that regulation 9(b) deliber ately conferred wide power of termination of service without giving reasonable opportunity to an employee even if he was regular or permanent employee, in addition to regulation 15 which provided for dismissal or removal after a disciplinary enquiry, thus, the intention of the regulation making au thority was clear and unambiguous; the provision was not capable of two interpretations, and consequently, the ques tion of reading down did not arise, and reading down in the instant cases involved not interpretation of any single word in regulation 9(b) but adding a whole clause to it, which amounted to rewriting the provisions, which courts had refused to make up for the omission of the legislature, and would inevitably drain out Article 14 of its vitality, and the right to equality which was regarded as a basic feature of the Constitution, and subject permanent employees of the DTC to a tremendous sense of insecurity which is against the philosophy and scheme of the Constitution, that unless the provision of the Constitution itself excluded the principles of natural justice, they continued to be applicable as an integral part of the right to equality guaranteed by the Constitution, that as the employees of the DTC were not Government employees, Article 311(2) was not applicable, and Article 14 fully applied to them, including the principles of natural justice. 147 On behalf of the Indian Airlines Corporation and the Air India, which filed intervention applications, it was submit ted that there had been distinction between the discharge simpliciter and dismissal from service by way of punishment, that the effect of the judgments of this Court in the Cen tral Inland Water 's case and West Bengal 's case was to take away the right of the employer to terminate the services of an employee by way of discharge simpliciter, that this Court had recognised the existence of the inherent right of an employer to terminate the services of an employee in terms of the contract of employment and also under the various labour enactments, that a plain reading of the amended Regulation 13 of the Indian Airlines Employees ' Regulations and a cumulative reading of the amended regulations 48 and 44 of the Air India Employees Service Regulations clearly established that the vice, if any, of arbitrariness had been completely removed and that the power to terminate had been vested with the Board of Directors, and not with any indi vidual, and sufficient guidelines made available to the Board to exercise the restricted and limited power available to the employer under these regulations. On behalf of another intervenor, New India Assurance Co., it was submitted that the Central Inland Water 's case was erroneous, insofar as it made complete negation of power of the employer to terminate and rendered the termination illegal even where the employer had made all the necessary investigation and had given hearing to the employee con cerned before making the order, and took in even private employment; therefore, the judgment of this Court should be read down and made applicable prospectively. In Civil Appeal No. 4073 of 1986 it was contended on behalf of the Bank employee whose services were terminated under para 522 of the Shastri Award, that mere failure of the employee to mention the loan taken by him from another branch of the Bank, which was repaid subsequently, had deprived him of his livelihood, and his services were termi nated without charge of 'misconduct ' and without an enquiry, and paragraph 522 of the Shastri Award gave no indication as to on what conditions this arbitrary uncontrolled power could be used to get rid of one or more permanent employees for "efficient management of Banks" on subjective opinions or suspicion not tested in enquiry into facts, and that this provision provided for "insecurity of tenure" for lakhs of permanent employees; Articles 14, 19(1)(g) and 21 and the integrated protection of these Fundamental Rights excluded the "doctrine of pleasure" and insisted on security of tenure "during good behaviour", and the right to livelihood could not be rendered precari 148 ous or reduced to a "glorious 'uncertainty", that no princi ple of interpretation permitted reading down a provision so as to make it into a different provision altogether differ ent from what was intended by the legislature or its dele gate, and there could not be any reading down which was contrary to the principles of interpretation; that if two provisions existed, firstly to remove from service after holding an enquiry on a charge of 'misconduct ' and secondly, without serving a charge sheet or holding an enquiry, all provisions for holding enquiry would be rendered otiose and would be reduced to a mere redundancy, that the Court had a duty to correct wrongs even if orders had been made which were later found to be violative of any fundamental right and to recall its orders to avoid injustice; that substan tive provision of para 522 could not be controlled or cur tailed effectively so as to confine its operation within narrow constitutional limits; that it was not the duty of the court to condone the constitutional delinquencies of those limited by the Constitution if they arrogated uncon trolled unconstitutional powers, which were neither neces sary nor germane for supposed efficiency of services in the Banks as a business enterprise, and that in a system gov erned by rule of law, discretion when conferred upon execu tive authorities must be confined within clearly defined limits. In Civil Appeal No. I 115 of 1976, the appellant employ ee of the Zila Parishad contended that his services were terminated on account of the vindictiveness of some of the employees of the respondent, and without enquiry. The em ployer submitted that the termination order was passed on the basis of the condition in the mutually agreed terms of contract of appointment, and resolution passed by the Board, and that Rule 1(i) of District Board Rules, 1926, Part V gave right to both the parties to terminate the employment on one month 's notice. On the questions (i) whether Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952, was arbitrary, illegal, discriminatory and violative of audi alteram partem and so constitutionally invalid and void; and (ii) whether the Regulation could be interpreted and read down in such a manner as to hold that it was not discriminatory, or arbi trary and did not confer unbriddled and uncanalised power on the authority to terminate the service of an employee, including a permanent employee, without any reason whatsoev er. Dismissing Civil Appeal No. 2876 of 1986 (appeal by the Delhi Transport Corporation), allowing Civil Appeal No. 1115 of 1976, and directing other matters to be placed before a Division Bench, in ac 149 cordance with the majority decision (per Ray, Sharma, Sawant and K. Ramaswamy, JJ.) this Court, HELD: Per Ray, J.: 1. I Regulation 9(b) of the Delhi Road Transport Author ity (Conditions of Appointment and Service) Regulations, 1952 which confers powers on the authority to terminate the services of a permanent and confirmed employee by issuing a notice terminating the services or by making payment in lieu of notice without assigning any reasons in the order and without giving any opportunity of hearing to the employee before passing the orders is wholly arbitrary, uncanalised and unrestricted violating principles of natural justice as well as Article 14 of the Constitution. There is no guide line in the Regulations or in the Delhi Road Transport Authority Act, 1950 as to when or in which cases and circum stances this power of termination by giving notice or pay in lieu thereof can be exercised. [264G, 285C] 1.2 Government Companies or Public Corporations which carry on trade and business activity of State being State instrumentalities, are State within the meaning of Article 12 of the Constitution and as such they are subject to the observance of fundamental rights embodied in Part 111 as well as to conform to the directive principles in Part IV of the Constitution. In other words, the Service Regulations or Rules framed by them are to be tested by the touchstone of Article 14 of the Constitution. Furthermore, the procedure prescribed by their Rules or Regulations must be reasonable, fair and just and not arbitrary, fanciful and unjust. [264H, 265A B] 1.3 The 'audi alteram partem ' rule which, in essence, enforces the equality clause in Article 14 of the Constitu tion is applicable not only to quasi judicial orders but to administrative orders affecting prejudicially the party in question unless the application of the rule has been ex pressly excluded by the Act or Regulation or Rule which is not the case here. Rules of natural justice do no supplant but supplement the Rules and Regulations. Moreover, the Rule of Law, which permeates the Constitution of India, demands that it has to be observed both substantially and procedurally. Rule of law posits that the power to be exercised in a manner which is just, fair and reasonable and not in an unreasonable, capricious or arbitrary manner leaving room for discrimination. [265D E] Regulation 9(b) does not expressly exclude the application of the 150 'audi alteram parterm ' rule and as such the order of termi nation of service of a permanent employee cannot be passed by simply issuing a month 's notice or pay in lieu thereof without recording any reason in the order and without giving any hearing to the employee to controvert the allegation on the basis of which the purported order is made. [265F] 1.4 Considering from all these aspects Regulation 9(b) is illegal and void, as it is arbitrary, discriminatory and without any guidelines for exercise of the power. It confers unbridled, uncanalised and arbitrary power on the authority to terminate the services of a permanent employee without recording any reasons and without conforming to the princi ples of natural justice. It is also void under Section 23 of the Contract Act, as being opposed to public policy and also ultra vires of Article 14 of the Constitution. [265E, 265B C, 266G] Moti Ram Deka Etc. vs General Manager, NEF Railways, Maligaon. Pandu, Etc., ; ; Parshotam Lal Dhingra vs Union of India, ; ; Shyam Lal vs The State of Uttar Pradesh and Anr., ; ; Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Ors., ; ; Jyoti Pershad vs The Administrator for the Union Territory of Delhi, ; ; State of Orissa vs Dr. (Miss) Binapani Devi & Ors., ; ; A.K. Kraipak of India vs Col. J.N. Sinha and Anr., [1971] 1 SCR 791; Air India Corporation vs V.A. Rebello & Ant., AIR 1972 S.C. 1343; The Workmen of Sudder Office Cinnamara vs The Manage ment, ; Tata Oil Mills Co. Ltd. vs Work men & Anr.; , ; Maneka Gandhi vs Union of India, [1978] 2 SCR 621; E.P. Royappa vs State of Tamil Nadu and Anr. ; ; Municipal Corporation of Greater Bombay vs Malvenkar & Ors., ; ; Manohar P. Kharkher and Anr. vs Raghuraj & Anr., ; 1. Michael & Anr. vs Johnaton Pumps India Ltd., ; ; Sukhdev Singh & Ors. vs Bhagat Ram Sardar Singh Raghu vanshi & Anr.; , ; S.S. Muley vs J.R.D. Tata & Ors., ; West Bengal State Electricity Board & Ors. vs Desh Bandhu Ghosh and Ors., [1985] 3 SCC 116; Workmen Of Hindustan Steel Ltd. and Anr. vs Hindustan Steel Ltd. and Ors., ; ; O.P. Bhandari vs Indian Tourism Development Corporation Ltd. & Ors. , ; ; Central Inland Water Transport Corporation Ltd. & Anr. vs Brojo Nath Ganguly & Anr., and Delhi Transport Undertaking vs Balbir Saran Goel, ; , referred to. 2.1 An Act can be declared to be valid wherein any term has been 151 used which per se seems to be without jurisdiction, but can be read ' down in order to make it constitutionally valid by separating and excluding the part which is invalid or by interpreting the word in such a fashion as to make it con stitutionally valid and within jurisdiction of the legisla ture which passed the said enactment, by reading down the provisions of the Act. This however, does not under any circumstances, mean that where the plain and literal meaning that follows from a bare reading of the provisions of the Act, Rule or Regulations that it confers arbitrary uncana lised, unbridled unrestricted power to terminate the serv ices of a permanent employee without recording any reasons for the same and without adhering to the principles of natural justice and equality before the law as envisaged in Article 14 of the Constitution, it can be read down to save the said provision from constitutional invalidity, by bring ing or adding words in the said legislation, such as saying that it implies that reasons for the order of termination have to be recorded. [271C F] 2.2 In interpreting the provisions of an Act, it is not permissible where the plain language of the provision gives a clear and unambiguous meaning that it can be interpreted by reading down and presuming certain expressions in order to save it from constitutional invalidity. Therefore, it is impossible to hold by reading down the provisions of Regula tion 9(b) framed under section 53 of the Delhi Road Trans port Act, 1950 read with Delhi Road Transport (Amendment) Act, 1971 that the said provision does not confer arbitrary, unguided, unrestricted and uncanalised power without any guidelines on the authority to terminate the services of an employee without conforming to the principles of natural justice and equality as envisaged in Article 14 of the Constitution of India. [271F H, 272A] Union of India & Anr. vs Tulsiram Patel & Ors., [1985] Supp. 2 SCR 131; Roshan Lal Tandon vs Union of India, ; ; Commissioner of Sales Tax, Madhya Pradesh, Indore & Ors. vs Radhakrishan & Ors. , ; ; In Re The Hindu Women 's Rights to Property Act, 1937, and the Hindu Women 's Rights to Property (Amendment) Act, 1938 and in Re a Special Reference under Section 213 of the Government of India Act, 1935, ; R.M.D. Chamarbaugwalla vs The Union of India; , ; R.L. Arora vs State of Uttar Pradesh & Ors. , ; and The Mysore State Electricity Board vs Bangalore Woollen, Cotton and Silk Mills Ltd. & Ors., [1963] Supp. 2 SCR 127, Jagaish Pandey vs The Chancellor of Bihar & Anr. , ; , referred to. H.N. Seervai: Constitutional Law of India, Third Edi tion, p. 119, referred to. 152 Per Sharma, J. 1.1 The rights of the parties in the present cases cannot be governed by the general principle of master and servant, and the management cannot have unrestricted and unqualified power of terminating the services of the employ ees. In the interest of efficiency of the public bodies, however, they should have the authority to terminate the employment of undesirable, inefficient, corrupt, indolent and disobedient employees, but it must be exercised fairly, objectively and independently; and the occasion for the exercise must be delimited with precision and clarity. Further, there should be adequate reason for the use of such a power, and a decision in this regard has to be taken in a manner which should show fairness, avoid arbitrariness and evoke credibility. And this is possible only when the law lays down detailed guidelines in unambiguous and precise terms so as to avoid the danger of misinterpretation of the situation. An element of uncertainty is likely to lead to grave and undesirable consequences. Clarity and precision are. therefore, essential for the guidelines. [272D F] 1.2 Regulation 9(b) of the Delhi Road Transport Authori ty (Condition of Appointment and Service) Regulation, 1952 cannot, therefore. be upheld for lack of adequate and appro priate guidelines. [272G] Per Saw,ant, J. 1.1. There is need to minimise the scope of the arbi trary use of power in all walks of life. It is inadvisable to depend on the good sense of the individuals. however high placed they may be. It is all the more improper and undesirable to expose the precious rights like the rights of life. liberty and property to the vagaries of the individual whims and fancies. It is trite to say that individuals are not and do not become wise because they occupy high seats of power, and good sense, circumspection and fairness do not go with the posts, however high they may be. There is only a complaisant presumption that those who occupy high posts have a high sense of responsibility. The presumption is neither legal nor rational. History does not support it and reality does not warrant it. In particular, in a society pledged to uphold the rule of law, it would be both unwise and impolitic to leave any aspect of its life to be governed by discretion when it can conveniently and easily be covered by the rule of law. [276E F] 1.2 Beyond the self deluding and self asserting right eous presumption, there is nothing to support the 'high authority ' theory. This 153 theory undoubtedly weighed with some authorities for some time in the past. But its unrealistic pretensions were soon noticed and it was buried without even so much as an ode to it. [278A B] 1.3 The employment under the public undertakings is a public employment and a public property. It is not only the undertakings but also the society which has a stake in their proper and efficient working. Both discipline and devotion are necessary for efficiency. To ensure both, the service conditions of those who work for them must be encouraging, certain and secured, and not vague and whimiscal. With capricious service conditions, both discipline and devotion are endangered, and efficiency is impaired. [276G H, 277A] 1.4 The right to life includes right to livelihood. The right to livelihood, therefore, cannot hang on to the fan cies of individuals in authority. The employment is not a bounty from them nor can its survival be at their mercy. Income is the foundation of many fundamental rights and when work is the sole source of income, the right to work becomes as much fundamental. Fundamental rights can ill afford to be consigned to the limb of undefined premises and uncertain applications. That will be a mockery of them. [277B] 1.5 Both the society and the individual employed, there fore, have an anxious interest in service conditions being well defined and explicit to the extent possible. The arbi trary rules which are also sometimes described as Henry VIII Rules, can have no place in any service conditions. [277C] Sukhdev Singh & Ors. vs Bhagatram Sardar Singh Raghu vanshi & Anr. ; , ; Maneka Gandhi vs Union of India, ; The Manager, Government Branch Press & Ant. vs D.R. Belliappa, ; ; The Manag ing Director, Uttar Pradesh Warehousing Corporation & Anr. vs Vinay Narayan Vajpayee; , ; A.L. Kalra vs The Project & Equipment Corporation of India Ltd., ; ; Workmen of Hindustan Steel Ltd. & Anr. vs Hindustan Steel Ltd. & Ors. , ; ; West Bengal State Electricity Board & Ors. vs Desh Bandhu Ghosh & Ors., [1985] 2 SCR 1014; Olga Tellis & Ors. vs Bombay Municipal Corpora tion & Ors. , [1985] Supp. 2 SCR 51; Union of India & Anr. vs Tulsiram Patel& Ors., [1985] Supp. 2 SCR 131; Cen tral Inland Water Transport Corporation Ltd. & Anr. vs Brojo Nath Ganguly & Anr. , ; O.P. Bhandari vs Indian Tourism Development Corporation Ltd. & Ors. ; ; N.C. Dalwadi vs State of Gujarat, [1987] 3 154 SCC 611; M.K. Agarwal vs Gurgaon Gramin Bank & Ors., [1987] Supp. SCC 643 and Daily Rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch etc. vs Union of India & Ors., , referred to. 2.1 The doctrine of reading down or of recasting the statute can be applied in limited situations. It is essen tially used, firstly, for saving a statute from being struck down on account of its unconstitutionality. It is an exten sion of the principle that when two interpretations are possible one rendering it constitutional and the other making it constitutional the former should be preferred. The unconstitutionality may spring from either the incompetence of the legislature to enact the statute or from its viola tion of any of the provisions of the Constitution. The second situation which summons its aid is where the provi sions of the statute are vague and ambiguous and it is possible to gather the intention of the legislature from the object of the statute, the context in which the provision occurs and the purpose for which it is made. However, when the provision is cast in a definite and unambiguous language and its intention is clear, it is not permissible either to mend or bend it even if such recasting is in accord with good reason and conscience. In such circumstances, it is not possible for the Court to remake the statute. Its only duty is to strike it down and leave it to the legislature if it so desires, to amend it. If the remaking of the statute by the courts is to lead to its distortion that course is to be scrupulously avoided. The doctrine can never be called into play where the statute requires extensive additions and deletions. Not only it is no part of the court 's duty to undertake such exercise, but it is beyond its jurisdiction to do so. [288F H, 289A B] Re Hindu Women 's Rights to Property Act, 1937, and the Hindu Women 's Rights to Property (Amendment) Act, 1938 etc., ; Nalinakhya Bysack vs Shyam Sunder Halder & Ors. , ; ; R.M.D. Chamarbaugwalla vs The Union of India, ; ; Kedar Nath Singh vs State of Bihar, [1962] Supp. 2 SCR 769; R.L Arora vs State of Uttar Pradesh & Ors., ; ; Jagdish Pandey vs The Chancellor, University of Bihar & Anr., [1968] I SCR 231; Shri Umed vs Raj Singh & Ors., [1975] I SCR 918; Mohd. Yunus Salim 's case; , ; Sunil Batra etc. vs Delhi Adminis tration & Ors.; , ; Excel Wear etc. vs Union of India & Ors. , ; ; Minerva Mills Ltd. & Ors. vs Union of India & Ors. , ; ; Union of India & Anr. etc. vs Tulsiram Patel etc. ; , and Elliott Ashton Welsh, 11 vs United States; , ; 308, referred to. 155 2.2 Therefore, the doctrine of reading down cannot be availed of for saving the regulation in the instant case. In the first instance, the regulation is a part of the service regulations of the employees made by the Delhi Road Trans port Authority in exercise of the powers conferred by sub section (1) read with clause (c) of sub section (2) of Section 53 of the Delhi Road Transport Act, 1950, whose object is to provide for the establishment and the regula tion of Road Transport Authority for the promotion of a co ordinated system of road transport in the State of Delhi. There is nothing either in the object of the service regula tions or in the object of the Act which has a bearing on Regulation 9(b). If anything the object of the Act would require framing of such service regulations as would ensure dedicated and diligent employees to run the undertaking. The dedication of the employees would pre suppose security of employment and not a constant hanging of the Democle 's sword over their head, and hence would in any case not bear the existence of such regulation. Secondly, the language of regulation is so crystal clear that no two interpretations are possible to be placed on it and hence it is not permis sible to read in it any meaning other than what is clearly sought to be conveyed by it. Thirdly, the context of the regulation makes it abundantly clear that it is meant to be a naked hire and fire rule and the authority has been vested with unguided and arbitrary power to dispense with the services of any category of the employees. Sub clause (a) of the Regulation mentions elaborately the circumstances in which the services of an employee can be terminated without any notice or pay in lieu of such notice. Sub clause (b) follows closely on its heel and states in clear language that when the termination is made due to reduction of estab lishment or in circumstances other than those mentioned in sub clause (a), one month 's notice or pay in lieu thereof is all that is necessary to be given for terminating an employ ee 's services. The intention of the rule making authority, therefore, is more than clear. It was to give an absolute free hand without any limitations whatsoever to terminate the services of any employee. Both the language of the regulation as well as the context in which it is cast leave no scope for reading into it any further provision. [289C H, 290A] 2.3 Moreover, reading in the rule circumstances under which alone the rule can be used, and reading it down to read in it words or expressions or provisions in order to save the legislation would not only distort the intention of the rule making authority but would also require extensive amendment of a very vague nature to it. The reading in the regulation of a provision that the concerned employees should be given a hearing with regard to his mis conduct will require that be should first be intimated of the mis conduct of which he is guilty. But 156 that kind of a situation is taken care of by sub clause (a) of the said regulation. There is. therefore. no need of a separate prevision for the same. on the other hand. the services of an employee are to be terminated on grounds other than those mentioned in sub clause (a), then those grounds being unknown to the employee, cannot be met by him even if he is given a hearing. The Court cannot read in the rule all circumstances where it is not possible or necessary to hold an enquiry. Such situations are capable of being formulated easily and conveniently at least in general terms as is done by the Constitution makers in the second proviso to Article 311( 2). The reading of such circumstances in the existing regulation would require its extensive recasting which is impermissible for the Court to do. There is no authority which supports such wide reading down of any provision of the statute or rule/regulation. Therefore the doctrine of reading down is singularly inapplicable to the present case. [281B, 290B, 291A F] 3. Clause (b) of Regulation 9 contains the much hated and abused rule of hire and fire reminiscent of the days of laissez faire and unrestrained freedom of contract. [274E] Per Ramaswamy. J 1. 1.1 The question of security of work is of most impor tance. If a person does not have the feeling that he belongs to an organisation engaged in promotion. he will not put forward his best effort to produce more. That sense of belonging arises only when he feels that he will not be turned out of employment the next day at the whim of the management. Therefore, as far as possible security of work should be assured the employees so that they may contribute to the maximisation of production. [300D E] Daily Rated Casual Labour vs Union of India, at 130 131, referred to. 1.2 A permanent employee of a statutory authority, corporation or instrumentality under Article 12 has a lien on the post till he attained superannuation or compulsorily retired or service is duly terminated in accordance with the procedure established by law. Security of tenure enures the benefit of pension on retirement. Dismissal, removal or termination of his/her service for inefficiency, corruption or other misconduct is by way of penalty. He/She has a right to security of tenure which is essential to inculcate a sense of belonging to the service or organisation and in volvement for maximum production or efficient 157 service. It is also a valuable right which is to be duly put an end to only as per valid law. [300A G] Roshan Lal Tandon vs Union of India, ; at 195 196; Calcutta Dock Labour Board vs Jarfar Imam, and Sirsi Municipality vs Cecelia Kom Francis Tal lis; , , referred to. 1.3 The right to life, a basic human right, assured by Article 21 of the Constitution comprehends some thing more than mere animal existence; it does not only mean physical existence, but includes basic human dignity. The right to public employment and its concomitant right to livelihood receive their succour and nourishment under the canopy of the protective umbrella of Articles 14, 16(1), 19(1)(g) and 21. [296A, 297B] Munn vs Illinois, ; and 154, referred to. Kharak Singh vs State of U.P., [1964] 1 SCR 332; Olga Tellis vs Bombay Municipal Corporation, [1985] 2 Suppl. SCR page 51 at 79; Menaka Gandhi vs Union of India, [1978] 2 SCR 621; State of Maharashtra vs Chander Bhan, and Board of Trustees, Port of Bombay vs Dilip Kumar; , , referred to. 1.4 The arbitrary, unbridled and naked power of wide discretion to dismiss a permanent employee without any guidelines or procedure would tend to defeat the constitu tional purpose of equality and allied purposes. Therefore, when the Constitution assures dignity of the individual and the right to livelihood, the exercise of power by the execu tive should be combined with adequate safeguards for the rights of the employees against any arbitrary and capricious use of those powers. Workmen of Hindustan Steels Ltd. vs Hindustan Steel Ltd. & Ors.; , and Francis Corallie vs U.T. of Delhi; , = ; , referred to. 1.5 It is well settled constitutional law that different Articles the Chapter on Fundamental Rights and the Directive Principles in Part IV of the Constitution must be read as an integral and incorporeal whole with possible overlapping with the subject matter of what is to be protected by its various provisions, particularly the Fundamental Rights. The fundamental rights, protected by Part III of the constitu tion, out of which Articles 14. 19 and 21 are the most frequently 158 invoked to test the validity of executive as well as legis lative actions when these actions are subjected to judicial scrutiny, are necessary means to develop one 's own person ality and to carve out one 's own life in the manner one likes best subject to reasonable restrictions imposed in the paramount interest of the society and to a just. fair and reasonable procedure. The effect of restriction or deprivation and not of the form adopted to deprive the right is the conclusive test. Thus, the right to a public employ ment is a constitutional right under Article 16(1). All matters relating to employment include the right to continue in service till the employee reaches superannuation or his service is duly terminated in accordance with just, fair and reasonable procedure prescribed under the provisions of the Constitution or the Rules made under proviso to Article 309 of the Constitution or the statutory provision or the Rules. regulations or instructions having statutory flavour made thereunder. But the relevant provisions must be conformable to the rights guaranteed in Parts III & IV of the Constitu tion. Article 21 guarantees the right to live which includes right to livelihood. to many. assured tenure of service is the source. [311G; 312G H, 313A B] R.C. Cooper vs Union of India, ; ; Minerva Mills Ltd. vs Union of India, and Union of India & Ant. vs Tulsiram Patel & 0rs. [1985] Suppl. 2 SCR 131 at 233 referred to. 1.6 Article 14 is the general principle while article 311(2) is a special provision applicable to all civil serv ices under the State. Article 311(2) embodies the principles of natural justice but proviso to clause (2) of article 311 excludes the operation of principles of natural justice engrafted in article 311(2) as an exception in the given cir cumstances enumerated in these clauses of the proviso to article 311(2) of the Constitution. Article 14 read with Arti cles 16(1) and 311 are to be harmoniously interpreted that the proviso to article 311(2) excludes the application of the principles of natural justice as an exception; and the applicability of Article 311(2) must, therefore, be circum scribed to the civil services and to be construed according ly. In respect of all other employees covered by Article 12 of the Constitution the dynamic role of Article 14 and other relevant Articles like 21 must be allowed to have full play without any inhibition. unless the statutory rules them selves, consistent with the mandate of Articles 14.16.19 and 21 provide, expressly, such an exception. [317F H, 315A] Union of India & Ant. vs Tulsiram Patel & Ors., [1985] Suppl. 2 SCR 131 at 233; A.K. Kraipak & Ors. etc. vs Union of India & Ors., and Union of India vs Col J.N. Sinha & Ors., [1971] 1 SCR 791, referred to. 159 1.7 Article 19(1)(g) empowers every citizen right to avocation or profession etc., which includes right to be continued in employment under the State unless the tenure is validly terminated and consistent with the scheme enshrined in the fundamental rights of the Constitution. Whenever there is arbitrariness in State action whether it be of the Legislature or of the Executive or of an authority under Article 12. Articles 14 and 21 spring into action and strike down such an action. The concept of reasonableness and non arbitrariness pervades the entire constitutional spectrum and is a golden thread which runs through the whole fabric of the Constitution. [315B D] 1.8 Thus, Article 14 read with 16(1) accords right to an equality or an equal treatment consistent with principles of natural justice. Any law made or action taken by the employ er, corporate statutory or instrumentality under Article 12 must act fairly and reasonably. Right. to fair treatment is an essential inbuilt of natural justice. Exercise of unbri dled and uncanalised discretionary power impinges upon the right of the citizen; vesting of discretion is no wrong provided it is exercised purposively, judiciously and with out prejudice. Wider the discretion, the greater the chances of abuse. Absolute discretion is destructive of freedom than of man 's inventions. Absolute discretion marks the beginning of the end of the liberty. The conferment of absolute power to dismiss a permanent employee is antithesis to justness or fair treatment. The exercise of discretionary power wide of mark would bread arbitrary, unreasonable or unfair actions and would not be consistent with reason and justice. [320B D] 1.9 The right to public employment which includes right to continued public employment till the employee is superan nuated as per rules or compulsorily retired or duly termi nated in accordance with the procedure established by law is an integral part of right to livelihood which in turn is an integral part of right to life assured by article 21 of the Constitution. Any procedure prescribed to deprive such a right to livelihood or continued employment must be just, fair and reasonable procedure and conformable to the mandate of Articles 14 and 21. In other words, an employee in a public employment also must not be arbitrarily, unjustly or unreasonably deprived of his/her livelihood which is ensured in continued employment till it is terminated in accordance with just, fair and reasonable procedure. Otherwise any law or rule in violation thereof is void. [320E F] A.K. Kraipak & Ors. etc. vs Union of India & Ors. , ; Union of India vs Col. J.N. Sinha and Anr., [1971] 1 SCR 791; 160 Fertilizer Corporation Kamgar Union (Regd.), Sindri & Ors. vs Union of India & Ors. , ; at 60 61; S.S. Muley vs J.R.D. Tata, ; Superin tendent of Post Office vs K. Vasayya, [1984] 3 Andhra Pra desh law Journal 9; West Bengal Electricity Board & Ors. vs D.B. Ghosh & Orb '., [1985] 2 SCR 1014; Workmen of Hindustan Steel Ltd. & Anr. vs Hindustan Steel Ltd. & Ors. , ; ; O.P. Bhandari vs Indian Tourism Development Corp. Ltd. & Ors. , ; ; A.P.S.R.T. Corp. vs Labour Court, AIR 1980 A.P. 132; R.M.D. Chamarbaugwalla vs State of Punjab, ; ; Kanhialal vs District Judge & Ors., ; M.K. Agarwal vs Gurgaon Gramin Bank & Ors., ; All Saints High School vs Government of A.P., ; & 938 e to f; Frank Anthoney Public School vs Union of India, ; & 269 b to e; Christian Medical College Hospital Employees ' Union & Anr. vs Christian Medical College Veilore Association & Ors., ; & 562; Kameshwar Prasad vs State of Bihar, [1962] Suppl. 3 SCR 369 and O.K. Ghosh vs EZX Joseph, [1963] Supp. 1 SCR 789, referred to. United States vs Samuel D. singleton; , , referred 1.10 Undoubtedly, efficiency of the administration and the discipline among the employees is very vital to the successful functioning of an institution or maximum produc tion of goods or proper maintenance of the services. Disci pline in that regard amongst the employees is its essential facet and bas to be maintained. The society is vitally interested in the due discharge of the duties by the govern ment employees or employees of corporate bodies or statutory authorities or instrumentalities under article 12 of the Con stitution. The government or corporate employees are, after all, paid from the public exchequer to which everyone contributes either by way of direct or indirect taxes. The employees are charged with public duty and they should perform their public duties with deep sense of responsibili ty. The collective responsibility of all the officers from top most to the lowest maximises the efficient public admin istration. They must, therefore, be held to have individual as well as collective responsibility in discharge of their duties faithfully honestly with full dedication and utmost devotion to duty. Equally the employees must also have a feeling that they have security of tenure. They should also have an involvement on their part in the organisation or institution, corporation, etc. They need assurance of serv ice and protection. The public interest and the public good demands that those who discharge their duties honestly, efficiently and 161 with a sense of devotion and dedication to duty should receive adequate protection and security of tenure. There fore, before depriving an employee of the means of liveli hood to himself and his dependents, i.e. job, the procedure prescribed for such deprivation must be just, fair and reasonable under articles 21 and 14 and when infringes article 19(1)(g) must be subject to imposing reasonable restrictions under article 19(5). [320G H, 321A D, 322D] 1.11 Conferment of power on a high rank officer is not always an assurance, in particular, when the moral standards are generally degenerated, that the power would be exercised objectively, reasonably, conscientiously, fairly and justly without inbuilt protection to an employee. Even officers who do their duty honestly and conscientiously are subject to great pressures and pulls. Therefore, the competing claims of the "public interest" as against "individual interest" of the employees are to be harmoniously blended so as to serve the societal need consistent with the constitutional scheme. [322D E] 1.12 Regulation 9(b) of the Delhi Road Transport (Condi tions of Appointment and Service) Regulations, 1952, is arbitrary, unjust, unfair and unreasonable offending Arti cles 14, 16(1), 19(1)(g) and 21 of the Constitution. It is also opposite to the public policy and thereby is void under Section 23 of the . [330G] 1.13 Under ordinary law of master and servant, whether the contract of service is for a fixed period or not, if it contains a provision for termination of service by notice, in terms thereof, it can be so determined and if the con tract finds no provision to give notice and the contract of service is not for a fixed period, law implies giving of a reasonable notice. Where no notice or a reasonable notice was issued. before terminating the contract. the termination of the contract of service is wrongful and the aggrieved employee is entitled at law to sue for damages. It is not disputed that the Delhi Road Transport Corporation is a statutory Corporation under the Delhi Road Transport Act and the Regulations are statutory and its employees are entitled to the fundamental rights enshrined in Part 111 of the Constitution. The Corporation or an instrumentality or other authority under Article 12 is not free, like an ordinary master (a private employer) to terminate the services of its employees at its whim or caprices or vagary. It is bound by the Act and the Regulation and paramount law of the land, the Constitution. [292G H; 293A B] 1.14 Any law, much less the provisions of Contract Act, which are inconsistent with the fundamental rights guaran teed in Part III of 162 the Constitution, are void by operation of Article 13 of the Constitution. The law of contract, like the legal system itself, involves a balance between competing sets of values. Freedom of contract emphasises the need for stability. certainty and predictability. But, important as values are. they are not absolute, and there comes a point when they face a serious challenge. 'This Court, as a court of consti tutional conscience enjoined and is jealously to project and uphold new values in establishing the egalitarian social order. As a court of constitutional functionary exercising equity jurisdiction, this Court would relieve the weaker parties from unconstitutional contractual obligations, unjust, unfair, oppressive and unconscionable rules or conditions when the citizen is really unable to meet on equal terms with the State. It is to find whether the citi zen, when entered into contracts of service, was in distress need or compelling circumstances to enter into contract on dotted lines or whether the citizen was in a position of either to "take it or leave it" and if it finds to be so, this Court would not shirk to avoid the contract by appro priate declaration. [302G, 303B, 304H, 305A B] Central Inland Water Transport Company Limited vs Brojo nath Ganguly, 1986 SC 1571, affirmed. Ramdas Vithaldas Durbar vs section Amarchand & 60., 43 Indian Appeals. 164 and V. Raghunadha Rao vs State of Andhra Pra desh, , referred to. Anson 's Law of Contract, p. 6 and 7 and Professor Guido Calabresi of Yale University Law School "Refractivity, Paramount power and Contractual Changes", 1961 62 71 Yale Law Journal, P 1191, referred to. 2.1 The golden rule of statutory construction is that the words and phrases or sentences should be interpreted according to the intent of the legislature that passed the Act. All the provisions should be read together. If the words of the statutes are in themselves precise and unambig uous, the words, or phrases or sentences themselves alone do, then no more can be necessary than to expound those words or phrases or sentences in their natural and ordinary sense. But if any doubt arises from the terms employed by the legislature, it is always safe means of collecting the intention, to call in aid the ground and cause of making the statute, and have recourse to the preamble, which is a key to open the minds of the makers of the statute and the mischiefs which the Act intends to redress. In determining the meaning of statute the first question to ask always is what is the natural or ordinary meaning of that 163 word or phrase in its context. It is only when that meaning leads to some result which cannot reasonably be supposed to have been the intent of the legislature, then it is proper to look for some other possible meaning and the court cannot go further. [323D G] 2.2 The Doctrine of Reading Down is, therefore, an internal aid to construe the word or phrase in a statute to give reasonable meaning, but not to detract, disort or emasculate the language so as to give the supposed purpose to avoid unconstitutionality. Thus, the object of reading down is to keep the operation of the statute within the purpose of the Act and constitutionally valid. [324E, 325B] 2.3 It cannot be accepted that the Courts, in the proc ess of interpretation of the Statute, would not make law but leave it to the legislature for necessary amendments. In an appropriate case, Judges would articulate the inarticulate major premise and would give life and force to a Statute by reading harmoniously all the provisions ironing out the creezes. The object is to elongate the purpose of the Act. [323B] 2.4 The Courts, though, have no power to amend the law by process of interpretation, but do have power to mend it so as to be in conformity with the intendment of the legis lature. Doctrine of reading down is one of the principles of interpretation of statute in that process. But when the offending language used by the legislature is clear, precise and unambiguous, violating the relevant provisions in the constitution, resort cannot be had to the doctrine of read ing down to blow life into the void law to save it from unconstitutionality or to confer jurisdiction on the legis lature. Similarly it cannot be taken aid of to emasculate the precise, explicit, clear and unambiguous language to confer arbitrary, unbridled and uncanalised power on an employer which is a negation to just, fair and reasonable procedure envisaged under Articles 14 and 21 of the Consti tution and to direct the authorities to record reasons, unknown or unintended procedure. [326H, 327A B] Elliott Ashton Walsh, H vs United States, ; ; Nalinakhya Bysack vs Shyam Sunder Haldar & Ors., ; at 544 45; United States vs Wunderlick, ; S.C. Jaisinghani vs Union of India, ; ; In re Hindu Women 's Right to Property Act, ; K.N. Singh vs State of Bihar, [1962] Suppl. 2 SCR 769; R.L. Arora vs State of U.P., ; ; Jagdish Pandev vs Chan cellor of the Bihar, ; Amritsar Municipality vs State of Punjab, ; ;Sunil Batra vs Delhi Admn., ; ; N.C. Dalwadi vs State of Gujarat, [1987] 3 164 SCC 611; Charanlal Sahu vs Union of India, [1989] Suppl. Scale 1 at p. 61; Delhi Transport Undertaking vs Balbir Saran Goel, ; Air India Corporation vs Rebellow; , and Municipal Corporation of Greater Bombay vs P.S. Malvankar, ; , re ferred to. Federal Steam Navigation Co. vs Department of Trade and Industry, at p. 100 and Saints High School, Hyderabad vs Govt. of A. P., ; , re ferred to. Craies Statute Law, 7th Ed. V, P. 64. 2.5 The language of Regulation 9(b) is not capable of two interpretations. This power is in addition to the normal power in Regulation 15 to conduct an enquiry into misconduct after giving reasonable opportunity. Thereby the legislative intention is manifest that it intended to confer such draco nian power couched in language of width which hangs like Damocles sword on the neck of the employee, keeping every employee on tenter hook under constant pressure of uncer tainty, precarious tenure at all times right from the date of appointment till date of superannuation. It equally enables the employer to pick and choose an employee at whim or vagary to terminate the service arbitrarily and capri ciously. Regulation 9(b), thereby deliberately conferred wide power of termination of services of the employee with out following the principles of audi alteram partem or even modicum of procedure of representation before terminating the services of permanent employee. [327E G] 2.6 No doubt, the power to take appropriate and expedi tious action to meet the exigencies of weeding out ineffi cient, corrupt, indolent officers or employees from service should be provided and preserved to the competent authority but any action taken without any modicum of reasonable procedure and prior opportunity always generates an un quenchable feeling that unfair treatment was meted out to the aggrieved employee. To prevent miscarriage of justice or to arrest a nursing grievance that arbitrary whimsical or capricious action was taken behind the back of an employee without opportunity, the law must provide a fair, just and reasonable procedure as is exigible in a given circumstance as adumbrated in proviso to article 311(2) of the Constitution. If an individual action is taken as per the procedure on its own facts its legality may be tested. But it would be no justification to confer power with wide discretion on any authority without any procedure which would not meet the test of justness, fairness and reasonable 165 ness envisaged under articles 14 and 21 of the Constitution. Therefore, conferment of power with wide discretion without any guidelines, without any just, fair or reasonable proce dure is constitutionally anathema to articles 14, 16(1), 19(1)(g) and 21 of the Constitution. Doctrine of reading down cannot be extended to such a situation. [328A C, 329B C] 2.7 In view of the march of law, made by Article 14 it is too late in the day to contend that the competent author ity would be vested with wide discretionary power without any proper guidelines or the procedure. When it is found that the legislative intention is unmistakably clear, unam biguous and specific, the preamble, the other rules and the circumstances could not be taken aid of in reading down the provisions of the rules or the regulations of the constitu tional scheme. [330F G] 3.1 The phrases "public policy", opposed to public policy, or "contrary to public policy" are incapable of precise definition. It is valued to meet the public good or the public interest. What is public good or in the public interest or what would be injurious or harmful to the public good or the public interest vary from time to time with the change of the circumstances. Therefore, in the absence of specific head of public policy which covers a case, then the court must in consonance with public conscience and in keeping with public good and public interest invent new public policy and declare such practice or rules that are derogatory to the constitution to be opposed to public policy. The rules which stem from the public policy must of necessity be laid to further the progress of the society, in particular when social change is to bring about an egalitar ian social order through rule of law. In deciding a case which may not be covered by authority, courts have before them the beacon light of the trinity of the Constitution viz., the preamble, Part III and Part IV and the play of legal light and shade must lead on the path of justice social, economic and political. Lacking precedent, the court can always be guided by that light and the guidance thus shed by the trinity of our Constitution. [308C D, 309G H, 310A] 3.2 Since Constitutions are the superior law of the land, and because one of their outstanding features is flexibility and capacity to meet changing conditions, con stitutional policy provides a valuable aid in determining the legitimate boundaries of statutory meaning. Thus public policy having its inception in Constitutions may accomplish either a restricted or extended interpretation of the liter al expression of a statute. A statute is always presumed to be constitutional and where necessary, a constitutional meaning will be inferred to preserve validity. Likewise, where a statute tends to extend or preserve a constitutional 166 principle, reference to analogous constitutional provisions may be of great value in shaping the statute to accord with the statutory aim or objective. Therefore, when the provi sions of an Act or Regulations or Rules are assailed as arbitrary, unjust, unreasonable, unconstitutional, public law element makes it incumbent to consider the validity thereof on the anvil of inter play of articles 14, 16(1), 19(1)(g) and 21 and of the inevitable effect of the provi sion challenged on the rights of a citizen and to find whether they are constitutionally valid. [310C D, 311E] 4. The absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based. In a system governed by rule of law, dis cretion, when conferred upon executive authorities, must be confined within defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any princi ple or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law. [328D E] 5. No doubt, it is open to the authorities to terminate the services of a temporary employee without holding an enquiry. But in view of the march of law made, viz., that it is not the form of the action but the substance of the order which is to be looked into, it is open to the Court to lift the veil and pierce the action challenged to find whether the said action is the foundation to impose punishment or is only a motive. The play of fair play is to secure justice procedural as well as substantive. The substance of the order, the effect thereof is to be looked into. [330C D] Shamsher Singh vs State of Punjab, , re ferred to. It is for concerned authorities to make appropriate rules or regulations and to take appropriate action even without resorting to elaborate enquiry needed consistent with the constitutional scheme. [331A] Workmen of Hindustan Steel Ltd. vs Hindustan Steel Ltd. & Ors. ; , , referred to. Ram Chander vs Union of India, , referred to. The ratio in Brojonath 's case was correctly laid down and requires no reconsideration. [331D] 167 Central Inland Water Transport Company Limited vs Brojo nath Ganguly, , affirmed. Per Mukharji, CJ., (Contra) 1. The constitutionality of the conferment of power to terminate services of a permanent employee without holding an enquiry is sustained by reading that the power must be exercised on reasons relevant for the efficient running of the services or performing of the job by the societies or the bodies. It should be done objectively, the reasons should be recorded, and the basis that it is not feasible or possible reasonably to hold any enquiry without disclosing the evidence which in the circumstances of the case would be hampering the running of the institution. The reasons though recorded, need not be communicated, it is only for the purpose of running of the institution. There should be factors which hamper running of the institution without the termination of the employment of the employee concerned at the particular time, either because he is a surplus or inefficient, disobedient and dangerous. [235C E] 2.1 The philosophy of the Indian Constitution, as it has evolved, from precedent to precedent, has broadened the horizons of the right of the employees and they have been assured security of tenures and ensured protection against arbitrariness and discrimination in discharge or termination of his employment. This is the basic concept of the evolu tion from the different angles of law of master and servant or in the evolution of employer and employee relationship. It is true that the law has traveled in different channels, government servants or servants or employees having status have to be differentiated from those whose relationships are guided by contractual obligations. However, the basic and fundamental question to be judged is, in what manner and to what extent, the employees of either of semi Government or statutory corporations or public undertakings who enjoy the rights, privileges, limitations and inhibitions of institu tions who come within the ambit of Article 12 of the Consti tution could be affected in their security of tenure by the employers consistent with the rights evolved over the years and rights emanating from the philosophy of the Constitution as at present understood and accepted. [229D G] 2.2 Efficiency of the administration of these undertak ings is very vital and relevant consideration. Production must continue, services must be maintained and run. Efficacy of the services can be manned only by the disciplined em ployees or workers. Discipline. decency and 168 order will have to be maintained. Employees should have sense of participation and involvement and necessarily sense of security in semipermanent or quasi permanent or permanent employment. There must be scope for encouragement for good work. In what manner and in what measure, this should be planned and ensured within the framework of the Constitution and, power mingled with obligations, and duties enjoined with rights, are matters of constitutional adjustment at any particular evolved stage of the philosophy of our Constitu tion. [230A C] 2.3 Arbitrary, whimsical or discriminatory action can flow or follow in some cases by the preponderance of these powers to terminate. The tact that the power is entrusted with a high ranking authority or body is not always a safe or sound insurance against misuse. At least, it does not always ensure against erosion of credibility in the exercise of the power in particular contingency. Yet discipline has to be maintained, efficiency of the institution has to be ensured. It has to be recognised that quick actions are very often necessary in running of an institution or public service or public utility and public concern. It is not always possible to have enquiry because disclosure is diffi cult; evidence is hesitant and difficult, often impossible. In those circumstances, the approach to the location of power, possession and exercise of which is essential for efficient running of the industries or services, has to be a matter both of balancing and adjustment, on which one can wager the salivation of rights and liberties of the employ ees concerned and the future of the industries or the serv ices involved. [330D F] 2.4 The power to terminate the employment of permanent employment must be there. Efficiency and expediency and the necessity of running an industry or service make it impera tive to have these powers. Power must, therefore, be with authorities to take decision quickly, objectively and inde pendently. Power must be assumed with certain conditions of duty. The preamble, the policy, purpose of the enacting provision delimit the occasions or the contingencies for the need for the exercise of the power and these should limit the occasions of exercise of such powers. The manner in which such exercise of power should be made should ensure fairness, avoid arbitrariness and mala fide and create credibility in the decisions arrived at or by exercise of the power. All these are essential to ensure that power is fairly exercised and there is fair play in action. Reasons good and sound, must control the exercise of power. [230G H, 231A] Thus, for the running of the industry or the service, effi ciently, 169 quickly and in a better manner or to avoid dead locks or inefficiency or friction, the vesting of the power in cir cumstances must be such that it will evoke credibility and confidence. Notice of hearing and opportunity in the form of an enquiry may or may not be given, yet arbitrariness and discrimination and acting whimsically must be avoided. These powers must, therefore, be so read that the powers can be exercised on reasons, which should be recorded, though need not always be communicated, and must be by authorities who are high ranking or senior enough and competent and are expected to act fairly, objectively and independently. The occasion for the use of power must be clearly circumscribed in the above limits. These must also circumscribe that the need for exercise of those powers without holding a detailed or prolonged enquiry is there. [231E, F G] Workmen of Hindustan Steel Ltd. & Anr. vs Hindustan Steel Ltd. & Ors. , ; ; West Bengal State Electricity Board and Others vs Desh Bandhu Ghosh and Oth ers, [1985] 3 SCC 116; Moti Ram Deka vs North East Frontier Railway, ; S.S. Muley vs J.R.D. Tata, ; Manohar P. Kharkhar vs Raghuraj, ; Central Inland Water Transport Corporation Limited and Anr. vs Brojo Nath Ganguly and Anr., ; Sukhdev Singh vs Bhagatram Sardar Singh Raghuvanshi, ; ; Union of India & Anr. vs Tulsi Ram PateI, [1985] Suppl. 2 SCR 131 at p. 166; Tata Oil Mills Co. Ltd. vs Workmen & Anr., ; at 130; L. Michael & Anr. vs M/s Johnston Pumps India Ltd.; , at 498; Delhi Transport Corporation Undertaking vs Balbir Saran Goel, ; at 764; Air India Corporation, Bombay vs V.A. Rebellow & Anr., ; ; Municipal Corpo ration of Greater Bombay vs P.S. Malvenkar & Ors., ; at page 1006; Roshan Lal Tandon vs Union of India, ; at 195 D E; Champak Lal Chiman Lal Shah vs The Union of India, at 204; Ram Gopal Chaturvedi vs State of M.P., ; at 475; Gheru Lal Parekh vs Mahadeodas Maiva & Others, [1959] Supp. 2 SCR 406 at 440; O.P. Bhandari vs I.T.D.C. & Ors., ; ; The Hindu Women 's Rights to Property Act, ; Fertilizer Corporation Kamgar Union (Regd.) Sindri and Others vs Union of India and Others, [1981] 2 SCR at 60 61; Ajay Hasia etc. vs Khalid Mujib Sehravardi & Ors. etc.; , at 100 102; A.V. Nachane & Anr. vs Union of India & Anr. , ; ; India Tobacco Co. Ltd. vs The Commercial Tax Officer, Bhavanipore & Ors., at 657; A.L. Kalra vs The Project and Equipment Corpora tion of India Ltd.; , at 664; Bandhua Mukti Morcha vs Union of India & Ors., [1984] 2 170 SCR 79 at 101; Hindustan Antibiotics Ltd. vs The Workmen & Ors. , ; at 669; The Collector of Customs, Madras vs Nathella Sampathu Chetty, ; at 825; Commissioner of Sales Tax, Madhya Pradesh vs Radhakrishan & Ors., (supra); Gurdev Singh Sidhu vs State of Punjab & Anr., ; at 592 593; U.P. State Electricity Board vs Hari Shankar Jain, ; A.R. Antulay vs R.S. Nayak and Anr., ; ; S.G. Jaisinghani vs Union of India and Ors., ; at p. 718 19 and Kesavananda Bharati vs State of Kerala, [1973] Supp. 1 SCR 1, referred to. A. Schroeder Music Publishing Co. Ltd. vs Macaulay, (formerly Instone), , referred to. Chitty on Contract, 46th Edition Vol. II, p. 808 or 25th Edition Vol. II p. 712 paragraph and Halsbury 's Law of England, 4th Edition Vol. No. 16 paras 607 and 608, referred to. 3.1 Courts have been tempted to read down in the path of judicial law making on the plea that legislature could not have intended to give powers to the authorities or employers which would be violative of fundamental rights of the per sons involved in the exercise of those powers and, there fore, should be attributed those powers on conditions which will only make these legal or valid. Our law making bodies are not law unto themselves and cannot create or make all laws. They can only confer powers or make laws for the conferment of powers on authorities which are legal and valid. Such powers conferred must conform to the constitu tional inhibitions. [232C D] 3.2 Legislation, both statutory and constitutional, is enacted from experience of evils. But its general language should not necessarily be confined to the form that the evil had taken place. Time works changes, brings into existence new conditions and purposes and new awareness of limita tions. Therefore, a principle to be valid must be capable of wider application than the mischief which gave it birth. This is particularly true of the constitutional construc tions. Constitutions are not ephemeral enactments designed to meet passing occasions, but designed to approach immor tality as nearly as human institutions can approach it. In the application of a Constitutional limitation or inhibi tion, the interpretation cannot be only of 'what has been ' but of 'what may be '. Therefore. in the interpretation of the provisions of an Act, where two constructions are possi ble, the one which leads towards constitutionality of the legislation would be preferred to that which has the effect of 171 destroying it. If the Courts do not read the conferment of power in the aforesaid manner, the power is liable to be struck down as bad. [233B D] 3.3 The Court must proceed on the premise that the law making authority intended to make a valid law to confer power validly or which will be valid. The freedom therefore, to search the spirit of the enactment or what is intended to obtain or to find the intention of parliament gives the Court the power to supplant and supplement the expressions used to say what was left unsaid. This is an important branch of judicial power, the concession of which if taken to the extreme is dangerous, but denial of that power would be ruinous and this is not contrary to the expressed inten tion of the legislature or the implied purpose of the legis lation. [234G H; 235A] 3.4 It has been said that if the legislature has mani fested a clear intention to exercise an unlimited power, it is impermissible to read down the amplitude of that power so as to make it limited. This cannot be agreed to. Our legis latures are limited by the constitutional inhibitions and it is made, that the Court should read their Acts and enact ments with the attribute that they know their limits and could not have intended to violate the Constitution. It is true that the Court should be loath to read down where there are clear, unambiguous and positive terms in a legislation and should proceed with a straight forward method of strik ing down such legislations. But where the statute is silent or not expressive or inarticulate, the Court must read down in the silence of the statute and in the inarticulation of its provisions, the Constitutional inhibitions and transmute the major inarticulate premise into a reality and read down the statute accordingly. [236H, 237A B] 3.5 The plain thrust of legislative enactment has to be found out in the inarticulate expressions and in the silence of the legislation. In doing so, to say what the legislature did not specifically say is not distortion to avert any constitutional collision. [237E] In the language of the relevant provisions of the instant cases, there is no intention of the legislature to flout the constitutional limitations. [237E] Elliot Ashto Welsh 11 vs United States; , , 26 Ed. 308, referred to. 3.6 It is not that the reading down is used for a purpose which is just the opposite which the legislature had intended. Legislature had not 172 intended arbitrary or uncontrolled or whimsical power. Indeed it considered. This is not the proper way to read that power in the Regulation 9(b). Para 522 of the Shastri Award, read properly, must be circumscribed with the condi tions indicated above as a necessary corollary or conse quence of that power. It is also not reading to the legisla ture conditions which were not there in the second proviso to Article 311(2) of the Constitution. [237H, 238A B] Union of India & Anr. vs Tulsiram Patel, [1985] Supp. 2 SCR 131, relied on. No doubt, absolute powers cannot be regulated without essential legislative policy, but in the instant cases properly read, absolute power was not there. Power that was only constitutionally valid, that power can be presumed to have been given and if that presumption is made, conditions indicated above inevitably attach. But these conditions are necessary corollary flowing from the conferment of the power of termination in a constitutional manner for the smooth, proper and efficient running of the industry. [238C, E] 3.7 In the circumstances power must be there, the power must be read down in the manner and to the extent indicated above, of terminating the services of permanent employees without holding any enquiry in the stated contingencies and this would be either by virtue of the silence of the provi sion indicating the contingencies of termination or by virtue of constitutional inhibitions. That reading would not violate the theory that judges should not make laws. [238F G] Shri Ram Krishna Dalmia vs Justice Tandolkar, ; at 299; Jyoti Prasad vs The Administrator for the Union Territory of Delhi, ; at 139; Union of India vs Col. J.N. Sinha & Anr., ; at 461; N.C. Dalwadi vs State of Gujarat, paragraphs 9 and 10 at page 619; Commissioner of Sales Tax, M.P., Indore & Ors. vs Radhakrishan & Ors. , ; at 257; Olga Tellis & Ors. etc. vs Bombay Municipal Corporation & Ors., [1985] Suppl. 2 SCR 51 at 89; R.M.D. Chamarbaugwalla vs Union of India; , at p. 935 and 938; Kedar Nath Singh vs State of Bihar, [1962] Supp. 2 SCR 769; R.L. Arora vs State of Uttar Pradesh, ; ; Jagdish Pandev vs The Chancellor, University of Bihar & Anr., ; , at pages 236 237; Sunil Batra vs Delhi Administration & Ors., ; ; Tinsukhia Electric Supply Co. Ltd. vs State of Assam & Ors., ; ; Charan Lal Sahu & Ors. vs Union of India, , at 173 pages 53 and 54, paras 101 as well as p. 61 para 114; Shah & Co. vs State of Maharashtra, ; at 477 78; M. Pentiah and Ors. vs Veera Mallappa and Ors., ; ; Bangalore Water Supply and Sewerage Board etc. vs A. Rajappa & Ors., ; ; Minerva Mills Ltd.& Ors., vs Union of India & Ors. , ; , at p. 239 and 259; Elliott Ashton Welsh, 11 vs United States, 26 Lawyers ' Edition 2nd, 308 at 327; Malinakhva Bysack vs Shyam Sunder Haldar & Ors., ; , at p. 544 545 and Municipal Committee, Amritsar & Anr. vs State of Punjab & ors. ; , , referred to. United States of America vs Edward A. Rumely, 97 Law yers Edition 770 at 775; Reg. vs Sadiers Co., ; , 460 and 463; Framamus vs Film Artists Association, at 542 and Seaford Court Estates, , referred to. H.M. Seervaid 'Constitutional Law of India ', 3rd Edn. 1 pages 119 120 and Lord Denning: "The discipline of Law", at p. 12, referred to. 3.8 Termination simpliciter under Regulation 9(b) of the Regulation 1952, Delhi Road Transport Authority (Conditions of Appointment and Services) or similar powers can be exer cised only in circumstances other than those in Regulation 9(a). The exercise of such powers can only be for purposes germane and relevant to the statute, viz., the employee is incompetent or unsuitable so as to make his continuance in the employment detrimental to the interest of the institu tion, or where the continuance of the employee is a grave security risk making his continuance detrimental to the interest of the Corporation and where because of the conduct of the employee, or there is lack of confidence in the employee which makes it necessary in the interest of the Corporation to immediately terminate the services of the employee etc., etc. Therefore, each case of conferment of power involved should be judged on the aforesaid basis. [236E G] 3.9 Having regard to the finality of the position of law and having regard to the theory that parties have ad justed their rights on the understanding of the law as it was, justice of the situation would be met if pending liti gations are examined and disposed of in the light of afore said principles. Where issues of damages or consequences of termination by virtue of exercise of the power are still pending adjudication in any forum and have been finally adjudicated, these should be re examined by the appropriate authorities before whom these issues 174 are pending, but previous terminations, where no lis is pending, will not be reopened. To that extent, the law will be prospective. [239D F] 4. This Court. under Article 141 of the Constitution, is enjoined to declare law. The expression 'declared ' is wider than the words 'found or made '. To declare is to announce opinion. Indeed, the latter involves the process. while the former expresses result. Interpretation, ascertainment and evolution are parts of the process, while that interpreted, ascertained or evolved is declared as a law. The law de clared by this Court is the law of the land. To deny this power to this Court on the basis of some outmoded theory that the Court only finds law but does not make it, is to make ineffective the powerful instrument of justice placed in the hands of the highest judiciary of this country. Therefore. there should be a more active and creative role for the courts in declaring what the law is. [240E G] 1. C. Golaknath & Ors. vs State of Punjab & Anr. , ; @ 811,813/84, referred to. </s>
<s>[INST] Summarize the judgementition (Civil) No. 873 of 1990. (Under Article 32 of the Constitiution of India) WITH Contempt Petition No. 6 of 1991. AND Civil Appeal Nos. 309 to 373 of 1992. R.K. Garg, Kapil Sibal, V. Lakshmi Narayanan, D.K. Garg and P. Mahale for the Petitioners. R.N. Narasimhamurthy, Kh. Nobin Singh and M. Veerappa for the Respondents. The Judgment of the Court was delivered by R.M. SAHAI, J. Teachers appointed temporarily for three months or less, by privately managed degree colleges receiving cent per cent grant in aid, controlled administratively and financially by the Educational Department of the State of Karnataka, seek regularisation of their services by invoking principle of equitable estoppel arising from implied assurance due to their continuance, as such, for years with a break of a day or two every three months. Another basis for direction to regularise is founded on denial of similar treatment by the State as has been extended to contract teachers and local teachers appointed in government or vocational colleges. Payment of fixed salary instead of regular emoluments for eight months in a year and that too for number of years is yet another grievance. Ad hoc appointments, a convenient way of entry usually from back door, at times even in disregard of rules and regulations, are comparatively recent innovation to the service jurisprudence. They are individual problem to begin with, become a family problem with passage of time and end with human problem in court of law. It is unjust and unfair to those who are lesser fortunate in society with little or no approach even though better qualified, more meritorious and well deserving. The infection is 401 widespread in government or semi government departments of State financed institutions. It arises either because the appointing authority resorts to it deliberately as a favour or to accommodate someone or for any extraneous reason ignoring the regular procedure provided for recruitment as a pretext under emergency measure or to avoid loss of work etc. Or the rules or circulars issued by the department itself empower the authority to do so as a stop gap arrangement. The former is an abuse of power. It is unpardonable. Even if it is found to have been resorted to as a genuine emergency measure the courts should be reluctant to grant indulgence. Latter gives rise to equities which have bothered courts every now and then. Malady appears to be widespread in educational institutions as provisions for temporary or ad hoc appointments have been exploited by the managements of private aided colleges to their advantage by filling it, on one hand, with persons of own choice, at times without following the procedure, and keeping the teachers exposed to threat of termination, on the other, with all evil consequences flowing out of it. Any institution run by State fund but managed privately is bound to suffer from such inherent drawbacks. In State of Karnataka it is basically State created problem due to defective rule and absence of any provsions to effectively deal with such a situation. What is surprising is that till today the State has not been able to bring out a comprehensive legislation on such an important aspect as education and the appointment, selection, promotion, transfer, payment of salary etc. of teachers is regulated by government orders issued from time to time. Since 1980 it is governed by an order issued by Educational and Youth Services Department of the State of Karnataka on 3rd October, 1981. Clause 5 of the Order reads as under: "Any appoinment for a period of three months or less in a College shall be made, subject to approval of the Director within one month from the date of appointment by the Management or such authority as the Management by Order, may specify in that behalf. Such temporary appointments may, however, be continued for a further period of not more than three months, with one day 's break when selection through the Selection Committee is likely to take time. The Director may, for reasons to be recorded in writing refuse approval for the said appointment and the services of the person so appointed shall be terminated forthwith. " Appointments for more than three months is to be by a regularly constituted selection committee under clause 4 of the order. But if is for three months or less than the appointment could be made by the 402 Management under clause 5 subject to approval by the Director. It could be continued for further period of three months if there was delay in regular appointment. But the direction to re appoint with one day 's break is not understandable. If the intention was to differentiate between appointments for more than three months and others it was a futile exercise. That had already been achieved by providing two different methods of selection one by Selection Committee and ohter by Management. Distinction between appointment against temporary and permanent vacancies are well known in service law. It was unnecessary to make it appear crude. If the purpose was to avoid any possible claim for regularisation by the temporary teachers then it was acting more like a private business house of narrow outlook than government of a welfare State. Such provisions cannot withstand the test of arbitrariness. That is why the High Court, while disposing of CMW 6232 of 1990 B.R. Parineeth & Ors. vs The State of Karnataka & Others, along with many other petitions by its order dated 3rd July, 1990, criticised such practice as pernicious. The rule making authority lost sight of fact that such policy was likely to give dominance to vested interests who leave no opportunity to exploit the educated youth who have to survive even at cost of one meal a day. That is apparent from continuance of these teachers for 8 to 10 years with sword of termination hanging on their head ready to strike every three months at the instance of either the management or the Director. Provision of stop gap appointments might have been well intended and may be necessary as well but their improper use results in abuse. And that is what has happened on a large scale. The helplessness expressed by the State in the counter affidavit that the managements went on continuing such teachers without holding regular selections despite orders of educational authorities may be true but not convincing. It sounds like surrender in favour of private managements. Another obnoxious part is the emoluments that have been paid to the temporary teachers. The order provides that the teacher shall be paid a fixed salary which is ten rupees less than the minimum payable to regular employee. This method of payment is again beyond comprehension. An appointment may be temporary or permanent but the nature of work being same and the temporary appointment may be due to exigency of service, non availability of permanent vacancy or as stop gap arrangement till the regular selection is completed, yet there can be no justification for paying a teacher, so appointed a fixed salary by adopting a different method of payment than a regular teacher. Fixation of such emoluments is arbitrary and violative of Article 14 of the Constitution. The evil inherent in it is that apart from the teachers being at the beck and call of the management are in danger of being exploited as has been done by the management 403 committees of State of Karnataka who have utilized the services of these teachers for 8 to 10 years by paying a meagre salary when probably during this period if they would have been paid according to the salary payable to a regular teacher they would have been getting much more. Payment of nearly eight months ' salary, by resorting to clause 5, and, that too fixed amount, for the same job which is performed by regular teachers is unfair and unjust. A temporary or ad hoc employee may not have a claim to become permanent without facing selection or being absorded in accordance with rules but no discrimination can be made for same job on basis of method of recruitment. Such injustice is abhorring to the constitutional scheme. While deprecating direction by the government to break service for a day or two and paying fixed salary to temporary employees we must condemn the practice of management of not making regular selection utmost within six months of occurrence of vacancy. Nor the helplessness of government can be appreciated as expressed in the counter affidavit that despite orders the management continued with it. If the government could not take effective measure either by superseding the management or stopping grant in aid then either it was working under pressure from Management of the private aided institutions or it was itself interested in continuing such unfortunate state of affairs. In either case the equities have been created because of doing of state itself, therefore, it should resolve it. One such method was adopted by the High Court in invididual petitions filed by the teachers by directing the Director of Education to hold selection. In pursuance of it some of the teachers have been regularised. But substantial number still remain due to State 's going back on its agreement before the court by creating obstacles in implementation of the order. Many of them who have have faced selection and have secured higher marks and are in zone of selection are being denied the benefit because it is claimed that such regularisation would be contrary to reservation policy of the State. The policy is under challenge in another proceedings in the Court. Without entering into validity of the policy which according to petitioner results in cent per cent reservation we are of opinion that such practice should be put an end to, therefore, following directions are necessary to be issued: (1) Provision in clause 5 of one day 's break in service is struck down as ultra vires. (2) Orders for payment of fixed salary to temporary teachers is declared invalid. But it shall operate prospectively. A teacher appointed temporarily shall be paid the salary that is admissible to any teacher appointed regularly. 404 (3) Any teacher appointed temporarily shall be continued till the purpose for which he has been appointed exhausts or if it is in waiting of regular selection then till such selection is made. (4) Management shall take steps, whenever necessary, to fill up permanent vacancies in accordance with rules. Delay in filling up the vacancies shall not entitle the management or Director to terminate the services of temporary teachers except for adequate reasons. But it shall entitle the government to take such steps including supersession of management or stopping grants in aid if permitted under law to compel the institutions to comply with the rules. So far these petitioners and teachers similarly situated are concerned, it could not be disputed that many of those teachers who appeared for selection in pursuance of the High Court order secured sufficiently high marks but they could not be regularised because the vacancies are said to be reserved. But what has been lost sight of is that petitioners are seeking regularisation on posts on which they have been working and not fresh appointments, therefore, they could not be denied benefit of the High Court 's order specially when no such difficulty was pointed out and it was on agreement by the respondents that the order was passed. No material has been brought on record to show that any action was taken prior to decision by the High Court against any institution for not following the reservation policy. To deny therefore the benefit of selection held on agreement by the respondents is being unjust to such selectees. Further the State of Karnataka appears to have been regularising services of adhoc teachers. Till now it has regularised services of contract lecturers, local candidates, University lecturers,Engineering colleges, lecturers etc. It may not furnish, any basis for petitioners to claim that the State may be directed to issue similar order regularsing services of teachers of privately managed colleges. All the same such policy decisions of government in favour of one or the other set of employees of sister department are bound to raise hopes and expectations in employees of other departments. That is why it is incumbent on governments to be more circumspect in taking such decisions. The petitioners may not be able to build up any challenge on discrimination as employees of government colleges and private colleges may not belong to the same class yet their claim cannot be negatived on the respondents ' stand in the counter affidavit that the regularisation of temporary teachers who have not faced selection shall impair educational standard without explaining the effect of regularisation of temporary teachers of University and even technical colleges. Such being the unfortunate state of affairs this Court is left with no option but to issue following directions to respondents for not honoring its com 405 mitments before the High court and acting contrary to the spirit of the order, and also due to failure of governemt in remaining vigilant against private management of the college by issuing timely directions and taking effective steps for enforcing the rules: (1) Services of such temporary teachers who have worked as such for three years, including the break till today shall not be terminated. They shall be absorbed as and when regular vacancies arise. (2) If regular selections have been made the governemt shall create additional posts to accommodate such selected candidates. (3) The teachers who have undergone the process of selection under the directions of the High Court and have been appointed because of the reservation policy of the Government be regularly appointed by creating additional posts. (4) From the date of judgment every temporary teacher shall be paid salary as is admissible to teachers appointed against permanent post. (5) Such teachers shall be continued in service even during vacations. For these reasons this petition succeeds and is allowed. The direction is issued to respondents in the terms indicated above. Civil Appeal Nos. 309 373 of 1992 arising out of SLP (Civil) Nos. 13131 95 of 1990 challenging the order of High Court in CMW 6232 of 1990 decided on 3rd July, 1990 is disposed of accordingly. Contempt Petition No. 6 of 1991 alleging violation of status quo order granted in W.P. (Civil) No. 873 of 1990 need not be decided. It is directed to be filed. The petitioners shall be entitled to their cost from the State of Karnataka. T.N.A. Petition allowed. [/INST]The Respondents landlords filed a suit for possession of the suit premises against the appellants on the ground of default in payment of rent, amongst other, The 7th Additional Small Causes Judge, dismissed the suit holding that the service of notice dated 7 8 1980 on the defendants terminating the tenancy was not proved, even though one out of the three acknowledgments due, had been received duly signed. As regards the question of default in payment of rent, the learned Judge took the view that the case did not fall under Section 12(3)(b) of the Act, as the defendants had paid Rs. 55,800 on 16.1.1984 and thereafter made regular payment of Rs. 600 every month. On appeal by the respondent landlords, the learned additional District Judge reversed the findings of the trial Court and decreed the suit. The learned Additional District Judge held that when the notices are sent by registered post, it is presumed to have been served and mere denial by the tenants had no value, unless they proved some extraordinary happenings or events which prevented following of usual course of business. On the question of default in payment of rent the learned Judge held that as the defendants did not deposit the entire arrears on the first date of hearing and did not deposit the further rent during the pendency of the appeal, they persistently committed defaults during the pendency of the suit and also the appeal. The appellants thereupon filed a writ petition in the High Court challenging the validity of the aforesaid order of the learned Additional District Judge. The High Court dismissed the writ petition and affirmed the order passed by the learned Additional District Judge. Hence this appeal by the appellants, after obtaining special leave. Dismissing the appeal, this Court, 228 HELD: The notice under Section 106 T.P. Act can be sent by post to the party who is intended to be bound by it. Thus the notice sent by registered post in the name of the defendant company who is the tenant is fully in accordance with the requirement of section 106 of the Transfer of Property Act.[232H 233A] The plaintiffs had sent a copy of the notice to all the three defendants by registered post. Three postal receipts Exhs. 52,53 and 54 have been filed in the present case Exh. 51, one acknowledgment receipt. As regards Exh. 51, the defendants No.2 has appeared in the witness box and has denied his signatures. However, it has not been shown that this acknowledgment receipt was related to which of the three notices sent vide postal receipts Exhs. 52,53 and 54. [231E F] The rebuttal, if any, made by defendant No.2 can be related only with regard to Exh. 51 for one notice but not with regard to all the three notices sent by registered post vide Exhs. 52 to 54.[232D] The service of notice shall have to be presumed so far as defendant company is concerned and there is no rebuttal to presumption by the defendant appellants. [232E] The finding recorded by the learned Additional District Judge that the defendants were defaulter in the payment of rent as full amount of rent was not paid or deposited on the first date of hearing and no rent was paid month by month during the pendency of the appeal could not be assailed. [233B] Green View Radio Service vs Laxmibai Ramji and Anr., , referred to. </s>
<s>[INST] Summarize the judgementAppeals Nos. 187 and 188 of 1953. Appeals under article 132 of the Constitution of India from the Judgment and Order, dated the 29th August, 1952, of the High Court of Judicature at Madras in Writ Petitions Nos. 21 and 41 of 1952. K.V. Venkatasubramania Iyer (A. N. Rangaswami and. section K. Aiyangar, with him) for the appellant. M. Seshachalapathi for the respondent. V.K. T. Chari, Advocate General of Madras (V. V. Raghavan, with him) for the intervener (State of Madras). T. R. Balakrishna lyer and Sardar Bahadur for the intervener (State of Travancore Cochin). Nittoor Sreenivasa Rao, Advocate General Of Mysore (Porus A. Mehta, with him) for the intervener (State of Mysore). Lal Narayan Sinha (B. K. P. Sinha, with him) for the intervener (State of Bihar). March 11. The Judgment of the Court was delivered by DAS J. These two appeals arise out of Writ Petitions Nos. 21 'and 41 of 1952, filed in the High Court of Judicature at Madras under article 226 questioning the validity of the Madras General Sales Tax Act (IX of 1939) and of the Turnover and Assessment Rules framed under that Act. 1119 The petitioners are tanners carrying, on business in Eluru, West Godawari District, which is now part of the newly created State of Andhra. They make large purchases of untanned hides and skins and after tanning them in their tanneries they export the tanned hides and skins or sell the same to local purchasers. In the High Court the appellants impugned the Act and the rules on the following grounds : I (a) The Provincial Legislature had no power under the Government of India Act of 1935 to enact a law imposing a tax on purchasers; (b) The liability to pay tax on sales is thrown on the purchaser not by the statute but by the rules. This is an unconstitutional delegation by the legislature of its functions to the executive and the imposition of ,the tax is accordingly illegal; (c) The Act has become void under article 14 of the Constitution, as it singles out for taxation purchasers in some trades and is, therefore, discriminatory; and (d) The rules framed under the Act are inconsistent with the provisions enacted in the body of the Act and are void. The High Court repelled each of the aforesaid grounds except that under item (d). It held that rule 16(5) was ultra vires in that it offended against section 5 (vi) of the Act and dismissed their applications. Hence the present appeals by the appellants under the certificate granted by the High Court that it was a fit case for appeal to this court. Learned advocate appearing in support of these appeals has not pressed the objection under item (b) but has insisted on the remaining grounds of objection. In our opinion the decisions of the High Court on those grounds are substantially well founded and correct. On the question of legislative competency the learned advocate drew our 'attention to entry 54 in List II of the Seventh Schedule to the Constitution of India and argued that this entry clearly indicated that entry 48 in List II of the Seventh Schedule to the Government of India Act, 1935; under which the 145 1120 impugned Act was passed, was much narrower in its scope and could not be read as authorise in a the making of a law with respect to taxes on the purchase of goods. This argument appears to us to be fallacious, for the intention of the Constituent Assembly as expressed in entry 54 in List II of the Seventh Schedule to the Constitution cannot be a guide for ascertaining the intention of a totally, different body, namely, the British Parliament, in enacting entry 48 in List 11 of the Seventh Schedule to the Government of India Act, 1935. Further, we agree with the High Court that entry 48 in List II of the Seventh Schedule to the Government of India Act, on a proper construction, was wide enough to cover a law imposing tax on the purchaser of goods as well and that the Constituent Assembly in entry 54 of List II in the Seventh Schedule to the Constitution accepted this liberal construction of the corresponding entry 48 and expressed in clearer language what was implicit in that corresponding entry. The next point urged by the learned advocate was founded on article 14 of the Constitution. The appellants ' grievance is that the impugned Act singles out for taxing purchasers of certain specified commodities only but leaves out purchasers of all other commodities. The principle underlying the equal protection clause of the Constitution has been dealt with and explained in Chiranjitlal Chowdhury vs The Union of India (1) and several subsequent cases and need not be reiterated. It is well,settled that the guarantee of equal protection of laws does not require that the same law should be made applicable to all persons. Article 14, it has been said, does not forbid classification for legislative purposes, provided that such classification is based on some differentia having a reasonable relation to the object and purpose of the law in question. As pointed out by the majority of the Bench which decided Chiranjitlal Chowdhury 's case, there is a strong presumption in favour of the validity of legislative classification and it is for those who challenge it as (1) [1950] S.C.R. 1121 unconstitutional to allege and prove beyond all doubt that the legislation arbitrarily discriminates between different persons similarly circumstanced. There is no material on the record before us to suggest that the purchasers of other commodities are similarly situated as the purchasers of hides and skins. The majority decision in Chiranjitlal Chowdhury 's case(1) clearly applies to the case before us and there is no getting away from the position that the appellants before us have not discharged the burden of proof that, according to the majority decision, was upon them to do. Lastly, the learned advocate urges that rule 16(5) clearly contravenes the provisions of section 5(vi) of the Act. This sub rule has been held to be ultra vires by, the High Court and, indeed, the learned Advocate General of Madras did not in the High Court, as before ,us, dispute that rule 16(5) was repugnant to section 5(vi). That sub rule, however, affects only unlicensed dealers and the appellants who are admittedly licensed dealers are not affected by that sub rule. Further, it has not been suggested before us that the appellants were ever called upon to pay any tax on purchase of hides or skins in respect of Which tax had been previously paid by some prior purchaser. That sub rule is clearly severable and cannot affect the validity of the rules which may otherwise be within the ambit of the Act. Our attention has not been drawn to any other infirmity in the rules. In the premises there is no substance in these appeals which must, therefore, be dismissed with costs. Appeals dismissed. Agent for the respondent and for the interveners, States of Madras, Mysore and Bihar: R. H. Dhebar. [/INST]In an appeal to this Court, the High Court 's view that on the admission of a petition under sections 433 and 439 of the for compulsory winding up of a company, the Court is bound forthwith to advertise the petition, was challenged. Held: A petition for winding up cannot be placed for hearing before the Court, unless the petition is advertised: that is clear from terms of r. 24(2) of the Companies (Court) Rules, 1959. But that is not to say that as soon as the petition is admitted, it must be advertised. If the petition is admitted, it is still open to the company to move the Court that in the interest of justice or to prevent abuse of the process of Court, the petition be not advertised. Such an application may be made where the Court has issued notice under the last clause of r. 96, and even when there is an unconditional admission of the petition for winding up. The power to entertain such an application of the company is inherent in the Court and r. 9 iterates that power. [432C F] In re. A. Company applied. Lord Krishna Sugar Mills Ltd., vs Smt. Abnash Kaur A.I.R. (1961) Punj. 505 approved. </s>
<s>[INST] Summarize the judgementAppeal No. 29 of 1966. Appeal from the judgment and order dated April 30, 1964 of the Patna High Court in M.J.C. No. 498 of 1963. B. C. Ghosh and K. K. Sinha, for the appellant. section Mustafi and A. K. Nag, for respondent No. 3 P. K. Chatterjee, for respondent No. 4. 233 The Judgment of the Court was delivered by Wanchoo, C. J. This is an appeal on a certificate granted by the Patna High Court and arises in the following circumstances. The appellant. Jagdish Pandey, joined as a lecturer in Ramakrishna College Madhubani in July 1948. His appointment was approved by the University in June 1949, and on September 23, 1951 he was confirmed as a lecturer in that College. In July 1961 the post of the Principal of Pandaul College, Pandaul fell vacant and was advertised. The appellant was one of the applicants and was appointed after interview as the Principal of the college on January 22, 1962. On January 24, 1962, the appellant 's appointment as Principal of the College was approved by the University. It appears that the appointment was challenged by a writ petition before the Patna Court, but that challenge failed on July 11, 1962, when the petition was dismissed. In the meantime, the Bihar Legislature passed the Bihar State Universities (University of Bihar, Bhagalpur and, Ranchi) (Amendment) Act, No. 13 of 1962 (hereinafter referred to as the Act) which came into force on April 21, 1962. Section 4 thereof was in the following terms: "Certain appointments, etc., of teachers of nonGovernment affiliated colleges to be subject to Chancellor 's orders Notwithstanding anything contained in the said Act or the Magadh University Act, 1961 (Bihar Act IV of 1962) or the statutes made thereunder, or the Bihar State Universities (University of Bihar, Bhagalpur and Ranchi) Ordinance, 1962, (Bihar Ordinance No. 1 of 1962) every appointment, dismissal, removal, termination of service or reduction in rank of any teacher of a college, not belonging to the State Government, affiliated to the University established under the said Act or the Magadh University Act, 1961 (Bihar Act IV of 1962) made on or after the twenty seventh day of November, 1961 and before the first day of March, 1962, shall be subject to such order as the Chancellor of the University may, on the recommendation of the University Service Commission established under section 48A of the said Act, pass with respect thereto. " This Act was passed to amend the Bihar State Universities (University of Bihar, Bhagalpur and Ranchi) Act, No. 14 of 1960, The reason for making the amendment as stated in the statement of objects and reasons was this. The Bihar State Universities Act, No. 14 of 1960, was amended by Bihar Act II of 1962 and section 48 A was introduced therein. That section provided for the establishment of a University Service Commission (hereinafter referred to as the Commission) for affiliated colleges not belonging to the State Government. Sub section (6) of section 48 A provided that "subject to the approval of the University, appointments, dismis 234 teachres of an affiliated college not belonging to the State Government shall be made by the governing body of the college on the recommendation of the Commission. " In effect thereafter no appointment, dismissal, etc., could be made after section 48 A came into force without the recommendation of the Commission. This section came into force on March 1, 1962, but the report of the Joint Select Committee, which resulted in the enactment of section 48 A, was made on November 27, 1961. The statement of objects and reasons of the Act stated that several reports had been received by Government that the Governing Bodies of affiliated colleges had made a very large number of unnecessary appointments and unwarranted removals from service in order to avoid scrutiny of such cases by the Commission. It was to meet this situation that an Ordinance was first promulgated which made obligatory for the Governing Bodies to submit for the scrutiny of the Commission, the cases of appointments, dismissals, removals etc. of teachers which occurred between November 27, 1961 and March 1, 1962. The Act replaced that Ordinance. After the Act came into force, the appellant received an order dated August 18, 1962 from the Chancellor of the University to the effect that the Chancellor had been pleased to approve, under section 4 of the Act, on the recommendation of the Commission the appointment of the appellant as Principal of the Pandaul College till November 30, 1962 or till the candidate recommended by the Commission joined, whichever was earlier. It seems that before this, a similar order had been passed with respect to another teacher of Ramakrishna College Madhubani on May 31, 1962, and that order was challenged in the Patna High Court on the ground that the teacher in question had not been heard before the order was made and therefore the order was bad as it violated the principles of natural justice. That case was decided by the High Court on April 23, 1963 and the order in question was struck down on the ground that it violated principles of natural justice. Further in that case the validity of section 4 of the Act was also challenged but that question was not decided. (See Ram Kripalu Mishra vs University of Patna)(1). It seems that it was realised sometime in October or Novem ber, 1962 that the order of August 18, 1962 in the case of the appellant might be similarly challenged; so on November 8, 1962 the Commission gave notice to the appellant to show cause why the Commission should not recommend to the Chancellor that there was no adequate justification or reason for the Chancellor to modify the order already passed on August 18, 1962. This was a composite notice to the appellant and several other teachers with whose cases we are not concerned. The body of the notice shows various grounds on which the notice was issued, but it did not (1) A.I.R. 1964 Patna, 41. 235 indicate which particular ground applied to the appellant. e must say that we should have expected a better notice than this from the Commission. The notice should have been addressed to each teacher separately indicating the particular ground on which the notice was given as against him. However, the appellant replied to the notice and controverted all the grounds mentioned therein, though it now appears from the final order which was passed on February 18, 1963 that the only ground that concerned him was that he was not academically qualified for appointment as Principal of the College on the date of the selection by the governing body. The appellant seems to have been given a hearing by the Commission and eventually on February 18, 1963 the Chancellor passed another order which purported to modify the order of August 18, 1962 insofar as it related to the appellant. The modification was that the appellant would be given a year or two to appear at the examination to enable him to obtain a second class Master 's Degree , otherwise his services would be terminated. Thereupon the appellant filed a writ petition in the High Court challenging both the orders of August 18, 1962 and February 18, 1963. Three main grounds were urged by the appellant in this con nection. It was first urged that section 4 of the Act was ultra vires, as it violated article 14 of the Constitution. Secondly, it was urged that the order of August 18, 1962 violated the principles of natural justice and it could not be modified after November 30, 1962 as it had worked itself out and there was no power of review given to the Chancellor under section 4 and further that proceedings based on the notice issued on November 8, 1962 by the Commission were a mala fide device to get over the infirmity in the order of August 18, 1962. Thirdly, it was urged that in view of ch. 16 r. (1) of the Statutes of the University, the appellant must be deemed to have the minimum qualification for the post of the Principal and therefore the order of February 18, 1963 requiring him to appear at an examination to obtain a Second Class Master 's degree or in the alternative requiring that his services be terminated was bad. The petition was resisted on behalf of the Chancellor and the University. The High Court rejected all the three contentions and dismissed the petition, but granted a certificate to appeal to this Court; and. that is how the matter has come before us. The three points raised in the High Court have been urged before us in support of the appellant 's contention that the two orders dated August 18, 1962 and February 18, 1963 are liable to be quashed. We shall first consider whether section 4 is ultra vires article 14 of the Constitution. The first ground in that behalf is that the dates mentioned in section 4 were completely arbitrary and therefore there was no valid classification to uphold the validity of the section. There is no doubt that if the dates are arbitrary, 236 section 4 would be violative of article 14, for then there would be no justification for singling out a class of teachers who were appointed or dismissed etc. between these dates and applying section 4 to them while the rest would be out of the purview of that section. But we are of opinion that the dates in section 4 cannot be said to be arbitrary. We have already referred to the statement of objects and reasons which gives the reasons for the enactment of section 4. We are entitled to look into those reasons to see what was the state of affairs when section 4. came to be passed and whether that state of affairs would justify making a special provision for teachers appointed, dismissed etc. between the two dates specified therein. The reason for these two dates appears to be that a bill for the establishment of the Commission which would have the effect of curtailing the powers of the governing bodies of affiliated colleges was on the anvil of the legislature. The report of the Joint Select Committee in that connection was made on November 27, 1961. Act II of 1962 was passed after the report of the Joint Select Committee on January 19, 1962 and section 48 A with respect to the Commission was actually put into force from March 1, 1962. The statement of objects and reasons also shows that irregularities had been brought to the notice of the Government as to appointments, dismissals etc. during this period and that led to the enactment of section 4 of the Act by the legislature. In these circumstances it cannot be said that these dates in section 4 are arbitrary. Taking the circumstances as they were when section 4 came to be enacted and enforced, it cannot be said that teachers appointed etc. between these two dates did not form a class that would have nexus with the object to be achieved. In these circum stances we must hold that section 4. cannot be struck down, on the ground that it has fixed two arbitrary dates and has visited teachers appointed, dismissed etc. between these two dates with a differential treatment as compared to teachers appointed before November 27, 1961. The next attack on the validity of section 4 is that it confers uncanalised powers on the Chancellor without indicating any critedon on the basis of which the power under section 4 can be exercised. There is no doubt that if one reads section 4 literally it does appear to give uncanalised powers to the Chancellor to do what he likes on the recommendation of the Commission with respect to teachers covered by it . We do not however think that the Legislature intended to give such an arbitrary power to the Chancellor. We are of opinion that section 4 must be read down and if we read it down there is no reason to hold that the legislature was conferring a naked arbitrary power on the Chancellor. It seems to us that the intention of the legislature was that all appointments, dismissals etc. made between the two dates should be scrutinised and the scrutiny must be for the purpose of seeing that the appointments, dismissals etc., were in accordance with the University Act and the. Statutes, Ordinances, Regulations and Rules 237 framed thereunder, both in the matter of qualifications, and in the matter of procedure prescribed for these purposes. We do not think that the legislature intended more than that when it gave power to the Chancellor to scrutinise the appointments, dismissals, etc. made between these two dates. We have therefore no hesitation in reading down the section and hold that it only authorises the Chancellor to scrutinise appointments, dismissals etc. made between these two dates for the purpose of satisfying himself that these appointments, dismissals etc., were in accordance with the University Act and the Statutes, Ordinances, Regulations or Rules made thereunder, both as to the substantive and procedural aspects thereof. If the appointments etc. were in accordance with the University Act etc., the Chancellor would uphold them, and if they were not, the Chancellor would pass such orders as he deemed fit. Read down this way, section 4 does not confer uncanalised power on the Chancellor; as such it is not liable to be struck down as discriminatory under article 14. It is then urged that no provision was made in section 4 for hearing of the teacher before passing an order thereunder. Now section 4 provides that the Chancellor will pass an order on the recommendation of the Commission. It seems to us reasonable to hold that the Commission before making the recommendation would hear the teacher concerned, according to the rules of natural justice. This to our mind is implicit in the section when it provides that the Commission has to make a recommendation, to the Chancellor on which the Chancellor will pass necessary orders. If an order is passed under section 4 even though on the recommendation of the Commission but without complying with the principles of natural justice, that order would be bad and liable to be struck down as was done by the Patna High Court in Ram Kripalu Mishra vs University of Bihar(1). But we have no difficulty in reading section 4 as requiring that the Commission before it makes its commendation must hear the teacher concerned according to principles of natural justice. Reading the section therefore in this way and that is the only way in which it can be read we are of opinion that it cannot be struck down under article 14 of the Constitution as discriminatory. Then it is urged that section 4 does not provide for approval by the University of the Chancellor 's order while section 48 A(6) does, and it is therefore discriminatory. We are of opinion that section 4 was enacted, to meet a particular situation as we have already indicated above, and in that situation the approval by the University of the Chancellor 's order would be quite out of place. Section 4 cannot be struck down as discriminatory on this ground. We therefore read section 4 in the manner indicated above both as to the limit of the Chancellor 's power while passing an order thereunder and as to the necessity of the Commission giving a hearing (1) A.I.R. 1964 Pat. 238 to the teacher concerned before making the recommendation, and so read we are of opinion that section 4 cannot be held to be discriminatory and as such liable to be struck down under article 14 of the Constitution. This brings us to the next point, namely, that the order of August 18, 1962, violated the principles of natural justice and was therefore bad. It is not the case of the respondents that the appellant was heard before the said order was passed, and if that order stood by itself it would be bad as the appellant was not given a hearing before it was. passed and the decision of the Patna High Court in Rain Kripalu Mishra(1) would apply. What happened in this case was that at some stage it was realised that the appellant should be given a hearing before an order was passed against him under section 4. Therefore the appellant was given a hearing by the Commission on a notice issued on November 8, 1962 to show cause. It is true that the subsequent proceedings were in form as if they were for the review or modification of the order of August 18, 1962 and it is doubtful whether section 4 provides for review of an order once passed. It seems to us that in substance what happened was that the order of August 18, 1962 was not given effect to when it was realised that it might be illegal and thereafter action was taken to give notice to the appellant and a hearing before passing an order under section 4. Here again the order of February 18, 1963 is in form an order modifying the order of August 18, 1962, but in substance it should be taken as a fresh, order under section 4 after giving opportunity to the appellant to represent his case before the Commission. The order made on February 18, 1963 therefore cannot be said to suffer from the defect that it was passed without observing the principles of na tural justice. As for the order of August 18, 1962, it must be taken to have fallen when action was taken to give notice to the appellant on November 8, 1962 and pass a fresh order on February 18, 1963 after giving a proper hearing. In the circumstances it is not necessary to quash the order of August 18, 1962, for it fell when further proceedings were taken after notice to the appellant. Further as to the order of February 18, 1963 it must be treated to be a fresh order and as it is not defective on the ground that the principles of natural justice had been violated, it cannot be struck down on that ground. This brings us to the last contention raised on behalf of the appellant. The order of February 18, 1963 shows that the only defect that was found in the appointment of the appellant as Principal of the Pandaul College was that he was not a second class M.A. It appears that according to chapter 16, r. (1) of the Statutes, the minimum qualification for the appointment of Principal is a second class Master 's degree and at least ten years,, (1) A.I.R. 1964 Pat. 239 teaching experience in a college of which at least seven years must be in a degree college or five years ' experience as Principal of an Intermediate College. It is not disputed, that the appellant had ten years ' teaching experience in a college of which sever,, years were in a degree college. But it appears that the appellant had a third class Master 's degree and therefore did not satisfy the qualification that a Principal should have a second class Master 's degree. The appellant relies on sub r. (6) of r. (1) which is in these terms: "Notwithstanding anything in the Article, the qualifications of a teacher already in service and confirmed before the 1st July 1952 shall be considered to be equivalent to the minimum qualifications for the post he holds. " The appellant was confirmed before July 1, 1952. It is therefore contended on his behalf that in view of sub r. (6), he must be deemed to have the minimum qualification for a lecturer, which, according to sub r. (1) is a second class Master 's degree. Once therefore it is deemed under sub r. (6) that he had a second class Master 's degree, it follows that that deeming must continue when he is appointed Principal for which also the minimum qualification is second class Master 's degree with certain experience. The High Court has however held that sub r. (6) would only mean this that the appellant had a second class Master 's degree for the purpose of the post of a lecturer in Ramakrishna College and that sub rule could not mean that for the purpose of appointment as a Principal of the Pandaul College, the appellant would be deemed to have a second class Master 's degree. The High Court therefore held that as the appellant did not fulfil the minimum qualification for the post of a Principal, his appointment was irregular under the Statutes and the Chancellor would have the power to pass such order as he thought fit under section 4. We are unable to accept this construction of sub r. Rule (1) of chapter 16 of the Statutes provides for the grades, pay scales and qualifications of teachers. This sub rule is prospective in operation meaning thereby that the minimum qualifications thereunder would be required for future appointments. Further nothing has been brought to our notice in the Statutes to show that teachers appointed before July 1, 1952 would be liable to removal on the ground that they did not possess the minimum qualifications. This means that sub r. (6) was not necessary in order that teachers appointed and confirmed before July 1, 1952 who did not fulfil the minimum qualifications then being prescribed should continue in service. Obviously those teachers would have continued in service even without sub r. Therefore, the view of the High Court that sub r. (6) was made for the purpose of allowing teachers with less than the minimum qualifications to continue in the post which they actually held at the time the 240 Statutes were passed cannot be accepted. If that was the intention of sub r. (6), we would have found its language very different It would then have provided that teachers already in service and confirmed before July 1, 1952 would continue in their present posts even though they did not fulfil the minimum qualifications. But the language of sub r. (6) is very different. It begins with a non obstante clause and says in effect that whatever may be the actual qualification of the teacher appointed and confirmed before July 1, 1952 that qualification will be considered to be equal to the minimum qualification for the post he holds. The words "for the post he holds" are only descriptive and mean that if a person holds the post of a lecturer, his actual qualification will be considered to be equal to the minimum qualification of the lecturer; if he happens to hold the post of a Principal, his actual qualification will be considered to be equal to the minimum qualification required for the post of the Principal, even though in either of these cases the actual qualification is less than the minimum qualification. The obvious intention behind sub r. (6) was to safeguard the interest of teachers already appointed and confirmed before July 1, 1952, and that is why we find language which lays down that even though the actual qualification may be less than the minimum, that will be considered equivalent to the minimum. Once that equivalence is established by sub r. (6), and it is held that even though the actual qualification was less, it was equal to the minimum qualification as provided by sub r. (1), we fall to see how that deemed qualification can be given a go by in the case of further promotion or appointment. The appellant was a lecturer in Ramakrishna College, and though he had only a third class Master 's degree, sub r. (6) provided that that third class Master 's degree must be treated as equivalent to the minimum qualification necessary for the lecturer 's post i.e., a second class Master 's degree. Therefore, it must be held that from the date the sub rule came into force, the appellant, though he actually had a third class Master 's degree, must be deemed to have a second class Master 's degree, which was the minimum qualification for the lecturer 's grade. Nothing has been pointed out to us in the Statutes which would take away this deemed qualification thereafter. We cannot therefore agree with the High Court that when sub r. (6) says that a teacher appointed and confirmed before July 1, 1952 would be deemed to have the minimum qualification though in fact he does not have it it only provides for this deeming so long as he held the particular post he was holding on the date the Statutes came into force. That in our opinion is not the effect of the words "the post he holds", for these words are only descriptive and have to be there because the provision in r. (1) (1) referred to three categories, namely, lecturers, professors and principals. 'We may in this connection refer to sub r. (5) which shows that even if in future candidates with minimum qualification are not available, the 241 A Syndicate can relax the minimum qualification, thus indicating that the minimum qualifications are not absolutely rigid. But apart from this it appears to us that sub r. (6) was made for the protection of teachers who were appointed and confirmed before July 1, 1952 and by this deeming provision gave them the minimum qualifications and if that was so that must be for all pur poses in future. If this were not the interpretation of sub r. (6) another curious result would follow inasmuch as a lecturer could be appointed a college professor for which a second class Mas ter 's degree was not made the minimum qualification under sub r. (1) but he could not be appointed a Principal on the interpretation pressed before us on behalf of the respondents. We should have thought that a good degree would be more necessary in the case of a professor whose main work is teaching than in the case of a principal whose main work is administrative. However that may be, we are of opinion that sub r. (6) is meant for the protection of teachers who were appointed and confirmed before July 1, 1952 and it confers on them a qualification by its deeming provision and that must enure to their benefit for all time in future for the purpose of promotion or appointment to a higher grade in another college. Another curious result would follow if the interpretation accepted by the High Court is correct. The High Court as we have pointed out above has held that sub r. (6) give equivalence only for the particular post held by a teacher appointed and confirmed before July 1, 1952. Suppose that a lecturer in one college who holds a third class Master 's degree and is entitled to remain as lecturer in that college, for some reason is appointed to another college after the Statutes came into force. This would be a new appointment and such a lecturer could not be appointed in a new college because he would not have a second class Mas ter 's degree for the new appointment. It seems to us therefore that the intention of sub r. (6) was not that for the purpose of the particular post actually held the equivalence would prevail but no more. We are of opinion that sub r. (6) must be read as a protection to the teachers who were appointed and confirmed before July 1, 1952 and by fiction it gave the minimum qualification even though they may not actually have. That minimum qualification must therefore remain with them always for the future, for nothing has been brought to our notice which takes away that minimum qualification deemed to be conferred on the teachers by sub rule (6). We are therefore of opinion that the order dated February 18, 1963 passed by the Chancellor requiring the governing body of the Pandaul College to give the appellant a year or two to appear at an examination to enable him to obtain a second class Master 's degree, otherwise his services might be terminated, is not valid, for the appellant must be deemed to have the minimum qualification of a second class Master 's degree by 412 virtue of sub rule (6) of the Statutes and as such he was qualified A for appointment as Principal of Pandaul College. We therefore allow the appeal, set aside the order of the High Court and allowing the writ petition quash the order of the Chancellor dated February 18, 1963 in respect of the appellant. The appellant will get his costs from the respondent University. R.K.P.S Appeal allowed. [/INST]The appellant was appointed as a lecturer in 1952 of a non Government College affiliated to the Bihar University and later as Principal of another college. Both these appointments were approved by the University. The Bihar State Universities (University of Bihar, Bhagalpur and Ranchi) (Amendment) Act 13 of 1962 came into force in April 1962, section 4 of which provided that every appointment, dismissal, etc., of any teacher of a college not belonging to the State Government affiliated to the University made after the 27th November, 1961 and before 1st March, 1962 shall be subject to such order as the Chancellor of the University, on the recommendation of the University Service Commission, may pass. Thereafter, the appellant received an order dated August 8, 1962, from the Chancellor to the effect that he had been pleased to approve under section 4 of the Act, on the recommendation of the Commission, the appointment of the appellant as Principal till November 30, 1962 or till the candidate recommended by the Commission joined, whichever was earlier. Subsequently, as ' it was realised that the order of August 18. 1962 Might be successfully challenged on the ground that the appellant had not been given an opportunity for a hearing, the Commission gave the appellant a show cause notice on November 8, 1962 and after he was given a hearing the Chancellor passed another order on February 18, 1963 which purported to modify the order of August 18, 1962; the modification was to the effect that the appellant would be given a year or two to sit for an examination and obtain a second class Master 's degree which was the minimum qualification for the post of Principal, failing which his services would be terminated. The appellant filed a writ petition in the High Court challenging both the orders of August 18, 1962 and February 18, 1963 on the grounds, inter alia; (i) that under sub rule (6) of Rule (1) of Chapter 16 of the Statutes of the University, which provided that notwithstanding any other requirements the qualifications of a teacher already in service and confirmed before the 1st July, 1962, shall be considered to be equivalent to the minimum qualifications for the post he holds, the appellant must be deemed to have the minimum qualifications for a lecturer i.e. a Second Class MaSter 's degree. and that this deeming would continue when he was appointed Pricipal for which also the minimum qualification was a Second Class Master 's degree with certain experience; (ii) that section 4 of the Act was violative of article 14 of the Constitution. and (iii) that the order of August 18, 1962 violated the principles of natural justice and it could not be modified after November 30, 1962 as it had worked itself out 231 232 and there was no power of review given to the Chancellor under section 4. The High Court dismissed the petition. On appeal to this Court, HELD: allowing the appeal, (i) The Chancellor 's order of February 18, 1963 giving the appellant time to appear at an examination to enable him to obtain a second class Master 's degree failing which his services would be terminated was invalid. The appellant must be deemed to have the minimum qualifica tion of a second class Master 's degree by virtue of sub rule (6) of the Statutes and as such he was qualified for appointment as Principal. Sub r. (6) must be read as a protection to the teachers who were appointed and confirmed before July 1, 1952 and by fiction it gave them the minimum qualification even though they may not actually have it. That minimum qualification must therefore remain with them always for the future. for there was nothing to show that it was taken away. [241G 242A]. (ii) Section 4 was not discriminatory and violative of article 14 of the Constitution on the ground that it fixed two arbitrary dates and had visited teachers appointed, dismissed etc. between these two dates with a differential treatment as compared to teachers appointed before November 27, 1961. The report of the Joint Select Committee recommending the establishment of the University Service Commission which would have the effect of curtailing the powers of the governing bodies of affiliated colleges was published on November 27, 1961 and after the passing of Act II of 1962, section 48 A with respect to the Commission was actually put into force from March 1, 17962. Many irregularities as to appointments, dismissals etc., during this period were brought to the notice of the government and this led to the enactment of section 4 of the Act. It cannot therefore be said that teachers appointed etc. between these two dates did not form a class that would have a nexus with the object to be achieved. [236B F]. Furthermore, section 4 only authorises the Chancellor to scrutinise appointments. dismissals etc. made between these two dates for the purpose of satisfying himself that these were in accordance with the University Act and the Statutes, etc. Read this way, section 4 cannot be said to confer uncanalised power on the Chancellor. [237A C]. Although section 4 makes no provision for giving the teacher a hearing before passing an order thereunder, it must be read as requiring that the Commission must act according to principles of natural justice and must hear the teacher concerned before making its recommendation. [237 D E]. (iii) The order of August 18, 1962 must be taken to have fallen when action was taken to give notice to the appellant on November 8, 1962 and a fresh order passed on February 18. 1963. The latter order must be treated as a fresh order which was passed after giving the appellant a hearing and which was not therefore defective on the round that principles of natural justice had been violated. [238G]. </s>
<s>[INST] Summarize the judgementvil Appeal Nos. 1403 to 1406 of 1974. From the Judgment and Order dated 23.12. 1971 of the Madras High Court in W.P. Nos. 1053 54, 4679 & 4715 of 1968. Anil Dev Singh, Ms. Indu Malhotra and C.V. Subba Rao for the Appellant. 467 R.P. Bhat, G.L. Sanghi, M.N. Krishnamani, Vineet Kumar, R. Mohan, K.C. Dua and R.A. Perumal for the Respondents. The Judgment of the Court was delivered by SINGH, J. These appeals are directed against the judg ment and order of a Division Bench of the High Court of Madras dated 2.8. 1974, quashing the notices issued by the Deputy Commercial Tax Officer, Madras. The respondents manufacture various medicinal prepara tions and in that process they use tincture containing alcohol. On the enforcement of the (hereinafter referred to as 'the Act ') the respondents became liable to pay duty.in accordance with Section 3 of the Act read with Schedule to the Act. They 'further became liable to obtain licence, but they neither paid duty nor obtained licence. The Commercial Tax Officer issued notices to the respondents in exercise of his powers under Rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules 1956 directing them to pay duty on all medicinal preparations manufactured by them after 1.6.1961. The notices were in the shape of notice of demand requiring the respondents to pay the duty which they had failed to pay in accordance with the Act and the Rules on the use of tincture in manufacturing medicinal preparations. The respondents filed writ petitions under Article 226 of the Constitution of India before the High Court of Madras challenging the notices and the proceedings initiated in pursuance thereof for the recovery of duty from them. A Division Bench of the High Court allowed the writ petitions on the sole ground that Rule 12 under which the impugned notices were issued was ultra vires the Act, conse quently, proceedings initiated in pursuance thereof, were without jurisdiction. On these findings the writ petitions were allowed and the notices as well as the proceedings were quashed. The sole question which arises for consideration in these appeals relates to the validity of Rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules 1956. The High Court has declared the Rule ultra vires on the ground that the Act was silent on the question of levy of duty on escaped turn over and hence Rule 12 which pro vides for the recovery of escaped duty was outside the purview and scope of the Act. The Act was enacted to provide for the levy and collection of 468 duty of excise on medicinal and toilet preparations contain ing alcohol, opium, Indian hemp or other narcotic drugs as the preamble states. Section 3 provides for levy and collec tion of duties. It reads as under: "3(1). There shall be levied duties of excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India. (2) The duties aforesaid shall be leviable (a) where the dutiable goods are manufactured in bond, in the State in which such goods are released from a bonded warehouse for home consumption, whether such State is the ,State of manufacture or not; (b) where the dutiable goods are not manufac tured in bond, in the State in which such goods are manufactured. (3) Subject to the other provisions contained in this Act, the duties aforesaid shall be collected in such manner as may be prescribed. " Excise duty is imposed by Section 3 on the manufacture of dutiable goods at the rates specified in the Schedule. Sub section (2) indicates the stage at which the duty is to be levied. Section 3(3) provides for collection of duty, lays down that it shall be collected in such manner as may be prescribed by Rules made under the Act. Section 3, there fore, imposes duty on the manufacture of medicinal prepara tions and it lays down the rates and it also indicates the stage at which the duty is to be levied. So far as collec tion of duty is concerned the Act leaves the same to the rule making authority. Section 19 confers power on the Central Government to make rules to carry out the purposes of the Act. The relevant provision of Section 19 is as under: "19(1). The Central Government may, by notifi cation in the Official Gazette, make rules to carry out the purposes of this Act. (2) In particulars, and without prejudice to the generality of the foregoing power, such rules may (i) provide for the assessment and collection of duties levied under this Act, the authori ties by whom functions 469 under this Act are to be discharged, the issue of notices requiring payment, the manner in which the duties shall be payable and the recovery of duty not paid. " Section 19(1) read with Section 3(3) confer wide powers on the Central Government to make rules which may be necessary for carrying out the purpose of the Act. Such rules may provide for the assessment and collection of duties, and, the manner in which the duty is to be paid as well as for the recovery of duty not paid at all. The Central Government in exercise of its power under Section 19 of the Act has framed the Medicinal and Toilet Preparations (Excise Duties) Rules 1956 which were enforced on 9th March 1957. Chapter III of the Rules provide for levy and refund of, and, exemp tion from duty. Rules 6 to 17 relate to recovery, exemption and refund of duty. Rule 6 requires every person who manu factures any dutiable goods, or who stores such goods in a warehouse to pay the duty on such goods, at such time and place as may be designated. Rule 9 prescribes time and manner of payment of duty. According to this Rule no dutia ble goods shall be removed from any place where they are manufactured either for consumption or for export, outside such place until the excise duty leviable thereon is paid at such place and in such manner as prescribed in the Rules or as the Excise Commissioner may require. Rule 11 provides for recovery of duty or charges which may have been shortlevied through inadvertence, error, collusion, or mis construction on the part of an Excise Officer and through mis statement on the part of the owner and it also provides for recovery of any refund erroneously made to the manufacturer, owner of the goods on written demand made within six months from the date of payment of duty. Rule 12 confers residuary power for the recovery of sums due to the Government. Rule 12 reads as under: "12. Residuary powers for recovery of sums due to Government Where these rules do not make any specific provision for the duty has for any reason been short levied, or of any other sum of any kind payable to the collecting Government under the Act or these rules, such duty, deficiency in duty or sum shall, on written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify. " 470 As already noted Rules contained in Chapter III of the Rules particularly Rules 6, 9, 10 and 11 provide for payment and recovery of duty and also the time and manner of its payment. Rule 12 is designed to confer residuary power for recovery of duty if unpaid on account of short levy or deficiency or for any reason it remains unpaid. If recovery of duty or any amount of sum payable to the Government under the Act is not covered by any specific Rule, additional supplementing provision is made for its recovery by Rule 12. Rule 12 provides for recovery of duty, as well as any other sum payable to the collecting Government under the Act if the same is not paid on account of short levy or deficiency or for any reason. In substance Rule 12 contains additional safeguard for recovery of duty, it does not create any additional charge or liability on the manufacturer for the payment of the duty. The liability to pay tax is created by the charging Section 3 and Rule 12 confers, on the autho rised officer to recover duty if the same has not been paid on account of any short levy or deficiency or any other reason. Rule 12 is referable to section 19(2)(i) of the Act. The Rule carries out the purposes of the Act as it seeks to provide for recovery of duty as contemplated by Section 3(3) of the Act. The High Court committed error in holding that the Rule provides for recovery of escaped duty although the Act is silent on the question of escaped assessment and therefore Rule 12 is ultra vires the Act. Learned counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article 14 of the Constitution, as it does not provide for any period of limitation for the recovery of duty. He urged that in the absence of any prescribed period for recovery of the duty as contemplated by Rule 12, the officer may act arbitrarily in recovering the amount after lapse of long period of time. we find no substance in the submission. While it is true that Rule 12 does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasonable or violative of Article 14 of the Constitution. In the absence of any period of limitation it is settled that every author ity is to exercise the power within a reasonable period. What would be reasonable period, would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice or demand for recovery was made within reasona ble 471 period. No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case. In view of the above discussion, we allow the appeals and set aside the judgment and order of the High Court of Madras dated 2.8. There will be no order as to costs. T.N.A. Appeals allowed. [/INST]The respondents were manufacturing various medicinal preparations and in that process were using tincture con taining alcohol. On the enforcement of the they became liable to pay duty and also to obtain licence but they continued their manufacture without doing so. The Commercial Tax Officer issued demand notices under Rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 requiring payment of the duty which the respondents had failed to pay. The respondents filed writ petitions in the High Court challenging the aforesaid notices, and the proceedings for recovery of duty. Allowing the writ petitions the Division Bench quashed the notices as well as the proceedings for recovery on the ground that the Act was silent on the ques tion of levy of duty on escaped turnover, and hence Rule 12 which provides for recovery of escaped duty was outside the purview and scope of the Act and, therefore, ultra vires. In these appeals it was contended that Rule 12 was invalid and 466 unreasonable and violative of Article 14 of the Constitution because it does not provide for any period of limitation for the recovery of duty. Allowing the appeals and setting aside the judgment of the High Court, this Court, HELD: 1. The liability to pay tax is created by the charging section 3 and Rule 12 confers, power on the autho rised officer to recover duty if the same has not been paid on account of any short levy or deficiency or any other reason. Rule 12 is referable to section 19(2)(i) of the Act and carries out the purposes of the Act as it seeks to provide for recovery of duty as contemplated by section 3(3) of the Act. It is designed to confer residuary power for recovery of duty if unpaid on account of short levy or deficiency or for any reason it remains unpaid. If recovery of duty or any amount of sum payable to the Government under the Act is not covered by any specific Rule, additional supplementing provision is made for its recovery by this Rule. This Rule does not create any additional charge or liability on the manufacturer for the payment of the duty. The High Court Committed error in holding that the Rule is ultra vires the Act. [470C D, 470A B] 2. Rule 12 does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasona ble or violative of Article 14 of the Constitution. In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable period, would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice or demand for recovery was made within reasonable period. No hard and fast rules can be laid down in this regard as the determination of the ques tion will depend upon the facts of each case. [470F, G, H, 471A] </s>
<s>[INST] Summarize the judgementivil Appeal No. 4053 of 1985. From the Judgment and Order dated 25.1.1985 of the Madhya Pradesh High Court in Civil Revision No. 378 of 1984. U.R. Lalit, S.S. Khanduja, Y.P. Dhingra and Mrs. Madhu Kapoor for the Appellants. T.C. Sharma and S.K. Gambhir for the Respondents. The Judgment of the Court was delivered by DUTT, J. This appeal by special leave is directed against the judgment of the Madhya Pradesh High Court, whereby the High Court affirmed the order of the District Judge, Bhopal, dismissing the counter claim by the appel lants on the ground that it was barred by section 14 of the , hereinafter referred to as 'the Act '. The High Court also held that the counter claim was not maintainable under sub rule (1) of Rule 6A of Order VIII of the Code of Civil Procedure, as the same was filed by the appellants after the filing of the written statement. The predecessor in interest of the appellants, namely, Babulal, purchased a house in Bhopal in the year 1947 from the sons of one Mannulal. The appellants and the respondents Nos. 6 to 8 are the sons of the other three brothers of Mannulal. In the year 1976, the respondents Nos. 2 to 5, who were the heirs and legal representatives of the said Babu lal, started reconstructing or renovating the house and for that purpose they commenced digging the plinth. In the course of digging, a treasure consisting of gold and silver ornaments and also Government currency notes amounting to Rs.2,900 was found. The respondents Nos. 2 to 5 intimated the discovery of the treasure to the Collector of the Dis trict, who issued a notification under section 5 of 159 the Act requiting all persons claiming the treasure,. or any part thereof, to appear personally or by agent before him on the day and place mentioned in the notification. Pursuant to the said notification, the respondents Nos. 2 to 5, and the appellants and the respondents Nos. 6 to 8 filed claims before the Collector. It has been held by the Collector that the respondents Nos. 2 to 5, the finders of the treasure, are the owners of the house from where the treasure was found during excavation undertaken by them with a view to starting reconstruction, and he permitted them under section 8 of the Act to institute a suit in the Civil Court to establish their right before February 22, 1979. The respondents Nos. 2 to 5 instituted a suit being Civil Suit No.1 A of 1979, in the Court of the District Judge, Bhopal, for a declaration of their title to the treasure found by them. The respondents Nos. 2 to 5 did not, however, make the other claimants before the Collector including the appellants, parties to the suit. The appel lants and the respondents Nos. 6 to 8 made an application for their addition as parties to the suit under the provi sion of Order I, Rule 10 of the Code of Civil Procedure. The learned District Judge allowed the said application and, accordingly, they were made defendants in the suit. Thereafter, the appellants and the respondents Nos. 6 to 8 filed their written statement, inter alia, denying the claim of the respondents Nos. 2 to 5 to the treasure. They claimed title to the treasure. After the filing of the written statement, the appel lants filed a counter claim claiming title to the treasure. It is not necessary for us to state the basis of the claims of the parties to the treasure. The respondents Nos. 2 to 5 filed an application praying that the counter claim should be dismissed contending that it was barred by limitation as prescribed under section 14 of the Act and that it was also not maintainable under Order VIII, Rule 6A(1) of the Code of Civil Procedure. The learned District Judge came to the finding that the counter claim was barred by section 14 of the Act and, in that view of the matter, dismissed the counter claim. Being aggrieved by the said order of the learned District Judge, the appellants and the said respond ents Nos. 6 to 8 moved the High Court in revision against the same. The High Court upheld the order of the learned District Judge that the counterclaim was barred by limita tion as prescribed by section 14 of the Act. The High Court further held that the counter claim having been filed after the filing of the written statement, it was not maintainable under Order VIII, Rule 6A(1) of the Code of Civil Procedure. Hence this appeal by special leave. 160 At this stage, it is necessary to refer to some of the provisions of the Act. Section 4 of the Act provides, inter alia, for the giving of notice by the finder of treasure to the Collector containing the details of the treasure. The treasure may be deposited in the nearest Government Treasury or the finder may give the Collector such security as the Collector thinks fit to produce the treasure at such time and place, as he may, from time to time, require. Under section 5, the Collector shall, after making such enquiry, if any, as he thinks fit, issue a notification requiting the claimants to the treasure to appear before him on a day and at a place mentioned in the notification, such day not being earlier than four days or later than six months, after the date of the publication of such notification. Section 6 provides that any person having claimed any fight to such treasure or any part thereof, as owner of the place in which it was found or otherwise, and not appearing as required by the notification issued under section 5, shall forfeit such right. Sections 7, 8, 9, 13 and 14 which are relevant for our purpose are extracted below: "section 7 On the day notified under section 5, the Collector shall cause the treasure to be produced before him, and shall enquire as to and determine (a) the person by whom, the place in which, and the circumstances under which, such treasure was found; and (b) as far as is possible, the person by whom, and the circumstances under which, such treasure was hidden. If, upon an enquiry made under section 7, the Collector sees reason to believe that the treasure was hidden within one hundred years before the date of the finding, by a person appearing as required by the said notification and claiming such treasure, or by some other person under whom such person claims, the Collector shall make an order adjourning the hearing of the case for such period as he deems sufficient, to allow of a suit being instituted in the Civil Court by the claimant, to establish his right. If upon such enquiry the Collector sees no reason to believe that the treasure was so hidden; or If, where a period is fixed under section 8, no suit is 161 instituted as aforesaid within such period to the knowledge of the Collector; or if such suit is instituted within such period, and the plaintiff 's claim is finally rejected; the Collector may declare the treasure to be ownerless. Any person aggrieved by a declaration made under this section may appeal against the same within two months from the date thereof to the Chief Controlling Revenueauthority. Subject to such appeal, every such declaration shall be final and conclusive." "section 13. When a declaration has been made as aforesaid in respect of any treasure, and two or more persons have appeared as aforesaid and each of them claimed as owner of the place where such treasure was found, or the right of any person who has so appeared and claimed is disputed by the finder of such treasure, the Collector shall retain such treasure and shall make an order staying his proceedings with a view to the matter being enquired into and determined by a Civil Court. section 14. Any person who has so appeared and claimed may, within one month from the date of such order, institute a suit in the Civil Court to obtain a decree declaring his right and in every such suit the finder of the treasure and all persons disputing such claim before the Collector shall be made defendants. " Under the scheme of the Act, two kinds of suits can be filed at two stages, namely, one under section 8 and the other under section 14 of the Act. Section 8 provides that if the Collector has reason to believe that the treasure was hidden by any person appearing before the Collector within one hundred years or by some other person under whom such person claims, the Collector shall adjourn the hearing for such period as he deems sufficient to allow the claimant to institute a suit to establish his right to the treasure. So under section 8, the suit has to be filed by the claimant within the period for which the hearing 162 of the case is adjourned for the establishment of his right to the treasure. On the other hand, the question of filing a suit under section 14 will not arise unless the Collector makes a declaration under section 9 that the treasure is ownerless. Such a declaration under section 9 will be made by the Collector if he sees no reason to believe that the treasure was not hidden within one hundred years or if no suit is instituted under section 8 within the period for which the hearing adjourned by the Collector or if the plaintiffs claim is rejected. An appeal lies against a declaration by the Collector to the Chief Controlling Revenue Authority and subject to the appeal, such declaration shall be final and conclusive. If, however, no such contingencies as mentioned in section 9 take place, the Collector will have no juris diction to make a declaration that the treasure is owner less. If however, any of such contingencies happens and the Collector makes a declaration under section 9 and two or more persons have appeared before the Collector each claim ing the ownership of the place where such treasure was found or the finder of the treasure disputes the fight of any person who has so appeared and claimed, the Collector shall make an order under section 13 staying the proceedings with a view to the matter being enquired into by a Civil Court. It may be noticed here that the claim made under section 13 by the rival claimants relate to the ownership of the place and not to the ownership of the treasure for, it has been already noticed that the declaration by the Collector under section 9 that the treasure is ownerless shall, subject to the appeal to the Chief Controlling Revenue Authority, be final and conclusive. The object of an enquiry as to the ownership of the place by the Civil Court is necessary is as much as section 10 of the Act provides inter alia that when a declaration has been made in respect of any treasure under section 9, such treasure shall either be delivered to the finder or be divided between him and the owner of the place in which it has been found. Thus it is manifestly clear that if no declaration is made under section 9, there is no question of filing a suit under section 14 of the Act. While a suit under section 8 relates to the establishment of the right of the claimant to the treasure, a suit under section 14 relates to the estab lishment of the ownership of the place where the treasure was found for the purpose of division of the treasure be tween the finder and the owner of the place. Section 14 lays down that such a suit has to be filed within one 163 month from the date of such order to obtain a decree declar ing his right. It is manifestly clear from section 14 that the suit referred to therein is a suit to be filed by a person for the establishment of his right after the Collector had declared the treasure to be ownerless under section 9 after making a claim before the Collector under section 13. The words "such order" in section 14, in our view, refer to the order passed by the Collector under section 13. Further, the placement of section 14 after section 13 of the Act points only to the filing of the suit by a person after the Collec tor had made an order staying the proceedings under section 13. The suit contemplated by section 8 of the Act has to be filed by the claimant within the period for which the hear ing of the case is adjourned. Such period for which the hearing under section 8 is adjourned by the Collector, may be more than a month. It is absurd to think that although section 8 provides that the suit has to be filed within the period for which the hearing is adjourned, yet it has to be filed within one month under section 14. Section 8 and sections 13 and 14 contemplate two different situations. While under section 8 the suit has to be filed within the period during which the hearing stands adourned, the suit under section 14 has to be filed within one month of the order of the Collector under section 13 of the Act. To hold that suits under section 8 and section 13, are both governed by.the limitation prescribed by section 14, will be to do violence to the provisions of the Act and the clear inten tion of the Legislature as indicated in the provisions. Another aspect in this regard may be considered. It may be argued that as the Collector had not allowed the appel lants and the respondents Nos. 6 to 8 to file a counter claim or a suit, the suit was not maintainable. In our opinion, the question of filing a counter claim arises after a suit is filed by the claimant under section 8. It may be that there is no substantial difference between a counter claim and a suit, but nonetheless a defendant cannot be prevented from filing a counter claim under the Code of Civil Procedure. In the instant case, as the respondents Nos. 2 to 5 have instituted the suit within the period during which the hearing before the Collector stands adjourned under section 8, the question of making a declaration by the Collector under section 9 of the Act does not arise and, consequently, there is no scope for filing any suit under section 14 of the Act for the establishment of the right to ownership of the place where the treasure was found by the respondents Nos. 2 to 5. Thus 164 section 14 has no manner of application to a suit filed under section 8 of the Act. The next point that remains to be considered is whether Rule 6A(1) of Order VIII of the Code of Civil Procedure bars the filing of a counter claim after the filing of a written statement. This point need not detain us long, for Rule 6A(1) does not, on the face of it, bar the filing of a counter claim by the defendant after he had filed the writ ten statement. What is laid down under Rule 6A(1) is that a counter claim can be filed, provided the cause of action had accrued to the defendant before the defendant had delivered his defence or before the time limited for delivering his defence has expired, whether such counterclaim is in the nature of a claim for damages or not. The High Court, in our opinion, has misread and misunderstood the provision of Rule 6A(1) in holding that as the appellants had filed the coun ter claim after the filing, of the written statement, the counter claim was not maintainable. The finding of the High Court does not get any support from Rule 6A(1) of the Code of Civil Procedure. As the cause of action for the counter claim had arisen before the filing of the written statement, the counter claim was, therefore, quite maintainable. Under Article 113 of the , the period of limitation of three years from the date the right to sue accrues, has been provided for any suit for which no period of limitation is provided elsewhere in the Schedule. It is not disputed that a counter claim, which is treated as a suit under section 3(2)(b) of the has been filed by the appellants within three years from the date of accrual to them of the fight to sue. The learned District Judge and the High Court were wrong in dismissing the coun ter claim. For the reasons aforesaid, the appeal is allowed. The order of the learned District Judge and the judgment of the High Court are set aside. The learned District Judge is directed to proceed with the hearing of the suit and the counter claim in accordance with law. The appellants shall pay court fee on the counter claim, if not already paid, within such time as may be fixed by the learned District Judge. A.P.J. Appeal allowed. [/INST]Consequent to an agreement between the Executive Commit tee of the Central Board of the appellant Bank and its Officers ' Federation, in pursuance of the Pillai Committee Report, the Grade I and Grade II Officers discharging mana gerial and supervisory functions, were merged into the new Junior Management Grade. It was agreed that Officers, of Grade II would be junior to the existing officers of Grade I and the seniority list would be prepared accordingly. There after, in exercise of powers conferred by sub section (1) of section 43 of the the State Bank of India Officers ' (Determination of Terms and Conditions of Service) Order, 1979 was made and brought into force with effect from October 1, 1979. Paragraph 2(1) of that Order provided that it shah apply to the existing officers of the Bank and to such employees of the Bank to whom it may be made applicable. Under paragraph 3(h) the expression "exist ing officers" was defined to mean officers in the service of the Bank immediately prior in the appointed date, i.e., October 1, 1979. Paragraph 7 provided for the placement of existing officers on the appointed date in the corresponding new grades and scales. Paragraph 8(1) provided for fitment of existing officers in the new grades, and scales of pay in accordance with paragraph 7, at a stage corresponding to the existing grade and scale. Under paragraph 18(5) the seniori ty among the existing officers was to 116 remain the same, i.e., the Officers Grade I were to rank senior to Officers Grade II. Certain Probationary/Trainee Officers, who were appoint ed by the Bank in Grade I on October 30/31, 1979 before the Order was made on December 19, 1979 flied writ petitions before the Allahabad High Court and some others before the Delhi High Court claiming seniority over the erstwhile Grade II Officers, in which it was contended for the Bank that since the petitioners were not the employees of the Bank on October 1, 1979, i.e., the appointed date, they could not be given seniority over the erstwhile Grade II Officers, who were the 'existing officers ' within the mean ing of the expression under paragraph 3(h) of the Order. The Allahabad High Court took the view that the expres sion 'existing officers ' has to be read as including the Probationary Officers and Trainee Officers, otherwise a repugnancy between the definition of 'existing officers ' and the provisions of paragraph 7 and 8 of the Order will arise, that the notional date of the coming into force of the Order, viz., October 1, 1979 is only to protect the emolu ments of the officers and nothing else, and directed the Bank to prepare the seniority list of its officers accord ingly. The Delhi High Court, however, took a contrary view and dismissed the writ petitions. In these appeals by the Bank against the decision of the Allahabad High Court and Special Leave Petition by the Probationary/Trainee Officers against the decision of the Delhi High Court, it was submitted for the Probationary/Trainee Officers in support of their contention that they should be considered as 'existing officers ' within the meaning of paragraph 3(h) of the Order, that the Bank itself had treated them as 'existing officers ' by fitting them to the Junior Management Grade and giving them a higher start of Rs.960 p.m., that such fitment had been made by the Bank following the principles laid down in paragraphs 7 and 8 of the Order, that unless the expression 'existing offi cers ' is read as including 'Probationary/Trainee Officers ', three will be a repugnancy between the definition of 'exist ing officers ', as contained in paragraph 3(h) and the provi sions of the paragraphs 7 and 8 of the Order, that the definition of 'existing officers ' is only illustrative and not exhaustive, that the merger of officers of Grade II and Grade I into the Junior Management Grade was only for the purpose of fitment in the higher scale of pay and not for the purpose of seniority, that they have to undergo tests which were more stringent than the tests to be undergone by Grade II Officers and as such Probationary/Trainee 117 Officers, could not be placed under Officers Grade II in the seniority list, and that the Bank had no authority to give retrospective operation to the Order with effect from Octo ber 1, 1979 inasmuch as section 43 of the Act under which the Order has been passed, did not authorise the Bank to pass any such Order with retrospective effect. For the Bank it was contended that the order had not been made retrospective, that all that has been done was that the Officers Grade I and Grade II, who were in the employment of the Bank immediately before October 1, 1979 have been merged into one category, namely, Junior Manage ment Grade, in terms of the recommendations of the Pillai Committee, that these Officers were already employees of the Bank before October 1, 1979 and as such they were 'existing officers ' within the meaning of paragraph 3(h) of the Order, that the Probationary/Trainee Officers, who were appointed on 30th/31st October, 1979 had no locus standi to challenge the Order or the merger of Officers Grade I and Grade II and that as no order has been passed under paragraph 2(1) of the Order applying the same to the Probationary/ Trainee Offi cers, they were outside the purview of the Junior Management Grade and, as such, were precluded from challenging the seniority of the erstwhile Officers of Grade II. Allowing the appeals and dismissing the special leave petition, this Court. HELD: 1. The expression 'existing officers ' as defined in paragraph 3(h) of the State Bank of India Officers ' (Determination of Terms and Conditions of Service) Order, 1979 means officers in the service of the Bank immediately prior to the appointed date, i.e., October 1, 1979. The Probationary/Trainee Officers who were appointed by the Bank on 30/31st October, 1979 after the appointed date could not, therefore, be held to be 'existing officers ' within the meaning of paragraph 3(h) of the Order. [128B; F] 2. It is incorrect to say that when an employee is fitted to a particular scale of pay of another cadre, he does not become a member of that cadre. In the instant case, the Probationary/Trainee Officers were placed in the corre sponding scales of pay in the Junior Management Grade for the purpose of fitment in the new scales of pay. It may be that such fitment has been made by the Bank following the principles as laid down in paragraphs 7 and 8 of the Order presumably with a view to removing any disparity between Officers Grade I and Officers Grade II in the Junior Manage ment Grade, but it cannot be said that they were treated as existing officers and such fitment was made under 118 paragraphs 7 and 8 of the Order. The Probationary/Trainee Officers were not in the service of the Bank immediately prior to the appointed date. As such the Bank could not treat them as existing officers for the purpose of fitment or giving a higher scale of pay. [128D F; B] 3.1 Repugnancy of the definition of any term my arise only if such definition does not agree with the subject or context of a particular provision. But any action not in conformity with the provision of the definition clause will not render the definition of a term repugnant to the subject or context of any provision of the statute containing that term. [129BC] 3.2 In the instant case, there is no ambiguity in the definition of 'existing officers ', as given in paragraph 3(h) of the Order, nor is it in any way repugnant to the subject or context of paragraphs 7 and 8. If the Probation ary/Trainee Officers are treated as 'existing officers ' it would be doing violence to the provision of paragraph 3(h). [129B; A] 4. The definition of 'existing officers ' in paragraph 3(h) does not give any illustration whatsoever. On the contrary, it is quite specific and points to only one class of officers who were in the service of the Bank immediately prior to the appointed date and to whom any of the rules, as mentioned in that paragraph were applicable. [129D] 5. All the officers of the Bank at the lower level before the Probationary or Trainee Officers were appointed on 30/31 October, 1979 had agreed that they would merge into a new grade, and Officers Grade I would be senior to the Officers Grade ii. When two grades of officers are merged into a new grade, the question of inter se seniority automatically arises and casts a duty on the employer to fix the seniori ty. Paragraph 18(5) of the Order lays down that the seniori ty among the existing officers will remain the same, that b, the Officers Grade I will remain senior to Officers Grade II. Therefore, it cannot be said that the merger was only for the purpose of fitment in the higher scale and not for purposes of seniority. [130B D; 129F] 6. The question is not whether the Probationary/Trainee Officers have to undergo more stringent tests than the tests to be undergone by Grade H Officers, but whether the Probationary/Trainee Officers were existing officers or not, that is to say, whether they were in the employment of the Bank immediately prior to October 1, 1979. As they were not existing officers, they could not claim seniority over the Officers of Grade II. [130FG] 119 7.1 Unless the statute, under which the rules are framed by the rule making authority, does not specifically autho rise the making of rules with retrospective effect, such authority cannot frame any role with retrospective effect. [130H 131A] Cannanore Spinning and Weaving Mills Ltd. vs Collector of Customs and Central Excise, Cochin, & Ors. , ; ; Income Tax Officer, Alleppey vs M.C. Ponnoose & Ors., ; ; Hukam Chand etc. vs Union of India & Ors. , ; and Regional Transport Officer, Chittoor, & Ors. vs Associated Transport Madras (P) Ltd. & Ors., ; , referred to. 7.2 In the instant case, it cannot be said that the Order was retrospective in operation. All that has been done by it is that the Officers Grade I and Grade II in the em ployment of the Bank immediately prior to October 1, 1979 have been merged into one category, namely, Junior Manage ment Grade. Although the Order was actually published on December 19, 1979, the Officers of the Bank who were there on or before October, 1, 1979 were aware of the fact that the Order would be given effect to from October 1, 1979 as agreed to between the Bank and the Officers ' Federation. The appointed date is relevant for the purpose of applicability of the Order to the Officers who have been there in the service of the Bank immediately prior to the appointed date. [131E; C; 132G 133A] V.T. Khanzode & Ors. vs Reserve Bank of India & Anr., and Reserve Bank of India vs C.N. Sahasra naman, [1986] Suppl. SCC 143, referred to. The distinction in the status of Officers Grade I and Grade II having been abolished in the instant case, it is apparent that the Probationary/Trainee Officers being Offi cers of Grade I were of the same status and position as the Officers of Grade II. Admittedly, the erstwhile Officers of Grade H were appointed much earlier than the Probationary/Trainee Officers. They cannot, therefore, be considered senior to the erstwhile Officers Grade II. [134G 135AB] 9. The Probationary/Trainee Officers have not been brought within the purview of the new cadre, viz., the Junior Management Grade since no order has been passed under paragraph 2(1) of the Order applying the same to them. As they are not in the Junior Management Grade, which is a completely different cadre, they have no locus standi to challenge any benefit conferred on the Officers of the 120 Junior Management Grade comprising erstwhile Officers Grade I and Officers Grade II as were in the employment of the Bank prior to October 1, 1979. [134F; CD; 135C] </s>
<s>[INST] Summarize the judgementt Petition No. 4998 of 1983 IN CRIMINAL WRIT PETITION NO. 6607 Of 1981 Under Article 32 of the Constitution of India Kapil Sibal, A.C. and Ms. Madhu Singh for the petitioner S.C. Maheshwari, G.D. Gupta and R.N. Poddar for the Respondents. The Judgment of the Court was delivered by BHAGWATI, J. The short question that arises for consideration in this writ petition is whether in a case where First Information Report is lodged and after completion of investigation initiated on the basis of the First Information Report, the police submits a report that no offence appears to have been committed, the Magistrate can accept the report and drop the proceeding without issuing notice to the first informant or to the injured or in case the incident has resulted in death, to the relatives of the deceased. It is not necessary to state the facts giving rise to this writ petition, because so far as this writ petition is concerned, we have already directed by our order dated 28th November, 1983 that before any final order is passed on the report of the Central Bureau of 1: Investigation by the Chief Metropolitan Magistrate, the petitioner who is the father of the unfortunate Gurinder Kaur should be heard. Gurinder Kaur died as a result of burns received by her and allegedly she was burnt by her husband and his parents on account of failure to satisfy their demand for dowry. The circumstances in which Gurinder Kaur met with her unnatural death were investigated by the Central Bureau of Investigation and a report was filed by the Central Bureau of Investigation in the court of the Chief Metropolitan Magistrate on 11th August, 1982 stating that in their opinion in respect of the unnatural death of Gurinder Kaur no offence appeared to have been committed. The petitioner was however not aware that such a report had been submitted by the Central Bureau of Investigation and he, therefore, brought an application for initiating proceedings for contempt against the Central Bureau of Investigation on the ground that the Central Bureau of Investigation had not completed their investigation and submitted their report within the period stipulated by the Court by its earlier order dated 6th May, 1983. lt was in reply to this application for initiation of contempt proceedings that 945 the Central Bureau of Investigation intimated that they had already filed their report in the Court of the Chief Metropolitan Magistrate on 11th August, 1982 and the report was pending consideration by the Chief Metropolitan Magistrate. When this fact was brought to our notice we immediately passed an order dated 28th November, 1983 directing that the petitione !should be heard before any final order was passed on the report. There was no objection on the part of the respondents to the making of this order, but since the question whether in cases of this kind, the first informant or any relative of the deceased or any other aggrieved person is entitled to be heard at the time of consideration of the report by the Magistrate and whether the Magistrate is bound to issue notice to any such person, is a question of general importance which is likely to arise frequently in criminal proceedings, we thought that it would be desirable to finally settle this question so as to afford guidance to the courts of magistrates all over the country and we accordingly proceeded to hear the arguments on both sides in regard to this question. It is necessary to refer to a few provisions of the Code of Criminal procedure, 1973 in order to arrive at a proper determination of this question. Chapter XII of the Code of Criminal Procedure, 1973 deals with information to the police and their powers to investigate. Sub section (1) of Section 154 provides that every information relating to the commission of a congizable offence, if given orally to an officer in charge of a police station, shall be reduced in writing by him or under his direction and be read over to the informant and every such information, whether given in writing or reduced to writing, shall be signed by the person giving it and sub section (2) of that section requires that a copy of P such information shall be given forthwith, free of cost, to the informant. Section 156 sub section (1) vests in the officer in charge of a police station the power to investigate any cognizable case without the order of a magistrate and sub section (3) of that section authorises the magistrate empowered under Section 190 to order an investigation as mentioned in sub section (1) of that section. Section 157 sub section (1) lays down that if, from information received or otherwise an officer in charge of a police station has reason to suspect the commission of an offence which he is empowered under Section 156 to investigate, he shall forthwith send a report of the same to a Magistrate empowered to take cognizance of such offence 946 upon a police report and shall proceed to the spot to investigate the facts and circumstances of the case and, if necessary, to take measures for the discovery and arrest of the offender. But there are of the First Information Report lodged by him. No sooner he lodges the First Information Report, a copy of it has to be supplied to him, free of cost, under sub section (2) of Section 154. If, two provisos to this sub section. Proviso (b) enacts that if it appears to the officer in charge of a police station that there is no sufficient ground for entering on an investigation, he shall not investigate the case, but in such a case, sub section (2) of Section 157 requires that the officer shall forthwith notify to the informant the fact that he will not investigate the case or cause it to be investigated. What the officer in charge of a police station is required to do on completion of the investigation is set out in section 173. Sub section (2)(i) of Section 173 provides that as soon as investigation is completed, the officer in charge of a police station shall forward to the magistrate empowered to take cognizance of the offence on a police report, a report in the form prescribed by the State Government setting out various particulars including whether, in the opinion of the officer, as offence appears to have been committed and if so, by whom. Sub section (2)(ii) of Section 173 states that the officer shall also communicate, in such manner as may be prescribed by the State Government, the action taken by him to the person, if any, by whom the information relating to the commission of the offence was first given. Section 190 sub section (1) then proceeds to enact that any ' magistrate of the first class and any magistrate of the second class specially empowered in this behalf under sub section (2) may take cognizance of any offence: (a) upon receiving a complaint of facts which constitute such offence or (b) upon a police report of such facts or (c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed. We are concerned in this case only with clause (b), because the question we are examining here is whether the magistrate is bound to issue notice to the first informant or to the injured or to any relative of the deceased when he is considering the police report submitted under section 173 sub section (2). It will be seen from the provisions to which we have referred in the preceding paragraph that when an informant lodges the First Information Report with the officer in charge of a police 947 station he does not fade away with the lodging of the First Information Report. He is very much concerned with what action is initiated by the officer in charge of the police station on the basis of the First Information Report lodged by him. On sooner he lodges the First Information Report, a copy of it has to be supplied him, free of cost, under sub section (2) of Section 154. notwithstanding the First Information Report, the officer in charge of a police station decides not to investigate the case on the view that there is no sufficient ground for entering on an investigation, he is required under sub section (2) of Section 157 to notify to the informant the fact that he is not going to investigate the case because it to be investigated. Then again, the officer in charge of a police station is obligated under sub section(2)(ii) of Section 173 to communicate the action taken by him to the informant and the report forwarded by him to the magistrate under sub section (2)(i) has therefore to be supplied by him to the informant. The question immediately arises as to why action taken by the officer in charge of a police station on the First Information Report is required to be communicated and the report forwarded to the Magistrate under sub section (2)(i) of Section 173 required to be supplied to the informant. Obviously, the reason is that the informant who sets the machinery of investigation into motion by filing the First Information Report must know what is the result of the investigation initiated on the basis of the First Information Report. The informant having taken the initiative in lodging the First Information Report with a view to initiating investigation by the police for the purpose of ascertaining whether any offence has been committed and, if so, by whom, is vitally interested in the result of the investigation and hence the law requires that the action taken by the officer in charge of a police station on the First Information Report should be communicated to him and the report forwarded by such officer to the Magistrate under sub section (2)(i) of Section 173 should also be supplied to him. Now, when the report forwarded by the officer in charge of a police station to the Magistrate under sub section (2)(i) of Section 173 comes up for consideration by the Magistrate, one of two different situations may arise. The report may conclude that an offence appears to have been committed by a particular person or persons and in such a case, the Magistrate may do one of three things: (1) he may accept the report and take cognizance of the offence and issue process or (2) he may disagree with the report and 948 drop the proceeding or (3) he may direct further investigation under sub section (3) of Section 156 and require the police to make a further report. The report may on the other hand state that, in the opinion of the police, no offence apppears to have been committed and where such a report has been made, the Magistrate again has an option to adopt one of three courses: (1) he may accept the report and drop the proceeding or (2) he may disagree with the report and taking the view that there is sufficient ground for proceeding further, take cognizance of the offence and issue process or (3) he may direct further investigation to be made by the police under sub section (3) of Section 156. Where, in either of these two situations, the Magistrate decides to take cognizance of the offence and to issue process, the informant is not prejudicially affected nor is the injured or in case of death, any relative of the deceased aggrieved, because cognizance of the offence is taken by the Magistrate and it is decided by the Magistrate that the case shall proceed. But if the Magistrate decides that there is no sufficient ground for proceeding further and drops the proceeding or takes the view that though there is sufficient ground for proceeding against some, there is no sufficient ground for proceeding against others mentioned in the First Information Report, the informant would certainly be prejudiced because the First Information Report lodged by him would have failed of its purpose, wholly or in part. Moreover, when the interest of the informant in prompt and effective action being taken on the First Information Report lodged by him is clearly recognised by the provisions contained in sub section (2) of Section 154, sub section (2) of Section 157 and sub section (2)(ii) of Section 173, it must be presumed that the informant would equally be interested in seeing that the Magistrate takes cognizance of the offence and issues process, because that would be culmination of the First Information Report lodged by him. There can, therefore, be no doubt that when, on a consideration of the report made by the officer in charge of a police station under sub section (2)(i) of Section 173, the Magistrate is not inclined to take cognizance of the offence and issue process, the informant must be given an opportunity of being heard so that he can make his submissions to persuade the Magistrate to take cognizance of the offence and issue process. We are accordingly of the view that in a case where the magistrate to whom a report is forwarded under sub section (2)(i) of Section 173 decides not to take cognizance of the offence and to drop the proceeding or takes the 949 view that there is no sufficient ground for proceeding against some of the persons mentioned in the First Information Report, the magistrate must give notice to the informant and provide him an opportunity to be heard at the time of consideration of the report. It was urged before us on behalf of the respondents that if in such a case notice is required to be given to the informant, it might result in unnecessary delay on account of the difficulty of effecting service of the notice on the informant. But we do not think this can be regarded as a valid objection against the view we are taking, because in any case the action taken by the police on the First Information Report has to be communicated to the informant and a copy of the report has to be supplied to him under sub section (2) (i) of Section 173 if that be so, we do not see any reason why it should be difficult to serve notice of the consideration of the report on the informant. Moreover, in any event, the difficulty of service of notice on the informant connot possibly provide any justification for depriving the informant of the opportunity of being heard at the time when the report is considered by the Magistrate. The position may however, be a little different when we consider the question whether the injured person or a relative of the deceased, who is not the informant, is entitled to notice when the report comes up for consideration by the Magistrate. We connot spell out either from the provisions of the Code of Criminal procedure, 1973 or from the principles of natural justice, any obligation on the Magistrate to issue notice lo the injured person or to a relative of the deceased for providing such person an opportunity to be heard at the time of consideration of the report, unless such person is the informant who has lodged the First Information Report. But even if such person is not entitled to notice from the Magistrate, he can appear before the Magistrate and make his submissions when the report is considered by the Magistrate for the purpose of deciding what action he should take on the report. The injured person or any relative of the deceased, though not entitled to notice from the Magistrate, has locus to appear before the Magistrate at that time of consideration of the report, if he otherwise comes to know that the report is going to be considered by the Magistrate and if he wants to make his submissions in regard to the report, the Magistrate is bound to hear him. We may also observe that even though the Magistrate is not bound to give notice of the hearing fixed for consideration of the report 950 to the injured person or to any relative of the deceased, he may, in the exercise of his discretion, if he so thinks fit, give such notice to the injured person or to any particular relative of or relatives the deceased, but not giving of such notice will not have any invalidating effect on the order which may be made by the Magistrate on a consideration of the report. This is our view in regard to the question which has arisen for consideration before us. Since the question is one of general importance, we would direct that copies of this judgment shall be sent to the High Courts in all the States so that the High Courts may in their turn circulate this judgment amongst the Magistrates within their respective jurisdictions. [/INST]In a criminal case where First Information Report is lodged and the police submits a report after completion of investigation initiated on the basis of such FIR that no offence appears to have been committed, on the question whether in cases of this kind, the first informant or any relative of the dec eased or any other aggrieved person is entitled to be heard at the time of consideration of the Report by the Magistrate and whether the Magistrate is bound to issue notice to any such person, the Court, ^ HELD: I . When the report forwarded by the Officer in charge of a police station to the Magistrate under sub section (2) (i) of section 173 comes up for consideration by the Magistrate, one of two different situations may arise. The report may conclude that an offence appears to have been committed by a particular person or persons and in such a case, the Magistrate may do one of three things: (1) he may accept the report and take cognizance of the offence and issue process or (2) he may disagree with the report and drop the proceeding or (3) he may direct further investigation under sub section (3) of section 156 and require the police to make a further report. The report may on the other hand state that, in the opinion of the police, no offence appears to have been committed and where such a report has been made, the Magistrate again has an option to adopt one of three courses: (1) he may accept the report and drop the proceeding or (2) he may disagree with the report and taking the view that there is sufficient ground for proceeding further, take cognizance of the offence and issue process or (3) he may direct further investigation to be made by the police under sub section (3) of section 156. Where, in either of these two situations, the Magistrate decides to take cognizance of the offence and to issue process, the 943 informant is not prejudicially affected nor is the injured or in case of death, any relative of the deceased aggrieved, because cognizance of the offence is taken by the Magistrate and it is decided by the Magistrate that the case shall proceed. But if the Magistrate decides that there is no sufficient ground for proceeding further and drops the proceedings or takes the view that though there is sufficient ground for proceeding against others mentioned in the First Information Report, the informant would certainly be prejudiced because the First Information Report lodged by him would have failed of its purpose; wholly or in part. Moreover, when the interest of the informant in prompt and effective action being taken on the First Information Report lodged by him is clearly recognised by the provisions contained in sub section (2) of section 154, subsection (2) of section 157 and sub section (2) (ii) of section 173, it must be presumed that the informant would equally be interested in seeing that the Magistrate takes cognizance of the offence and issues process, because that would be culmination of the First Information Report lodged by him. The Court is accordingly of the view that in a case where the Magistrate to whom a report is forwarded under sub section (2) (i) of section 173 decides not to take cognizance of the offence and to drop the proceedings or takes the view that there is no sufficient ground for proceeding against some of the persons mentioned in the First Information Report, the Magistrate must give notice to the informant and provide him an opportunity of being heard at the time of consideration of the report, and the difficulty of service of notice on the informant cannot possibly provide any justification for depriving the informant of the opportunity of being heard at the time when the report is considered by the Magistrate.[947G H; 948, 949A C] 2. This Court cannot spell out either from the provisions of the Code of Criminal procedure, 1973 or from the principles of natural justice, any obligation on the Magistrate to issue notice to the injured person or to a relative of the deceased for providing such person an opportunity to be heard at the time of consideration of the report, unless such person is the informant who has lodged the First Information Report. But even if such person ii not entitled to notice from the Magistrate, he can appear before the Magistrate and make his submissions when the report is considered by the Magistrate for the purpose of deciding what action he should take on the report. The injured person or any relative of the deceased, though not entitled to notice from the Magistrate, has locus to appear before the Magistrate at the time of consideration of the report, if he otherwise comes to know that the report is going to be considered by the Magistrate and if he wants to make his submissions in regard to the report, the Magistrate is bound to hear him. [949E G] Observation: Even though the Magistrate is not bound to give notice of the hearing fixed for consideration of the report to the injured person or to any relative of the deceased, he may, in the exercise of his discretion, if he so thinks fit, give such notice to the injured person or to any particular relative or relatives of the deceased, but not giving of such notice will not have any invalidating effect on the order which may be made by the Magistrate on a consideration of the report.[949H. 950A] 944 </s>
<s>[INST] Summarize the judgementAppeal No. 128 of 1963. Appeal by special leave from the judgment and order dated September 21, 1961 of the Bombay High Court in Income Tax Reference No. 32 of 1959. N.D. Karkhanis, R.N. Sachthey and B.R.G.K. Achar, for the appellant. R.J. Kolah, J.B. Dadachanji, O.C. Mathur and Ravinder Narain, for the respondent. December 2, 1963. The Judgment of the Court was delivered by SHAH, J. Henry Gannon who was a registered holder of 2674 shares of Gannon Dunkerley & Company a private Limited Company with its registered office in Bombay died on May 13, 1945, having made and published a will disposing of his extensive estate in the United Kingdom and in British India. The National Bank of India Ltd. obtained probate of Gannon 's will in the United Kingdom and appointed the respondent James Anderson its attorney to administer the estate in British India. Anderson applied for and obtained in India on August 14, 1946, Letters of Administration "durante absentia" to the estate of Gannon in British India. 450 out of the shares were specifically bequeathed by Gannon to certain legatees, and in the course of administration, share certificates with transfer forms duly executed were delivered to the legatees in respect of those shares and no question arises in this appeal in regard to those shares. By agreement dated August 14, 1946, between the executor to the estate, the Company and one Morarka, the executor agreed to sell the remaining 2224 shares of the Company to Morarka and pursuant thereto the relevant share certificates with transfer deeds were handed over to Morarka on October 12, 1946, against payment of the price at the rate of Rs. 140 per share. Morarka, for some reason which is not clear from the record, failed to present the transfer deeds and the share certificates for registration at 593 the office of the Company and the name of Gannon remained at all material times on the register of shareholders in respect of those 2224 shares. In the assessment of the Company for the assessment years 1946 47 and 1947 48 the Income tax Officer, Bombay, made an order on March 26, 1953, under section 23A of the Income tax Act, 1922 (as it then stood) that certain undistributed parts of the assessable income of the Company shall be deemed to have been distributed as dividends amongst the shareholders as at the dates, viz., May 26, 1947, and December 22, 1947, of the General Meetings of the Company. The net dividends so deemed to be distributed in respect of the shares were Rs. 61,051 and Rs. 3,73,099. The Income tax Officer then issued on March 28, 1953, a notice under section 34(1)(b) of the Income tax Act addressed to "James Anderson, Administrator to the Estate of late Mr. Henry Gannon" reciting that he had reason to believe that Anderson 's "income assessable to income tax for the year ending 31st of March 1949" had escaped assessment and that he proposed to re assess the escaped income and for that purpose called upon Anderson to make a return of his total income and the total world income assessable for the year ending March 31, 1949. In compli ance with the requisition Anderson submitted a return, but did not include therein the dividend deemed to have been distributed under the order dated March 26, 1953. The Income tax Officer in his order of assessment included dividends deemed to be distributed and after processing the amount under section 18(5) included it in the total income of Anderson and levied tax thereon at the appropriate rate. Anderson 's appeals against the order of the Income tax Officer to the Appellate Assistant Commissioner and to the Income tax Appellate Tribunal, Bombay, were unsuccessful. At the instance of Anderson the following questions were referred by the Tribunal to the High Court of Bombay under section 66(1) of the Income tax Act: 1/SCI/64 38 594 "(1)Whether in the facts and in the circumstances of the case the assessment made on Mr. James Anderson, Administrator to the estate in India of Mr. Henry Gannon (deceased) is valid in law? If the above question is answered in the affirmative (2 ) whether in the facts and in the circumstances of the case the dividends of Rs. 61,051 and "Rs. 3,73,099 deemed to have been distributed on 26th May 1947 and 22nd December 1947 respectively under section 23A of the Income tax Act were assessable in the hands of the applicant?" The High Court answered the first question in the negative and declined to answer the second question. With special leave, the Commissioner of Income tax, Bombay, has appealed to this Court. The estate of Gannon to which the Letters of Administration relate, vested by virtue of section 211 of the Indian Succession Act, in Anderson, but he did not take steps to get his name entered in the register of shareholders maintained by the Company, and the Income tax Officer sought to tax the dividends deemed to have been distributed in the hands of Anderson as administrator of the estate of Gannon. The order made by the Income tax Officer under section 23A gives rise to a notional income: it merely creates a fiction about distribution and consequential receipt of dividend. The order by its own force however does not charge the income to tax: it has to be followed by an order of assessment to make tax on such income eligible. The sole question in this appeal is whether the Act contains machinery for assessing dividends deemed to have been distributed by virtue of an order under section 23A in respect of the shares held by a shareholder, when before the date on which the fiction of distribution becomes effective viz. , the date of the relevant General Meeting of the Company the registered shareholder has died and his representatives have not been substituted in the register of the Company. 595 It was held by this Court in Commissioner of Income tax, Bombay City II vs Shakumtala and others(1) following Howrah Trading Company Ltd. vs Commissioner of Income tax, Central Calcutta(2) that the expression "shareholder" in section 23A of the Indian Income tax Act, 1922, means a shareholder registered in the books of the company, and such shareholder alone is liable to be taxed in respect of the dividend deemed to be distributed. Counsel for the Commissioner submits that the principle of those cases applies only when the registered share holder is alive and the beneficial ownership in the shares is vested as a result of some transaction inter vivos in a person in whose name the shares do not stand in the Company 's register, but not where by the grant of representation to the estate of a registered shareholder who has died, the representative is invested, without his name being entered in the register, with the rights of the shareholder. Whether on the death of a shareholder his executor or administrator may enforce the rights of the shareholder or incur liability in respect of the shares to the Company, depends upon the nature of the right and the obligation, and terms of the statute and the articles of the Company which create those rights and obligations. The legal representative of a deceased person cannot vote on behalf of the shareholder and may not become a director of the Company on the strength of the representation alone. Again by the express provision contained in section 35 of the Indian Companies Act, 1913, a transfer of the share or other interest of a deceased member by his legal representative although he is himself not a member is as valid as if he were a member at the time of the execution of the transfer. This implies that the legal representative does not acquire in all cases the rights of a shareholder of a company in respect of shares of which the name of the deceased was registered as holder. But if the estate of a shareholder of a com (1) (2) 596 pany is by virtue of the Articles of the Company liable in respect of calls upon shares whether made during the life time of the holder or after his death, the legal representative is obliged to satisfy the calls in his representative character. This obligation arises not because the legal representative becomes, by virtue of probate or Letters of Administration, a shareholder in place of the person whose estate is vested in him, but because as a representative it is his duty to discharge the obligations enforceable against the estate. Under an order made by the Income tax Officer under section 23A of the Indian Income tax, 1922, dividend is deemed to be distributed among the shareholders and by the express provision contained in the statute the proportionate share of the dividend of each shareholder has to be included in the total income of such shareholder for the purpose of assessing his total income. The statute therefore in terms applies to the shareholder and makes the dividend taxable as his income. The obligation to pay the tax on the dividend so deemed to be distributed is of the shareholder, and may be enforced against him or his legal representative in the manner and to the extent the statute permits. There is no special machinery devised by the Income tax Act enabling assessment and levy of tax in respect of such deemed income from the estate of the shareholder in the hands of his legal representative when the order of the Income tax Officer pursuant to which the income was to be deemed to be distributed becomes effective was made after the death of the shareholder, and the general provision in section 24B for enforcement of liability against the legal representative of a deceased person to pay tax which would have been payable if such person had not died, has a limited application. In Commissioner of Income tax Bombay vs Ellis C. Reid(" it was observed by the Bombay High Court in rejecting the claim made by the Income tax Department to assess a deceased person 's estate (1) I.L.R. 5 Bom. 312: 597 in the hands of his legal representative to tax, that the definition of "assessee" in section 2(2) of the Indian Income tax Act, 1922 (as it stood at the material date) in terms only applied to a living person, the words being "a person by whom income tax is payable" and not "a person by whom or by whose estate Income tax is payable", and in the absence of appropriate provisions, for collecting tax from the estate of a deceased person in the Act, the claim of the Income tax Officer to make an assessment under section 23(4) must fail. The Court also observed that throughout the Income tax Act there is no reference to the decease of a person on whom the tax had been originally charged, and it was difficult to suppose that the omission was unintentional. In Reid 's case(" the tax payer had died after the commencement of the financial year but before the income of the previous year was assessed, and it was held that the executors under the will of the tax payer were not liable to pay tax on receipt of income due to the deceased, notwithstanding that he died while assessment proceedings were pending, because the proceedings could not be continued and the assessment could not be made after the tax payer 's death. To rectify the lacuna in the machinery of assessment the Legislature enacted section 24B, by the Indian Income tax (Second Amendment) Act, 18 of 1933. The first sub section of section 24B provided: "Where a person dies, his executor, administrator or other legal representative shall be liable to pay out of the estate of the deceased person to the extent to which the estate is capable of meeting the charge the tax assessed as payable by such person, or any tax which would have been payable by him under this Act if he had not died." In interpreting that enactment this Court held in a recent case: Commissioner of Income tax, Bombay City 1 vs Amarchand Shroff (2) that by the incorporation of section 24B the Legislature has extended the legal personality of a deceased person for the duration (1) I.L.R. (2) 598 of the entire previous year in the course of which he died, and therefore the income either received by him before his death or by his heirs and representatives after his death in that previous year becomes assessable to tax in the relevant assessment year, but not the income received in the year subsequent to the previous or account year. In Amarchand Shroff 's case(1), 'A ' who was a partner in a firm of solicitors which maintained accounts "on cash basis" died on July 7, 1949. Outstandings of the firm in respect of professional services rendered prior to the death of 'A ' were realized during five years subsequent to 'A 's death and were divided between the partners of the firm and certain sums were paid to the heirs and legal representatives of 'A ' as his share. The Income tax Department sought to assess the amounts received by the legal representative of 'A ' as his share to tax under section 34 (1)(b) read with section 24B. It was held that section 24B did not authorise the levy of tax on receipts by the legal representative of a deceased person in the years of assessment succeeding the year of account in which such person died and accordingly the income received by him before his death and that received by his heirs and legal representatives after his death in that previous year became assessable to income tax in the relevant assessment year, but not receipts by the legal representatives after the expiry of the account year in which 'A ' died. In the case before us Gannon died in May 1945, and the dividend in respect of which orders under section 23A were passed was deemed to be distributed in the year of account ending March 31, 1949. The legal personality of Gannon as held in Amarchand Shroff 's case(1) came to an end for the purpose of section 24B at the end of the account year in which Gannon died and no tax could be levied under section 24B on the dividends deemed to have been received by him or his legal representatives after the end of that year. Counsel for the Commissioner sought to rely on the following observations made by Kapur, J, who spoke for the Court in Amarchand Shroff 's case(1) (at p. 67): (1)48 I.T.R. 59. 599 "In the present case the amounts which are sought to be taxed and which have been held not to be liable to tax are those which were not received in the previous year and are there fore not liable to tax in the several years of assessment. It cannot be said that they were income which may be deemed by fiction to have beer received by the dead person and therefore they are not liable to be taxed as income of the deceased, Amarchand, and are not liable to be taxed in the hands of the heirs and legal representatives who cannot be deemed to be assessees for the purpose of assessment in regard to those years", and on the latter part of the opinion sought to raise two arguments (1) that even if after the expiry of the year of account receipts which if the person earning had not died would have been treated as his income, ceased to be liable to assessment as income of the deceased, they could still be taxed as his income in the hands of the legal representatives and (2) that where the income was notional as under section 23A the legal personality of the deceased must be regarded as extended to the end of the year in which such notional income must be deemed to have been received by the legal representatives of the deceased. The first argument is plainly inconsistent with what was decided in Amarchand Shroff 's case(1). In that case the Court held that the receipts by the heir or legal representative for professional services rendered by the deceased solicitor were liable to be brought to tax in the hands of the legal representatives only to the limited extent permitted by section 24B. The second argument involves the importation into the expression "deemed by fiction to have been received" a concept which was wholly alien to what was decided by the Court, for in Amarchand Shroffs case(1) the Court was dealing not with a fiction of distribution by an order under section 23A of dividends which never reached the shareholder or his legal representative, but to a fiction of receipt by a deceased person of income by extending (1) 600 his legal personality. Section 24B does not warrant the application of two different interpretations in the matter of extension of the legal personality of the deceased according as the income is actual or notional. Section 24B in terms refers to the liability of the legal representative to pay tax assessed as payable by such deceased person, or any tax which would have been payable by him under the Act if he had not died, and if the expression "tax which would have been payable under this Act, if he had not died" is intended to impose liability for tax on income received in the year of account in the course of which the tax payer died, a different interpretation of the same expression in the context of notional income would be impermissible. The Legislature not having made any provision generally for assessment of income receivable by the estate of the deceased person, the expression "any tax which would have been payable by him under this Act if he had not died" cannot be deemed to have supplied the machinery for taxation of income received by a legal representative to the estate after the expiry of the year in the course of which such person died. It was then urged that apart from section 24B, the legal representatives of a deceased person also represent his estate in the matter of taxation of income and it is competent to the taxing authorities to assess them on income received on behalf of the estate. Counsel did not rely upon any specific provision of the Act in support of the contention, and merely asserted that the Act seeks to tax all assessable incomes, and income received by a legal representative of the estate of a deceased person should not be permitted to escape tax to the detriment of public revenue. But if the Legislature has failed to set up the procedure to assess such income, the Courts cannot supply it. The expression "assessee" in section 2(2) as substituted by the Indian Income tax (Amendment) Act, 25 of 1953, with effect from April 1, 1952, means a person by whom income tax or any other 601 every person in respect of whom any proceeding and this Act has been taken for the assessment of his income or of the loss sustained by him or of the amount of refund due to him. By section 3 where income tax is chargeable for any year at any rate or rates prescribed by the Act of the Central Legislature, tax at that rate shall be charged for that year in accordance with and subject to the provisions of the Act in respect of 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. The charge to income tax has therefore to be in accordance with and subject to the provisions of the Act, and the Legislature has not provided that the income received by a legal representative which would, but for the death of the deceased, have been received by such deceased person, is to be regarded for the purpose of assessment as the personal income of the legal representative To assess tax on such receipts on the footing that it is the personal income of the legal representative is to charge tax not in accordance with the provisions of the Act. We therefore agree with the High Court, though for somewhat different reasons. The appeal therefore fails and is dismissed with costs. Appeal dismissed. [/INST]G, a holder of certain shares of a private limited company made a will disposing of his estate and died on May 13, 1945. The respondent obtained Letters of Administration "durante absentia" to the estate, and in pursuance of an agreement between himself, the company and one M to sell the shares to M, handed over the share certificates to M against payment of the price. M failed to present the share certificates for registration and the name 591 of G remained on the register of shareholders of the Company. The Income tax Officer made an order under section 23A of the Income tax Act (as it then stood) that certain undistributed part of the assessable income of the company shall be deemed to have been distributed as dividend amongst the shareholders as at the dates of the general meetings, viz., May 26, 1947 and December 22, 1947. The Income tax Officer then issued a notice under section 34(1) (b) to the respondent proposing to re assess his income and calling upon him to file a return for the relevant year. The respondent submitted a return, but did not include the dividend deemed to have been distributed by the order passed under section 23A The Income tax Officer included the dividends in the total income of the respondent and levied tax. The respondent 's appeals to the Appellate Assistant Commissioner and the Income tax Appellate Tribunal were unsuccessful. On reference, the High Court held that the assessment made on the respondent Administrator to the estate of G (deceased) was not valid in law. In appeal by special leave: Held (i) The legal representative does not acquire in all cases, the right of a share holder in respect of shares of which the deceased was registered as holder. But if the estate of a share holder of a company is by virtue of the Articles of the Company liable in respect of calls whether made during the life time of the holder or after his death, the legal representative is obliged to satisfy the calls in his representative character. (ii) There is no special machinery devised by the Income tax Act enabling assessment and levy of tax in respect of such deemed income from the estate of the share holder, in the hands of his legal representative when the order of the Income tax Officer pursuant to which the income was to be deemed to be distributed becomes effective was made after the death of the share holder. The provision in section 24B for enforcement of liability against the legal representative of a deceased person to pay tax which would have been payable if such person had not died, has a limited application. The expression "tax which would have been payable under this Act, if he had not died," in section 24B is intended to impose liability for tax on income actually received or deemed fictionally to be received in the year of account in the course of which the taxpayer died. This expression does not supply machinery for taxation of income received by a legal representative after the expiry of the year in the course of which such person died. Commissioner of Income tax Bombay vs Amarchand Shroff, [1963] Supp. I S.C.R. 699 and Commissioner of Income tax, Bombay vs Ellis C. Reid. I.L.R. , referred to. (iii) To assess tax on such receipts after the expiry of the year in the course of which the original owner died on the footing that it is the personal income of the legal representative is to charge tax not in accordance with the provisions of the Act. </s>
<s>[INST] Summarize the judgementAppeal No. 87 of 1957. Appeal from the judgment and decree dated December 1, 1955, of the Allahabad High Court in Special Appeal No. 18 of 1955, arising out of the judgment and order dated November 30, 1954, of the ' said Court in Civil Misc. Writ No. 355 of 1952. H. N. Sanyal, Additional Solicitor General of India, G. C. Mathur and C. P. Lal, for the appellants. P. R. Das and B. P. Maheshwari, for the respondent. B. P. Maheshwari, for Agra Bullion Exchange (Intervener). K. Veeraswami and T. M. Sen, for the State of Madras (Intervener). R. C. Prasad, for the State of Bihar (Intervener). H. N. Sanyal, Additional Solicitor General of India, B. Gopalakrishnan and T. M. Sen, for the Union of India (Intervener). September 23. The Judgment of the Court was delivered by BHAGWATI J. The facts leading up to this appeal lie within a narrow compass. The respondent is a firm registered under the Indian Partnership Act dealing in Bullion, Gold and Silver ornaments and forward contracts in Silver Bullion at Banaras in the State of Uttar Pradesh. For the assessment years 1948 49, 1949 50 and 1950 51 the Sales Tax Officer, Banaras, the appellant No. 1 herein assessed the respondent to U. P. Sales Tax on its forward transactions in Silver Bullion. The respondent had deposited the sums of Rs. 150 12 0, Rs. 470 0 0 and Rs. 741 0 0 for the said 1352 three years which sums were appropriated to wards the payment of the sales tax liability of the firm under the respective assessment orders passed on May 31, 1949, October 30, 1950 and August 22, 1951. The levy of sales tax on forward transactions was held to be ultra vires, by the High Court of Allahabad by its judgment delivered on February 27, 1952, in Messrs. Budh Prakash Jai Prakash vs Sales Tax Officer, Kanpur (1) and the respondent by its letter dated July 8, 1952, asked for a refund of the amounts of sales tax paid as aforesaid. The appellant No. 2, the Commissioner of Sales Tax, U. P., Lucknow, however, by his letter dated July 19, 1952, refused to refund the same. The respondent thereafter filed in the High Court of Allahabad the Civil Misc. Writ Petition No. 355 of 1952 under article 226 of the Constitution and asked for a writ of certiorari for quashing the aforesaid three assessment orders and a writ of mandamus requiring the appellants to refund the aforesaid amounts aggregating to Rs. 1,365 12 0. The judgment of the Allahabad High Court was confirmed by this Court on May 3, 1954, in Sales Tax Officer, Pilibhit vs Budh Prakash Jai Prakash () and the writ petition aforesaid was heard by Chaturvedi J. The learned judge by an order dated November 30, 1954, quashed the said assessment orders in so far as they purported to assess the respondent in respect of forward contracts in silver and also issued a writ of mandamus directing the appellants to refund the amounts paid by the respondent. The appellants filed a Special Appeal No. 18 of 1955 in the High Court of Allahabad against that order of the learned Judge. A Division Bench of the said High Court heard the said appeal on December 1, 1955. It was argued by the Advocate General on, behalf of the appellants that the amounts in dispute were paid by the respondent under a mistake of law and were therefore irrecoverable. The Advocate General also stated categorically that in that appeal he did not contend that the respondent ought to have (1) (1952) A.L.J 332. (2) [I955] 1 S.C.R. 243. 1353 proceeded for the recovery of the amount claimed otherwise than by way of a petition Under article 226 of the Constitution. The High Court came to the conclusion that section 72 of the applied to the present case and the State Government must refund the moneys unlawfully received by it from the respondent on account of Sales Tax. It accordingly dismissed the appeal with costs. The appellants then applied for a certificate under article 133(1)(b) of the Constitution which certificate was granted by the High Court on July 30, 1956, on the Advocate General 's giving to the Court an undertaking that the State will, in any event, pay the costs, charges and expenses incurred by or on behalf of the respondent as taxed by this Court. This appeal has accordingly come up for hearing and final disposal before us at the instance of the Sales Tax Officer, Banaras, appellant No. 1, the Commissioner, Sales Tax, U.P., Lucknow, appellant No. 2 and the State of U.P., appellant No. 3. The question that arises for our determination in this appeal is whether section 72 of the applies to the facts of the present case. The learned Additional Solicitor General appearing for the appellants tried to urge before us that the procedure laid down in the U.P. Sales Tax Act by way of appeal and/or revision against the assessment orders in question ought to have been followed by the respondent and that not having been done the respondent was debarred from proceeding in the civil courts for obtaining a refund of the monies paid as aforesaid. He also tried to urge that in any event a writ petition could not lie for recovering the monies thus paid by the respondent. Both those contentions were, however, not available to him by reason of the categorical statement made by the Advocate General before the High Court. The whole matter had proceeded on the basis that the respondent was entitled to recover the amount claimed in the writ petition which was filed. No such point had been taken either in the grounds of appeal or in the statement of case filed before us in this Court and we did not feel justified in allowing the 1354 learned Additional Solicitor General to take this point at this stage. Section 72 of the is in the following terms: " A person to whom money has been paid, or anything delivered by mistake or under coercion, must repay or return it. " As will be observed the section in terms does not make any distinction between a mistake of law or a mistake of fact. The term " mistake " has been used without any qualification or limitation whatever and comprises within its scope a mistake of law as well as a mistake of fact. It was, however, attempted to be argued on the analogy of the position in law obtaining in England, America and Australia that money paid under a mistake of law could not be recovered and that that was also the intendment of section 72 of the . The position in English law is thus summarised in Kerr on " Fraud and Mistake " 7th Edn., at p. 140: " As a general rule it is well established in equity as well as at law, that money paid under a mistake of law, with full knowledge of the facts, is not recoverable, and that even a promise to pay, upon a supposed liability, and in ignorance of the law, will bind the party. " The ratio of the rule was thus stated by James L. J. in Rogers vs Ingham(1) : " If that proposition were trite in respect of this case it must be true in respect to every case in the High Court of Justice where money has been paid under a mistake as to legal rights, it would open a fearful amount of litigation and evil in the cases of distribution of estates, and it would be difficult to say what limit could be placed to this kind of claim, if it could be made after an executor or trustee had distributed the whole estate among the persons supposed to be entitled, every one of them having knowledge of all the facts, and having given a release. The thing has never been done, and it is not a thing which, in my opinion, is to be encouraged. Where people have a (1) ,356. 1355 knowledge of all the facts and take advice, and whether they get proper advice or not, the money is divided and the business is settled, it is not for the good of mankind that it should be reopened. " (See also National Pari Mutual Association Ltd. vs The King (1) and Pollock on Contract, 13th Edn., at pp. 367 & 374). The American doctrine is also to the same effect as appears from the following passage in Willoughby on the Constitution of the United States, Vol. 1, p. 12: " The general doctrine that no legal rights or obligation can accrue under an unconstitutional law is applied in civil as well as criminal cases. However, in the case of taxes levied and collected under statutes later held to be unconstitutional, the tax payer cannot recover unless he protested the payment at the time made. This, however, is a special doctrine applicable only in the case of taxes paid to the State. Thus, in transactions between private individuals, moneys paid under or in pursuance of a statute later held to be unconstitutional, may be recovered, or release from other undertakings entered into obtained. " The High Court of Australia also expressed a similar opinion in Werrin vs The Commonwealth (2) where Latham C. J. and MacTiernan J. held that money paid voluntarily under a mistake of law was irrecoverable. Latham C. J. in the course of his judgment at p. 157 relied upon the general rule, as stated in Leake on Contracts, 6th Edn. (1911), p. 63 " that money paid voluntarily, that is to say, without compulsion or extortion or undue influence and with a knowledge of. all the facts, cannot be recovered although paid without any consideration. " It is no doubt true that in England, America and Australia the position in law is that monies paid voluntarily, that is to say, without compulsion or extortion or undue influence and with a knowledge of all facts, cannot here covered although paid without any consideration. Is the position the same in India ? (1) (2) 172 1356 It is necessary to observe at the outset that what we have got to consider are the plain terms of section 72 of the as enacted by the Legislature. If the terms are plain and unambiguous we cannot have resort to the position in law as it obtained in England or in other countries when the statute was enacted by the Legislature. Such recourse would be permissible only if there was any latent or patent ambiguity and the courts were required to find out what was the true intendment of the Legislature. Where, however, the terms of the statute do not admit of any such ambiguity, it is the clear duty of the courts to construe the plain terms of the statute and give them their legal effect. As was observed by Lord Herschell in the Bank of England vs Vagliano Brothers (1) : " I think the proper course is in the first instance to examine the language of the statute and to ask what is its natural meaning uninfluenced by any considerations derived from the previous state of the law, and not to start with enquiring how the law previously stood, and then, assuming that it was probably intended to leave it unaltered, to see if the words of the enactment will bear an interpretation in conformity with this view. " "If a Statute, intended to embody in a code a particular branch of the law, is to be treated in this fashion, it appears to me that its utility will be almost entirely destroyed, and the very object with which it was enacted will be frustrated. The purpose of such a statute surely was that on any point specifically dealt with by it, the law should be ascertained by interpreting the language used instead of, as before, by roaming oyer a vast number of authorities in order to discover what the law was, extracting it by a minute critical examination of the prior decision. . . This passage was quoted with approval by their Lordships of the Privy Council in Narendranath Sircar vs Kamal Basini Dasi (2) while laying down the proper mode of dealing with an Act enacted to codify a particular branch of the law. (1) , 144. (2) Cal. 563, 571. 1357 The Privy Council adopted a similar reasoning in Mohori Bibee vs Dhurmodas Ghose (1) where they had to interpret section 11 of the . They had before them the general current of decisions in India that ever since the passing of the the contracts of infants were voidable only. There were, however, vigorous protests by various judges from time to time; and there were also decisions to the contrary effect. Under these cir cumstances, their Lordships considered themselves at liberty to act on their own view of the law as declared by the Contract Act, and they had thought it right to have the case reargued before them upon this point. They did not consider it necessary to examine in detail the numerous decisions above referred to, as in their opinion the " whole question turns upon what is the true construction of the Contract Act itself ". They then referred to the various relevant sections of the and came to the conclusion that the question whether a contract is void or voidable presupposes the existence of a contract within the meaning of the Act and cannot arise in the base of an infant who is not " competent to contract. " In Satyabrata Ghose vs Mugneeram Bangur & Co. (2), section 56 of the came up for consideration by this Court. B. K. Mukherjea J. (as he then was) while delivering the judgment of the Court quoted with approval the following observations of Fazl Ali J. in Ganga Saran vs Ram Charan (3): " It seems necessary for us to emphasise that so far as the courts in this country are concerned, they must look primarily to the law as embodied in sections 32 and 56 of the . and proceeded to observe : " It would be incorrect to say that section 56 of the Contract Act applies only to cases of physical impossibility and that where this section is not applicable, recourse can be had to the principle of English law on the subject of frustration. It must be held also that to the extent that the deals (1) (1902) L.R. 30 I.A. 114. (2) ; (3) ; , 52. 1358 with a particular subject, it is exhaustive upon the same and it is not permissible to import the principles of English law dehors these statutory provisions. The decisions of the English courts possess only a persuasive value and may be helpful in showing how the courts in England have decided cases under circumstances similar to those which have come before our courts. " It is, therefore, clear that in order to ascertain the true meaning and intent of the provisions, we have got to turn to the very terms of the statute itself, divorced from all considerations as to what was the state of the previous law or the law in England or elsewhere at the time when the statute was enacted. To do otherwise would be to make the law, not to interpret it. (See Gwynne vs Burnell (1) and Kumar Kamalranjan Roy vs Secretary of State (2). The courts in India do not appear to have consistently adopted this course and there were several decisions reached to the effect that section 72 did not apply to money paid under a mistake of law, e.g., Wolf & Sons vs Dadyba Khimji & Co. (3) and Appavoo Chettiar vs section 1. Co. (4). In reaching those decisions the courts were particularly influenced by the English decisions and also provisions of section 21 of the which provides that a contract is not voidable because it was caused by a mistake as to any law in force in British India. On the other hand, the Calcutta High Court had decided in Jagdish Prasad Pannalal vs Produce Exchange Corporation Ltd. (5), that the word " mistake " in section 72 of the included not only a mistake of fact but also a mistake of law and it was further pointed out that this section did not conflict with section 21 because that section dealt not with a payment made under a mistake of law but a contract caused by a mistake of law, whereas section 72 dealt with a payment which was either not under a contract at all or even if under a contract, it was not a cause of the contract. (1) (2) L. R. 66 I. A. 1, 10. (3) Bom. 631, 649. (4) A.I.R. 1929 Mad. (5) A.I.R. 1946 Cal. 1359 The Privy Council resolved this conflict in Shiba Prasad Singh vs Srish Chandra Nundi(1). Their Lordships of the Privy Council observed that the authorities which dealt with the meaning of " mistake " in the section were surprisingly few and it could not be said that there was any settled trend of authority. Their Lordships were therefore bound to consider this matter as an open question, and stated at p. 253: " Those learned judges who have held that mistake in this context must be given a limited meaning appear to have been largely influenced by the view expressed in Pollock and Mulla 's commentary on section 72 of the , where it is stated (Indian Contract & Specific Relief Acts, 6th Edn., p. 402): " Mistake of law is not expressly excluded by the words of this section; but section 21 shows that it is not included ". For example, Wolf & Sons vs Dadyaba Khimji & Co. (2). Macleod J. said referring to section 72 " on the face of it mistake includes mistake of law. But it is said that under section 21 a contract is not voidable on the ground that the parties contracted under a mistaken belief of the law existing in British India, and the effect of that section would be neutralized if a party to such a contract could recover what he had paid by means of section 72 though under section 21 the contract remained legally enforceable. This seems to be the argument of Messrs. Pollock and Mulla and as far as I can see it is sound. " In Appavoo Chettiar vs South Indian Rly. (3), Ramesam and Jackson JJ. say: " Though the word ' mistake ' in section 72 is not limited it must refer to the kind of mistake that can afford a ground for relief as laid down in sections 20 and 21 of the Act. . Indian law seems to be clear, namely, that a mistake, in the sense that it is a pure mistake as to the law in India resulting in the payment by one person to another and making it equitable that the payee should return the money is no ground for relief." Their Lordships have found no case in which an opinion that ',mistake" in section 72 must be given a limited meaning has been based on any other ground. In their (1) (1949) L.R. 76 I.A. 244. (2) Bom. (3) A.I.R. 1929 Mad. 1360 Lordships ' opinion this reasoning is fallacious. If a mistake of law has led to the formation of a contract, section 21 enacts that that contract is not for that reason voidable. If money is paid under that contract, it cannot be said that that money was paid under mistake of law ; it was paid because it was due under a valid contract, and if it had not been paid payment could have been enforced. Payment " by mistake " in section 72 must refer to a payment which was not legally due and which could not have been enforced ; the " mistake " is thinking that the money paid was due when, in fact, it was not due. There is nothing inconsistent in enacting on the one hand that if parties enter into a contract under mistake in law that contract must stand and is enforceable, but, on the other hand, that if one party acting under mistake of law pays to another party money which is not due by contract or otherwise, that money must be repaid. Moreover, if the argument based on inconsistency with section 21 were valid, a similar argument based on incon sistency with section 22 would be valid and would lead to the conclusion that section 72 does not even apply to mistake of fact. The argument submitted to their Lordships was that section 72 only applies if there is no subsisting contract between the person making the payment and the payee, and that the does not deal with the case where there is a subsisting contract but the payment was not due under it. But there appears to their Lordships to be no good reason for so limiting the scope of the Act. Once it is established that the payment in question was not due, it appears to their Lordships to be irrelevant to consider whether or not there was a contract between the parties under which some other sum was due. Their Lordships do not find it necessary to examine in detail the Indian authorities for the wider interpretation of " mistake " in section 72. They would only refer to the latest of these authorities, Pannalal vs Produce Exchange Corp. Ltd. (1), in which a carefully reasoned judgment was given by Sen J. Their Lordships agree with this judgment. It may be well to add that their (1) A.I.R. 1946 Cal. 1361 Lordships ' judgment does not imply that every sum paid under mistake is recoverable, no matter what the circumstances may be. There may in a particular case be circumstances which disentitle a plaintiff by estoppel or otherwise. " We are of opinion that this interpretation put by their Lordships of the Privy Council on section 72 is correct. There is no warrant for ascribing any limited meaning to the word I mistake ' as has been used therein and it is wide enough to cover not only a mistake of fact but also a mistake of law. There is no Conflict between the provisions of section 72 on the one hand and sections 21 and 22 of the on the other and the true principle enunciated is that if one party under a mistake, whether of fact or law, pays to another party money which is not due by contract or otherwise that money must be repaid. The mistake lies in thinking that the money paid was due when in fact it was not due and that mistake, if established, entitles the party paying the money to recover it back from the party receiving the same. The learned Additional Solicitor General, however, sought to bring his case within the observations of their Lordships of the Privy Council that their judgment did not imply that every sum paid under mistake is recoverable no matter what the circumstances might be and that there might be in a particular case circumstances which disentitle a plaintiff by estoppel or otherwise. It was thus urged that having regard to the circumstances of the present case, (i) in so far as the payments were in discharge of the liability under the U.P. Sales Tax Act and were voluntary payments without protest and also (ii) inasmuch as the monies which had been received by the State of U. P. had not been retained but had been spent away by it, the respondent was disentitled to recover the said amounts. Here also, we may observe that these contentions were not specifically urged in the High Court or in the statement of case filed by the appellants in this court; but we heard arguments on the same, as they were necessarily involved in the question whether section 72 of 1362 the applied to the facts of the present case. Re: (i): The respondent was assessed for the said amounts under the U. P. Sales Tax Act and paid the same; but these payments were in respect of forward transactions in silver. If the State of U. P. was not entitled to receive the sales tax on these transactions, the provision in that behalf being ultra vires, that could not avail the State and the amounts were paid by the respondent, even though they were not due by contract or otherwise. The respondent committed the mistake in thinking that the monies paid were due when in fact they were not due and that mistake on being established entitled it to recover the same back from the State under section 72 of the . It was, however, contended that the payments having been made in discharge of the liability under the U. P. Sales Tax Act, they were payments of tax and even though the terms of section 72 of the applied to the facts of the present case no monies paid by way of tax could be recovered. We do not see any warrant for this proposition within the terms of section 72 itself. Reliance was, however, placed on two decisions of the Madras High Court reported in (1) Municipal Council, Tuticorin vs Balli Bros. (1) and (2) Municipal Council, Rajahmundry vs Subba Rao (2). It may be noted, however, that both these decisions proceeded on the basis that the payments of the taxes there were made under mistake of law which as understood then by the Madras High Court was not within the purview of section 72 of the . The High Court then proceeded to consider whether they fell within the second part of section 72, viz., whether the monies had been paid under coercion. The court held on the facts of those cases that the payments had been voluntarily made and the parties paying the same were therefore not entitled to recover the same. The voluntary payment was there considered in contradistinction to payment under coercion and the real ratio of the decisions was that there was no coercion or duress exercised by the authorities for (1) A.I.R. 1934 Mad. (2) A.I.R, 1937 Mad. 1363 exacting the said payments and therefore the payments having been voluntarily made, though under mistake of law, were not recoverable. The ratio of these decisions, therefore, does not help the appellants before us. The Privy Council decision in Shiba Prasad Singh vs Srish Chandra Nandi (1) has set the whole controversy at rest and if it is once established that the payment, even though it be of a tax, has been made by the party labouring under a mistake of law the party is entitled to recover the same and the party receiving the same is bound to repay or return it. No distinction can, therefore, be made in respect of a tax liability and any other liability on a plain reading of the terms of section 72 of the , even though such a distinction has been made in America vide the passage from Willoughby on the Constitution of the United States, Vol. 1, p. 12 opcit. To hold that tax paid by mistake of law cannot be recoverd under section 72 will be not to interpret the law but to make a law by adding some such words as " otherwise than by way of taxes " after the word " paid ". If this is the true position the fact that both the parties, viz., the respondent and the appellants were labouring under a mistake of law and the respondent made the payments voluntarily would not disentitle it from receiving the said amounts. The amounts paid by the respondent under the U. P. Sales Tax Act in respect of the forward transactions in silver, had already been deposited by the respondent in advance in accordance with the U. P. Sales Tax Rules and were appropriated by the State of U. P. towards the discharge of the liability for the sales tax on the res pective assessment orders having been passed. Both the parties were then labouring under a mistake of law, the legal position as established later on by the decision of the Allahabad High Court in Messrs. Budh Prakash Jai Prakash vs Sales Tax Officer, Kanpur (2) subsequently confirmed by this Court in Sales Tax Officer, Pilibhit vs Budh Prakash Jai Prakash (3) not having been known to the parties at the relevant (1) (1949) L. R. 76 1. A. 244. (2) (3) [1955] I S.C.R. 243. 173 1364 dates. This mistake of law became apparent only on May 3, 1954, when this Court confirmed the said decition of the Allababad High Court and on that position being established the respondent became entitled to recover back the said amounts which had been paid by mistake of law. The state of mind of the respondent would be the only thing relevant to consider in this context and once the respondent established that the payments were made by it under a mistake of law, (and it may be noted here that the whole matter proceeded before the High Court on the basis that the respondent had committed a mistake of law in making the said payments), it was entitled to recover back the said amounts and the State of U. P. was bound to repay or return the same to the respondent irrespective of any other consideration. There was nothing in the circumstances of the case to raise any estoppel against the respondent nor would the fact that the payments were made in discharge of a tax liability come within the dictum of the Privy Council above referred to. Voluntary payment of such tax liability was not by itself enough to preclude the respondent from recovering the said amounts, once it was established that the payments were made under a mistake of law. On a true interpretation of section 72 of the the only two circumstances there indicated as entitling the party to recover the money back are that the monies must have been paid by mistake or under coercion. If mistake either of law or of fact is established, he is entitled to recover the monies and the party receiving the same is bound to repay or return them irrespective of any consideration whether the monies had been paid voluntarily, subject however to questions of estoppel, waiver, limitation or the like. If once that circumstance is established the party is entitled to the relief claimed. If, on the other hand, neither mistake of law nor of fact is established. , the party may rely upon the fact of the monies having been paid under coercion in order to entitle him to the relief claimed and it is in that position that it becomes relevant to consider whether the payment has been a voluntary payment or a payment under coercion. The 1365 latter position has been elaborated in English law in the manner following in Twyford vs Manchester Corporation (1) where Romer J. observed: " Even so, however, I respectfully agree with the rest of Walton J. 's judgment, particularly with his statement that a general rule applies, namely, the rule that, if money is paid voluntarily, without compulsion, extortion, or undue influence, without fraud by the person to whom it is paid and with full knowledge of all the facts, it cannot be recovered, although paid without consideration, or in discharge of a claim which was not due or which might have been successfully resisted. " The principle of estoppel which has been adverted to by the Privy Council in Shiba Prasad Singh vs Srish Chandra Nandi (2) as disentitling the plaintiff to recover the monies paid under mistake can best be illustrated by the decision of the Appeal Court in England reported in Holt vs Markham (3) " here it was held that as the defendant had been led by the plaintiffs ' conduct to believe that he might treat the money as his own, and in that belief had altered his position by spending it, the plaintiffs were estopped from alleging that it was paid under a mistake; and this brings us to a consideration of point No. 2 above stated. Re: (ii): Whether the principle of estoppel applies or there are circumstances attendant upon the transaction which disentitle the respondent to recover back the monies, depends upon the facts and circumstances of each case. No question of estoppel can ever arise where both the parties, as in the present case, are labouring under the mistake of law and one party is not more to blame than the other. Estoppel arises only when the plaintiff by his acts or conduct makes a representation to the defendant of a certain state of facts which is acted upon by the defendant to his detriment; it is only then that the plaintiff is estopped from setting up a different state of facts. Even if this position can be availed of where the representation is in regard to a position in law, no (1) , 241. (2) [1949] L. R. 76 I. A. 244. (3) 1366 such occasion arises when the mistake of law is common to both the parties. The other circumstances would be such as would entitle a court of equity to refuse the relief claimed by the plaintiff because on the facts and circumstances of the case it would be inequitable for the court to award the relief to the plaintiff. These are, however, equitable considerations and could scarcely be imported when there is a clear and unambiguous provision of law which entitles the plaintiff to the relief claimed by him. Such equitable considerations were imported by the Nagpur High Court in Nagorao vs G. G. in Council where Kaushalendra Rao J. observed: " The circumstances in a particular case, disentitle the pltf. to recover what was paid under mistake." " If the reason for the rule that a person paying money under mistake is entitled to recover it is that it is against conscience for the receiver to retain it, then when the receiver has no longer the money with him or cannot be considered as still having it as in a case when he has spent it on his own purposes which is not the case here different considerations must necessarily arise. " We do not agree with these observations of the Nagpur High Court. No such equitable considerations can be imported when the terms of section 72 of the are clear and unambiguous. We may, in this context, refer to the observations of their Lordships of the Privy Council in Mohori Bibee vs Dhurmodas Ghose (2) at p. 125. In dealing with the argument which was urged there in regard to the minor 's contracts which were declared void, viz., that one who seeks equity must do equity and that the minor against whom the contract was declared void must refund the advantage which he had got out of the same, their Lordships observed that this argument did not require further notice except by referring to a recent decision of the Court of Appeal in Thurstan vs Nottingham Permanent Benefit Building Society (3) (1) A.I.R. 1951 Nag. 372,374. (2) [19O2] L. R. 30 I. A. 114. (3) [I9O2] 1 Ch. 1. 1367 since affirmed by the House of Lords and they quoted with approval the following passage from the judgment of Romer L. J., at p. 13 of the earlier report: " The short answer is that a Court of Equity cannot say that it is equitable to compel a person to pay moneys in respect of a transaction which as against that person the Legislature has declared to be void. " That ratio was applied by their Lordships to the facts of the case, before them and the contention was negatived. Merely because the State of U. P. had not retained the monies paid by the respondent but had spent them away in the ordinary course of the business of the State would not make any difference to the position and under the plain terms of section 72 of the the respondent would be entitled to recover back the monies paid by it to the State of U.P. under mistake of law. The result, therefore, is that none of the contentions urged before us on behalf of the appellants in regard to the non applicability of section 72 of the to the facts of the present case avail them and the appeal is accordingly dismissed with costs. Appeal dismissed. [/INST]Under section 72 of the : " A person to whom money has been paid . by mistake or under coercion must repay or return it ". The respondent, a registered firm, paid sales tax in respect of its forward transactions in pursuance of the assessment orders passed by the sales tax officer for the years 1949 51, but in 1952, the Allahabad High Court having held in Messrs. Budh Prakash jai Prakash vs Sales Tax Officer, Kanpuy, , that the levy of sales tax on forward transactions was ultra vires, the respondent applied for a refund of the amounts paid, by a writ petition under article 226 of the Constitution. It was contended for the sales tax authorities that the respondent was not entitled to a refund because (1) the amounts in dispute were paid by the respondent under a mistake of law and were therefore irrecoverable, (2) the payments were in discharge of the liability under the Sales Tax Act and were voluntary payments without protest, and (3) inasmuch as the monies which had been received by the Government had not been retaine but had been spent away by it, the respondent was disentitled to recover the said amounts. Held, that the term " mistake " in section 72 Of the Indian Con tract Act comprises within its scope a mistake of law as well as a mistake of fact and that, under that section a party is entitled to recover money paid by mistake or under coercion, and if it is established that the payment, even though it be of a tax, has been made by the party labouring under a mistake of law, the party receiving the money is bound to repay or return it though it might have been paid voluntarily, subject, however, to questions of estoppel, waiver, limitation or the like. Shib Prasad Singh vs Maharaja Srish Chandra Nandi, (1949) L.R. 76 I.A. 244, relied on. Where there is a clear and unambiguous provision of law which entitles a party to the relief claimed by him, equitable considerations cannot be imported and, in the instant case, the fact that the Government had not retained the monies paid by the respondent but had spent them away in the ordinary course 1351 of business of the State would not make any difference, and under the plain terms of section 72 Of the Act the respondent was entitled to recover the amounts. Observations in Nagorao vs Governor General in Council, A. 1. R. , 374, to the effect that where a party receiving money paid under a mistake has no longer the money with him, equitable considerations might arise, disapproved. </s>
<s>[INST] Summarize the judgementCivil Appeal No. 662 of 1981 Appeal by special leave from the judgment and order dated the 15th January, 1981 of the Bombay High Court in Letters Patent Appeal No. 611 of 1980. Soli J. Sorabji G.L. Sanghi, P.H. Parekh, P.K. Shroff and Gautam Philips for the Appellant. R.P. Khambata, B.R. Agarwala, K.P. Khambata, Ashok C. Mehta and Miss Halida Khatun for Respondent No. 1. K.K. Venugopal, R. Vaidya, M.B. Rele, Rajiv K. Garg and N.D. Garg for Respondent No. 2. The following judgments were delivered: FAZAL ALI, J. This appeal by special leave is directed against an Order dated January 15, 1981 of the Division Bench of the Bombay High Court by which the appeal filed by the appellant against the Order of the Trial Judge was dismissed on the ground that the appeal was not maintainable as the Order impugned was 197 not a judgment within the meaning of clause 15 of the Letters Patent of the High Court. After hearing counsel for the parties at great length we passed the following Order on April 22, 1981: "We have heard counsel for the parties at great length. In our opinion, the appeal before the High Court was maintainable and the High Court should have entertained and decided it on merits. We, therefore, allow this appeal, set aside the judgment dated January 15, 1981 of the Division Bench of the Bombay High Court and remand the case to the same and decide it on merits. The High Court will dispose of the appeal as quickly as possible. The interim order passed by this Court on February 16, 1981 will continue until the High Court disposes of the appeal. Liberty to parties to approach the High Court for fixing an early date of hearing. In the circumstances, there will be no order as to costs. Reasoned judgment will follow. " We now set out to give the reasons for the formal Order allowing the appeal which was passed by us on the aforesaid date. As we are not at all concerned with the facts of the case it is not necessary to detail the same in this judgment. Suffice it to say that the plaintiff appellant had filed a suit on the original side of the Bombay High Court for specific performance of a contract and prayed for an interim relief by appointing a receiver of the suit property and injuncting the defendant from disposing of the suit property during the pendency of the suit. The single Judge after hearing the notice of motion dismissed the application for appointment of receiver as also for interim injunction. Thereafter, the plaintiff appellant filed an appeal before the Bombay High Court which dismissed the appeal as being non maintainable on the ground that the Order impugned (order of the Single Judge) was not a judgment as contemplated by clause 15 of the letters patent of the High Court. Hence, this appeal by special leave. The substantial questions of law raised in this appeal by the Counsel for the parties are as to the scope, ambit and meaning of 198 the word 'judgment ' appearing in clause 15 of the Letters Patent of the Bombay High Court and corresponding clauses in the Letters Patent of other High Courts. We might mention here that the significance of the word 'judgment ' assumes a special importance in those High Courts which have ordinary civil jurisdiction depending on valuation of the suit or the action. These High Courts are Calcutta, Bombay, Madras as also Delhi and Jammu & Kashmir. The other High Courts do not have any ordinary civil jurisdiction but their original jurisdiction is confined only to a few causes like probate and administration, admiralty and cases under . It seems to us that the interpretation of the word 'judgment ' appearing in the Letters Patent of the High Court has been the subject matter of judicial interpretation by decisions rendered by various High Courts in India. Unfortunately, however, the decisions are by no means consistent or unanimous. On the other hand, there appears to be a serious divergence of judicial opinions and a constant conflict between the High Courts regarding the true scope, ambit and meaning of the word 'judgment ' appearing in the Letters Patent so much so that a colossal controversy has been raging in this country for more than a century. Several tests have been laid down by leading judgments of the Calcutta, Madras and Rangoon High Courts. Other High Courts have either followed one or the other of the leading judgments regarding the validity of the tests laid down by the three High Courts. The Calcutta High Court appears to have followed the leading case of its court in The Justices of the Peace for Calcutta vs The Oriental Gas Company where Sir Richard Couch, C.J. had laid down a particular test on a rather strict and literal interpretation of the Letters Patent. Later decisions of the Calcutta High Court have followed this decision of Sir Richard Couch, C.J. with some modifications and clarifications. The Madras High Court has taken a very liberal view in its decision in T.V. Tuljaram Row vs M.K.R.V. Alagappa Chettiar. The Bombay High Court seems to have consistently taken the view that no interlocutory order can ever be said to be a judgment within the meaning of the Letters Patent so as to be appealable from the order of a Single Judge exercising original civil jurisdiction (hereinafter referred to as 'Trial Judge ') to a larger Bench. The Rangoon High Court speaking through Sir Page, C.J. in In Re Dayabhai Jiwandas & Ors vs A.M.M. Murugappa Chettiur has placed a very narrow interpretation on 199 the term 'judgment ' and has almost equated it with a decree passed by a civil court. This Court also has incidentally gone into the interpretation of the word 'judgment ' and has made certain observations but seems to have decided the cases before it on the peculiar facts of each case without settling the conflict or the controversy resulting from the divergent views of the High Courts. This Court, however, has expressed a solemn desire and a pious wish that the controversy and the conflict between the various decisions of the High Courts has to be settled once for all some time or the other. In this connection, in Asrumati Debi vs Kumar Rupendra Deb Raikot & Ors. this Court observed as follows: "In view of this wide divergence of judicial opinion, it may be necessary for this Court at some time or other to examine carefully the principles upon which the different views mentioned above purport to be based and attempt to determine with as much definiteness as possible the true meaning and scope of the word 'judgment ' as it occurs in clause 15 of the Letters Patent of the Calcutta High Court and in the corresponding clauses of the Letters Patent of the other High Courts. We are, however, relieved from embarking on such enquiry in the present case as we are satisfied that in none of the views referred to above could an order of the character which we have before us, be regarded as a 'judgment ' within the meaning of clause 15 of the Letters Patent". (Emphasis supplied) Similarly, in the case of State of Uttar Pradesh vs Dr. Vijay Anand Maharaj, this Court noticed the divergence of judicial opinions on the subject and observed as follows : "The scope of the expression "judgment" came under the judicial scrutiny of the various High Courts, there is a cleavage of opinion on that question. . . 200 The foregoing brief analysis of judgment shows that the definition given by the Madras High Court is wider than that given by the Calcutta and Nagpur High Courts. It is not necessary in this case to attempt to reconcile the said decision or to give a definition of our own, for on the facts of the present case the order of Mehrotra, J., would be a judgment within the meaning of the narrower definition of that expression". After, however, analysing the various judgments this Court did not think it necessary to give any definition of its own and refrained from giving a final decision on the question as to the scope and meaning of the word 'judgment ' appearing in the Letters Patent. Mudholkar, J. in his concurring judgment expressly refrained from expressing any opinion on the subject. Again in a later decision in Shankarlal Aggarwal & Ors. vs Shankarlal Poddar & Ors. the conflict in the various decisions of various High Courts was again noticed and this Court observed as follows: "There has been very wide divergence of opinion between the several High Court in India as to the content of the expression 'judgment ' occurring in Cl. 15 of the Letters Patent. . . We consider that occasion has not arisen before us either since in view of the construction which we have adopted of section 202 of the Indian the scope of the expression 'judgment ' in the Letters Patent does not call for examination or final decision". (Emphasis ours) There are other decisions of this Court also which have touched the fringes of the question but did not choose to give a final verdict on the vexed question and preferred to decide the cases on their own facts. We shall briefly refer to these decisions at a later stage of this judgment. With due deference to the desire of this Court to settle the controversy in question once for all, the very able, detailed and lengthy arguments advanced by counsel for the parties on various shades, features and aspects of the interpretation of the word 'judg 201 ment ' appearing in the Letters Patent, the serious legal controversy raging in this country for over a century between the various High Courts resulting in an irreconciliable element of judicial uncertainty in the interpretation of the law and further having regard to the huge backlog and accumulation of arrears in the High Courts, we are clearly of the opinion that the time has now come when the entire controversy on the subject should be set at rest and an authoritative pronouncement on the matter may be given by us so as to maintain complete consistency in deciding the matter by the High Courts whenever it arises. Mr. Sorabjee, learned counsel for the appellants has submitted four important points of law dwelling on the various facts of the question at issue: (1) It was contended that the provisions of section 104 read with order 43 Rule 1 of the Code of Civil Procedure, 1908 (hereinafter referred to as 'Code of 1908 ') does not impose any bar on the trial held by the Trial Judge and thus by virtue of these provisions the order impugned (the order of the trial court refusing to appoint Receiver and to grant injunction) falls squarely under clauses (r) and (s) of order 43 Rule 1 of the Code of 1908 and is therefore appealable to a larger Bench. In amplification of this contention it was submitted that the Trial Judge is governed by the procedure prescribed by the Code of 1908 in all matters and hence there is no reason why order 43 Rule 1 should not apply to any order passed by the Trial Judge under any of the clauses of order 43 Rule 1 read with section 104. (2) Even if we assume that the Letters Patent was a special law which overrides the provisions of the Code of Civil Procedure, the power under section 104 read with order 43 Rule 1 is in no way inconsistent with cl. 15 of the Letters Patent. Section 104 merely provides an additional remedy and confers a new jurisdiction on the High Court without at all interfering with or overriding the existing provisions of the Letters Patent. 202 (3) Even if order 43 Rule 1 did not apply in terms, the orders which have been mentioned as being appealable to a larger Bench could form valuable guidelines for the Court in arriving at the conclusion that such orders amount to judgments of the Single Judge as contemplated by the Letters Patent. (4) Even if section 104 read with order 43 Rule 1 does not apply, an order refusing to appoint a receiver or to grant injunction has the trappings and attributes of finality as it affects valuable rights of the plaintiff in an ancillary proceeding though the suit is kept alive and would, therefore, amount to a judgment within the meaning of the Letters Patent. The learned counsel for the respondents while countering the arguments of Mr. Sorabjee submitted the following propositions: (1) section 104 read with order 43 Rule 1 could not apply to the original trial by the Trial Judge which is governed by the Letters Patent alone. (2) It was further argued that the forum for an appeal contemplated by section 104 is the same as that for appeals under sections 96 to 100 of the Code of 1908, that is to say, appeals from the courts in the mofussil (district courts) to the High Court and it has no application to internal appeals within the High Court. In other words, the forum under which an appeal lies from one Judge of the High Court to a larger Bench is not a forum contemplated by section 104 at all but is created by the Letters Patent. (3) If section 104 of the Code of 1908 is held to be applicable to proceedings before the Trial Judge of the High Court certain strange anomalies will arise, viz., where an appeal lies from a district court under order 43 Rule 1 before a Single Judge, a further appeal will have to lie before a larger Bench against the order of the Trial Judge although section 104 prevents a second appeal against miscellaneous orders under order 43 Rule 1 and permits only one appeal. This will, therefore, lead to an inconsistent and anomalous position. 203 (4) The word 'judgment ' should be strictly construed as was done by Sir Richard Couch, C.J. in Oriental Gas Company 's case (supra) so as to include only those orders of the Trial Judge which are of a final nature and effectively decide the controversy of the issues in dispute. We would first deal with the point relating to the applicability of section 104 read with order 43 Rule 1 of the Code of 1908 because it seems to us that the arguments of Mr. Sorabjee on this score are well founded and must prevail. Moreover, some of the decisions of this Court, those of the Privy Council and other High Courts support the propositions adumbrated by Mr. Sorabjee. In order, however, to appreciate the applicability of section 104 read with Order 43 Rule 1, it may be necessary to examine some important provisions of the Code of Civil Procedure as also the previous history which led to the enactment of section 104 by the Code of 1908. It appears that prior to the Code of 1908 in the earlier Code of Civil Procedure there were two kinds of appeals to the High Court (1) appeals against judgments and decrees of the Trial Judge, and (2) appeals against orders, either interlocutory or quasi final, passed by the court during the pendency of the suit or proceedings. In the Civil Procedure Code of 1877 the section corresponding to order 43 Rule 1 of the Code of 1908 was section 588 which provided for appealable orders under clauses (a) to (t). Section 588 of the Code of 1877 provided that an appeal from any order specified in section 588 shall lie to the High Court or when an appeal from any other order is allowed by the Chapter it would lie to the Court to which an appeal would lie from the decree in the suit in respect of which such order was made or when such order is passed by a court other than the High Court, then to the High Court. A perusal of sections 588 and 589 of the Code of 1877 would clearly show that the statute made no distinction between appeals to the High Courts from the district courts in the mofussils or internal appeals to the High Courts under the Letters Patent. Section 591 clearly provided that except the orders mentioned in section 588 no further appeal could lie from any order passed by any court in exercise of its original or appellate jurisdiction. Section 591 may be extracted thus: "591. No other appeal from orders; but error therein may be set forth in memorandum of appeal against decree. 204 "Except as provided in this chapter, no appeal shall lie from any order passed by any Court in the exercise of its original or appellate jurisdiction but if any decree be appealed against, any error, defect or irregularity in any such order, affecting the decision of the case, may be set forth as a ground of objection in the memorandum of appeal". In other words, the position was that while the statute provided only for appeals against orders, all other appeals could only be against a decree passed by the court concerned. The statute there fore, did not contemplate any other appeal except those mentioned in sections 588 and 591. The Code of 1877 was later on replaced by the Code of 1882 but the provisions remained the same. In view of the rather vague and uncertain nature of the provisions of sections 588 to 591 a serious controversy arose between the various High Courts regarding the interpretation of section 588. The Bombay and Madras High Courts held that under cl. 15 of the Letters Patent of the said High Courts, an appeal could lie only from orders passed under section 588 and not even under the Letters Patent. In Sonba 'i vs Ahmedbha 'i Habibha 'i a Full Bench of the Bombay High Court held that under cl. 15 of the Letters Patent an appeal to the High Court from an interlocutory order made by one of the Judges lies only in those cases in which an appeal was allowed under the Code of Civil Procedure, that is to say, under sections 588 and 591 of the Code of 1877. The Madras High Court in Rajgopal & Ors (in Re: L.P.A. No. 8 of 1886 took the same view. Then came the decision of the Privy Council in the case of Hurrish Chunder Chowdry vs Kali Sundari Debia which while considering section 588 made the following observations: "It only remains to observe that their Lordships do not think that section 588 of Act X of 1877, which has the effect of restricting certain appeals is from one of the Judges of the Court to the full Court." (Emphasis ours) 205 This judgment gave rise to a serious conflict of opinions in the High A Courts in India. The High Courts of Calcutta, Bombay and Madras held that in view of the decision of the Privy Council in the aforesaid case, even though an order may not have been appealable under section 588 it could be appealable provided it was a judgment within the meaning of cl. 15 of the Letters Patent of the respective High Courts. Toolsee Money Dassee vs Sudevi Dassee,, Secretary of State vs Jehangir; Chappan vs Modin Kutti, However, the Allahabad High Court in Banno Bibi vs Mehdi Husain held that if an order was not appealable under sections 588 and 591 of the Code of 1877 it could not be appealed against even under the Letters Patent of the High Court. This view was affirmed by a later decision of the same High Court in Muhammad Naim ul Lah Khan vs Ihsan ul Lah Khan. With due respect we would like to point out that the pointed and terse observations of the Privy Council did not leave any room for any doubt or speculation in the matter. While construing section 588, the Judicial Committee in Hurrish Chunder Chowdry 's case (supra) had made it clear that appeals would lie under section 588 to the High Court and the section did not contain any restriction to the effect that appeal against the orders of the Trial Judge mentioned in section 588 would not lie to a larger Bench of the High Court. In other words, the Privy Council intended to lay down clearly that section 588 did not affect nor was it inconsistent with the provisions of the Letters Patent and hence those orders of the Trial Judge which fell beyond section 588 could be appealable to a larger Bench under the Letters Patent if those orders amounted to judgment within the meaning of cl. 15 of the Letters Patent. Therefore, the views taken by the Calcutta, Bombay and Madras High Courts, referred to above, were undoubtedly correct. At any rate, since a fresh controversy had arisen, the legislature stepped in to settle the controversy by enacting the new section 104 in the Code of 1908. Section 104 made it clear that appeals against orders mentioned in order 43 Rule 1 were not in any way inconsistent with the Letters Patent and merely provided an additional remedy by allowing appeals against miscellaneous Orders passed by the Trial Judge to a larger Bench. In other words, the legislature gave full statutory effect to the views of the Calcutta, 206 Bombay and Madras High Courts. Even after the introduction of section 104, the conflict between the various High Courts still continued as to whether or not section 104 would apply to internal appeals in the High Court. That is the question which we shall now discuss. To begin with, it is not disputed that a Trial Judge has to follow the entire procedure laid down by the Code of 1908 starting from the presentation of the plaint right up to the delivery of the judgment. The only difference in the assumption of jurisdiction by the High Court is that a suit of a particular valuation has to be instituted in the High Court rather than in the District court. Secondly, it is indisputable that any final judgment that the Trial Judge passes deciding the suit one way or the other amounts to a decree and under the provisions of the Letters Patent an appeal lies to a larger Bench which normally is a Division Bench as provided for under the Rules made by various High Courts. Thirdly, the Letters Patent itself does not define the term 'judgment ' and has advisedly not used the word 'decree ' in respect of any judgment that may be given by the Trial Judge. Section 5 of the Code of 1908 may be extracted thus: "5. Application of the Code to Revenue Courts: (1) Where any Revenue Courts are governed by the provisions of this Code in those matters of procedure upon which any special enactment applicable to them is silent the State Government may, by notification in the Official Gazette, declare that any portions of those pro visions which are not expressly made applicable by this Code shall not apply to those Courts, or shall only apply to them with such modifications as the State Government may prescribe. (2) "Revenue Court" in Sub section (1) means a court having jurisdiction under any local law to entertain suits of other proceedings relating to the rent, revenue or profits of land used for agricultural purposes, but does not include a Civil Court having original jurisdiction under this Code to try such suits or proceedings as being suits or proceedings of a civil nature " The importance of this section is that wherever the provisions of the Code of Civil Procedure are sought to be excluded by any special enactment which may be silent on the point, the State 207 Government can by notification apply the provisions of the Code to Revenue courts. A bare perusal of this section would clearly reveal that excepting Revenue courts all other Civil courts would normally be governed by the provisions of the Code of Civil Procedure in the matter of procedure. Section 4(1) of the Code of 1908 which is a saving provision clearly provides that in the absence of any specific provision to the contrary the provisions of the Code does not limit or affect any special or local law. Thus, the test contained in section 4 is not applicable in the instant case because even if the Letters Patent of the High Court be deemed to be a special law as contemplated by section 4, the provisions of section 104 do not seek to limit or affect the provisions of the Letters Patent. This now takes us to section 104 of the Code of 1908, the relevant portion of which may be extracted thus: "104.(1) An appeal shall lie from the following orders, and save as otherwise expressly provided in the body of this Code or by any law for the time being in force, from no other orders: (a) to (f) annulled; (ff) an order under section 35 A (g) an order under section 95; (h) an order under any of the provisions of this Code imposing a fine or directing the arrest or detention in the civil prison of any person except where such arrest or detention is in execution of a decree; (1) any order made under rules from which an appeal is expressly allowed by rules: (2) No appeal shall lie from any order passed in appeal under this section. " Thus by the force of section 104 all appeals as indicated in the various clauses of order 43 Rule 1 viz. (a) to (w) would lie to the appellate court. Section 105 clearly provides that no appeal shall lie from any order of a Court made in the exercise of its original or appellate 208 jurisdiction except according to the procedure laid down by the Code. The relevant part of section 105 (1) may be extracted thus: "105. (1) Save as otherwise expressly provided no appeal shall lie from any order made by a Court in the exercise of its original or appellate jurisdiction; but where a decree is appealed from, any error, defect or irregularity in any order, affecting the decision of the case, may be set forth as a ground of objection in the memorandum of appeal. " Finally, order, 49 Rule 3 expressly exempts matters contained in clauses (1) to (6) of Rule 3 from the operation of the extraordinary original civil jurisdiction of the chartered High Courts, that is to say, the jurisdiction conferred on the High Court by the Letters Patent. The relevant portion of this provision may be extracted thus: "O. 49. (3) The following rules shall not apply to any Chartered High Court in the exercise of its ordinary or extraordinary original civil jurisdiction, namely: (1) rule 10 and rule 11, clauses (b) & (c), of order VII; (2) rule 3 of order X; (3) rule 2 of order XVI; (4) rules 5, 6, 8, 9, 10, 11, 13, 14, 15, and 16 (so far as relates to the manner of taking evidence) of Order XVIII; (5) rules 1 to 8 of order XX; and (6) rule 7 of order XXXIII (so far as relates to the making of a memorandum); and rule 35 of order XLI shall not apply to any such High Court in the exercise of its appellate jurisdiction" It may be pertinent to note that although a number of rules have been exempted from the operation of the Code, order 43 Rule 209 1 and the clauses thereunder have not been mentioned in any of these clauses. Thus, a combined reading of the various provisions of the Code of Civil Procedure referred to above lead to the irresistible conclusion that section 104 read with order 43 Rule 1 clearly applies to the proceedings before the Trial Judge of the High Court. Unfortunately, this fact does not appear to have been noticed by any of the decisions rendered by various High Courts. We might further point out that section 117 of the Code of 1908 expressly applies the provisions of the Code to High Courts also. Section 117 may be extracted thus: "117. Save as provided in this Part or in Part X or in rules, the provisions of this Code shall apply to such High Courts". We find ourselves in complete agreement with the arguments of Mr. Sorabjee that in the instant case section 104 read with Order 43 Rule 1 does not in any way abridge, interfere with or curb the powers conferred on the Trial Judge by cl. 15 of the Letters Patent. What section 104 read with order 43 Rule 1 does is merely to give an additional remedy by way of an appeal from the orders of the Trial Judge to a larger Bench. Indeed, if this is the position then the contention of the respondent that section 104 will not apply to internal appeals in the High Courts cannot be countenanced. In fact, the question of application of the Code of Civil Procedure to internal appeals in the High Court does not arise at all because the Code of Civil Procedure merely provides for a forum and if order 43 Rule 1 applies to a Trial Judge then the forum created by the Code would certainly include a forum within the High Court to which appeals against the judgment of a Trial Judge would lie. It is obvious that when the Code contemplates appeals against orders passed under various clauses of order 43 Rule 1 by a Trial Judge, such an appeal can lie to a larger Bench of the High Court and not to any court subordinate to the High Court. Hence, the argument that order 43 Rule 1 cannot apply to internal appeals in the High Court does not appeal to us although the argument has found favour with some of the High Courts. We might also reiterate that prior to the Code of 1908, in the Code of 1877 an identical provision like order 43 Rule 1 also existed in the shape of section 588 which was absolutely in the same terms 210 as order 43 Rule 1 and its various clauses. Of course, section 104 was conspicuously absent from the Codes of 1877 or 1882. As indicated earlier, the question of the application of section 588 (now Order 43 Rule 1) was considered as early as 1882 in Hurrish Chunder Chowdary 's case (supra) where the Privy Council in very categorical terms observed thus: "It only remains to observe that their Lordships do not think that section 588 of Act X of 1877, which has the effect of restricting certain appeals, applies to such a case as this, where the appeal is from one of the Judges of the Court to the full Court. " We have already shown that a perusal of these observations leaves no room for doubt that the Privy Council clearly held that section 588 undoubtedly applied to appeal from one of the Judges of the High Court to the Full Court, which really now means the Division Bench constituted under the Rules. In spite of the clear exposition of the law on the subject by the Privy Council it is rather unfortunate that some High Courts have either misinterpreted these observations or explained them away or used them for holding that s.588 does not apply to High Courts. We shall deal with those judgments and point out that the view taken by the High Courts concerned is not at all borne out by the ratio decidendi of the Privy Council. So far as the applicability of section 588 to proceedings in the High Courts is concerned, in a later decision the Privy Council reiterated its view in unmistakable terms. In Mt. Sabitri Thakurain vs Savi & Anr., their Lordships observed as follows: "Section 15 of the Letters Patent is such a law and what it expressly provides, namely an appeal to the High Court 's appellate jurisdiction from a decree of the High Court in its original ordinary jurisdiction, is thereby saved. Thus regulations duly made by orders and Rules under the Code of Civil Procedure, 1908 are applicable to the jurisdiction exercisable under the Letters Patent, except that they do not restrict the express Letters Patent appeal". Though not directly, some observations made by this Court also support the consistent view taken by the Privy Council that order 43 Rule 1 applies to the original proceedings before the Trial 211 Judge. In Union of India vs Mohindra Supply Co., this Court made the following observations: "The intention of the legislature in enacting sub section (1) of section 104 is clear: the right to appeal conferred by any other law for the time being in force is expressly preserved. This intention is emphasised by section 4 which provides that in the absence of any specific provision to the contrary nothing in the Code is intended to limit or otherwise affect any special jurisdiction or power conferred by or under any other law for the time being in force. The right to appeal against judgments (which did not amount to decrees) under the Letters Patent, was therefore not affected by section 104 (1) of the Code of Civil Procedure, 1908". Thus, this Court has clearly held that the right to appeal against judgments under the Letters Patent was not affected by section 104 (1) of the Code of 1908 and the decision therefore fully supports the argument of Mr. Sorabjee that there is no inconsistency between the Letters Patent jurisdiction and section 104 read with order 43 Rule 1 of the Code of 1908. Similarly, in Shankarlal Aggarwal 's case (supra) this Court while construing the provisions of section 202 of the Indian observed as follows: "There was no doubt either that most of the orders or decisions in winding up would not be comprehended within the class of appealable orders specified in section 104 or O. 43 r.1. If therefore the contention of the respondent were accepted it would mean that in the case of orders passed by the District Courts appeals would lie only against what would be decrees under the Code as well as appealable orders under section 104 and o. 43 r.1. and very few of the orders passed in the Courts of the winding up would fall within these categories. On the other hand, the expression "judgment" used in cl. 15 is wider. The learned Judge therefore rejected a construction which would have meant that the same orders passed by District Courts and by a Single Judge of a High Court would be subject to different rules as to appealability". There is yet another aspect of the matter which shows that section 104 merely provides an additional or supplemental remedy by way 212 of appeal and, therefore, widens rather than limits the original jurisdiction of the High Court. For instance, in this very case with which this Court was dealing, an order passed under section 202 of the was appealable to a larger Bench and yet it was argued that the order being of an interlocutory nature would not be a judgment and therefore no appeal would lie to the Division Bench. This contention was negatived by the Supreme Court and it was held that against the order passed by a Trial Judge under the , an appeal would lie to the Division Bench. On a parity of reasoning, therefore, section 104 read with order 43 Rule 1 expressly authorises and creates a forum for appeal against orders falling under various clauses of order 43 Rule 1, to a larger Bench of the High Court without at all disturbing, interfering with or overriding the Letters Patent jurisdiction. There are a number of other Acts also which confer additional powers of appeal to a larger Bench within the High Court against the order of a Trial Judge. Take, for instance, a case under the Arbitration Act. Suppose in a suit the matter is referred to arbitration and after the award is filed by the Arbitrator certain objections are taken, under section 39 of the Arbitration Act an appeal would lie to a Larger Bench from the order of a Single Judge disposing of the objections taken by the parties against the award. Section 39 runs thus: "39. Appealable orders. (1) An Appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decree of the Court passing the orders; An Order (i) superseding an arbitration; (ii) on an award stated in the form of a special case; (iii)Modifying or correcting an award; (iv) filing or refusing to file an arbitration agreement; (v) staying or refusing to stay legal proceedings where there is an arbitration agreement; (vi)setting aside or refusing to set aside an award: Provided that the provisions of this section shall not apply to any order passed by a small Cause Court. 213 (2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court". It cannot be contended by any show of force that the Order passed by the Trial Judge being an interlocutory order, no appeal would lie to the Division Bench or that the provisions of the Arbitration Act giving a right of appeal to a litigant from the order of a Trial Judge to the Division Bench in any way fetter or override the provisions of the Letters Patent. There are, however, a number of decisions of the various High Courts which have held that the provisions of order 43 Rule 1 clearly apply to a Trial Judge. As early as 1872, the Bombay High Court in Sonba 'i 's case (supra) held that in regard to appeals against orders of the Trial Judge the practice of the Bombay High Court has been that in all matters the provisions of the Code concerned would be applicable. In this connection, Sargent, Acting C.J., speaking for the court observed as follows: "the word "judgment" may be taken to include any preliminary or interlocutory judgment, decree, order, or sentence within the meaning of clause 40, and effect may be given to section 37 by limiting the orders open to appeal to those orders which are expressly declared appealable in the various sections of the Civil Procedure Code, or in other words by incorporating the provisions of the Civil Procedure Code relating to appeals with Sec. IS of the Letters Patent, and holding the word 'judgment ' to mean all judgments and orders which are appealable under the provisions of the Civil Procedure Code". This case was followed by a Division Bench of the Madras High Court which clearly held that an order passed under section 592 was controlled by section 588. We have already pointed out that in the Code prior to 1882, order 43 Rule 1 appeared in the shape of section 588 and even under order 43 Rule 1 an order rejecting an appeal in forma pauperis is not appealable and does not appear in any of the clauses of order 43 Rule 1. The Madras High Court in Rajgopal 's case (supra), relying on the decision of the Bombay High Court, observed thus: 214 "An order passed under section 592 of the Code of Civil Procedure rejecting an appeal in forma pauperis is not appealable under section 588, which provides that no appeal shall lie from orders not specified in that section. It has already been decided in Achaya vs Ratnavelu (ILR that section 15 of the Letters Patent is controlled by a similar section in the Civil Procedure Code, which provided that an order shall be final, and that enactments to such effect are not beyond the legislative powers of the Governor General in Council". Thus, even in the earlier times the High Court had veered round to the view that section 588 would be applicable to the High Courts also even in respect of internal appeals in, the High Court. Similarly, in Ruldu Singh vs Sanwal Singh, Shadi Lal, C.J. Speaking for the court observed thus; Now, section 588 of the old Code, which has now been replaced by section 104 and Order XLIII, rule of the new Code, enacted that an appeal lay from the orders specified in that section and from no other orders"; and it was consequently decided by a Full Bench of that Court in Muhammad Naim ul Lah Khan vs Ihsan Ullah Khan All. 226 that clause 10 of the Letters Patent was controlled in its operation by section 588, and that no appeal lay under the Letters Patent from an order made under the Code if it was not one of the orders enumerated in that section. Section 104 of the new Code, however, expressly saves the right of appeal otherwise provided by 'any law for the time being in force '. It seems to us that the object of the Legislature in enacting sub section (2) was to make it clear that there was no second appeal under the Code from the orders specified in Sub section (1) of section 104, and that sub section (2) was not intended to override the express provisions of the letters patent." The Lahore High Court relied on the decision of the Privy Council in Hurrish Chunder Chowdrys case (supra). The High Court further held that section 104 does not in any way take away the 215 right of appeal conferred by the Letters but Patent of the High Court merely bars a second appeal from orders passed under O.43 R. 1 to Division Bench. A contrary view was taken by the Allahabad High Court in Ram Sarup vs Kaniz Ummehani where the following observations were made: "It may, however, be conceded that this saving clause does not occur in sub section (2) of section 104. But under the corresponding section 588 of the old Code, where the words were "orders passed in appeal under this section shall be final", their Lordships of the Privy Council in Hurrish Chunder Chowdhry vs Kalisunduti Debi Cal. 482 observed that section 588, which had the effect of restricting certain appeals, did not apply to a case where the appeal is from one of the Judges of the High Court to the Full Court to the full Court. In any case section 104 (2) does not contain any express provision which would suggest that the provisions of the Letters Patent have been abrogated. We accordingly hold that under clause 10 of the Letters Patent an appeal lies from the order of a single Judge passed in appeal." With due deference to the Hon 'ble Judges we are of the opinion that the decision of the Allahabad High Court on this point is based on a serious misconception of the legal position. It is true that section 104 was introduced by the Code of 1908 and the aforesaid section, as we have already indicated, clearly saved the Letters Patent jurisdiction of the High Court. From this, however, it does not necessarily follow that the restriction that there is no further appeal from the order of a Trial Judge to a larger Bench would be maintainable or permissible. In the first place, once section 104 applies and there is nothing in the Letters Patent to restrict the application of section 104 to the effect that even if one appeal lies to the Single Judge, no further appeal will lie to the Division Bench. Secondly, a perusal of clause 15 of the Letters Patent of the Presidency High Courts and identical clauses in other High Courts, discloses that there is nothing to show that the Letters Patent ever contemplated that even after one appeal lay from the subordinate court to the Single Judge, a second appeal would again lie to a Division Bench of the Court. All that the Letters Patent provides for is that where the Trial Judge passes an order, an appeal against the judgment of the said Trial Judge would 216 lie to a Division Bench. Furthermore, there is an express provision in the Letters Patent where only in one case a further or a second appeal could lie to a Division Bench from an appellate order of the Trial Judge and that is in cases of appeals decided by a Single Judge under section 100 of the Code of Civil Procedure. Such a further appeal would lie to a Division Bench only with the leave of the court and not otherwise. The relevant portion of cl. 15 of the Letters Patent may be extracted thus: "And we do further ordain that an appeal shall lie to the said High Court of Judicature at Madras, Bombay, Fort William in Bengal from the judgment. Of one Judge of the said High Court or one Judge of any Division Court, pursuant to section 108 of the Government of India Act, and that notwithstanding anything hereinbefore provided, an appeal shall lie to the said High Court from a judgment of one Judge of the said High Court or one Judge of any Division Court, pursuant to section 108 of the Government of India Act, made (on or after the first day of February, 1929) in the exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court where the Judge who passed the judgment declares that the case is a fit one for appeal. " A perusal of the Letters Patent would clearly reveal two essential incidents (1) that an appeal shall lie against any order passed by the Trial Judge to a larger Bench of the same High Court, and (2) that where the Trial Judge decides an appeal against a judgment or decree passed by the district courts in the mofussil, a further appeal shall lie only where the judge concerned declares it to be a fit one for appeal to a Division Bench. Thus, the special law, viz., the Letters Patent, contemplates only these two kinds of appeals and no other. There is, therefore, no warrant for accepting the argument of the respondent that if order 43 Rule 1 applies, then a further appeal would also lie against the appellate order of the Trial Judge to a Division Bench. As this is neither contemplated nor borne out by the provisions of the Letters Pantent extracted above, the contention of the respondent on this score must be overruled. A further second appeal Lying to a Division Bench from an appellate order of the Trial Judge passed under order 43 Rule 1 is wholly foreign to the scope and spirit of the Letters Patent. Un 217 fortunately however, the Allahabad High Court in Ram Sarup 's case (supra) refused to follow a Division Bench decision in Piari Lal vs Madan Lal and also tried to explain away the Full Bench decision in Ram Sarup 's case (supra) where it was clearly pointed out that in such cases no further appeal would lie to the Division Bench under the Letters Patent. The distinction drawn by the Allahabad High Court regarding the application of section 104 is a distinction without any difference. Sir John Edge, C.J., in Muhammad Naim ul lah Khan 's case (supra) dealing with this aspect of the matter observed thus: "It appears to me that the Code of Civil Procedure (Act No. XIV of 1882), as did Act No. X of 1877, contemplates a High Court in two aspects. It contemplates a High Court doing the ordinary work of a Court of original and appellate jurisdiction; having the necessary powers of review and revision in certain cases and certain other powers such as are generally found vested in the Courts of the importance of High Courts. whatever those powers may be, it is quite clear to my mind that the power conferred on a High Court under Chapter XLV of the Code of Civil Procedure are special powers and entirely distinct from the ordinary powers required by the High Court in the carrying on of its ordinary judicial business." and Mahmood, J. Observed thus: "To hold then that where this statute of ours, namely, our present Code of Civil Procedure, declares a decree or order non appealable, such decree or order can be made the subject of consideration by the whole of this Court under the Letters Patent, is to hold that wherever no appeal lies to this Court the ceremony of presenting it to this Court to a Single Judge of this Court who would undoubtedly reject the appeal, makes it the subject of consideration by a Bench of the Court. " The other Judges agreed with the view taken by the Chief Justice and Mahmood, J. In Piari Lal 's case (supra) which was decided after section 104 was introduced in the Code of 1908, the following observations were made: 218 "A preliminary objection has been taken to the hearing of the appeal based on the Full Bench decision in the case of Muhammad Naimullah Khan vs Ihsan ullah Khan All. 226. Section 104 of the Code of Civil Procedure provides for the cases in which an appeal shall lie against an "order '. Clause (ii) provides that "No appeal shall lie from any order passed in appeal under this section". The contention of the respondent in the preliminary objection is that no second appeal lies and reliance is placed upon the authority quoted to show that even a Letters Patent appeal is not permissible. We are of course bound by the Full Bench ruling of this Court. It is contended, however, that the words in section 588 of the Code of Civil Procedure, which was in force when the decision in the Full Bench case was given, differed from the words of the present Code. The only difference is that in the old Code the words were "The order passed in appeals under this section shall be final", whereas in the present Code the words are "No appeal shall lie". We cannot see how the change in the words can in any way help the appellant. Possibly the reason for the change is that under the words in the old Code it might have been argued that even a "revision" or a "review of judgment" would not lie against an order passed by an appellate court. We think the preliminary objection must prevail and we accordingly dismiss the appeal with costs." Thus, in these two cases it was clearly held that where a Trial Judge had passed an order in an appeal against an order passed by the district judge under order 43 Rule 1, a further appeal under the Letters Patent was not maintainable. This view is fully supported by the express language in which clause 15 of the Letters Patent has been couched, as referred to above. Thus the latter decision of the Allahabad High Court in Ram Sarup 's case (supra) was clearly wrong in holding that an appeal under the Letters Patent would lie even against an appellate order of the Trial Judge passed under O.43, R. 1 even though it was prohibited by section 104 (2) of the Code. Similarly, in Chappan 's case (supra) the Court on an interpretation of section 588 (which now corresponds to the present Order 43 Rule 1 clearly held that an appeal would lie to the High Court 219 against the orders contemplated in various clauses of section 588 of the Code of 1877. The Court held thus: "The result of this judgment (so far as it applies to the question before us) appears to me to come to this, that if the order made by a single Judge only amounts to an order such as is intended by chapter XLII of the Code, it is not appealable unless it is within section 588." The Madras case heavily relied on the decision of the Privy Council in Hurrish Chunder Chowdry 's case (supra). In Lea Badin vs Upendra Mohan Roy Chaudhury & Ors. while criticising the judgment of Sir Richard Couch, C.J. in The Justice of the Peace for Calcutta (supra) the Court as an alternative argument clearly held that order 43 Rule 1 would apply pro tanto to the Trial Judge and on this ground also the order would be appealable to a Division Bench. In this connection, the celebrated jurist Sir Manmatha Nath Mookerjee, J. Observed as follows: "But there is another and a far simpler ground on which it must be held that an appeal is competent. The order in the present case is one for which a right of appeal is provided in cl. (s) of r. 1 of or 43 of the Code. Under the present Code (Act V of 1908) it cannot be contended that the Code and the Rules made under it do not apply to an appeal from a learned Judge of the High Court " Another important decision regarding the applicability of order 43 Rule 1 to an order passed by the Trial Judge was rendered by a Full Bench in Mathura Sundari Dassi vs Haran Chandra Shaha & Ors. where Sanderson, C.J. Observed thus: "By the terms of section 117, the Code is made applicable to the High Court, and O. 43, R. 1 gives a right of appeal in the very case under discussion. But it is said that this Code and the rules made under it do not apply to an appeal from a learned Judge of the High Court. I cannot follow that argument. It is part of the defendant 's case that O.9 R. 8 applies. That order is in effect a part of the Civil Procedure Code. It seems to me strange that the plaintiff 220 should be subjected to O. 9, R. 8 and be liable to have his suit dismissed for want of appearance, yet when he has had his suit dismissed under one of the rules of the Code and wants to call in aid another of the rules which when his application for reinstatement has been refused gives him a right of appeal against that refusal, he is met with the argument that he cannot call in aid that rule because there is no appeal from the learned Judge of the High Court under the Civil Procedure Code. I think this is not a true view or a reasonable construction to put upon the Code and the rules made under it. In my judgment, the Code and the rules do apply and the plaintiff has a right of appeal." and Woodroffo 'J ' made similar observations: "Whether or not as a question of jurisdiction an appeal lies under clause 15 of the Letters Patent in a case in which an appeal is allowed under the Code, I think it may be said that there are prima facie grounds for holding that an appeal should be held to lie under the Letters Patent where it is allowed under the Code; for the fact that the Legislature has in the Code allowed an appeal in a particular case, a affords to my mind prima facie grounds for supposing that case is of a class which this Court considers appealable under its Letters Patent. Looking at the nature of the order appealed from, I think I should hold that it is appealable as a 'judgement ' under the Letters Patent." and Mookerjee, J. Observed thus: "The term "Rule" which finds a place in section 117 is defined in clause 18 of section 2 of the Code to mean "a rule contained it the First Schedule or made under section 122 or section 125. " our attention has not been drawn to any such rule which makes O. 43, R, 1, clause (c) inapplicable. On the other hand, O. 49, R. 3 which excludes the operation of other rules, lends support to the contention of the appellant that O. 43, R. 1 clause (c) is applicable to the present appeal. "section 104 of the Code of 1908 is materially different from section 588 of the Code of 1882. It provides that lie from 221 the orders mentioned in the first clause of that section and, save as otherwise expressly provided in the body of the Code or by any law for the time being in force from no other orders. " The effect of section 104 is thus, not to take away a right of appeal given by clause 15 of the Letters Patent, but to create a right of appeal in cases even where clause 15 of the Letters Patent is not applicable. I hold accordingly that this appeal is competent under Clause (c), R. 1, O. 43 of the Civil Procedure Code. I am further of opinion that the appeal is competent also under Clause 15 of the Letters Patent." (Emphasis ours) We find ourselves in complete agreement with the view taken and the reasons given by the three eminent Judges in the aforesaid case which furnishes a complete answer to the arguments of the respondents that order 43, Rule I will have no application to internal appeals in the High Court under the provisions of the Letters Patent. A similar view was taken in Lea Badin 's case (supra) where the following observations regarding the applicability of order 43 Rule I in respect of an order passed by a Trial Judge were made: "As an order refusing an application for the appointment of a receiver based on provision in the indenture of hypothecation, that on a breach of any one of the covenants contained therein the plaintiff 's assignor would be entitled to have a receiver appointed, the order has determined a right which is one of the matters in the controversy itself, and so it satisfies the definition of Couch, C.J., as well. The order appealed from in this case is, in our opinion, a judgment ' within the meaning of Cl. IS, Letters Patent. We may add that there are decisions of this Court in which orders discharging or refusing to discharge a receiver appointed in a suit, after the suit had come to an end or had become infectious, have been held to be ' judgments ' and so appealable. But there is another and a far simpler ground on which it must be held that an appeal is competent. The order in the present case is one for which a right of appeal is provided in cl. (s), R. 1, 222 O. 43 of the Code. Under the present Code (Act S of 1908) it cannot be contended that the Code and the Rules made under it do not apply to an appeal from a learned Judge of the High Court, such a contention was elaborately dealt with and repelled in the case of Malhura Sundari Dassi vs Haran Chandra Shaha & Ors. (AIR (Emphasis ours) In Toolsee Money Dassee & Ors. vs Sudevi Dassee & ors. (supra) Maclean, C.J. while relying on the decision of the Judicial Committee in Hurrish Chunder Chowdry 's case made the following pithy observations: "To my mind the first of these points has been authoritatively decided against the view of the present respondents by the Judicial Committee of the Privy Council in the case of Hurrish Chunder Chowdhry vs Kali Sunderi Debi (10 I. A. 4). I need not travel into the facts of that case, but there their Lordships said at page 494 of the report in the Indian Law Reports: "It only remains to observe that their Lordships do not think that section 588 of Act X of 1877, which has the effect of restricting certain appeals, applies to such a case as this where the appeal is from one of the Judges of the Court to the Full Court. " It is clear from the report that the point was elaborately argued, and the clear expression of their Lordships ' opinion must be read in connection with that argument." and Prinsep, J. who agreed with the Chief Justice, made the following identical observations: "We have it, therefore, that if beyond clause 15 of the Letters Patent, 1865, section 588 of the Code of Civil Procedure gives the right of appeal against any order of the description specified therein, there is no Court of Appeal constituted to hear it, if such order not being a judgment had been made by the Judge on the original Side of the High Court. . I understand this to mean that section 588 does not affect any matter coming within clause 15 of the Letters 223 Patent, and if I may venture to say so, the reasons which led to the expression of that opinion and which have not been given in the judgment reported may be those stated by me for arriving at the same conclusion. I have no doubt that we are bound to follow to the fullest extent the opinion expressed by their Lordships of the Privy Council that section 588 of the Code does not apply to the case now before us, and that this matter has thus become settled law". And Ammer Ali, J. while dissenting from the applicability of section 588 held that the order appealable under section 588 was a judgment within the meaning of the Letters Patent. Two decisions of the Rangoon High Court also have consistently taken the view that the provisions of section 104 read with order 43 Rule I apply to the Trial Judge. In P. Abdul Gaffor vs The Official Assignee (1) the following observations were made: For an order made in exercise of the ordinary original civil jurisdiction to be appealable, it must come either under order XLIII, Rule 1 or be a judgment within the meaning of Section 13 of the Letters Patent, so that for the purpose of this application the appellant must establish that it is a judgment within the meaning of section 13". (Emphasis ours) The question of the applicability of order 43 Rule I to an appeal from the Trial Judge under the Letters Patent was raised and decided by the Jammu & Kashmir High Court in Abdul Samad & Ors. vs The State of J & K (2) a decision to which one of us (Fazal Ali, C.J. as he then was) was a party. After an exhaustive review of various decisions on the subject, the High Court observed as follows: G The legal position that emerges, therefore, is that orders of the character specified in Section 104 and order 43, Rule I, Civil P.C. excepting clause (JJ) thereof, would 224 be construed as judgments and an appeal against any one of such orders would lie to the. Division Bench of the High Court notwithstanding the fact that it is passed by one of the judges of the High Court sitting on the original side". It may be mentioned that like the Presidency High Courts, the High Court of Jammu & Kashmir had also been invested with ordinary civil original jurisdiction. The question of the applicability of order 43 Rule 1 to an appeal against an order of a Trial Judge to the Division Bench was directly in point and fully considered by a Division Bench of the Calcutta High Court and a Full Bench of the Rangoon High Court. In Kumar Gangadhar Bagla vs Kanti Chunder Mukerjee & Anr. while dwelling on this aspect of the matter it was observed as follows: "Mr. Bose did not seek to argue, that the formal order of the 7th of June, 1935, was one of the appealable orders provided for in the Code of Civil Procedure. On the contrary, he went so far as to aver with considerable vehemence that neither sec. 104 nor order XLIII, r. l of the Civil Procedure Code has any application to the High Court. I would point out that it is clear from sec. 117 of Code of Civil Procedure and still clearer from Or. XLIX, r. 3, C.P.C., that both sec. 104 and Or. XLIII, r. 1, do apply to the High Court". (Emphasis ours) It is manifest from the observations made above that in view of the clear and explicit provisions of section 117 and order 49 Rule 3 which while exempting other provisions from the jurisdiction of the High Court did not exempt the various clauses of order 43 Rule 1. An identical view seems to have been taken by Sir Page, C.J. in a Full Bench decision of the Rangoon High Court in In re: Dayabhai Jiwandas & Ors. (supra) where the Chief Justice pithily observed as follows : "In many statutes in India, of course, a Right of appeal from an order passed pursuant to the statute is expressly provided, and in such cases an appeal will lie on the terms and conditions therein prescribed. I will not pause to enumerate or discuss these enactments, although 225 many such statutes were cited at the Bar. But, except A where otherwise a right of appeal adhoc is given under some statute or enactment having the force of a statute, the right of appeal from orders that do not amount to "judgment" is regulated by the provisions of the Code of Civil Procedure; (see section 104 and order 43, Rule 1)". Thus, there appears to be a general consensus of judicial opinions on the question of the applicability of order 43 Rule 1 to Letters Patent appeals. This now brings us to the second limb of the argument of Mr. Sorabjee that even assuming that order 43 Rule I does not apply to the High Court so far as the Trial Judge of the said court is concerned, there can be no doubt that the orders indicated in various clauses of order 43 Rule 1 possess the attributes and incidents of a final order which conclusively decides a particular issue so far as the Trial Court is concerned. Thus, there can be no difficulty, even without applying order 43 Rule 1 to hold by a process of analogical reasoning that the appeals and orders mentioned in the various sub clauses would amount to a judgment within the meaning of cl. 15 of the Letters Patent because they contain the traits, trappings and qualities and characteristics of a final order. In other words, the argument advanced was that we could still apply the provisions of order 43 Rule 1 by the process of analogy. We fully agree with this argument because it is manifest that the word 'judgment ' has hot been defined in the Letters Patent but whatever tests may be applied, the order passed by the Trial Judge appealed against must have the traits and trappings of finality and there can be no doubt that the appealable orders indicated in various clauses of order 43 Rule I are matters of moment deciding valuable rights of the parties and in the nature of final orders so as to fall `within the definition of 'judgment '. This Court in Radhey Shyam vs Shyam Behari Singh (1) clearly held that an application under order 21 rule 90 to set aside the auction sale is a judgment as the proceeding raises a controversy between the parties regarding their valuable rights. In this connection, this Court observed thus : "In our view an order in a proceeding under o. XXI, r. 90 is a "judgment" inasmuch as a proceeding raises 226 a controversy between the parties therein affecting their valuable rights and the order allowing the application certainly deprives the purchaser of rights accrued to him as a result of the auction sale". On a parity of reasoning, an order refusing to appoint a receiver or grant an injunction and similar orders mentioned in various clauses of order 43, Rule 1 fall within the tests laid down by this Court in the aforesaid case. We are aware that there are some decisions which have taken a contrary view by holding that section 104 read with order 43 Rule I does not apply to a Trial Judge under the Letters Patent. These decisions do not appear to have considered the various shades and aspects and the setting of the provisions of sections 104 and 117 and order 49 Rule 3 but seem to have proceeded on the basis that the Letters Patent being a special law or a special jurisdiction, the same over rides section 104 which in terms does not apply where a special law makes certain special provisions. We now proceed to discuss these cases briefly. In Pandy Walad Dagadu Mahar & Anr. vs Jammadas Chotumal Marwadi (1) the identical point which is at issue in the instant appeal was not involved and the finding given by the High Court was merely incidental. The Division Bench seems to have relied on a judgment of Sir Basil Scott and Hayward, JJ. where the question was only incidentally dealt with. Martin, J. In Pandy 's case observed thus : "Shortly stated, therefore, this Full Bench decision amounts to this,. that appeals under the Letters Patent are governed by the Letters Patent, and appeals under Code are governed by the Code. Further, the Code only deals with appeals from certain Courts and it does not deal with appeals within the High Court from the decision of one Judge of the Court to another. That is in my opinion, the true view of the relative position of the Letters Patent and the Code". With due respect, a close analysis of this decision would reveal that the Judges followed a fallacious process of reasoning, According to their opinion, the appeals under the Code of Civil 227 Procedure and those under the Letters Patent were, so to say two separate compartments having different spheres of their own. With due deference, we might point out that such a view is based on a total misinterpretation and misconstruction of the true nature and object of the Code of Civil Procedure and the Letters Patent. In fact, as we have pointed out earlier, there is no inconsistency, whatsoever between the Letters Patent and section 104 read with order 43 Rule l; The first premise of the Court that internal appeals in the High Court were governed by the Letters Patent alone and not by the Code appears to be legally fallacious. We have already pointed out that a large number of decisions, including the Privy Council, have clearly taken the view that although the Letters Patent is a special law certain provisions of the Code of Civil Procedure in the matter of procedure do apply to appeals against the decision of a Trial Judge to a larger Bench or to quote the Bombay Judges to 'internal appeals '. Secondly, the Court completely overlooked the legal effect of section 117 and order 49 Rule 3 which completely demolishes the presumptuous process of logic adopted by the court. Thirdly, the Court appears to have overlooked that far from excluding the Code there could be other special Acts which could and did confer additional jurisdiction even in internal appeals to the High Court, viz., from an order passed by a Trial Judge to a larger Bench, for instance, section 39 of the Arbitration Act or section 202 of the Indian and other similar local or special Acts. If these special Acts could without affecting the jurisdiction of the Letters Patent or overriding the same provided a supplementary or additional jurisdiction, there was no reason why the Code of Civil Procedure also could not do the same particularly when the Trial Judge had to adopt the procedure contained in the Code, starting from the presentation of the plaint to the delivery of judgment. Fourthly, the Division Bench does not seem to have considered the fact that what the Letters Patent did was merely to confer original civil jurisdiction on the High Court to be exercised by a Single Judge, who would undoubtedly be a Trial Judge, but of an elevated status so that only such suits could be filed in the Court of the said Judge as are of a very high valuation which may differ from High Court to High Court. This was done in order that in heavy suits involving substantial questions of fact and law, the hearing of the suit by a senior Court of the status of a High Court Judge would repose, endeanr and generate greater confidence in the people. Thus if, interlocutory orders passed by District courts in the mofussil could be appealable to the High Court, there was no reason why inter 228 locutory orders passed by a Trial Judge could not be appealable to a larger Bench irrespective of the question whether or not they were judgments within the meaning of cl. 15 of the Letters Patent. This appears to us to be the cardinal philosophy of the Code in applying the provisions of order 43 Rule I, to the original suit tried by the Single Judge (Trial Judge). Furthermore, the concept of internal appeals in the High Court seems to be a legal fiction without any factual existence imported by some of the High Courts in order to get rid of some of the provisions of the Code of Civil Procedure which is totally opposed not only to the aim and object of the Code but also to the very spirit of the Letters Patent. In a later judgment of the Bombay High Court in Vaman Ravji Kulkarni vs Nagesh Vishnu Joshi & Ors.,(1) the following observations were made: "I am, with respect, of opinion that the view taken by the full Bench of the Madras and Calcutta High Courts in the cases referred to above is correct, and that the question must be regarded as having been finally settled by the decision of the Privy Council in 10 I. A. 4. (Hurrish Chunder Chowdry vs Kali Sundari Debi) section 104. Civil P.C., which refers only to appeals to the High Court from Courts subordinate to it, cannot apply to appeals filed under Cl. 15 of the Letters Patent from a single Judge OF the High Court to a bench. (Wadia, J.) . . There can be no doubt that the provisions of the Letters Patent have conferred special powers regarding appeals within the High Court. Those powers are not specifically taken away by section 104, Civil P.C. and are not, therefore, affected by it . Special enactments are not repealed by later general Acts unless there be some express reference to the previous legislation or a necessary inconsistency in the two Acts standing together, which prevents the maxim from being applied. Sub section (2) of section 104, Civil P.C., does not refer to the Letters Patent and say that in spite of Cl. 15 of the Letters Patent no appeal lies from any order passed in an appeal under Sub section Sub section (2) is in no way 229 inconsistent with cl. 15 of the Letters Patent and the two can stand together, the former applying to appeals under the Code, and the latter to special appeals within the High Court. I am satisfied that section 104, Civil P.C . does not control cl. 15 of the Letters Patent, and in spite of the absence of a saving clause in sub section (2) of section 104 does not affect or cut down the right of appeal conferred by the Letters Patent." (Lokur, J.) As regards the first part of the observations of Wadia, J, we are constrained to observe that the learned Judge has not correctly construed the true ratio of the decision of the Privy Council in Hurrish Chunder Chowdry 's case (supra) where, as indicated, the Privy Council has in express terms held that section 588 (which now corresponds to order 43 Rule 1) clearly applies to appeals against orders of a Trial Judge to a larger Bench of the High Court. Similarly, the observations made by Lokur, J. run against the plain interpretation of section 104 by assuming that there is a conflict between section 104 read with order 43 Rule I and the Letters Patent when in fact, as pointed out, there is no such conflict at all all that section 104 does is to give an additional jurisdiction apart from the Letters Patent which is in no way unconstitutional with the Letters Patent. We may like to observe here that there is no non obstante clause in the provisions of the Letters Patent to indicate that the provisions of the Code of Civil Procedure, particularly section 104 would not apply either expressly or by necessary intendment. In this view of the matter, therefore, we are clearly of the opinion that the Bombay decisions are wrongly decided and must, therefore, be overruled. In Vishnu Pratap and Ors. vs Smt. Revati Devi and Ors.(l) the Court held that no appeal against an order passed by a Trial Judge under section 202 of the would lie to a Division Bench in view of the Letters Patent. This argument was negatived and overruled in Shankarlal Aggarwal 's case (supra) as already discussed above. As regards the applicability of order 43, the following observations were made in Vishnu Pratap 's case: "It is true that orders 40 & 43 both apply to the High Court but the question here is whether o. 43 makes provision for an appeal from one court to another or it is intended to cover cases of an appeal from one Judge to a bench of 230 the same Court. While section 96 deals with original decree, section 104 Civil P.C. deals with orders, not being decrees, and the orders that are appealable are set out under o. 43, C.P.C. The question of an appeal from one Court to another Court is no doubt governed by the provisions of the Code of Civil Procedure but the provision for appeal from one Judge of a Court to a bench of the same Court is not provided for by the Code and must be governed by the Letters Patent. If section 104 read with O. 43 makes all these orders appealable then what would be the Court to which appeals would lie from an order passed by a Division Bench and not by a single Judge. We are not satisfied that section 104 or O. 43 ever intended to deal with appeals from a Judge or Judges of one Court to a larger number of Judges in the same Court. It is no doubt true, as has been held by their Lordships of the Judicial Committee. in 'Mt. Sabitri Thakurain vs Savi ' (AIR that section 104 as well as o. 43 apply to High Courts but it does not mean that they give any right to an appeal from an order by a Judge or Judges of that Court to a larger number of Judges of the same Court independently of the Letters Patent of the Court. As we have said if o. 43 or section 104, Civil P.C., were made applicable per se, without reference to the Letters Patent, then even an order passed by a bench would come under those provisions, but before an appeal can be filed there will have to be a Court constituted for hearing an appeal and the only provision for hearing an appeal, from the judgment of a single Judge, by a bench of two or more Judges of the same Court is contained in the Letters Patent of the Chartered High Courts. An order, to come under the Letters Patent must be a judgment, and, if an order is not a judgment, then cl. 10 of the Letters Patent would not apply and there is no provision for constituting a bench of more than one Judge to hear such an appeal. We, therefore, fail to understand how O. 43 R. 1, or section 104, Civil P.C. without any reference to cl. 10 of the Letters Patent, can help the appellants. ' In this case also, the line of reasoning adopted by the court is the same as that of the Bombay High Court referred to above. 231 One of the reasons given is that while order 43 makes provision for A appeal from one court to another, it is not intended to apply to an appeal from one Judge of the High Court to a bench of the same Court. No reasons have been given by the Judges for holding why this is not so particularly in the face of the clear provisions of section 117 and order 49 Rule 3, as discussed above. Thus, the first part of R the reasoning of the High Court is totally irrelevant and wholly unintelligible. The point at issue is if section 104 read with order 43, Rule I applies to an order passed by District Courts in the mofussil, why could it not apply to the one passed by the Trial Judge when the Letters Patent does not in any way bar such an appeal. Another ground taken by the Court is that if order 43 Rule I is made applicable to the High Court then a strange anomaly will arise in that where an appeal lies to the Division Bench, how could a further appeal lie to some other bench of the court. This argument also is based on a misconception of order 43 Rule 1. It is manifest that if order 43 Rule I were to apply to orders passed by the Trial Judge, the order would be one passed by only one Judge of the High Court and, therefore, in the context of the original jurisdiction exercised by a Single Judge of the High Court, the appellate jurisdiction would lie with the Division Bench as contemplated by the Letters Patent and the Rules framed by the High Court. We are unable to see any anomaly or inconsistency in this position. Thirdly, the court seems to have relied on a decision of the Privy Council in Mt. Sabitri Thakurain vs Savi (AIR and has interpreted the ratio of this case to mean that section 104 would not apply to High Courts which is exactly what the Privy Council does not say. With due respect, therefore, the learned Judges have not correctly appreciated the decision of the Privy Council which has nowhere indicated that order 43 Rule I would not apply to internal appeals in the High Court. On the other hand their Lordships of the Privy Council had held to the contrary as discussed above. For these reasons, therefore, we are of the opinion that this case has also not been correctly decided and we disapprove the reasons given and the decision taken in this case. We might also notice a full Bench decision of the Nagpur High Court in Madhukar Trimbaklal vs Shri Sati Godawari Upasani Maharaj 232 of Sakori & Ors. (1) where Niyogi, J. Observed as follows : "Clause 10, Letters Patent defines the appellate jurisdiction of the High Court vis a vis the judgment passed by a single Judge of that Court. It should be observed that the Civil Procedure Code does not make any provision in this behalf. The right of appeal from a decree of a single Judge to the High Court is not governed by section 96 or section 100 or section 104, Civil P.C., but by cl. 10, Letters Patent. This right of appeal depends on the special provision made in the Charter. section 4, Civil P.C., provides that the Code does not affect any special jurisdiction or power conferred, or any special form of procedure prescribed by or under any other law for the time being in force. Since the special jurisdiction or power is conferred on the High Court by cl. 10, Letters Patent the provisions in the Civil Procedure Code regarding appeals cannot come into operation in regard to an appeal from a single Judge of the High Court to the High Court". With due respect, we are unable to agree with the opinion expressed by Niyogi, J. who has made a bald statement that the Code of Civil Procedure does not make any provision in regard to an appeal from an order passed by a Trial Judge to a Division Bench and that the right of appeal from a decree of a Civil Judge to a High Court is not governed by section 100 or section 104 but by cl. 10 of the Letters Patent of the Nagpur High Court. Here again, the learned Judge seems to have committed an error apparent on the face of the record. An examination of the language of sections 96 to 100 would clearly show that the scope of these sections is quite different from that of section 104. Sections 96 to 100 expressly deal with the forum of appeal provided by the Code against decrees or orders amounting to decrees passed by the District Court in the mofussil. Section 104 is couched in very general terms and cannot be limited to appeals against orders passed by the courts contemplated in sections 96 to 100. Moreover, section 104 does not deal with appeal against a decree at all but provides a forum for appeal against orders under order 43 Rule I which are mainly orders of a final or quasi final nature passed during the pendency of a suit. Section 104, therefore, has a much wider application, as discussed above, and neither overrides the Letters Patent nor is it inconsistent with the same. For these reasons, therefore, we are unable to accept the line of reasoning adopted by the aforesaid High Court in holding 233 that section 104 does not apply to internal appeals in the High Court and A we accordingly overrule this decision. A some what identical view was taken by a later decision of the Nagpur High Court in Ratanlal Jankidas Agarwal vs Gajadhar & Ors. (l) Where the following observations were made "Firstly, O. 43 has not been made applicable to appeals from appellate decrees by o. 43, R. 1, though the rules of o. 41 have been made applicable to them. So section 104 bars an appeal from the order. Moreover, the Civil Procedure Code makes no provision for an appeal within the High Court, that is to say, from a single Judge of the High Court. Power is given to a Division Bench of the High Court to hear appeals from decisions of a single ' ' Judge of the High Court only under cl. 10 of the Letters Patent". For the reasons which we have already given above, we hold that the learned Judges have fallen into the same error which was committed by the earlier Nagpur case. The first reasoning given by Mangalmurti, J. that order 43 is not applicable to appeals from appellate decrees is wholly irrelevant because the question is whether under order 43 Rule 1, an appeal could lie from a Trial Judge to a Division Bench of the High Court. Secondly, the learned Judge says that section 104 bars a second appeal from the order and that the Code of Civil Procedure makes no provision for appeal within the High Court. Here again, the learned Judge is wrong because we have already pointed out that as far back as Hurrish Chunder Chowdry 's case (supra) it was clearly held by the Judicial Committee that section 588 was applicable even to internal appeals in the High Court. On a parity of reasoning, therefore, on the basis of which we have overruled the decisions of the other High Courts, taking a similar view we find ourselves unable to agree with the view taken by Mangalmurti and Bose, JJ. in the aforesaid case and hold that this case is not correctly decided. A later decision of the Allahabad High Court also seems to have taken the same view. In Standard Glass Beads Factory & Anr. vs Shri Dhar & Ors. (2) the following observations were made : "Such an order if made by a subordinate court is appealable under or. 43 R. 1, C.P.C.; it is, as we have seen an order from which in England an appeal lies, without 234 leave, to the Court of Appeal. If the narrower view of the meaning of the word 'judgment ' be correct such an order when made by a Judge of a High Court in India exercising original jurisdiction would not be appealable". Here also with due deference to the Judges constituting the Full Bench, we are of opinion that they committed an error in drawing inspiration from the procedure prevailing in England in the court of appeal. In the first place the hierarchy of the Courts in India under the Civil Procedure Code is essentially different from that in the United Kingdom. Secondly, there is no provision existing in the English law corresponding to Order 43 Rule 1 of an appeal from a Trial Judge to a Division Bench under various circumstances. Lastly, this case does not seem to have considered a large number of decisions referred to by us, clearly holding that section 104 read with order 43 Rule I applies to appeals under the Letters Patent in the High Court. For these reasons, therefore, we hold that this case also was not correctly decided and must be overruled. Another case taking a contrary view is again a case of the Bombay High Court which also makes a rather interesting reading. In J.K Chemicals Ltd. vs Kreba and Co. (1) Desai, J. speaking for the court observed on this part of the case thus: "The reply to the said argument is that the provisions of section 104 and O. 43, R. I provide for an appeal only from the subordinate Court to the higher Court and not from one part of the Court to the other. It has been held that the provisions relating to appeals contained in the Civil Procedure Code deal with appeals from subordinate Courts to higher Courts and do not deal with appeals from the decisions and decrees of the High Court in the exercise of its ordinary or extra ordinary civil jurisdiction except so far as the appeal to the Supreme Court is concerned. The subject of an appeal from the decision of a single Judge of the High Court to a Division Bench of the same High Court is dealt with only under the Letters Patent and such right is not governed by the provisions of the Civil Procedure Code relating to appeals. This view has been taken consistently by the High Courts in India and also by the Privy Council (see Hurrish Chunder vs Kali Sunderi Debi (1883) ILR at p. 494)". 235 The first part of the observations follows the reasonings of the A two decisions of the Bombay High Court, discussed above, and are therefore open to the same criticism which we have levelled against the previous decisions. Secondly, the court seems to think that all the High Courts in India have consistently taken the view that order 43 Rule 1 does not apply to internal appeals in the High Courts. This is doubtless factually incorrect because we have referred to a large number of decisions which have taken a contrary view. The High Court was, therefore, not quite correct in observing that the High Courts in India had taken a consistent view in regard to this matter. Thirdly, the High Court seems to have relied heavily on the decision of the Privy Council in Hurrish Chunder Chowdry 's case (supra) and on Chappan 's case (supra) in holding that order 43 did not apply to internal appeals in the High Courts which were governed by the Letters Patent alone. Here also, with due respect, the High Court has gravely erred. We have pointed out while dealing with Hurrish Chunder Chowdry 's case (supra) that the Privy Council had clearly laid down that section 588 applied to the High Court and this position has been understood in this very sense by several judgments discussed above. The High Court, therefore, has not correctly appreciated the real ratio of the Privy Council case, referred to above. As regards Chappan 's case (supra), the conclusion of the High Court is not borne out by the ratio of the Full Bench in the said case. It would appear that the Full Bench in the aforesaid case was concerned with two questions: (1) Whether in view of section 622 of the old Code (which corresponds to section 115 of the Code of 1908) an order passed by a trial Judge could be revised by a larger Bench, and (2) Whether the right of appeal given by cl. 15 of the Letters Patent against an order passed by a trial Judge was controlled and limited by sections 588 and 591 of the Code of 1877 (which now corresponds to order 43 Rule 1). In the instant case we are not concerned with the revisional power but only with what old section 588 was. Far from deciding that section 588 was not controlled by the Letters Patent, the learned Judge decided to the contrary. To begin with, Benson, J. formulated 236 the questions referred to the Full Bench thus : (1) Whether the jurisdiction exercised by the High Court under section 622, Civil Procedure Code, is included in the expression "appellate jurisdiction" as used in section 13 of the High Court Act (24 and 25 Vict. 104 and in section 36 of the Letters Patent of 1866, and (2) Whether the right of appeal given by section 15 of the Letters Patent against an order passed by a single Judge of the High Court is controlled and limited by sections 588 and 591, Civil Procedure Code? I am of opinion that both of these questions must be answered in the affirmative". and Shephard, Acting C.J. Observed as follows: "Accordingly I think it must be assumed that the judgment of a single Judge acting under section 622 of the Code is open to appeal, unless the right of appeal has been taken away by section 588 of that Code. On that question I entirely agree with Mr. Justice Subramania Ayyar. The question is, in my opinion, concluded by authority which it is beyond our province to criticise". and Boddam, J. expressed the following opinion : "The result of this judgment (so far as it applies to the question before us) appears to me to come to this, that if the order made by a single Judge only amounts to an order such as is intended by chapter XLIII of the Code, it is not appealable unless it is within section 588". and Moore, J. Observed as follows : "It is clear, however, that this could not have been done, for the provisions of sections 588 and 591 do, in certain cases, most certainly apply to the High Court. For example, section 588, clause 1, provides that if a District Munsif passes an order under section 20 of the Code, an appeal lies to the District Judge, but that there is no second appeal to the High Court, while if a District Judge passes 237 such an order an appeal can be preferred to the High Court. Whatever view be taken of section IS of the Letters Patent it would have been impossible to include section 588 among those sections that do not apply to the High Court". Thus, the ratio decidendi of the decision clearly goes to indicate that the Full Bench of the Madras High Court had held in no uncertain terms that section 588 applied to the High Court and orders mentioned therein passed by a Trial Judge would be appealable to a larger Bench. This, therefore, knocks the bottom out of the decision of the Bombay High Court when Chappan 's case (supra) in no way supported the view taken by them. For the reasons given above, we hold that J.K Chemicals 's case (supra) was also wrongly decided and can no longer be treated as good law. It is rather unfortunate that despite clear, explicit, pointed and pragmatic observations of the Privy Council in Hurrish Chunder Chowdry 's case (supra) and further clarification by the legislature by introducing section 104 of the Code of 1908, some of the High Courts n seem to have stuck to the antiquated view that the provisions of order 43 Rule I do not apply to internal appeals within the High Courts. Thus after considering the arguments of counsel for the parties on the first two limbs of the questions, our conclusions are : (1) That there is no inconsistency between section 104 read with order 43 Rule I and the appeals under the Letters Patent and there is nothing to show that the Letters Patent in any way excludes or overrides the application of section 104 read with order 43 Rule I or to show that these provisions would not apply to internal appeals within the High Court. (2) That even if it be assumed that order 43 Rule I does not apply to Letters Patent appeals, the principles governing these provisions would apply by process of analogy. (3) That having regard to the nature of the orders contemplated in the various clauses of order 43 Rule 1, there can be no doubt that these orders purport to decide valuable rights of the parties in ancillary proceedings even though the suit is kept alive and 238 that these orders do possess the attributes or character of finality so as to be judgments within the meaning of cl. 15 of the Letters Patent and hence. appealable to a larger Bench. (4) The concept of the Letters Patent governing only the internal appeals in the High Courts and the Code of Civil Procedure having no application to such appeals is based on a serious misconception of the legal position. This now brings us to the second important point which is involved in this appeal. Despite our finding that section 104 read with order 43 Rule I applies to Letters Patent appeals and all orders passed by a Trial Judge under clauses (a) to (w) would be appealable to the Division Bench, there would still be a large number of orders passed by a Trial Judge which may not be covered by order 43 Rule l. The next question that arises is under what circumstances orders passed by a Trial Judge not covered by order 43 Rule 1 would be appealable to a Division Bench. In such cases, the import, definition and the meaning of the word 'judgment ' appearing in cl. 15 assumes a real significance and a new complexion because the term 'judgment ' appearing in the Letters Patent does not exclude orders not falling under the various clauses of order 43 Rule 1. Thus the serious question to be decided in this case and which is indeed a highly vexed and controversial one is as to what is the real concept and purport of the word 'judgment ' used in cl. IS of the Letters Patent. The meaning of the word 'judgment ' has been the subject matter of conflicting decisions of the various High Courts raging for almost a century and in spite of such length of time, unfortunately, no unanimity has so far been reached. As held by us earlier it is high time that we should now settle this controversy once for all as far as possible. We now proceed to deal with the main controversy as to what is the true scope, meaning and purport of the word 'judgment ' used in cl. 15 of the Letters Patent. Numerous authorities on both sides were cited before us in the course of the very able arguments advanced by counsels for the parties and it appears that there are three leading judgments which have spelt out certain tests to determine as to when an order passed by a Trial Judge can be said to be a 'judgment ' within the meaning of. cl IS of the Letters Patent. A very narrow view on this point was taken by a Division Bench 239 Of the Calcutta High Court in the case of The Justice of the Peace for Calcutta (supra) where Sir Couch, C.J. On an interpretation of cl. 15 of the Letters Patent observed thus: "We think that "judgment" in clause 15 means a decision which affects the merits of the question between the parties by determining some right or liability. It may be either final, or preliminary, or interlocutory, the difference between them being that a final judgment determines the whole cause or suit, and a preliminary or interlocutory judgment determines only a part of it, leaving other matters to be determined. " An analysis of the observations of the Chief Justice would reveal that the following tests were laid down by him in order to decide whether or not an order passed by the Trial Judge would be a judgment: (1) a decision which affects the merits of the question between the parties; (2) by determining some right or liability; (3) the order determining the right or liability may be final, preliminary or interlocutory, but the determination must be final or one which decides even a part of the controversy finally leaving other matters to be decided later. Thus, examining the tests laid down by Sir Richard Couch, C.J,, it seems to us that the view taken by the learned Chief Justice appears to place a very strict and narrow interpretation on the word 'judgment ' under which orders deciding matters of moment or valuable right of the parties without finally deciding the suit may not amount to a judgment and hence, not appealable. In giving this interpretation the learned Chief Justice was guided by two considerations: (I) that a liberal interpretation may allow vexed litigants to carry any discretionary order of the Trial Court in appeal, and (2) that it would confer more extensive right to appeal against the Judge sitting on the original side than the right of appeal given to a Trial Judge sitting in the mofussil. We are doubtless impressed with the argument of the Chief Justice and fully appreciate the force of the reasons given by him but we feel that despite those considerations the law must be interpreted as it stands and a court is not 240 justified in interpreting a legal term which amounts to a complete distortion of the word 'judgment ' so as to deny appeals even against unjust orders to litigants having genuine grievances so as to make them scapegoats in the garb of protecting vexatious appeals. In such cases, a just balance must he struck so as to advance the object of the statute and give the desired relief to the litigants, if possible. Although it is true that this decision is practically the locus classicus so far as the Calcutta High court is concerned and has been consistently followed by later decisions at the same time it cannot be denied that in a number of cases the conscience of the Judges was so shocked that they tried to whittle down or soften the rigours of this decision so much so that in one case the observations of the Chief Justice were not only not followed but were described as antiquated and in other cases the Judges strongly expressed them selves that the High court should give up its fondness to stick to the principles laid down by the learned Chief Justice. It is not necessary for us to burden this judgment with later decisions of the Calcutta High court in trying to comment on the correctness of the principles laid down by sir Couch, c J. but a few instances may be quite revealing. In Chandi Charan Saha vs Jnanendra Nath Bhattacharjee and Ors. ,(l) Sir Asutosh Mookerjee in his leading judgment modified the strict rule of interpretation of 'judgment ' laid down by sir Couch, C.J. and pointed out that the words 'merits of the question between the parties by determining a right of liability ' were not to be confined or restricted to the controversy in a suit itself but could take within its fold any right involved in any application which puts an end to the suit or the proceeding. sir Mookerjee, J. has widened the scope of the observations of sir Couch, c. J and adopted some of the observations of Sir White, C.J. in Tuljaram Row 's case (supra) and in this connection observed thus: "It is plain that the expression 'some right or liability is not restricted to the right in controversy in the suit itself on the other hand, if we adopt the wider definition formulated by White C.J. in the case of Tuljaram Row vs Alagappa Chettiar (ILR , the decision is unquestionably a judgment within the meaning of the Letters Patent. The test is, not what the form of the adjudication is, but what is its effect in the suit or proceeding in which 241 it is made. If its effect, whatever its form may be and whatever may be the nature of the application on which it is made, is to put an end to the suit or proceeding so far as the Court before which the suit or proceeding is pending is concerned, or if its effect, if it is not complied with, is to put an end to the suit or proceeding, the adjudication is a judgment: Mathura vs Haran Cal. 857). " In Lea Badin 's case (supra), the following observations were made: "To remove the incongruity which appears in the decision of this Court and to lay down some definite rule by which orders might be tested when it has to be determined whether or not they are 'judgments ' within the meaning of the clause, this Court will some day have to abandon its fond adherence to the antiquated definition of Couch, C.J., and boldly acknowledge its allegiance to the tests laid down by White, C.J." (Emphasis supplied) After making these observations the Court further reiterated the position in the following words. "In more decisions than one of this Court this definition of 'Judgment ' given by Couch, C.J. has been described as classical, and yet in a long course of decisions this Court has repeatedly expressed the view that the definition is absolutely exhaustive. Treating this definition as not of an inflexible character and yet not expressly purporting to extend it, the Court has in numerous cases emphasised the necessity of scrutinizing the nature of the decision in each particular case in order to find out whether the decision amounts to a 'judgment ' within the meaning of the Clause. In Shorab Merwanji Modi and Anr. vs Mansata Film Distributors and Anr., the following observations were made: "On a strict construction of the Calcutta test, the Tight or liability must mean some right or liability which is 242 a subject matter of controversy in the suit or proceeding but in its application to individual cases, that strict construction has not been adhered to and was indeed often departed from by Couch, J., himself who was the author of the test. Orders concerning the jurisdiction of the Court to entertain a suit, as distinguished from matters of the actual dispute between the parties, were held by him to come within the category of judgments." In Mooammed Felumeah vs section Mondal & Ors. the Court pithily observed as follows: "Now, so far as this Court is concerned, there is a considerable body of judicial opinion, which, while holding that Sir Richard Couch 's above definition is classical and of pre eminent practical importance and usefulness, has consistently refused to regard it as, in any sense. exhaustive or inflexible. Indeed, in essence and truth, it has been accepted merely as the starting point on a broad open field, stretched in front of it in all its vastness and immense magnitude, and Judges have always endeavoured to extend it and expand the different aspects of the term and to give it a wide and extended meaning, though, of course, within certain limits. " The other leading case which puts even a narrower interpretation and in our opinion, a clearly wrong one, on the word 'judgment ' is the Full Bench decision of the Rangoon High Court In Re Dayabhai Jiwandas 's case (supra) where the following observations were made: "I am of opinion that in the Letters Patent of the High Courts the word judgment ' means and is a decree in a suit by which the rights of the parties at issue in the suit are determined." With due respect to the learned Chief Justice and the Judges who agreed with him, we are unable to accept the interpretation of the word judgment ' given by the Chief Justice which runs counter to the very spirit and object of the word 'judgment ' appearing in cl. 15 of the Letters Patent. The learned Chief Justice seems to 243 have fallen into the error of equating the word 'judgment ' with 'decree ' as used in the Code of Civil Procedure when, as pointed out above, the words 'judgment ' and 'decree ' used in the Code cannot form a safe basis to determine the definition of the word 'judgment ' in the Letters Patent particularly when the Letters has deliberately dropped the word 'decree from judgment. ' We are, therefore, unable to hold that the view taken by the Chief Justice, Sir Page, is correct and accordingly overrule the same. The next leading case which lays down the test of a 'judgment ' and which seems to have found favour with most of the High Courts in India is the test laid down by Sir Arnold White, C.J. in Tuljaram Row 's case (supra) where the learned Chief Justice pointedly spelt out various tests and observed thus: "The test seems to me to be not what is the form of the adjudication but what is its effect in the suit or proceeding in which it is made. If its effect, whatever its form may be, and whatever may be the nature of the application on which it is made, is to put an end to the suit or proceeding so far as the Court before which the suit or proceeding is pending is concerned, or if its effect, if it is not complied with, is to put an end to the suit or proceeding, I think the adjudication is a judgment within the meaning of the clause. An adjudication on an application which is nothing more than a step towards obtaining a final adjudication in the suit is not, in my opinion, a judgment within the meaning of the Letters Patent. " I think, too, an order on an independent proceeding which is ancillary to the suit (not instituted as a step towards judgment, but with a view to rendering the judgment effective if obtained) e.g., an order on an application for an interim injunction, or for the appointment of a receiver is a 'judgment ' within the meaning of the clause. " Analysing the observations of the learned Chief Justice it would appear that he has laid down the following tests in order to assess the import and definition of the word 'judgment ' as used in cl. IS of the Letters Patent : (1) It is not the form of adjudication which is to be seen but its actual effect on the suit or proceeding; 244 (2) If, irrespective of the form of the suit or proceeding, the order impugned puts an end to the suit or proceeding it doubtless amounts to a judgment; (3) Similarly, the effect of the order, if not complied with, is to terminate the proceedings, the said order would amount to a judgment; (4) Any order in an independent proceeding which is ancillary to the suit (not being a step towards judgment) but is designed to render the judgment effective can also be termed as judgment within the meaning of the Letters Patent. So far as this test is concerned, the learned Chief Justice had in mind orders passed by the Trial Judge granting or refusing ad interim injunction or appointing or refusing to appoint a receiver. (5) An order may be a judgment even if it does not affect the merits of the suit or proceedings or does not determine any rights in question raised in the suit or proceedings. (6) An adjudication based on a refusal to exercise discretion the effect of which is to dispose of the suit, so far as that particular adjudication is concerned, would certainly amount to a judgment within the meaning of the Letters Patent. Similarly, Krishnaswami Ayyar, J., who agreed with tile Chief Justice in the above case, pointed out that even an interlocutory judgment which determines some preliminary or subordinate point or plea or settles some step without adjudicating the ultimate right of the parties may amount to a judgment. With due respect we think that if the observations of Krishnaswamy Ayyar, J. are carried to its logical limit every interlocutory order would have to be held to be appealable. So far as the tests laid down by White, C.J., and as analysed by us, are concerned we are inclined to agree generally with these tests though we feel that some of the tests laid down are far too 245 wide and may not be quite correct. While the view taken by Sir Richard Couch, C.J. in The Justice of the Peace for Calcutta (supra) is much too strict, the one taken by Sir White, C.J. is much too wide. The correct test seems to lie somewhere in between the tests laid down by the aforesaid jurists. We might point out that the tests laid down by the Calcutta High Court have been consistently followed by the Bombay High Court and also by a large majority of the later decisions of the Calcutta High Court in Lea Badin vs Upendra Roy Chaudhury, Kumar Gangadhar vs Kanti Chunder Mukherjee, Shorab Merwanji Modi vs Mansata Film Distributors, Mohammed Felumeah vs section Mondal.(supra) Some of the decisions have sounded a discordant note and have gone to the extent of characterising the view of Sir Couch, C.J, as being antiquated and have strongly expressed the view that the Calcutta High Court should give up its fondness for the strict test laid down by Sir Couch in The Justice of the Peace for Calcutta 's case. On the other hand, the tests laid down by Sir White, C.J. in Tuljaram Row 's case have been followed by the Lahore High Court in Ruldu Singh vs Sanwal Singh and by some other High Courts in Standard Glass Beads Factory Shri Dhar & Ors. and later decisions of the Madras High Court as also by Andhra Pradesh High Court in Kuppa Viswappathi vs Kuppa Venkata Krishua Sastry. A Full Bench of the Allahabad High Court, however, in Mt. Shahzadi Begam vs Alak Nath dissented from the view taken by the Madras High Court and held that the tests laid down by that High Court in the aforesaid case were rather too wide. In this connection, Sulaiman, C.J., speaking for the Court observed as follows : "We would like to point out that the test laid down by the learned Chief Justice of the Madras High Court is put in too wide a language and cannot be accepted as laying down the correct criterion". Similarly, in a later Full Bench decision of the Nagpur High Court in Manohar Damodar Bhoot vs Baliram Ganpat Bhoot, Hidayatullah. J. (as he then was) who wrote the leading judgment, very pithily described the essential requisites and the exact meaning 246 of the word 'judgment ' as used in the Letters Patent and observed thus: "A judgment means a decision in an action whether final, preliminary or interlocutory which decides either wholly or partially, but conclusively in so far as the Court is concerned, the controversy which is the subject of the action. It does not include a decision which is on a matter of procedure, nor one which is ancillary to the action even though it may either imperil the ultimate decision or tend to make it effective. The decision need not be immediately executable 'per se ' but if left untouched must result inevitably without anything further, save the determination of consequential details, in a decree or decretal orders, that is to say, an executive document directing something to be done or not to be done in relation to the facts of the controversy. The decision may itself order that thing to be done or not to be done or it may leave that over till after the ascertainment of some details but it must not be interlocutory having for its purpose the ascertainment of some matters or details prior to the determination of the whole or any part of the controversy". The pointed observations of the Hon 'ble Judge try to synthesize the conflicting views taken by the Calcutta and the Madras High Courts and, in our opinion, they represent the true scope and import of the word 'judgment ' as used in the Letters Patent. The learned Judge while making these observations has made an exhaustive analysis of a large number of cases. Having dealt with the main cases of the various High Courts reflecting different and variant views, we do not think it necessary to multiply authorities on this subject which have been fully debated in the decisions we have referred to. We shall now proceed to refer to the decisions of this Court with respect to the incidental observations made by them regarding the scope and meaning of the word 'judgment ' before giving our own view of the matter. Before, however, dealing with the cases of this Court we might indicate that in view of the decisions taken by us regarding the applicability of section 104 read with order 43 Rule 1 even to internal appeals in the High Court, the controversy regarding the meaning of the word 'judgment ' has been largely narrowed down and sufficiently abridged because the orders mentioned in clauses (a) to (w) of order 43 Rule 1 having 247 been held to be appealable, there would be only a few cases left in A which the question as to whether or not the orders passed by the Trial Judge are judgments would arise. After discussing the decisions of this Court, we shall give a list of illustrative cases which may justly be described as 'judgment ' within the meaning of the Letters Patent so as to cover almost the entire field though a few cases still may have to be determined according to the principles laid down. The first decision of this Court which is relevant is Asrumati Debi 's case (supra). In this case the only question involved was whether an order transferring a suit under cl. 13 of the Letters Patent satisfied the tests of a judgment as mentioned in cl. 15 of the Letters Patent. This Court referring to the Calcutta and Madras decisions refrained from giving any particular decision except that they held that the mere order of transfer under cl. 13 of the Letters Patent could not be said to be a judgment and was therefore not appealable. This Court pointed out that the order neither affected the merits of the controversy not did it terminate or dispose of the suit. In this connection, the Court observed as follows: "The judgment must be the final pronouncement which puts an end to the proceeding so far as the court dealing with it is concerned. It certainly involves the determination of some right or liability, though it may not be necessary that there must be a decision on the merits. . We have indicated that the essential features of a 'judgment ' are according to both the, Calcutta and the Madras High Courts and all that we need say is that, in our opinion, an order under clause 13 of the Letters Patent does not satisfy the tests of a 'judgment ' as formulated by either of these High Courts". Apart from this what is more important is that the Court clearly observed that as an order granting leave under cl. 12 of the Letters Patent constitutes the very foundation of the suit, hence if by an order such leave is rescinded the suit automatically comes to an end and there can be no doubt that such an order would be a judgment. In this connection, this Court observed as follows: "Leave granted under clause 12 of the Letters Patent constitutes the very foundation of the suit which is 248 instituted on its basis. If such leave is rescinded, the suit automatically comes to an end and there is no doubt that such an order would be a judgment". Thus, from this case an important test that can be spelt out is that where an order which is the foundation of the jurisdiction of the Court or one which goes to the root of the action, is passed against a particular party, it doubtless amounts to a judgment. As we have already pointed out apart from these observations this Court refused to embark on an enquiry as to in what cases an order passed by a Trial Judge would be a 'judgment ' for purposes of appeal before a larger Bench. Again in Union of India vs Mohindra Supply Co. (supra) this Court clearly held that in enacting section 104 the intention of the Legislature was to preserve the Letters Patent jurisdiction of the High Court and provided for a right to appeal from the Trial Judge to the Division Bench without affecting the provisions of the Code of 1908. In this connection, the Court observed as follows : "Under the Code, as amended, the view has consistently been taken that interlocutory judgments (i.e., decisions though not amounting to decrees which affect the merits of the questions between the parties by determining some right or liability) passed by single Judges of Chartered High Courts were appealable under the Letters Patent". We might mention here that the observations of this Court completely demolish the arguments of some of the High Courts that section 104 does not apply to internals in the High Court because this Court while referring to the Code made specific reference to section 104 in the previous paragraph. Apart from this, there is no observation by this Court regarding essential requisites of a Judgment. In State of U.P. vs Dr. Vijay Anand Maharaj (supra) the order impugned passed by the Single Judge was an order dismissing an application filed by the applicant to review the order of the Trial Judge. The question for determination was whether the order was a judgment so as to be appealable to the Division Bench. This Court referred to the observations of Hidayatullah, J. extracted in Manohar V. Baliram (supra) and though they did not expressly approve this decision they indirectly seem to have been impressed by the reasons given by Hidayatullah, J. Nothing further was said by this Court because it held that on the facts of that case the 249 order of the Trial Judge dismissing the application for review was A appealable. We might mention here that under clause (w) of order 43 Rule 1 an order granting an application for review is appealable. On a parity of reasoning, therefore, an order dismissing an application for review would also be appealable under the Letters Patent being a judgment though it is not made appealable under order 43 Rule 1. In Shankarlal Aggarwal 's case (supra) while indicating the divergence of judicial opinion on the subject this Court held that an order under section 202 of the Indian was a judgment within the meaning of Letters Patent and therefore appealable. We might mention here that the which confers additional original jurisdiction on the Trial Judge expressly makes an order passed by the Trial Judge under section 202 appealable and, therefore, it is manifest that any order passed under section 202 would have to be appealable under the and therefore it was rightly construed as a judgment. In Radhey Shyam vs Shyam Behari (supra) the question was whether in an application under order 21 rule 90 to set aside an auction sale an order passed by the Court would be a judgment affecting valuable rights. This Court held that an order in such proceedings affected valuable rights and was therefore appealable. In this connection, the Court observed as follows: "In our view an order in a proceeding under O. XXI, r. 90 is a "judgment" in as much as such a proceeding raises a controversy between the parties therein affecting their valuable rights and the order allowing the application certainly deprives the purchaser of rights accrued to him as a result of the auction sale. " Thus, the only point which emerges from this decision is that whenever a Trial Judge decides a controversy which affected valuable rights of one of the parties, it must be treated to be a judgment within the meaning of the Letters Patent. 250 The last case of this Court to which our attention has been drawn is Shanti Kumar R. Canji vs The Home Insurance Co. Of New York where the court was considering the effect of an order passed by the Trial Judge allowing amendment of the plaint and the question at issue was whether such an order would be a judgment within the meaning of the Letters Patent. The following observations were made by this Court in the aforesaid case. "We are in agreement with the view expressed by the High Court at Calcutta in the M.B. Sirkar 's case (AIR 1956 Cal. 630) as to when an order on an application for amendment can become a judgment within the meaning of clause 15 of the Letters Patent. If an amendment merely allows the plaintiff to state a new cause of action or to ask a new relief or to include a new ground of relief all that happens is that it is possible for the plaintiff to raise further contentions in the suit, but it is not decided whether the contentions are right. Such an amendment does nothing more than regulate the procedure applicable to the suit. It does not decide any question which touches the merits of the controversy between the parties. Where, on the other hand, an amendment takes away from the defendant the defence of immunity from any liability by reason of limitation, it is a judgment within the meaning of clause 15 of the Letters Patent. The reason why it becomes a judgment is that it is a decision affecting the merits of the question between the parties by determining the right or liability based on limitation. It is the final decision as far as the trial court is concerned. In finding out whether the order is a judgment within the meaning of clause 15 of the Letters Patent it has to be found out that the order affects the merits of the action between the parties by determining some right or liability. The right or liability is to be found out by the court. The nature of the order will have to be examined in order to ascertain whether there has been a determination of any right or liability". (Emphasis ours) 251 Thus, having noticed the ratio of some of the cases of this Court referred to above, regarding the tests to determine the import and meaning of the word 'judgment ' we now proceed to deal with the specific question after interpreting cl.15 of the Letters Patent of the Bombay High Court and the corresponding clauses of Letters Patent of other High Courts. We shall endeavour to interpret the connotation and the import of the word 'judgment ' particularly in the light of pertinent and pointed observations made by this Court on earlier occasions as discussed above. The relevant portion of cl. 15 of the Letters Patent may be extracted thus : "We do further ordain that an appeal shall lie to the said High Court of Judicature at Madras, Bombay, Fort William in Bengal from the judgment. . of one Judge of the said High Court. " Clause 15 makes no attempt to define what a judgment is. As Letters Patent is a special law which carves out its own sphere, it would not be possible for us to project the definition of the word 'judgment ' appearing in section 2 (9) of the Code of 1908, which defines 'judgment ' into the Letters Patent: "judgment ' means the statement given by the Judge of the grounds of a decree or order". In Mt. Shahzadi Begam vs Alak Nath and Ors., Sulaiman, C.J., very rightly pointed out that as the Letters Patent were drafted long before even the Code of 1882 was passed, the word 'judgment ' used in the Letters Patent cannot be relatable to or confined to the definition of 'judgment ' as contained in the Code of Civil Procedure which came into existence long after the Letters Patent were given. In this connection, the Chief Justice observed as follows : "It has been held in numerous cases that as the Letters Patent were drafted long before even the earlier Code of 1882 was passed, the word 'judgment ' used therein does not 252 mean the judgment as defined in the existing Code of Civil Procedure. At the same time the word 'judgment ' does not include every possible order, final, preliminary or interlocutory passed by a Judge of the High Court". We find ourselves in complete agreement with the observations made by the Allahabad High Court on this aspect of the matter. The definition of the word 'judgment ' in sub section (9) of section 2 of the Code of 1908 is linked with the definition of 'decree ' which is defined in sub section (2) of section 2 thus: "decree" means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within section 47 or section 144, but shall not include (a) any adjudication from which an appeal lies as an appeal from an order, or (b) any order of dismissal for default. Explanation: A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final". Thus, under the Code of Civil Procedure, a judgment consists of the reasons and grounds for a decree passed by a court. As a judgment constitutes the reasons for the decree it follows as a matter of course that the judgment must be a formal adjudication which conclusively determines the rights of the parties with regard to all or any of the matters in controversy. The concept of a judgment as defined by the Code of Civil Procedure seems to be rather narrow and the limitations engrafted by sub section (2) of section 2 253 cannot be physically imported into the definition of the word 'judgment ' as used in cl. 15 of the Letters Patent because the Letters Patent has advisedly not used the terms 'order ' or 'decree ' anywhere. The intention, therefore, of the givers of the Letters Patent was that the word 'judgment ' should receive a much wider and more liberal interpretation than the word 'judgment ' used in the Code of Civil Procedure. At the same time, it cannot be said that any order passed by a Trial Judge would amount to a judgment; otherwise there will be no end to the number of orders which would be appealable under the Letters Patent. It seems to us that the word 'judgment ' has undoubtedly a concept of finality in a broader and not a narrower sense. In other words, a judgment can be of three kinds :. (1) A Final Judgment a judgment which decides all the questions or issues in controversy so far as the Trial Judge is concerned and leaves nothing else to be decided. This would mean that by virtue of the judgment, the suit or action brought by the plaintiff is dismissed or decreed in part or in full. Such an order passed by the Trial Judge indisputably and unquestionably is a judgment within the meaning of the Letters Patent and even amounts to a decree so that an appeal would lie from such a judgment to a Division Bench (2) A preliminary judgment This kind of a judgment may take two forms (a) where the Trial Judge by an order dismisses the suit without going into the merits of the suit but only on a preliminary objection raised by the defendant or the party opposing on the ground that the suit is not maintainable. Here also, as the suit is finally decided one way or the other, the order passed by the Trial Judge would be a judgment finally deciding the cause so far as the Trial Judge is concerned and therefore appealable to the larger Bench. (b) Another shape which a preliminary judgment may take is that where the Trial Judge passes an order after hearing the preliminary objections raised by the defendant relating to maintainability of the suit, e.g., bar of jurisdiction, res Judicata, a manifest defect in the suit, absence of notice under section 80 and the like, and these objections are decided by the Trial Judge 254 against the defendant, the suit is not terminated but continues and has to be tried on merits but the order of the Trial Judge rejecting the objections doubtless adversely affects a valuable right of the defendant who, if his objections are valid, is entitled to get the suit dismissed on preliminary grounds. Thus, such an R order even though it keeps the suit alive, undoubtedly decides an important aspect of the trial which affects a vital right of the defendant and must, therefore, be construed to be a judgment so as to be appealable to larger Bench. (3) Intermediary or Interlocutory judgment Most of the interlocutory orders which contain the quality of finality are clearly specified in clauses (a) to (w) of order 43 Rule 1 and have already been held by us to be judgments within the meaning of the Letters Patent and, therefore, appealable. There may also be interlocutory orders which are not covered by o. 43 R.1 but which also possess the characteristics and trappings of finality in that, the orders may adversely affect a valuable right of the party or decide an important aspect of the trial in an ancillary proceeding. Before such an order can be a judgment the adverse effect on the party concerned must be direct and immediate rather than indirect or remote. For instance, where the Trial Judge in a suit under order 37 of the Code of Civil Procedure refuses the defendant leave to defend the suit, the order directly affects the defendant because he loses a valuable right to defend the suit and his remedy is confined only to contest the plaintiff 's case on his own evidence without being given a chance to rebut that evidence. As such an order vitally affects a valuable right of the defendant it will undoubtedly be treated as a judgment within the meaning of the Letters Patent so as to be appealable to a larger Bench. Take the converse case in a similar suit where the trial Judge allows the defendant to defend the suit in which case although the plaintiff is adversely affected but the damage or prejudice caused to him is not direct or immediate but of a minimal nature and rather too remote because the plaintiff still possesses his full right to show that the defence is 255 false and succeed in the suit. Thus, such an Order passed by the Trial Judge would not amount to a judgment within the meaning of cl. 15 of the Letters Patent but will be purely an interlocutory order. Similarly, suppose the Trial Judge passes an Order setting aside an exparte decree against the defendant, which is not appealable under any of the clauses of O. 43 R.1 though an order rejecting an application to set aside the decree passed exparte falls within O. 43 R.l cl. (d) and is appealable, the serious question that arises is whether or not the order first mentioned is a judgment within the meaning of Letters Patent. The fact, however, remains that the order setting aside the ex parte decree puts the defendant to a great advantage and works serious injustice to the plaintiff because as a consequence of the order, the plaintiff has now to contest the suit and is deprived of the fruits of the decree passed in his favour. In these circumstances, therefore, the order passed by the Trial Judge setting aside the ex parte decree vitally affects the valuable rights of the plaintiff and hence amounts to an interlocutory judgment and is therefore, appealable to a larger Bench. In the course of the trial, the Trial Judge may pass a number of orders whereby some of the various steps to be taken by the parties in prosecution of the suit may be of a routine nature while other orders may cause some inconvenience to one party or the other, e.g., an order refusing an adjournment, an order refusing to summon an additional witness or documents, an order refusing to condone delay in filing documents, after the first date of hearing an order of costs to one of the parties for its default or an order exercising discretion in respect of a procedural matter against one party or the other. Such orders are purely interlocutory and cannot constitute judgments because it will always be open to the aggrieved party to make a grievance of the order passed against the party concerned in the appeal against the final judgment passed by the Trial Judge. Thus, in other words every interlocutory order cannot be regarded as a judgment but only those orders would be judgments which decide matters of moment or affect vital and valuable rights 256 of the parties and which work serious injustice to the party concerned. Similarly, orders passed by the Trial Judge deciding question of admissibility or relevancy of a document also cannot be treated as judgments because the grievance on this score can be corrected by the appellate court in appeal against the final judgment. We might give another instance of an interlocutory order which amounts to an exercise of discretion and which may yet amount to a judgment within the meaning of the Letters Patent. Suppose the Trial Judge allows the plaintiff to amend his plaint or include a cause of action or a relief as a result of which a vested right of limitation accrued to the defendant is taken away and rendered nugatory. It is manifest that in such cases, although the order passed by the trial Judge is purely discretionary and interlocutory it causes gross injustice to the defendant who is deprived of a valuable right of defence to the suit. Such an order, therefore, though interlocutory in nature contains the attributes and characteristics of finality and must be treated as a judgment within the meaning of the Letters Patent. This is what was held by this Court in Shanti Kumar 's case (supra), as discussed above. Let us take another instance of a similar order which may not amount to a judgment. Suppose the Trial Judge allows the plaintiff to amend the plaint by adding a particular relief or taking an additional ground which may be inconsistent with the pleas taken by him but is not barred by limitation and does not work serious injustice to the defendant wh o would have ample opportunity to disprove the amended plea taken by plaintiff at the trial. In such cases, the order of the Trial Judge would only be a simple interlocutory order without containing any quality of finality and would therefore not be a judgment within the meaning of cl. 15 of the Letters Patent The various instances given by us would constitute sufficient guidelines to determine whether or not an order passed by the Trial Judge is a judgment within the meaning of the Letters Patent. We must however hasten to add that instances given by us are illustrative and not exhaustive. We have already referred to the various tests laid down by the Calcutta, Rangoon and Madras High Courts. So far as the Rangoon High Court is concerned we have already pointed out that the strict test that an order passed by the Trial Judge would be a judgment only if it amounts to a decree 257 under the Code of Civil Procedure, is legally erroneous and opposed to the very tenor and spirit of the language of the Letters Patent. We, therefore, do not approve of the test laid down by the Rangoon High Court and that decision therefore has to be confined only to the facts of that particular case because that being a case of transfer, it is manifest that no question of any finality was involved in the order of transfer. We would like to adopt and approve of generally the tests laid down by Sir White, C.J. in Tuljaram Row 's case (supra) (which seems to have been followed by most of the High Courts) minus the broader and the wider attributes adumbrated by Sir White, C.J. Or more explicitly by Krishnaswamy Ayyar, J. as has been referred to above. Apart from the tests laid down by Sir White, C.J., the following considerations must prevail with the court: (1) That the Trial Judge being a senior court with vast experience of various branches of law occupying a very high status should be trusted to pass discretionary or interlocutory orders with due regard to the well settled principles of civil justice. Thus, any discretion exercised or routine orders passed by the Trial Judge in the course of the suit which may cause some inconvenience or, to some extent, prejudice one party or the other cannot be treated as a judgment otherwise the appellate court (Division Bench) will be flooded with appeals from all kinds of orders passed by the Trial Judge. The courts must give sufficient allowance to the Trial Judge and raise a presumption that any discretionary order which he passes must be presumed to be correct unless it is ex facie legally erroneous or causes grave and substantial injustice. (2) That the interlocutory order in order to be a judgment must contain the traits and trappings of finality either when the order decides the questions in controversy in an ancillary proceeding or in the suit itself or in a part of the proceedings. (3) The tests laid down by Sir White, C.J. as also by Sir Couch, C.J. as modified by later decisions of the Calcutta High Court itself which have been dealt with by us elaborately should be borne in mind. 258 Thus, these are some of the principles which might guide a Division Bench in deciding whether an order passed by the Trial Judge amounts to a judgment within the meaning of the Letters Patent. We might, however, at the risk of repetition give illustrations of interlocutory orders which may be treated as judgments: (1) An order granting leave to amend the plaint by introducing a new cause of action which completely alters the nature of the suit and takes away a vested right of limitation or any other valuable right accrued to the defendant (2) An order rejecting the plaint. (3) An order refusing leave to defend the suit in an action under Order 37, Code of Civil Procedure. (4) An order rescinding leave of the Trial Judge granted by him under clause 12 of the Letters Patent. (5) An order deciding a preliminary objection to the maintainability of the suit on the ground of limitation, absence of notice under section 80, bar against competency of the suit against the defendant even though the suit is kept alive. (6) An order rejecting an application for a judgment on admission under order 12 Rule 6. (7) An order refusing to add necessary parties in a suit under section 92 of the Code of Civil Procedure. (8) An order varying or amending a decree. (9) An order refusing leave to sue in forma pauperis. (10) An order granting review. (11) An order allowing withdrawal of the suit with liberty to file a fresh one. (12) An order holding that the defendants are not agriculturists within the meaning of the special law. (13) An order staying or refusing to stay a suit under section 10 of the Code of Civil Procedure. 259 (14) An order granting or refusing to stay execution of the decree. (15) An order deciding payment of court fees against the plaintiff. Here, it may be noted that whereas an order deciding the nature of the court fees to be paid by the plaintiff would be a judgment but this order affects only the plaintiff or the Government and not the defendant. Thus, only the plaintiff or the Government as the case may be will have the right to file an appeal in the Division Bench and not the defendant because the question of payment of court fees is a matter between the Government and the plaintiff and the defendant has no locus in this regard. We have by way of sample laid down various illustrative examples of an order which may amount to judgment but it is not possible to give such an exhaustive list as may cover all possible cases. Law with its dynamism, pragmatism and vastness is such a large ocean that it is well nigh impossible for us to envisage or provide for every possible contingency or situation so as to evolve a device or frame an exhaustive formula or strategy to confine and incarcerate the same in a straitjacket. We, however, hope and trust that by and large the controversy raging for about a century on the connotation of the term 'judgment ' would have now been settled and a few cases which may have been left out, would undoubtedly be decided by the court concerned in the light of the tests. Observations and principles enunciated by us. In the instant case, as the order of the Trial Judge was one refusing appointment of a receiver and grant of an ad interim injunction, it is undoubtedly a judgment within the meaning of the Letters Patent both because in view of our judgment, order 43 Rule 1 applies to internal appeals in the High Court and apart from it such an order even on merits contains the quality of finality and would therefore be a judgment within the meaning of cl. 15 of the Letters Patent. The consistent view taken by the Bombay High Court in the various cases noted above or other cases which may not have been noticed by us regarding the strict interpretation of cl. 15 of the Letters Patent are hereby overruled and the Bombay High Court is directed to decide the question in future in the light of our decision. We, therefore, hold that the order passed by the Trial Judge in the instant case being a judgment within the meaning of cl. 15 of the 260 Letters Patent, the appeal before the Division Bench was maintainable and the Division Bench of the High Court was in error in dismissing the appeal without deciding it on merits. We have already directed the High Court to decide the appeal on merits by our formal order dated April 22, 1981. Before closing this judgment we may indicate that we have refrained from expressing any opinion on the nature of any order passed by a Trial Judge in any proceeding under article 226 of the Constitution which are not governed by the Letters Patent but by rules framed under the Code of Civil Procedure under which in some High Courts writ petitions are heard by a Division Bench. In other High Court writ petitions are heard by a Single Judge and a right of appeal is given from the order of the Single Judge to the Division Bench after preliminary hearing, In the circumstances we make no order as to costs. AMARENDRA NATH SEN, J. The only question which falls for determination in this appeal by special leave is whether an order passed by a Single Judge on the original side of the Bombay High Court refusing to grant an injunction or to appoint a receiver in an interlocutory application made in the suit, is appealable or not ? In other words, the maintainability of an appeal filed before a Division Bench of the Bombay High Court against an order of a learned single Judge of the High Court dismissing an interlocutory application for injunction and for appointment of a receiver by way of interim relief pending final disposal of the suit in the original side of the High Court, forms the subject matter of the present appeal. The question is of some importance, as there appears to be no uniformity of the view amongst the various High Courts on the competence and the maintainability of such an appeal. The appellant has filed in the original side of the Bombay High Court a suit for specific performance of an agreement dated 12th January, 1979. In the said suit the appellant, as plaintiff in the suit, took out a notice of motion seeking the following reliefs: (a) that pending the hearing and final disposal of the suit, the respondent i.e. the defendant in the suit, be restrained by an order and injunction from in any 261 manner dealing with or disposing of or alienating or A encumbering the right, title and interest in respect of the said lands and the said land or any part thereof or parting possession of the said land or any part thereof; (b) that pending the hearing and final disposal of the suit, the Court receiver High Court Bombay or some other fit and proper person be appointed receiver of the said lands which forms the subject matter of the agreement, with all powers under 0.40, rule I of the Code of Civil Procedure; (c) ad interims in terms of prayers (a) (b); and (d) for such further and other reliefs as the nature and circumstances of the case may require. A learned single Judge dealing with the said application of the appellant on the original side of the Bombay High Court dismissed the said application. Against the order of the learned single Judge, the appellant preferred an appeal to the High Court of Bombay. A preliminarily objection has been raised before the appellate Court as to the maintainability of the appeal on the ground that no appeal lay from the order of the learned Single Judge on the original side of the High Court, as the order could not be considered to be a 'judgment ' within the meaning of cl. IS of the Letters Patent and the appeal was incompetent and not maintainable. The appellate Court for reasons recorded in the Judgment upheld the said preliminary objection, holding that the order under appeal was not a judgment and no appeal would lie from the said order and the appeal, therefore was incompetent and not maintainable. Against the order of the Division Bench of the Bombay High Court, the appellant has preferred this appeal by special leave granted by this Court. After the hearing of the appeal was concluded, this Court in view of the urgency of the matter passed an order allowing the appeal and remanding the matter to the Bombay High Court for decision of the appeal on merits and this Court observed at the time of the passing of the order that this Court would state reasons later on. The full text of the order has been set out in the judgment of my learned brother Fazal Ali. J. 262 I have had the benefit of reading the judgment of my learned brother Fazal Ali, J. in advance. I concur generally with the views expressed by my learned brother. 1, however, propose to state my own reasons for the order earlier passed by us. The learned counsel appearing on behalf of the respective parties invited us only to decide the question of appealability of the order under appeal without going into the merits of the case. The learned counsel for the parties have submitted before us that there is a conflict of decisions on the question of appealability of an order of this kind and maintainability of an appeal from such an order and this Court should resolve the conflict and decide the question of appealability of such an order and necessarily the maintainability of the appeal to a Division Bench of the High Court. It has been further submitted before us that in the event of this Court holding that an appeal lay from the order in question and an appeal to the the Division Bench from the order was competent and maintainable, this Court should remand the appeal to the High Court for decision on merits and should not in this appeal go into the merits of the case. The learned counsel for the parties, in view of the aforesaid submissions made, did not advance any arguments on the merits of the case before us. The only question with which we are concerned in this appeal, as I have already indicated, therefore, is whether the order of the learned Single Judge refusing to grant an injunction or to appoint a receiver on the interlocutory application of the appellant, is appeal able or not; or, whether the appeal against the order of the learned Single Judge to the Division Bench of the High Court is competent and maintainable or not. Mr. Sorabjee, learned counsel appearing on behalf of the appellant, has raised two principal contentions. The first contention urged by Mr. Sorabjee is that in view of the provisions contained in section 104 of the Code of Civil Procedure read with order 43 thereof, the order is appealable under the Code and an appeal from the order becomes clearly maintainable. The other contention raised by Mr. Sorabjee is that the order should in any event be considered to be a judgment within the meaning of clause IS of the Letters Patent, bearing in mind the provisions contained in section 104 of the Code of Civil Procedure and also order 43 thereof. In support of his first contention, Mr. Sorabjee has argued that an appeal is a creature of statute and in the absence of any 263 statutory provisions making any other appealable no appeal will A normally lie against any order passed by a single Judge. Mr. Sorabjee contends that cl. I S of the Letter Patent makes such provision for an appeal being filed against any order passed by a learned Single Judge on the original side of the High Court. It is the contention of Mr. Sorabjee that as Cl. 15 of the Letters Patent makes provision for preferring an appeal against an order passed by a learned Single Judge on the original side, provided the conditions laid down in the said clause are satisfied, Code of Civil Procedure and various other Statutes also make provision regarding appeal from orders passed by a learned Single Judge. Mr. Sorabjee has submitted that the Code of Civil Procedure confers substantive rights of preferring appeals against particular orders specified in the Code. In this connection Mr. Sorabjee has drawn our attention to section 104 and also order 43 of the Code of Civil Procedure. Mr. Sorabjee argues that the Code of Civil Procedure confers a right of appeal on a litigant in respect of the orders which have been made statutorily appealable by the provisions contained in section 104 and order 43 of the Code of Civil Procedure. It is the argument of Mr. Sorabjee that the Code of Civil Procedure makes inter alia general provisions with regard to appeals and also specifically confers on the litigant a right in respect of various orders, just as various other statutes make special or specific provisions with regard to the right of appeal in respect of any order under the particular statute. Mr. Sorabjee has submitted that section 104 of the Civil Procedure Code and order 43 thereof clearly apply to the original side of a High Court. In support of these submissions, Mr. Sorabjee has drawn our attention to the various provisions of the Code and particularly to Ss. 4, 98 104, 116 to 120, and section 122 and to order 43 rule 1 thereof. Mr. Sorabjee in this connection has also relied on the following decisions : 1. Mathura Sundari Dass vs Haran Chandra Shall(1) 2. Lea Badin vs Upendra Mohan Roy Choudhary (2) 3. Union of India vs Mohindra Supply Co. (3) 4. Kumar Gangadhar Bagla vs Kanti Chander Mukherji (4) 5. Sonbai vs Ahmedbhai Habibhai (5) 264 Mr. Sorabjee has criticised the view expressed by the Bombay High Court that section 104 of the Code of Civil Procedure and order 43 thereof do not apply to an order passed by a learned Single Judge on the original side of the High Court and an order passed by a learned Single Judge on the original side can only become appealable if the order can be said to be a 'judgment ' within the meaning of cl. 15 of the Letters Patent. Mr. Sorabjee comments that cl. IS of the Letters Patent does not, in any way, seek to control or curb the provisions contained in section 104 and order 43 of the Code of Civil Procedure. He submits that a plain reading of the various sections of the Code of Civil Procedure make it clear that the pro visions contained in section 104 and order 43 of the Code are applicable to the original side of the High Court. It is his submission that the provisions of the Code and the provisions contained in cl. 15 of the Letters Patent are not at all in conflict, as, clause IS of the Letters Patent may make such orders which may not be appealable under the Code, still appealable as judgment under cl. 15 of the Letters. Patent. In other words, it is the submission of Mr. Sorabjee that cl. IS of the Letters Patent and the provisions of the Code are indeed supplementary to each other. Mr. Sorabjee has fairly submitted that before the Division Bench of the Bombay High Court this argument that the order is appealable under the provisions of the Code and the appeal is, there t fore, competent was not advanced. It is his submission that this argument was not advanced before the Division Bench of the Bombay High Court, as the view of the Bombay High Court has been that the provisions of section 104 and of order 43 of the Code of Civil Procedure do not apply to the original side of the Bombay High Court. Mr. Sorabjee has argued that though in this appeal this aspect was not argued before the Division Bench of the Bombay High Court, he is entitled to urge this point before this Court as this point is a pure point of law. Mr. Sorabjee has next contended that in any event the order under appeal should be considered to be a judgment within the meaning of cl. 15 of the Letters Patent. He argues that the word 'judgment ' in clause 15 of the Letters Patent should be construed liberally so as to include within its fold any order which has been made appealable by virtue of the provisions contained in the Code or in any other statute. He submits that such an interpretation will be in conformity with the principles of justice and will truly reflect intention of the Legislature and will avoid any kind of conflict 265 between the provisions contained in cl. 15 of the Letters Patent and A the provisions contained in the Code of Civil Procedure and in any other statute. It is his submission that the word 'judgment ' in cl. 15 of the Letters Patent may include various other orders which may not otherwise be appealable under the provisions of the Code or any other Statute but may still become appealable as 'judgment ' by virtue of the provisions contained in the Letters Patent. In other words, it is the contention of Mr. Sorabjee that the expression 'judgment ' in cl. 15 of the Letters Patent should be so construed as to include necessarily all orders which are appealable under any statute and also in appropriate cases various other orders which are not expressly made appealable by any statute. He contends that the provisions of the Code contained section 104 and order 43 or in any other statute with regard to the appealability of any order do not have the effect of curtailing or affecting the special jurisdiction and power of the Court of entertaining an appeal from any other order, if the Court is satisfied that the order is in effect a judgment within the meaning of cl. 15 of the Letters Patent. Mr. Sorabjee has submitted that as to the true meaning, effect and import of the word 'judgment ' in cl. 15 of the Letters Patent, there is a divergence of judicial opinion, and the word `judgment ' has come up for consideration before various Courts in many cases. In this connection, Mr. Sorabjee has referred to the following decisions : 1. The Justice of the Peace for Calcutta vs The Orientatal Gas Co. Ltd. (1) 2. T.V. Tulzaram Row vs M.K.R.V. Allagappachettiar (2) 3. Ruldu Singh vs Sanwal Singh (3) 4. Shah Hari Dial & Sons vs Sohnamal Beliram (4) 5. In Re: Dayabhai Jiwandas and Ors. vs A.M.M. Muru gappa Chettiar (5) 6. Abdul Samad & Ors. vs State of J. & K. (6) 266 7. Standard Glass Beads Factory vs Shri Dhar & Ors.(1) 8. Sri Raja Vallanki Venkata Chinnayamma Rao Bahadur Zimidarni Garu vs Sri Raja Kotagiri Subemma Rao Bahadur Zimidarni Garu (2) 9. Chitaranjan Mandal vs Shankar Prosad Sahani (3) 10. Manohar Damadar Bhoot vs Baliram Ganpat Bhoot (4) 11. Masanta Film Distributors Calcutta vs Sorab Marwanji Modi (5) 12. J.K. Chemicals Ltd. vs Kreba and Co.(6) 13. Kedar Nath Mitter vs Denobandhu Shaha(7) 14. Shorab Merwanji Modi and Anr. vs Mansata Film Distributors and Anr.(8) 15. M.B. Sarkar and Sons vs Powell and Co.(9) 16. Asrumati Devi vs Kumar Rupendra Deb Rai and Ors.(10) 17. State of U.P. vs Dr. Vijay Anand Maharaj(11) 18. National Bell Co. vs Metal Goods Co. (P) Ltd.(12) 19. Shanti Kumar R. Canji vs The Home Insurance Co. Of New York(13) Mr. Sorabjee has submitted that this Court should lay down the guidelines or enumerate the principles to remove the confusion and resolve the conflict in the sphere of judicial determination as 267 to what constitutes 'judgment ' within the meaning of cl 15 of the Letters Patent. Mr. Kapadia and Mr. Venugopal, learned counsel for the Respondents, have submitted that the provisions of the Code of Civil Procedure contained in section 104 and order 43 thereof are not applicable to the original side of the Bombay High Court which is a Chartered High Court in view of the provisions contained in cl. 15 of the Letters Patent. They have argued that special jurisdiction has been conferred in the matter of preferring an appeal against an order of a Single Judge on the original side of a Chartered High Court by cl. 15 of the Letters Patent and this special jurisdiction of the High Court cannot in any way be affected by the provisions of the Code. In support of this contention reference has been made to Ss. 3 and 4 of the Code of Civil Procedure and particular reliance has been placed on section 4. They have also strongly relied on the decision of the Bombay High Court in the case of Vaman Raoji Kulkarni vs Nagesh Vishnu Joshi(1) and also on the decision of the same High Court in the case of J.K. Chemicals Ltd. vs Kreba and Co. (supra). They have submitted that these judgments for cogent reasons recorded therein represent correct law and the view expressed by the Bombay High Court to the effect that section 104 and order 43 of the Code of Civil Procedure do not apply to the original side of the Bombay High Court, has been consistently followed by the Bombay High Court and should be upheld by this Court. They have also relied on the following observations of the Judicial Committee in the case of Hurrish Chunder Chowdhry vs Kali Sundari Debia(2) at p. 17: "It only remains to observe that their Lordships do not think that sec. 588 of Act X. Of 1877, which has the effect of restricting certain appeals, applies to such a case as this, where the appeal is from one of the Judges of the Court to the full Court. " They have argued that if the provisions of the Code are not held to be applicable to the original side of the Bombay High Court, then the appeal from the order of the learned Single Judge can only be maintained if the order becomes a 'judgment ' within the meaning 268 of cl. 15 of the Letters Patent. They have contended that an order on an interlocutory application refusing to grant an injunction or appoint a receiver cannot be considered to be a 'judgment within the meaning of cl. 1 S of the Letters Patent, as such an order virtually does not decide anything and does not in any way affect the merits of the suit. They have also relied on the decisions which were cited by Mr. Sorabjee and they have placed particular reliance on the decision of the Bombay High Court in the case of J.K. Chemicals Ltd. vs Kreba and Co. (supra). Mr. Kapadia and Mr. Venugopal have both pointed out to us that the question of appealability of the order under the provisions of the Code was not argued before the High Court in the instant case and was sought to be argued for the first time in this Court. Both of them, however, have fairly stated that the question is one of law and one of of considerable importance and the Court should decide the same. I propose to deal with the question of applicability of the provisions contained in section 104 and order 43 of the Code of Civil Procedure to the original side of the Bombay High Court in the first instance. Before I deal with the contentions urged by the counsel for the respective parties, it will be convenient to consider the relevant provisions of the Code. section I of the Code makes it clear that the Act is applicable to whole of India excepting the places mentioned in the said section and the Act, therefore, applies to Maharashtra. section 3 of the Code provides that for the purpose of this Code, the District Court is subordinate to the High Court, and every Civil Court of a grade inferior to that of a District Court and every Court of Small Causes is subordinate to the High Court and District Court. section 4 of the Code reads: "(1) In the absence of any specific provision to the contrary, nothing in this Code shall be deemed to limit or otherwise affect any special or local law now in force or any special jurisdiction or power conferred, or any special form of procedure prescribed, by or under any other law for the time being in force. (2) In particular and without prejudice to the generality of the proposition contained in sub section (1), nothing in this Code shall be deemed to limit or otherwise 269 affect any remedy which a landholder or landlord may have under any law for the time being in force for the recovery of lent of agricultural land form the produce of such land. " section 5 of the Code deals with the applicability of the provisions of the Code to Revenue Courts. section 100 of the Code deals with appeals from Appellate Decree and section 100 A which has been introduced into the Code w.e.f. 1.2.1977 by the Amending Act, 104 of 1976 provides that notwithstanding anything contained in Letters Patent for any High Court or in any other instrument having the force of law or in any other law for the time being in force, where any appeal from an appellate decree or order is heard and decided by a single Judge of a High Court, no further appeal shall lie from the judgment, decision or order of such Single Judge in such appeal or from any decree passed in such appeal. The material provisions of section 104 are: "section 104 (1); An appeal shall lie from the following orders, and save as otherwise expressly provided in the body of this Code or by any law for the time being in force, from no other orders : x x x x x x x x (ff) an order under section 35A; (fa) an order under section 91 or section 92 refusing leave to institute a suit of the nature referred to in section 91 or section 92 as 'the case may be; (g) an order under S 95; (h) an order under any of the provisions of this Code imposing a fine or directing the arrest or detention in the Civil prison of any person except where such arrest or detention is in execution of a decree; (i) any order made under rules from which an appeal is expressly allowed by rules; Provided that no appeal shall lie against any order specified 270 in clause (i) save on the ground that no order, or an order for the payment of a less amount, ought to have been made. (2) No appeal shall lie from any order passed in appeal under this section. " Sections 105 and 106 may also be quoted: "(1) Save as otherwise expressly provided no appeal shall lie from any order made by a Court in the exercise of its original or appellate jurisdiction; but, where a decree is appealed from, any error, defect or irregularity in any order, affecting the decision of the case, may be set forth as a ground of objection in the memorandum of appeal; (2) Notwithstanding anything contained in sub section (1), where any party aggrieved by an order of remand from which an appeal lies does not appeal the reform, he shall thereafter be precluded from disputing its correctness. section 106: Where an appeal from any order is allowed it shall lie to the Court to which an appeal would lie from the decree in the suit in which such order was made, or where such order is made by a court (not being a High Court) in the exercise of appellate jurisdiction, then to the High Court. ' ' Special provisions relating to the High Courts, not being the court of a Judicial Commissioner, are made in para IX of the Code which consists of five sections namely Ss. 116 to 120 and the said sections are as follows: "section 116: This Part applies only to High Courts not being the Court of a Judicial Commissioner. section 117: Save as provided in this Part or in part X or in rules, the provisions of this Court shall apply to such High Courts. section 118: Where any such High Court considers it necessary that a decree passed in the exercise of its original civil jurisdiction should be executed before the amount of 271 the costs incurred in the suit can be ascertained by taxation, the Court may order that the decree shall be executed forthwith, except as to so much thereof as relates to the costs: and, as to so much thereof as relates to the costs, that the decree may be executed as soon as the amount of the costs shall be ascertained by taxation. section 119: Nothing in this Code shall be deemed to authorise any person on behalf of another to address the Court in the exercise of its original civil jurisdiction, or to examine witnesses, except where the Court shall have in the exercise of the power conferred by its charter authorised him so to do, or to interfere with the power of the High Court to make rules concerning advocates, vakils and attorneyes. section 120: The following provisions shall not apply to the High Court in the exercise of its original civil jurisdiction, namely, secs. 16, 17 and 20. section 122 empowers the High Courts, not being the Court of a Judicial Commissioner to make rules regulating their own procedure and the procedure of the Civil Courts subjects to their superintendence. section 129 further provides: "Notwithstanding anything in this Code, any High Court not being the Court of a Judicial Commissioner may make such rules not inconsistent with the Letters Patent or order or other law establishing of it to regulate its own procedure in the exercise of its original civil jurisdiction as it shall think fit, and nothing herein contained shall affect the validity of any such rules in force at the commencement of this Code. The material provisions contain in O. XLIII of the Code of Civil Procedure may be set out: "An appeal shall lie from the following orders under the provisions of section 104, namely: x x x x x x x x 272 (q) an order under rule 2, rule 3 or rule 6 of order XXXVIII: (r) an order under rule 1, rule 2, rule 2A, rule 4 or rule 10 of O. XXXIX; (s) an order under rule 1, or rule 4 of order XL. x x x x 2. The rules of O. XLI shall apply, so far as may be, to appeals from orders." On a proper analysis of the relevant provisions of the Code there cannot be, in my opinion, any manner of doubt that section 104 and order 43 of the Code of Civil Procedure apply, to the original side of the Bombay High Court. It is not in dispute and it cannot be disputed that the Code of Civil Procedure applies to the High Court. section 1 of the Code which provides for territorial extent of the operation of the Code makes this position abundantly clear. The argument is that section 104 and order 43 of the Code do not have any application to the original side of the High Court, although various other provisions of the Code may apply to the High Court including its original side. This argument, as we have earlier noticed, is made mainly on the basis of the provisions contained Ss. 3 and 4 of the Code. section 3 of the Code deals with subordination of Courts. It is no doubt true that a learned Single Judge dealing with any matter on the original side discharges his duties as a Judge of the High Court, and he can, therefore, be in no way subordinate to the High Court. When a division Bench of a High Court hears an appeal from any decree, order or judgment of any Single Judge of the High Court in its original side there can be no question of any subordination of the Judge, presiding over a Bench on the original side of the High Court to the High Court. An appeal admittedly lies to a division Bench of the High Court from any order passed by a learned single Judge on the original side under cl. 15 of the Letters Patent, if the order is a 'Judgment ' within the meaning of the said clause. An appeal also admittedly lies from a decree passed by a Single Judge on the original side of the High Court to a division Bench of the High Court. A division Bench, properly constituted, is perfectly competent to hear an appeal from any such order which may constitute a judgment within the meaning of cl. 15 and from any decree by a Single Judge on the original side of the 273 High Court. In the same way, in case of any other order in respect of which right to prefer any appeal has been conferred by a statute, a division Bench of the High Court will be competent to hear such an appeal. S.3 of the Code, in my opinion, has really no bearing on the question and creates no bar to the competence and maintainability of an appeal from an order passed by a Judge on the original side, if the order is otherwise appealable. section 4 of the Code has been enacted to preserve any special or local law in force. An analysis of the material part of this section clearly indicates that in the absence of any specific provision to the contrary, no provision in the Code shall be deemed to limit or otherwise affect any special or local law in force or special jurisdiction or power conferred or any special form of procedure prescribed by or under any Jaw for the time being in force. The argument that section 104 and order 43 of the Code affect the special jurisdiction or power conferred on the High Court under cl. 15 of the Letters Patent is, to my mind, untenable. 15 of the Letters Patent was enacted to provide for an appeal from the Courts of original jurisdiction to the High Court in its appellate jurisdiction and the said clause undoubtedly confers power for the hearing of an appeal from a judgment of any judge on the original side of the High Court. Though cl. 15 makes special provisions in relation to appeal from a judgment of a learned single Judge on the original side, yet it cannot be said that the side clause intended to lay down that in no other case an appeal will lie from an order passed by any learned Judge on the original side, even if any specific provision is made in any other statute making any other order appealable. An appeal, it has to be remembered, is a creature of a statute and litigant generally does not have a right of appeal against any decision of a competent Court unless a right of appeal has been specifically conferred on the litigant by law. Cl. 15 of the Letters Patent confers on the litigant a right to prefer an appeal against any judgment. Any order which is considered to be a 'judgment ' will be appealable by virtue of the provisions contained in cl. 15 of the Letters Patent. In the same way other statutes may confer on the litigant the right to prefer an appeal against an order; and by virtue of the provisions of the statute such an order shall become appealable. If any other statute confers on the litigant any right to prefer an appeal in respect of any other order, it cannot be said that such a provision creating a right of appeal in any way affects the provisions contained in cl. 15 of the Letters Patent. The special power and jurisdiction of the High court under cl. 15 to entertain an appeal from any judgment is in no way affected and is fully retained; 274 and in addition to the said power, a High Court may be competent to entertain other appeals by virtue of specific statutory provisions. section 4 of the Code cannot, therefore, be said to be in conflict with the provisions contained in cl. 15 of the Letters Patent and section 4 of the Code does not limit or otherwise affect the power and jurisdiction of the High Court under cl. 15 of the Letters Patent. On the other hand, the Code contains specific provisions which go to indicate in which case or to which Court the provisions of the Code, may or may not be applicable. section S of the Code makes specific provisions regarding the nature and manner of applicability of the Code to Revenue Courts and the Revenue Court has also been defined in the said section. On the other hand, in Ss. 116 to 120 it is convincingly indicated that section 104 and order 43 of the Code of Civil Procedure apply to the original side of a High Court. Ss. 116 to 120 are contained in part IX of the Code which makes special provisions relating to High Courts (not being the Court of Judicial Commissioner). section 117 specifically provides that the provisions of the Code shall apply to High Court save as provided in part IX or in part X. section 120 contained in part IX lays down that the provisions contained in Ss. 16, 17 and 20 of the Code shall not apply to the High Court in the exercise of its original civil jurisdiction. Part X which deals with rules and manner of framing thereof does not have any material bearing on the question of applicability of section 104 and order 43 of the Code to the original side of the High Court. The effect of the special provisions contained in part IX relating to High Courts, therefore, clearly appears to be that the provisions of the Code have as provided in Part IX or Part X or in rules, apply to the original side of the High Court and Ss. 16,17 and 20 of the Code do not apply to the High Court in the exercise of its original civil jurisdiction. section 104 of the Code is contained in part VII which deals with appeals. Part VII of the Code dealing with appeals consists of the sections commencing from Ss. 96 to 112. This part VII dealing with appeals makes provisions for an appeal from original decrees, appeals, appellate decrees, appeals from orders, general provisions relating to appeals and also appeals to the Supreme Court. section 104 of the Code provides for appeals from orders and clearly stipulates that an appeal shall lie from the orders mentioned therein and save as otherwise expressly provided in the body of the Code or by any law for the time being in force, from no other order. Order 43 which is attracted by section 104 of the Code clearly provides that an appeal shall lie from the orders mentioned in rule 1 of o. 43 under the provisions of section 104 and the orders referred to therein particularly in (q), (r) and (s) clearly 275 indicate that the order in question is an appealable order. As I have earlier observed that an appeal is a creature of a statute and the right to appeal is only enjoyed, if law confers any right. The Code of Civil Procedure clearly makes the order in question an appealable one. The legislature has thought it fit to confer a right on the litigant to prefer an appeal in respect of the orders mentioned in section 104 of the Code read with order 43 thereof. A Court will be slow to deprive a litigant of the statutory right merely on the ground that the order in question has been passed by a learned Judge on the original side of the High Court. It may further be pointed out that section 104 which makes the order under appeal and also various other orders referred to therein appealable under the Code, recognises that apart from the order made appealable under the Code there may be other orders appealable by any law for the time being in force and further provides that no appeal will lie from any orders other than the orders expressly provided in the body of the Code or by any other law in force. The right of appeal against a judgment of a learned single Judge on the original side under cl. 15 of the Letters Patent is a right conferred by any other law in force. It may be pertinent to point out in this connection that by incorporating section 100A in the Code (by the Amending Act 104 of 1976, section 38), the Legislature has thought it fit to interfere with the right of appeal in certain cases, even if such right had been conferred by Letters Patent or any other law. This right of appeal under cl. 15 of the Letters Patent is in no way curtailed or affected by section 104 of the Code of Civil Procedure and section 104 seeks to confer the right of preferring an appeal in respect of the various orders mentioned therein. In other words, by virtue of the provisions contained in section 104(1), a litigant enjoys the right of preferring an appeal in respect of various orders mentioned therein, even though such orders may or may not be appealable under cl. 15 of the Letters Patent as a judgment and the right of appeal under cl. 15 of the Letters Patent remains clearly unimpaired. In this connection the following observations of this Court in the case of Union of India vs Mohindra Supply Co. (supra) at p. 511 may be usefully quoted: "The intention of the legislature in enacting the sub s.(1) of section 104 is clear: the right to appeal conferred by any other law for the time being in force is expressly preserved This intention is emphasised by section 4 which provides that in the absence of any specific provision to the contrary 276 nothing in the Code is intended to limit or otherwise affect any special jurisdiction or power conferred by or under any other law for the time being in force. The right to appeal against judgments (which did not amount to decrees under the Letters Patent, was therefore not affected by section 104(1) of the Code of Civil Procedure, 1908". It will be apt in this connection to bear in mind the view expressed by the Privy Council in the case of Mt. Savitri Thakurain vs Savi and Anr.,(1) the Judicial Committee held at p. 82 83 as follows: "The orders and rules under the Code are by Section 121 given the same affect as if they had been enacted in the Code, and therefore order 41, Rule 10, is one of the pro visions of the Code. It applies to appeals in the High Court, including the present appeal, unless any particular section of the Act can be found to exclude it. Section 104(1) is the section relied on for this purpose It prescribes what orders shall be appealable and enumerates them, and among the orders enumerated there is not included such an order as that made by Choudhary, J. Out of the operation of Section 104 there are, however, expressly excepted matters, which are otherwise expressly provided for in the body of the Code. In order to appreciate the full effect of section 104 it should be compared with the corresponding section of the Act of 1882, Section 588. The earlier section enacted that appeals should lie in certain cases, which it enumerated, 'and from no other such orders. ' This raised this question nearly whether an appeal, expressly given by Section 15 of the Letters Patent and not expressly referred to in Section 588 of the Code of 1882, could be taken away by the general words of the section 581 and in the wording of section 104 of the Act of 1908 is significant for it runs, 'and same as otherwise expressly provided. by any law for the time being in force, from the other orders '. Section 15 of the Letters Patent is such a law, and what it expressly provides namely, an appeal to the High Court 's appellate jurisdiction from a decree of the High 277 Court in its original ordinary jurisdiction, is thereby saved. Thus regulations duly made by orders and Rules under the Code of Civil Procedure, 1908 are applicable to the jurisdiction exercisable under the Letters Patent, except that they do not restrict the express Letters Patent appeal. " The effect of sub section (1) section 104, therefore, is clearly not to affect any existing special or local law or any special jurisdiction or power conferred and to preserve any existing right of appeal whether under any statute or the Letters Patent and to create a further right of preferring an appeal in respect of the orders enumerated therein. C In the case of Mathura Sundari Dassi vs Haran Chandra Shaha and Ors. (supra), Sanderson, C.J. Observed at p. 362 as follows: "I would be very loth to hold that this order is not a 'judgment ' within the meaning of cl. 15 of the Letters Patent, but it is not necessary in my judgment to give a definite opinion upon it because I think, on the second point, the Code does give a right of appeal. By clause 14 of the Letters Patent it is provided as follows: 'And we do further ordain and declare that all the provisions of these our Letters Patent are subject to the legislative powers of the Governor General in Council, exercised at meetings for the purpose of making law and regulations '. By the terms of section 117 the code is made applicable to the High Court, and o. 43. R. 1, gives a right of appeal in the very case under discussion. But it is said that this Code and the rules made under it do not apply to an appeal from a learned Judge of the High Court. I cannot follow that argument. It is part of the defendant 's case that O.9, R. 8 applies. That order is in effect a part of the Civil Procedure Code. It seems to me strange that the plaintiff should be subjected to O.9, R. 8, and be liable to have his suit dismissed for want of appearance, yet when he has had his suit dismissed under one of the rules of the Code and wants to call in aid another of the rules which when his application for reinstatement has been refused gives him a right of appeal against that refusal, he is met with the argument that he cannot call in aid that rule because there is no appeal from the learned Judge of the High Court under the Civil Procedure Code. I think this 278 is not a true view or a reasonable construction to put upon the Code and the Rules made under it. In my judgment, the Code and the rules do apply and the plaintiff has a right of appeal. " Sri Aushotosh Mookherji in his judgment in the same case at pp. 364 365 held as follows: "The question, consequently, arises whether O,43, r. 1, clause (c), is applicable to an order under o. IX, r. 9, made by a Judge on the original side of this Court. On behalf of the appellant, reliance has been placed upon section 117 of the Code which lays down that 'save as provided in this part or in part X or in rules, the High Court established under the Indian High Courts Act, 1961. ' The only provision in Part IX, which may have any possible hearing is that contained in section 120 which obviously does not touch the present question. The provision in Part X, which deal with the matter, is contained in section 129: this also does not militate against the contention of the appellant. The term 'rule ', which finds a place in section 117, is defined in clause 18 of section 2 of the Code to mean 'a rule contained in the first Schedule or made under section 122 or section 125 '. Our attention has not been drawn to any such rule which makes o. 43, R. 1, Clause (e), inapplicable. On the other hand O.49, R. 3, which excludes the operation of other rules, lends support to the contention of the appellant that o. 43, r. 1, cl. (c) is applicable to the present appeal. But it has been argued on behalf of the respondents, on the authority of the decision of the Judicial Committee in Hurriah Chandra Choudhary vs Kali Sudari Dasi that the Civil Procedure Code, in so far as it provides for appeals, does not apply to an appeal preferred from a decision of one Judge of a High Court to the Full Court. The true effect of the decision of the Judicial Committee was considered by this Court in Toolses Money Dassesv. Sudevi Dasses (1890) 25 Cal. 361) but it is not necessary for my present purpose to determine its hearing in all its implications, because in my opinion, the law has been substantially altered since that decision was pronounced. section 104 279 Of the Code of 1908 is materially different from section 588 of Code of 1882. It provides that an appeal shall lie from the orders mentioned in the first clause of that section, and save as otherwise expressly provided in the body of the Code or by any law for the time being in force, from no other orders '. The effect of section 104 is thus, not to take away a right of appeal given by clause IS of the Letters Patent, but to create a right of appeal in cases even where clause 15 of the Letters Patent is not applicable. I may here observe perethically that in the case of Tooles Money Dasses vs Sudevi Dasses. Princep J. felt pressed by the argument that if an appeal was deemed to have been allowed by the Code of Civil Procedure, there was no provision for the Constitution of a Court to which such an award might be preferred. section 106 of the Code, however, lays down that "where an appeal from any order is allowed, it shall lie to the Court to which an appeal would lie from the decree in the suit in which such order was made. ' Consequently, where a right of appeal has been so given, it would be the duty of this Court to constitute a Court of Appeal under section 13 of the Indian High Courts Act. 1 hold accordingly that this appeal is competent under cl. tc), R. 1, o. 43 of the Civil Procedure Code. " In the case of Lea Badin vs Upendra Mohan Roy Chaudhry (supra), a Division Bench of the Calcutta High Court held at p. 37 as follows: "But there is another and far simpler ground on which it must he held that an appeal is competent. The order in the present case is one for which a right of appeal ii provided in cl. R. 1, o. 43 of the Code. Under the pre sent Code (Act 5 of 1908) it cannot be contended that the Code and the Rules made under it do not apply to an appeal from a learned Judge of the High Court; such a contention was elaborately dealt with and repelled in the case of On a plain reading of the various provisions of the Code and on a proper construction thereof I have no hesitation in holding that section 104 of the Code of Civil Procedure applies to the original side of the High Court and the order in question is clearly appealable by virtue of the provisions contained in section 104(1) read with order 280 43 thereof. The authorities to which I have referred also lend support to the view that I have taken. A contrary view expressed by any High Court must necessarily be considered to be wrong and incorrect. The leading decision of the Bombay High Court in the case of Baman Rao Kulkarini vs Naresh Vishnu Joshi (supra) proceeds on an incorrect appreciation and interpretation of the provisions of the Code. As I have earlier discussed, there is no question of section 104 of the Code of Civil Procedure purporting to control of cl. 15 of the Letters Patent. It may, on the other hand, be said that section 104 of the Code seeks to supplement cl. 15 of the Letters Patent by conferring a right of appeal in the case of various orders mentioned in sub section (1) of section 104, which brings in its purview section 43 of the Code. The further approach of the Bombay High Court in that case as to subordination of a judge of the High Court sitting singly on the original side, is fallacious and untenable. An appeal under cl. 15 of the Letters Patent from a judge sitting singly on the original side of the High Court becomes competent to a division Bench and a learned judge against whose judgment the appeal is preferred does not become subordinate to the High Court. There is in fact no question of subordination at all. The observations of the Judicial Committee in the case of Hurish Chandra Choudhary vs Kali Sudari Dasi (supra) at p. 17 relied on by the learned counsel for the Respondents are of no material assistance to them. I have already quoted the said observations of the Judicial Committee. The said observations made in relation to the provisions of section 588 of the Act 10 of 1877 only go to lay down that the said section which has the affect of restricting certain appeals does not have the affect of restricting the right of appeal under cl. 15 of the Letters Patent and does not apply to a case where an appeal is one under cl. 15 of the Letters Patent. It may further be noted that the law has since the said decision been substantially altered and section 104 of the Code of Civil Procedure of 1908 is materially different from section 588 of the Code of 1882. This decision of the Judicial Committee has already come up for consideration by a division Bench of the Calcutta High Court in the Mathura Sudari Dassi vs Haran Chandra Shaha (supra). I, therefore, accept the first contention of Mr. Sorabjee that the order in question is appealable under section 104 (1) of the Code read with order 43 thereof and the said provisions of the Code apply to the original side of the Bombay High Court and the appeal preferred 281 from the order of the learned single judge to the Division Bench of A the Bombay High Court was competent and maintainable. In view of my accepting the first contention of Mr. Sorabjee it does not really become necessary for me to consider the other contention raised by him, namely, that the order in question is also appealable as a 'judgment ' under cl. 15 of the Letters Patent. As elaborate arguments have been advanced on this aspect and various decisions have been cited, my learned brother Fazal Ali, J. has in his judgment also considered this aspect and has dealt with various cases, in deference to the submissions made from the bar that this Court should lay down guidelines as to what will constitute a 'judgment ' within the meaning of cl. l S of the Letters Patent. An order which is appealable under the Code or under any other statute becomes appealable as the statute confers a right on the litigant to prefer an appeal against such an order. Such an order may or may not be appealable as 'judgment ' under cl. 15 of the Letters Patent. An order which may be appealable under cl. IS of the Letters Patent as a 'judgment ' becomes appealable as Letters Patent confers on the litigant a right of appeal against such an order as 'judgment '. An order appealable under the Letters Patent may or may not be appealable under the Code. A right of appeal is a creature of Statute. A litigant does not have an inherent right to prefer an appeal against an order unless such a right is conferred on the litigant by law. Certain orders become appealable under the Code, as the Code makes such orders appealable. Other Statutes may confer a right of appeal in respect of any order under the Statute. The Letters Patent by cl. 15 also confers a right to prefer an appeal against a 'judgment '. An order which satisfies the requirements of 'judgment ' within the meaning of cl. 15 becomes appealable under the Letters Patent. What kind of an order will constitute a 'judgment ' within the meaning of cl. 15 of the Letters Patent and will become appealable as such much necessarily depend on the facts and circumstances of each case and on the nature and character of the order passed. The question whether a particular order constitutes a judgment within the meaning of cl. 15 of the Letters Patent to be appealable under the provisions thereof has come up for consideration before the various Courts in a number of decision. Very many decisions have been cited in the present case and they have been considered by my learned brother, Fazal Ali, J. in his judgment. The question indeed, is not free from difficulties and divergent views have been expressed by different Courts and by various learned 282 Judges. This Court had also the occasion to consider as to what may constitute a judgment within the meaning of cl. 15 of the Letters Patent in certain cases. In the case of Shanti Kumar R. Canji vs The Home Insurance Co. Of New York (Supra) this Court referring to the earlier decision of this Court in the case of Asrumati Debi vs Kumar Rupendra Deb Rajkot & ors (supra), observed at p. 550 "This Court in Asrumati Debi 's case said that a judgment within the meaning of cl. 15 of the Letters Patent would have to satisfy two tests. First, the judgment must be the final pronouncement which puts an end to the proceedings as far as the Court dealing with it is concerned. Second, the judgment must involve the determination of some right or liability though it may not be necessary that there must be a decision on merits". This Court further observed at p. 555 "The view of the High Courts of Calcutta and Madras with regard to the meaning of 'judgment ' are with respect preferred to the meaning of 'judgment ' given by the Rangoon and Nagpur High Court. " This Court also held at p. 556 "In finding out whether the order is a 'judgment ' within the meaning of cl. IS of the Letters Patent it has to be found out that the order affects the merits of the action between the parties by determining some right or liability. The right or liability has to be found out by a Court. The nature of the order will have to be examined in order to ascertain whether there has been a determination of any right or liability. " In my opinion, an exhaustive or a comprehensive definition of 'judgment ' as contemplated in ch IS of the Letters Patent cannot be properly given and it will be wise to remember that in the Letters Patent itself, there is no definition of the word 'judgment '. The expression has necessarily to be construed and interpreted in each particular case. It is, however, safe to say that if any order has the effect of finally determining any controversy forming the subject matter of the suit itself or any part thereof or the same affects the question of Court 's jurisdiction or the question of limitation, such an order will normally constitute 'judgment ' within the meaning of cl. IS of the Letters Patent. I must not, however, be understood to say that any other kind of order may not become judgment within the meaning of cl. IS of the Letters Patent to be appealable under the provisions thereof. As already stated, it is not necessary to decide in the present case whether the order in question would be appealable under cl. IS of the Letters Patent as judgment; and I, therefore, refrain from expressing any opinion on this question. [/INST]In a suit for specific performance of an agreement to sell filed on the original side of the Bombay High Court the plaintiff (appellant) prayed for certain interim reliefs. A single Judge of the High Court dismissed the application. A Division Bench of the High Court, on appeal by the plaintiff, held that the appeal was not maintainable on the ground that the impugned order of the single Judge was not a 'judgment ' within the meaning of clause 15 of the Letters Patent of the High Court. In appeal to this Court it was contended on behalf of the appellant that since the trial Judge is governed by the procedure prescribed by the Code of Civil Procedure, by virtue of the provisions of section 104 read with Order 43 Rule (1) the impugned order is appealable to a larger Bench; (2) assuming that the Letters Patent was a special law, section 104 read with Order 43 is in no way inconsistent with clause 15 of the Letters Patent; (3) even if section 104 read with Order 43 Rule 1 does not apply an order refusing to appoint a receiver or to grant injunction has the attributes of finality and, therefore, amounts to a judgment ' within the meaning of Letters Patent. Allowing the appeal ^ HELD: (per Fazal Ali and A. Varadarajan, JJ.) (Amarendra Nath Sen, J. concurring.) Since the Order of the trial Judge was one refusing appointment of a receiver and grant of ad interim injunction, it is a 'judgment ' within the meaning of the Letters Patent both because order 43 rule 1 applies to internal appeals in the High Court, and such an order even on merits contains the quality of finality and would be a judgment within the meaning of clause 15 of Letters Patent. Hence an appeal is maintainable to the Division Bench. The Division Bench was in error in dismissing the appeal without deciding it on merits. [259 F G] 188 There is no inconsistency between section 104 read with Order 43 Rule 1, C.P.C. and appeals under Letters Patent. There is nothing to show that Letters Patent in any way excludes or overrides the application of section 104 read with Order 43 Rule 1 or that these provisions do not apply to internal appeals within the High Court. [237 E F] Code of Civil Procedure 1877, by sections 588 and 589, did not make any distinction between appeals to the High Court from the District Court and internal appeals to the High Court under Letters Patent. Notwithstanding the clear enunciation of law by the Privy Council that section 588 did not affect nor was it inconsistent with the provisions of Letters Patent and that, therefore, orders of a trial Judge which fall beyond section 588 could be appealable to a larger bench under the Letters Patent if its orders amounted to a 'judgment ' within the meaning of clause 15 of the Letters Patent, there was a serious controversy among the High Courts on this question. Section 104 of the C.P.C., 1908 made it clear that appeals against orders mentioned in Order 43 Rule 1 were not in any way inconsistent with the Letters Patent but merely provide additional remedy by allowing appeals against miscellaneous orders passed by the trial Judge to a larger bench. [205 E G] In dealing with a suit the trial Judge has to follow the procedure prescribed by the Code. It is indisputable that any final judgment passed by the trial Judge amounts to a decree and under the provisions of the Letters Patent an appeal lies to a larger bench. Letters Patent itself does not define the term 'judgment ' and has advisedly not used the word 'decree ' in respect of a judgment given by the trial Judge. [206 B D] Section 5 of the Code empowers the State Government to apply the provisions of the Code where any enactment is silent as to its applicability. Section 5 makes clear that, excepting the Revenue Courts, all other Civil Courts would normally be governed by the provisions of the Code in the matter of procedure.[206H,207A] Section 4 of the Code which provides that in the absence of any specific provision to the contrary the provisions of the Code do not limit or affect any special or local law, is not applicable in the instant case because even if the Letters Patent is deemed to be a special law within the meaning of this section the provisions of section 104 do not seek to limit or affect the provisions of the Letters Patent. [207 B C] By force of section 104 all appeals, as indicated in the various clauses of Order 43 Rule 1, would lie to the appellate court. In short a combined reading of the various provisions of the Code leads to the conclusion that section 104 read with Order 43 Rule 1 clearly applies to proceedings before a trial Judge of the High Court. [207 H; 209 B] In the instant case, therefore, section 104 read with Order 43 Rule 1 does not in any way abridge or interfere with or curb the powers conferred on the trial Judge by clause 15 of Letters Patent. They only give an additional remedy by way of appeal from the orders of the trial Judge to a larger bench. That being so there is no force in the respondent 's argument that these provisions do not apply to internal appeals in the High Court. [209 D E] 189 Hurrish Chunder Chowdry vs Kali Sundari Debia, 10 I.A. 4, Mt. Sabitri Thakurain vs Savi & Anr. A.I.R. 1921 P.C. 80, Union of India vs Mohindra Supply Co., ; and Shankarlal Aggarwal & Ors. vs Shankarlal Poddar & Ors. , referred to. A number of enactments, as for example, section 202 of the and section 39 of the Arbitration Act widen, rather than limit, the original jurisdiction of the High Court by conferring additional or supplementary remedy by way of appeal to a Division Bench from the judgment of a single Judge. On a parity of reasoning, therefore, section 104 read with Order 43 Rule 1 expressly authorises and creates a forum for appeal against orders falling under the various clauses of Order 43 Rule 1 to a larger bench of the High Court without disturbing, interfering with or over riding the Letters Patent jurisdiction. [211 B C] Dayabhai Jiwandas & Ors. vs A.M.M. Murugappa Chettiar, I.L.R. 13 Rangoon 457, Sonbai vs Ahmedbhai Habibhai [1872] 9 Bom. HC Reports. 398, Rajagopal & Ors. (in Re. LPA 8 of Mad. 447, Ruldu Singh vs Sanwal Singh Lahore 188, Lea Badin vs Upendra Mohan Roy Chaudhary & Ors. , Mathura Sundari Dassi vs Haran Chandra Shaha & Ors. A.I.R. 1916 Cal. 361 Abdul Samad & Ors. vs The State of J & K. A.I.R. 1969 J&K 52, and Kumar Gangadhar Bagla vs Kanti Chunder Mukerjee & Anr., , approved. Ram Sarup vs Kaniz Ummehani, ILR 1937 All. 386 over ruled. Assuming that Order 43 Rule 1 does not apply to Letters Patent appeals the principles governing these provisions would apply by process of analogy. The provisions of Order 43 Rule 1 possess the traits, trappings and qualities and characteristics of a final order. Although the word 'judgment ' has not been defined in the Letters Patent but whatever test may be applied the order passed by the trial Judge appealed against must have the traits and trappings of finality. The appealable orders indicated in the various clauses of Order 43 Rule 1 are matters of moment deciding valuable rights of the parties and are in the nature of final orders so as to fall within the definition of 'judgment '. [237G; 225 E F] Radhey Shyam vs Shyam Behari Singh ; referred to. Pandy Walad Dagadu Mahar & Anr. vs Jamnadas Chotumal Marwadi, ; Vaman Ravi Kulkarni vs Nagesh Vishnu Joshi & Ors, A.I.R. 1940 Bom. 216; Vishnu Pratap & Ors. vs Smt. Revati Devi & Ors. A.I.R. 1953 All. 647; Madhukar Trimbaklal vs Shri Sati Godawari Upasani Maharaj of Sakori & Ors. ; Ratanlal Jankidas Agarwal vs Gajadhar & Ors.; A.I.R. 1949 Nagpur 188; Beads Factory & Anr. vs Shri Dhar & Ors. A.I.R. 1960 All. 692; J. K. Chemicals Ltd. vs Kreba & Co.; A.I.R. 1967 Bom. 56, overruled. Having regard to the nature of the orders contemplated in the various clauses of Order 43 Rule 1 which purport to decide valuable rights of the parties in the ancillary proceedings even though the suit is kept alive these orders possess the attributes or characteristics of finality so as to be judgments within the meaning of clause 15 of the Letters Patent. They are therefore, appealable to a larger 190 bench. The concept of the Letters Patent governing only the internal appeals in the High Courts and the Code of Civil Procedure having no application to such appeals is based on a serious misconception of the legal position. [237H 238A B] The question to be decided in this case which is a vexed and controversial one is as to what is the real concept and purport of the word 'judgment ' used in the Letters Patent. The meaning of the word 'judgment ' has been the subject matter of conflicting decisions of the various High Courts raging for almost a century and over which despite the length of time no unanimity had been reached and it is high time that this controversy should be settled once and for all as far as possible. [238 E F] Out of the numerous authorities cited three leading judgments have spelt out certain tests for determining as to when an order passed by a trial Judge can be said to be a 'judgment ' within the meaning of clause 15 of the Letters Patent and we are inclined to agree generally with the tests laid down in these cases though some of the tests laid down are far too wide and may not be correct. [238 G H] While the view taken in the Justices of the Peace for Calcutta vs The Oriental Gas Company (VIII Bengal L.R. 433) is much too strict, the one taken in T. V. Tuljaram Row vs M.K.R.V. Alagappa Chettiar (ILR 35 Madras 1) is much too wide. The correct test seems to lie somewhere in between the tests laid down in these cases. Similarly the full Bench decision in Manohar Damodar Bhoot vs Baliram Ganpat Bhoot (AIR 1952 Nagpur 357) pithily described the essential requisites and the exact meaning of the word 'judgment ' as used in the Letters Patent. The pointed observations made in this case try to synthesize the conflicting views taken by the Calcutta and Madras High Courts. They represent the true scope and import of the word 'judgment ' as used in the Letters Patent. [The Court reviewed the entire case law on the subject laying down various tests to determine what a judgment is.] The test for determining as to when an order passed by a trial Judge can be said to be a 'judgment ' within the meaning of the Letters Patent are: (1) Where an order, which is the foundation of the jurisdiction of the Court or one which goes to the root of the action, is passed against a particular party, it amounts to a judgment. [248 B C] Asrumati Debi vs Kumar Rupendra Deb Raikot ; (2) An order dismissing an application for review would be appealable under the Letters Patent being a judgment, though it is not made appealable under Order 43 rule 1. [249 B] State of Uttar Pradesh vs Dr. Vijay Anand Maharaj ; (3) The which confers original jurisdiction on the trial Judge expressly makes an order passed by the trial Judge under section 202 appealable and, therefore, any order passed under that section would be appealable under the and is, therefore, a judgment. [249 C D] 191 Shankarlal Aggarwal vs Shankerlal Poddar (4) Whenever a trial Judge decides a controversy which effects valuable rights of one of the parties it is a judgment within the meaning of the Letters Patent. [249 H] Radhey Shyam vs Shyam Behari Singh ; (5) Where an order passed by the trial Judge allowing amendment of the plaint, takes away from the defendant the defence of immunity from any liability by reason of limitation, it is a judgment within the meaning of clause 15 of the Letters Patent. [250 A B] Shanti Kumar R. Canji vs The Home Insurance Co. of New York ; (6) Clause 15 of the Letters Patent does not define the term 'judgment '. The Letters Patent is a special law which carves out its own sphere and it would not be possible to project the definition of the word 'judgment ' as defined in the Code of Civil Procedure. Letters Patent were drafted long before the Code of Civil Procedure of 1882 was enacted. The word 'judgment ' used in the Letters Patent does not mean a 'judgment ' as defined in the Code. At the same time it does not include every possible order final, preliminary or interlocutory passed by a Judge of the High Court. [251 D E] Mt. Shahzadi Begum vs Alak Nath & Ors. A.I.R. 1935 All 628. Under the Code of Civil Procedure a judgment consists of reasons and grounds for a decree passed by a Court. As a judgment constitutes the reasons for the decree, it follows as a matter of course that the judgment must be a formal adjudication which conclusively determines the rights of the parties with regard to all or any of the matters in controversy. The concept of a judgment as defined in the Code seems to be rather narrow and the limitations engrafted by section 2(2) cannot be physically imported into the definition of the word 'judgment ' as used in clause 15 of the Letters Patent because the Letters Patent has advisedly not used the terms 'order ' or 'decree ' anywhere. The intention of the givers of the Letters Patent was that the word 'judgment ' should receive a much wider and more liberal interpretation than the word 'judgment ' used in the Code of Civil Procedure. At the same time, it cannot be said that any order passed by a trial Judge would amount to a judgment; otherwise there will be no end to the number of orders which would be appealable under the Letters Patent. The word 'judgment ' has a concept of finality in a broader and not a narrower sense. [2 52 G H; 253 A C] A judgment can be of three kinds: (1) A final judgment: A judgment, which decides all the questions or issues in controversy so far as the trial Judge is concerned and leaves nothing else to be decided is a final judgment. This would mean that by virtue of the judgment, the suit or action brought by the plaintiff is dismissed or decreed in part or in full. Such an order passed by the trial Judge is a judgment within the 192 meaning of the Letters Patent and amounts to a decree so that an appeal would lie from such a judgment to a Division Bench. [254 D E] (2) A preliminary judgment: A preliminary judgment may be of two forms: (i) where the trial Judge by an order dismisses the suit without going into the merits of the suit but only on a preliminary objection raised by the defendant or the party opposing on the ground that the suit is not maintainable. Since the suit is finally decided one way or the other, the order passed by the trial judge would be a 'judgment ' finally deciding the cause so far as the trial Judge is concerned and, therefore, appealable to a larger bench; (ii) where the trial Judge passes an order after hearing the preliminary objections raised by the defendant relating to the maintainability of the suit as for example, bar of jurisdiction, res judicata, a manifest defect in the suit, absence of notice under section 80 and the like. An order of the trial Judge rejecting these objections adversely affects a valuable right of the defendant who, if his objections were held to be valid, is entitled to get the suit dismissed on preliminary grounds. Such an order, though it keeps the suit alive, decides an important aspect of the trial which affects a vital right of the defendant and must, therefore, be construed to be a judgment so as to be appealable to a larger bench. [254 F H; 255 A B] (3) Intermediary or Interlocutory judgment: Most of the interlocutory orders which contain the quality of finality are clearly specified in clause (a) to (w) of Order 43 Rule 1. They are judgments within the meaning of the Letters Patent and, therefore, appealable. There may also be interlocutory orders not covered by Order 43 Rule 1 but possessing the characteristics and trappings of finality because they adversely affect a valuable right of the party or decide an important aspect of the trial in an ancillary proceeding. Before such an order can be a judgment the adverse effect on the party concerned must be direct and immediate rather than indirect or remote. Thus when an order vitally affects a valuable right of the defendant it will be a judgment within the meaning of Letters Patent so as to be appealable to a larger bench. [255 C E; 256 A] Every interlocutory order cannot be regarded as a judgment but only those orders would be judgments which decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned. [256 H 257 A] The following considerations should prevail with the Court in deciding whether or not an order is a judgment: (1) The trial Judge being a senior court with vast experience of various branches of law occupying a very high status, should be trusted to pass discretionary or interlocutory orders with due regard to the well settled principles of civil justice. Thus any discretion exercised or routine orders passed by the trial Judge in the course of the suit which may cause some inconvenience or, to some extent, prejudice one party or the other cannot be treated as a judgment.[258D E] (2) An interlocutory order, in order to be a judgment, must contain the traits and trappings of finality either when the order decides the question in controversy in ancillary proceeding or in the suit itself or in a part of the proceedings. [258 G] 193 It is not the form of adjudication which has to be seen but its actual effects on the suit or proceedings. [243 H] If irrespective of the form of the suit or proceeding, the order impugned puts an end to the suit or proceeding it doubtless amounts to a judgment. [244A] If the effect of the order, if not complied with, is to terminate the proceedings, the said order would amount to a judgment. [244 B] An order in an independent proceeding which is ancillary to the suit, (not being a step towards judgment) but is designed to render the judgment effectively can also be termed as judgment within the meaning of the Letters Patent. [244C] An order may be a judgment even if it does not affect the merits of the suit or proceedings or does not determine any rights in question raised in the suit or proceedings. [244 D E] An adjudication based on a refusal to exercise discretion, the effect of which is to dispose of the suit, so far as that particular adjudication is concerned, would amount to a judgment within the meaning of the Letters Patent. [244 E F] Some illustrations of interlocutory orders which may be treated as judgments may be stated thus: (1) An order granting leave to amend the plaint by introducing a new cause of action which completely alters the nature of the suit and takes away a vested right of limitation or any other valuable right accrued to the defendant. [258 B C] (2) An order rejecting the plaint. [258 C] (3) An order refusing leave to defend the suit in an action under Order 37, Code of Civil Procedure. [258 C] (4) An order rescinding leave to the trial Judge granted by him under clause 12 of the Letters Patent. [258 D] (5) An order deciding a preliminary objection to the maintainability of the suit on the ground of limitation, absence of notice under section 80, bar against competency of the suit against the defendant even though the suit is kept alive. [258 D E] (6) An order rejecting an application for a judgment on admission under Order 12 Rule 6. [258 E F] (7) An order refusing to add necessary parties in a suit under section 92 of the Code of Civil Procedure. [258 F] (8) An order varying or amending a decree. [258 F G] (9) An order refusing leave to sue in forma pauperis. [258 F G] (10) An order granting review. [258 F G] 194 (11) An order allowing withdrawal of the suit with liberty to file a fresh one. [258 G H] (12) An order holding that the defendants are not agriculturists within the meaning of the special law. [258 G H] (13) An order staying or refusing to stay a suit under section 10 of the Code of Civil Procedure. [258 H] (14) An order granting or refusing to stay execution of the decree. [259A] (15) An order deciding payment of court fee against the plaintiff. [259 B] (per Amarendra Nath Sen J concurring) On a plain reading and proper construction of the various provisions of the Code of Civil Procedure, section 104 of the Code applies to the original side of the High Court of Bombay and the impugned order of the single Judge is appealable to a Division Bench under this section read with Order 43 thereof. [279 H; 280 A] The right of appeal under clause 15 of the Letters Patent is in no way curtailed or affected by section 104. By virtue of the provisions of section 104(1) a litigant enjoys the right of preferring an appeal in respect of various orders mentioned therein, even though such orders may or may not be appealable under clause 15 of the Letters Patent as a judgment and the right of appeal under clause 15 remains clearly unimpaired. [275 E G] The argument of the respondent, based mainly on the provisions of sections 3 and 4 of the Code of Civil Procedure that even if various other provisions of the Code apply to the Bombay High Court, including its original side, the provisions of section 104 read with Order 43 could not apply to the original side of a Chartered High Court because the jurisdiction conferred by clause 15 of the Letters Patent is a special jurisdiction is without force. [267 B C] That by virtue of section 1 (which provides for territorial extent of the operation of the Code) the Civil Procedure Code applies to the State of Maharashtra cannot be disputed. [268 E F] Section 3 which deals with subordination of Courts to the High Court has no bearing on the point in issue and does not create any bar to the competence and maintainability of an appeal from an order passed by a single Judge on the original side if the order is otherwise appealable. While dealing with any matter on the original side of the High Court a single Judge is in no way subordinate to the High Court. Nor again, could there be a question of his being a subordinate to the Division Bench which hears an appeal from his judgment. If any order passed by him on the original side is a 'judgment ' within the meaning of clause 15 of the Letters Patent an appeal lies to a Division Bench. [272 E G] Similarly there is no force in the argument that since section 104 and Order 43 of the Code affect the special jurisdiction conferred on the High Court under 195 clause 15 of Letters Patent these provisions are not applicable to the present case. [273 C D] Section 4 of the Code cannot be said to be in conflict with the provisions of clause 15; nor can it be said that it limits or otherwise affects the power and jurisdiction of the High Court under clause 15. [274 A B] Section 4 provides that nothing in the Code shall be deemed to limit or otherwise affect any special or local law in force or any special jurisdiction conferred by or under any law for the time being in force. Clause 15 confers on the litigant a right to prefer an appeal from the court of original jurisdiction to the High Court in its appellate jurisdiction. It confers a right of appeal from a judgment of any Judge on the original side to the High Court. Though this clause is a special provision it cannot be said that it is intended to lay down that no appeal would lie from an order of a single Judge on the original side even if specific provision is made in any statute making the order appealable. By virtue of this provision any order considered to be a judgment would be appealable. If a statute confers on the litigant right of appeal, it cannot be said that such provision would affect the special provisions of clause 15. This special power is in no way affected and is fully retained. In addition, the High Court may be competent to entertain other appeals by virtue of specific statutory provisions. [273 C H: 274 A] On the contrary, the Code contains specific provisions indicating cases in which its provisions are or are not applicable, as for example section 5, which makes specific provision regarding the nature and manner of applicability of the Code to revenue courts. Sections 116 to 120 clearly indicate that section 104 and order 43 apply to the original side of the High Court. Section 104 and Order 43 which is attracted by section 104, clearly provide that an appeal shall lie from the orders mentioned in rule 1 of Order 43. The impugned order is one such order and is clearly appealable. When the legislature conferred such a right on the litigant a Court would be slow to deprive him of the statutory right merely on the ground that the order had been passed by a single Judge on the original side of the High Court. [274 B E] Section 104 recognises that, apart from the orders made appealable under the Code, there may be other orders appealable by any law for the time being in force. It further provides that no appeal will lie from any orders other than orders expressly provided in the Code or by any other law in force. The right of appeal against a judgment of a single Judge on the original side under clause 15 is a right conferred by "any other law in force". [275 C E] Union of India vs Mohindra Supply Co. ; and Mt. Savitri Thakurain vs Savi and Anr. referred to. Mathura Sundari Dassi vs Haran Chandra Shaha, A.I.R. and Lea Badin vs Upendra Mohan Roy Choudhary, A.I.R. 1935 Cal. 35 approved. Vaman Raoji Kulkarni vs Nagesh Vishnu Joshi, A.I.R. overruled. Hurrish Chander Chowdhry vs Kali Sundari Debia, 10 I.A. 4, held in applicable. 196 Unless a right is conferred on him by law, a litigant does not have an inherent right of appeal. An order appealable under the C.P.C. or any other statute becomes appealable because the concerned statute confers a right of appeal on the litigant. But yet such an order may or may not be appealable as 'judgment ' under clause 15 of the Letters Patent. An order appealable under clause 15 as a 'judgment ' becomes appealable because the Letters Patent confers the right of appeal against such order as 'judgment '. Similarly an order appealable under the Letters Patent may or may not be appealable under the Code. [281 C E] The Letters Patent, by clause 15, confers a right of appeal against a 'judgment ' and therefore an order which satisfies the requirements of 'judgment ' within the meaning of clause 15 becomes appealable. What kind of order will constitute a 'judgment ' within the meaning of this clause and become appealable as such must necessarily depend on the facts and circumstances of each case and on the nature and character of the order passed. [281 F G] A comprehensive definition of 'judgment ' contemplated by clause 15 cannot properly be given. Letters Patent itself does not define 'judgment '. The expression has necessarily to be construed and interpreted in each case. But yet it is safe to say that if an order has the effect of finally determining any controversy forming the subject matter of the suit itself or any part thereto or the same affects the question of the Court 's jurisdiction or the question of limitation, it normally constitutes 'judgment ' within the meaning of clause 15 of Letters Patent. [282 E G] </s>
<s>[INST] Summarize the judgementAppeal No. 302 of 1955. Appeal by special leave from the judgment and order dated April 3, 1954, of the Mysore High Court in Regular Appeal No. 195 of 1951 52. S.A. Gopala Rao and B. R. L. Iyengar, for the appellants. Mirle N. Lakshminaranappa, P. Ram Reddy, R. Thiagarajan and C. V. L. Narayan, for the respondent. September 8. The Judgment of the Court was delivered by KAPUR J. This appeal has little substance and must, therefore, be dismissed. The appellants are the decree holders and the respondent is the judgment debtor. On February 3, 1941, by a registered deed the father of the appellants leased to the respondent the house in dispute for a period of 10 years with an option of renewal for further periods for as long as the respondent wanted. This house was used by the respondent for his hotel. The father died on January 25, 1945. On December 21, 1945, the appellants filed a suit for a declaration that the deed of lease of February 3, 1941, executed by their father was not for legal necessity or for the benefit of the family, that the alienation was not binding on them and the option of renewal under the lease was void and unenforceable on account of uncertainty. The appellants further prayed for delivery of possession and for a decree for a sum of Rs. 2,655 as past mesne profits and future mesne profits at Rs. 250 per mensem as from December 1, 1945. The respondent filed his written statement on March 11, 1946, and an additional written statement on November 26, 1946, whereby he raised an objection to the jurisdiction of the court by reason of the Mysore House Rent Control Order of 1945. The trial judge upheld the preliminary objection and dismissed the suit. On appeal, the High Court set aside the decree on the ground that the 594 nature and scope of the suit had been misconceived by the trial court and that it was not based on relationship of landlord and tenant and therefore section 8(1) of the Mysore House Rent Control Order was inapplicable and the case was remanded for retrial. On August 23, 1948, the suit was decreed. The trial court held that the lease was binding for the first period of ten years as from May 1, 1941, as it was supported by legal necessity; but the option of renewal was void and unenforceable for uncertainty and therefore a decree for possession was passed to be operative on the expiry of ten years, i.e., May 1, 1951. On appeal the High Court confirmed that decree on August 22, 1950. On July 9, '1951, the appellants took out execution of the decree and on July 22, 195 1, possession was delivered to them. The order for delivery was made without notice to and in the absence of the respondent. The proceedings, "spot mahazar" that the respondent came to the spot after delivery of the major portion of the property in dispute had been delivered to the appellants. On August 13, 1951, the respondent made an application in the Executing Court, the District Judge, under sections 47, 144 and 151 of the Code of Civil Procedure for setting aside the ex parte order of delivery and for redelivery of possession of the house to him and in the alternative for an order to the appellants to give facilities to him (respondent) to remove the various moveables and articles mentioned in the petition. The appellants pleaded that the application was not maintainable. The District Judge, on November 14, 1951, upheld this contention and dismissed the application. An appeal was taken to the High Court and it reversed the order of the Executing Court and directed the appellants to return possession of the house in dispute to the respondent along with the moveables which were in the house at the time respondent was evicted. The High Court held that the Executing Court had no jurisdiction to order the eviction of the respondent because of the provisions of Mysore House Rent and Accommodation Control 595 Order, 1948, which was in operation on the date of eviction, The High Court having refused to give a certificate under article 133 the appellants obtained special leave to appeal from this Court on January 12, 1955, and this is how the matter has come to this Court. The question for decision mainly turns upon the applicability of the provisions of the two House Rent Control Orders of 1945 and 1948 and how far they were applicable to the proceedings in the suit and execution. The Mysore House Rent Control Order of 1945 came into force on November 6, 1945, and by section 8(1) of this Act a restriction was imposed on the eviction of tenants and the relevant part of this section was: Section 8 "(1) A tenant in possession of a house shall not be evicted therefrom, whether in execution of a decree or otherwise before or after the termination of the tenancy, except in accordance with the provisions of this clause; (2)A landlord wishing to evict a tenant in possession shall apply to the Controller for a direction in that behalf. If the Controller after giving the tenant a reasonable opportunity of showing cause against the application, is satisfied This Order was replaced by the Mysore Rent and Accommodation Control Order of 1948 which came into force on July 1, 1948. The relevant provisions of this Order, i. e., sections 9 and 16 which are applicable to the present appeal are as follows: Section 9 " (1) A tenant in possession of a house shall not be evicted therefrom whether in execution of a decree or otherwise except in accordance with the provisions of this clause (2)A landlord who seeks to evict a tenant in possession shall apply to the Controller for a direction in that behalf If the Controller, after giving tenant a suitable opportunity of showing cause against such application , is satisfied: this Order shall Prevent 596 a landlord from filing a suit for eviction of a tenant before a competent civil court, provided that no decree for eviction of a tenant, passed by a civil court shall be executed unless a certificate to that effect is obtained from the Controller " It was argued on behalf of the appellants before the High Court and that argument was repeated before us that the Mysore House Rent Control Order of 1948 was repugnant to the provisions of the (Act IV of 1882) which was brought into force in the State of Mysore by Part B States (Laws) Act, 1951 (Act III of 1951). This Act was enacted on February 22, 1951, and came into force on April 1, 1951, which was termed the appointed day. It was contended therefore that the House Control Order could not operate on the rights of the parties on the day when the Executing Court made the. order for delivery of possession to the appellants, i.e., July 9, 1951, or when the delivery was actually given, i.e., on July 22, 1951. To test the force of this argument it is necessary to examine the provisions of Part B States (Laws) Act and how and when as a consequence of it the became effective and operative in the State of Mysore. Section 3 of that Act deals with the extension and amendment of certain Acts and Ordinances. The Acts and the Ordinances specified in the Schedule were amended and became applicable as specified and as a consequence the fourth paragraph of section 1 for the words " Bombay ' Punjab or Delhi ", the words " that the said States " were substituted. Therefore the effect of the Part B States (Laws) Act merely was that qua the , the State of Mysore was placed on the same footing as the States of Bombay, Punjab or Delhi. It was by virtue of a Notification No. 2676 Cts. 46 51 5 dated September 12, 1951, that the was extended to the State of Mysore as from October 1, 1951. Consequently the laws of the State applying to leases which would include the Mysore House Rent Control Order of 1948 continued to be in force and applicable to cases that were pending till it was repealed by the 597 Mysore Rent Control Act of 1951 which received the President 's assent on August 16, 1951. The argument, therefore, that as from April 1, 1951, as a result of repugnancy the House Rent Control Order of 1948 stood repealed must be repelled as unsound and cannot be sustained, because it was an existing law which was saved by article 372 of the Constitution and remained unaffected by article 254. The Punjab High Court in M/s. Tilakram Rambaksh vs Bank of Patiala (1) discussing the effect of Part B States (Laws) Act on the application of the to PEPSU said: " All that Central Act III of 1951 has done is to make it possible for Part B States to extend the Act to any part of territory by notification. Actually, however, this wag never done by PEPSU or Punjab and the is not as such in force there. It is unnecessary in the circumstances to examine the argument further ". Although the question of repugnancy was raised in the High Court at the time of the hearing of the appeal, the true effect of section 3 of the Part B States (Laws) Act was not brought to the notice of the learned Judges nor was the Notification placed before them, but it was discussed by the High Court in its order refusing certificate under article 133(1) of the Constitution. The argument of repugnancy, therefore, is wholly inefficacious in this appeal. The inapplicability of section 47 to the proceedings out of which the appeal has arisen was also raised before us, but that contention is equally unsubstantial because the question whether the decree was completely satisfied and therefore the court became functus officio is a matter relating to execution, satisfaction and discharge of the decree. It was held by this Court in Ramanna vs Nallaparaju (2) that: " When a sale in execution of a decree is impugned on the ground that it is not warranted by the terms thereof, that question could be agitated, when it arises between parties to the decree, only by an application under section 47, and not in a separate suit ". (1) A.I.R. 1959 Pb. 440, 447. (2) A.I.R. 1956 $.C. 87, 91. 598 See also J. Marret vs Mohammad Shirazi & Sons (1) where the facts were that an order was made by the Executing Court directing contrary to the terms of the decree the payment of a certain fund to the decree holder. The Madras High Court in K. Mohammad Sikri Sahib vs Madhava Kurup (2) held that where the Executing Court was not aware of the amendment of the Rent Restriction Act by which the execution of a decree was prohibited and passed an ejectment order against a tenant, the Executing Court could not execute the decree and any possession given under an ex parte order passed in execution of such a decree, could be set aside under section 151 of the Code of Civil Procedure. The prohibition is equally puissant in the present case and section 47 read with section 151 would be equally effective to sustain the order of redelivery made in favour of the respondent. The applicability of res judicata and the defenses of waiver and estoppel were also raised by the appellants. The contention of res judicata was based on the plea taken by the respondent in his written statement, dated March 11, 1946, where he pleaded that the civil court had no jurisdiction to order eviction because of the House Rent Control Order, 1945, to which the reply of the appellants was that considering the nature of the suit and the consequential remedy that they were seeking, the plea of jurisdiction of the court was not open to the respondent. Thereupon the trial court raised a new 'issue " whether this court has jurisdiction to try the suit, in view of the House Rent Control Order " which was decided against the respondent and a decree in favour of the appellants was passed on August 23,1945. This judgment formed the basis of the argument before us that the plea of in executability of the decree could not be raised because it was barred on the principle of res judicata. The plea of res judicata is not available to the appellants as the prohibition on account of the House Rent Control Order was not against the passing of the decree but against its execution and therefore the objection to the executability could only be taken (1) A.I.R. 1930 P.C. 86, (2) A.I.R. 1949 Mad. 599 at the time of the execution of the decree which in the instant case could not be done because the order for delivery by the Executing Court was passed without notice to the respondent. We must, therefore, repel the contention based on the ground of res judicata. The argument of waiver and estoppel is also devoid of force. This plea was based on a letter which the respondent 's lawyer sent in reply to the respondent asking to make arrangements to put the appellants in possession. The former replied thereto that his client ' was making arrangements and as soon as he could do go, he would hand over possession to the appellants. This is slender basis for the sustainability of the plea of waiver and estoppel. There is no conduct on the part of the respondent which has induced the appellants to change their position or has in any way affected their rights and the plea of non executability which has been taken is based on statute and against statute there cannot be an estoppel. This ground taken by the appellants is equally unsound and must be rejected. The contention raised that ignoring sections 9(1) and 16 of the 1948 House Rent Control Order is no more than an error in the exercise of jurisdiction does not appear to be sound because those sections are a fetter on the executability of the decree and not merely an error in the exercise of the jurisdiction. In the present case the two sections mentioned above were a restriction on the power of the court to execute the decree and therefore this argument must also be, rejected. In the result this appeal fails and is dismissed with costs. Appeal dismissed. [/INST]The appellant, at the time a resident of Lahore, was asses sed to income tax on an income of Rs. 49,047 for the assessment year 1944 45 by the Income tax Officer, Lahore. After the partition in 1947 he shifted to Delhi and resided there. He was one of the three share holders of a company called Indra Singh and Sons Ltd. of Calcutta, the shares of all the three shareholders being equal. The company at a meeting held oil April 17, 1943, passed its accounts for the year ending March 31, 1942, but declared no dividends although the accounts disclosed large profits. On June 11, 1947, the Income tax Officer, Calcutta, passed an order under section 23A of the Income tax Act that the sum of Rs. 4,74,370, being the appellant 's share of the undistributed assessable income of the company, be included in his income for the assessment year 1944 45. Thereupon the Income tax Officer, Delhi, on April 10, 1948, issued a notice to the appellant, who was then working as the Defence Minister of India and residing in Delhi, under section 34 of the Act to file a revised return, which he did under protest, reopened the earlier assessment and by a fresh order made on March 25, 1949, assessed the appellant on an income of Rs. 5,23,417 for the year in question. It was contended on behalf of the appellant that the proceeding under section 34 could be held only in Lahore and not in India at all. The question for determination was whether the Income tax Officer, Delhi, could validly reassess the appellant under section 34 of the Act. Held, that the issue of a notice under section 34 of the Income tax Act, 1922, under the provision of the section itself, attracted such provisions of the Act as might apply to a notice issued under section 22(2) of the Act and since section 64 of the Act was the only provision under which the place of assessment upon a notice under section 22(2) could be determined, in absence of anything to the contrary in the Act, section 64 applied to an assessment under section 34 of the Act. The appellant was, therefore, rightly assessed by the Income tax Officer, Delhi, under section 64(2) of the Act. 483 C. V.Govindarajulu vs Commissioner of Income tax, Madras, I.L.R. and Lakshminarain Bhadani vs Commissioner of Income tax, Bihar and Orissa, , held inapplicable. The time specified by the proviso to section 64(3) could have no application since the contention in the present case was that the assessment under section 34 could be made only in Lahore and not in India at all. Section 23A of the Act, as it then stood, raised only one fiction, and not two, and that was of an income arising on a specific date in the past with the purpose that such income might be included in the income of a share holder for assessment. That income must, therefore, be deemed to have existed on the date for the purpose of assessment and, if not included in the assessment for the relevant year, must be taken to have actually escaped assessment so as to attract section 34 of the Act. Dodworth vs Dale, , D. & G. R. Rankine vs Com missioners of Inland Revenue, and Chatturam Horliram Ltd. vs Commissioner of Income tax, Bihar and Orissa, ; , held inapplicable. There is no warrant for the proposition that section 23A of the Act was meant to apply only to cases where pending assessment for any year, an order is made under that section creating a fictional income that year. Such an order could, therefore, be made even after the assessment of the income of the share holder for the year concerned had already been completed. But section 23A does not itself provide for any assessment being made and that has to be made under other provisions of the Act authorising assessment including section 34. It is not correct to say that section 23A(1), as it then stood, was beyond the competence of the Legislature and was as such unconstitutional. Under Entry 54 of List I of the Seventh Schedule to the Government of India Act, 1935, the Legislature could pass not only a law imposing a, tax on a person on his own income but also a law preventing him from evading the tax payable on his income and there can be no doubt that section 23A, properly construed, was meant to prevent such evasion. </s>
<s>[INST] Summarize the judgementAppeal Nos. 252 and 253 of 1958. Appeals by Certificate and special leave from the judgment and order dated August 5, 1955, of the former Andhra High Court in Writ Appeal No. 13 of 1955. AND VICE VERSA D. Narsaraju, Advocate General for the State of Andhra Pradesh, D. Parsanna Kumari, P. V. R. Tatachari and P. D. Menon., for the, appellant (In C. A. No. 252 of 58) and Respondent No, 1 (In C. A. NQ 253 of 58). 175 P. Ram Reddy, for the the appellants (In C. A. No. 253 of 58) and Respondent No. 1 to 3 (In C. A. No. 252 of 58). A. V. Vishwanatha Sastri and K. R. Choudhri, for the respondent No. 2 (In C. A. No. 253 of 58). April 2. WANCHOO, J. These are two connected appeals arising out of the same judgment of the, Andhra Pradesh High Court. The main appeal No. 252 is by the State of Andhra Pradesh while the other appeal No. 253 is by Duvvura Balarami Reddy and others. We shall dispose of them by this common judgment and will hereinafter refer to the State of Andhra Pradesh as the appellant and Duvvuru Balarami Reddy and others at the respondents. The brief facts necessary for present are these. The respondents had filed a writ petition for the issue of a writ in the nature of mandamus or any other ap propriate writ directing the appellant to give permission to the respondents to carry on mica mining operations in survey No.49/1 in the village of Ananthamadugu in Rapur Taluk of Nellore district subject to the respondents executing as agreement in the manner provided under the Mineral Conces sion Rules, 1949 (hereinafter referred to as the Rules) and conforming to the conditions mentioned therein. The case of the respondents was that they had obtained leases for mica mining purposes from various co owners in the shrotriem village of Ananthamadugu on March 24, 1952. Thereafter on May 27, 1953, this village was notified under the Madras Estates (Abolition and Conversion into Ryotwari) Act, No. XXVI of 1948, (hereinafter referred to as the Act) and the interest of the shrotriem owners was taken over by the appellant. The leases granted to the respondents were for a period of one year and one of the terms provided that the lessors were bound to extend and renew the period 176 of lease for such period as may be desired by the lessess subject to the Rules. After the estate was taken over, the question arose whether the leases were enforceable against the Government under s.20 "1 of the Act. In November 1953, the Manager of Estates, appointed on behalf of the Government, held that the leases were enforceable against the Government. This order was confirmed by the Collector of Nellore. Thereupon there was a revision petition by one of the co owners of the shrotriem who was not a party to the leases before the Board of Revenue. The respondents also applied to the Government for permission to work the mines. The Government however did not grant such permission. The respondents contended that the Government had no right to withheld permission to work the mines. Therefore, the writ petition was filed asking for the issue of a writ in the nature of mandamus or any other appropriate writ directing the appellant to give permission to the respondents to carry on mica mining in accordance with the leases. The petition was opposed on behalf of the appellant and the main contention on its behalf was that the village in question being a shrotriem inam village there was no presumption that the inam grant included the grant of sub soil rights also to the shrotriemdars. Therefore, the respondents could not claim any rights higher than these of their lessors. In effect, the appellant had contended that the lessors had no rights to the minerals and therefore the leases even if not void within the meaning of s.20 of the Act would not confer any rights on the respondents to claim as a matter of right the grant of permission to work the mines from the appellant and that it was entirely within the discretion of the State whether to grant a mining lease or not in accordance with the Rules. It was also stated in that the revision filed before the Board of Revenue had been stayed as the Points 177 raised before the Board were covered by the questions involved in the writ petition. On these pleadings the main question that arose for decision was whether the shrotriemdars had any rights in the minerals at all and were entitled to grant leases thereof If the shrotriemdars had no right in the minerals the grant of lease by them would be of no value and would not entitle the respondents to claim a mining lease under the Rules from the appellant as a matter of right. The learned Single Judge who heard the writ petition came to the conclusion that there was nothing to show that the inam grant in the present case covered the right to minerals. In consequence, it was held that the respondents did not get any rights under the said leases to the minerals. The learned Judge then considered the other points raised in the petition with which we are however not concerned and eventually dismissed it. The respondents went in appeal to a Division Bench of the High Court, and the appeal court seems to have held on a review of the various,standing orders of the Board of Revenue of the composite State of Madras that the State was only entitled to impose a royalty on minerals taken out by the shrotriem inamdar. It was pointed out that this seemed to be in accordance with common sense as the "grantee is entitled to the surface rights and the grantor to the sub soil rights and as the latter rights can only be exercised by entering upon the surface. it is only natural and just that they should share what is produced by working the mine, since one cannot enter upon the land, as he has no right to do so and the other cannot work the mine, as he has no right to the land". This would seem to suggest that the appeal court held that the sub soil right,,; belonged to the State and not to the inamdars; but because of the difficulty that arose on account of 178 the surface rights being in the inamdar and sub soil rights being in the State, it apparently head that the inamdar and the Government should share what is produced by working the mine. Finally, however, the appeal court dismissed the appeal on the ground that the period of one year for which the leases had been granted had expired and the period of renewal which the respondents could get under the Rules also had expired before the decision of the appeal court. It relied in this connection on the decision of this Court in K. N. Guruswamy vs The State of Mysore (1) : but as the respondents had failed on account of the expiry of time they were allowed their costs. This was followed by an application by the State for a certificate which was granted, and that is how the State 's appeal has come up before us. As for the appeal by special leave by the respondents, they contend that the decision being in their favour on the merits, the High Court should have ordered the State to grant them a lease even though the period fixed in the original leases and the period of renewal permissible under the Rules had expired. The main question therefore that fails for decision in these appeals is whether shrotriemdars can be said to have rights in the minerals. This matter has been the subject of consideration by the Madras High Court on a number of occasions and eventually the controversy was set at rest by the decision of the Judicial Committee in Secretary of State for India in Council vs Srinivasa Chariar (2) That case came on appeal to the Judicial Committee from the decision of the Madras High Court in the Secretary of State for India in Council vs,. Sreenivasa Chariar (3). The controversy before the Madras High Court was with respect to a shrotriem inam which was granted by the Nawab of Carnatic (1) ; (2) (1920) L.R. 48 I. A. 56. (3) Mad. 179 in 1750 and had been enfranchised by the, British Government in 1862. The inamdar started quarrying stones in the land granted to him and '. the Government claimed that it had a right to levy royalty or seigniorage fee on stones quarried by the inamdar. The inamdar contended on the other hand that an enfranchised inam was exactly. in the same position as a zamindari estate under the permanent settlement and that he was entitled to the entire sub soil rights and the Government was not entitled to levy royalty or seigniorage fee on stones quarried by him. The High Court held that under the terms of the grant, the grantor conveyed all that the grantor had in the. soil including sub soil rights and therefore it was not open to the Government to levy any royalty or seigniorage fee on stones quarried by the inamdar. In effect, the decision of the High Court negatived the claim of the Government to sub soil rights, for the Government could only levy royalty or seigniorage fee if it bad sub soil rights and the inamdar had no such rights. This decision was taken in appeal to the Judicial Committee as already indicated above, and the controversy between the parties, was that the inamdar claimed a decree establishing his full rights to the said village to the rocks and hills within its boundaries. The State on the other hand while admitting that there had been an inam grant of the village to the inamdar contended that there was no conveyance of the rights to minerals in the village. The Judicial Committee held that the grant of a village in inam might be no more than an assignment of revenue, and even where there was included a grant of land, what interest in the land pawed must depend on the language of the instrument and the circumstances of each case. The Judicial 'Committee also considered the standing orders of the Board of Revenue of 1890 and 1907 ,which have been referred to by the appeal court in 180 the judgment under appeal. This decision thus establishes that the mere fact that a ' person is the holde 'r of an inam grant would not by itself be enough to establish that the inam grant included the grant of sub soil rights in addition to the surface rights and that the grant of sub soil rights would depend upon the language used in the grant. If there are no words in the grant from which the grant of subsoil rights can be properly inferred the inam grant, would only convey the surface rights to the grantee, and the inam grant could not by itself be equated to a complete transfer for value of all that was in the grantor. In particular, the Judicial Committee stressed the use of the words "the produce of the seasons each year" used in the grant to show that, only the surface rights were granted in that case. It is not disputed that eversince the decision of the Judicial Committee in Srinivasa Chariar 's case(1) that has been the law with respect to sub soil rights of inamdars as distinct from zamindars under. the permanent settlement. The Boards standing orders of 1890 and 1907 to which the appeal court has referred in its judgment were also considered by the Judicial Committee and it is now too late in the day to use them to find out the rights of the inam dars and the Government in the minerals under the soil. As the decision of ' the Judicial Committee, shows, the standing orders of the Board of Revenue themselves show how the views of the Government changed from time to time on this question. , The older view seems to have been that the sub soil rights were in the inamdars but from 1907 at any rate the Government has taken the view that. sub soil rights are in the Government unless there: is anything in the grant to the contrary. It is this later view which was upheld by the Judicial, Committee in Srinivasa Chariar 's case(1).and this view has ever since prevailed as to the rights of the Government in the minerals under the soil in the case of (1) (1920) L.R.48 I.A. 56. 181 inams. We are unable to see bow this decision as to the rights of the Government to the minerals under the soil can be distinguished on the ground that the decision dealt only with the question of royalty. It is obvious that the Government could charge royalty only if it had the right to the minerals under the soil and not the inamdars. What therefore we have to see is whether on the terms of the grant in this case the shrotriemdars can be said to have been granted the sub soil rights also. So far as, this matter is concerned, here does not seem to have been a serious controversy in the High Court and it does not appear that the respondents contended that under the term$ of the grant to the shrotriemdars the latter were entitled to sub soil rights. We have already referred to that part of the judgment of the appeal court which suggests that ' even the appeal court was of the view that the subsoil rights were in the Government in this case and the surface rights were in the shrotriemdars. The orioinal grant is not available and all that we have is the inam fair register of 1861 and all that is stated in that register is that the grant is for the personal ad vantage of the holder. There is nothing therefore in the inam fair register to show that the grant included the grant of sub soil rights. It is however urged on behalf of the respondents that the grant included Poramboke, and from the fact that Poramboke was also included it should be inferred that mere surface rights were not the subject matter of the grant. Reliance in this connection has been placed on the decision of the Judicial Committee in Secretary of State vs Krishna Rao. The dispute in that case related to levy of water cess under the Madras Irrigation Cess Act, .(No. 7 of 1865). The Judicial Committee pointed out that the inam grant in that case included not only dry, wet. and garden land but also poramboke (1) (1945) L.R. 721.A. 211 182 i.e. unculturable land. This was held to indicate that full proprietary rights were granted and therefore the Government could not charge any water cess. It is urged for the respondents that this case shows that where poramboke is also granted, the grantee gets all the rights including the sub soil rights in full proprietorship. It should however be remembered. that the dispute in that case was whether the inamdar was entitled to free irrigation from water sources lying in the shrotiem village by virtue of the grant or whether the grantor could levy a cess under the Madras Irrigation Cess Act. There was no dispute as to the sub soil rights 'in that case, the dispute being confined to surface rights relating to water. The Government contended in that case that the grant to .the inamdar was only of the melvaram or the right of the revenue from the lands. while the respondent 's contention was that the grant I carried not only the meraram but also the proprietary interest in the land itself and therefore the Government had no right to levy the irrigation cess. It was in that connection that the Judicial Committee held that the grant of poramboke i. e. unculturable land, was one of the factors that indicated that it was not a mere grant of melvaram but full proprietary right. It is remarkable however that though the Judicial Committee came to the. conclusion in that case that full proprietary right had been granted, it referred to the earlier decision in Srinivasa Chariar 's case during the course of the .judgment. This later decision therefore in our opinion cannot be read in such a way as to lay down that wherever poramboke is included in the grant, a presumption must be drawn that the inam grant included sub soil rights also all that may be possible to infer by the inclusion of poramboke on the basis of this decision is that all the surface rights were granted and not merely the melvaram as 183 was contended in that case. The fact therefore that in the inam fair register in this case the grant includes poramboke would not by itself ' establish that sub soil rights were also included in the grant. So far as sub soil rights are concerned, they can only pass to the grantee if they are conferred as such by the grant or if it can be inferred from the grant that sub soil rights were also included therein. We have already remarked that the original grant in this case is not available and we have only the inam fair register to go ' by. There can be no doubt therefore on the facts of this case that the learned Single Judge was right in holding that the grant of sub soil rights to shrotriemdars is not established. The appeal court also does not appear to differ from this view of the learned Single Judge. Once the conclusion is reached that sub soil rights were not granted to the shrotriemdars it seems to us that the inference is plain ' that it was not open to the shrotriemdars to grant any lease of minerals lying under the soil to any one. Therefore, the leases granted by the shrotriemdars to the respondents in this case would be of no legal effect in conveying any right to them in the minerals under the soil. In the circumstances the respondents cannot put forward the leases in their favour to claim a mining leases under the Rules. With respect, we have not been able to understand how the difficulty which may arise in practice, on account of the sub soil rights being in the Government and the surface rights being in the shrotriemdars, in the working of the mines would make the shrotriemdars shares in the sub soil rights and therefore entitled to grant a lease of the sub soil rights. Whatever may have been the practice in the past and howsoever the Government may have been getting over the practical difficulty in the past would not confer any right to the minerals upon the shrotriemdar so as to enable 184 him to grant a mining lease to; any one. It follows therefore that the mining,, leases granted in this case were granted by persons who had no right to the minerals and therefore confer no rights on the respondents to claim at; of right from the Government that they should be granted a mining lease under the Rules. In view of the above decision appeal No. 252 must be allowed and appeal No. 253 must fail. We therefore allow appeal No. 252 and setting aside the order of the appeal court dismiss the writ petition with costs to the State throughout. Appeal No. 253 is hereby dismissed but in the circumstances parties will bear their own costs. C. A. No. 252 of 1958 allowed. C. A No. 253 if 1958 dismissed. [/INST]The appellants were convicted of offences under section 302 read with section 34 and section 201 read with section 34 Indian Penal Code by the Sessions judge. On appeal to the High Court there was a difference of opinion between the two judges who heard it and the case was referred under section 429 Code of Criminal Procedure to a third judge. The third judge upheld the con victions. The appellants contended that where a case was referred under section 429, the opinion of the judge acquitting the accused had to be treated as a judgment of acquittal and that the third judge must consider all the reasons given by the acquitting judge and his judgment should indicate the reasons for disagreeing with the opinion of the acquitting judge. The appellants further contended that there were certain circumstances proved by the evidence on the record which showed that the eye witnesses could not be relied upon. Held, that there was nothing in section 429 which required the third judge to whom the reference was made to act as though he was sitting in appeal against acquittal. He had to consider the opinion of the two differing judges and to give his own opinion. Held, further (per Kapur and Das Gupta JJ. Dayal. J. contra) that the judgment of the High Court suffered from such infirmities as placing the onus of proof of certain facts on the appellants and using of inadmissible evidence. The case was full of so many inconsistencies and improbilities and peculiarities that it made it difficult to rely upon the testimony of the eye witnesses and to hold that the case against the appellants was established beyond reasonable doubt. Per Dayal J. The circumstances urged by the appellant did not make out a case for interference with the findings of facts of the High Court. </s>
<s>[INST] Summarize the judgementCivil Appeal No. 1153 of 1975. Appeal by Special Leave from the Judgment and order dated the 29th November 1974 of the Mysore High Court at Bangalore Writ Petition No. 117 of 1973. section V. Gupte, K. R. Nagaraja for the Appellant. Shyamla Pappu (Mrs.) for Respondent No. 3. The Judgment of the Court was delivered by Gupta, J. on the application of the appellant the Regional Transport Authority, Mandya, granted him. a contract carriage permit on February 8, 1972, valid for the entire State of Karnataka. The grant was cancelled by the Karnataka State Transport Appellate Tribunal by its order dated August 19, 1972 on appeal preferred by the third respondent, Karnataka State Road Transport Corporation. The appellant filed a writ petition in the High Court of Karnataka at Ban galore challenging the order of the Appellate Tribunal. The High Court dismissed the petition by its order dated November 29, 1 974 agreeing with the Appellate Tribunal that the Regional Transport Authority, Mandya, had no jurisdiction to grant permits valid throughout the State of Karnataka in view of the first proviso to sub section (1) of section 45 of the (hereinafter referred to as the Act). The correctness of that decision is questioned by the appellant in this appeal by special leave. Section 45(1) with its first proviso which is the only part of the section relevant for the present purpose is in these terms: General provision as to applications for permits. 30 "45 (1) Every application for a permit shall be made to the Regional Transport Authority of the region in which it is proposed to use the vehicle or vehicles: Provided that if it is proposed to use the vehicle or vehicles in two or more regions lying within the same State, the application shall be made to the Regional Transport Authority of the region in which the major portion of the proposed route or area lies, and in case the portion of the proposed route or area in each of the regions is approximately equal, to the Regional Transport Authority of the region in which it is proposed to keep the vehicle or vehicles :" As its marginal note indicates, section contains a general provision regulating applications for permits. The proviso, quoted above, lays down that where the applicant for a permit proposes to use his vehicle in two or more regions in the same State, the application must be made to the Regional Transport Authority within whose jurisdiction the major portion of the proposed route or area lies. The appellant had asked for a contract carriage permit that would be valid throughout the State of Karnataka which meant that he proposed to use his vehicle in all the different regions lying in the State. The second proviso to section 44(1) of the Act lays down that the area specified as the region of a Regional Transport Authority shall not be less than an entire district, or the whole area of a Presidency town. In the State of Karnataka there are 19 Regional Transport Authorities, one for each district in the State. In terms of the first proviso to section 45 (1), an application for an inter regional permit that the appellant was asking for had to be made to the Regional Transport Authority of the region that included the major portion of the proposed area. The question debated before the appellate tribunal and the High Court was whether the area lying within the jurisdiction of the Regional Transport Authority, Mandya, was larger than the area within the region of any other Regional Transport Authority in the State, and in that context the meaning of the term 'area ' in the first proviso to section 45 (1) arose for consideration. According to the applicant for the permit, 'area ' in section 45 meant the extent of motorable tract in the region, and the Regional Transport Authority, Mandya, agreeing with this interpretation of the word 'area ' found that the 'Mandya Region has more motorable roads than any other district in the State". The appellate tribunal and the High Court both refused to accept this meaning of 'area ' which they held to mean plain geographical area and as the Regional Transport Authority, Mandya, was admittedly not the largest district in that State, the High Court dismissed the writ petition and affirmed the decision of the appellate tribunal that the grant of permit was without jurisdiction. Before proceeding to consider the merits of the rival contentions as to the meaning of the word 'area ' in the first proviso to section 45(1), it would be helpful to refer to certain other provisions of the Act which seem to be relevant in this context. The appellant had asked for a contract carriage permit. Section 2(3) defies a contract carriage as a motor vehicle which carries passengers for hire or reward under a contract for the use of the vehicles as a whole either on a time basis or 31 from one point to another, and in both cases without stopping to pick up or set down along the line of route passengers not included in the contract. A motor vehicle is defined in section 2(18) as a mechanically propelled vehicle 'adapted for use upon roads '. Section 49 lays down the particulars that an application for a contract carriage permit shall contain, and the 'area ' for which the permit is required is one of the matters that the application must state. The word route which has been used in association with 'area ' in section 45(1) is defined by section 2(28A) as "a line of travel which specifies the highway which may be traversed by a motor vehicle between one terminus and another." Section 2(1) defines 'area ' as follows: " "area", in relation to any provision of this Act, means such area as the State Government may, having regard to the requirements of that provision, specify by notification in the official Gazette;" The terms and expressions defined in section 2 will apply only if there is nothing repugnant in the subject or context as the opening words of the section indicate. The first proviso to section 45 (1) speaks of the route or area proposed in an application for a permit and, as such, there can be no question here of the State Government specifying the area. Clearly, the definition of area in section 2(1) has no relevance in this context. The question therefore remains to be answered, whether 'area` in section 45(1) has been used in the wider sense of geographical area, or it means only the area of motorable roads ? The section uses both the words, 'route ' and 'area ', whichever is applicable in a given case. A route as defined is a line of travel between two termini on a highway, but the idea of a route as a notional line that the definition suggests has not been consistently maintained in the Act. In Dosa Satyanarayanamurty etc. vs The Andhra Pradesh State Road Transport Corpn. (1) this Court observed: "There is no inherent in consistency between an "area" and a "route". The proposed route is also an area limited to the route proposed. " A similar observation was made in C.P.C. Motor Service, Mysore vs The State of Mysore(2) that in the scheme of the Act, by the word "route" is meant "not only the notional line but also the actual road over which the omnibuses run". Of course, it would not be correct to say that the Act recognizes no distinction between 'route ' and 'area '. A route may mean not only the notional line of travel between one terminus and another, but also the area of the road over which the motor vehicles ply, yet the two terms are not interchangeable; as pointed out in C.P. Sikh Regular Motor Service etc. vs The State of Maharashtra,(3) "a route is an area plus something more". This "something" is the notional line of travel between two termini which distinguishes a route ` from an area simpliciter. The first proviso to section 45(1) speaks of "route or area" apparently making a distinction between them to cover applications relatable to either. A contract carriage does not ply along a fixed route or routes but over an area, which is why an application for a contract carriage permit has to contain a statement as to the proposed area. (1) (644). (2) [1962 Supp. (1) S.C.R. 717 (725). (3) ; 32 All the decisions to which we have referred above have taken the view that by area is meant the road, the physical tract, over which the motor vehicles ply without reference to any notional line of travel. Of course, this meaning was given to the word 'area ' in the context of the provisions of the Act considered in these cases, in none of which section 45 came up for consideration. We do not however find any reason to think that 'area ' in section 45 ( 1 ) has a different connotation. Except that the territorial jurisdiction of the regional transport authorities is fixed in terms of geographical area districtwise in the State of Karnataka 'area ' in that wider sense is irrelevant to the purposes of the Act. Counsel for the respondent, Mysore State Road Transport Corporation, Bangalore, built an argument on the provisions of section 12 of the Act that the meaning of 'area ' is not restricted only to the area of motorable roads in a region. Section 42 prohibits the use of a transport vehicle in any public place except in accordance with the conditions of a valid permit. A transport vehicle includes a motor vehicle used for the carriage of passengers [section 2(33) and section 2(25). Public place has been defined by section 2(24) of the Act as "road, street, way or other place, whether a thoroughfare or not, to which the public have a right of access, and includes any place or stand at which passengers are picked up or set down by a stage carriage". lt was argued that a contract carriage which does not ply on a fixed route could be used in any public place which need not necessarily be a road; this, according to counsel, indicated that the word area occurring in section 45(1) meant geographical area and not motorable roads only. We do not find it possible to accept this contention. Assuming that a contract carriage could be used in places which are not really roads, the fact remains that a contract carriage being a motor vehicle is intended for use upon roads, and any casual use of it in places other than roads is not decisive on the interpretation of the word area. The prohibition against the use of transport vehicles in public places which are not roads serves to repel a possible claim that for using a motor vehicle in places which cannot be called roads no permit was necessary. We hold therefore that the word area in the first proviso to section 45(1) of the Act means the area of motorable roads within the territorial jurisdiction of a regional transport authority. The Regional Transport Authority, Mandya, held that it had within its jurisdiction the largest area of motorable roads in the State of Karnataka, and this finding has not been disturbed by the appellate tribunal. The appellate tribunal thought that the expression "motorable roads" was vague as the area comprising of motorable roads would be changing from time to time", but the jurisdiction of a regional transport authority to grant an inter regional permit depends on the existing area of motorable roads when an application for a permit is made. In the course of arguments before us doubts were expressed on the reasonableness of a provision which requires an application for an inter regional permit to be made to the regional transport authority of the region in which the major portion of the proposed route or area lies when section 63 of the Act provides elaborate checks and lays 33 down conditions for the validation of permits for use outside the region in which it has been granted. It was submitted that in view of the provisions of section 63 there was no point in insisting on the application being made to the Regional Transport Authority of any particular region. We see the logic of this submission, but this is a matter of policy on which the court has no say. However, the policy itself does not appear to have been stated very clearly. On the provisions as they are it is difficult to say that the construction put forward on behalf of the third respondent is altogether implausible. It is also true that there can be practical difficulties, whichever interpretation was adopted. This being the position we should have thought that instead of leaving the law in such a slippery state, the State should clarify it by appropriate legislation so that the law may be clear and easily ascertainable by the concerned section of the public. The appeal is allowed and the impugned order including the order of the Mysore State Transport Appellate Tribunal is set aside. We make it clear that all we have decided in this case is that the Regional Transport Authority, Mandya, had jurisdiction to issue the permit to the appellant, whether the permit satisfies the other conditions of a valid inter regional permit did not arise for consideration in this appeal In the circumstances of the case we make no order as to costs. S.R. Appeal allowed. [/INST]The respondent, a director of a company was charged with offences under sections 418 and 471 read with sections 468 and 477A, I.P.C. on the ground that he defrauded the company. At the trial, a single Judge of the High Court discharged the respondent on the view that he had no jurisdiction to proceed with the trial by reason of s.195(1)(c) of the Cr. P.C., 1898. The full Bench of the High Court affirmed the view of the single Judge. Allowing the appeals to this Court, ^ HELD: The High Court was entitled to proceed with the trial of the respondent in respect of offences under section 471 without any complaint in writing from the company Judge whom the proceeding was pending. [938A] (1) Section 195(1)(c) of the Code of Criminal Procedure provides that no court shall take cognizance of an offence described in section 463 or punishable under sections 471, 475 and 476, Indian Penal Code where such offence is alleged to have been committed by a party to any proceeding in any court in respect of any document produced or given in evidence in such proceeding, except on the complaint in writing of such court or of some other court to which such court is subordinate. The High Court had clearly and indubitably jurisdiction to proceed with the trial against the respondent in respect of offences under sections 418 and 477A. On its plain language the inhibition in section 195(1)(c) applies only where a person is being tried for an offence under section 463 or punishable under sections 471, 475 or 476. Offences under 418 and section 477A are plainly not covered by section 195(1)(c) Cr. P.C. [936 D G] (2) In regard to offences under section 471, I.P.C. it could not be said that the respondent could invoke the applicability of section 195(1)(c). The offence under section 471 was committed by the respondent long before the proceeding in the Company matter commenced and he became a party to that proceeding, and it was not committed by him in his capacity as such party, i.e. after having become a party to the proceeding. In Patel Laljibhai Somabhai vs The State of Gujarat this Court restricted the scope and ambit of section 195 (1)(c) to cases where the offence was alleged to have been committed by a party to a proceeding after he became such party and not before. [936H, 937A D] Raghunath vs State of U.P., AIR 1973 S.C. 1100 and Mohan Lal vs The State of Rajasthan, AIR 1974 S.C. 299, referred to. In the instant case since the offence charged against the respondent was one alleged to have been committed by him before he became a party to the proceeding in the company matter, section 195(1)(c) had no application. Secondly, the forged bills had not been produced in evidence before the Company Judge in the proceeding before him. The requirement of section 195(1)(c) that the document in question should be produced or given in evidence in the proceeding was, therefore, clearly not satisfied and on this ground also section 195(1)(c) was not attracted in the present case. [937G, 938A] </s>
<s>[INST] Summarize the judgementminal Appeal No. 240 of 1960. Appeal by special leave from the judgment and order dated November 25, 1958, of the Punjab High Court in Criminal Appeal No. 114 of 1954. Jai Gopal Sethi, C. L. Sareen and R. L. Kohli, for the appellant. N. section Bindra, R. H. Dhebar and D. Gupta, for respondent. August 30. The Judgement of the Court was delivered by SARKAR, J. The appellant Payare Lal was the Tehsildar of Patiala. He and Bishan Chand, a Patwar. clerk of the Tehsil Office, were prosecuted for offences under s.5(2) of the Prevention of 330 Corruption Act, 1947. The Criminal Law Amendment Act, 1952 (Act XLVI of 1952), to which it will be convenient hereafter to refer as the Act, required the trial to be held by a special Judge appointed under it and in accordance with certain provisions of the Code of Criminal Procedure mentioned in section 8 of the Act. The Principal question in this appeal turns on the construction of sub section (1) of this .section which we will later set out. The trial commenced before section Narinder Singh the special Judge, Patiala. He heard the evidence but before he could deliver a judgment he was transferred and was succeeded by section Jagjit Singh. section Jagjit Singh did not recall the witnesses and hear the evidence over again, but proceeded without any objection from either side, with the trial from the stage at which his predecessor had left it and having heard the arguments of the advocates for the parties, delivered his judgment convicting both the accused of the offences with which they had been charged and passed certain sentences on them. The accused appealed against their conviction to the High Court of Punjab. The appeals came to be heard by Mehar Singh J., who,, though no point had been taken by the accused, himself felt considerable difficulty as to whether section Jagjit Singh had the power to decide the case on the evidence recorded by his predecessor and referred the matter to a larger bench taking the view that if the course followed was defective, the defect would be one of jurisdiction of the Court and could not be cured by the consent of parties. The case was thereupon heard by a bench of that High, Court constituted by Gurnam Singh and Mehar Singh JJ. who took different views. Gurnam Singh J. held that section 350 of the Code applied to the trial before a special Judge in view of section 8(1) of the Act and under the terms of section 350, which we will later set out, section Jagjit Singh was entitled to proceed on the evidence recorded by his predecessor 331 section Narinder Singh, while Mehar Singh J., was of the opinion that section 8(1) of the Act did not make section 350 of that Code applicable to such a trial. He also held that what section Jagjit Singh had done was not a matter of mere irregularity curable under section 537 of the Code. The matter was then referred to Passey J., who agreed with Gurnam Singh J. On the question of section 537 of the Code, Gurnam Singh and Passey JJ. expressed no opinion in the view that they had taken of section 8(1) of the Act. The appeals were thereafter heard on the merits by Tek Chand J. who upheld the conviction of the appellant but reduced the sentence passed on him. He,, however, acquitted the other accused Bishan Chand giving him the benefit of doubt. The appellant has now come up to this Court in further appeal with special leave. There is no appeal by the State against the acquittal of Bishan Chand. There is no covntroversy that the general principle of law is that a judge or magistrate can decide a case only on evidence taken by him. Section 350 of the Code is a statutory departure from this principle. That section so far as material was at the date section Jagjit Singh decided the case in these terms : section 350. Whenever any Magistrate, after having heard and recorded the whole or any part of the evidence in an inquiry or a trial, ceases to exercise jurisdiction therein, and is succeeded by another Magistrate who has and who exercises such jurisdictions, the Magistrate so succeeding may act on the evidence so recorded by his predecessor, or partly recorded by his predecessor and partly recorded by himself or be may resumption the witnesses and recommence the inquiry or trial It is only if this provision was available to section Jagjit Singh that the course taken by him can be supported. 332 As we have said earlier, section 8 of the Act makes certain provisions of the Code applicable to the proceedings before a special Judge The question is whether section 350 of the Code. was one of such provisions. The answer to this question will depend on the construction of sub ss.(1) and (3) of section 8 of the Act the material portions of which we now set out. section 8 (1) A special judge may take cognizance of offences without the accused being committed to him. for trial, and in trying the accused persons, shall follow the procedure prescribed by the Code of Criminal Procedure, 1898 . for the trial of warrant ' cases by magistrates. (3) Save as provided in sub section (1) . . the provisions of the Code of Criminal Procedure, 1898, shall, so far as they are not inconsistent with this Act, apply to the proceedings before a special Judge ; and for the purposes of the said provisions, the Court of the special judge shall be deemed to be a Court of session trying cases without a jury or without the aid of assessors. . . . In substance these sub sections provide that a special Judge shall follow the procedure prescribed by the Code for the trial of warrant cases by magistrates and save to this extent. , the provision ,, of the Code applicable to a Court of session, shall govern him as if he were such a Court subject to certain qualifications which are not relevant for the present case. There is no controversy that section 350 of the Code is applicable only to magistrates and not a Court of session and cannot therefore be applied to a special Judge under sub section (3) as it makes only those provisions of the Code applicable to him which would apply to a Court of session. The only controversy is whether that section is applicable to a special Judge under sub s.(1) of section 8 of the Act. If it is so applicable, it must be applied 333 though under sub section (3) it is not applicable, for this sub section, is to have effect " 'Save as provided in subsection (1)". The real question is, what is meant by the words "the procedure prescribed by the Code . . . for the trial of warrant cases by magistrates" In section 8(1) of the Act ? Does section 350 of the Code prescribe one of the rules of such procedure ? It is necessary however to point out that by an amendment made in the Act after judgment had been delivered in this case by section Jagjit Singh, it has been expressly provided that section 350 of the Code applies to the proceedings before a special Judge. On the amended Act, therefore, the question that has arisen in this case, would no longer arise. For reasons to be hereafter stated, this amendment clearly does not govern the proceedings before section Jagjit Singh and this case has to be decided without reference to the amendment. Is was once held by the Madras High Court in In re, Vaidyanatha Iyer (1) that section 350 of the Code prescribed a rule of procedure for the trial of warrant cases as mentioned in section 8 (1) of the Act. This seems to be the only reported decision taking that view. All other decisions which have been brought to our notice take the contrary view. Even in Madras, in In re Fernandez (2), a Full Bench of the High Court has now hold that section 350 of the Code was not applicable to a special Judge and has overruled In re Vaidyanatha Iyer (1). That appears to be the position on the authorities. It is true that section 350 of the Code is a provision applying to all magistrates and therefore, also to a magistrate trying a warrant case. That however does not in our opinion decide the question. We think it 'relevant to observe that it is a right of an accused person that his case should be decided by a judge who has heard the whole of it and we agree with the view expressed in Fernandez 's case(2) (1) ; A.I.R. (1954) Mad. (2) 334 that very clear words would be necessary to take away such an important and well 'established right. We find no such clear words here. We turn now to the word used. When sub section (1) of section 8 of the Act talks of a procedure prescribed by the Code for the trial of warrant cases by magistrates it is reasonable to think that it has the provisions and the language of the Code in view. When we look at the Code, we find that ch. XXI is headed "of the. Trial of Warrant Cases by Magi strates". This chapter consists of sections 251 to 259. Section 251 is in these terms : section 251 In the trial of warrant cases by Magistrates, the Magistrate shall, (a) in any case instituted on a police report, follow the procedure specified in section 251A; and (b) in any other case, follow the procedure specified in the other provisions of this Chapter. The Code, therefore, expressly refers to sections 251 259 as containing the procedure specified for the trial of warrant cases by magistrates; this then,, is the procedure it prescribes for the trial of such cases. It would be legitimate, therefore, to think that the Act in using the words "procedure prescribed by the Code. for the trial of warrant cases by magistrates" also meant only these sections of the Code and did not contemplate section 350 of the Code as a procedure so prescribed, though that section is applicable to the proceedings before a magistrate trying a warrant case. It does not seem to us that the words "the procedure prescribed by the Code. . for the trial of warrant cases by magistrates" meant a procedure which may be followed by magistrates in all cases. Further more section 350 occurs in a chapter of the Code which deals with general provisions relating to inquiries and trials and is not a provision which has been specifically prescribed by the Code for application to the 335 trial of warrant cases by magistrates, as are sections 251 to 259. Again, section 350 of the Code cannot, without doing violence to the language used in it, be applied to the proceedings before a special Judge Clearly it cannot be, applied where its terms make such application impossible. Now the section can be applied only when one magistrate succeeds another. It lays down what the succeeding magistrate can do. Now suppose one special Judge succeeds another. How can he exercise the powers conferred by the section ? The section applies only when the predecessor is a magistrate. The predecessor in the case assumed is however a special Judge. Such a Judge is not a magistrate for the purpose of the Act, nor does the Act require that he is to be deemed to be such. Section 8 (1) of the Act which only requires a special Judge to follow the procedure for the trial of a warrant case, cannot justify the creation of a fiction making the predecessor special Judge, a magistrate. It is of some interest to note here that the amendment to the Act which expressly makes section 350 of the Code applicable to proceedings before a special Judge also provides that for the purposes of so applying the section, "a special Judge shall be deemed to be a magistrate". Clearly, the legislature thought that unless such a fiction was created, the application of the section to the proceedings before a special Judge would create difficulties or anomalies. Therefore also, the Act could not in our view, have intended that section 350 of the Code would be available to a special Judge as a rule, of procedure prescribed for the trial of warrant cases. For all these reasons, we would prefer the opinion expressed by Mehar Singh J. We think that under the Act, as it stood before its amendment as aforesaid, section 350 of the Code was not available when one special Judge succeeded another. 'we hold that section Jagjit Singh had no authority 336 under the law to proceed with the trial of the case from the stage at which section Narinder Singh left it. The conviction by section Jagjit Singh of the appellant cannot be supported as he had not heard the evidence in the case himself The proceedings before him were clearly incompetent. It is then said that this defect was a mere irregularity and the conviction of the appellant can, if sustainable on the evidence, be upheld under EA. 537 of the Code. In regard to this section, it was said by the Privy Council in Pulukuri Kotayyam vs King Emperor (1), "When a trial is conducted in a manner different from that prescribed by the Code (as in N. A. Subramania Iyer 's case, 1901 L.R. 28 I.A. 257), the trial is bad, and no question of curing an irregularity arises but if the trial is conducted substantially in the manner prescribed by the Code, but some irregularity occurs in the course of such conduct, the irregularity can be cured under section 537, and none the less so because the irregularity involves, as must nearly always be the case, a breach of one or more of the very comprehensive, provisions of the Code". It seems to us that the case falls within the first category mentioned by the Privy Council. This is not a case of irregularity but want of competency. Apart from section 350 which, as we have said, is not applicable to the present case, the, Code, does not conceive of such a trial. The trial offends the cardinal principle of law earlier stated, the acceptance of which by the Code is clearly manifest from the fact that the Code embodies an exception to that principle in section 350. Therefore, we think that section .537 of the Code has no application. It cannot be called in aid to make what was incompetent, competent. There has been no proper trial of the case and there should be one. (1) (1947) L.R. 74 I.A. 65, 75. 337 'Then it is said or,. behalf of the appellant that we should not send the case back for a fresh trial but decide it ourselves on the evidence on the record. Coming from the appellant, it is a somewhat surprising contention. According to him, a point which we have accepted, there has realy been no proper trial of the case. It would follow from this that there has to be one. In the absence of such a trial we cannot even look at the evidence on the record. Lastly, we have to say a few words on the amendment of the Act expressly making section 350 of the Code applicable to the proceedings, before a special Judge. The amendment came long after the decision of the case by section Jagjit Singh and had not expressly been made retrospective. It was said on behalf of the respondent, the prosecutor, that the amendment being 'in a procedural provision was necessarily retrospective, and, therefore, no exception can now be taken to the action taken by section Jagjit Singh. Assuming that the rule contained in section 350 of the Code is only a rule of procedure, all that would follow would be that it would be presumed to apply to all actions pending as well as future : Kimbray vs Draper (1). Such a retrospective operation does not assist the respondent 's contention. Nor do we think it an argument against sending the case back for retrial that the special Judge now hearing the case would be entitled to proceed on the evidence recorded by section Narinder Singh in view of the amendment. Whether he would be entitled to do so or not would depend on whether the amended Act would apply to proceedings commenced before the amendment. It has to be noted that the impugned part of the proceedings was concluded before the amendment. On this question, we do not propose to express any opinion. In any event, under section 350 as it now stands a succeeding magistrate (1) 338 liar, power to resummon and examine a witness further. We cannot speculate what the special Judge who tries the case afresh will think fit to do if section 350 of the Code is now applicable to the proceedings before him. For all these considerations, we think it fit to send the case back for retrial. We therefore, allow the appeal and set aside the conviction of the appellant and the sentence passed on him. The case will now go back for retrial According to law. [/INST]The Punjab Government acquired certain parcels of land belonging to two brothers Land N who refused to accept the compensation offered to them and applied to the Government of Punjab under r. 6 of the Punjab Land Acquisition (Defence of India) Rules, 1943, to refer to arbitration their joint claim based on the allegation that the land belonged to them jointly. The State Government referred the matter to an arbitrator as required under r. 10 who passed an award in favour of both L and N ordering inter alia payment of an amount higher than what was offered to them by the Government. The Government appealed against the said award to the High Court. During the pendency of the appeal before the High Court respondent L died and as no application for bringing on record his legal representative had been made within the time limit, the High Court dismissed the appeal holding that the appeal had abated against L and that its effect was that the appeal against N also abated. Held, that there can be no question of abatement of appeal against the correspondents of the deceased respondent as Order 22 Rule 4 of the Code of Civil Procedure does not provide for the same but in certain circumstances the appeal cannot proceed against them and such a result depends on the nature of the relief sought in the appeal. If the Court can deal with the matter in controversy so far as regards the rights and interest of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it; otherwise it will have to refuse to proceed further with the appeal and therefore dismiss it. Ordinarily, the consideration which will weigh with the court in deciding upon the question whether the entire appeal had abated or not will be whether the appeal between the appellants and the respondents other than the deceased respondent can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the court and the tests to determine this have been described thus: (a) when the success of the appeal may lead to the court 's coming to a decision which will be in conflict with the decision between the appellant and the deceased respondent and therefore which would lead to the court 's passing a decree which will be contradictory to the decree which had become 637 final with respect to the same subject matter between the appellant and the deceased respondent; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who are still before the court and (c) when the decree against the surviving respondents, if the appeal succeeds, be ineffective that is to say it could not be successfully executed. The abatement of an appeal against the deceased respondent means not only that the decree between the appellant and the deceased respondent has become final but also as a necessary corollary that the appellate court cannot in any way modify that decree directly or indirectly. When the decree in favour of the respondents is joint and indivisible, the appeal against the respondents other than the deceased respondent cannot be proceeded with if the appeal against the deceased respondent has abated. In the present case the appeal against N alone was not pro perly constituted when the appeal against L had abated and the State appeal against N alone could not proceed. </s>
<s>[INST] Summarize the judgementCivil Appeal No. 891 of 1980. From the Judgement and order dated the 22nd February, 1980 of the Karnataka High Court in Writ Appeal No. 949 of 1 974. K. Parasaran, Soliciter General, Vineet Kumar, Naresh Kumar and Miss Deepika Saxena for the appellant. K.K. Venugopal, K.N. Bhat, M. Kangaswamy, MRV. Achar, section Ravindra Bhatt and Nanjappa Ganapathy for the respondents. The Judgment of the Court was delivered by MADON, J. This Appeal has been filed by the Karnataka State Road Transport Corporation pursuant to a certificate granted by the Karnataka High Court against its Judgment and order in Writ Appeal No. 949 of 1974 on the following two questions of law: "1. Whether the conditions of a permit can be varied so as to increase the number of trips and/or the number of vehicles allowed to be operated under that permit ? 2. Whether the conditions of a permit held by an existing operator on an inter State route exempted under the Kolar Pocket Scheme, can be varied so as to allow an increase in the number of vehicles operating under that permit ? Before embarking on a discussion of the above questions, it will be convenient to relate the facts which have given rise to this Appeal. On February 2, 1966, the First Respondent, B.A. Jayaram, 772 had been granted by the Regional Transport Authority, Bangalore, a stage carriage permit on the inter State route Cuddapah in the State of Andhra Pradesh to Bangalore in the State of Karnataka for one trip only and a stage carriage permit No. 20/65 66 in respect of this route was issued to him on March 16, 1966. This permit was counter signed by the State Transport Authority Andhra Pradesh, on March 21, 1967. By Notification No. S.O. 111 dated January 10, 1968, published in the Mysore Government Gazette dated January 25, 1968, the Government of Mysore (now Karnataka) granted its approval under sub section (2) of section 68 D of the (IV 1939) (hereinafter referred to as "the said Act") to a scheme set out in the Schedule to the said Notification. The said Scheme covered 87 intra State routes in the State of Karnataka set out in the Appendix to the said Scheme. The effect of the said Scheme was to nationalize passenger transport service between Bangalore and various places in the Kolar District as also certain routes within the Kolar District. For this reason, the said Scheme was popularly known as the Kolar Pocket Scheme '. The class of service covered by the said Scheme was "Stage Carriages, Mofussil". Clause 4 of the said Scheme inter alia provided as follows: "Whether the services are to be operated by the State Transport Undertaking to the exclusion, complete or partial, of other persons or otherwise: The State Transport Undertaking will operate services on all the routes, to the complete exclusion of other persons except that: (a) that existing permit holders on the inter State routes, may continue to operate such inter State routes subject to the conditions that their permit shall be rendered ineffective for the overlapping portions of the notified routes. " The said Scheme was implemented with effect from January 1, 1969, by issuing a stage carriage permit to the Appellant under sub section (1) of section 68 F of the said Act. The route between Bangalore and Royalpad in the State of Karnataka formed part of the route between Bangalore and Cuddapah and was covered by the said Scheme. Accordingly, the First Respondent 's permit for the said portion of the Bangalore Cuddapah 773 route became ineffective with the result that the vehicles operated by the First Respondent could not either pick up or set down passengers on the Bangalore Royalpad portion of the Bangalore Cuddapah route though they could traverse the said portion. On January 24, 1973, the First Respondent made an application to the Karnataka state Road Transport Authority, the Second Respondent before us, for varying the conditions of the stage carriage permit granted to him by increasing the number of trips on the Bangalore Cuddapah route from one trip per day to two trips per day This was apparently done to eliminate an overnight halt at either of the two termini. The said application was rejected by the Second Respondent on April 22, 1974, as not being maintainable in view of the said Scheme, without publishing it for inviting objections thereto. The First Respondent thereupon filed a writ petition in the Karnataka High Court, being Writ Petition No. 3360 of 1974, against the said order of the Second Respondent. On September 25, 1974, the said writ petition was allowed and the court issued a writ of mandamus to the Second Respondent to dispose of the First Respondent 's said application in accordance with law, holding that the said Scheme did not operate as a bar to increasing the number of trips of an existing inter State route. In pursuance of the said order of the High Court, the Second Respondent published the First Respondent 's said application inviting representations in connection therewith. In the meanwhile the Appellant filed on November 27, 1974, a writ petition in the Karnataka High Court, being Writ Petition No. 6399 of 1974, to recall the order made in the said Writ Petition No. 3360 of 1974 and to rehear the said writ petition after impleading the Appellant as a respondent thereto. A learned Single Judge of the said High Court dismissed the Appellant 's said writ petition on December 2, 1974, holding that the Appellant was not a necessary party to the said Writ Petition No. 3360 of 1974. On December 23/24, 1974, the Second Respondent granted to the First Respondent the additional trip applied for by him. Against the order of the learned Single Judge dismissing its writ petition, the Appellant filed alia intra Court appeal under section 4 of the Karnataka High Court Act. 1961 (Mysore Act V of 1962), being Writ Appeal No. 949 of 1979 The Division Bench, which heard the said appeal, referred the following question to a larger Bench for its opinion: "If the condition of a permit for operating a stage carriage over a route is altered by increasing the maximum number of trips over that route, specified earlier ill that 774 permit, does such variation of the condition of the permit amount to grant of a new permit ?" By its Judgment delivered on September 19, 1979, the Full Bench answered the said question as follows: "If the condition of a permit for operating a stage carriage over a route is altered by increasing the maximum number of trips over that route specified earlier in the permit such variation of the condition of the permit does not amount to grant of a new permit. " We will now relate the circumstances in which the Third Respondent, section Joginder Singh, the sole proprietor of Janatha Travels, Bangalore, and the Fourth Respondent, D.P. Sharma, sole proprietor of Sharma Transport, Bangalore, made their entry on the stage of this litigation. The Third Respondent had been granted three stage carriage permits on three different inter state routes, namely, Bangalore to Cuddapah, Bangalore to Kalahasti and Bangalore to Vellore. After coming into force of the said Scheme, the third Respondent made applications on June 11, 1979, to the second Respondent for varying the conditions of the said three permits by increasing the number of vehicles by an additional vehicle on each route and by increasing the number of trips from two to four on each route, that is, for two round trips These applications were granted be the second Respondent. The Fourth Respondent did not file any objections to the said applications for variation made by the Third Respondent, nor does it appear that the had filed any objection to the said application for variation made by the First Respondent. The Fourth Respondent, however., filed three writ petitions, being Writ Petitions Nos. 16247 to 16249 of 1979, in the Karnataka High Court against the orders of the Second Respondent granting variation of the Third Respondent 's said permits. The said writ petitions were dismissed by a learned Single Judge of the Karnataka High Court and against these orders of dismissal the Fourth Respondent preferred three writ appeals, being Writ Appeals Nos. 1285 to 1287 of 1979. He also made an application to implead himself as a respondent in the said Appeal No. 949 of 1974 out of which the present appeal before us arises. The Fourth Respondent 's said application was granted and he was impleaded as Fourth Respondent to the said Writ Appeal No. 949 of 1974. The Third Respondent before us was the Third Respondent in the said Writ Appeal No. 949 of 1974. 775 By Notification HD 45 TMI 76 dated January 10, 1980, the said Scheme was modified by substituting clause (d) thereof. The substituted clause (d) inter alia provided as follows: "The State Transport undertaking will operate the services on all routes to the complete exclusion of other persons except the following : x x x x x (c) The operation of services by the permit holders who have already been granted permits by the Transport Authorities on the date of publication of the modified c scheme on inter State routes which are included in the inter State agreement entered into by the Government of any other State provided that the operator on such route shall not be entitled to pick up and set down passengers in such portion of the Notified routes. " By its Judgment and order dated February 22, 1980, a Division Bench of the Karnataka High Court dismissed the said writ appeals filed by the Fourth Respondent . The Division Bench held that in view of the opinion given by the Full Bench in the said Writ Appeal No. 949 of 1974 it was permissible under sub section (8) of section 57 of the said Act to vary the conditions of a stage carriage permit in respect of a route so as to increase the number of trips on that route allowed under such permit; that increase in the number of trips on a route can be effected either by increasing the frequency of operation of the existing number of vehicles playing on that route without increasing the existing number of vehicles operating on that route or by increasing the number of vehicles operating on that route; and that the Fourth Respondent was not an existing inter State Permit holder nor had filed any objection before the Second Respondent to the applications for variation made by the Third Respondent and had, therefore, no locus to file the said writ petitions. By its Judgment and order, made on the same day, the said Division Bench dismissed the Appellant 's said Writ Appeal No. 949 of 1974 with no order as to costs and granted to the Appellant a certificate of fitness to appeal to this Court on the two questions which we have set out earlier; in pursuance of which the present Appeal has been filed. The Fourth Respondent has also filed in this Court a petition for special leave to appeal, being Special Leave Petition No. 4771 of 1980, against the said Judgment and order in the said Writ Appeal No. 949 of 1974. He has also 776 filed three other petitions for special leave to appeal to this Court, being Special Leave Petitions Nos. 5141 to 5143 of 1980 against the common Judgment and order of the said High Court in the said Writ Appeals Nos. 1285 to 1287 of 1979. These petitions have been ordered to be listed after the disposal of this Appeal and will accordingly be disposed of by separate orders. We now turn to the rival contentions raised before us at the hearing of this Appeal. On behalf of the Appellant, it was submitted that under sub section (8) of section 57 an application to vary the conditions of a permit in respect of a matter specified in that sub section "shall be treated as an application for the grant of a new permit. " Subsection (8), therefore, creates a legal fiction and a legal fiction must be taken to its logical conclusion. An application to vary the conditions of a permit in respect of a matter specified in sub section (8) when granted would, therefore, result in the grant of a new permit. One of the matters specified in subsection (8) is a variation of the conditions of a stage carriage permit by increasing the number of trips above the specified maximum. If such variation were permitted by the result of the operation of the statutory fiction enacted in sub section (8) of Section 57 the permit so varied would in law be a new permit. Under section 618 FF of the said Act no permit can be granted except in accordance with the provisions of a scheme. The said Scheme prohibits of a new permit and, therefore, to vary the conditions of a stage carriage permit by increasing the number of trips or the number of vehicles would be tantamount to granting a new permit which would be contrary to the said Scheme and thus not permissible under section 68 FF. According to the Appellant, the Judgment of the learned Single Judge in the said Writ Petition No. 3360 of 1974 filed by the : First Respondent allowing the said Writ Petition No. 3360 of 1974 and setting aside the order of the Second Respondent rejecting as not maintainable the First Respondent 's said application for varying the conditions of his inter State carriage permit by increasing the Dumber of trips by one and directing the Second Respondent by a writ of mandamus to dispose of the said application in accordance with law was erroneous as also the decision of the Full Bench in the said Civil Appeal No. 949 of 1974, holding that such variation did not amount to grant of a new permit. It was further submitted that increasing the number of vehicles on a route resulted in an increase in the number of trips and an application for varying the conditions of a permit by increasing the number of vehicles allowed to ply on the route in respect of which such permit was given was, therefore, 777 equally an application for the grant of a new permit and such an application could not, therefore, be granted in respect of a portion of a route covered by the said Scheme. On the other hand, it was submitted on behalf of The contesting Respondents that sub section (8) of section 57 did not create a legal fiction and all that it did was to provide that the procedure . for considering an application for varying the conditions of a permit in respect of the matters specified in that sub section was to be the same as the procedure for considering an application for granting a new permit. In the alternative, it was submitted that if sub section (8) of section 57 created a legal fiction, it was only for the purpose of the procedure to be followed in processing an application for a variation in the conditions of a permit in respect of a matter specified in that sub section and cannot be extended beyond that purpose so as to create another legal action, namely, that permit the conditions of which were so allowed to be varied would be deemed to be a new permit. It was further submitted that the said Scheme, both prior to and after its modification, permitted the existing permit holders on inter State routes to continue to operate on such routes subject to the condition that their permits be rendered ineffective for the overlapping portions of the notified routes only, with the result that they could not pick up and set down passengers on such portions only. It was also submitted that increasing the number of trips or vehicles on such inter . State routes was not in any manner inconsistent with the provisions of the said Scheme, whether prior to or after its notification. On the above rival contentions, two main questions arise for our consideration, namely, (1) Whether sub section (8) of section 57 creates a legal fiction by reason of which the grant of an application for variation in the conditions of a permit in respect of a matter set out in that sub section results in the grant of a new permit ? (2) Whether an increase in the number of trips or the number of vehicles above the maximum specified in an existing inter State stage carriage permit would be inconsistent with the provisions of the said Scheme ? In order to determine these questions, it is necessary to refer to the relevant provisions of the said Act. Chapter IV of the said 778 Act, which consists of sections 42 to 68, provides for control of transport vehicles. A "transport vehicle," is defined by clause (33) of section 2 as meaning "a public service vehicle or a goods vehicle". A "public service vehicle" is defined by clause (25) of section 2 as meaning "any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a motor cab, contract carriage, and stage carriage;". The expression "stage carriage" is defined by clause (29) or section 2 as follows: "(29) "stage carriage" means a motor vehicle carrying or adapted to carry more than six persons excluding the driver which carries passengers for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey." As the said Scheme and its modification relate only to stage carriages, we are not concerned in this Appeal with contract carriages or goods vehicles and it is unnecessary to look at the definitions of those expressions or the provisions of the said Chapter IV l elating to these types of vehicles. Under section 42 no owner of a transport vehicle can use or permit the use of the vehicle in any public place (whether or not such vehicle is actually carrying any passenger or goods) save in accordance with the conditions of a permit granted or counter signed by a Regional or State Transport Authority or the Commission, that is, the Inter State Transport Commission constituted under section 63 A, authorizing the use of the vehicle in that place in the manner in which the vehicle is being used. Section 43 confers power upon the State Government to control road transport by issuing directions to the State Transport Authority in the form of notifications in the official Gazette. Section 44 empowers the State Government by notification in the official Gazette to constitute for the State a State Transport Authority to exercise and discharge the powers and functions specified in subsection (3) of section 44 and in like manner to constitute Regional Transport Authorities to exercise and discharge throughout specified areas the powers and functions conferred on Regional Transport Authorities by the said Chapter IV. The said Chapter IV provides for grant of different permits, namely, state carriage permits, contract carriage permits, private carrier 's permits, public carrier 's permit and temporary Permits, as also for applications to 779 be made in respect of these classes of permits, the procedure to be A followed in dealing with such applications, for cancellation and suspension of permits and other cognate matters. Section 45 sets out the general provisions with respect to applications for permits irrespective of the type of permits applied for and it prescribes the authority to whom an application for a permit is to be made. Under sub section (3) of section 45 every applicant for the grant of a new stage carriage permit or public carrier 's permit is required to deposit, by way of security, with his application an amount in such manner and at such rate not exceeding Rs. 200 per motor vehicle, as the State Government may, with reference to each class of vehicle, by notification in the official Gazette, specify. Under sub section (4) of section 45 the security so furnished is liable to be forfeited in whole or in part by the transport authority if it is satisfied that the application was made for the purpose of preventing the issue of a temporary permit under section 62. The whole or part of this security deposit as has not been forfeited is to be refunded to the applicant, as soon as may be, after the disposal of his application. Other sections in the said Chapter IV male special provisions with respect to applications for different types of permits. Section 46 deals with an application for a stage carriage permit. Such an application is to contain the particulars specified in clauses (a) to (f) of the said section 46. The particulars required to be specified by clauses(a) to (c) of the said section 46 are material for our purpose and it will be, therefore, convenient to reproduce these clauses these clauses provide as follows: "(a) the route or routes or the area or areas to which the application relates; (b) the number of vehicles it is proposed to operate in relation to each route or area and the type and seating capacity of each such vehicle; (c) the minimum and maximum number of daily trips proposed to be provided in relation to each route or area and the time table of the normal trips. Explanation For the purposes of this section 57, "trip" means a single journey from one point to another, and every return journey shall be deemed to be a separate trip. " 780 Section 47 prescribes the matters which a Regional Transport Authority is to have regard to in considering an application for a stage carriage permit. It also requires the Regional Transport Authority to take into consideration any representations made by persons already providing passenger transport facilities by any means along or near the route or area or by any association representing persons interested in the provision of road transport facilities recognized in this behalf by the State Government or by any local authority of police authority within whose jurisdiction any part of the proposed route or area lies. The said section also provides for reservation of certain percentage of stage carriage permits for the Scheduled Castes, and the Scheduled Tribes and persons belonging to economically weaker sections of the community. Under section 48, subject to the provisions of section 47, a Regional Transport Authority may, on an application made to it under section 46 grant a stage carriage permit in accordance with the application or with such modifications as it deemed fit or refuse to grant such a permit. Sub section (3) of section 48 provides for conditions which may be attached to a stage carriage permit. Amongst the conditions which can be attached are conditions that the vehicle or vehicles be used only in a specified area or on a specified route or routes, the minimum and maximum number of daily trips to be provided in relation to any route or area generally or on specified days and occasions and a condition that within municipal limits and such other areas and places as may be prescribed, passengers or goods shall not be taken up or set down except at specified points. Sections 49 to 51 deal with contract carriage permits, sections 52 and 53 with private carrier 's permits and sections 54 to 56 with public carrier 's permits. Section 57 is important since the answer to the first question which we have to determine in this Appeal depends upon the true interpretation of sub section (8) thereof and in order to understand the scope and effect of that sub section, it is necessary to reproduce section 57. The said section 57 provides as follows: "27. Procedure in applying for and granting permits (1) An application for a contract carriage permit or a private carrier 's permit may be made at any time. (2) An application for a stage carriage permit or a public carrier 's permit shall be made not less than six weeks before the date on which it is desired that the permit shall take effect, or if the Regional Transport Autho 781 rity appoints dates for the receipt of such applications, on such dates. (3) on receipt of an application for a stage carriage permit or a public carrier 's permit, the Regional Transport Authority shall make the application available for inspection at the office of the Authority and shall publish the application or the substance thereof in the prescribed manner together with a notice of the date before which representations connection therewith may be submitted and the date, not being less than thirty days from such publication, on which, and the time and place at which, the application and any representations received will be considered: Provided that, if the grant of any permit in accordance with the application or with modifications would have the effect of increasing the manner of vehicles operating in the region, or any area or on any route within the region, under the class of permits to which the application relates, beyond the limit fixed in that behalf under sub section (3) of section 47 or sub section (2) of section 55, as the case may be, the regional Transport Authority may summarily refuse the application without following the procedure laid down in this sub section. (4) No representation in connection with an application referred to in sub section (3) shall be considered by the Regional Transport Authority unless it is made in writing before the appointed date and unless a copy thereof is furnished simultaneously to the applicant by the person making such representation. (5) When any representation such as is referred to in sub section (3) is made, the Regional Transport Authority shall dispose of the application at a public hearing at which the applicant and the person making the representation shall have an opportunity of being heard either in person or by a duly authorised representative. (6) When any representation has been made by the persons or authorities referred to in section SO to the effect that the number of contract carriages for which permits have already been granted in any region or any area 782 within a region is sufficient for or in excess of the needs of the region or of such area, whether such representation is made in connection with a particular application for the grant of a contract carriage permit or otherwise, the Regional Transport Authority may take any such steps as it considers appropriate for the hearing of the representation in the presence of any persons likely to be affected thereby. (7) When a Regional Transport Authority refuses an application for a permit of any kind, it shall give to the applicant in writing its reasons for the refusal. (8) An application to vary the conditions of any permit, other than a temporary permit, by the inclusion of a new route or routes or a new area or, in the case of a stage carriage permits by increasing the number of trips above the specified maximum or by altering the route covered by it or in the case of a contract carriage permit or a public carrier 's permits by increasing the number of vehicle covered by the permit, shall be treated as an application for the grant of a new permit. Provided that it shall not be necessary to treat an application made by the holder of a stage carriage permit who provides the only service on an route or in any area to increase the frequency of the service so provided, with out any increase in the number of vehicles. (9) A Regional Transport Authority may, before such date as may be specified by it in this behalf, replace any stage carriage permit or public carrier 's permit or public carrier 's permit granted by it before the said date by a fresh permit conforming to the provisions of Section 48 or section 51 or section 56, as the case may be, and the fresh permit shall be valid for the same route or routes or the same area for which the replaced permit was valid; Provided that no condition other than the condition which was already attached to the replaced permit or which could have been attached thereto under the law in force when that permit was granted shall be attached to the fresh permit except with the consent in writing of the holder of the permit. 783 (10) Notwithstanding anything contained in section 58, a permit issued under the provisions of sub section (9) shall be effective without renewal for the remainder of the period during which the replaced permit would have been so effective. " We will must conclude our survey of the relevant provision of the said Act before proceeding to ascertain the correct interpretation to be placed upon sub section (8) of section 57. Section 588 provides that a stage carriage permit or a contract carriage permit, other than a temporary permit issued under section 62, shall be effective without renewal For such period. not less than three years and not more than five years, as the Regional Transport Authority may specify in the permit. A private carrier 's permit or a public carrier 's permit other than 3 temporary permit is to be effective without renewal for a period of five years. Under sub section (2) of section 58 an applications for renewal of a permit is to be made and disposed of as if it were an application for a permit. Subsection (2) also prescribes the time limit within which applications for renewal are to be made and it further provides that other conditions being equal, an application for renewal shall be granted preference over new applications for permits. Section 59 prescribes the general conditions to be attached to all permits. Section 60 deals with cancellation and suspension of permits. It is unnecessary to refer to the other provisions of the said Chapter IV. Chapter IV A of the said Act provides for nationalization of road transport service. Under section 68 B the provisions of Chapter IV A and the rules and orders made thereunder are to have effect notwithstanding anything inconsistent therewith contained in Chapter IV of the said Act or any other law for the time being in force or in any instrument having effect by virtue of any such law. Section 68 C deals with the preparation of a scheme by a State Transport Undertaking for the purpose of providing an efficient, adequate, economical and property coordinated road transport service. Such a scheme is to be published in the official Gazette and also in such other manner as the State Government may direct. Section 68 D provides for filing of objections to a proposed scheme. Under Sub section (2) of section 68 D, after considering the objections which may have been made to a proposed scheme and after giving an opportunity to the objector or his representatives and the representatives of the State Transport Undertaking to be heard in 784 the matter, the State Government may approve or modify the scheme. The scheme as approved or modified is to be published in the official Gazette and it is there upon to become final and is to be called the approved scheme and the area or route to which it relates is to be called the notified area or notified route. Section 68 F provides for cancelation or modification of approved schemes. Section 68 F provides for issue of a stage carriage permit or a public carrier 's permit or a contract carriage permit in respect of a notified area or notified routes to the State Transport Undertaking. Section 68 FF provides as follows: "68 FF Restriction on grant of permits in respect of a notified area or notified route. Where a scheme has been published under sub section (3) of section 68 D in respect of any notified are or notified route, the State Transport Authority or the Regional Transport Authority, as the case may be, shall not grant any permit except in accordance with the Provisions of the scheme " There is a proviso to the said section 68 FF with which we are not concerned. We now turn to a consideration of the scope and effect of sub section (8) of section 57. That sub section does not apply to applications to vary any of the conditions of a permit but applies only to applications to vary certain conditions of a permit. These applications are: (1) an application to vary the conditions of any permit, other than a temporary permit, by the inclusion of a new route or routes or a new area; (2) an application to vary the conditions of a stage carriage permit by increasing the number of trips above tho specified maximum; (3) an application to vary the conditions of a stage carriage permit by altering the route covered by it; (4) an application to vary the conditions of a contract carriage permit by increasing the number of vehicles covered by the permit: and (5) an application to vary the conditions of a public carrier 's 785 permit by increasing the number of vehicles covered by the permit. In all these five cases, sub section (8) provides that the application "shall be treated as an application for the grant of a new permit". As seen above, under section 68 F when a scheme has been approved and published under sub section (3) of section 68 D in respect of any notified area or notified route, the State Transport Authority or the Regional Transport Authority, as the ease may be, is prohibited from granting any permit except in accordance with the provisions of that scheme. The said Scheme confers a right upon the Appellant to op rate the services on all routes mentioned in the appendix to the said Scheme to the complete exclusion of all other persons except existing permit holders on inter State routes with the condition that the permits of such existing permit holders were to be rendered ineffective for the overlapping portions of the notified routes and they would not be entitled to pick up or set down passengers on such portions of the notified routes. If the effect of sub section (8) of section 57 were as contended for by the Appellant, that is, if the said sub section (8) were to create a legal fiction by which an application for variation of the conditions of a permit of the nature referred to in that subsection is to be deemed to be an application for the grant of a new permit and such variation when granted would result in the grant of a new permit, then clearly by reason of the prohibition contained in section 68 FF, the granting of such application would be inconsistent with the provisions of the said Scheme and would not be permissible in law. Considerable emphasis were placed on behalf of the Appellant on the words ' shall be treated as an application for the grant of a permit occurring in the said sub section (8) and on the basis of this phraseology, it was submitted that an application for variation of a condition of a permit referred to in subsection (8) of section 57 was by a fiction of law put on the same footing as an application for the grant of a new permit and it, therefore, followed as a corollary that such an application if granted would result in the grant of a new permit. In a passage which has become a classic Lord Asquith in the House of Lords in the case of East End Dwellings Co. Ltd. v Finsbury Borough Gouncil said: 786 "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequence and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs " This passage has been referred to or quoted with approval in a number of decision of this Court. One of the earliest of them as the State of Bombay vs Pandurang Vinayak Chaphalkar and others. It is unnecessary to refer to other cases of this Court in which this passage was cited and approved. The question, however, is whether sub section (8) of section 57 creates a legal fiction. Admittedly, the language of that sub section is not one which is normally used by legislature in creating a legal fiction. Sub section (8) does not state that an application of the nature referred to in that subsection is to be deemed to be an application for the grant of a new permit which would have been the case were the intention of Parliament to create a legal fiction. The arguments on behalf of the Appellant are founded upon a basis which has no relation to the purpose underlying sub section (8). Section 57 is a procedural section, Its various sub sections form an integra whole providing for the manner in which an application for variation of certain conditions of a permit is to be made, the mode of inviting objections thereto an the disposal of such applications and objections. Subsection (1) provides when an application for a contract carriage permit or a private carrier 's permit can be made. Sub section (2) provides when an application for a stage carriage permit or a public carriages permit should be made. Thus, these two subsections deal with the time when applications for grant of certain classes of permits can be made. Sub sections (3) to (7) prescribe the procedure to be followed by the Regional Transport Authority when it receives an application for a stage carriage permit or a public carrier 's permit. Sub section (9) deals with applications to vary certain conditions of particular permits. Sub section (9) confers power upon the Regional Transport Authority to replace a stage 787 carriage permit, contract carriage permit or public carrier 's permit granted by it by a fresh permit and sub section (10) provides that such fresh permit shall be effective without renewal for the remainder of the period during which the replaced permit would have been so effective. Sub section (8) comes immediately after sub sections (3) to (7) and when read in the context of these sub sections and in juxtaposition with them, it is clear that the legislative intent in enacting that subsection was to prescribe the procedure to be followed when an application for variation of this conditions of a permit referred to in that sub section is made, this procedure being the same as is laid down in sub sections (3) to (7) with respect to an application for a new stage carriage permit or a new public carrier 's permit. It is for the purpose of providing that the procedure to be followed in the case of an application made under sub section (8) is to be the same as the procedure to be followed in the case of an application for a new permit that sub section (8) uses the words "shall be treated as an application for the grant of a new permit. " By the use of these words what sub section (8) does is to incorporate in it the provisions of sub sections(3) to (7). This is a very different thing from enacting a legal fiction. We find that in a recent case, namely, Civil Appeal No. 3787 of 1983 Myls Shivchand Amolakchand vs Regional Transport Authority and another subsection (8) of section 57 has been interpreted in the same way as we have done. In that case too there was a modification made in an approved scheme whereby plying of stage carriages by private operators upon a portion of the notified route connecting a district headquarter and not more than 20 kms. in length was permitted. On the said modification being made, the applicants whose permits for a portion of the notified route, namely, from Shivpuri to Sautanwana, had become ineffective on the coming into force of the approved scheme applied to the Regional Transport Authority for the extension of the route specified in their permits, so as to include the route from Shivpuri to Santawana. The Regional Transport Authority rejected the said application inter alia on the ground that no extension of the route could be granted without following the procedure laid down in sub section (3) of section 47 of the said Act. In the writ petition filed by the appellants before the High Court of Madhya Pradesh, the High Court took the same view. This Court allowed the appeal and set aside the Judgment and order of the 788 High Court. In that case too, this Court had to consider the effect of sub section (8) of section 57. The Court observed: "The context in which sub section (8) occurs and its juxtaposition with sub section (3) to (7) in section 58 clearly indicate that what is sought to be made applicable to an application referred to in sub section (8) by treating it as an application for grant of a new permit, is the procedure set out in sub sections (3) to (7) of section 58 and nothing more. An application to vary the conditions of a permit as set out in sub section (8) of section 57 is undoubtedly to be treated as an application for grant of a new permit, but that is only for the purpose of applying the procedure set out in sub sections (3) to (7) of the said section. It is not an application for a new permit and if it is granted, the permit for the extended route does not become a new permit in the hands of the applicant. It is the same permit which now, after the granting of the application, covers the extended route. " Even if sub section (8) of section 57 can be viewed as creating a legal fiction the question which would arise would be for what purpose such legal fiction was created. As was observed by lord James in Ex Porte Walton, In re Levy; "When a statute enacts that something shall be deemed to have been done, which in fact and in truth was not done, the Court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to. " This passage was quoted with approval by the House of Lords in Arthur Hill vs East and West India Dock Company. This principle of statutory interpretation has been accepted by this Court. In The Bengal Immunity Co. Ltd. vs The State of Bihar and Ors it was held that "a legal fiction is to be limited to the purpose for which it was created and should not be extended beyond that legitimate field. " This was reiterated in The Commissioner of Income 789 tax, Bombay City, Bombay vs Amarchand N. Shroff, Maharani Mandalsa Devi vs M. Ramnarain P. Ltd. and others and Commissioner of Income tax, Gujarat vs Vadilal Lallubhai. Assuming, therefore, that an application for variation of the conditions of a permit referred to in sub section (8) of section 57 is to be deemed by a fiction of law to be an application for the grant of a new permit the question to which we must address ourselves is for what purpose is such an application for variation deemed to be an application for grant of a new permit. Reading sub sections (3) to (8) of section 57 as a whole, it is clear that the only purpose is to apply to such an application for variation the procedure prescribed by sub sections (3) to (7) of section 57 and not for the purpose of providing that when the application for variation is granted, the permit so varied would be deemed to be a new permit. If a permit so varied were to be deemed to be a new permit, the result would be anomalous. As we have seen, under sub section (3) of section 45 every application for the grant of a new stage carriage permit or a public carrier 's permit is to be accompanied by a deposit by way of security of an amount not exceeding Rs. 200 per motor vehicle as the State Government may, with reference to each class of vehicle, by notification in the official Gazette, specify. The object of providing for such a deposit is made clear by sub section (4) of section 45. The object is that if the transport authority is satisfied that such application was made for the purpose of preventing the issue of a temporary permit under section 62, then it can forfeit the whole or part of the security deposit. consideration does not and cannot be applied to an application for variation of the conditions of a permit referred to in sub section (8) of section 57. Further, under subsection (1) of section 58 a stage carriage permit or a contract carriage permit, other then a temporary permit, is to be effective without renewal for such period, not less than three years and not more than five years, as the Regional Transport Authority may specify in the permit. Under sub section (2) of section 58, an application for renewal of a stage carriage permit or a public carrier 's permit is to be made not less than 120 days before the date of its expiry and an application for renewal of a permit in any other case is to be made not less than 60 days before the date of its expiry. Under sub section (3) a permit may be renewed on an application made and 790 disposed of as if it were an application for a permit. If a permit in respect of which a condition referred to in sub section (8) of section 57 is allowed to be varied is to be deemed to be a new permit, it would automatically follow that such a permit would get extended for a further period even though no application for its renewal was made and that in granting such variation, the Regional Transport Authority would have to specify for what period, not less than three years, the permit so varied would be effective. Such a result could not have been in the contemplation of Parliament and has not been provided for. Even though when the condition of a permit is allowed to be varied on an application made under sub section (8) of section 57, the permit so varied is not a new permit, the question still remains whether in the case of an existing inter State permit exempted under the said Scheme an increase in the number of trips or the number of vehicles allowed to be operated under such a permit would not be inconsistent with the provisions of the said Scheme. We fail to see any inconsistency between an increase in the number of vehicles or trips allowed under such a permit and the provisions of the said Scheme. So far as the portions of the inter State route covered by the said Scheme are concerned, the permits of the existing permit holders have been rendered ineffective. Further, by the said Scheme as modified, the existing permit holders are not allowed to pick up or set down passengers on these portions of the notified routes. Whether one vehicle or more traverse these portions or whether the same vehicle traverses such portion more than once cannot any manner affect the services operated by the Appellant on such portions since no passengers are allowed to be picked up or set down or such portions. All that would happen is that these vehicles, in the course of their inter State operation would traverse these portions of the notified routes without in any way operating as stage carriages for such portions. It is, therefore, clear that the Second respondent was in error in rejecting the First Respondent 's said application for variation without following the procedure laid down in sub sections (3) to (7) of section 57 merely on the ground that granting such application would be to grant a new permit and would be inconsistent with the provisions of the said Scheme. The learned Single Judge was, therefore, clearly right in allowing Writ Petition No. 3360 of 1964 filed by the First Respondent and in issuing a writ of mandamus against the Second Respondent directing him to dispose of the First Res 791 pondent 's said application according to law. We are further of the opinion that the High Court was right in dismissing the said Writ Appeal No. 949 of 1974 filed by the Appellant. We would like to observe that it is difficult to understand how a certificate was granted by the High Court with respect to the first question contained in it. The question as framed does not bring out the actual controversy between the parties. The controversy was not whether the conditions of a permit can be varied so as to increase the number of trips or the number of vehicles allowed to be operated under that permit as mentioned by the High Court in the certificate granted by it. The real controversy was whether when the condition of a permit is varied so as to increase the number of trips or the number of vehicles allowed to be operated under that permit it would amount to the grant of a new permit, the grant of which would not be in accordance with the provisions of the said Scheme by reason of the provisions of section 68 FF. For the reasons set out above, this Appeal fails and is dismissed. The Appellant will pay to Respondent Nos. 1 to 3 the costs of this Appeal. Respondent No. 4 will bear and pay his own costs of this Appeal. S.R. Appeal dismissed. [/INST]Paragraph 516 B of the Punjab Jail Manual provided inter alia that after a person sentenced to life imprisonment had undergone detention for the period specified in that paragraph together with remission earned, his case should be submitted to the State Government for consideration of his pre mature release. In 1971 the State Government issued instructions laying down certain minimum period of actual detention to be undergone by a person sentenced to life imprisonment before his case for pre mature release could be considered by the State Government. In 1976 the State Government issued further instructions that cases of life convicts whose death sentence had been commuted to life imprisonment should be considered for premature release only after completion of 14 years of actual imprisonment. The petitioners, who claimed to have satisfied the requirements of para 516 B and thus become entitled to be considered for pre mature release under that paragraph, alleged that following the 1971 and 1976 instructions the jail authorities were not submitting their cases to the State Government for consideration of their pre mature release. The petitioners contended that para 516 B was a statutory rule and the subsequent executive instructions issued in 1971 and 1976 could not amend or alter the statutory rule thereby adversely affecting their rights under Para 516 B. Dismissing the five petitions and allowing two petitions, ^ HELD: A sentence of imprisonment for life is a sentence for the remainder of the natural life of the convict and there is no question releasing such a convict earlier in the absence of a formal order of commutation passed by the State Government either under sec. 55, IPC. or sec. 433 (b) of Cr. P.C. 1973 and that even the Remission Rules, though statutory, cannot over ride the statutory provisions contained in the Penal Code. Admittedly, in the case of none of the petitioners before the Court has any order of commutation been passed by the State Government under either of the said provisions. [746E F] 742 Pandit Kishori Lal AIR 1945 PC. 64; Gopal Godse ; ; Maru Ram; , and Kartor singh ; ; referred to. Para 516.B of the manual itself contained executive instructions and had no force of a statutory rule. If that be so it would always be open to the State Government from time to time to alter or amend or even withdraw such executive instructions by issuing fresh instructions. But once fresh instructions for processing the cases for lifers for pre mature release are issued these must be uniformly and invariably applied to all cases of lifers so as to avoid the charge of discrimination under article 14 of the Constitution. [748E F] In Naranjan Singh 's case (which decision is subject matter of challenge in criminal appeal arising from leave being granted in SLP (Crl.) No. 499 of 1983) the fact that the State Government had issued the 1971 instruction which substituted Para 516 B of the manual was not properly placed before the High Court and in the absence of such proper material the High Court took the view that the convict 's case for pre mature release was required to be considered in the light of the provisions of Para 516 B. The view of the High Court cannot obviously be accepted. [748G H] The contention of the petitioners that the State had been erroneously making a distinction between cases of prisoners who had been sentenced to death but whose sentences, on mercy petitions, had been commuted to life imprisonment and prisoners who had been straightaway sentenced to life imprisonment in the matter of consideration of their cases for pre mature release, must fail in view of the admitted position that cases of prisoners who have been sentenced to death but whose sentence on mercy petitions has been commuted to life imprisonment (who constitute a distinct class) will now be governed by the 1976 Instructions. The view of the High Court in the case of Mehar Singh vs State of Punjab (not reported) that the 1976 instructions will not be applicable to cases of prisoners convicted earlier to that date is not tenable. Clearly existing cases of life convict 's falling within that category will be governed by those instructions. [749A C] </s>
<s>[INST] Summarize the judgementON: Civil Appeal No. 2876 of 1986. From the Judgment and Order dated 14.5.1986 of the Delhi High Court in Civil Writ No. 1422 of 1985. Soli J. Sorabji, Attorney General, Ashok Desai, Solici tor General, Vinod Bobade, M.C. Bhandare, M.K. Ramamurthy, R.K. Garg, Mrs. Shyamala Pappu, P.P. Rao, Mrs. J. Wad, Mrs. Aruna Mathur, Ms. A. Subhashini. P. Parmeshwaran, D.K. Garg, A.K. Sil, G. Joshi, S.K. Gupta, B.R. Sabharwal, Mrs. Seita Vidyalingam, S.K. Bisaria (NP), Salman Kurshid, Irshad Ahmad, V.D. Phadke, A. Sharan, Lalit Bhasin, Ms. Nina Gupta, Vineet Kumar, R.C. Bhatia, P.C. Kapur (NP), B.S. Charya (NP), Vijay K. Verma, C.M. Nayar, H.S. Munjral and A.V.S.L. Somayajulu (NP) for the appearing parties. Satnam Singh appellant in person in C.A. No. 1115 of 1976. The Judgments of the Court were delivered by SABYASACHI MUKHARJI, CJ. These civil appeals, special leave petitions and civil miscellaneous petitions deal with the question of constitutional validity of the right of the employer to terminate the 175 services of permanent employees without holding any inquiry in certain circumstances by reasonable notice or pay in lieu of notice. The facts involved in these matters are diverse but the central question involved in all these is one, i.e. whether the clauses permitting the employers or the authori ties concerned to terminate the employment of the employees by giving reasonable notice or pay in lieu of notice but without holding any inquiry, are constitutionally valid and, if not, what would be the consequences of termination by virtue of such clauses or powers, and further whether such powers and clauses could be so read with such conditions which would make such powers constitutionally and legally valid? In order to appreciate the question the factual matrix of these cases so far as these are relevant for the ' determination of the aforesaid questions, will have to be borne in mind in the light of the actual legal provisions involved in the respective cases. It will, therefore, be proper and appropriate to deal with the relevant facts in civil appeal No. 2876 of 1986 first. The appellant herein the Delhi Transport Corpora tion, is a statutory body formed and established under Section 3 of the Delhi Road Transport Act, 1950 read with Delhi Road Transport (Amendment) Act, 1971 (hereinafter called 'the Act '). The appellant carries out the objects of vital public utility, according to the appellant, i.e. transport of passengers in the Union Territory of Delhi and other areas. Respondent No. 2, Sri Ishwar Singh was appoint ed as conductor therein on probation for a period of 1 year in 1970. The probation period was extended thereafter for a further period of one year and thereafter he was regularised in service of the appellant. Similarly, respondent No. 3 Sri Ram Phal was appointed as Assistant Traffic Incharge and after the probation period he was regularised in serv ice. Respondent No. 4 Sri Vir Bhan was appointed as driver and after completing the probation period he was also regu larised in service. It is stated that respondents Nos. 2 to 4 became, according to the appellant, inefficient in their work and started inciting other staff members not to perform their duties. They were served with termination notices on 4th June, 1985 under Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment & Service) Regulations, 1952. On 11th June, 1985 respondents Nos. 2 to 4 and their Union being respondent No. I DTC Mazdoor Con gress, filed writ petition No. 1422/85 in Delhi High Court, challenging the constitutional validity of Regulation 9(b) of the Delhi Road Transport Act. On 11th May, 1986 the division bench of the High Court of Delhi allowed the said writ petition and struck down Regulation 9(b) of the said Regulations, and directed the appellant to 176 pay back respondents ' wages and benefits within 3 months from the date of the said judgment. This is an appeal, therefrom, by special leave. The question, therefore, is, was the High Court justified in the view it took? It may be mentioned that regulations 9(a) & (b) were framed in exer cise of the powers conferred u/s 53 of the said Act, which enables the formulation of Regulations. Regulation 9 of the said regulations, which is material for the present contro versy, reads as follows: "9. Termination of service: (a) Except as otherwise speci fied in the appointment orders, the services of an employee of the authority may be terminated without any notice or pay in lieu of notice: (i) During the period of probation and without assigning any reason thereof. (ii) For misconduct, (iii) On the completion of specific period of appointment. (iv) In the case of employees engaged on contract for a specific period, on the expiration of such period in accord ance with the terms of appointment. (b) Where the termination is made due to reduction of estab lishment or in circumstances other than those mentioned at (a) above, one month notice or pay in lieu thereof will be given to all categories of employees. (c) Where a regular/temporary employee wishes to resign from his post under the authority he shall give three/one month 's notice in writing or pay in lieu thereof to the Authority provided that in special cases, the General Manager may relax, at his discretion, the conditions regarding the period of notice of resignation or pay in lieu thereof." The said Regulation, as set out hereinbefore, deals with termination of services. Four contingencies are contemplated vide clause (a) of Regulation 9, whereupon the services of employees may be terminated without any notice or pay in lieu thereof except as otherwise provided in the appointment order. Apart from these four contingencies where termination is made due to reduction of establishment 177 or in circumstances other than those mentioned in clause (a) above, one month 's notice of pay in lieu thereof is required to be given to all categories of employees. Therefore, except in the said four cases, if there is reduction of establishment or there is any termination uncovered by these four contingencies referred to in clause (a) the same shall be by giving one month 's notice or pay in lieu thereof to all categories of employees. Clause (c) postulates when a regular or temporary employee wishes to resign from his post under the authority then in such a situation one month 's notice in writing or pay in lieu thereof to the authority may be provided. The High Court in the judgment under appeal noted that since the filing of this petition the notices issued by D.T.C. to its various employees have been withdrawn and all these persons have been reinstated, therefore, the court was not concerned with the validity of clause (a) of Regulation 9 but respondents Nos. 2 to 4 against whom action had been taken by the appellant by issuing notices of termination under Regulation 9(b) had not been reinstated and the court considered the validity of Regulation 9(b). It was held by the court that the said provision gave absolute, unbridled and arbitrary powers to the Management to terminate the services of any permanent or temporary employee. It was contended that such power was violative of Article 14 of the Constitution. In support of this contention, reliance had been placed, on which the High Court also relied upon, on the decision of this Court in Workmen of Hindustan Steel Ltd. & Anr. vs Hindustan Steel Ltd. & Ors., ; In that case, Standing Order 31 of M/s. Hindustan Steel Ltd., a public sector undertaking, had prescribed for a detailed procedure for dealing with cases of misconduct; and for imposing major penalty, the employer had to draw up a chargesheet and give an opportunity to the delinquent workman to make his repre sentation within 7 days. If the allegations were controvert ed, an enquiry had to be held by an officer to be nominated by the management and in such an enquiry reasonable opportu nity of explaining and defending the alleged misconduct had to be given to the workman. Suspension of the delinquent workman pending enquiry was also permitted. At the end of the enquiry, if the charges were proved, and it was provi sionally decided to impose any major penalty, the delinquent workman had to be afforded a further reasonable opportunity to represent why the penalty should not be imposed on him. Standing Order 32 provided for a special procedure in case a workman was convicted for a criminal offence in a court of law or where the General 178 Manager was satisfied for reasons to be recorded in writing that it was inexpedient or against the interests of security to continue to employ the workmen ' viz. the workman could be removed or dismissed from service without following the procedure laid down in Standing Order No. 31. There the appellant was an Assistant in the respondent 's undertaking, who was removed from service on the ground that it was no longer expedient to employ him. The management dispensed with the departmental enquiry, after looking into the secret report of one of their officers that the appellant therein had misbehaved with the wife of an employee and that a complaint in respect thereof had been lodged with the po lice. In the reference to the Industrial Tribunal, the Tribunal held that as the employer dispensed with the disci plinary enquiry in exercise of the power conferred by Stand ing Order 32, it could not be said that the dismissal was unjustified, and that if there were allegations of miscon duct, the employer was quite competent to pass an order of removal from service without holding any enquiry in view of the provisions contained in Standing Order 32, and rejected the reference. There was an appeal to this Court. This Court held that the reasons for dispensing with the enquiry do not spell out what was the nature of the misconduct alleged to have been committed by the appellant and what prompted the General Manager to dispense with the enquiry. As there was no justification for dispensing with the enquiry, imposition of penalty of dismissal without the disciplinary enquiry as contemplated by Standing Order 31 was illegal and invalid. It was directed that the respondent should recall and cancel the order dated 24th August, 1970 removing the appellant from service, and reinstate him and on the same day the appellant was directed to tender resignation of his post which should be accepted by the respondent. The respondent should pay as and by way of back wages and future wages, a sum of Rs.1.5 lakhs to the appellant within 2 months which should be spread over from year to year commencing from the date of removal from service. It was reiterated that where an order casts a stigma or affected livelihood, before making the order, principles of natural justice of a reason able opportunity to present one 's case and controvert the adverse evidence must have full play. Even under the Consti tution which permits dispensing with the inquiry under Article 311(2) a safeguard is introduced that the concerned authority must specify reasons for its decision why it was not reasonably practicable to hold the inquiry. Standing Order 32 nowhere obligates the General Manager to record reasons for dispensing with the inquiry as prescribed by Standing Order 31. On the contrary, it was held that the language of Standing Order 32 enjoins a duty upon the Gener al Manager to record reasons for his satisfaction why it was inexpedient 179 or against the interest of the security of the State to continue to employ the workman. Reasons for dispensing with the enquiry and reasons for not continuing to employ the workman, stand wholly apart from each other. This Court finally observed that it was time for the public sector undertaking to recast Standing Order, and to bring it in tune with the philosophy of the Constitution failing which the vires of the said Standing Order ,would have to be examined in an appropriate proceeding. Reliance was also placed before this Hon 'ble Court on the decision of this Court in the case of West Bengal State Electricity Board and Others vs Desh Bandhu Ghosh and Oth ers, [1985] 3 SCC 116, where this Court was concerned with regulations 33 and 34 of the West Bengal State Electricity Board. The said regulations 33(1) and 34 were as follows: "33(1) Unless otherwise specified in the appointment order in any particular case, the services of a permanent employee of the Board may be terminated without notice (i) on his attaining the age of retirement or by reason of a declaration by the competent medical authority that he is unfit for further service; or (ii) as a result of disciplinary action; (iii) if he remains absent from duty, on leave or otherwise, for a continuous period exceeding 2 years. In case of a permanent employee, his services may be terminated by serving three months ' notice or on payment of salary for the corresponding period in lieu thereof. " The High Court had come to the conclusion in that case that Regulation 34 was arbitrary in nature and suffered from the vice of enabling discrimination. The High Court, there fore, struck down the first paragraph of Regulation 34 and as a consequence quashed the order terminating the services of the first respondent therein. It was contended before this court on appeal that the Regulation 34 did not offend Article 14 of the Constitution, that Sections 18 A and 19 of the Electricity Supply Act laid down sufficient guidelines for the exercise of the power under Regulation 34 and in any case the power to terminate the services of any permanent employee was vested in high ranking officials who might be expected to exercise the same in a 180 reasonable way. This Court was unable to accept that argu ment. This Court was of the view that the regulation was totally arbitrary and conferred on the Board a power which was capable of vicious discrimination. This Court was of the view that it was naked 'hire and fire ' rule, the time for banishing which, according to this Court in the said deci sion, altogether from employer employee relationship was fast approaching. It is only parallel, this Court was of the view, to the Henry VIII clause so familiar to administrative lawyers. Reference was made to the decision of this Court in Moti Ram Deka vs North East Frontier Railway, , where Rules 148(3) and 149(3) of the Indian Railway Estab lishment Code had been challenged on the ground that these Rules were contrary to Article 311(2) of the Constitution. The challenge was upheld though no opinion was expressed on the question whether the rule offended Article 14 of the Constitution or not since then Article 14 has been inter preted in several decisions of this Court and conferment and exercise of arbitrary power on and by the State or its instrumentalities have been frowned upon and struck down by this Court as offending Article 14 of the Constitution. Indeed, it was noted in S.S. Muley vs J.R.D. Tara, by this Court that, Justice Sawant, of Bombay High Court had considered at great length Regulation 48(a) of the Air India Employees ' Service Regulations which conferred similar power on the Corporation as Regulation 34 confers on the Board in the present case. The learned Judge therein (Sawant, J.) had struck down that Regulation. Reli ance had also been placed on another decision of the Bombay High Court in the case of Manohar P. Kharkhar vs Raghuraj. This Court found it difficult to accept the reasoning therein. In that view of the matter the appeal was dismissed. Reference in this connection may also be made to the decision of this Court in Central Inland Water Transport Corporation Limited and Anr. vs Brojo Nath Ganguly and Anr., There the appellant Corporation was a Government company incorporated under the Companies Act. The majority shares of the Corporation were held by the States of West Bengal and Assam. Article 51 of the Articles of Association of the Corporation conferred upon the President of India power to issue directions/instructions regarding affairs and conduct of the business of the Corporation or of the Directors thereof as also regarding exercise and per formance of its functions pertaining to national security and public interest. Article 51 A of the 181 said articles entitled the President to call for returns, accounts etc. of the Corporation. Articles 14, 15, 16, 17 and 37 conferred on the President power to appoint and remove Chairman and the Board of Directors of the Corpora tion. Articles 41 and 42 were regarding the ' President 's control over the working of the Corporation. Article 47 provided for appointment of the auditors of the Corporation to be made by the Central Government on the advice of the Comptroller ' and Auditor General of India and the nature of control to be exercised by the Comptroller and Auditor General in the matter of audit and accounts. Since another company namely the Rivers Steam Navigation Co. Ltd. was carrying on the same business as the Corporation was doing, a Scheme of Arrangement was entered into between the Corpo ration and that Company for dissolution of the latter and taking over of its business and liabilities by the former. The Scheme, inter alia, stipulated that the Corporation shall take as many of the existing staff or labour as were possible and that those who could not be taken over shall be paid by the transferor company all moneys due to them under the law and all legitimate and legal compensations payable to them either under Industrial Disputes Act or otherwise legally admissible and that such moneys shall be provided by the Government of India to the transferor Company who would pay these dues. The Calcutta High Court approved the Scheme. Each of the respondents therein were in the service of the said company. Their services were taken over by the Corpora tion after the High Court 's sanction to the Scheme of Ar rangement. While the respondent Ganguly therein was appoint ed as the Deputy Chief Accounts Officer and was later pro moted as Manager (Finance), the respondent Sengupta was appointed as Chief Engineer (River Services) and was later promoted as General Manager (River Services) Their appoint ment letters were in stereotype forms under which the Corpo ration could without any previous notice terminate their services, if the Corporation was satisfied that the employee was unfit medically or if he was guilty of any insubordina tion, intemperance or other misconduct, or of any breach of any rules pertaining to this service or conduct or non performance of his duties. The letters of appointment fur ther stipulated that they would have been subject to the rules and regulations of Corporation. Rule 9(i) of the Corporation 's Service, Discipline and Appeal Rules of 1979 had provided that the services of permanent employee could be terminated on three months ' pay plus DA to the employee or on deduction of a like amount from his salary as the case might be in lieu of the notice. By confidential letter the respondent Ganguly was asked to reply within 24 hours to the allegations of negligence made against him. After having his representation and detailed reply, a notice under 182 Rule 9(i) was served on him terminating his services with immediate effect by paying three months ' pay. Similarly a charge sheet was issued to the respondent Sengupta intimat ing that a disciplinary inquiry was proposed against him under the Rules and calling upon him to file his written statement of defence. Sengupta denied the charges made against him and asked for inspection of documents and copies of statements of witnesses mentioned in the said charge sheet. But a notice was serviced on him under Rule 9(i) terminating his services with immediate effect of paying three months ' salary. Both Ganguly and Sengupta filed Writ Petitions before High Court. A Division Bench of that Court allowed the same. The Corporation filed appeals before this Court. The main questions for determination therein were (i) whether the appellant Corporation was an instrumentality of the State as to be covered by Article 12 and 36 of the Constitution and (ii) whether an unconscionable term in a contract of employment entered into with the Corporation was void under Section 23 of the Contract Act and violative of Article 14 of the Constitution and as such whether Rule 19(i) which formed part of the contract of employment be tween the Corporation and its employees to whom the said Rules applied, was void? This Court confirmed the judgment of the High Court with modification in the declaration made and dismissed the Corporation 's appeal to this Court. This Court held that the appellant was State within the meaning of Article 12 of the Constitution. This Court further held that an unconscionable bargain or contract is one which is irreconcilable with what is right or reasonable or the terms of which are so unfair and unreasonable that they shock the conscience of the Court. This Court was of the view that the doctrine of distributive justice is another jurisprudential concept which has affected the law of contracts. According to that doctrine, distributive fairness and justice in the possession of wealth and property could be achieved not only by taxation and regulatory control of private and contractu al transactions even though this might involve some sacri fice of individual liberty. This Court referred to articles 38 and 39 of the Constitution so far as the test of reasona bleness was concerned. The test of reasonableness or fair ness of a clause in a contract where there was inequality of bargaining power is another theory recognised in the sphere of law of contacts. It was reiterated in that decision that the Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or a clause in the contract. Reference was made to the observa tions of Lord Diplock in A. Schroeder Music Publishing Co. Ltd. vs Macaulay (formerly Instone), [1974] i W.L.R. 1308 and that test was: 183 "Whether the restrictions are both reasonably necessary for the protection of the legitimate interests of the promisee and commensurate with the benefits secured to the promiser under the contract? For the purpose of this test all the provisions of the contract must be taken into consideration." Justice Madon of this Court in the said decision found that this was in consonance with right and reason, intended to secure social and economic justice and conformed to the mandate of the equality clause in Article 14 of the Consti tution. It was further recognised that there might be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumer ated nor fully illustrated. The Court must judge each case on its own facts and circumstances. The above principle would apply, this Court reiterated, where the inequality of bargaining power is the result of the disparity in the economic strength of the contracting parties or where the inequality is the result of circumstances, whether of the creation of the parties or not or where the weaker party is in a position in which he could obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them or where a man had no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in pre scribed or standard form or to accept a set of rules as part of the contract, however, unfair, unreasonable and uncon scionable clause in that contract or form or rules might be. This Court, however, reiterated that this principle would not apply where the bargaining power of the contracting parties is equal or almost equal. This principle would not apply where both parties are businessmen and the contract is a commercial transaction. The contracts of this type to which the principle formulated above applied were not con tracts which were tainted with illegality but were contracts which contained terms which were so unfair and unreasonable that they shock the conscience of the Court. In the vast majority of cases such contracts are entered into by the weaker party under pressure of circumstances, generally economic, which results in inequality of bargaining power. Such contracts will not fall within the four corners of the definition of "undue influence" given in Section 16(1) of the Contract Act, even though at times they are between parties one of whom holds a real or apparent authority over the other. Contracts in prescribed or standard forms or which embody a set of rules as part of the contract are entered into by the party with superior bargaining power with large number of persons or 184 a group of persons, if they are unconscionable, unfair and unreasonable, are injurious to the public interest, should be adjudged void according to Justice Madon, under Section 23 of the Contract Act on the ground of being opposed to public policy. Public policy, it was reiterated, is not the policy of any particular Government. It connotes some matter which concerns the public good and the public interest. The principles governing public policy must be and are capable on proper occasion, of expansion or modification. If there is no head of public policy which covers a case, then the Court must in consonance with public conscience and in keeping with public goods and public interest declare such practice to be opposed to public policy. In any case which is not covered by authority, courts should be guided by the Preamble to the Constitution and the principles underlying the Fundamental Rights and the Directive Principles. Rule 9(i) can aptly be called 'the Henry VIII Clause" this Court opined therein. It confers an absolute, arbitrary and un guided power upon the Corporation to exercise that power. This Court was concerned with the "Central Inland Water Transport Corporation Ltd. Service Discipline and Appeal Rules" framed by the Corporation. The relevant provisions of the said Rule 9 relating to permanent employees therein were as follows: "9. Termination of employment for Acts other than misdemea nour (i) The employment of a permanent employee shall be subject to termination on three months ' notice on either side. The notice shall be in writing on either side. The Company may pay the equivalent of three months basic pay and dearness allowances, if any, in lieu of notice or may deduct a like amount when the employee has failed to give due notice. (ii) The services of a permanent employee can be terminated on the grounds of "services no longer required in the inter est of the Company" without assigning any reason. A perma nent employee whose services are terminated under this clause shall be paid 15 days ' basic pay and dearness allow ance for each completed year of continuous service in the Company as compensation. In addition he will be entitled to encashment of leave to his credit." This Court found that Rule 9(i) can be called 'the Henry VIII 185 Clause '. It confers an absolute, arbitrary and unguided power upon the Corporation. It does not even say who on behalf of the Corporation was to exercise that power. While the Rules provided for four different modes in which the services of a permanent employee could be terminated earlier than his attaining the age of superannuation, namely, Rules 9(i), 9(ii), 36(iv)(b) read with 38 and 37, Rule 9(i) is the only rule which does not state in what circumstances the power conferred by that rule is to be exercised. Thus even where the Corporation could proceed under a regular disci plinary inquiry, it is free to resort instead to Rule 9(i) in order to avoid the trouble of an inquiry. No opportunity of a hearing was at all intended to be afforded to the permanent employee whose service was being terminated in the exercise of that power. It violated audi alteram partem rule of natural justice also which was implicit in Article 14 of the Constitution. It is not covered by any of the situations which would justify the total exclusion of the audi alteram parterm rule. The view that the Board of Directors would not exercise this power arbitrarily or capriciously as it con sisted of responsible and highly placed persons ignored, it was held, the fact that however highly placed a person might be, he must necessarily possess human frailties and "power tends to corrupt, and absolute power corrupts absolutely. " It was, however, held that Rule 9(i) was also discriminatory for the Corporation was given power to discriminate between employee and employee. It was stated that it could back up one employee and apply to him Rule 9(i). It could pick up another employee and apply to him Rule 9(ii). It was further reiterated that the Corporation was a large organisation. The said Rules formed part of the contract of employment between the Corporation and its employees who were not workmen. These employees had no powerful Union to support them. They had no voice in the framing of the said Rules. They had no choice but to accept the said Rules as part of their contract of employment. There was gross disparity between the Corporation and its employees, whether they be workmen or officers. The Corporation could afford to dis pense with the services of an officer and will find many others to take his place but an officer cannot afford to lose his job because if he does so, there are not many jobs waiting for him. It was, therefore, held that clause 9(i) of the said regulation was against right and reasons and it was wholly unconscionable. It had been entered into between parties between whom there was gross inequality of bargain ing power. Rule 9(i) was a term of the contract between the Corporation and all its officers, it was noted. It affected a large number of persons and it squarely fell within the principle stated earlier. The Government and its agen cies and instrumentalities constitute the largest employer in the country. A 186 clause such as Rule 9(i) in a contract of employment, it was noted, affecting large sections of the public was harmful and injurious to the public interest for it tended to create a sense of insecurity in the minds of those to whom it applied and consequently against public good. Such a clause, therefore, was opposed to public policy and as such it is void under Section 23 of the Contract Act, it was held. It was further held that it was not possible to accept the contention that this was a contract entered into by the Corporation like any other contract entered into by it in the course of its trading activities and the Court, there fore, ought not to interfere with it. The employees could not be equated with goods which could be bought and sold, nor could a contract of employment be equated with a mercan tile transaction between two businessmen much less when the contract of employment was between a powerful employer and a weak employee. Although it was reiterated that the aforesaid rule 9(i) was supported by mutuality inasmuch as it con ferred an equal right upon both the parties but considering the unequal position of the Corporation and its employees, there was no real mutuality, this Court opined. It was reiterated that the Corporation being covered by Article 12, its actions must also be in accordance with the Directive Principles prescribed by Part IV of the Constitution. Refer ence may be made to paragraph 39 of the aforesaid decision where this Court noted that in the working of the Constitu tion, it was found that some of the provisions of the Con stitution were not adequate for the needs of the country or for ushering in a Welfare State and the constituent body empowered in that behalf amended the Constitution several times. By the very first amendment made in the Constitution, namely, by the Constitution (First Amendment) Act, 1951 clause (6) of Article 19 was amended with retrospectitive effect. Under this amemdment, sub clause (g) of Article 19(1) which guarantees to all citizens the right to carry on occupation, trade or business, was not to prevent the State from making any law relating to the carrying on by the State, or by a Corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial of citizens or otherwise. This amendment also validated the operation of all existing laws insofar as these had made similar provisions. Article 298 of the Constitution, as originally enacted, provided that the executive power of the Union and of each State was to extend, subject to any law made by the appropriate legis lature, to the grant, sale, disposition or mortgage of any property held for the purposes of the Union or of such State as the case may be, and to the purchase or acquisition of property for those purposes respectively, and to the making of contracts. and it further provided that all property acquired for the purposes of the Union or of 187 State was to vest in the Union or in such State, as the case might be. This Court referred to the decision of this Court in Sukhdev vs Bhagatrarn Sardar Singh Raghuvanshi, ; , "the Governing power wherever located must be subject to the fundamental constitutional limitations. " The High Court in the judgment under appeal was unable to accept the plea of alternative remedy and allowed the Writ Petition and declared regulation 9(b) of the Regula tions to be illegal and ultra vires and as a consequence thereof the orders terminating the services of respondents Nos. 1 to 4 were quashed and these respondents were deemed to be in the service of DTC and back wages and all other benefits by way of annual increments were directed to be paid. Learned Solicitor General of India contended before us that in the facts and the circumstances of this case, there was sufficient guideline in the Regulation 9(b) and the power of termination, properly read, would not be arbitrary or violative of Article 14 of the Constitution. It may be mentioned that under the general law of contract of employ ment, which was commonly known as the 'law of master and servant ', which is not termed as law of employer and employ ee, whether the contract of service is for a fixed period or not, if it contained a provision for its termination by notice, it could be so terminated. If there was no provision for giving notice and the contract was not for a fixed period, the law implied an obligation to give a reasonable notice. Where no notice in the first case or no reasonable notice in the second case was given and the contract was wrongfully terminated, such wrongful termination would give rise to a claim for damages. In this connection, reference may be made to the observations of this Court in the five judge bench decision in Union of India & Anr. vs Tulsi Ram Patel, [1985] Supp. 2 SCR 131 at p. 166. This is also the position at common law. See Chitty on Contract; 26th Edition Vol. II, p. 808 or 25th Edition Vol. II p. 712, paragraph 3490. In this connection, reliance may also be placed at paragraphs 607 and 608 of Volume No. 16, 4th Edition of Halsbury 's Law of England. Under the Industrial Law, subject to the relevant statu tory provision, the services of an employee could be termi nated by reasonable notice. In such a case it was always open to the Industrial Tribunal to examine whether the power of termination by reasonable notice was exercised bona fide or mala fide. If, however, the industrial Court was satis fied that the order of discharge was punitive, that it was mala fide, or that it amounted to victimisation or unfair labour practice, the 188 industrial court was competent to set aside the order and in proper cases, direct the reinstatement of the employee. Reference may also be made to the observations of this Court in Tata Oil Mills Co. Ltd. vs Workmen & Anr., ; at 130. If, however, the exercise of such power was challenged on the ground of being colourable or mala fide or on account of victimisation or unfair labour practice, the employer must disclose to the Court the ground of his im pugned action, so that the same may be tested judicially. See the observations of this Court in L. Michael & Anr. vs M/s Johnston Pumps India Ltd.; , at 498. The relationship between a statutory corporation and its employees is normally governed by the relevant rules, regu lations and standing orders. A statutory Corporation is "State" within the meaning of Article 12 of the Constitution and its action is subject to judicial review in certain cases and certain circumstances. In the facts and circum stances of these cases, we have proceeded on that basis and we are of the opinion that it is the correct basis. The exercise of such power under regulations similar to the one impugned which has been upheld in various types of cases are instructive in their variety. It may be mentioned that the exercise of power under the very same Regulation 9(b) was upheld by the Court in a matter, wherein in an action by the employee of D.T.C., this Court in Delhi Transport Corpora tion Undertaking vs Balbir Saran Goel, ; at 764 held that even if the employees of the respondent thought that he was a cantankerous man and it was not de sirable to retain him in service it was open to them to terminate his services in terms of Regulation 9(b) and it was not necessary to dismiss by way of punishment for mis conduct. Reliance was placed on this decision by the High Court in the Judgment under appeal. The High Court in our opinion rightly pointed out, however, that the decision was on a different basis and could not be availed of in deciding controversy involved in the present determination. In Air India Corporation, Bombay vs V.A. Rebellow & Anr., ; , this Court dealing with the power of the Air India to terminate the services of a person who was alleged to have misbehaved with air hostesses, observed on page 6 16 of the report that the anxiety of the Legislature to effective ly achieve the object of duly protecting the workmen against victimisation of unfair labour practice consistently with the preservation of the employer 's bona fide right to main tain discipline and efficiency in the industry for securing the maximum production in peaceful, harmonious atmosphere is obvious from the 189 overall scheme of these sections. This Court on page 620 of the report observed that the record merely disclosed that the appellant had suspicion about the complainant 's suit ability for the job in which he was employed and this led to loss of confidence in him with the result that his services were terminated under Regulation 48. Loss of confidence in such circumstances could not be considered to be mala fide, it was held. Similarly in Municipal Corporation of Greater Bombay vs P.S. Malvenkar & Ors., ; at page 1006, where it was alleged that the services of an employee of Bombay Municipal Corporation were unsatisfactory, this Court held that the powers of dismissal after an inquiry and the powers of simpliciter termination are to distinct and independent powers and as far as possible neither should be construed so as to emasculate the other or to render it ineffective. One is the power to punish an employee for misconduct while the other is the power to terminate sim pliciter the service of an employee without any other ad verse consequence. It may be mentioned that the case of civil servants is, however, governed by their special constitutional position which accords them status; the legal relationship (between the Government and its servants) is something entirely different, something in the nature of status. It is much more than a purely contractual relationship voluntarily entered into between the parties. The duties of state are fixed by the law and in the enforcement of these duties society has an interest. In the language of jurisprudence status is a condition of membership of a group of which powers and duties are exclusively determined by law and not by agreement between the parties concerned. See the observa tions of this Court in Roshan Lal Tandon vs Union of India, ; at 195 D E. But even then the services of a temporary civil servant (although entitled to the protection of Article 311 of the Constitution) is subject to termina tion by notice. But beside the above, the government may find it necessary to terminate the services of a temporary servant if it is not satisfied with his conduct or his suitability for the job and/or his work. See the observa tions of this Court in Champak Lal Chiman Lal Shah vs The Union of India, at 204. The services of a temporary government servant, further. may be terminated on one month 's notice whenever the government thinks it neces sary or expedient to do so for administrative reasons. It is impossible, this Court observed, to define before hand all the circumstances in which the discretion can be exercised. The discretion was necessarily left to the Government. See observations of this Court in Ram Gopal Chaturvedi vs State of M. P., ; at 475. 190 The aforesaid position of a government servant has been analysed in depth by the decision of this Court in Union of India vs Tulsi Ram Patel, (supra), where it was reiterated that the doctrine of pleasure is not a relic of the feudal ages or based upon any special prerogative of the Crown but is based on public interest and for the public good because it is as much in public interest and for public good that government servants who are inefficient, dishonest or cor rupt or have become a security risk should not continue in service and that the protection afforded to them by the Acts and the Rules made under Article 309 and by Article 311 of the Constitution be not abused by them to the detriment of the public interest and public good. It was reiterated on page 190 of the report that if in a situation as envisaged in one of the three clauses of the second proviso to Clause (2) of Article 311 arises and the relevant clause is proper ly applied and the disciplinary inquiry dispensed with, the concerned government servant cannot be heard to complain that he is deprived of his livelihood. This Court reiterated that the livelihood of an individual is a matter of great concern to him and his family but his livelihood is a matter of his private interest where such livelihood is provided by the public exchequer and the taking away of such livelihood is in the public interest and for the public good, and the former must yield to the latter public policy, it was reit erated, requires, public interest needs and public good demands that there should be such a doctrine. It was further reiterated that the rules of natural justice are not immuta ble but flexible. These rules can be adopted and modified by statutes and statutory rules and also by the constitution of the Tribunal which has to decide a particular matter and the rules by which such Tribunal is governed. Not only, can the principles of natural justice be modified but in exceptional cases they can even be excluded. See the observations of this Court at page 237 G of the aforesaid report. Reference was also made to the observations of this Court at pages 214 215 of the aforesaid report. Thus, the Constitution Bench laid down that even where a government servant enjoys constitutional status there can be exclusion of inquiry in the cases prescribed for termination of employment. It must, however, be borne in mind that in some recent cases this Court has taken the view that a regulation pro viding for the termination of the service of an employee of the public corporation by notice only or pay in lieu thereof is invalid under Article 14 of the Constitution. We have referred to the decisions of the Workmen of Hindustan Steel 's case (supra); West Bengal State Electricity Board 's case (supra) and Central Inland Water Transport Corpora tion 's case (supra). Mr. 191 Ashok Desai, learned Solicitor General of India submitted that the decisions in the West Bengal State Electricity Board 's (supra) and Central Inland Water Transport Corpora tion 's case (supra) were incorrectly decided and the deci sion proceeded on the theory of unconscionable bargains and that termination by notice is against public policy. He, however, drew our attention to Gheru Lal Parekh vs Mahadeo das Maiya & Others, [1959] Supp. 2 SCR 406 and 440 where it was held that though theoretically it may be permissible to evolve a new head under exceptional circumstances in a changing world, it is advisable in the interest of stability of society not to make any attempt to discover new heads of avoidance of such clauses in these days. Furthermore, as stated above, learned Solicitor General submitted that in the ordinary law of contract termination of employment by reasonable notice on either side has never been regarded as unconscionable. Therefore, the learned Solicitor General submitted that this part of the above judgments was errone ous and should be overruled. It must, however, be noted that in a later judgment of this Court, which followed this line of reasoning, it was recognised that a public corporation requires protection from employees who are inefficient or those who lacked probity or even made faulty policy decisions. Reference was made to the decision of this Court in O.P. Bhandari vs 1. T.D.C. & Ors. , ; where this Court held that so far as some of the higher placed employees are concerned (described as 'gold collar ' employees) public sector under takings may be exposed to irreversible damage on account of faulty policy decisions or on account of lack of efficiency or probity of such employees and its very existence might be endangered beyond recall. A public corporation may not be able to cut the dead wood and get rid of a managerial cadre employee in case he is considered to be wanting in perform ance or integrity. Reference may be made to page 343 para graph 5 (supra) of the report. It may be mentioned that in Moti Ram Deka 's case (supra) at p. 707 of the said report, a similar rule was considered by seven learned Judges in the context of government servants in Railway. The majority judgment did not express opinion on the question of the Railway rule being bad on the ground of unguided and uncana lised power. In his judgment, Mr. Justice Das Gupta held that the rule gave no guidance and was, therefore, violative of Article 14. (See page 769 of the report). On this point Mr. Justice Shah, as the learned Chief Justice then was, in his judgment observed at page 799 800 of the aforesaid report: "In considering the validity of an order an assumption that the power may be exercised mala fide and on that ground 192 discrimination may be practised is wholly out of place. Because of the absence of specific directions in Rule 148 governing the exercise of authority conferred thereby, the power to terminate employment cannot be regarded as an arbitrary power exercisable at the sweet will of the author ity, when having regard to the nature of the employment and the service to be rendered, the importance of the efficient functioning of the rail transport in the scheme of our public economy, and the status of the authority invested with the exercise of power would appropriately be exercised for the protection of public interest on grounds of adminis trative convenience. Power to exercise discretion is not necessarily to be assumed to be a power which will invali date the conferment of power. Conferment of power has neces sarily to be coupled with the duty to exercise it bona fide and for effectuating the purpose and policy underlying the rules which provide for the exercise of the power. If in the scheme of the rule, a clear policy relating to the circum stances in which the power is to be exercised is discerni ble, the conferment of power must be regarded as being made in furtherance of the scheme, and is not open to attack as infringing the ' equality clause. It may be remembered that the rules relating to termination of employment of temporary servants and those on probation, and even those relating to compulsory retirement generally do not lay down any specific directions governing the exercise of the powers conferred thereby. The reason is obvious: the appointing authority must in all these cases be left with discretion to determine employment having regard to the exigencies of the service, suitability of the employee for absorption or continuance in the cadre, and the larger. interest of the public being served by retaining the public servant concerned in service. " Learned Solicitor General submitted that the question is whether it is the very existence of power which is bad or the exercise is bad in any specific case. It was submitted that the Court would be entitled to obtain guidance from the preamble, the policy and the purpose of the Act and the power conferred under it and to see that the power is exer cised only for that purpose. It was submitted that even if a statute makes no clarification Court would ascertain if the statute laid down any principle or policy. In such a case, the statute will be upheld although a given exercise may be struck down in particular cases. See 193 the observations of this Court in Shri Ram Krishna Dalmia vs Justice Tandolkar; , at 299. The guidance in the statute for the exercise of discretion may be found from the preamble read in the light of surrounding circumstances or even from the policy or the purpose of the enactment or generally from the object sought to be achieved. See the observations of this Court in Jyoti Prasad vs The Adminis trator for the Union Territory of Delhi; , at 139. Even a term like 'public interest ' can be sufficient guidance in the matter of retirement of a government employ ee. See the observations of this Court in Union of India vs Col. J.N. Sinha & Anr., at 461 and such a provision can be read into a statute even when it is not otherwise expressly there. Learned Solicitor General draw our attention to the observations of this Court in N.C. Dalwadi vs State of Gujarat, paragraphs 9 and 10 at page 619. It is well settled and the learned Solicitor General made a point of it that the Court will sustain the presumption of constitutionality by considering matters of common knowledge and to assume every state of facts which can be conceived and can even read down the section, it was submitted, if it becomes necessary to uphold the validity of the provision. Reliance was placed on the decision of this Court in Commissioner of Sales Tax, M.P., Indore & Ors. vs Radhakrishan & Ors. , ; at 257. In the case of Olga Tellis & Ors. vs Bombay Munici pal Corporation & Ors., [1985] Suppl. 2 SCR 51 at 89 this Court has held that considering the scheme of the act, a section which enabled the Commissioner to remove encroach ment without notice must be read to mean that notice would be given unless circumstances are such that it is not rea sonably practicable to give it. This Court further held that the discretion is to be exercised in a reasonable manner so as to comply with the constitutional mandate that the proce dure accompanying the performance of a public act must be fair and reasonable. We must lean in favour of that inter pretation because it helps to sustain the validity of the law. Learned Solicitor General submitted that the appeal involved herein the power of Delhi Transport Corporation (a statutory corporation) regarding termination of service simpliciter under Regulation 9(b). These Regulations were framed as mentioned under Section 53 of the Delhi Road Transport Authority Act, 1950. The said Act was replaced by the Delhi Municipal Corporation Act, 1957 but the regula tions have been saved and even though in 1971 a new Corpora tion, viz. the Delhi Transport Corporation (the appellant), was constituted 194 under the Road Transport Corporation Act, 1950, the regula tions have been continued. The guidelines for the exercise of such power, according to the Solicitor General, could be found in the statutory provisions of the 1950 Act under which the regulations have been framed, the preamble; Sections 19 and 20 (equivalent to Sections 18 and 19 of the Road Transport Corporation Act, 1950); Section 53 (equivalent to 45 of the Road Transport Corporation Act, 1950); the context of Regulation 9(b) read with 9(a) and 15. Even for the exercise of this power, reasons could be recorded although they need not be communi cated. This will ensure according to the Solicitor General, a check on the arbitrary exercise of power and effective judicial review in a given case. The present regulations are parallel, to but not identical with, the exceptions carved out under Article 311(2) proviso. It was submitted that even the power of termination simpliciter under Regulation 9(b) can only be exercised in circumstances other than those in Regulation 9(a), i.e., not where the foundation of the order is 'misconduct '. The exercise of such power can only be for purposes germane and relevant to the statute. It was submit ted by the learned Solicitor General that these would in clude several cases which have been held by Courts to give rise to termination simpliciter including where the employee shows such incompetence or unsuitability as to make his continuance in employment detrimental in the interest of the Corporation, where the continuance of the employee is a grave security risk making his continuance detrimental in the interest of the Corporation, if there is a justifiable lack of confidence which makes it necessary in the interest of the Corporation to immediately terminate the services. These are illustrative and not exhaustive. It was submitted by the learned Solicitor General that the above guidelines of recording reasons and confining action under Regulation 9(b) for purposes germane and rele vant to the statute would prevent arbitrary action by the Corporation while enabling it to run its services efficient ly and in public interest. Thus, there is no vice of arbi trariness in the regulation. The judgment of the High Court, therefore, cannot and should not be upheld according to the learned Solicitor General. In Civil Appeal No. 2876 of 1986, the learned Attorney General urged that the settled rule judicially evolved in matters of constitutional adjudication is that in order to sustain the constitutionality of legislation, the words of a statute may be qualified, its operation limited and condi tions, limitations and obligations may be implied or 195 read into the statute in order to make it conform to consti tutional requirements. The underlying rationale, according to the learned Attorney General, of this rule of interpreta tion, or the doctrine of reading down of a statute is that when a legislature, whose powers are not unlimited, enacts a statute, it is aware of its limitations, and in the absence of express intention or clear language to the contrary, it must be presumed to have implied into the statute the requi site limitations and conditions to immunise it from the virus of unconstitutionality. From what the learned Attorney General submitted and what appears to be the correct that every legislature intends to act within its powers. There fore, in a limited Government, the legislature attempts to function within its limited powers. It would not, therefore, be expected to have intended to transgress its limits. In Re The Hindu Women 's Rights to Property Act, , the question before the Federal Court was about the meaning of the word 'property ' in the Act. The Court limited the opera tion of the word 'property ' to property other than agricul tural land because otherwise the Central Legislature would have had no competence to enact the statute. The Court observed at pages 26 and 27 of the Report as follows: "No doubt if the Act does affect agricultural land in the Governors ' Provinces, it was beyond the competence of the Legislature to enact it: and whether or not it does so much depend upon the meaning which is to be given to the word 'property ' in the Act. If that word necessarily and inevita bly comprises all forms of property, including agricultural land, then clearly the Act went beyond the powers of the Legislature; but when a Legislature with limited and re stricted powers makes use of a word of such wide and general import, the presumption must surely be that it is using it with reference to that kind of property with respect to which it is competent to legislate and to no other. The question is thus one of construction, and unless the Act is to be regarded as wholly meaningless and ineffective, the Court is bound to construe the word 'property ' as referring only to those forms of property with respect to which the Legislature which enacted the Act was competent to legis late; that is to say, the property other than agricultural land . " See also the observations of Chief Justice Gwyer at pages 27 to 29 of the Report on how legislations of legisla ture with limited powers should be construed. See also the observations of this Court in R.M.D. 196 Chamarbaugwalla vs Union of India, ; , at p. 935 and 938. There section 2(d) of defined 'prize competition ' as meaning any competition in which prizes are offered for the solution of any puzzle. As defined, the statute covered not only competition in which success depended on chance but also those which involved substantial degree of skill. It was conceded that the Act would be violative of Article 19(1)(g) of the Constitution if competitions which involved substantial degree of skill were included in the statutory definition. See the observa tions of this Court at p. 935 of the report. This Court rejected the argument of the petitioners therein that since the language of the definition of prize competition was wide and unqualified, it was not open to the Court to read into it a limitation which was not there. This principle was reiterated and applied by this Court in the case of Kedar Nath Singh vs State of Bihar, [1962] Supp. (2) SCR 769. The question before this Court was about the validity of section 124A of the Indian Penal Code. This Court in order to sustain the validity of the section on the touch stone of Article 19(1)(a) of the Constitution of India, limited its applica tion only to acts involving intention or tendency to create disorder, or disturbance of law and order, or incitement to violence. This Court held that it was well settled that if certain provisions of law construed in one way would make them consistent with the Constitution, and another interpre tation would render them unconstitutional, the Court would lean in favour of the former construction. The provisions of the sections read as a whole, along with the explanations, make it reasonably clear that the sections aim at rendering penal only such activities as would be intended, or have a tendency, to create disorder or disturbance of public peace by resort to violence. Reference may also be made to the decision of this Court in R.L. Arora vs State of Uttar Pradesh, ; where the question was about the Constitutionality of sec tion 41(aa) of the . This Court upheld the validity of the section following the principle of interpreting the said rule in a way which would be consistent with the Constitution. See the observations of this Court at p. 797 of the said report. The technique of reading down has been adopted in numer ous cases to sustain the validity of the provision. For example, in Jagdish Pandey vs The Chancellor, University of Bihar & Anr., ; 1, at pages 236 37, this Court made resort to section 4 of the Bihar State Universities Act, 1962. It was observed that section 4 so read literally it did appear to give uncanalised powers to the Chancellor to 197 do what he liked on the recommendation of the Commission with respect to teachers covered by it. But this Court was of the opinion that the legislature did not intend to give such an arbitrary power to the Chancellor and was of the opinion that section 4 should be read down and if it is read down, there was no reason to hold that the legislature was conferring a naked arbitrary power on the Chancellor and that power cannot be struck down ,as discriminatory under Article 14 of the Constitution. See the observations of this Court in Sunil Batra vs Delhi Administration & Ors., ; There the constitutionality of section 30, sub section (2) and section 56 of the was in question. Krishna Iyer, J, speaking for this Court at p. 511, para 34, of the report observed that the Court does not 'rush in ' to demolish provisions where judicial endeavour, amelioratively interpretational, may achieve both constitutionality and compassionate resurrection. This salutary strategy, the learned Judge observed, of sustaining the validity of the law and softening its application was of lovely dexterity. The semantic technique of updating the living sense of a dated legislation is, in our view, perfectly legitimate. Semantic readjustments are necessary to obviate alegicidal sequel and a validation oriented approach becomes the phi losophy of statutory construction sometimes. Similar obser vations were made in N.C. Dalwadi vs State of Gujarat, (supra). In Tinsukhia Electric Supply Co. Ltd. vs State of Assam & Ors., ; , this Court upheld the valid ity of sections 9 and 10 of the Act by reading in several matters by necessary implication in order to sustain the validity of the sections. In Charan Lal Sahu & Ors. vs Union of India, [1989] Supp. SCALE 1, at pages 53 and 54, paras 101 as well as p. 61, para 114, it was observed that this principle of reading down has been adopted in U.S. Supreme Court in several cases. See also United States of America vs Edward A. Rumely, 97 Lawyers Edition 770 at 775. The princi ple as enunciated in Rumely 's case (supra) has been approved by this Court in Shah & Co. vs State of Maharashtra, ; at 477 78. This principle of reading down or placing limited construction has been adopted by courts in England in deciding the validity of bye laws and regula tions. See Reg. vs Sadlers Co., ; , at 460 and 463 and Faramus vs Film Artists Association, at 542. The courts must iron out the creases, as said Lord Denning in Seaford Court Estates, This Court has also on numerous occasions followed this practice. See the observations of this Court in M. Pentiah and Ors. vs Veera Mallappa and Ors., ; ; Bangalore Water Supply and Sewerage Board etc. vs A. Rajappa & Ors., ; See also H.M. Seervai 's 'Constitutional Law of India ', 3rd Edn. I, pages 119 120. In the background of this, the learned Attorney General also 198 drew our attention that the present regulation, as mentioned hereinbefore, should be read and construed in the said manner and the reasons and conditions of its exercise can be spelt out and it may be so construed. He submitted that it should be spelt out that the regulation requires reasons to be there, reasons which are germane and relevant. The principles of natural justice or holding of an enquiry is neither a universal principle of justice nor inflexible dogma. The principles of natural justice are not incapable of exclusion in a given situation. For example, Article 311(2) of the Constitution which essentially em bodies the concept of natural justice, itself contemplates that there may be situations which warrant or permit the non applicability of the principles underlying Article 311(2) of the Constitution. Reference may be made to the second proviso to Article 311 of the Constitution. This court has also recognised that the rule of audi alteram partera can be excluded where having regard to the nature of the action to be taken, its object and purpose and the scheme of the relevant statutory provision, fairness in action does not demand its application and even warrants its exclusion. If importing the right to be heard has the effect promptitude or the urgency of the situation so demands, natural justice could be avoided. See the observations of this Court in Maneka Gandhi 's case at p. 681 of the report (supra). This Court in Tulsi Ram Patel 's case (supra) had in terms ruled that not only, therefore, can the principles of natural justice be modified but in exceptional cases they can even be excluded. But the principles of natural justice must not be displaced save in exceptional cases. Consequent ly, the learned Attorney General submitted that the words "where it is not reasonably practicable to hold an enquiry" may be imported into the regulations. It was submitted by the learned Attorney General that the exclusion of audi alteram partera rule in circumstances which are circum scribed and coupled with the safeguard of recording of reasons which are germane and relevant, the termination in such a situation would not render the regulation unreasona ble or arbitrary. Then it could not be said that the power was uncanalised or unguided if the regulation is construed and read down in the manner indicated above, according to the learned Attorney General. The reading down, the learned Attorney General conceded cannot, however, be done where there was no valid reason and where it would be contrary to proclaimed purpose. See the observations of this Court in Minerva Mills Ltd. & Ors. vs Union of India & Ors. , ; , at p. 239 and 259. On behalf of the workmen of the respondent DTC, Shri 199 Ramamurthi, submitted that the Constitutional questions of great public importance arising in the present appeal, have to be examined in the light of the law laid down by the Full Court in the case of R.C. Cooper vs Union of India, ; at 577 and by larger Constitution Benches in the cases of Maneka Gandhi vs Union of India (supra), Moti Ram Deka vs Union of India (supra), State of West Bengal vs Union of India, (supra) and the Constitution Bench decisions in the cases of Olga Tellis and Others vs Bombay Municipal Corporation and Others, (supra), Fertilizer Corporation Kamgar Union (Regd.) Sindri and Others vs Union of India and Others, [1981] 2 SCR at 60 61, Union of India vs Tulsiram Patel and Others (supra), Sukhdev Singh & Others vs Bhagat Ram Sardar Singh Raghuvanshi and Another (supra) and Ajay Hasia etc. vs Khalid Mujib Sehravardi & Ors. etc.; , at 100 102. According to Shri Ramamurthi these deci sions are authority for the following propositions: (a) The declarations in the provisions contained in the Fundamental Rights Chapter involve an obligation imposed not merely upon the "State" but upon all persons to respect the rights declared, unless the context indicates otherwise, against every person or agency seeking to infringe them. See the observations of this Court in State of West Bengal vs Union of India, [1964] 1 SCR 371 at page 438: (b) Part III of the Constitution weaves a pattern of guarantee on the texture of basic human rights. The guaran tees delimit the protection of those rights in their allot ted field. They do not attempt to enunciate distinct right. [See R.C. Cooper 's case (supra( at p. 577 of the report]. The extent of protection against impairment of a fundamental right is determined not by the object of the Legislature nor 2by the form of the action, but by its direct operation upon the individual 's rights. (c) Any person who is deprived of his right to live lihood except according to just and fair procedure estab lished by law can challenge the deprivation as offending the right to life, conferred by Article 21. See the observations of this Court in Olga Tellis 's case (supra( at 80 81 and 85 of the report. Therefore, the holding to the contrary in A.V. Nachane & Anr. vs Union of India & Anr., ; is no longer good law. In any event Counsel is right that the observations made at p. 259 of the report (supra) were in a different context and the challenge 200 based on Articles 19(1)(g) and 31 does not appear to have any substance in resolving the present controversy before us. Mr. Ramamurthi submitted that provision of any Rule that service shall be liable to termination on notice for the period prescribed therein contravenes Article 14 of the Constitution as arbitrary and uncontrolled power is left in the authority to select at its will any person against whom action will be taken. See the observations of this Court in Moti Ram Deka 's case (supra) at p. 770 and 751 of the re port. It was submitted that Articles 14, 19 and 21 of the Constitution are inter related and the law must, therefore, now be taken to be well settled that Article 21 does not exclude Article 19 and even if there is a law providing a procedure for depriving a person of personal liberty (this will equally apply to life) and there is, consequently, no infringement of fundamental right conferred by Article 21, such law in so far as it abridges or takes away any funda mental right under Article 19 would have to meet the chal lenge of the Article. See the observations of this Court in Maneka Gandhi 's case (supra). Article 19(1)(g), it was urged, confers a broad and general right which is available to all persons to do work of any particular kind and of their choice. See the observations in Fertilizer Corporation Kamgar Union 's case (supra) at p. 60 61 of the report. According to Mr. Ramamurthi, there is a distinction between Public Employment or service and "pure master and servant cases". He referred to the observations of this Court in India Tobacco Co. Ltd. vs The Commercial Tax Offi cer, Bhavanipore & Ors., at 657; followed in A.L. Kalra vs The Project and Equipment Corporation of India Ltd., ; at 664; Whenever, therefore, according to Shri Ramamurthi, there is arbitrariness in State Action whether it be of the Legislature or of the Executive or of an authority under Article 12, article 14 immediately springs into action and strikes down such State action. In fact, the concept of reasonableness and non/arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the Constitution. See the observations of this Court in Bandhua Mukti Morcha vs Union of India & Ors., at 101. A violation of a principle of natu ral justice by State action is a violation of Article 14 of the Constitution, which can be excluded only in exceptional circumstances. See the observations of this Court in Tulsi Ram Patel 's case (supra) at 229, and at 233 of the report. It was, therefore, submitted that a clause authorising the ?201 employer to terminate the services of an employee whose contract of service is for an indefinite period or till the age of retirement, by serving notice violates the fundamen tal rights guaranteed under Articles 14, 19(1) (g) and 21 of the Constitution for Article 21 is violated when right to livelihood is taken away by termination of service of a person; employed for an indefinite period or till the age of retirement except for proved misconduct. Assuming, it was argued, that in such a case right to livelihood can be taken away by termination of service by giving notice, nonetheless it could be validly done only, according to Shri Ramamurthi, if: (i) There is a fair and just procedure by way of (1) recording of reasons and (2) notice to show cause; (ii) And the right to terminate is restricted to exceptional grounds. When the service of a person employed for an indefinite period or till the age of retirement is terminated, Shri Ramamurthi assets, then Article 14 is violated when there is no guidance for the exercise of power and reasons are not required to be recorded and principles of natural justice are abrogated. Similarly Article 19(1)(g) is violated, according to him, for the reasons that there is no guidance, no requirement of reasons to be recorded and there is viola tion of the principles of natural justice. Shri Ramamurthi reminded us that before India became independent in 1947, the was ap plicable only to British India on its own force. By Merged State Laws Act, 1949 it was extended to the new provinces and merged States to the States of Manipur, Tripura by Vindhya Pradesh by Union territories Law Act 1950. It was also extended to the States merged in the States of Bombay and Punjab by Bombay Act 4 of 1950 and Punjab Act 5 of 1950. With the promulgation of the Constitution, the Indian Con tract Act 1872 extends to the whole of India except the State of Jammu & Kashmir. Shri Ramamurthi asserted the what ever might have been the position in regard to the provinces comprised in British India before independence, as far as other areas, forming part of the Union of India under the Constitution are concerned, only the is applicable. By article 372 of the Constitution, this Act has been continued in operation even after the Constitu tion came into force, subject to the other provisions of the Constitution. 202 A contract of service, according to Shri Ramamurthi is a species of contract and will, therefore, be governed by the provisions of the . This Act has been held to be an Amending as well as a Consolidating Act. Therefore, there can be no question of common law of Eng land, as made applicable in India during the British Rule, being the basis for deciding any question relating to con tract of employment after 1950. In any event any provisions of either the , or of the English Common Law Applicable in British India before the Constitu tion came into force would be void by reason of Article 13 of the Constitution if it infringed any of the fundamental rights contained in Part III of the Constitution, pleaded Mr. Ramamurthi before us. Under Section 2(h) of the an agreement (including an agreement of service) becomes a contract only when it is enforceable by law. If it is not enforceable in law, it would be void by reason of section 2(g) of the Contract Act. The question for consideration would, therefore, be whether a clause in an agreement of service when it is for an indefinite period or till the age of retirement providing for termination by giving notice would be enforceable? It was submitted by the workers ' union that it would not be enforceable if it vio lates the fundamental rights guaranteed by Articles 14, 19(1)(g) and 21 of the Constitution. See the observations of this Court in Moti Ram Deka 's case (supra) at 709 of the Report. It was submitted that the broader submission was that under our Constitution there can be no contract of employment providing for termination of service by an em ployer of an employee by giving notice, when the employment is for indefinite period or till the age of retirement. In any event, such a clause cannot find a place either in the contract of service or in the statutory provisions governing the conditions of service in the case of public employment under the 'state ' as defined in Article 12 of the Constitu tion. Shri Ramamurthi urged that the observations contained in the judgment of this Court in Tulsiram Patel 's case (supra) at 166 of the report, regarding the ordinary law of master and servant cannot be construed as laying down the proposi tion that under the Indian law, even if a contract of serv ice is for an indefinite period or till the age of retire ment, it can still be terminated by giving reasonable period of notice. In any event, even in the Common Law of England, a distinction is made between public employment and "pure master and servant cases" [See the observations of this Court in Sukhdev Singh 's case (supra) at page 657 of the report. Mr. Ramamurthi submitted that the doctrine of pleasure 203 advanced by the learned Solicitor General of India was confined to employment under the Union of India and States dealt with under Part XIV, Chapter I of the Constitution and cannot and do not extend to employment under local or other authorities referred to under Article 12 of the Constitu tion. There cannot be any pleasure by such authority in respect of employment of the permanent employee. It was submitted by Shri Ramamurthi further that even in cases of employment under the Union and the States, the pleasure doctrine is limited by the express provisions of Article 311 of the Constitution. For that reason, according to him, it has lost some of its majesty and power. He referred us to the observations of this Court in Moti Ram Deka 's case (supra) at p. 704 and Tulsi Ram Patels 's case (supra) at page 196. In dealing with the question of validity of rules autho rising the Government to terminate the services of temporary servants as upheld by this court in Champaklal Chimanlal Shah 's case (supra) and Ram Gopal Chaturvedi 's case (supra) it was submitted that it is important to note that the validity of the rules was challenged on the ground of denial of equality of opportunity in employment under the State guaranteed by Article 16 of the Constitution. In that con text this Court observed at p. 20 1 (supra) of the report that there can also be no doubt, if such a class of tempo rary servants could be recruited, there could be nothing discriminatory or violative of equal opportunity if the conditions of service of such servants are different from those of permanent employees. It is thus apparent that this Court, it was submitted, had no occasion to consider the reasonableness of a provision for termination of service on giving notice under Article 14 of the Constitution and, therefore, this decision can be of no assistance to the appellants. Shri Ramamurthi submitted that since, audi alteram partem is a requirement of Article 14, in view of recent decisions of this Court, and conferment of arbitrary power itself is contrary to Article 14, the rule in question can, according to Shri Ramamurthi, no larger be sustained as valid. As far as the decision in Ram Gopal Chaturvedi 's case (supra) was concerned, Shri Ramamurthi submitted that the reasons given for rejecting the argument that the rule confers an arbitrary and unguided power are not valid for in Moti Ram Deka ' case (supra), where the view of two learned judges of this Court who had held similar power to be arbi trary had not ever been noticed. The observation that it is impossible to define before hand all the circumstances in which the discretion can be exercised and the discretion had necessarily to be left to the Government, has not taken into consideration the circumstance 204 that the denial of audi alteram parlem which is a require ment of Article 14, can be only in exceptional circumstances and, therefore, such circumstances have necessarily to be spelt out. This Court had no occasion, according to Shri Ramamurthi, to consider the cumulative impact of the funda mental rights guaranteed by Article 14, 19(1)(g) and 21 of the Constitution. Shri Ramamurthi sought to urge before us that industrial law recognises the right of the employer to exercise, bona fide, the power to terminate the services of workman by giving notice, except in case of misconduct, which is unlike the law of master and servant. Shri Ramamurthi urged that it is important to note that in all cases under industrial law, decisions have been rendered by industrial tribunal when disputes had been raised by workmen challenging the action of the employer terminating their services by giving notice, under the terms of the contract of service or the Certified Standing Orders. The question was never raised, nor could it be raised, before the Tribunals that the very term in the contract of service or in Standing Orders would have to stand the test of Articles 14, 19(1)(g) and 21 of the Con stitution. Further a constitution bench of this Court had rejected the contention that Industrial Tribunals should make a distinction between public sector and private sector industries. Reliance was placed on the observations of this Court in Hindustan Antibiotics Ltd. vs The Workmen & Ors., at 669. On the consideration of the rele vant material placed before us, we are asked to come to the conclusion that the same principles evolved by industrial adjudication in regard to private sector undertakings will govern those in the public sector undertakings having a distinct corporate existence. Therefore, all the decisions referred to by the appellant, it was argued, and interven ers, were all concerned with applying the industrial law even though some Of them dealt with employees, working in statutory corporations or public sector undertakings. It was, therefore, submitted by Shri Ramamurthi that these decisions could afford no assistance to the Court, in decid ing the issues raised in the present case, where the validi ty of a term of employment, permitting the employer to terminate the services of a permanent employee by simply giving notice, is challenged on the ground that such a term violates fundamental rights guaranteed by Articles 14, 19(1)(g) and 21 of the Constitution. It was submitted fur ther that the constitutional guarantees under Articles 14 and 21 of the Constitution are for all persons and there can be no basis for making a distinction between 'workmen ' to whom the Industrial Disputes Act and other industrial laws apply and those who are outside their purview. The laws applicable to the former 205 can only add to and not detract from the rights guaranteed by Part III of the Constitution. It was important to note that all the decisions so far rendered by this Court striking down rules and regulations or a provision in the contract of service, authorising termination of service of permanent employees by giving notice relate to cases of non workman and we were referred to the decisions in West Bengal State Electricity Board 's case (supra), Central Inland Water Transport Corporation Ltd. 's case (supra) and O.P. Bhandari 's case (supra). There is the theory that possibility of abuse of power is no ground for striking down the law. Attention may be drawn to the observations of this Court in The Collector of Customs, Madras vs Nathella Sampathu Chetty, ; at 825 and Commissioner of Sales Tax, Madhya Pradesh vs Radhakri shan & Ors. (supra). However, these decisions, it was sub mitted on behalf of the respondents, would have no relevance for the present case because the power to terminate the services of a person employed to serve indefinitely or till the age of retirement can be exercised only in cases of proved misconduct or exceptional circumstances having regard to the Constitutional guarantee available under Articles 14, 19(1)(g) and 21 of the Constitution. Unless the exceptional circumstances are spelt out the power to terminate the services would cover both permissible and impermissible grounds rendering it wholly invalid, it was urged. This was particularly so because the requirement of audi alteram partem which is a part of the guarantee of Article 14 is sought to be excluded. There can be no guidance available in the body of the law itself because the purpose for which an undertaking is established and the provisions dealing with the same in the law can provide no guidance regarding excep tional circumstances under which alone the power can be exercised. The question involved, Shri Ramamurthi empha sised, in these cases is not the exercise of power which an employer possesses to terminate the services of his employee but the extent of that power. Shri Ramamurthi drew our attention to the award and referred to paragraph 5.6 of the Shastri Award and other provisions of the award defining misconduct and also para graph 522 of the Award dealing with the procedure for termi nation of employment and 523 onwards. Mr. Ramamurthi further submitted that provisions of Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952 cannot be rendered constitutional by reading the requirement of recording reasons and confin ing it to cases where it is not reasonably practicable to hold an enquiry 206 and reading it down further as being applicable to only exceptional cases would not be permissible construction and proper. Shri Ramamurthi drew our attention to the true scope of Regulation 9(b) of the aforesaid Regulations in the light of the judgment of this Court in Balbir Saran Goel 's case (supra). This rule, it has to be borne in mind, according to him, has been interpreted as applicable to all cases of termination including termination for misconduct as defined in the Standing Orders. In the aforesaid decision, at p. 761 of the report. this Court observed that: "Regulation 9(b) clearly provides for termination of serv ices in two modes: the first is where the services may be terminated without any notice or pay in lieu of notice. This can be done among other reasons for misconduct. The second mode is of terminating the services owning to reduction of establishment or in circumstances other than those mentioned in clause (a) which relate to termination without notice. When termination is made under clause (b) one month 's notice or pay in lieu thereof is to be given to the employee. Thus it is clear that if the employer chooses to terminate the services in accordance with clause (b) after giving one month 's notice or pay in lieu thereof it cannot amount to termination of service for misconduct within the meaning of clause (a). It is only when some punishment is inflicted of the nature specified in Regulation 15 for misconduct that the procedure laid down therein for an enquiry etc. becomes applicable. " If this was the true scope of the Regulation, Shri Ramamurthi contended, then it was obvious that it leaves the choice entirely to the DTC Management either to proceed against the person for misconduct by holding an enquiry or for the same misconduct terminate his services by giving one month 's notice. It is the conferment of such a power that has been held to be unguided and arbitrary in all decisions from Moti Ram Deka 's case (supra) to the more recent deci sions of this Court such as West Bengal Electricity Board 's case (supra), etc. Therefore, it was submitted that the argument based on the assumption that Regulation 9(b) was confined to cases under than misconduct really overlooked the interpretation placed upon this Regulation by this Court. Shri Ramamurthi further submitted that if regulation 9(b) con 207 fers this arbitrary power of leaving it to the DTC manage ment to pick and choose then it is plain that there is nothing in the provisions of the Act or the regulations from which the DTC management can find any guidance. It was, therefore, the submission of the respondents that in order to conform to the Constitutional guarantees contained in Articles 14, 19(1)(g) and 21 of the Constitution as inter preted by this Court, the first and foremost the regulation will have to make a distinction between cases where services are sought to be terminated for misconduct and cases of termination on grounds other than what would constitute misconduct. As far as termination or dismissal on ground of misconduct is concerned, ordinarily the detailed procedure for establishing misconduct had to be followed. In cases where it is not possible to follow the detailed procedure, then at least the minimum procedure of issuing a show cause notice should be followed after recording reasons why it is not practicable to hold a full fledged enquiry. In cases where even this requirement of the elementary principles of natural justice is not to be followed, then the regulation must itself indicate those cases in which principles of natural justice can be totally abrogated after recording reasons. As far as termination of service of a permanent employee on grounds which do not constitute misconduct is concerned, assuming that this is held to be permissible, it can be only in very exceptional cases and that too after observing at least the elementary principle of natural justice of asking for explanation before terminating the services and also recording reasons. Shri Ramamurthi urged that to read all this into the regulations would literally mean re writing the regulations which is not permissible under any of the decisions or the law. As one of the cases cover termination under The Punjab Civil Services Rules, 1952, Shri Ramamurthi drew our atten tion to some of the provisions of these rules. He drew our attention to rule 3.12 which provides that unless in any case it be otherwise provided in those rules, a Government employee on substantive appointment to any permanent post acquired a lien on that post and ceased to hold any lien previously acquired on any other post. He also drew our attention to rule 3.15(a) which provided that except as provided in clause (b) and (c) of that rule and in note under rule 3.13, a Government employee 's lien on a post may, in no circumstances, be terminated, even with his consent, if the result would be to leave him without a lien or a suspended lien upon a permanent post. Clause (b) of rule 3.15 provided that notwithstanding the provisions of rule 3.14(a), the lien of a Govern 208 ment employee holding substantively a permanent post shall be terminated while on refused leave granted after the date of compulsory retirement under rule 6.21; or on his appoint ment substantively to the post of Chief Engineer of the Public Works Department. And clause (c) of this rule provid ed that a Government employee 's lien on a permanent post, shall stand terminated on his acquiring a lien on a perma nent post (whether under the Central Government or a State Government) outside the cadre on which he is borne. Note under rule 3.13 speaks about a Government employee holding substantially the post of a Chief Engineer of the Public Works Department, taking leave immediately on vacating his post he then shall during the leave be left without a lien on any permanent post. The expression 'vacate ' used in the note refers only to vacation as a result of completion of tenure of attainment of superannuation. Mr. R.K. Garg, appearing for the respondents in C.A. No. 4073 of 1986 stated that the Attorney General had rightly pointed out that employee 's services were terminated under Para 522 of the Shastri Award merely because he had failed to mention a loan of Rs. 1.5 lakhs taken from another Branch of the Bank. Mr. Garg pointed out that the loan had been repaid. The failure to mention this loan had deprived the appellant of his livelihood. The use of this power claimed under Para 522 of the Shastri Award was not defended by the Attorney General in this case. We had fairly conceded that he might not support this termination when the case is heard on merits. But, that does not derogate from the wide ampli tude of this uncontrolled, arbitrary power claimed by the management under Para 522 of the Shastri Award. Powers claimed under Para 522 must, therefore, be examined in the background of the facts and circumstances of this Appeal. It was submitted that this Court must hold that nothing in Para 522 of the Shastri Award confers on the management power so far as they can get rid of permanent employees of the Banks merely after service of notice on the imaginary belief that they were doing so for "efficient Management" of the Banks. Mr. Garg reminded us that it is common knowledge that all despots act as tyrants in the firm belief that the intolera ble indignities and atrocities they inflict, were necessary in public interest and to save the Society. Mr. Garg submit ted that the rule of law cannot be preserved if absolute, uncontrolled powers are tolerated and fundamental rights or Directive Principles are allowed to be reduced to a "dead letter". Mr. Garg urged that the fundamental requirements of natural justice are not dispensible luxury. The express language of Para 522 of 209 the Shastri Award is totally destructive of this require ment. The express language as mentioned hereinbefore of Para 522 of the Shastri Award provides: "(1) In cases not involving disciplinary action for miscon duct and subject to clause (6) below. The employment of a permanent employee may be terminated by three months ' notice or on payment of three months ' pay and allowances in lieu of notice. The services of a probationer may be terminated by one month 's notice or on payment of a month 's pay and allow ances in lieu of notice." Rule 148(3) reads: "(3) Other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not, however, required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of Clause (2) of Arti cle 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity. " "Note: The appointing authorities are empowered to reduce or waive, at their discretion, the stipulated period of notice to be given by an employee, but the reason justifying their action should be recorded. " Rule 348(4) reads: "In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice." Rule 149(3) reads: "Other railway servants: The services of other railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not howev er, required in cases of dismissal or removal as a discipli nary measure after compliance with the provisions 210 of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity. " It was urged by Mr. Garg that the services of a perma nent bank employee cannot be terminated without charge of 'misconduct ' and without an enquiry and the aforesaid para graph gives no indication as to on what conditions this arbitrary uncontrolled power can be used to get rid of one or more permanent employees for "efficient management of Banks" on subjective opinions or suspicion not tested in enquiry into facts. It was further urged that this provision provides for "insecurity of tenure" for lakhs of permanent employees, Articles 14, 19(1)(g) and 21 of the Constitution and the integrated protection of these Fundamental Rights excludes the "doctrine of pleasure" and insists on security of tenure "during good behaviour". The right to livelihood cannot be rendered precarious or reduced to a glorious uncertainty", it was urged by Mr. Garg. Mr. Garg submitted that the right to "hire and fire" was the prerogative claimed by the employer in the days of uncontrolled "laissez faire. " This was the "doctrine of pleasure of the Crown" in case of Government servants, who held office during the pleasure of the King who had absolute powers over his sub jects. Articles 14, 19(1)(g) and 21 secure the rights of the citizen and act as limits on the powers of the "State" in Democratic Republic of India. Unjust, arbitrary, uncon trolled power of "premature" termination of services of permanent employees should not be tolerated according to Mr. Garg by the Constitution of free India. In case of Government servants, Articles 311(1) and 311(2) of the Constitution expressly restrict the "doctrine of pleasure" contained in Article 310. Article 14 also insists on natural justice as was provided in Article 311(2), in order to prevent arbitrary use of power of termi nation. Articles 19(1)(g) and 21 read together require just, fair and reasonable procedure for termination of services for good cause. Without these safeguards, employees are reduced to the status of slaves of their masters. Employers are no longer masters as in the days of slavery of feudal relations, Mr. Garg tried to emphasise. He submitted that Article 14 of the Constitution did not permit permanent railway employees to be exposed to termination of their services on notice without charge of misconduct or a reason able opportunity to answer the charge. Rules 148 and 149 of the Railway Establishment Code which have been set only hereinbefore have the same effect, as is the effect of para 522 of the Shastry Award, and both these Rules were declared unconstitutional in Moti Ram Deka 's case (supra) by a seven 211 Judges ' Bench, according to Mr. Garg. Rules 148 and 149 were found violative of Article 14 for two reasons, it was submitted: (i) Railway servants in the matter of termination of service could not form a separate Class from other Govern ment servants (As per majority view, in the Judgment of Justice Gajendragadkar, in Moti Ram Deka '5 case ; ,729 731). (ii) Rule 148 conferred unguided, uncontrolled power of termination and, therefore, was hit by Article 14. (As per Justice Subba Rao and Justice Das Gupta, in Moti Ram Deka 's case (supra). Mr. Garg sought to urge that this binding decision of seven Judges ' Bench in Moti Ram Deka 's (supra) was applied in Gurdev Singh Sidhu vs State of Punjab & Anr., ; at 592 593 by the Constitution Bench of five Judges to strike down a Service Rule which permitted compulsory retirement on completion of 10 years ' services on the ground of 'inefficiency ' etc. This Court held that Compulsory retirement could not be tolerated even after 10 years of service in view Of such retirement being not based on rele vant considerations, including expected longivity of life of the employees in India. If the power of removal by way of compulsory retirement even after ten years was held uncon stitutional in Gurdev Singh 's case (supra) para 522 of the Shastri Award was far more arbitrary, unjust and unreasona ble, it was urged before us. It was reiterated before us that in view of the binding decision of seven Judges in Moti Ram Deka 's Case and its application by five Judges in Case of compulsory retirement after 10 years in Gurdev Singh 's Case (supra), it is not open to the employees to submit that similar powers claimed under paragraph 522 of the Shastri Award, even without 10 years ' service for removal without charge of 'misconduct ' and without enquiry, can be upheld as constitutional on any grounds whatsoever. It cannot be upheld as constitutional on any grounds whatsoever. It cannot be done without over ruling Moti Ram Deka 's case or without an express constitu tional provision like second Proviso (a), (b) or (C) to Article 311(2), which was adopted.by the Constituent Assem bly, not by a court of law, it was reiterated before us. 212 It was submitted that no principle of interpretation permits reading down a provision so as to make it into a different provision altogether different from what was intended by the legislature or its delegate. (R. M.D.C. 's case (supra). It was urged that it was established law that on reading down a provision, Court cannot preserve a power for a pur pose which is just the opposite of what the legislature had intended. Para 522 of the Shastri Award was not at all intended to be used within limits expressed or implied. The Court must not legislate conditions such as were adopted by the Constituent Assembly in case of second Proviso to Arti cle 311(2) in the Constitution of India. Even Parliament could not graft such limitations on Article 311(2), if second Proviso to Article 311 was not there in the Constitu tion. This Court cannot and ought. it was submitted not to arrogate powers to legislate what was patently outside even the competence of Parliament of India. It was submitted that in Tulsi Ram Patel 's Case, the majority decision could not hold second Proviso to Article 311(2) unconstitutional. In order to give effect to the express language of second Proviso to Article 311(2), Court denied the protection of Article 14 to permit the President to terminate the services without following principles of natural justice ' in cases covered by the said Proviso. In every other case, natural justice is the command of Article 311(2) of the Constitution was submitted. The operation of Articles 14, 19(1)(g) and 311(2) of the Constitution does not permit Courts to lay down essential legislative policy, such as was laid down by the Constituent Assembly to over ride 311(2) of the Constitution. Mr. Garg, therefore, submitted that the requirement of defining 'misconduct ' in the Standing Orders and providing by meticulous provisions for a just, fair and reasonable enquiry into charges of 'misconduct ' are the mandatory requirement of Industrial Employment Standing Orders Act. (U. P State Electricity Board vs Hari Shankar Jain, Shri Garg urged that the I.L.O. Conventions, accepted by India. required all employers to frame Standing Orders. He further urged that the demands of natural justice, which form part of Article 14 of the Constitution have been raised to the status of 'public policy ' controlling section 23 of the . On that basis, clauses in 213 contract of employment which provide for removal from serv ice on the will of the employer have been condemned as 'The Henry VIII Clause ' (see the observations of this Court in Central Inland Water Transports case (supra) against the ethos of the Constitution of Socialist Democratic Republic of India. In this connection, reference was made to the decision of this Court in Central Inland Water Transport 's case (supra) and Maneka Gandhi 's case (supra). In India, Shri Garg submitted. workers have a right to participate in the management. The participation in the management cannot exclude the 'power to be heard ' and thus participate in a decision to remove a permanent employee. Government alone has power to refer to the industrial tribunal, Shri Garg submitted. He was against any reading down which is contrary to the principles of interpretation. He referred to the observations of the Privy Council in Nazir Ahmed 's case [AIR 1936 PC 253]. He submitted that if two provisions exist, firstly, to remove from service after holding an enquiry on a charge of a 'misconduct '; and secondly without serving a charge sheet or holding an enquiry all provisions for hold ing enquiry will be rendered otiose and will be reduced to a mere redundancy. Such an interpretation will expose workers to harsher treatment than those guilty of misconduct, who will enjoy greater protection than those who have committed no misconduct. Such powers are patently discriminatory. Reference under section 10 of the Industrial Disputes Act would serve no purpose, submitted Mr. Garg. Court has a duty, according to him. to correct wrongs even if orders have been made which are later found to be violative of any fundamental right and to recall its orders to avoid injus tice. He referred to the decision of this Court in A.R. Antulay vs R.S. Nayak and Anr., ; He remind ed us that no draft had been submitted by the Attorney General or the Solicitor General, which could be added as a proviso to para 522 of the Shastri Award by this Court as a piece of judicial legislation to amend the impugned para 522. Substantive provision of para 522 could not be con trolled or curtailed effectively so that its operation could be confined within narrow constitutional limits. Mr. Garg reminded us that it is not the duty of the court to condone the constitutional delinquencies of those limited by the Constitution if they arrogate uncontrolled unconstitutional powers, which are neither necessary nor germane for supposed efficiency of services in the Banks as a business enter prise. Mr. Garg submitted that in a system governed by rule of law, discretion when conferred upon executive authorities must be confined within clearly defined limits. The rule of law from this point means that decisions should be made by the application of known 214 principles and rules and. in general, such decisions should be predictable and the citizen should know where he is. Law can only reach its finest moments when it has freed man from the unlimited discretion of ruler. He referred to the obser vations of this Court in S.C. Jaisinhhani vs Union of India and Ors., ; at p. 718 19. On behalf of the Interveners in Civil Appeal No. 2876, Mr. P.P. Rao submitted that the aforesaid decision in Tulsi Ram Patel 's case (supra) was an authority for the proposi tion that but for clause (b) of the second proviso to Arti cle 311(2) of the Constitution, the principles of natural justice could not have been excluded from the scope of Article 14 of the Constitution. It was urged by him that the said second proviso to Article 311(2) being itself a consti tutional provision, such exclusion was upheld by this Court in the said Tulsi Ram Patel 's case (supra). page 237 and at last para to p. 242. Mr. Rao drew our attention to the well settled rule of interpretation and submitted that where two interpretations are possible, one of which would pre serve and gave the constitutionality of the particular statutory provision while the other would render it uncon stitutional and void, the one which saves and preserves its constitutionality should be adopted and the other should be rejected. Fie, further, submitted that unless the provision of the Constitution itself excludes the principles of natu ral justice, they continue to be applicable as an integral part of the right to equality guaranteed by the Constitu tion. It was further reiterated that as the employees of the DTC were not Government employees, Article 311(2) of the Constitution was not applicable. Consequently, the second proviso thereof was also not applicable, with the result that Article 14 of the Constitution fully applied to them and it included the principles of natural justice as held in Tulsi Ram Patel 's (supra) itself at p. 233, last paragraph. Mr. Rao submitted that it is not permissible to read down statutory provisions when the avowed purpose is to confer power on an authority without any limitation whatever. That would be reading down contrary to the expressed or manifest intention of the legislature. He drew our attention to the observations of this Court in Minerva Mills Limited vs Union of India & Ors., ; at 261. Therein, at p. 259 of the report, it was reiterated that the principles of reading down could not be distorted even when words of width are used inadvertently. In the instant case, Mr. Rao submit ted, reading down would amount to distortion of the right to equality conferred by Article 14, which was regarded as a basic feature of the Constitution. Nothing short of an amendment of the Constitution could cut down the scope of the basic 215 principle of equality, submitted Mr. Rao then referred to us Kesavananda Bharati vs State of Kerala, [1973] Supp. 1 S.C.R. 1 and submitted that any constitutional amendment which impairs the doctrine of equality would be liable to be declared unconstitutional on the ground of violation of the basic structure of the Constitution. In the instant case, Mr. Rao submitted, regulation 9(b) deliberately conferred wide power of termination of service without giving a reasonable opportunity to an employee even if he is a regular or permanent employee, in addition to regulation 15 which provided for dismissal or removal after a disciplinary enquiry. Therefore, the intention of the regulation making authority was clear and unambiguous. The provision is not capable of two interpretations. Consequent ly, the question of reading down did not arise. Mr. Rao drew our attention to the observations of the Supreme Court of America in Elliott Ashton Welsh, II vs United States, 26 Lawyers ' Edition 2nd, 308 at 327. Mr. Rao submitted that the decisions referred to by the learned Attorney General were not applicable to the instant case. He submitted that the decision of the Federal Court in Re The Hindu Women 's Rights to Property Act 's case (supra) involved the interpretation of a single word in the context of legislative competence. That was not the context of the present controversy, submit ted Mr. Rao. Mr. Rao submitted that R.M.D. Chamarbaughwal la 's case (supra) was a case on severability. That was a case where the word 'competition ' was interpreted. In the present case, the suggested reading down involves, according to Mr. Rao, not interpretation of any single word in regula tion 9(b) but adding a whole clause to it which amounted to rewriting the provisions. Courts have refused to rewrite legislation to make up for the omissions of the legislature. Reliance was placed by Mr. Rao on Nalinakhya Bysack vs Shyam Sunder Halder & Ors., ; , at p. 544 545. Mr Rao referred to the observations of this Court in Kedar Nath Singh vs State of Bihar, (supra) involving the interpreta tion of section 124A IPC in the context of Article 19(1)(a) of the Constitution. The content of Article 19(1)(a) was not cut down. In the present case, the suggested reading down would inevitably drain out Article 14 of its vitality. Shri Rao drew our attention to the decision of this Court in R.L. Arora vs State of Uttar Pradesh, (supra) and submitted that the said decision did not involve cutting down the scope of a fundamental right. He also drew our attention to the decision of this Court in Jagdish Pandey vs The Chancellor, University of Bihar (supra) which did not involve reading down so as to sacrifice the principle of natural justice 216 which are considered an essential part of the rule of law. In Municipal Committee, Amritsar & Anr. vs State of Punjab & Ors. , ; , this Court was concerned with the intention of the legislature and interpreted the Act con sistent with the said intention. In the instant case. the intention was to confer power of termination of services of all categories of employees without any further enquiry. Sunil Batra vs Delhi Administration (supra) was again a decision where this Court found that the intention of the legislature was not to confer arbitrary power. In the in stant case, the intention was different. N.C. Dalwadi vs State of Gujarat. (supra) was a case of giving reasonable interpretation to a provision which was capable of such an interpretation. In the scheme of DTC Regulations. regulation 9(b) was not susceptable to two interpretations. submitted Mr. Rao. According to Mr. Rao, the principle of reading down was not applicable where the intention of the law maker was to confer too wide a power intended to be exercised without giving an opportunity to the affected party to be heard. It was, therefore, submitted that the principle of reading down was not applicable and if applied would amount to cutting down the scope of Article 14 and subjecting permanent em ployees of the DTC to a tremendous sense of insecurity which is against the philosophy and scheme of the Constitution. Mr Nayar, appearing in Civil Appeal No. 1115 of 1976 (Shri Samara Singh vs Zila Parishad Ferozepure) for the respondent, drew our attention to the fact that the appellant, Shri Satnam Singh was appointed by the respondent vide letter of appointment dated 9th March. 1961 the appel lant ceased to work for the respondent, when his services were terminated simpliciter vide Resolution dated 26th November, 1965. He, therefore, had worked for the respondent only for a short period of less than four years. The serv ices of the appellant ceased on the basis of the contract. the terms of which were mutually agreed between the parties. In case he had continued to work, he would have reached the age of superannuation in the year 1984. His total emoluments with effect from 1st November, 1964 to 30th September, 1984 would have been approximately Rs.2,46,464. Mr. Nayar filed a detailed statement and stated that the appellant ceased to work for the respondent with effect from 26th November, 1964 when he was discharged from service. In this case, it is necessary to bear in mind that the appellant, Shri Satnam Singh was appointed by the respond ent, Zila Parishad, Ferozepure by letter of appointments dated 9th March. The Board approved his terms of appointment and the same were duly 217 accepted by the appellant. The 'relevant clause of Contract between the parties for present purposes was clause 4 which was as follows: "His services will be terminated on one month 's notice on either side provided it will be open to pay him his salary for the period by which the notice falls short of one month. Similarly, if he wishes to resign he may do so by depositing with the District Board his salary for the period by which the notice given by him fails short of one month. " The appellant, however, was continued to be governed by the Statutory Rules, known as District Board Rules, 1926. According to the respondent, the appellant did not cooperate inasmuch as he was not available in the Headquarters and presumably left without permission and without handing over important record and documents of the District Board, etc. But the appellant 's version, as stated in the grounds of appeal, was entirely different. He urged that it was on account of vindictive attitude on the part of some of the employees of the respondent, which had produced his termina tion order without enquiry. The District Board resolved that in terms of condition 4 of the terms of appointment, his services should be terminated on one month 's notice or pay in lieu thereof. Mr. Nayar submitted that rule 1(i) of District Board Rules, 1926, Part V also gave right to both the parties to terminate the contract of employment on one month 's notice, etc. The said rule reads as follows: "In the absence of a written contract to the contrary every officer or servant employed by a District Board shall be entitled to one month 's notice before discharge or to one month 's wages in lieu thereof, unless he is discharged during the period of probation or for misconduct or was engaged for a specified term and discharged at the end of it. " The services of the appellant were terminated vide Resolution dated 26th November, 1964 of the Board and he was discharged by allowing him one month 's salary in lieu of notice. The termination order was dated 14th December, 1964. The appellant, Shri Satnam Singh filed a suit for declara tion in the Court of Senior Sub Judge, Ferozepure, challeng ing the order of termination dated 14th December, 1964 as illegal, void, ultra vires, etc. The Senior Sub Judge, Ferozepure, vide judgment and decree dated 9th January, 1969 held 218 that the discharge of the appellant amounted to dismissal and as clearly no enquiry was held against him, the termina tion simpliciter was bad in law. The respondent, Zila Pari shad filed an appeal in the Court of 3rd Additional District Judge, Ferozepure, who vide order dated 22nd December, 1969 affirmed the decision of the trial Judge and dismissed the appeal of the respondent. The respondent filed regular appeal in the High Court of Punjab and Haryana at Chandi garh, inter alia, pleading that the appellant was validly discharged in terms of his appointment order and rule 1(i), Part V A of the District Board Rules, 1926. The learned Single Judge of the High Court considered the matter in detail and referred to various judgments of this Court and held that it could not be said that the action of termination prima facie amounted to an order of dismissal even though the appellant was at the time a con firmed employee of the respondent. The learned Single Judge found that the respondent had a contractual right to termi nate the services of the appellant by giving a month 's notice or a month 's salary in lieu of notice. According to Shri Garg, the removal of the appellant from service was in accordance with the terms governing his appointment. Merely because on the 7th of November, 1964, the respondent re solved to charge sheet the appellant for acts of omission and commission and ordered an enquiry, and such an enquiry never commenced, would certainly not be enough reason to hold that the termination of the appellant 's services, was ordered by way of punishment and therefore, amounted to his dismissal, argued Mr. Nayar. It was submitted by Mr. Nayar that the appellant had conceded that condition No. 4 was legally good but he had argued that it was not meant to be effective after the appellant had been confirmed. Aggrieved by the order mentioned above, the appellant had filed Letters Patent Appeal before the Division Bench of the High Court. The Division Bench of the High Court by an order dated 13th September, 1972 referred the question of law for the decision of the full bench. The full bench of the High Court refrained the question of law as under: "Whether, the termination of services of a permanent Dis trict Board Employee by giving him one month 's notice or pay in lieu thereof in terms of the conditions of his appoint ment and/or rule 1 in part V A of the District Board Rules, 1926, is bad in law and cannot be made? 219 The majority of the learned Judges, inter alia, held that the appellant not being a government servant cannot have the protection of Article 311 of the Constitution as he was not a civil servant under the Central Government of the State Government. He was an employee of the District Board and his tenure of appointment was governed by the provisions of the District Board 's Act, 1883 and the rules flamed thereunder as well as by the terms and conditions of his appointment. The condition No. 4 gave mutual right to the District Board as well as to the appellant to terminate the service by giving one month 's notice or pay in lieu of notice, etc. The condition in the appointment letter shall not be deemed to have been abrogated by the Punjab Civil Services Rules. The Court held further that the condition stated in the letter of appointment of the appellant contin ued to bind the parties even after the appellant 's confirma tion and his services could be terminated by an order of discharge simpliciter in accordance with the condition No. 4 thereof as this condition was almost in the same terms as Rule I in Part V A of the Rules. It was further held by the full bench of the High Court that the Punjab Civil Service Rules had no over riding effect and these rules were to apply in respect of matters for which no provision had been made anywhere else because of the phrase used "so far as may be". Rule 8.1 of the Business Rules reads as under: "In all matters relating to the conditions of service of its employees the Board shall so far as may be follow the rules from time to time in force for servants of the Punjab Gov ernment. " The finding of the Letters Patent Bench in this regard was as under: "According to Rule 8.1 ibid, the Punjab Civil Services Rules were to apply in respect of matters for which no provision had been made anywhere else because of the phrase used "so far as may be". Naturally, if a provision was made anywhere else, which went counter to the Punjab Civil Services Rules, the application of the latter rules It thus follows that the Punjab Civil Services Rules were not to apply to the appel lant in respect of matters for which specific provision was made in his letter of appointment, which constituted the contract of service between him and the District Board, as he joined 220 service on those terms.after accepting the same. " The learned Chief Justice of Punjab & Haryana High Court, however, dissented. The answer to the question, therefore, was given in the negative vide order dated 3rd April, 1974. The Division Bench of the High Court which heard the matter after the question of law was answered by the Full Bench, dismissed the appeal of the appellant vide order dated 28th October, 1974 and this appeal to this Court arises from this order. The appellant in Civil Appeal No. 1115/76, who appeared in person before us reiterated the relevant facts and urged that his removal was bad and the rule under which he was removed may be quashed. It may be mentioned that as regards letter of Shri Kuldip Singh Virk to the Senior Superintend ent of Police, Ferozepure regarding the charges of corrup tion against the appellant, a case under section 5(2) of the Prevention of Corruption Act was registered. The appellant was tried for the said alleged offence and acquitted of the charges by the Special Judge Ferozepure. A further case was registered under sections 381/ 409 of IPC against the appellant. Accordingly, the appellant was tried by the Judicial Magis trate Ferozepure. The charge was framed by the Judicial Magistrate against the appellant. Against the aforesaid, the appellant filed a petition in the High Court and the charge and the proceedings in question were thereupon quashed by the High Court in July/August, 1967. There were three more cases tried by the Special Judge, Ferozepure and acquitted. The appellant filed a document in this Court claiming the monetary claim on the basis that his termination was wrongful. According to the appellant, he was entitled to recover Rs.4,83,061.90 paise. However. according to the statement filed by Shri Nayar, learned counsel for the respondents in this case, the appellant was entitled to withdraw from the District Board Rs.2,46,464.46 paise, in case he would have been in service before his date of super annuation, i.e., 30th September, 1984. There is no evidence from either side as to whether the appellant had worked somewhere else though the appellant did not work with the respondent because of his suspension. The appellant had, however, stated that he did not so work. In that view of the matter, if the contentions or ' the appellant are accepted that the clause under which the terms of employment of the appellant was agreed and under which the termination was effected without any enquiry and further in view of the fact that the learned trial Judge before whom the appellant had filed the suit first and decreed the suit declaring the 221 appellant to be entitled to be in service, the appellant, in our opinion. should rightly be granted a monetary claim for Rs.4,83,061.90 paise and further interest at 6% from 30th September, 1984. This would be in consonance with justice and equity in the facts and the circumstances of this case. This order, however, will have to be passed if we accept the contention on behalf of the appellant herein on the con struction of the clause. In the matter of M/s Indian Airlines, which is the subject matter of the Application for Intervention No. 1 of 1990:in Civil Appeal No. 2846 of 1986, Mr. Lalit Bhasin, on behalf of the interveners contended that there has been distinction between the discharge simpliciter and dismissal from service by way of punishment. According to Mr. Bhasin the effect of the judgments of this Court in the Central Inland Water 's case (supra) and West Bengal 's (supra) was to take away the right of the employer to terminate the serv ices of an employee by way of discharge simpliciter. Accord ing to Mr. Bhasin, this Court had recognised the existence of the inherent right of an employer to terminate the serv ices of an employee in terms of the contract of employment and also under the various labour enactments. Attention of this Court was invited to the provisions of the , which applies to all industrial establishments whether in the public or private sector. Under and as a part of the said Act, model standing ' orders are set out and Standing Order No. 13 provides for simple termination of employment by giving one month 's notice etc. Similarly, there are provi sions under various Shops and Establishments Acts of differ ent States providing for termination of employment of perma nent employee after giving one month 's notice or pay in lieu of notice. Attention of this Court was invited to section 30 of Delhi Shops and Establishments Act. The Industrial Disputes Act itself makes distinction between discharge and dismissal and attention of this Court was invited to section 2(00) of the Industrial Disputes Act, which defines 'retrenchment '. This section expressly ex cludes termination of services as a result of nonrenewal of contract of employment. Section 2(s) of the Industrial Disputes Act defines 'workman ' to include any person who has been dismissed, discharged or retrenched. Section 2A distin guishes discharge, dismissal and retrenchment. It is pertinent to point out that the Original Regula tion 13 of Indian Airlines Employees Service Regulations was set out as under: 222 "13. The services of an employee are terminable at 30 days on either side or basic pay in lieu: Provided however, the Corporation will be at liberty to refuse to accept the termination of his service by an em ployee where such termination is sought in order to avoid disciplinary action contemplated or taken by the Management. " After the decisions of this Court in Central Inland Water 's case (supra), Indian Airlines initiated steps to amend its Regulation 13 and bring it in line with Article 311(2) of the Constitution as directed by this Court in Hindustan Steels Lid ' case (supra). It appears that the Board of Directors of Indian Airlines had accordingly ap proved of the amendments to Regulation 13 and the amended Regulation reads as under: "(a) The services of an employee may be terminated without assigning any reasons to him/her and without any prior notice but only on the following grounds not amounting to misconduct under the Standing Orders, namely: (i) If he/she is, in the opinion of the Corporation (the Board of Directors of Indian Airlines) incompetent and unsuitable for continued employment with the Corporation and such incompetence and unsuitability is such as to make his/her continuance in employment detrimental to the inter est of the Corporation; OR If his/her continuance in employment constitutes, in the opinion of the Corporation (the Board of Directors of Indian Airlines), a grave security risk making his/her continuance in a service detrimental to the interests of the Corporat ion; OR if in the opinion of the Corporation (the Board of Directors of Indian Airlines) there is such a justifiable lack of confidence which, having regard to the nature of duties performed, would make it necessary in the interest of the Corporation, to immediately terminate his/her services. 223 (b) The employee can seek termination of his/her employment by giving 30 days notice or basic pay in lieu: Provided however the Corporation will be at liberty to refuse to accept the termination of his/her service by an employee where such termination is sought in order to avoid disciplinary action contemplated or taken by the Management." According to Mr. Bhasin, in the amended Regulation 13, Indian Airlines had taken care to set out the circumstances in which the services of an employee can be terminated by way of discharge and without holding enquiry. Mr Bhasin urged that these are eventualities which do not constitute misconduct and yet retention of an employee in the service by the management for any one of the grounds mentioned in the aforesaid Regulation might be considered as detrimental for the management or against public interest. Mr. Bhasin submitted that the power has been vested with the Board of Directors and not with any individual. According to Mr. Bhasin, plain reading of Regulation 13, as amended, would clearly establish that the vice. if any, or arbitrariness is completely removed and sufficient guidelines are made avail able to the highest functionary, namely, the Board of Direc tors to exercise the restricted and limited power now avail able to the employer under these Regulations. Similar submissions have been made on behalf of Air India, who are interveners. Submissions made hereinbefore were alternative submissions. The original Regulation 48 of Air India Employees Service Regulations was as follows: "Termination . ' The services of an employee may be terminated without as signing any reason, as under: (a) of a permanent employee by giving him 30 day 's notice in writing or pay in lieu of notice; (b) of any employee on probation by giving him 7 days ' notice in writing or pay in lieu of notice: (c) of a temporary employee by giving him 24 hours ' notice in writing or pay in lieu of notice. 224 Explanation. ' For the purposes of the regulation, the word "pay" shall include all emoluments which would be admissible if he were on Privilege leave. " After the decisions of this Court declaring the afore said Regulation as void in Civil Appeal No. 19 of 1982 in the Case of Manohar P. Kharkar & Anr. vs Kaghu Raj & Anr., Air India amended the aforesaid Regulation, which now reads as under: "(a) The services of a permanent employee may be terminated without assigning any reasons to him/her and without any prior notice but only to the following grounds not amounting to misconduct under Service Regulation 42, namely: (i) if he/she is, in the opinion of the Corporation (the Board of Directors of Air India) incompetent and unsuitable for continued employment with the Corporation and such incompetence and unsuitability is such as to make his/her continuance in employment detrimental to the interests of the Corporation; OR If his/her continuance in employment constitutes, in the opinion of the Corporation (the Board of Directors of Air India), a/grave security risk making his/her continuance in service detrimental) to the interests of the Corporation; OR If, in the opinion of the Corporation (the Board of Direc tors of Air India), there is such a justifiable lack of confidence which, having regard to the nature of duties performed, would make it necessary, in the interest of the Corporation, to immediately terminate his/her services. (b) The services of an employee on probation may be termi nated without assigning any reason to him/her but on giving 30 days notice in writing or pay in lieu thereof. (c) The services of a temporary employee may be terminated without assigning any reason to him/her but on giving 15 days notice in writing or pay in lieu thereof. 225 Explanation For the purpose of this Regulation the word "pay" shall include all emoluments which would be admissible if he were on privilege leave. " The question regarding justification of the action taken by the management was touched by this Court, but since the action was based on the old Regulation 48, it had to be quashed. It was submitted on behalf of the Air India that care had been taken to suit the circumstances in which the services of an employee could be terminated by way of dis charge simpliciter and without holding enquiry. These are eventualities which do not constitute misconduct and yet retention of an employee in the service of the management for any one of the grounds mentioned in the said Regulation might be considered as detrimental for the management or against public interest. It was submitted that the said regulation 48 has to be read with Regulation 44(A) which reads as under: "44(A)(i) Notwithstanding anything contained in these Regu lations and if, in the opinion of the Corporation (the Board of Directors of Air India), it is not possible or practica ble to hold an enquiry under the relevant provisions of these Regulations, the Corporation may, if satisfied that the employee has been guilty of any misconduct, any one of the punishment mentioned in Regulation 43 on the employee concerned. Provided that before exercising his extra ordinary power, the Board shall give 30 days prior notice to the employee concerned of the act of misconduct that the reasons why it is not possible or practicable to hold an enquiry into such misconduct, and the punishment proposed by the Board and the employee shall be entitled to make a full written represen tation to the Board in response to such notice. (ii) No action shall be taken under the Regulation until the Board has taken into consideration the representation made by the concerned employee under the proviso to Section (i) within the notice period. " The original regulation 44 was also modified. According to the interveners, the cumulative reading of regulation 48, as amended, and regulation 44, as amended, would clearly establish that the vice, if any, of arbitrariness is com pletely removed and sufficient guidelines are 226 made available to the Board of Directors to exercise the restricted and limited power now available to the employer under these Regulations. In C.M.P. No. 30309 of 1988, on behalf of the New India Assurance Co., the intervention application was filed. It was stated that in the courts below the writ petition No. 835 of 1975 was filed by the employee challenging his termi nation and the appeal filed thereon were decided on grounds available to the petitioner at that time. A special leave petition was filed by the employee concerned which has now become C.A. No. 655 of 1984. After the judgment in the Central Inland Water 's case (supra), an additional ground is now being taken to contend that a contract entered into way back in the sixties when the employee concerned was an employee of the Orissa Cooperative Insurance Society Ltd., Cuttack could not be enforced now and the same ought to be declared void in view of the Central Inland Water 's case (supra). The intervention was allowed on 24th January, 1990 and Smt. Shyamla Pappu, Senior Advocate submitted written sub missions. It was submitted that adjudication on the merits and the consideration of the facts and circumstances of the case may be left to the Bench hearing the matter after the decision of the question of law referred to the Constitution Bench. In this connection, it may, however, be noted that the General Insurance was nationaIised under the provisions of the General Insurance Provisions (Nationalisation) Act, 1972 and the said Act came into force on 20th September, 1972. Prior to this, was passed under the provisions of which Act all under takings of all Insurers vested in the Central Government with effect from I3th May, 1971. This was pending nationali sation which took place in 1972 as aforesaid. Section 7(1) of the said Act which provided for the takeover of former employees reads as under: "Every whole time officer or other employee of an existing Insurer other than an Indian Insurance Company, who was employed by that insurer, wholly or mainly with his general insurance business immediately before the appointed day, shall, on the appointed day, become an officer or other employee, as the case may be, of the Insurance Company, in which the Undertaking to which the service of the officer 227 or other employee relates has vested and shall hold his office or service on the same terms and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him if there had been no such vesting and shall continue to do so until his employment in the Indian Insurance Company in which the undertaking or part has vested, is terminated or until his remuneration, terms and conditions are duly altered by that Indian Insur ance Company. " The original terms and conditions had not been altered and the employees like the appellant in C.A. No. 855/84 continued to be governed by the original terms and condi tions of the contract at the time of termination. The origi nal terms and conditions of employment, therefore, continued in force. The contract of service was entered into when the appellant joined the Orissa Cooperative Insurance Society Ltd. way back in 196 1 and at the time of take over by the Central Government was the Divisional Manager of the said society. After the take over by the Central Government of general insurance in 1972, a great deal of reorganisation had to be effected in order to tone up the system of general insurance which had become unwieldy due to the mushroom growth of societies with no control whatsoever when insur ance was in private hands. It was submitted by Smt. Shyamla Pappu that there are many such cases where action was taken soon after nationali sation of general insurance in 1972. If such orders are set aside today, Smt. Shyamla Pappu posed the question, what would be the result? Would the order set aside, at this stage give the employee a right to be reinstated '? If the answer to the above is in the affirmative, would it be conducive to efficiency in the conduct of a public utility such as general insurance, Smt. Pappu raised the question. Would it not hamper the Company 's business considering that the reduction/reorganisation of staff was essential for the effective functioning of the public service? Smt. Pappu asked the question would the public service not be saddled with unnecessary and/or incompetent staff, thus, burdening the public utility/service with unmanageable costs and staff that is ineffective '? It was urged that the New India Assur ance Company had a clause, in the contract at the relevant time, which was as follows: "in the event of the society not having any further need of any employees services, whether permanent or temporary, which shall be decided by the board, the Principal Officer 228 shall give 30 days notice in writing for termination of his services or in lieu thereof pay such employee a sum equiva lent to one month pay including allowance upto the period of notice. " The above clause covered cases of retrenchment, aboli tion of posts and other situations which had been adjudicat ed upon by this Court. If, however, the Central Inland Water 's case (supra) is applied, Smt. Shyamla Pappu submit ted, then the management of the Intervene r Company will be powerless even in a case of abolition of posts or retrench ment or any other allied situation. It is seen that the power to terminate an employee is co existent with the power to appoint. Shyamla Pappu relied on the General Clauses Act and submitted that the Central Inland Water 's case (supra) was erroneous in so far as it made a complete nega tion of this power. Then, it was submitted by her that in case of an employer who had made all the necessary investi gation and the employee concerned has been fully heard before the order 01 ' termination and if the decision of Central Inland Water 's case was applied, then even such a case would be a case of illegal termination, considering that there would be no power to terminate. It was submitted that the Central Inland Water 's case had to be read down because paras 77, 92 and 93 of the report take in even private employment. The sweep of the judgment cannot hold good and had to be curtailed. According to Smt. Pappu, what then was the position of terminations effected when the law was different? It cannot be said that they are entitled to relief now. It should be clarified that the judgment of this Court would apply pro spectively, it was submitted. Past cases might be treated as concluded in view of the law prevailing at that time and also in view of the contentions urged by the parties in the courts below at various stages. In the event, this Court comes to the conclusion that even old cases would be covered by the judgment now rendered, the orders already passed may be upheld and a post decisional hearing might be directed so that the management concerned has the opportunity of showing that there existed good reasons for termination though the same were not communicated to the employee concerned because the law then existing did not require such a communication. In the interest of justice, we should allow such a course. In the light of the provisions and in the facts and the circumstances of the case, it is, therefore, necessary to consider the validity of the power of termination of employ ment by the employers or authorities of the employees with out holding any enquiry in the circum 229 stances noted in the several civil appeals and applications herein. In these civil appeals. the question of actual user of power is not the main issue. but the validity of clauses or regulations containing the aforesaid power. The instances of actual user of power, however, are not wholly irrelevant on the question of the validity or extent of the power because these explain the extent and content of power and/or occa sion for such user. Firstly. we have to. in view of the facts and the circumstances of the Civil Appeal No. 2876 of 1986, consider the amplitude of the power under clause (b) of Regulation 9 of the Regulations concerned. We have noted the contents of that Regulation. We have also noted the amplitude of the expression of that power as was canvassed before the High Court in the matter under appeal and as noticed by the decision of this Court in Delhi Transport Undertaking vs Balbir Saran Goel 's case (supra). A survey of the several authorities of law and the development of law from time to time would lead one to the conclusion that the philosophy of the Indian Constitution, as it has evolved, from precedent to precedent. has broaden the horizons of the right of the employees and they have been assured security of tenures and ensured protection against arbitrariness and discrimination in discharge or termination of his employ ment. This is the basic concept of the evolution from the different angles of law of master and servant or in the evolution of employer and employee relationship. It is true that. the law has travelled in different channels, govern ment servants or servants or employees having status have to be differentiated from those whose relationships are guided by contractual obligations. But it has to be borne in mind that we are concerned in these matters with the employees either of semi Government or statutory corporations or public undertakings who enjoy the rights. privileges. limitations and inhibitions of institutions who come within the ambit of Article 12 of the Constitution. It is in the background of these parameters that we must consider the question essentially and basically posed in these matters. The basic and the fundamental ques tion to be judged is. in what manner and to what extent, the employees of these bodies or corporations or institutions could be affected in their security of tenure by the employ ers consistent with the rights evolved over the years and rights emanating from the philosophy of the Constitution as at present understood and accepted. We have noted the exhaustive and the learned analysis of the background of the diverse facts projected in the several cases and appeals before us. 230 Efficiency of the administration of these undertakings is very relevant consideration. Production must continue, services must be maintained and run. Efficacy of the serv ices can be manned by the disciplined employees or workers. Discipline, decency and order will have to be maintained. Employees should have sense of participation and involvement and necessarily sense of security in semi permanent or quasi permanent or permanent employment. There must be scope for encouragement for good work. In what manner and in what measure. this should be planned and ensured within the framework of the Constitution and, power mingled with obli gations, and duties enjoined with rights, are matters of constitutional adjustment at any particular evolved stage of the philosophy of our Constitution. We have noted several decisions, numerous as these are, and the diverse facts, as we have found. We have noted that in some cases arbitrary action or whimsical action or dis criminatory action can flow or follow by the preponderance of these powers. The fact that the power so entrusted with a high ranking authority or body is not always a safe or sound insurance against misuse. At least, it does not always ensure against erosion of credibility in the exercise of the power in particular contingency. Yet, discipline has to be maintained, efficiency of the institution has to be ensured. It has to be recognised that quick actions are very often necessary in running of an institution or public service or public utility and public concern. It is not always possible to have enquiry because disclosure is difficult; evidence is hesitant and difficult, often impossible. In those circum stances, what should be the approach to the location of power and what should be the content and extent of power, possession and exercise of which is essential for efficient running of the industries or services '? It has to be a matter both of balancing and adjustment on which one can wager the salvation of rights and liberties of the employees concerned and the future of the industries or the services involved. Bearing in mind the aforesaid principles and objects, it appears to us that the power to terminate the employment of permanent employment must be there. Efficiency and expedien cy and the necessity of running an industry or service make it imperative to have these powers. Power must, therefore,. with authorities to take decision quickly, objectively and independently. Power must be assumed with certain conditions of duty. The preamble, the policy, purpose of the enacting provision delimit the occasions or the contingencies for the need for the exercise of the power and these should limit the occasions 231 of exercise of such powers. The manner in which such exer cise of power should be made should ensure fairness, avoid arbitrariness and mala fide and create credibility in the decisions arrived at or by exercise of the power. All these are essential to ensure that power is fairly exercised and there is fair play in action. Reasons, good and sound, must control the exercise of power. We have noted the rival submissions. Learned Attorney General of India and the learned Solicitor General and others appearing those who sought for sustaining the power by the employers or the authorities, contend that for effi ciency of the industry, for the attainment of the very purpose for which institutions are created, there should be power to terminate the employment of undesirable, ineffi cient, corrupt, indolent, disobedient employees in those cases where holding of enquiry or prolonging these employees for that purpose would be detrimental, difficult and frus trating. It is in this context that we should examine the power under the aforesaid Regulation 9(b). The power must be there, the power must be utilised by person or authority, high ranking enough or senior enough who can be trusted or who can be presumed to be able to act fairly, objectively and independently. The occasion for the exercise of the power must be delimited with precision, clarity or objectiv ity. And those occasions must be correlated to the purpose for which the powers are sought to be exercised. In concrete terms, for the running of the industry or the service, efficiently, quickly and in a better manner or to avoid deadlocks or inefficiency or friction, the vesting of the power in circumstances must be such that will evoke credita bility and confidence. Reasons must be there, reasons must be perspectable, reasons must be relevant and the reasons must be of authority independently, fairly and objectively arrived at. Notice of hearing may or may not be given, opportunity in the form of an enquiry may or not be given, yet arbi trariness and discrimination and acting whimsically must be avoided. These power must, therefore, be so read that the powers can be exercised on reasons, reasons should be re corded, reasons need not always be communicated, must be by authorities who are competent and are expected to act fair ly, objectively and independently. The occasion for the use of power must be clearly circumscribed in the above limits. These must also circumscribe that the need for exercise of those power without holding a detailed or prolonged enquiry is there. As we have noted, a good deal of controversy was that these 232 inhibitions or limitations or conditions are not there in the amplitude or the extent of the power enumerated or stated in Regulation 9(b) of the aforesaid Regulations concerned or of similar provisions that we have examined in these cases. We have noted the argument, learned and interesting, on the question of judicial law making imputing to the legisla tures what these have not articulated. Should the courts say or can say what the legislatures have not said '? We have noted the controversy of how should legislation of limited legislatures, Parliaments or rule making bodies, who are not expected or enjoined to make rules or laws contrary to or in derogation or the constitutional prohibitions and inhibi tions be read. We have been tempted to read down in the path of judicial law making on the plea that legislature could not have intended to give powers to the authorities or employers which would be violative of fundamental rights of the persons involved in the exercise of those powers and, therefore, should be attributed those powers on conditions which will only make these legal or valid. Our law making bodies are not law into themselves and cannot create or make all laws. They can only confer powers or make laws for the conferment of powers on authorities which are legal and valid. Such powers conferred must conform to the consitu tional inhibitions. The question, therefore, is is it possible or desirable to read down the power conferred under Regulation 9(b) or similar regulations permitting employer or the authority to terminate the employment of the employ ees by giving reasonable notice or pay in lieu of notice without holding enquiry with the conditions indicated or mentioned hereinbefore? Will it or will it not amount to making laws of stating which the legislature or the law making body has not stated? We have been reminded that judges should not make laws. But the question is can the judges articulate what is inarticulate and what can be reasonably and plainly found to be inherent on the presumption that a legislature or a law making body with the limited authority would act only within limitations so as to make the legislation or law valid and the legislature must be presumed to act with certain amount of knowledge and fairness protecting the rights of people concerned and aiming at fairness in action? We have noted the rival contentions. We have noted the submission that Mr. Garg, Mr. Ramamurthi and others invited us not to read down and against legislating positively with conditions. But the question is are those conditions which we are invited to attribute to 233 the legislature or the law making bodies contrary to or against the manifest intention of the legislature? Legislation, both statutory and constitutional, is enacted, it is true, from experience of evils. But its general language should not, therefore, necessarily be confined to the form that evil had taken. Time works changes, brings into existence new conditions and purposes and new awareness of limitations. Therefore, a principle to be valid must be capable of wider application than the mischief which gave it birth. This is particularly true of the constitutional constructions. Constitutions are not ephemeral enactments designed to meet passing occasions. These are, to use the words of Chief Justice Marshall, "designed to approach immortality as nearly as human insti tutions can approach it . . ". In the application of a Constitutional limitation or inhibition, our interpretation cannot be only of 'what has been ' but of 'what may be '. See the observations of this Court in Sunil Batra vs Delhi Administration (supra). Where, therefore, in the interpreta tion of the provisions of an Act, two constructions are possible, one which leads towards constitutionality of the legislation would be preferred to that which has the effect of destroying it. If we do not read the conferment of the power in the manner we have envisaged before, the power is liable to be struck down as bad. This, we say in spite of the argument by many including learned Solicitor General of India and Smt. Shyamla Pappu that in contractual obligations while institutions or organisations or authorities, who come within the arebit of Article 12 of the Constitution are free to contract on the basis of 'hire and fire ' and the theory of the concept of unequal bargain and the power conferred subject to constitutional limitations would not be applica ble. We are not impressed and not agreeable to accept that proposition at this stage of the evolution of the constitu tional philosophy of master and servant framework or if you would like to call it employer or employee relationship. Therefore, these conferments of the powers on the employer must be judged on the constitutional peg and so judged without the limitations indicated aforesaid, the power is liable to be considered as arbitrary and struck down. Whenever a statute comes up for consideration, it must be remembered that it is not within human powers to ,foresee the manifold sets of facts which may arise, and, even if it were, it is not possible to provide for them in terms free from all ambiguity. The English language, and for that matter any language in use today, is not an instrument of mathematical precision. It has been said that our literature would have been much the poorer if it were. Leaving, how 234 ever. the question of richness or poverty of our literature apart, we must proceed on the assumption that human mind cannot foresee everything. It has, therefore, been said that when a question arises whether the power has been properly conferred and even if so, the extent of it. Lord Denning has opined that a Judge in such a situation cannot simply fold his hand and blame the draftsmen and look for new enactment. Lord Denning invites us to set to work on the construction task of finding the intention of the Parliament or the law making body and we must. however. do this not only from the language of the statute. because. as we have seen. language is an imperfect medium and very often thoughts are perpetu ally in search of 'broken language '. But the judge must also do it from a consideration of the social conditions which give rise to it, and o[ the mischief which it was intended to remedy and also in the light of the constitutional inhi bitions and then supplant the written words and add to it end give 'force and life ' to the intention and purpose of the legislature or the law making authority. A judge must not alter the material of which a law or an instrument is woven, but he can and should iron out the creases and if one may venture to say, make articulate the inarticulate premise but make articulate only which follow from necessary compul sions of the situations and the constitutional position. See in this connection the observations of Lord Denning in "The Discipline of Law" at p. 12. It is true that judicial jealously of legislature in law making has long been outdrawn, but the strict construction remains still an established rule. It is generally accepted principle that judges in interpreting statutes, should give effect to the legislators ' intent. By doing so. the courts do recognise their subordinate position and their obligation to help the legislature to achieve its purpose. But in that effort. creativity is essential. There have been differences of opinion on the practices that the courts may employ in attempting to discover the legislative intent. In the begin ning, conventional practice was only to look to the words of the statutes. Now the entire spectrum has to be examined. It has been said that judges are not unfettered glossators. is true that there is no actual expression used ena bling the legislation or the statute in question indicating the limitations or conditions as aforesaid. But it must proceed on the premise that the law making authority intend ed to make a valid law to confer power validly or which will be valid. The freedom, therefore, to search the spirit of the enactment or what is intended to obtain or to find the intention of the Parliament gives the Court the power to supplant and supplement the expressions used to say what was left unsaid. This is a power which 235 is an important branch of judicial power, the concession of which if taken to the extreme is dangerous, but denial of that power would be ruinous and this is not contrary to the expressed intention of the legislature or the implied pur pose of the legislation. It was not as Shri Ramamurthi tried to argue that legislature wanted to give an uncontrolled and absolute power to discharge employees on the part of the employers without any enquiry in all circumstances. That cannot be and that was not intended to be as can be implied from all the circumstances. In the aforesaid view of the matter, I would sustain the constitutionality of this conferment of power by reading that the power must be exercised on reasons relevant for the efficient running of the services or performing of the job by the societies or the bodies. It should be done objective ly, the reasons should be recorded, it should record this and the basis that it is not feasible or possible reasonably to hold any enquiry without disclosing the evidence which in the circumstances of the case would be hampering the running of the institution. The reasons should be recorded, it need not be communicated and only for the purpose of the running of the institution, there should be factors which hamper the running of the institution without the termination of the employment of the employee concerned at that particular time either because he is a surplus, inefficient, disobedient and dangerous. Construction or interpretation of legislative or rule provisions proceeds on the assumption that courts must seek to discover and translate the intention of the legislature or the rule making body. This is one of the legal fictions upon the hypothesis of which the framework of adjudication of the intention of a piece of legislation or rule proceeds. But these are fictional myths to a large extent as experi ence should tell us. In most of the cases legislature, that is to say, vast majority of the people who are supposed to represent the views and opinions of the people, do not have any intention, even if they have, they cannot and do not articulate those intentions. On most of these issues their is no comprehension or understanding. Reality would reveal that it is only those who are able to exert their view points, in a common parliamentary jargon, the power lobby, gets what it wants, and the machinery is of a bureaucratic set up who draft the legislation or rule or law. So, there fore, what is passed on very often as the will of the people in a particular enactment is the handy work of a bureaucrat ic machine produced at the behest of a power lobby control ling the corridors of power in a particular situation. This takes the mythetical 236 shape of the 'intention of the people ' in the form of legis lation. Again, very often, the bureaucratic machine is not able to correctly and properly transmute what was intended to be conveyed. In such a situation, is it or is it not better, one would ponder to ask, whether the courts should attribute to the law making body the knowledge of the values and limitations of the Constitution, and knowledge of the evils that should be remedied at a particular time and in a situation that should be met by a particular piece of legis lation, and the court with the experience and knowledge of law, with the assistance of lawyers trained in this behalf, should endeavour to find out what will be the correct and appropriate solution, and construe the rule of the legisla tion within the ambit of constitutional limitations and upon reasonable judgment of what should have been expressed. In reality, that happens in most of the cases. Can it be con demned as judicial usurpation of law making functions of the legislature thereby depriving the people of their right to express their will? This is a practical dilemma which Judges must always, in cases of interpretation and construction, face and a question which they must answer. I have noted the guidelines for the exercise of the power, preamble, relevant sections from which the reasons should be inferred and recorded, although they need not be communicate. These should be recorded in order to ensure effective judicial review in a given case. Termination simpliciter under Regulation 9(b) or similar powers can be exercised only in circumstances other than those in regula tion 9(a). The exercise of such powers can only be for purposes germane and relevant to the statute. There are several illustrations of that, namely, the employee is incompetent or unsuitable so as to make his continuance in the employment detrimental to the interest of the institu tion, where the continuance of the employee is a grave security risk making his continuance detrimental to the interest of the Corporation and where because of the conduct of the employee, there is lack of confidence in the employee which makes it necessary in the interest of the Corporation to immediately terminate the services of the employee. These, however, are illustrative and not exhaustive. There fore, each case of the conferment of the power involved should be decided on the aforesaid basis. I am conscious that clear intention as indicated in a legislation cannot be permitted to be defeated by means of construction. It has been said that if the legislature has manifested a clear intention to exercise an unlimited power, it is impermissible to read down the amplitude of that power so as to make it limited. I do not agree. Our 237 legislatures are limited by the constitutional inhibitions and it is time, in my opinion, that we should read their Acts and enactments with the attribute that they know their limits and could not have intended to violate the Constitu tion. It is true that where there are clear, unambiguous and positive terms in a legislation, the Court should be loath to read down. It should proceed with a straight forward method of striking down such legislations. But where the statute is silent or not expressive or inarticulate, the Court must read down in the silence of the statute and in the inarticulation of its provisions, the constitutional inhibitions and transmute the major inarticulate premise into a reality and read down the statute accordingly. It is true perhaps, as has been said, that in the history of constitutional law, statutes are seldom read down to mean what they say and intend. It is begging the question. If the statutes are seldom read down to mean what they say and intend. It is begging the question. If the statute does not specifically say, in such circumstances, as to how do we find the intention to transgress the constitutional limita tions. At least, the relevant provisions of the relevant statutes and the rules, mentioned hereinbefore, are, in my opinion, on these points, not expressive enough to betray an intention transgress constitutional limitations. I am afraid that reference to Elliott Ashton Welsh, II vs United States, ; ; is inept in the background of the principles we are confronted with. The plain thrust of legislative enactment has to be found out in the inarticu late expressions and in the silence of the legislation. In doing so, to say what the legislature did not specifically say, is not distortion to avert any constitutional colli sion, In the language of the relevant provisions with which we are confronted, I do not find that intention of the legislature to flout the constitutional limitations. I am also unable to accept the contention of Mr. Garg as well as Mr. Ramamurthi that it is clear as a result of the constitutional position of the security of tenure of the employees as well as the expressed language of the provi sions of several enactments that there is no valid power of the termination of employment of the permanent employees without holding an enquiry or giving an opportunity to the employees to rebut the charges on the grounds of termination in all circumstances. It was contended, as I have noted, by Shri R.K. Garg that no principle of interpretation permitted reading down a provision so as to make it into a different provision altogether different from what was intended by the legislature or its delegate. Reference was made to the decision of this Court in R.M.D.C. 's case (supra). I am unable to accept this contention. It is not that the reading down is used for a purpose which is just the opposite which the legislature had intended. 238 Legislature had not intended arbitrary or uncontrolled or whimsical power. Indeed it considered. This is not the proper way to read that power in the said Regulation 9(b). Para 522 of the Shastri Award, read properly, must be cir cumscribed with the conditions indicated above as a neces sary corollary or consequence of that power. It is also not reading to the legislature conditions which were not there in the second proviso Article 311(2) of the Constitution. In view of the ratio of the five judge Bench decision of this Court in Tulsiram 's case (supra), which had examined all the relevant decisions, I am unable to accept the submission of Shri R.K. Garg and Mr. Ramamurthi. Absolute powers, it is true, cannot be regulated without essential legislative policy, but here properly read, absolute power was not there. Power that was only constitutionally valid, that power can be presumed to have been given and if that pre sumption is made, conditions indicated above inevitably attach. We are not concerned with the concept of industrial democracy sought to be propounded by Mr. Garg in this case. The validity and the propriety of having industrial democra cy is not in issue. What is in issue is demonstrable fair play and justice, as sought for by Mr. Garg, in the exercise of the power which must be conceded as an essential at tribute for proper functioning of the institution. It is true that no drafts as such have been submitted by the learned Attorney General or by the learned Solicitor General nor by any counsel appearing for the management. But these conditions, which we have noted, are necessary corol lary flowing from the conferment of the power of termination in a constitutional manner for the smooth, proper and effi cient running of the industry. In the aforesaid view of the matter, 1 am unable to accept the submissions of Mr. Garg and Mr. Ramamurthi. The power must be there, the power must be read down in the manner and to the extent indicated above, in my opinion, of terminating the services of permanent employees without holding any enquiry in the stated contingencies and this would be by either virtue of the silence of the provision indicating the contingencies of termination or by virtue of constitutional inhibitions. That reading would not violate the theory that judges should not make laws. In the aforesaid view of the matter, I direct that whenever question of exercise of the power of termination of permanent employees by reasonable notice without holding any enquiry arises, the extent of 239 the power should be read in the manner indicated above and we reiterate that such powers can be exercised for the purposes of the Act which will be determinable by the pream ble and by relevant enacting provisions and the contingen cies for the exercise of the power must be specified and powers should be exercised by authority competent and inde pendent enough and should be articulated by reasons stated even if not communicated. These are the limitations inherent and latent in the framework of our Constitution and the power with these limitations is valid. Having regard to the aforesaid view, I will have to dispose of the appeals in terms of the aforesaid principles. Next the question arises what would be the position of the rights and liabilities determined as anterior to or before our reading these powers to be conditioned as afore said. Having regard to the finality of the position of law and having regard to the theory that parties have adjusted their rights on the understanding of the law as it was, in our opinion, justice of the situation would be met if we declare and hold that pending litigations should be examined in the light of the aforesaid principles and dispose of in the aforesaid light, namely, where issues of damages or consequences of termination by virtue of exercise of the power are still pending adjudication in any forum and have not been finally adjudicated, these should be re examined by the appropriate authorities before whom these issues are pending in the light of these principles, that is say, the exercise of the power should be judged on these conditions and in the light of those conditions. If in the light of these conditions, the exercise of the power is valid, the termination should be held to be valid, if on the other hand, there was exercise without compliance with these conditions, the termination would be invalid and conse quences in law of damages or reinstatement or others will follow. But previous terminations where the lis is no longer pending before any authority will not be reopened. To that extent. I will declare this to be the law prospectively. I had, after circulating the draft judgment herein, the advantage of the views of my learned brothers. They do not agree with me. With respect. I am definitely of the opinion that time has come for the judicial interpretation to play far more active, creative and purposeful role in deciding what is "according to law". Law as evolved in India today, in my opinion, makes the limitations on user of power quite clear and distinct, in this branch. These are constitutional limitations. Therefore, every provision in any legislation by limited legislatures, in 240 my opinion, should be judged bearing in mind that the legis lature and the law making authorities were aware and are bound by these constitutional limitations. These inhibitions must be read into these provisions so that law becomes effective, purposeful and legal. In that view of the matter, I am of the opinion that we should approach the question of constitutional limitations or inhibitions in our interpreta tion in deciding in each individual cases by not 'what has been ' but 'what may be '. This is the role and purpose of constitutional interpretation by the apex Court of the country. I know that this view of mine is not shared in this decision by my learned brothers. I respect their views, but I would like to hope that one day or the other this Court would be mature enough to fulfil what is purposeful and I believe to be the true role and purpose of the Court in interpretation in the light of constitutional inhibitions. Having had the advantage of the views of my learned broth ers, I regret, with respect, I cannot join them in their views. I am the loser for the same, but I will fondly hope only for the time being. I believe that we must do away with 'the childish fic tion ' that law is not made by the judiciary. Austin in his Jurisprudent at page 65, 4th edn. has described the BIack stone 's principle of finding the law as 'the childish fic tion '. Chief Justice K. Subba Rao in I.C. Golak Nath & Ors. vs State of Punjab & Ant '. , ; at p. 811 has referred to these observations. This Court under Article 14 1 of the Constitution is enjoined to declare law. The ex pression 'declared ' is wider than the words 'found or made '. To declare is to announce opinion. Indeed, the latter in volves the process, while the former expresses result. Interpretation, ascertainment and evolution are parts of the process, while that interpreted, ascertained or evolved is declared as law. The law declared by this Court is the law of the land. To deny this power to this Court on the basis of some outmoded theory that the Court only finds law but does not make it, is to make ineffective the powerful in strument of justice placed in the hands of the highest judiciary of this country. See the observations of Chief Justice K. Subba Rao in 1. C. Golak Nath & Ors '. vs State of Punjab & Anr. , (supra at pp. 813/14). I would, therefore, plead for a more active and creative role for the courts in declaring what the law is. In the aforesaid light, in Civil Appeal No. 2876 of 1986, having regard to the facts and the circumstances and the attitude taken by the Delhi Transport Corporation, I do not interfere with the order of the High Court. The appeal shall, therefore, fail. 241 Having regard to the facts and the circumstances and the observations above. Civil Appeal No. 655 of 1984 (M.L. Kamra vs Chairman cum Managing Director, New India Assurance Co. ) will be placed before a division bench of this Court to be disposed of in accordance with law and the light of the observations made herein. For the reasons that I have indicated above, in Civil Appeal No. 1115 of 1976 (Satnam Singh vs Zilla Parishad Ferozepur & Anr., ), with the facts herein where apparently no reasons were recorded, the appeal of Satnam Singh suc ceeds and in the interest of justice, the monetary relief should be given to the appellant which is quantified at Rs.4,83,061.90 paise (Rupees four lakhs eighty three thou sand and sixty one and ninety paise). I have indicated before the basis on which this quantification has been made. For the same reasons, Civil Appeal No. 4073(NL) of 1986 (Mahesh Kumar Giroti vs Regional Manager, Region 11, Region al Office, State Bank of India, Bareilly & Ors.), Civil Appeal No. 331 of 1987 (The Delhi Transport Corporation & Anr. vs Shri Hans Raj), Civil Appeal No. 328 of 1987 (The Delhi Transport Corporation & Anr. vs Shri Rohtash Singh), Special Leave Petition No. 75 12 of 1987 (Delhi Transport Corporation vs Shri Mohinder Singh & Anr.), and Civil Appeal No. 330 of 1987 (The Delhi Transport Corporation & Anr. vs Shri Prem Singh) should be placed before the divi sion bench of this Court to be disposed of in accordance with the observations made herein and in accordance with law. The appeals I would dispose of accordingly. Intervention of the parties are allowed and the C.M.Ps. are disposed of in the aforesaid terms. RAY, J. I have had the privilege of deciphering the judgment rendered by the learned Chief Justice. As the question involved in these groups of appeals for decision is very important, it is deemed necessary to express my views on this important matter. The pivotal question which arises for consideration is whether Regulation 9(b) of the Regulations framed under section 53 of the Delhi Road Transport Act, 1950 which provides for termination of services of permanent employees on giving simply one month 's notice or pay in lieu thereof without recording any reason therefore in the order of termination is arbitrary, illegal, discriminatory and viola tive of Audi Alteram Partern Rule and so constitutionaly invalid and void. It is 242 also necessary to consider in this respect whether the said Rule 9(b) can be interpreted and read down in such a manner to hold that it was not discriminatory nor arbitrary nor does it confer unbridled and uncanalised power on the trans port authority to, terminate, however, the services of any employee including permanent employee without any reason whatsoever by the Delhi State Transport Authority. It is also necessary to consider whether such a power can be exercised without conforming to the fundamental right em bodied in the Article 14 as interpreted by this Court in E.P. Royappa 's case that arbitrariness is the anti thesis of equality enshrined in Article 14 of the Constitution. In other words, whether such a regulation has to comply with the observance of fundamental rights guaranteed by Part III of the Constitution and whether such a power is to be exer cised in furtherance of and in consonance with the Directive Principles embodied in Article 38 and 39 of the Constitu tion. It is convenient to set out the relevant provisions of Regulation 9(b) framed by the Delhi Road Transport Authority under the 1950 Act. 9(b) Termination of services (b) Whether the termination is made due to reduction of establishment or in circumstances other than those mentioned in (a) one month 's notice or pay in lieu thereof will be given to all categories of employees. On a plain reading of this Regulation it is apparent that the authority has been conferred the power to terminate the services of any employee whether permanent or temporary by giving the month 's notice or pay in lieu thereof without recording any reason whatsoever in the purported order of termination of services. Thus a regular, temporary or perma nent employee of the State Transport Authority can be dis missed or removed from service at the whims and caprices of the concerned authority without any reason whatsoever and undoubtedly this evidence that such unbridled, indiscrimi nate and uncanalised power to terminate the services even of a permanent employee without assigning any reason and with out giving any opportunity of hearing as far play and jus tice demands a reasonable procedure is per se, arbitrary and discriminatory. It has been contended by the Attorney Gener al, appearing on behalf of the State that such a power is not uncanalised or unbridled and arbitrary in as much as firstly such power has been conferred on the responsible authority namely D.T.C. 243 for public purposes and secondly, the Regulation 9(b) is to be read down so as to make it constitutionally valid. It will be seen that there is guidance for exercise of this power in the regulation itself. It has also been submitted in this connection by the learned Attorney General that a provision of the Constitution has to be presumed to be valid unless it is proved by the other side challenging the con stitutional validity of such a provision that the same is arbitrary and so void. Several authorities have been cited at the Bar on this point. It is profitable to refer to the earlier pronouncements of this Court on this crucial question. Rules 148(3) and 149(3) in contravention of the provision of Article 14 of the Constitution were challenged before this Court in the case Moti Ram Deka etc. vs General Manager, N.E.F. Railways, Maligaon, Pandu, etc. ; , Rule 148(3) of the Railways Establishment Code is set out here under: "148(3) "Other (non pensionable) railway servants: The service of other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Arti cle 311 of the Constitution, retirement on attaining the age of superannuation and termination of service due to mental or physical incapacity. " In this case the service of Moti Ram Deka, a peon em ployed by the Railway and Sudhir Kumar Das a confirmed clerk, whose services have been terminated under Rule 148(3) of the said Rules challenged the termination of their serv ices before the Assam High Court which rejected the same and ultimately it came up to this Court on Special Leave. It was held by the Majority that Rules 148(3) and 149(3) are in valid in as such as they are inconsistent with the provi sions of article 311(2), as they purport to removal from serv ice of permanent servants without compliance with the proce dure prescribed by Article 311(2). It was also held that the Rule 148(3) contravenes article 14 as it does not give any guidance for exercise of the discretion by the authority concerned and hence it is invalid. It is necessary to refer in this connection to the pronouncement of this Court in the case of Parshotam Lal Dhingra vs Union of India, ; where it has been held that protection of Article 311 is 244 available only where dismissal, removal or reduction in rank is sought to be inflicted by way of punishment and not otherwise. Thus even the probationer or temporary employee if removed from service or dismissed from service as a penal measure having civil consequences has to conform to the procedure prescribed by Article 311(2) of the Constitution. Even a probationer who has no right to the post cannot be removed from service as a penal measure without complying with Article 311(2) of the Constitution. In the case of Shyam Lal vs The State of Uttar Pradesh and Anr., ; it was held by this Court that a compulsory retirement from service under the Civil Services (Classification, Control and Appeal) Rules does not amount to dismissal or removal within the meaning of Article 311 of the Constitution and therefore does not fall within the provision of the said Act. In the case of Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Others, ; the constitutionali ty of the Commission of Enquiry Act, 1952 was challenged. It was held that the Act was valid and intra vires and that the notification was also valid excepting the words "as and by way of securing redress or punishment" in CI. 10 thereof which went beyond the Act. It has been further held that it is now well settled that while Article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legis lation. Thus, to pass the test of permissible classification two conditions must be fulfilled, namely, that (i) That the classification must be rounded on an intelligible differen tia which distinguishes persons or things that are grouped together from others left out of the group and, (ii) that that differentia must have a rational relation to the object sought to be achieved by the statute in question. It has also been held that it must be presumed that the legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds. This Court observed in Jyoti Pershad vs The Administra tor For the Union Territory of Delhi; , while holding that Section 19 of the , was not obnoxious to the equal protec tion of laws guaranteed by Art, 14 of the Constitution, there was enough guidance to the competent 245 authority in the use of his discretion under Section 19(1) of the Act. The restrictions imposed by Section 19 of the Act could not be said to be unreasonable. It has been further observed that (1) If the statute itself or the rule made under it applies unequally to per sons or things similarly situated, it would be an instance of a direct violation of the Constitutional Guarantee and the provision of the statute or the rule in question would have to be struck down. (2) The enactment or the rule might not in terms enact a discriminatory rule of law but might enable an unequal or discriminatory treatment to be accorded to persons or things similarly situated. This would happen when the legislature vests a discretion in an authority, be it the Government or an administrative official acting either as an executive officer or even in a quasi judicial capacity by a legisla tion which does not lay down any policy or disclose any tangible or intelligible purpose, thus clothing the authori ty with unguided and arbitrary powers enabling it to dis criminate. In State of Orissa vs Dr. (Miss) Binapani Dei & Ors., ; the respondent joined service of the State Government in 1938. In the service record certain date of birth was recorded. In 196 1 Government held enquiry as to date of birth and she was asked to show cause why a certain date of birth should not be taken as a date of birth. The enquiry report was not disclosed to her and she was not given any opportunity to meet the evidence. The Government refixed her date of birth and ordered that she will be compulsorily retired. It was held that such a enquiry and decision were contrary to the basis concept of justice and cannot have any value. It is true that the order is adminis trative in character, but even an administrative order which involves civil consequences as already stated, must be made consistently with the rules of natural justice after inform ing the first respondent of the case of State, the evidence in support thereof and after giving an opportunity to the first respondent of being heard and meeting or explaining the evidence. No such steps were admittedly taken; the High Court was, in our judgment, right in setting aside the order of the State. In A.K. Kraipak and Others vs Union of India and Others, it has been held at page 268 269 Paragraph 13: "The dividing line between an administrative power and a 246 quasi judicial power 'is quite thin and is being gradually obliterated. For determining whether a power is an adminis trative power or a quasi judicial power one has to look to the nature of the power conferred, the person or persons on whom it is conferred, the framework of the law conferring that power, the consequences ensuing from the exercise of that power and the manner in which that power is expected to be exercised. Under our Constitution the rule of law per vades over the entire field of administration. Every organ of the State under our Constitution is regulated and con trolled by the rule of law. In a welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of rule of law would lose its vitality if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner. The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously. The procedures which are considered inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision . . What was considered as an administrative power some years back is now being considered as a quasi 'judicial power. ' ' In the case of Union of India vs Col. J.N. Sinha and Anr., 1. J.N. Sinha was compulsorily retired by an order of the President of India dated 13.8.69 under Section 56(j) of the Fundamental Rules from Government service without assigning any reason in the order. The High Court on a writ petition against the impugned order held that there was violation of principles of natural justice. On an appeal on Special Leave this Court held: "Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights. As observed by this Court in Kraipak and Ors. vs Union of India "the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. If a statutory provision can be read consist ently with the principles of natural justice, the courts should do so because it must be presumed that the legisla 247 ture and the statutory authorities intend to act in accord ance with the principles of natural justice. But on the other hand a statutory provision either specifically or by necessary implication excludes the application of any or all the principles of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision the princi ples of natural justice. Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the ex press words of the provisions conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of that power. " It was held that Fundamental Rule 56(j) does not in term require that any opportunity should be given to the con cerned servant to show cause against the compulsory retire ment. The order of the President is, therefore, not bad as the authority bona fide forms that opinion. In the case of Air India Corporation vs V.A. Rebello & Anr., ; the service of the respondent was terminated under Regulation 48 of the Air India Employees ' Service Regulations. The said Regulation 48 reads as under: CHAPTER VIII Cessation of Service X X X X X X X X X X X X X X X X X X 48. Termination: The service of an employee may be terminat ed without assigning any reason, as under: (a) of a permanent employee by giving him 30 days ' notice in writing or pay in lieu of notice; (b) of an employee on probation by giving him 7 days ' notice in writing or pay in lieu of notice; (c) of a temporary employee by giving him 24 hours ' notice in writing or pay in lieu of notice. In this case the complainant, V.A. Rebello was dismissed from service under Regulation 48 by paying salary of 30 days in lieu of notice. The order does not suggest any misconduct on behalf of the 248 complainant and it is not possible to hold that the order was passed on any misconduct. This has been challenged by the complainant by filing a complaint before the National Industrial Tribunal. Under Section 33 A of the the order was challenged as amounting to dismissal from service. The Tribunal held in its award that the discharge of the respondent is not a discharge simplic iter but in breach of section 33 A of and as such directed the complaint to be considered on the merits. On appeal by Special Leave this Court while considering the purpose and scope of Section 33(1) and 33(2) of the , held following its decision in The Workmen of Sudder Office Cinnamara vs The Management, as follows: "That if the termination of service is a colourable exercise of the power vested in the management or as a result of victimisation or unfair labour practice, the Industrial Tribunal would have jurisdiction to intervene and set aside such a termination. In order to find out whether the order of termination is one of termination simpliciter under the provisions of contract or of standing orders, the Tribunal has ample jurisdiction to go into all the circumstances which led to the termination simpliciter. The form of the order of termination, is not conclusive of the true nature of the order, for it is possible that the form may be merely a camouflage for an order of dismissal for misconduct. It is, therefore, open to the Tribunal to go behind the form of the order and look at the substance. If the Tribunal comes to the conclusion that though in form the order amounts to termination simpliciter but in reality cloaks a dismissal for misconduct, it will be open to it to set aside the orders as a colourable exercise of power by the management. " The same principles have also been reiterated in the later decision of this Court in Tara Oil Mills Co. Ltd. vs Workmen & Anr., ; It has been observed in this case: "That the position of the industrial workman is different from that of a Government servant because an industrial employer cannot "hire and fire" his workmen on the basis of an unfettered right under the contract of employment, that right now being subject to industrial adjudication; and there is also on the other hand no provision of the Consti tution like articles 3 10 and 311 requiring consideration in the 249 case of industrial workmen. " It has been further observed: "That Regulation 48 which has been set out earlier as its plain language shows does not lay down or contemplate any defined essential pre requisite for invoking its operation. Action under this Regulation can be validly taken by the employer at his sweet will without assigning any reason. He is not bound to disclose why he does not want to continue in service the employee concerned. It may be conceded that an employer must always. have some reason for terminating the services of his employee. Such reasons apart from misconduct may, inter alia, by want of full satisfaction with his overall suitability in the fact that the employer is not fully satisfied with the overall result of the performance of his duties by his employee does not necessarily imply misconduct on his part." In the case of Maneka Gandhi vs Union of India, 1. The petitioner was issued a passport on June 1, 1976 under the Passport Act, 1967. On the 4th July, 1977, the petitioner received a letter dated 2nd July, 1977, from the Regional Passport Officer, Delhi, intimating to her that it was decided by the Government of India to impound her passport under section 10(3)(c) of the Act "in public interest. " The petitioner was required to surrender her passport within 7 days from the receipt of that letter. The petitioner immediately addressed a letter to the Regional Passport Officer requesting him to furnish a copy of the statement of reasons for making the order as provided in Section 10(5), reply was sent by the Government of India, Ministry of External Affairs on 6th July 1977 stating inter alia that the Government decided "in the interest of the general public" not to furnish her copy of the statement of reasons for the making of the order. The petitioner challenges the action of the Government in impounding her passport by a writ petition. Sub section (1) of Section 10 empowers the Passport Authority to vary or cancel the endorsement on a passport or travel document or to vary or cancel it on the conditions subject to which a passport or travel document has been issued having regard to, inter alia, the provisions of section 6(1) or any notification under Section 19. Sub section (2) confers powers on the Passport Authority to vary or cancel the conditions of the passport or travel document on the application of the holder of the passport or travel document and with the previous approval of the Central Government, Sub section (3) pro 250 vides that the Passport Authority may impound or cause to be impounded or revoke a passport or travel document on the grounds set out in cl.(a) to (h). The order impounding the passport in the present case was made by the Central Govern ment under cl. (c) which reads as follows: "(c) If the passport authority deems it necessary so to do in the interest of the sovereignty and integrity of India, the security of India, friendly relations of India with the foreign country, or in the interest of the general public. " It was held that the right to travel and go outside the country is included in the right to Personal Liberty. In order to apply the test contained in articles 14 and 19 of the Constitution we have to consider the objects for which the exercise of inherent rights recognised by article 21 of the Constitution are restricted as well as the procedure by which these restrictions are sought to be imposed, both substantive and procedural laws and actions taken under them will have to pass the test imposed by articles 14 and 19, whenever facts justifying the invocation of either of these Articles may be disclosed. Violation for both articles 21 and 19(1)(g) may be put forward making it necessary for the authorities concerned to justify the restriction imposed by showing satisfaction of tests of validity contemplated by each of these two Articles. The tests of reason and justice cannot be abstract. They cannot be divorced from the needs of the nation. The tests have to be pragmatic otherwise they would cease to be rea sonable. The discretion left to the authority to impound a passport in public interest cannot invalidate the law it self. The orders under Section 10(3) must be based upon some material even if the material concerns in some cases of reasonable suspicion arising from certain credible asser tions made by reliable individual. In an emergent situation, the impounding of a passport may become necessary without even giving an opportunity to be heard against such a step which could be reversed after an opportunity is given to the holder of the passport to show why the step was unnecessary. It is well settled that even if there is no specific provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an indi vidual, which affects the right of 251 that individual the duty to give reasonable opportunity to be heard will be implied from the nature of the function to be performed by the authority which has the power to take punitive or damaging action. An order impounding a passport must be made quasi judi cially. This was not done in the present case. It cannot be said that a good enough reason has been shown to exist for impounding the passport of the petitioner. The petitioner had no opportunity of showing that the ground for impounding it given in this Court either does not exist or has no bearing on public interest or that the public interest can be better served in some other manner. The order should be quashed and the respondent should be directed to give an opportunity to the petitioner to show cause against any proposed action on such grounds as may be available. Even executive authorities when taking administrative action which involves any deprivation of or restriction on inherent fundamental rights of citizens must take care to see that justice is not only done but manifestly appears to be done. They have a duty to proceed in a way which is free from even the appearance of arbitrariness, unreasonableness or unfairness. They have to act in a manner which is patent ly impartial and meets the requirements of natural justice. It is also pertinent to refer in this connection the pronouncement of this Court in the case of E.P. Royappa vs State of Tamil Nadu and Anr., ; "Equality and arbitrariness are sworn enemies, one belongs to the rule of law in a public while the other to the whim and caprice of an absolute monarch. Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. The principle of reasonableness which legally as well as philosophically, is an essential element of equality or non arbitrariness pervades Article 14 like a brooding omni presence and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14, it must be right and just and fair and not arbitrary, fanciful or oppressive. " In the case of Municipal Corporation of Greater Bombay vs Malvenkar and Ors., ; the services of respondent No. 2, a permanent clerk in the Bombay Electric Supply and Transport Undertaking, which is run by the appel lant were terminated from the 252 close of work on January 23, ' 1968 as her record of service was unsatisfactory. The order of termination stated that the respondent No. 2 should be paid one month 's wages in lieu of notice and would also be eligible for all the benefits as might be admissible under the Standing Orders and Service Regulations of the Undertaking. The respondent No. 2 made an application before the Labour Court under Section 42(4) of the Bombay Industrial Relations Act contending that the order terminating her services was invalid as it was not passed by the competent authority as envisaged by the Stand ing Order and that the so called Executive Assistant to the General Manager had no authority to terminate her services because no validly sanctioned post of that designation existed on 20th or 23rd January, 1968. It was also contended that the aforesaid oders besides being mala fide was viola tive of the principles of natural justice in as much as the same was passed without holding any enquiry. The Labour Court dismissed the application. The respondent 's appeal before the President of the Industrial Court was however allowed. The Industrial Court held that the impugned orders bore only the initials of the Central Manager and therefore it was passed by an authority which was lacking in authori ty, the wording "unsatisfactory service record" cast a stigma and was patently punitive attracting the non observ ance of Standing Order No. 26 which did not create an abso lute right in the management to terminate the services of an employee for misconduct without holding an enquiry or giving her a fair opportunity of being heard. A Writ application filed by the appellant was dismissed holding inter alia that the appellant was dismissed holding inter alia that the fact that Standing Order 26 required reasons to be mentioned in the order terminating the services of an employee did not mean that an order of dismissal on the ground of misconduct could be converted into an order of discharge simpliciter by mentioning therein the nature of misconduct. While allowing the appeal on Special Leave it was held by this Court that under Standing Order 26 powers have been given to the Management in a particular case and this ques tion has to be determined having regard to the substance of the matter and not its form. One is the power of holding disciplinary enquiry under clause (3) of Standing Order 231 read with standing Order 23 and the other is the power to terminate the services of an employee by one calendar month 's written notice or pay in lieu thereof under Standing Order 26. The question is as to which power has been exer cised by the Management in a particular case and this ques tion has to be determined having regard to the substance of the matter and not its form. There are two distinct and independent powers and as far as possible, neither should 253 be construed so as to emasculate the other or to render it ineffective. One is the power to punish an employee for misconduct while the other is the power to terminate sim pliciter the service of an employee without any other ad verse consequences. Proviso (i) to clause (1) of Standing Order 26 requires that the reason for termination of the employment should be given in writing to the employee when exercising the power of termination of services of the employee under Standing Order 26. The Management is required to articulate the reason which operated in its mind for terminating the services of the employee. But merely because the reason must obviously not be arbitrary. capricious or irrelevant, it would not necessarily in every case make the order of termination punitive in character so as to require compliance with the requirements of clause (2) of Standing Order 21 read with Standing Order 23. It was further held that the service of the respondent was not satisfactory was undoubtedly based on past incidents set out in the record but for each of these incidents punishment is one form or another had already been meted out to her and it was not by way of punishment for any of these incidents, but because as gathered from these incidents, her record of service was unsatisfactory that her service was terminated by the man agement under Standing Order 26. The appellant produced satisfactory evidence to show that the impugned order termi nating the service of the respondent was justified and hence the impugned order must be sustained despite its having been passed without complying with the requirements of clause (2) of Standing Order 21 read with Standing Order 23. This decision has been made in the special facts and circum stances in that particular case. In the case of Manohar P. Kharkhar And Anr. vs Raghuraj & Anr., the petitioners challenged the order of termination of services dated 29.4. 1981, under Regulation 48 of Air India Employees ' Service Regulations. The petitioner No. 1 was The Director of Engineering and the Head of the Engineering Department while the petitioner No. 2 was Deputy Director of Engineering (Maintenance) and the Head of the Maintenance Division of the Air India Corpora tion. The Chairman and Managing Director of the said Corpo ration lost confidence in their ability and suitability to hold such important posts of Head of Departments which were reasonable for maintenance of the Air Crafts, safety of the Air Crafts and safety of the passengers carried therein and the order of termination were based on the note of The Chairman dated 29.4. Loss of confidence was the result of the negligence and failure to discharge their duty culmi nating in the admitted sabotage in the case of Makalu, an air craft 254 for the flight of VVIP. On this occasion the petitioners services were terminated on April 29, 1981 by the Chairman who recorded in its record the ground of loss of confidence. This order was challenged as arbitrary and capricious and Regulation 48 was violative of Article 14 of the Constitu tion as it contained to guidelines for choosing between employees and employees, occasion to occasion for the con templated action. In negativing the contentions, it was held after exhaus tively analysing the note dated 29.4.1981, that sheer un suitability and unfitness to hold office is not a misconduct in its generic sense or in its artificial meaning under Regulation 42. Regulations 42 to 44 have no application. Confidence in the petitioners ' suitability was lost due to such overall inefficiency of the departments under the petitioners. Conclusions could not be different even if it assumed that the note contemplated finding of the petition ers guilty of gross inefficiency and negligence. Inefficien cy by itself did not amount to misconduct in its generic sense. It was further held that the petitioners have no right to the post and do not possess any security of tenure. It was also held that if the Corporation choose to act under Regulation 48 and the action is not mala fide, arbitrary or capricious the question of its having acted in colourable exercise of its power could not arise. It was further held that the power conferred under Regulation 48 to terminate the services of permanent employees on 30 days notice with out assigning any reason is not violative of Article 14 of the Constitution. Accordingly the writ petition was dis missed and the rule was discharged. This decision however has not duly considered the ratio of the decision made by this Court in L. Michael & Anr. vs Johnaton Pumps India Ltd., ; and also in the case of Air India Corporation vs V.A. Rebello, (supra) as well as the ratio of the decision in the case of Sukhdev Singh & Ors. vs Bhagat Ram Sardar Singh Raghuvanshi & Anr., [1975] 1 SCC421. In the case of S.S. Muley vs J.R.D. Tata & Ors., constitutionality came up for consideration and this Court held the said Regulation 48 to be discriminatory and void as it gives unrestricted and unguided power on the Authority concerned to terminate the services of a permanent employee by issuing a notice or pay in lieu thereof without giving any opportunity of hearing to the employee concerned and thereby violating the principles of natural justice and also Article 14 of the Constitution. 255 In West Bengal State Electricity Board & Ors. vs Desh Bandhu Ghosh and Others, [1985] 3 SCC 116 the first respond ent, a permanent employee of the West Bengal State Electric ity Board, filed the writ petition out of which the appeal arises in the Calcutta High Court to quash an order dated March 22, 1984 of the Secretary, West Bengal State Electric ity Board terminating his services as Deputy Secretary with immediate effect on payment of three months ' salary in lieu of three months ' notice. The order was made under Regulation 34 of the Board 's Regulations which enables the Board to terminate the services of any permanent employee 'by serving three months ' notice or on payment of salary for the corre sponding period in lieu thereof. " The Regulation 34 reads as follows: "34. In case of a permanent employee, his services may be terminated by serving three months ' notice or on payment of salary for the corresponding period in lieu thereof. " This order of termination was challenged on the ground that Regulation 34 was arbitrary in nature and it was pat ently discriminatory. The High Court struck down the first paragraph of Regulation 34 and quashed the order of termina tion of service of the first respondent. In the case of Workmen of Hindustan Steel Ltd. and Anr. vs Hindustan Steel Ltd. and Ors., ; Standing Order 32 which provided for conferment of power in the General Manager to terminate the services of an employee if satisfied for reasons recorded in writing that it was inex pedient or against the order of security to employ the workman, the workman could be removed or dismissed from service without following the procedure laid down in Stand ing Order 31. Special Procedure in certain cases. Where a workman has been convicted for a criminal offence in a Court of law or where the General Manager is satisfied, for reasons to be recorded in writing, that it is inexpedi ent or against the interests of security to continue to employ the workman, the workman may be removed or dismissed from service without following the procedure laid down in Standing Order 31." The appellant, an Assistant in the 1st Respondent under taking was removed from service on the ground that it was 'no longer expe 256 dient ' to employ him. The management dispensed with the departmental enquiry, after looking into the secret report of one of their officers that the appellant had misbehaved with the wife of an employee and that a complaint in respect thereof had been lodged with the police. The Tribunal held that as the employer dispensed with the disciplinary enquiry in exercise of the power conferred by Standing Order 32, it could not be said that the dismissal from service was not justified and the respondent was quite competent to dismiss him from service without holding any enquiry. It was held that the reasons for dispensing with the enquiry do not spell out what was the nature of the miscon duct alleged to have been committed by the appellant and what prompted the General Manager to dispense with the enquiry. As there was no justification for dispensing with the enquiry imposition of penalty of dismissal without the disciplinary enquiry as contemplated by Standing Order 31 is illegal and invalid. It was further held that : "A Standing Order which confers such arbitrary. uncanalised and drastic power to dismiss an employee by merely stating that it is inexpedient or against the interest of the security to continue to employ the workman is violative of the basic requirement of natural justice inasmuch as that the General Manager can impose penalty of such a drastic nature as to affect the livelihood and put a stigma on the character of the workman without recording reasons why disciplinary inquiry is dis pensed with and what was the misconduct alleged against the employees. It is time for such a public sector undertaking as Hindustan Steel Ltd. to recast S.O. 32 and to bring it in tune with the philosophy of the Constitution failing which it being other authority and therefore a State under article 12 in an appropriate proceeding, the vires of S.O. 32 will have to be examined. It is not necessary to do so in the present case because even on the terms of S.O. 32, the order made by the General Manager is unsustainable. " In the case of Tata Oil Mills Co. Ltd. vs Workmen & Anr., (supra) the service of Mr. Banerjee, an employee of the appellant, was terminated on the ground that the appel lant had lost confidence in him and in lieu of notice he was paid one month 's salary. The Union to which Mr. Banerjee belonged took up his cause and on the failure of 'he par ties to reach a settlement the matter was referred to the Industrial Tribunal by the Government. It was contended before the Tribunal by the appellant that the order of termination of services of Mr. 257 Banerjee was an order of discharge which it was competent to make under R. 40(1) of the Service Rules, whereas the re spondent contended that the termination was not a discharge simpliciter but was in substance dismissal and that the Tribunal was entitled to consider the propriety of the appellant 's action. The Tribunal held that it had jurisdiction to look into the reasons behind the discharge of an employee. On the examination of the evidence the Tribunal found that no mala fides on the part of the employer had been proved and that the termination of service did not amount to victimisation or unfair labour practice. Even so it held that the dis charge was not justified and directed the reinstatement of Mr. Banerjee. This Court held that in the matter of an order of dis charge of an employee the form of the order is not decisive. An Industrial Tribunal has jurisdiction to examine the substance of the matter and decide whether the termination is, in fact, discharge simpliciter or it amounts to dismiss al which has put on the cloak of discharge simpliciter. The test always has to be whether the act of the employer is bona fide or whether it is a mala fide and colourable exer cise of the powers conferred by the terms of contract or by the standing orders. In O.P. Bhandari vs Indian Tourism Development Corpora tion Ltd. and Others, ; The question of constitutionality of Rule 31(v) of the Indian Tourist Devel opment Corporation Rules came up for consideration before this Court in this case. Rule 31 is quoted below: "31. Termination of services The services of an employee may be terminated by giving such notice or notice pay as may be prescribed in the contract of service in the following manner: (v) of an employee who has completed his probationary period and who has been confirmed or deemed to be confirmed by giving him 90 days ' notice or pay in lieu thereof. " It has been observed by this Court: "This rule cannot co exist with Articles 14 and 16(1) of the Constitution of India. The said rule must therefore die, so that the fundamental rights guaranteed by the aforesaid 258 constitutional provisions remain alive. For otherwise. the guarantee enshrined in Articles 14 and 16 of the Constitu tion can be set at naught simply by framing a rule authoriz ing termination of an employee by merely giving a notice. In order of uphold the validity of the rule in question it will have to be held that the tenure of service of a citizen who takes up employment with the State will depend on the pleas ure or whim of the competent authority unguided by any principle or policy. And that the services of an employee can be terminated though there is no rational ground for doing so. even arbitrarily or capriciously. To uphold this right is to accord a "magna carta" to the authorities in vested with these powers to practice uncontrolled discrimi nation at their pleasure and caprice on considerations not necessarily based on the welfare of the organisation but possibly based on personal likes and dislikes, personal preferences and prejudices. An employee may be retained solely on the ground that he is asycophancy and indulges in flattery, whereas the services of one who is meritorious (but who is wanting in the art of sycophancy and tempermen tally incapable of indulging in flattery) may be terminated. The power may be exercised even on the unarticulated ground that the former belongs to the same religious faith or is the disciple of the same religious teacher or holds opinions congenial to him. The power may be exercised depending on whether or not the concerned employee belongs to the same region. or to the same caste as that of the authority exer cising the power, of course without saying so. Such power may be exercised even in order to make way for another employee who is favourite of the concerned authority. Pro vincialism, casteism, nepotism, religious fanaticism, and several other obnoxious factors may in that case freely operate in the mind of the competent authority on deciding whom to retain and whom to get rid of. And these dangers are not imaginary ones. They are very much real in organisations where there is a confluence of employees streaming in from different States. Such a rule is capable of robbing an employee of his dignity, and making him a supine person whose destiny is at the mercy of the concerned authority (whom he must humour) notwithstanding the constitutional guarantee enshrined in Articles 14 and 16 of the Constitu tion of India. To hold otherwise is to hold that the funda 259 mental right embedded in Articles 14 and 16(1) is a mere paper tiger and that is so ethereal that it can be nullified or eschewed by a simple device of framing a rule which authorizes termination of the service of an employee by merely giving a notice of termination. Under the circum stances the rule in question must be held to be unconstitu tional and void. " This decision followed the observations of this Court in Central Inland Water Transport Corporation Limited And Another vs Brojo Nath Gangtdy and Another and West Bengal State Electricity Board vs Desh Bandhu Ghosh and Ors., (Supra). In Central Inland Water Transport Corporation Limited and Another vs Brojo Nath Ganguly and Another, the appellant Corporation is a Government Company incor porated under the Companies Act. The Majority shares of the Corporation are held by the Union of India and the remaining shares are held by the State of West Bengal and Assam. Article 47 provided for appointment and reappointment of the auditors of the Corporation to be made by the Central Gov ernment on the advice of the Comptroller and AuditorGeneral of India and the nature of control to be exercised by the Comptroller and Auditor General in the matter of audit and accounts. Article 51 A entitled the President to call for returns, accounts etc. of the Corporation. The respondents in the two appeals were in the service of the said company. Their appointment letters were in a stereotype form under which the Corporation could without any previous notice terminate their services. A Scheme of Arrangement was en tered into between the Corporation and that company for dissolution of the latter and takeover of its business and liabilities by the former. The Scheme inter alia stipulated that the Corporation shall take as many of the existing staff or labour as possible and that those who could not be taken over shall be paid by the concerned company all moneys due to them under the law and all legitimate and legal compensations payable to them either under Industrial Dis putes Act or otherwise legally admissible and that such moneys shall be provided by the Government of India to the transferor Company who would pay these dues. The two re spondents were in the service of the said company and their services were taken over by the Corporation after the Scheme of Arrangement was sanctioned by the High Court. The re spondent Ganguly was appointed as the Deputy Chief Accounts Officer and was later promoted as Manager (Finance), the respondent Sengupta was appointed as Chief Engineer (River Services) and was 260 later promoted as General Manager (River Services). Rule 9(i) of the Corporation 's Service, Discipline and Appeal Rules of 1979 provided that the services of a perma nent employee could be terminated on three months ' notice on either side or on payment of three months ' pay plus DA to the employee or on deduction of a like amount from his salary as the case may be in lieu of the notice. A notice under Rule 9(i) was served on him terminating his services with immediate effect by paying three months ' pay. Both Ganguly and Sengupta filed writ petition before High Court and a Division Bench of that Court allowed the same. The Corporation filed appeals before Supreme Court. The impugned questions for determination were (i) whether the appellant Corporation was an instrumentality of the State so as to be covered by Articles 12 and 36 of the Constitution and (ii) whether an unconscionable term in a contract of employment entered into with the Corporation was void under Section 23 of the Contract Act and violative of Article 14 and as such whether Rule 9(i) which formed a part of the contract of employment between the Corporation and its employees to whom the said Rules applied, was void? This Court held that it being a Government Company within the meaning of Article 12 of the Constitution has to comply with the rights embodied in Part III of the Constitution and the Directive Principles in Part IV of the Constitution. It was further held that by extending the executive power of the Union and each of the States to the carrying on any trade or business. Article 298 does not convert either the Union of India or any of the States which collectively form the Union into a merchant buying and selling goods or carrying on either trading or business activity, for the executive power of the Union and the States, whether in the field of trade or business or in any other field, is always subject to constitutional limitations and particularly the provisions relating to Fundamental Rights in Part III and is exercisa ble in accordance with and for the furtherance of the Direc tive Principles of State Policy. Rule 9(i) can aptly be called the 'Henry VIII Clause '. It confers an absolute. arbitrary and unguided power upon the Corporation. It does not even state who on behalf of the Corporation is to exercise that power. While the Rules provide for four different modes in which the services of a permanent employee can be terminated earlier than his at taining the age of superannuation, namely, Rules 9(i), 9(ii). 36(iv)(b) read with Rules 38 and 37. Rule 9(i) is the only rule which does not state in what circumstances the power conferred by the rule is 261 to be exercised. Thus even where the Corporation could proceed under Rule 36 and dismiss an employee on the ground of misconduct after holding a regular disciplinary inquiry, it is free to resort instead to Rule 9(i) in order to avoid the hassle of an inquiry. No opportunity of a hearing is at all to be afforded to the permanent employee whose service is being terminated in the exercise of this power. It thus violates audi alteram partent rule of natural justice also which is implicit in Article 14. It is not covered by any of the situations which would justify the total exclusion of the audi alteram partem rule. The view that the Board of Directors would not exercise this power arbitrarily or capriciously as it consists of responsible and highly placed persons ignores the fact that however highly placed a person may be he must necessarily possess human frailties and "power tends to corrupt, and absolute power corrupts abso lutely." Rule 9(i)is also discriminatory for it enables the Corporation to discriminate between employee and employee. It can pick up one employee and apply to him Rule 9(i). It can pick up another employee and apply to him Rule 9(ii). It can pick up yet another employee and apply to him Rule 36(iv)(b) read with Rule 38 and to yet another employee it can apply Rule 37. All this the Corporation can do when the same circumstances exist as would justify the Corporation in holding under Rule 38 a regular disciplinary inquiry into the alleged misconduct of the employee. This court in Delhi Transport Undertaking vs Balbir Saran Goel, ; considered the question whether the services of a permanent employee under Delhi Transport Undertaking could be terminated under Regulation 9(b) of the Regulation without complying with the procedure prescribed by Regulation 15 and (ii) whether although the order was made in perfectly harmless and innocuous terms purporting to be within Regulation 9(b) it was a mere camouflage for inflicting punishment for breach of Standing Order 17. as the respondent approached the High Court without exhausting the Departmental remedies and held that the order was not proved to be made mala tide on the part of the authority terminating the service nor the question of mala fide was gone into by the Courts below. Regulation 9(b) empowered the authorities to terminate the service after giving one month 's notice or pay in lieu thereof. The order was held to have been made unequivocally in terms of the Regulation 9(h) as the employee was a con tankerous person and it was desirable to retain him in service. The order was upheld. The question 262 whether Regulation 9(b) was illegal and void as it conferred arbitrary and uncanalised power to terminate the service of a permanent employee without recording any reason and with out giving any opportunity of hearing before passing the purported order as required under Article 14 of the Consti tution was neither raised nor considered in this case. In L. Michael & Anr. vs M/s Johnston Pumps India Ltd., (supra) the services of the appellant, an employee of the respondent, were terminated by the latter giving him one month 's notice as per. the standing orders without assigning any reasons for the termination. An industrial dispute was referred to the Labour Court. The management alleged that the employee misused his position by passing an important and secret information about affairs of the company to certain outsiders, that even after he was transferred to another section he made attempts to elicit information from the section with a view to pass it on to outsiders, and that therefore, the management lost confidence in the employee and terminated his services by a bona fide order. The Labour Court confirmed the order. On appeal this Court set aside the order holding that the Labour Court has misled itself on the law. This Court directed reinstatement of the employee with all back wages. The manner of dressing up an order does not matter. The Court will lift the veil to view the reality or substance of the order. The Tribunal has the power and indeed the duty to X ray the order and discover its true nature, if the object and effect, if the attendant circumstances and the ulterior purpose be to dismiss the employee because he is an evil to be eliminated. But if the management, to cover up the ina bility to establish by an inquiry, illegitimately but inge niously passes an innocent looking order of termination simpliciter, such action is bad and is liable to be set aside. Loss of confidence is no new armour for the manage ment; otherwise security of tenure, ensured by the new industrial jurisprudence and authenticated by a catend of cases of this Court can be subverted by this neo formula Loss of Confidence in the law will be the consequence of the Loss of Confidence doctrine. An employer who believes and suspects that his employee particularly one holding a position of confidence, has betrayed that confidence, can, if the conditions and terms of employment permit 263 terminate his employment and discharge him without any stigma attaching to the discharge. But such belief or suspi cion or ' the employer should not be a mere whim or fancy. It should be bona fide and reasonable. It must rest on some tangible basis and the power has to be exercised by the employer objectively ', in good faith. which means honestly and with due care and prudence. If the exercise of such power is challenged on the ground of being colourable or mala fide or an act of victimisation or unfair labour prac tice. the employer must disclose to the Court the grounds of his impugned action so that the same may be tested judicial ly. This Court in the case of workmen of Hindustan Steel Ltd. and Ant. vs Hindustan Steel Ltd. and Ors. , (supra) while considering the constitutionality of Standing Order 32 of the Hindustan Steel Ltd. which conferred power on the General Manager to remove or dismiss a workman without following the procedure for holding a disciplinary enquiry laid down in Standing Order 31 observed that: "It is time for such a public sector undertaking as Hindu stan Steel Ltd. to recast S.O. 32 and to bring it in tune with the philosophy of the Constitution failing which it being other authority and therefore a State under Article 12 in an appropriate proceeding, the views of S.O. 32 will have to be examined. " It is convenient to refer in this context relevant passage in paragraph 4 in Chitty on Contracts, 25th Edition, Volume 1: "These ideas have to a large extent lost their appeal today. 'Freedom of contract ', it has been said, 'is a reasonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed, and no injury is done to the economic interest of the community at large. ' Freedom of contract is of little value when one party has no alternative between accepting a set of terms proposed by the other or doing without the goods or services offered. Many contracts entered into by public utility undertakings and others take the form of a set of terms fixed in advance by one party and not open to discussion by the other. These are called 'contracts d 'adhesion ' by French lawyers. Traders frequently contract, not on individually negotiated terms, but on those contained in a standard form of contract settled by a trade association. And the 264 terms of an employee 's contract of employment may be deter mined by agreement between his trade union and his employer, or by a statutory scheme of employment. Such transactions are nevertheless contracts notwithstanding that freedom of contract is to a great extent lacking. " This Court has observed in Central Inland Water Trans port Corporation Ltd. and Anr. vs Brojo Nath Ganguly and Anr. (supra)as under: . Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the laws. The principle deducible from the above discus sions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Article 14. This principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreason able clause in a contract. entered into between parties who arc not equal in bargaining power . . It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them." The Court has. therefore, the jurisdiction and power to strike or set aside the unfavourable terms in a contract of employment which purports to give effect to unconscienable bargain violating article 14 of the Constitution Thus on a conspectus of the catena of cases decided by this Court the only conclusion follows is that Regulation 9(b) which confers powers on the authority to terminate the services of a permanent and confirmed employee by issuing a notice terminating the services or by making payment in lieu of notice without assigning any reasons in the order and without giving any opportunity of hearing to the employee before passing the impugned order is wholly arbitrary, uncanalised and unrestricted violating principles of natural justice as well as Article 14 of the Constitution. It has also been held consistently by this Court that the Govern ment carries on various trades and business activity through the instrumentality of the State such as Government Company or Public Corporations. Such Government Company or 265 Public Corporation being State 'instrumentalities are State within the meaning of Article 12 of the Constitution and as such they are subject to the observance of fundamental rights embodied in Part III as well as to conform to the directive principles in Part IV of the Constitution. In other words the Service Regulations or Rules framed by them are to be tested by the touchstone of Article 14 of Consti tution. Furthermore, the procedure prescribed by their Rules or Regulations must be reasonable, fair and just and not arbitrary, fanciful and unjust. Regulation 9(b), therefore, confers unbridled, uncanalised and arbitrary power on the authority to terminate the services of a permanent employee without recording any reasons and without conforming to the principles of natural justice. There is no guideline in the Regulations or in the Act, as to when or in which cases and circumstances this power of termination by giving notice or pay in lieu of notice can be exercised. It is now well settled that the 'audi alteram partem ' rule which is es sence, enforces the equality clause in Article 14 of the Constitution is applicable not only to quasi judicial orders but to administrative orders affecting prejudicially the party in question unless the application of the rule has been expressly excluded by the Act or Regulation or Rule which is not the case here. Rules of natural justice do not supplant but supplement the Rules and Regulations. Moreover, the Rule of Law which permeates our Constitution demands that it has to be observed both substantially and procedure ly. Considering from all aspects Regulation 9(b) is illegal and void as it is arbitrary, discriminatory and without any guidelines for exercise of the power. Rule of law posits that the power to be exercised in a manner which is just, fair and reasonable and not in an unreasonable, capricious or arbitrary manner leaving room for discrimination. Regula tion 9(b) does not expressly exclude the application of the 'audi alteram partern ' rule and as such the order of termi nation of service of a permanent employee cannot be passed by simply issuing a month 's notice under Regulation 9(b) or pay in lieu thereof without recording any reason in the order and without giving any hearing to the employee to controvert the allegation on the basis of which the purport ed order is made. It will be profitable to refer in this connection the observations of this Court in the case of Union of India and Anr. vs Tulsiram Patel and Ors., [1985] Supp. (2) SCR 131 where the constitutionality of provisions of article 311 par ticularly the 2nd proviso to clause (2) of 'the said Article came up for consideration. This Court referred to the find ings in Roshan Lal Tandon vs Union of India, ; wherein it was held that though the origin of a Govern ment service is contractual 266 yet when once appointed to his post or office, the Govern ment servant acquires a status and his rights and obliga tions are no longer determined by the consent of both the parties, but by statute or statutory rules which may be framed and altered unilaterally by the Government. In other words, the legal position of a Government servant is more one of status than of contract. The hall work of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement of the parties. It has been observed that article 14 does not govern or control article 311. The Constitution must be read as a whole. article 311(2) embodies the principles of natural jus tice including audi alteram partem rule. Once the applica tion of clause (2) is expressly excluded by the Constitution itself, there can be no question of making applicable what has been so excluded by seeking recourse to Article 14 of the Constitution. In the case of Sukdev Singh & Ors. vs Bhagatrarn Sardar Singh Raghuvanshi & Anr. (supra), Mathew, J. pointed out that: "The governing power wherever located must be subject to the fundamental constitutional limitations. " This has been referred to and relied upon in Central Inland Water Transport Corporation Ltd. and Anr. vs Brojo Nath Ganguly and Anr. (supra) and a similar Rule 9(i) was termed as "Henry VIII clause" as it confers arbitrary and absolute power upon the Corporation to terminate the service of a permanent employee by simply issuing a notice or pay in lieu thereof without recording any reason in the order and without giving any opportunity of hearting to the employee. Thus, the Rule 9(i) of the Services Discipline and Appeal Rules, 1979 was held void under Section 23 of the , as being opposed to public policy and is also ultra vires of Article 14 of the Constitution to the extent that it confers upon the Corporation the right to terminate the employment of a permanent employee by giving him three months ' notice in writing or by paying him the equivalent of three months ' basic pay and dearness allowance in lieu of such notice. Regulation 9(b) of the impugned Regulation framed under the Delhi Transport Corporation Act which is in pare materia with the said Rule 9(i) is void under Section 23 of the Contract Act as being opposed to public policy and is also ultra vires of Article 14 of the Constitution. Another crucial question is to consider how far the impugned provisions of Regulation 9(b) framed under the Delhi Road Transport 267 Act can be read down in order to save it from unconstitu tionality. Several decisions have been cited at the bar in order to impress upon the Court that the impugned provisions have been made for public purposes and for public interest and as such it should be read down in a manner that will save the said provisions from the on slaught of constitu tional invalidity. In the case of Commissioner of Sales Tax, Madhya Pra desh, Indore and Ors. vs Radhakrishnan and Ors. , ; it has been held by this Court that for sustaining 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 and can even read down this section. It is convenient to mention here the meaning and scope of the word 'reading down ' and 'Severance ' dealt with on page 7, para B in Australian Federal Constitutional Law by Colin Howard which reads as follows: "The High Court presumes the validity of legislation to the extent that it will not of its own motion raise questions of constitutionality. Legislation is treated as valid unless the parties to litigation challenge it on constitutional grounds. The techniques of construction known as reading down and severance are corollaries of this presumption. Reading down puts into operation the principle that so far as it is reasonably possible to do so, legisla tion should be construed as being within power. It has the practical effect that where an Act is expressed in language of a generality which makes it capable, if read literally, of applying to matters beyond the relevant legislative power, the court will construe it in a more limited sense so as to keep it within power. XX XX XX XX XX XX It does not necessarily follow that because a statute cannot be read down it is wholly invalid. The presumption of valid ity leads naturally to the view that where a statute cannot be held wholly valid it should be held valid at least to the 268 extent that it is reasonably possible or practicable to do so. Where reading down is not available the court next decides where there is a case for severing the invalid parts of the statute from the parts which, standing alone, are valid. If this can be done the court declares only the invalid parts to be beyond power and leaves the remainder operative. In Re The Hindu Women 's Rights to Property Act, 1937, and The Hindu Women 's Rights to Property (Amendment) Act, 1938 and in Re a Special Reference under Section 2 13 of the Government of India Act, 1935, the question arose whether the Hindu Women 's Rights to Property Act, 1937 (Central Act XVIII of 1937) and the Hindu Women 's Rights to Property (Amendment) Act, 1938 (Central Act XI of 1938), are applicable to agricultural land and what was the meaning of the word 'property '. It was observed that: "When a Legislature with limited and restricted powers makes use in an Act of a word of such wide and general import as "property", the presumption must be that it is using it with reference to that kind of property with respect to which it is competent to legislate and to no other. The word "proper ty" in the Hindu Women 's Right to Property Act must accord ingly be construed as referring to property other than agricultural land. There is a general presumption that a Legislature does not intend to exceed its jurisdiction. " In the case of R.M.D. Chamarbaugwalla vs The Union of India, ; the petitioners who had been promoting and conducting prize competitions in the different States of India, challenged the constitutionality of sections 4 and 5 of the (42 of 1955) and rr. 11 and 12 framed under section 20 of the Act on the grounds that prize competition as defined in section 2(d) of the Act included not merely competitions that were of a gambling nature but also those in which success depended to a substantial degree on skill and the sections and the rules violated their funda mental right to carry on business, and were unsupportable under Act. 19(6) of the Constitution, that they constituted a single inseverable enactment and, consequently. must fail entirely. It was held that validity of the restrictions imposed by sections 4 and 5 and rr 11 and 12 of the Act as re gards gambling competitions was no longer open to challenge under article 19(6) of the Constitution in view of the decision of this Court that gambling did not 269 fall within the purview of article 19(1)(g) of the Constitu tion. It has been further observed that: "When a question arises as to the interpretation to be put on an enactment, what the Court has to do is to ascertain "the intent of them that make it" and that must of course. be gathered from the words actually used in the statute. To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope and object of the whole Act . . To decide the true scope of the present Act, therefore, we must have regard to all such factors as can legitimately be taken into account in ascertaining the intention of the legislature, such as the history of the legislation and the purposes thereof, the mischief which it intended to suppress and the other provisions of the statute, and construe the language of section 2(d) in the light of the indications furnished by them." Having regard to the circumstances, it was held that the law which the State Legislatures moved Parliament to enact under article 252(1) was one to control and regulate prize competitions of a gambling character and as such it was held that the Act was valid It has been further observed that where the legislation falls in part within the area allotted to it and in part outside it, it is undoubtedly void as to the latter. In the case of R. 1. Arora vs State of Uttar Pradesh and Ors., ; challenge was thrown to the constitu tionality of the amendments made to Ss. 40, 41 and section 7 by the Land Acquisition Amendment Act (Act 31 of 1962) on the ground that it contravened article 31(2) inasmuch as it makes acquisition for a company before July 20, 1962 as being for a public purpose even though it may not be so in fact. Section 7 was also challenged on the ground that it contra venes article 14 inasmuch as it makes an unreasonable discrimi nation in the matter of acquisition for a company before July 20, 1962 and after that date insolaf as the former acquisitions are validated on the basis of their being deemed to be for a public purpose while the latter acquisi tions are not so deemed and have to satisfy the test of public purpose. it has been held that if the language of a provision of law is capable of only one construction and if according to that construction 270 the provision contravenes a constitutional provision it must be struck down. A literal interpretation is not always the only interpretation of a provision in a statute and the court has to look at the setting in which the words are used and the circumstances in which the law came to be passed to decide whether there is something implicit behind the words actually used which would control the literal meaning of the words used. It has been further held following the observa tions in The Mysore State Electricity Board vs Bangalore Woollen, Cotton and Silk Mills Ltd. & Ors., [1963] Supp. 2 SCR 127 that it is well settled that if certain provisions of law construed in one way will be consistent with the Constitution and if another interpretation would render them unconstitutional the court would bear in favour of the former construction. In the case of Jagdish Pandey vs The Chancellor Univer sity of Bihar & Anr., ; 1 the challenge was to the constitutionality of section 4 of Bihar State Universities (University of Bihar, Bhagalpur and Ranchi) (Amendment) Act 13 of 1962 as discriminatory and violative of article 14 of the Constitution. It has been urged that section 4 confers uncana lised powers on the Chancellor without indicating any crite rion on the basis of which the power under section 4 can be exercised. It has been observed that: " . There is no doubt that if one reads section 4 literal ly it does appear to give uncanalised powers to the Chancel lor to do what he likes on the recommendations of the Com mission with respect to teachers covered by it. We do not however think that the Legislature intended to give such an arbitrary power to the Chancellor. We are of opinion that section 4 must be read down and if we read it down there is no reason to hold that the legislature was conferring a naked arbitrary power on the Chancellor. " Seervai in his book 'Constitutional Law of India ', Third Edition has stated at p. 119 that: " . the Court are guided by the following rules in discharging their solemn duty to declare laws passed by a legislature unconstitutional: (1) There is a presumption in favour of constitutionality and a law will not be declared unconstitutional unless the case is so clear as to be free from doubt; "to doubt the 271 constitutionality of a law is to resolve it in favour of its validity." . . . . . . . . . . . . . . . (6) A Statute cannot be declared unconstitutional merely because in the opinion of the Court it violates one or more of the principles of liberty, or the spirit of the Constitu tion, unless such principles and that spirit are found in the terms of the Constitution. " On a proper consideration of the cases cited hereinbe fore as well as the observations of Seervai in his book 'Constitutional Law of India ' and also the meaning that has been given in the Australian Federal Constitutional Law by Coin Howard, it is clear and apparent that where any term has been used in the Act which per se seems to be without jurisdiction but can be read down in order to make it con stitutionally valid by separating and excluding the part which is invalid or by interpretting the word in such a fashion in order to make it constitutionally valid and within jurisdiction of the legislature which passed the said enactment by reading down the provisions of the Act. This, however, does not under any cicumstances mean that where the plain and literal meaning that follows from a bare reading of the provisions of the Act, Rule or Regulation that it confers arbitrary, uncanlised, unbridled, unrestricted power to terminate the services of a permanent employee without recording any reasons for the same and without adhering to the principles of natural justice and equality before the law as envisaged in Article 14 of the Constitution, cannot be read down to save the said provision from constitutional invalidity by bringing or adding words in the said legisla tion such as saying that it implies that reasons for the order of termination have to be recorded. In interpreting the provisions of an Act, it is not permissible where the plain language of the provision gives a clear and unambigu ous meaning can be interpreted by reading down and presuming certain expressions in order to save it from constitutional invalidity. Therefore, on a consideration of the above decisions, it is impossible to hold by reading down the impugned provisions of Regulation 9(b) framed under section 53 of the Delhi Road Transport Act, 1950 read with Delhi Road Transport (Amendment) Act, 1971 that the said provision does not confer arbitrary, unguided, unrestricted and uncanalised power without any guidelines on the authority to terminate the services of an employee without conforming to the prin ciples of natural justice and equality as 272 envisaged in Article 14 of the Constitution of India. I am, therefore, constrained to uphold the judgment of the Delhi High Court in C.W.P. No. 1422 of 1985 and dismiss Civil Appeal No. 2876 of 1986. I allow Civil Appeal No.1115 of 1976 and agree with the order proposed to be passed thereon by the learned Chief Justice. The other appeals as referred to in detail in the judgment of the learned Chief Justice be placed before the Division Bench of this Court to be dis posed of in accordance with the observations made herein. I agree with conclusion arrived of by my learned brother K. Ramaswamy, J. SHARMA.J. I have gone through the judgments prepared by the learned Chief Justice and by my other learned Brothers. In view 01 the elaborate consideration by them of the ques tions raised by the parties, from both points of view. I proceed to indicate my conclusions without further discus sion. I agree with the learned Chief Justice that the rights of the parties in the present cases cannot be governed by the general principle of master and servant, and the manage ment cannot have unrestricted and unqualified power of terminating the services of the employees. In the interest of efficiency of the public bodies, however. they should have the authority to terminate the employment of undesira ble, inefficient, corrupt. indolent and disobedient employ ees. but it must be exercised fairly, objectively and inde pendently: and the occasion for the exercise must be delim ited with precision and clarity. Further, there should be adequate reason for the use of such a power. and a decision in this regard has to be taken in a manner which should show fairness. avoid arbitrariness and evoke credibility. And this. in my view, is possible only when the law lays down detailed guidelines in unambiguous and precise terms so as to avoid the danger of misinterpretation of the situation. An element of uncertainty is likely to lead to grave and undesirable consequences. Clarity and precision are. there fore. essential for the guidelines. Examining in this back ground, I am of the view that Regulation 9(b) of the Delhi Road Transport Authority (Condition of Appointment and Service) Regulation, 1952 cannot be upheld for lack of adequate and appropriate guidelines. For these reasons Civil Appeal No. 2876 of 1986 is dismissed. I also agree that the Civil Appeal No. 1115/76 should be allowed in the terms indicated in the judgment of the learned Chief Justice. The other cases shall be placed before a division bench for final disposal. 273 SAWANT. I had the advantage of reading the judg ments of the learned Chief Justice and B.C. Ray and K. Ramaswamy, JJ. While with respect I agree with the conclu sion of the learned Chief Justice in Civil Appeal No. 1115/76, with utmost respect to him, I am unable to share his view of law on the subject in Civil Appeal No. 2876/86. I am in respectful agreement with the view on the point expressed by Ray and Ramaswamy, JJ. in the said Civil Ap peal. I give my separate reasons for the same. The only question involved in all these matters is whether the absolute power given to the Management of the public undertakings under their respective rules/regulations to terminate the services of an employee without assigning any reason, is constitutionally valid. It is not necessary to refer to the facts and service rules in each case. It will be sufficient if I reproduce hereinbelow the relevant service regulation of one of the public undertakings, viz., Delhi Transport Corporation (DTC ' for short) the validity of which is in question in the present case. The said regulation being Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appoint ment & Service) Regulations, 1952 (hereinafter referred to as the "Regulations") reads as follows: Termination of service: (a) Except as otherwise specified in the appointment orders, the services of an employee of the Authority may be terminated without any notice or pay in lieu of notice: (i) During the period of probation and without assigning any reasons thereof, (ii) For misconduct, (;,ii) On the completion of specific period of appointment, (iv) In the case of employees engaged on contract for a specific period, on the expiration of such period in accord ance with the terms of appointment. (b) Where the termination is made due to reduc tion of establishment or in circumstances other than those mentioned at (a) above, one month 's notice or pay in lieu 274 thereof will be given to all categories of employees. (c) Where a regular/temporary employee wishes to resign from his post under the Authority he shall given three/one month 's notice in writing or pay in lieu thereof to the Authority provided that in special cases, the General Manager may relax, at his discretion, the condition regard ing the period of notice of resignation or pay in lieu thereof. " It will be obvious from the provisions of clause (b) the above that it applies not only in the case of retrenchment of employees on account of reduction in the establishment but also in circumstances other than those mentioned in clause (a). The circumstances mentioned in clause (a) are (i) probationary period, (ii) misconduct, (iii) completion of specific period of appointment and (iv) expiration of contractual period of appointment when the appointment is contractual. In other words, when the management decides to terminate the services of an employee but not for his mis conduct 'or during his probation or because his tenure of appointment, contractual or otherwise, has come to an end, it is free to do so without assigning any reason and by merely giving either a notice of the specific period or pay in lieu of such notice. Reduced to simple non technical language, clause (b) contains the much hated and abused rule of hire and fire reminiscent of the days of laissez faire and unrestrained freedom of contract. There is no dispute that although the language differs, the substance of the relevant rules of the other public undertakings which are before us, is the same and hence what applies to Regulation 9(b) of the Regulations will apply equally to the relevant rules of the other undertakings as well. The contentions advanced before us on behalf of the managements of the undertakings acknowledge at the very outset that such a service rule without anything further was not only ultra vires the Constitution but was indefensible in law even otherwise being opposed to the principles of natural justice vesting as it does the naked arbitrary power in the management. The contention, however, was that the rule had to be read down to imply that the power vested by it could be exercised only in certain circumstances and for valid reasons and not otherwise. It was further contended that the rigour of the rule is mitigated because the power granted by it is exercised by a high ranking officer. It was also urged that the exercise of the said power can be con trolled by holding that it is open to scrutiny by the court, in individual cases. In other words, the contention was that the rule by itself 275 is innocent and legal and its movements are properly con trolled being under elderly care. Its occasional wayward behaviour in unguarded moments can be corrected by chastise ment by the courts. But the rule, it was solemnly urged, was necessary since otherwise the management of the undertakings will be well high impossible. The controversy before us thus lies in a narrow compass, viz., whether the rule whatever its admitted demerits, should continue to blot the statute book because it is necessary and will be used in certain circumstances only and its use in any other circumstances can be checked by the Court. It can at once be discerned that at the bottom of all the lengthy ardent arguments lies an anxiety not to specify the circumstances under which the power given by the rule will be exercised on the spacious plea that such circum stances cannot be stated in advance and in the interests of the administration of the undertakings it is best that they are not so stated. For once I thought that the framers of our Constitution had committed an irretrievable mistake by ignoring the interests of the Union and the State Govern ments and enumerating such circumstances in the second proviso to Article 311(2) of the Constitution. But then I was mistaken. The interests of the public undertakings appear to be more important than those of the Governments. May be they are super Governments. By claiming the privilege not to enumerate even the broad guidelines as contained in Article 311(2), the managements of the undertakings are indeed wearing a supercrown. The posture adopted by them is all the more obdurate and untenable in law when they ask the court to read down the rule, and read in it circumstances under which the power can be used, but maintain that they will under no circumstances mend it nor should they be asked to do it, by incorporating in it those very circumstances. With this prologue to the controversy, I may now examine the contentions advanced before us. It is contended that it is necessary to retain the rule in its present ambiguous form because it is not possible to envisage in advance all the circumstances which may arise necessitating its use. When we asked the learned counsel for the manage ments whether there were any circumstances which would not be governed by the broad guidelines given in the second proviso to subclause (2) of Article 311 of the Constitution, and why at least such intelligible guidelines should not be incorporated in the rule, we received no reply. We could appreciate the embarrassment of the counsel, and as stated earlier. there lies the nub of the matter. What this Court in the various decisions has struck down is a similar rule in its present naked form without any guideline whatsoever, broad or 276 otherwise. It was never the argument on behalf of the em ployees nor indeed is it to day before us that all the possible circumstances in which the rule may be used should be enumerated in it. Their argument has been that at least the broad circumstances under which its exercise may become necessary should be incorporated to avoid an arbitrary use or rather the abuse of power, and to guarantee the security of employment. That argument has been accepted by this Court in the past by holding that such a rule is violative of the Constitution and was not necessary to safeguard the inter ests of the undertakings or the interests of the public. The decisions which appear to take an inconsistent view show on close analysis that either they were not dealing with the validity of the rule or were rendered when the dimensions of both Articles 14 and 21 were not expanded as they have been subsequently. In the year 1990, it is not necessary for me to discuss in detail the authorities which have widened the horizons of Article 14 of the Constitution. Some of these precedents are directly on the point in as much as the validity of similar service rules was considered there. It is enough if I summarise the position of law as it obtains to day. There is need to minimise the scope of the arbitrary use of power in all walks of life. It is inadvisable to depend on the good sense of the individuals, however high placed they may be. It is all the more improper and undesirable to expose the precious rights like the rights of life, liberty and property to the vagaries of the individual whims and fancies. It is trite to say that individuals are not and do not become wise because they occupy high seats of power, and good sense, circumspection and fairness does not go with the posts, however high they may be. There is only a complaisant presumption that those who occupy high posts have a high sense of responsibility. The presumption is neither legal nor rational. History does not support it and reality does not warrant it. In particular, in a society pledged to uphold the rule of law, it would be both unwise and impoli tic to leave any aspect of its life to be governed by dis cretion when it can conveniently and easily be covered by the rule of law. The employment under the public undertakings is a public employment and a public property. It is not only the under takings but also the society which has a stake in their proper and efficient working. Both discipline and devotion are necessary for efficiency. To ensure both, the service conditions of those who work for them must be encouraging, certain and secured, and not vague and whimsical. With capricious service conditions, both discipline and devotion are endan 277 gered, and efficiency is impaired. The right to life includes right to livelihood. The right to livelihood therefore cannot hang on to the fancies of individuals in authority. The employment is not a bounty from them nor can its survival be at their mercy. Income is the foundation of many fundamental rights and when work is the sole source of income, the right to work becomes as much fundamental. Fundamental rights can ill afford to be con signed to the limbo of undefined premises and uncertain applications. That will be a mockery of them. Both the society and the individual employees, there fore, have an anxious interest in service conditions being well defined and explicit to the extent possible. The arbi trary rules, such as the one under discussion, which are also sometimes described as Henry VIII Rules, can have no place in any service conditions. These are the conclusions which flow from Sukhdev Singh & Ors. vs Bhagatram Sardar Singh Raghuvanshi & Anr., ; ; Maneka Gandhi vs Union of India, [1978] 2 SCR 621; The Manager, Government Branch Press & Anr. vs D.B. Felliappa; , ; Managing Director, Uttar Pra desh Warehousing Corporation & Anr. vs Vinay Narayan Vajpay ee; , ; A.L. Kalra vs The Project & Equipment Corporation of India Limited, ; ; Workmen of Hindustan Steel Ltd. & Anr. vs Hindustan Steel Ltd. & Ors. , ; ; West Bengal State Electricity Board & Ors. vs Desh Bandhu Ghosh & Ors., [1985] 2 SCR 1014; Olga Tellis & Ors. vs Bombay Municipal Corporation & Ors. etc., [1985] Supp. 2 SCR 51; Union of India & Anr. vs Tulsiram Patel & Ors., [1985] Supp. 2 SCR 13 1; Central Inland Water Trans port Corporation Ltd. & Anr. vs Brojo Nath Ganguly & Anr. , ; O.P. Bhandari vs Indian Tourism Development Corporation Ltd. & Ors., ; ; N.C. Dalwadi vs State of Gujarat, ; M.K. Agarwal vs Gurgaon Gramin Bank & Ors., [1987] Supp. SCC 643 and Daily Rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch etc. vs Union of India & Ors., 7. Since, before us the rule in question which admitted ly did not lay down explicit guidelines for its use was sought to be defended only on two grounds, viz., that the power conferred by it is to be exercised only by high au thorities and that it is capable of being read down to imply circumstances under which alone it can be used, I need deal only with the said grounds. 278 8. The "high authority" theory so called has already been adverted to earlier. Beyond the self deluding and self asserting righteous presumption, there is nothing to support it. This theory undoubtedly weighed with some au thorities for some time in the past. But its unrealistic pretensions were soon noticed and it was buried without even so much as an ode to it. Even while Shah, J. in his dissent ing opinion in Moti Ram Deka etc. vs General Manager, N.E.P. Railways, Maligaon, Pandu, etc. ; , had given vent to it, Das Gupta, J. in his concurring judgment but dealing with the same point of unguided provisions of Rule 148(3) of the Railway Establishment Code, had not supported that view and had struck down the rule as being violative of Article 14 of the Constitution. The majority did not deal with this point at all and struck down the Rule as being void on account of the discrimination it introduced between railway servants and other government servants. The reliance placed on the decision in Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Ors., ; to support the above theory is also according to me not correct. As has been pointed out there, the Commission of Inquiry Act, 1952, the validity of which was challenged on the ground of unguided powers to institute inquiries, was not violative of Article 14 because the long title and Section 3 of the Act had contained sufficient guidelines for exercise of the power. Section 3 has stated that the appro priate government can appoint a Commission of Inquiry only for the purpose of making inquiry into any definite matter of public importance. It is in the context of this guideline in the Act, that it is further stated there that even that power is to be exercised by the government and not any petty official. Hence a bare possibility that the power may be abused cannot per se invalidate the Act itself. The proposi tion of law stated there is to be read as a whole and not in its truncated form. The authority does not lay down the proposition that even in the absence of guidelines, the conferment of power is valid merely because the power is to be exercised by a high official. It must further be remem bered that in this case, the contention was that although the appropriate government was given power to appoint Com mission of Inquiry into any definite matter of public impor tance, the delegation of power was excessive since it was left to the government to decide for itself in each case what constituted such matter. The court repelled the argu ment by pointing out that "definite matter of public impor tance" constituted sufficient guideline to the government. It was not, therefore, a case of no guideline but of the absence of details of the guideline. 279 Of similar nature is the reliance placed on the decision in The Collector of Customs, Madras vs Nathella Sampathu Chetty & Anr., ; for the proposition that the possibility of the abuse of the powers is no ground for declaring the provision to be unreasonable or void. The relevant observations are made while repelling the conten tion there that the burden thrown under provisions of Sec tion 178A of the on the possessor of the goods to show that they were not smuggled was violative of Article 19(1)(f) and (g) of the Constitution. The obser vations are as follows: "The possibility of abuse of a statute otherwise valid does not impart to it any element of invalidity. The converse must also follow that a statute which is otherwise invalid as being unreasonable cannot be saved by its being adminis tered in a reasonable manner. 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. If so judged it passes the test of reasonable ness, possibility of the powers conferred being improperly used is no ground for pronouncing the law itself invalid and similarly if the law properly interpreted and tested in the light of the requirements set out in Part III of the Consti tution does not pass the test it cannot be pronounced valid merely because it is administered in a manner which might not conflict with the constitutional requirements. In saying this we are not to be understood as laying down that a law which might operate harshly but still be constitutionally valid should be operated always with harshness or that reasonableness and justness ought not to guide the actual administration of such laws. " The statute there was saved by the provisions of Article 19(6) of the Constitution and was otherwise valid. It was not a case of a provision which was constitutionally invalid being saved by recourse to the spacious assumption of its reasonable exercise in individual cases. In Tata Oil Mills Co. Ltd. vs Workmen & Anr., ; , it was a case of an employee of a private company who was given a discharge simpliciter. This Court following its earlier decisions on the point observed that in several cases, contract of employment or Standing Orders authorise an industrial employer to terminate the employee 's service by giving one month 's notice or salary of one month in lieu of notice and normally an employer may, in a proper 280 case be entitled to exercise the power. But where such order gives rise to an industrial dispute, the form of the order would not be decisive and the industrial adjudicator would be entitled to probe it to find out whether it is mala fide or is made in colourable exercise of the power. Being a private employment, the power so conferred was not as sailed on the ground that it violated Article 14 of the Constitution. I fail to understand the reliance placed on this authority to support the appellants ' case before us. The other authorities relied on behalf of the appellants have similarly no relevance to the point. In Jyoti Pershad vs The Administrator for the Union Territory of Delhi, ; , the Slum Clearance Act which was challenged there contained enough guidelines for the exer cise of the power. In Municipal Corporation of Greater Bombay vs P.S. Malvenkar & Ors., ; , Order 26 of the Standing Orders and Service Regulations which was in question there required reasons to be given for effecting termination simpliciter of an employee. In Organo Chemical Industries & Anr. vs Union of India & Ors. , ; , Section 143 of the Provident Fund Act which was challenged was held to be valid since the Act contained enough guide lines for imposing penal damages. In Champaklal Chimanlal Shah vs The Union of India, , Rule 5 of the Central Civil Services (Temporary Services) Rules, 1949 was challenged on the ground that it discriminated between temporary and permanent employees. There was no challenge to the absolute power given by the said rule to terminate the services of temporary employees. In Ram Gopal Chaturve di vs State of Madhya Pradesh; , , it was a case of termination of a temporary Government servant 's services. In Air India Corporation, Bombay vs V.A. Rebellow & Anr., ; , the challenge was to the termina tion of services on the ground that it was done in colour able exercise of power under Regulation 48 of the Air India Employees ' Service Regulations. The said regulation was not challenged on the ground that it gave unchannelised and unguided power of terminating the services of employees. In Hira Nath Mishra & Ors. vs The Principal, Rajendra Medical College, Ranchi and Anr. , , it was the case of the expulsior of students from college for two academic sessions pursuant to the order passed by the Principal of that college. The expulsion was effected following a confi dential complaint received from 36 girl students residing in the girls ' hostels alleging that the students in question d entered the compound of the girls ' hostels at belated night and walked without clothes on them. The students were heard but the evidence of the girls was not recorded in their presence. 281 The Court held that under the circumstances the requirements of natural justice were fulfilled since the principles of natural justice were not inflexible and differed in differ ent circumstances. I have not been able to appreciate the relevance of this decision to the point in issue. I may now deal with the second contention vehemently urged on behalf of the appellants. The contention was that if it is possible to save a legislation by reading it down to read in it words, expressions or provisions, it should not be struck down. In order to save the present rule, it was urged on behalf of the appellants that the Court should read in it circumstances under which alone it can be used. What precise circumstances should be read in it, however, was not stated by the learned counsel. I am afraid that the doctrine of reading down a statute has been wrongly pressed into service in the present case. The authorities relied upon by the learned counsel for the appellants not only do not help the appellants but go against their case. It would be better if I first deal with the authorities cited at the Bar for they will also bring out the correct meaning and application of the said doctrine as well as its limitations. In Re The Hindu Women 's Rights to Property Act, 1937, and the Hindu Women 's Rights to Property (Amendment) Act, 1938 etc. , [19411 FCR 12 what fell for consideration was whether the said two Act which were the Central pieces of legislation operated to regulate succession to agricultural land in the then Governors ' Provinces. Admittedly, under the scheme of the then Government of India Act, 1935, after April 1, 1937, the Central Legislature was precluded from dealing with the subjects numerated in List II of the 7th Schedule so far as the Governors ' Provinces were concerned. Laws with respect to the "devolution of agricultural land" could be enacted only by the Provincial Legislatures (Entry No. 21 of List II) and wills, intestacy and succession, save as regards agricultural land appeared as Entry No. 7 of List III, i.e., the Concurrent List. Hence, it was obvious that the said Acts enacted as they were by the Central Legisla ture could not have dealt with succession to agricultural land so far as the Governors ' Provinces were concerned. It is in these circumstances that the Federal Court read the two Acts of 1937 and 1938 as being not operative to regulate succession to agricultural land in the Governors ' Provinces but operative to regulate devolution by survivorship of property other than agricultural land. It will thus be obvious that the limited purpose for which the doctrine of reading down was called into play in that case was to ex clude from the purview of the Act a subject which was not within the competence of the legislature which had enacted it. 282 In Nalinakhya Bysack vs Shyam Sunder Haldar & Ors. , ; the expression "decree for recovery of pos session" in Section 18(1) of the West Bengal Premises Rent Control (Temporary Provisions) Act (XVII of 1950) fell for consideration, and the controversy was whether it included also an order for recovery of possession made under Section 43 of the Presidency Small Cause Court Act, 1882 and hence a person against whom an order under the latter provision was made was not entitled to claim relief under the former provision. In that connection the Court observed as follows: "It must always be borne in mind, as said by Lord Halsbury in Commissioner for Special Purposes of Income Tax vs Pem sel, LR 189 1 AC 53 1 at p. 549, that it is not competent to any Court to proceed upon the assumption that the Legisla ture has made a mistake. The Court must proceed on the footing that the Legislature intended what it has said. Even if there is some defect in the phraseology used by the Legislature the Court cannot, as pointed out in Crawford vs Spooner; , ; 4 MIA 179; aid the Legislature 's defective phrasing of an Act or add and amend or, by con struction, make up deficiencies which are left in the Act. Even where there is a casus omissus, it is, as said by Lord Russel of Killowen in Hansraj Gupta vs Official Liquidator of Dehra Dun Mussoorie Electric Tramway Co. Ltd., [1933] LR 60 IA 13; AIR 1953 PC 63 for others than the Courts to remedy the defect. In our view it is not right to give to the word "decree" a meaning other than its ordinary accepted meaning and we are bound to say, in spite of our profound respect for the opinions of the learned Judges who decided them, that the several cases relied on by the respondent were not correctly decided." In R.M.D. Chamarbaugwalla vs The Union of India, ; , more or less a similar situation arose. The Parlia ment had enacted the to provide for the control and regulation of the prize competitions, and Section 2 of the Act had defined "Prize Competitions" to mean "any competition (whether called a crossword prize competition, a missing word competition, a picture prize competition or by any other name), in which prizes are offered for the solution of any puzzle based upon the build ing up, arrangement, combination or permutation of letters, words or figures". The validity of.the restrictions imposed by the Act was challenged as going beyond Article 19(6) of the Constitution. The Court took a recourse to the 283 doctrine of reading down and held that the definition of prize competition given in Section 2(d) of the Act had in view only such competitions as were of gambling nature and no others. The Court further held there that in interpreting an enactment the Court should ascertain the intention of the legislature not merely from a literal meaning of the words used but also from such matters as the history of the legis lation, its purpose and the mischief which it seeks to suppress. In Kedar Nath Singh vs State of Bihar, [1962] Supp. 2 SCR 769, the challenge was to the constitutional validity of Section 124A of the Indian Penal Code. Two views were before this Court with regard to the ambit of the said section. One which held that words, deeds or writings constituted the offence of sedition under the said section only when they had the intention or tendency to disturb public tranquility, to create public disturbance or to promote disorder. The other view was that it was not an essential ingredient of the offence of sedition under the said section that the words, deeds or writings should be intended to or be likely to incite public disorder. The latter view of the section would have rendered it unconstitutional. It is in these circumstances that this Court held that the former view ' should be taken which would render the said section consti tutional. The Court in that connection also further held that keeping in mind the reasons for the introduction of the said section and the history of sedition the former view was the correct interpretation of the ambit of the said section. In R.L. Arora vs State of Uttar Pradesh & Ors. , ; , the validity of Sections 40 and 41 of the Land Acquisition Act, 1894, and of Section 7 of the Amending Act, was similarly upheld by placing on them construction which would render them constitutional. The relevant provisions were construed to mean that where land is acquired for the construction of a building or work which subserves the public purpose of the industry or work in which a company is engaged or is about to be engaged, it can be said that the land was acquired for a public purpose. In Jagdish Pandey vs The Chancellor, University of Bihar & Anr. ; , Section 4 of the Bihar State Uni versities (University of Bihar, Bhagalpur and Ranchi) (Amendment) Act 13 of 1962 was called in question as being violative of Article 14 of the Constitution on the ground that the said section did not make any provision for giving the teacher a hearing before passing the order thereunder. By that section, every appointment, dismissal etc. of any teacher of a college affiliated to the University (but not belonging to 284 the State) made on or after 27th November, 1961 and before 1st March, 1962 was to be subject to such order as the Chancellor of the University may on the recommendation of the University Service Commission established under Section 48 of the said Act pass with respect thereto. The Court held that the said section was not invalid on the ground of unchannelised power given to the Chancellor because it never authorised the Chancellor to scrutinise the relevant ap pointments for satisfying himself that they were in accord ance with University Act and its Statutes etc. The Court further held that although the said section did not make a provision for giving the teacher a hearing before passing order thereunder, such hearing must be read in the said section which the Commission had to give according to the principles of natural justice before making its recommenda tions to the Chancellor. In Shri Umed vs Raj Singh & Ors., ; , one of the questions which fell for consideration was whether the expression "to withdraw or not to withdraw from being a candidate" referred to the stage of withdrawal of candida ture under Section 37 and whether it applied to a situation where a contesting candidate announced that he does not wish to contest the election or declared his intention to sit down after the last date for withdrawal of candidature under Section 37 had passed. Over ruling its earlier decision in Mohd. Yunus Salim 's case AIR 1974 SC 12 18, the Court held that the function of the Court is to gather the intention of the legislature from the words used by it, and it would not be right for the Court to attribute an intention to the legislature which though not justified by the language used by it, accords with what the Court conceives to be reason and good sense and then bend the language of the enactment so as to carry out such presumed intention of the legisla ture. For the Court to do so would be to overstep its lim its. The Court also held that the words used by the legisla ture must be construed according to their plain natural meaning, and in order to ascertain the true intention of the legislature, the Court must not only look at the words used by the legislature but should also have regard to the con text and the setting in which they occur. The word "context" has to be construed in a wide sense to mean all the provi sions of the Act which bear upon the same subject matter and these provisions have to be read as a whole and in their entirety each throwing light and illumining the meaning of the other. In Sunil Batra etc. vs Delhi Administration & Ors., it was held that under Section 30(2)of the which provided that a prisoner under sentence of death shall be confined in a 285 cell apart from all other prisoners, did not mean that he has to be confined cellularly or separately from the rest of the prisoners so as to put him in a solitary confinement. The said expression had a restricted meaning and it only meant that such a prisoner has to be kept in a separate cell but one which is not away from the other cells. Thus, the said expression, viz. "shall be confined in a cell apart from all other prisoners" in the said provision was read down to exclude solitary confinement. In Excel Wear etc. vs Union of India & Ors. , ; , one of the questions before this Court was whether the Court could read in Section 25 O (2) of the that it was incumbent on the authority to give reasons in his order for refusing permission to close down the undertaking. The Court answered it in the negative. Although in the discussion that follows explicit reasons for the same are not found, it is legitimate to presume that the Court did not accept the said contention because of the clear and explicit language of the said section. In Minerva Mills Ltd. & Ors. vs Union of India & Ors. , ; , the majority judgment has discussed the limitations of the doctrine of reading down which is rele vant for our purpose. In that case, it was contended on behalf of the State that Article 31C should be read down so as to save it from the challenge of unconstitutionality and it was urged that it would be legitimate to read into that Article the intendment that only such laws would be immu nised from the challenge under Article 14 and 19 as did not damage or destroy the basic structure of the Constitution. The Court opined that "to do so in that case would involve a gross distortion of the principle of reading down depriving that doctrine of its only or true rationale when words of width are used inadvertently." According to the Court, "the device of reading down is not to be resorted to in order to save the susceptibilities of the law makers, nor indeed to imagine a law of one 's liking to have been passed. One must at least take the Parliament at its word when, especially, it undertakes a constitutional amendment . . . . If the Parliament has manifested a clear intention to exercise an unlimited power, it is impermissi ble to read down the amplitude of that power so as to make it limited. The principle of reading down cannot be invoked or applied in opposition to the clear intention of the legislature. We suppose that in the history of the constitu tional law, no constitutional amendment has ever been read down to mean the exact opposite of what it says and intends. In fact, to accept the argument that we should read down Article 31C, so as to make it 286 conform to the ratio of the majority decision in Kesavananda Bharati, is to destroy the avowed purpose of Article 31C as indicated by the very heading "Saving of certain laws" under which Articles 31, 3 lB and 31C are grouped. Since the amendment to Article 31C was unquestionably made with a view to empowering the legislatures to pass laws of a particular description even if those laws violate the discipline of Articles 14 and 19, it seems to us impossible to hold that we should still save Article 3 iC from the challenge of unconstitutionality by reading into that Article words which destroy the rationale of that Article and an intendment which is plainly contrary to its proclaimed purpose." The Court then dealt with the argument of the learned Additional Solicitor General who contended that it was still open to the Court under Article 3 IC of the Constitution to decide whether the law enacted pursuant to it secured any of the Directive Principles of the State Policy and whether the object of the Directive Principles could not be secured without encroaching upon the Fundamental Rights and the extent to which encroachment was necessary and whether such encroachment violated the basic structure of the Constitu tion. The Court opined that this argument was open to the same criticism to which the argument of Attorney General was open and that "it would be sheer adventurism of a most extraordinary nature to undertake the kind of judicial enquiry which according to the learned Additional Solicitor General, the courts are free to undertake." The Court fur ther held that in the very nature of things it was difficult for a court to determine whether a particular law gave effect to a particular policy and whether a law was adequate enough to give effect to that policy. It was pointed out by the Court that it was not possible for the Court to set aside the law so enacted as invalid merely because in the opinion of the Court, the law was not adequate enough to give effect to that policy. The Court further pointed out that "the only question open to judicial review was whether there was a direct and reasonable nexus between the impugned law and the provisions of the Directive Principles. The reasonableness was to be examined with regard to such nexus and not with regard to the impugned law. Hence, it was not open to the Court to undertake the kind of enquiry suggested by the Additional Solicitor General. That would involve an extensive judicial review which was impermissible in law." The Court then pointed out that where the express words of the statute are clear and intended to give power without limitation, the statute cannot be saved by reading into them words and intendment of a diametrically opposite meaning and content. The Court opined that provisions such as these provide a 287 striking illustration of the limitations of the doctrine of reading down. In Union of India & Anr. vs Tulsiram Patel etc. ; , the majority judgment asserts that when the statute expressly excludes the rule of audi alteram partem, there is no scope for reintroducing it by a side door to provide the enquiry which has been expressly prohibited. In Elliott Ashton Welsh, II vs United States, ; ; 26 L. ed. 2nd 308 while making useful observations on the doctrine of reading down and of recasting the statute, in his concurring opinion Harlan, J. stated as follows: "When the plain thrust of a legislative enactment can only be circumvented by distortion to avert an inevita ble constitutional collision, it is only by exalting form over substance that one can justify this veering off the path that has been plainly marked by the statute. Such a course betrays extreme skepticism as to constitutionality, and, in this instance, reflects a groping to preserve the conscientious objector exemption at all cost. I cannot subscribe to a wholly emasculated con struction of a statute to avoid facing a latent constitu tional question, in purported fidelity to the salutary doctrine of avoiding unnecessary resolution of constitution al issues, a principle to which I fully adhere. It is, of course, desirable to salvage by construction legislative enactments whenever there is good reason to believe that Congress did not intend to legislate consequences that are unconstitutional, but it is not permissible, in my judgment, to take a lateral step that robs legislation of all meaning in order to avert the collision between its plainly intended purpose and the commands of the Constitution. It must be remembered that although this Court will often strain to construe legislation so as to save it against constitutional attack, it must not and will not carry this to the point of perverting the purpose of a statute . or judicially rewriting it. To put the matter another way, this Court will not consider the abstract question of whether Congress might have enacted a valid statute but instead must ask whether the statute that Con gress did enact will 288 permissibly bear a construction rendering it free from constitutional defects. The issue comes sharply into focus in Mr. Justice Cardozo 's statement for the Court in Moore Ice Cream Co. vs Rose; , ,379; 77 L ed. 1245, 1270: 'A statute must be construed, if fairly possi ble, so as to avoid not only the conclusion that it is unconstitutional, but also grave doubts upon that score. ' . But avoidance of a difficulty will not be pressed to the point of disingenuous evasion. Here the intention of the Congress is revealed too distinctly to permit us to ignore it because of mere misgivings as to power. The problem must be faced and answered. " If an important congressional policy is to be perpetuated by recasting unconstitutional legislation, as the prevailing opinion has done here, the analytically sound approach is to accept responsibility for this decision. Its justification cannot be by resort to legislative intent, as that term is usually employed, but by a different kind of legislative intent, namely the presumed grant of power to the courts to decide, whether it more nearly accords with Congress ' wishes to eliminate its policy altogether or extend it in order to render what Congress plainly did intend, constitutional. It is thus clear that the doctrine of reading down or of recasting the statute can be applied in limited situa tions. It is essentially used, firstly, for saving a statute from being struck down on account of its unconstitutionali ty. It is an extention of the principle that when two inter pretations are possible one rendering it constitutional and the other making it unconstitutional, the former should be preferred. The unconstitutionality may spring from either the incompetence of the legislature to enact the statute or from its violation of any of the provisions of the Constitu tion. The second situation which summons its aid is where the provisions of the statute are vague and ambiguous and it is possible to gather the intentions of the legislature from the object of the statute, the context in which the provi sion occurs and the purpose for which it is made. However, when the provision is cast in a definite and unambiguous language and its intention is clear, it is not permissible either to mend or bend it even if such recasting is in accord 289 with good reason and conscience. In such circumstances, it is not possible for the Court to remake the statute. Its only duty is to strike it down and leave it to the legisla ture if it so desires, to amend it. What is further, if the remaking of the statute by the courts is to lead to its distortion that course is to be scrupulously avoided. One of the situations further where the doctrine can never be called into play is where the statute requires an extensive additions and deletions. Not only it is no part of the court 's duty to undertake such exercise, but it is beyond its jurisdiction to do so. Judged in the context of the above principles I am of the view that the doctrine cannot be availed of for saving the present regulation In the first instance, the regulation is a part of the service regulations of the employees made by the Delhi Road Transport Authority in exercise of the powers conferred by sub section (1) read with clause (c) of sub section (2) of Section 53 of the Delhi Road Transport Act, 1950 (hereinafter referred to as the "Act"). The object of the Act is to provide for the establishment and the regulation of Road Transport Authority for the promotion of a co ordinated system of road transport in the State of Delhi. There is nothing either in the object of the service regulations of which the present regulation is a part or in the object of the Act which has a bearing on the said Regulation 9(b). If anything, the object of the Act would require framing of such service regulations as would ensure dedicated and diligent employees to run the undertak ing. The dedication of the employees would pre suppose security of employment and not a constant hanging of the Democle 's sword over their head, and hence would in any case not bear the existence of such regulation. Secondly, the language of the regulation is so crystal clear that no two interpretations are possible to be placed on it and hence it is not permissible to read in it any meaning other than what is clearly sought to be conveyed by it. Thirdly, the context of the said regulation makes it abundantly clear that it is meant to be a naked hire and fire rule and the authority has been vested with unguided and arbitrary power to dispense with the services of any category of the employees. Sub clause (a) of the said Regulation 9 mentions elaborately the circumstances in which the services of an employee can be terminated without any notice or pay in lieu of such notice. Sub clause (b) follows closely on its heel and states in clear language that when the termination is made due to reduction of establishment or in circumstances other than those mentioned in subclause (a), one month 's notice or pay in lieu thereof is all that is necessary to be given for terminating an employee 's services. The intention of the rule making authority, therefore, is more than clear. It 290 was to give an absolute free hand without any limitations whatsoever to terminate the services of any employee. Both the language of the regulation as well as the context in which it is cast leave no scope for reading into it any further provision. What is more, the kind of recasting which is suggested on behalf of the appellants would not only distort the intention of the rule making authority but would also require extensive amendment to it of a very vague nature. The appellants suggest firstly that we should read into the regulation a provision that the concerned employee would be given a hearing. The suggestion itself begs the question: Hearing for what? Is he to be heard with regard to his misconduct? If so, it will require that he should first be intimated of the misconduct of which he is guilty. But that kind of a situation is taken care of by sub clause (a) of the said regulation. There is, therefore, no need of a separate provision for the same. If, on the other hand, the services of an employee are to be terminated on grounds other than those mentioned in sub clause (a), then those grounds being unknown to the employee, cannot be met by him even if he is given a hearing. The reading in the rule of a mere provision of a hearing is, therefore, meaningless. The other suggestion made on behalf of the appellants is still more objectionable. The suggestion was that we should read in the rule all circumstances where it is not possible or necessary to hold an enquiry. 1 thought that such situations are capable of being formulated easily and conveniently at least in general terms as is done by the Constitution makers in the second proviso to Article 311(2). In fact, one of the public undertakings viz., Indian Airlines has come out with such regulation being amended Regulation 13 of its Employ ees ' Service Regulations, and the same has been placed on record by them. What is necessary to note in this connection is that the reading of such circumstances in the existing regulation would require its extensive recasting which is impermissible for the Court to do. 1 know of no authority which supports such wide reading down of any provision of the statute or rule/regulation. For all these reasons the doctrine of reading down is according to me singularly inapplicable to the present case and the arguments in sup port of the same have to be rejected. I am, therefore, of the view that there is no sub stance in this appeal. I would rather that the long departed rule rests in peace at least now. Hence I dismiss Civil Appeal No. 2876/86 with costs. 1 allow Civil Appeal No. 1115 of 1976 and agree with the order proposed to be passed therein by the learned Chief Justice. 291 The rest of the civil appeals, and Special Leave Peti tion (Civil) No. 7612 of 1987 be referred to the Division Bench for disposal in accordance with the opinion expressed in Civil Appeal No. 2876 of 1986 hereinabove. The applica tion for intervention are allowed. K. RAMASWAMY, J: 1. These batch cases concern, a refer ence. the correctness of the ratio rendered in Central Inland Water Transport Company Limited vs Brojonath Ganguly, = (for short Brojo Nath). The facts in C.A. No. 2886/86 lie in a short compass and sufficient for deciding the controversy are stated thus: 2. The Delhi Transport Corporation, a statutory body terminated the services of its three permanent employees, the Conductor (R. 2), Asstt. Traffic Incharge (R. 3), and the Driver (R. 4) for their alleged inefficiency, by exer cising the power of Regulation 9(b) of Delhi Road Transport Authority (Conditions of appointment and Services) Regula tion, 1952 (for short "the Regulation") framed under section 53 of the Delhi Road Transport Act, 1950 read with Delhi Transport (Amendment) Act, 1971 (for short "the Act"). The first respondent union assailed the validity of the Regula tion which the High Court of Delhi struck it down as offend ing Articles 14 and 16 of the Constitution. The High Court solely relied on the ratio in Brojo Nath whose correctness is the subject of the reference: My learned brother, My Lord the Chief Justice extensively stated the argument of the counsel on either side. Therefore, to avoid needless burden on this judgment, I consider it redundant to reiterate them once over. Regulation 9(b) of the Regulations read thus: Termi nation of Services: "Whether the termination is made due to reduction of establishment or in circumstances other than those mentioned in (a) above, one. month 's notice or pay in lieu thereof will be given to all categories of employees" as is similar to Rule 9 of the Rules in Brojo Nath 's case (supra) which this Court declared to be Henry VIII clause, conferring an absolute, arbitrary and unguided power upon that Corporation and was held to be ultra vires of the provisions of the Constitution and was void under section 23 of the . As stated earlier, the correctness thereof is the primary question in these appeals. Sri Ashok Desai, the learned Solicitor General vehe mently contended that, under ordinary law of "master and servant" the 292 Corporation is empowered by the Contract of Service to terminate the services of its employees in terms thereof. The declaration in Brojo Nath 's case that such a contract is void, under section 23 of the or opposed to public policy offending the Fundamental Rights and the Directive Principles, is not sound in law. He contends that as a master the Corporation has unbridled right to terminate the contract in the interests of efficient functioning of the Corporation or to maintain discipline among its employ ees. The termination, if is found to be wrongful, the only remedy available to the employees is to claim damages for wrongful termination but not a declaration as was granted in Brojo Nath 's case. In support thereof, he cited passages from Chitti on Contract, Halsbury 's Laws of England and the ratio in Union of India vs Tulsiram PateI, [1985] Supp. 2 SCR 131 = AI He also placed strong reliance on Industrial Law and the decisions of this Court cited by my learned brother, the Chief Justice. Alternatively he contended that the relevant regulations would be read down so as to be consistent with articles 14 and 16(1) read with article 19(1)(g) of the Constitution and the authority invested with such power could in an appropriate case, report to terminate the services of an employee expeditiously without recourse to an elaborated enquiry and opportunity of hear ing. The latter contention of reading down the relevant rules received support from the learned Attorney General Sri Soli J. Sorabjee and other counsel appearing for the employ ers. M/s. M.K. Ramamurthi, R.K. Garg, and P.P. Rao, learned counsel appearing for the employees resisted these conten tions. The main controversy centres round the question whether the employer, Statutory Corporation or instrumental ity or other authority under article 12 of the Constitution has unbridled power to terminate the services of a permanent employee by issue of notice or pay in lieu thereof without inquiry or opportunity, in exercise of the power in terms of contract which include statutory Rules or Regulations or instructions having force of law. It is undoubted that under ordinary law of master and servant, whether the contract of service is for a fixed period or not, if it contains a provisions for termination of service by notice, in terms thereof, it can be so determined and if the contract finds no provisions to give notice and the contract of service is not for a fixed period, law implies giving of a reasonable notice. Where no notice or a reasonable notice was issued, before terminating the contract, the termination of the contract of service is wrongful and the aggrieved employee is entitled at law to sue for damages. But this common law principle could be applied to the employees, appointed by a Statutory Corporation or authority or an instrumentality within 293 the meaning of Article 12 of the Constitution is the square question. It is not disputed that Delhi Road Transport Corporation is a Statutory Corporation under the Act and the Regulations are statutory and its employees are entitled to the fundamental Rights enshrined in Part III of the Consti tution. It is well settled law by a heed role of decisions of this Court that the Corporation or a Statutory Authority or an instrumentality or other authority under article 12 of the Constitution is not free, like an ordinary master (a private employer), to terminate the services of its employ ees at its whim or caprices or vagary. It is bound by the Act and the Regulation and the paramount law of the land, the Constitution. Nature of the Power Statutory Authority to terminate the services of its employees. In Sukhdev Singh vs Bhagatram, ; = ; , the Constitution Bench of this Court put a nail in the coffin of the play of the private master 's power to hire and fire his employees and held that Regula tions or Rules made under a Statute apply uniformly to everyone or to all members of the same group or class. They impose obligations on the statutory authorities who cannot deviate from the conditions of service and any deviation will be enforced through legal sanction of declaration by Courts to invalidate the actions in violation of the Rules or Regulations. The statutory bodies have no free hand in framing the terms or conditions of service of their employ ees. The Regulations bind both the authorities and also the public. The powers of the statutory bodies are derived, controlled and restricted by the Statutes which create them and the Rules and Regulations framed thereunder. The Stat ute, thereby fetters on the freedom of contract. Accordingly declaration was granted that dismissal or removal of an employee by statutory Corporation in contravention of statu tory provision as void. Mathew, J. in a separate but concur rent judgment held that a Public Corporation being the creation of a Statute is subject to statutory limitations as a State itself. The preconditions of this Part II viz., that the corporation is created by Statute and the existence of power in the corporation is to invade a statutory right of the individual. Therefore, the governing power must be subject to fundamental statutory limitations. The need to subject the power centres to the control of the Constitution requires an expansion of concept of State action. The duty of State is affirmative duty seeing that all essentials of life are made available to all persons. The task of State today is to make the achievement of good life both by remov ing obstacles in the path of such achievement and by assist ing individual in realis 294 ing his ideal of self perfection. The employment under public corporation is a public employment and, therefore, the employee should have the protection which appurtains to public employment. (emphasis supplied). The Court must, therefore, adopt the attitude that declara tion is a normal remedy for a wrongful dismissal in case of public employees which can be refused in exceptional circum stances. The remedy of declaration should be a remedy made an instrument to provide reinstatement in public sector. This principle was extended to numerous instances where the termination of services of the employees of a statutory corporation was affected in violation of the principles of natural justice or in transgression of the statutory rules etc. In U.P. State Warehousing Corporation vs N.V. Vajpayee, at p 780 F to G and 783G to 784A this Court held that statutory body cannot terminate the services of its employees without due enquiry held in accordance with the principles of natural justice. The persons in public employment are entitled to the protection of Articles 14 and 16 of the Constitution, when the service was arbitrarily terminated. The question, therefore, is whether the statuto ry corporations are entitled to be invested with absolute freedom to terminate the services of its employees in terms of the contract of service. In Ramana vs International Airport Authority of India, ; = (1979) SC. p. 1628 this Court held that expression of welfare and social service functions necessitates the State to assume control over natural and economic resources and large scale natural and commercial activities. For the attainment of socio economic justice, there is vast and notable increase of frequency with which ordinary citizens come into relationship of direct encoun ters with the State. The Government in a welfare state is the regulator and dispenser of social services and provider of large number of benefits, including jobs etc. Thousands of people are employed in Central/State Government Services and also under local authorities. The Government, therefore, cannot act arbitrarily. It does not stand in the same posi tion as a private individual. In a democratic Government by rule of law, the executive Government or any of its officers cannot held to be possessed of arbitrary power over the interests of the individuals. Every action of the Government must be informed with reason and should be free from arbi trariness. That is the very essence of rule of law. It was further held: "It was, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of 295 giving jobs or entering into contracts . . the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard of norm which, is not arbitrary, irrational or irrelevant. The power of discretion of the Government in the matter of grant of largess including award of jobs, . . . . . must be conditioned and structured by rational relevant and non discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action or the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory. " This statement of law, though was made in the context of contractual relations, it is a general law with width and amplitude which permeates the entire spectrum of actions, legislative as well as executive. The Constitution is the permanent law of the land and its preamble is an integral part thereof. It assures Social and Economic Justice and also accords equality of opportuni ty and status as well as equality before law assuring digni ty of the individual. The Constitution Forty Second Amend ment Act introduced "Socialism" in the Preamble and made explicit of what is latent in the Constitutional Scheme. Article 14 accords equal protection of law and equality before law. Article 16(1) provides right to an appointment or employment to an office or post under the State. Article 19(1)(g) assures right to occupation or avocation. article 21 assures right to life and any deprivation is as per the procedure established by law. In General Manager, Southern Railway vs Rangachari, [1962] S.C.R. page 586 it was held that matters relating to employment would include salary, increments, leave, gratuity, pension, age of superannuation etc. Similarly, in respect of appointments, such matters would include all the terms and conditions of service per taining to the said office. All those matters are included in the expression "matters relating to employment or ap pointment" within the meaning of article 16(1) of the Constitu tion. This was reiterated in State of M.P.v. Shardul Singh, [19701 3 S.C.R. page 302 at 305 306 that conditions of service include holding of posts right from the time of appointment till his retirement beyond it like pension etc. The middle class, lower middle class and lower classes ' educated 296 youths generally, if not mainly, depend on employment or appointment to an office or posts under the States which include corporations, statutory body or instrumentality under article 12 of the Constitution as source to their liveli hood and means to improve their intellectual excellence and liner facets of life individually and collectively as a member of the society so that himself and his dependents are economically sound, educationally advanced and socially dignified so that the nation constantly rises to standards of higher level in an egalitarian social order under rule of law as is obligated under article 51A(J ). Right to life scope of 9. The right to life, a basic human right assured by article 21 of the Constitution comprehends something more than mere animal existence i.e. dignity of the individual. Field J. in Munn vs Illinois, ; and 154 held that by the term "life" as here used, something more is meant than mere animal existence. The inhibition against its deprivation extends to all those limbs and faculties by which life is enjoyed. The deprivation not only of life but of . . if it a efficacy be not lettered away by Judicial decision. In Kharak Singh vs State of U.P., [1964] 1 SCR 332 this Court approved the definition of life given by Field J. in his dissenting opinion. In Olga Tellis vs Bombay Munici pal Corporation, [1985] 2 Suppl. SCR page 51 at 79 this Court further laid that an equally important facet of the right to life is the right to livelihood because no person can live without the means of livelihood. If the right to livelihood is not treated as a part of the Constitutional right to life, the easiest way of depriving a person of his right to life would be to deprive him of his means of live lihood to the point of abrogation . . That, which alone can make it possible to live, leave aside which makes life liveable, must be deemed to be an integral component of the right to life . . The motive force which propels their desertion of their hearths and homes in the village is the struggle for survival, that is the struggle for life. So unimpeachable is the nexus between life and the means of livelihood. Right to life does not only mean physicaI exist ence but includes basic human dignity, vide Menaka Gandhi vs Union of India, [1978] 2 SCR 621 John Stuart Mill in his 'Consideration of Representative Govt. ' said years ago that "the power of the State is to promote virtue and intelli gence of the people". In State of Maharashtra vs Chunder Bhan, = ; Chinnappa Reddy, J. held that public employment opportunity is a national wealth in which all citizens are equally entitled to share and Varadarajan, J. held that public employment is the property of the nation which has to be shared equally. This rule 297 was laid when rule 15(1)(ii)(b ') of B.C.S. Rules to pay subsistence allowance during period of suspension @ Rs. 1 per month pending departmental enquiry was challenged and declared the rule as ultra vires by operation of articles 14, 16, 21 and 311(2). The right to public employment and its concomitant right to livelihood, thus, receive their succour and nourishment under the canopy of the protective umbrella of articles 14, 16(1), 19(1)(g) and 21. Could statutory law arbitrarily take away or abridged or abrogated it? In Board of Trustees, Port of Bombay vs Dilip Kumar, ; = ; this Court held that the expression "life" does not merely connote animal existence or a continued drudgery through life, the expression life has a much wider meaning. Where, therefore, the, outcome of a departmental enquiry is likely to affect reputation or livelihood of a person, some of the liner graces of human civilisation which makes life worth living would be jeopardised and the same can be put in jeopardy only by law which inheres fair procedure. In Workmen of Hindustan Steels Ltd. vs Hindustan Steel Ltd. & Ors., ; it was held that the standing order 31 which confers arbitrary, uncanalised and drastic power on the Manager to dismiss an employee without enquiry, apart from being in violation of basic requirement of natu ral justice, is such a drastic nature as to effect the livelihood and put a stigma on the character of the workman. In Francis Corallie vs U.T. of Delhi, ; = ; this Court held that "it is for the Court to decide, in exercise of its constitutional power of judicial review, whether the deprivation of life or personal liberty in a given case is by procedure which is reasonable, fair and just and fair treatment". The tests of reason and jus tice cannot be abstract nor can be divorced from the actual ities of life and the needs of the Society. The tests ap plied must be pragmatic and purposive lest they cease to be reasonable. Reasonableness must be meaningful and effica cious in content as well as in form. The procedure provided in Rule 9(b) or allied rules, therefore, must not be just, fair and reasonable so as to be in conformity with articles 14 and 21 is the cry of the case. The position of the public employee is whether status: The distinguishing feature of public employment is status. In Roshanlal Tandon vs Union of India, ; at 195 196 the Constitution Bench held that the legal position of a Government servant is more one of status than of contract. The hall mark of status 298 is the attachment to a legal relationship of rights and duties imposed by, the public law and not by mere agreement of the parties. The employment of the Government servant and his terms of service are governed by statute or statutory rules. Once he is appointed to the post or office, the Government servant acquires a status and his rights and obligations are no longer determined by consent of both parties but by Statute or Statutory Rules. The relationship between the Government and its servants is not like an ordinary contract of service between a master and servant. The legal relationship is in the nature of status. The duties of statute are fixed by the law and in the enforce ment of the duties society has an interest. Status is a condition of membership of a group of which powers and duties are exclusively determined by law and not by agree ment between the parties concerned. In Calcutta Dock Labour Board vs Jarfar Imam, it was held that the statutory scheme of employment confers on the worker a status. An unlawful act is an interference with status. This view was followed in Sirsi Municipality vs Cecelia Kom Francis Tellis, ; Beg, J. (as he then was) held that the principles applicable to the relation of a Private Master and servant unregulated by statute, could not apply to the cases of a public statutory body exercising powers of punishment lettered or limited by statute and relevant rules of procedure. This Court in a recent decision extended all the benefits of pay scales to all the Central Government Corporate Sector employees. It is, thus, I hold that the employees of the corporations, statutory authority or instrumentality under article 12 have statutory status as a member of its employees. The rights and obligations are governed by the relevant statutory provisions and the em ployer and employee are equally bound by that statutory provisions. Nature of the right of a permanent employee to a post In Purushottam Lal Dhingra vs Union of India, ; at 84 1 843 it was held that the appointment to a perma nent post may be substantive or on probation or on officiat ing basis. A substantive appointment to a permanent post in a public service confers normally substantive right to the post and he becomes entitled to hold a lien on the post. He is entitled to continue in office till he attains the age of superannuation as per rules or is dismissed or removed from service for inefficiency, misconduct or negligence or any other disqualification in accordance with the procedure prescribed in the rules, and fair and reasonable opportunity of being heard or on compulsory retirement or in certain circumstances, subject to the conditions like re employment on abolition of post. In Motiram Daka vs General Manager, [1964] 5 299 SCR 683 at 718 721=AIR 1964 SC 600 at 608 & 609 majority of seven Judges ' Bench held that a permanent post carries a definite rate of pay without a limit of time and a servant who substantively holds a permanent post has a title to hold the post to which he is substantively appointed, and that in terms, means that a permanent servant has a right to hold the post until, of course, he reaches superannuation or until he is compulsorily retired under the relevant rule. If for any other reason that right is invaded and he is asked to leave the service the termination of his service must inevitably mean the defeat of his right to continue in service and as such, it is in the nature of penalty and amounts to removal. In other words, termination of service of a permanent servant, otherwise than on superannuation of compulsory retirement, must per se amount to his removal and so, by Rule 148(3) or Rule 149(3) of Rly. Establishment Rules if such a termination is brought about, the rule clearly contravenes article 311(2) and must be held to be invalid. A permanent employment assures security of tenure which is essential for the efficiency and incorruptibility of public administration. In Guruder Singh Sidhu vs State of Pepsu, ; another Constitu tion Bench held that for efficient administration of the State, it is absolutely essential that permanent public servant should enjoy a sense of security of tenure. The safeguard which article 311(2) affords is no more than this that in case it is intended to dismiss or remove or reduce them in rank, a reasonable opportunity should be given to them of showing cause against the action proposed to be taken in regard to them. In Motiram Daka 's case (supra) it was further held that in a modern democratic State, the efficiency and incorruptibility of public administration is of such importance that it is essential to afford to civil servants adequate protection against capricious action from their superior authority. If a permanent civil servant is guilty of misconduct, he should no doubt be proceeded against promptly under the relevant disciplinary rules, subject, of course, to the safeguard prescribed by article 311(2); but in regard to honest, straight forward and effi cient permanent civil servants, it is of utmost importance, even from the point of view of the State, that they should enjoy a sense of security which alone can make them inde pendent and truly efficient. The sword of damocles hanging over the heads of permanent railway servants in the form of Rule 148(3) or Rule 149(3) would inevitably create a sense of insecurity in the minds of such servants and would invest appropriate authorities with very wide powers which may conceivably be abused. Thereby this Court laid emphasis that a permanent employee has a right or lien on the post he holds until his tenure of service reaches superannuation so as to earn pension at the evening of his life unless it is determined as 300 per law. An assurance of security of service to a public employee is an essential requisite for efficiency and incor ruptibility of public administration. It is also an assur ance to take independent drive and initiative in the dis charge of the public duties to alongate the goals of social justice set down in the Constitution. This Court in Daily Rated Casual Labour vs Union of India, 1 SCC 122 at 130 131 further held that the right to work, the right to free choice of employment, the right to just and favourable conditions of work, the right to protection against unemployment etc., and the right to security of work are some of the rights which have to be ensured by appropriate legislative and executive measures. It is true that all these rights cannot be extend ed simultaneously. But they do indicate the socialist goal. The degree of achievement in this direction depends upon the economic resources, willingness of the people to produce and more than all the existence of industrial peace throughout the country. Of those rights the question of security of work is of most importance. If a person does not have the feeling that he belongs to an organisation engaged in pro duction he will not put forward his best effort to produce more. (emphasis supplied) That sense of belonging arises only when he feels that he will not be turned out of employ ment the next day at the whim of the management. It is for this reason it is being repeatedly observed by those who are in charge of economic affairs of the countries in different parts of the world that as far as possible security of work should be assured to the employees so that they may contrib ute to the maximisation of production. It must, therefore, be held that a permanent employ ee of a statutory authority, corporation or instrumentality under article 12 has a lien on the post till he attains super annuation or compulsorily retired or service is duly termi nated in accordance with the procedure established by law. Security of tenure ensures the benefit of pension on retire ment. Dismissal, removal or termination of his/her service for inefficiency, corruption or other misconduct is by way of penalty. He/ she has a right to security of tenure which is essential to inculcate a sense of belonging to the serv ice or organisation and involvement for maximum production or efficient service. It is also a valuable right which is to be duly put an end to only as per valid law. How to angulate the effect of termination of service Law is a social engineering to remove the existing irabal ance and 301 to further the progress, serving the needs of the Socialist Democratic Bharat under rule of law. The prevailing social conditions and actualities of life are to be taken into account to adjudging whether the impugned legislation would subserve the purpose of the society. The arbitrary, unbrid dled and naked power of wide discretion to dismiss a perma nent employee without any guidelines or procedure would tend to defeat the constitutional purpose of equality and allied purposes referred to above. Courts would take note of actu alities of life that persons actuated to corrupt practices are capable, to maneuver with higher echolons in diverse ways and also camouflage their activities by becoming syco phants or chronies to the superior officers. Sincere, honest and devoted subordinate officer unlikely to lick the boots of the corrupt superior officer. They develop a sense of self pride for their honesty, integrity and apathy and inertia towards the corrupt and tent to undermine or show signs of disrespect or disregard towards them. Thereby, they not only become inconvenient to the corrupt officer but also stand an impediment to the on going smooth sipbony of cor ruption at a grave risk to their prospects in career or even to their tenure of office. The term efficiency is an elusive and relative one to the adept capable to be applied in diverse circumstances. if a superior officer develops likes towards sycophant, tough corrupt, he would tolerate him and found him to be efficient and pay encomiums and corruption in such eases stand no impediment. When he finds a sincere, devoted and honest officer to be inconvenient, it is easy to cast him/her off by writing confidential with delightfully vague language imputing to be 'not upto the mark ', 'wanting public relations ' etc. Yet times they may be termed to be "security risk" (to their activities). Thus they spoil the career of the honest, sincere and devoted officers. In stances either way are gallore in this regard. Therefore, one would be circumspect, pragmatic and realistic to these actualities of life while angulating constitutional validity of wide arbitrary, uncanalised and unbriddled discretionary power of dismissal vested in an appropriate authority either by a statute or a statutory rule. Vesting arbitrary power would be a feeding ground for nepotism and insolence; in stead of subserving the constitutional purpose, it would defeat the very object, in particular, when the tribe of officers of honesty, integrity and devotion are struggling under despondence to continue to maintain honesty, integrity and devotion to the duty, in particular, when moral values and ethical standards are fast corroding in all walks of life including public services as well. It is but the need and imperative of the society to pat on the back of those band of honest, hard working officers of integrity and devotion to duty. It is the society 's interest to accord such officers security of service and avenues of promotion. 302 That apart, the haunting fear of dismissal from service at the vagary of the concerned officer would dry up all springs of idealism of the employee and in the process coarsens the conscience and degrades his spirit. The nobler impulses of minds and the higher values of life would not co exist with fear. When fear haunts a man, happiness van ishes. Where fear is, justice cannot be, where fear is, freedom cannot be. There is always a carving in the human for satisfaction of the needs of the spirit, by arming by certain freedom for some basic values without which life is not worth living. It is only when the satisfaction of the physical needs and the demands of the spirit coexists, there will be true efflorescence of the human personality and the free exercise of individual faculties. Therefore, when the Constitution assures dignity of the individual and the right to livelihood the exercise of the power by the executive should be cushioned with adequate safeguards for the rights of the employees against any arbitrary and capracicous use of those powers. Contract of service must be consistent with the Constitu tion. From the above perspective vis a vis constitutional, social goals and rights of the citizens assured in the preamble, Parts III & IV i.e. the trinity, the question whether the statutory corporation or the instrumentality or the authority under article 12 of the Constitution is validly empowered to terminate the services of a permanent employee in terms of the contract of employment or rules without conducting an enquiry or an opportunity of show cause of proposed order of termination of the service. The operating in British India was extended to the merged States in 1949 & 1950 except to the State of Jammu & Kashmir. Therefore, after Bharat attained independ ence on August 15, 1947, the is applica ble to all States except Jammu & Kashmir. By operation of Article 372 of the Constitution, the continues to be in operation subject to the provisions of the Constitution. The is an amending as well as consolidating Act as held in Ramdas Vithaldas Durbar vs section Amerchand & Co., 43 Indian Appeals 164. Thereby common law principles applicable in England, if they are inconsist ent with or derogation to the provisions of the or the Constitution to that extent they stand excluded. Any law, muchless the provisions of Contract Act, are inconsistent with the fundamental rights which guaran teed in Part III of the Constitution, by operation of Arti cles 13 of the Constitution, are void. Section 2(h) of the defines "an agreement" including an agreement of service and becomes a Contract only when it is enforceable by 303 law. If it is not enforceable it would be void by reason of section 2(g) thereof. The question, therefore, is whether the contract of service or Regulation 9(b) in derogation to the Fundamental Rights guaranteed in of the Consti tution is valid in law and would be enforceable. Contract whether changeable with changing times. The law of contract, like the legal system itself, involves a balance between competing sets of values. Freedom of contract emphasises the need of stability, certainty and predictability. But, important as is values are, they are not absolute, and there comes a point where they "face a serious challenge" against them must be set the values of protecting the weak, oppressed and the thoughtless from imposition and oppressed. Naturally, at a particular time, one set of value tends to be emphasised at the expense of the other as the time changes the values get changed and the old values are under replacement and new values take their due place. Though certainty and predictability in ordinary commercial contract law is emphasised and insisted upon the need for progress of the society and to removing the disa bilities faced by the citizens and their relations when encounter with the State or its instrumentalities are in conflict with the assured constitutional rights demand new values and begin to assert themselves, for no civilised system of law can accept the implications of absolute sanc tity of contractual obligations and of their immutability. In paragraph 4 of Chitty on Contracts (25th Edition, Volume I) it is stated that "freedom of contract is a rea sonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed and no injury is done to the economic interest of the commu nity at large. In Anson 's Law of Contract at p. 6 & 7 stated the scope of freedom of contract in the changing circumstances thus: "Today the position is seen in a very different light. Freedom of contract is a reasonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed, and no injury is done to the econom ic interests of the community at large. In the more compli cated social and industrial conditions of a collectivist society it has ceased to have much idealistic attraction. It is now realised that economic equality often does not exists in any real sense, and that individual interests have to be 304 made to subserve those of the community hence there has been a fundamental change both in our social outlook and in the policy of the legislature towards contract and the law today interferes at numerous points with the freedom of the par ties to make what contract they like. The relation between employers and employed, for example, have been regulated by statutes designed to ensure that the employees condition of work are safe, that he is properly protected against redun dancy and that he knows his terms of service. The public has been protected against economic pressure by such measures as the Rent Acts, the supply of goods (implied terms) at, the consumer Credit Act and other similar enactments. These legislative provisions will override any contrary terms which the parties may make for themselves. Further, the legislature has intervened in the Restrictive Trade Practice Act 1956 and the Fair Trading Act, 1973 to promote competi tion in industry and to safeguard the interests of consum ers. This intervention is specially necessary today when most contracts entered by ordinary people are not the result of individual negotiation. It is not possible for a private person to settle the terms of his agreement with a British Railways Board or with a local electricity authority. The standard form ' contract is the rule. He must either accept the terms of this contract in toto, or go without. Since, however, it is not feasible to deprive onself of such necessary services, the individual is compelled to accept on those terms. In view of this fact, it is quite clear that freedom of contract is now largely an illusion. The trinity of the Constitution assure to every citizen Social and Economic Justice, Equality of Status and of opportunity with dignity of the person. The State is to strive to minimise the inequality in income and eliminate inequality in status between individuals or groups of peo ple. The State has intervened with the freedom of contract and interposed by making statutory law like Rent Acts, Debt Relief Acts, Tenancy Acts, Social Welfare and Industrial Laws and Statutory Rules prescribing conditions of service and a host of other laws. All these Acts and Rules are made to further the social solidarity and as a step towards establishing an egalitaran socialist order. This Court, as a court of constitutional conscience enjoined and a jealously to project and uphold new values in establishing the egali tarian social order. As a court of constitutional function ary exercising equity juris 305 diction, this Court would relieve the weaker parties from unconstitutional contractual obligations, unjust, unfair, oppressive and unconscienable rules or conditions when the citizen is really unable to meet on equal terms with the State. It is to find whether the citizen, when entered into contracts or service, was in distress need or compelling circumstances to enter into contract on dotted lines or whether the citizen was in a position of either to "take it or leave it" and if it finds to be so, this Court would not shirk to avoid the contract by appropriate declaration. Therefore, though certainty is an important value in normal commercial contract law, it is not an absolute and immutable one but is subject to change in the changing social condi tions. In Brojonath 's case, Madan, J., elaborately consid ered the development of law relating to unfair or unreasona ble terms of the contract or clauses thereof in extenso and it is unnecessary for me to traverse the same grounds once over. The learned Judge also considered the arbitrary, unfair and unbridled power on the envil of distributive justice or justness or fairness of the procedure envisaged therein. The relevant case law in that regard was dealt with in extenso in the light of the development of law in the Supreme Court of United States of America and the House of Lords in England and in the continental countries. To avoid needless burden on the judgment, I do not repeat the same reasoning. I entirely agree with the reasoning and the conclusions reached therein on all these aspects. Whether State can impose unconstitutional Conditions. The problem also would be broached from the angle whether the State can impose unconstitutional conditions as part of the contract or statute or rule etc. In 1959 60 73 Harvard Law Review, in the Note under the Caption 'Unconsti tutional Condition ' at page 1595 96 it is postulated that the State is devoid of power to impose unconstitutional conditions in the contract that the power to withhold lar gess has been asserted by the State in four areas i.e., (1) regulating the right to engage in certain activities; (2) Administration of Government welfare programme; (3) Govern ment employment; and (4) Procurement of contracts. It was further adumberated at pages 1602 1603 thus: "The sovereign 's constitutional authority to choose those with whom it will contract for goods and services is in effect a power to withhold the benefits to be deprived from economic dealings with the government. As government 306 activity in the economic sphere increases, the contracting power enables the government to control many hitherto unreg ulated activities of contracting parties through the imposi tion of conditions. Thus, regarding the government as a private entrepreneur threatens to impair constitutional rights . . The Government, unlike a private individual, is limited in its ability to contract by the Constitution. The federal contracting power is based upon the Constitu tion 's authorisation of these acts 'necessary and proper ' to the carrying out of the functions which it allocates to the national government, Unless the objectives sought by terms and conditions in government contracts requiring the surren der of rights are constitutionally authorised, the condi tions must fall as ultra vires exercise of power. " Again at page 1603, it is further emphasised thus: "When conditions limit the economic benefits to be derived from dealings with the government to those who forego the exercise of constitutional rights, the exclusion of those retaining their rights from participation in the enjoyment of these benefits may be a violative of the prohibition, implicit in the due process clause of fifth amendment and explicit in the equal protection clause of the fourteenth amendment against unreasonable discrimination in the Govern mental bestow of advantages. Finally, disabling those exer cising certain rights from participating in the advantages to be derived from contractual relations with the government may be a form of penalty lacking in due process. To avoid invalidation for any of the above reasons, it must be shown that the conditions imposed are necessary to secure the legitimate objectives of the contract ensure its effective use, or protect society from the potential harm which may result from the contractual relationship between the govern ment and the individual. Professor Guido Calabresi of Yale University Law School in his "Retroactivity, Paramount power and Contractu al Changes" ( 196 1 62) 71 Yale Law Journal P. 119 1 at 1196) stated that the Government can make contracts that are necessary and proper for carrying out any of the specific clauses of the Constitution or power to spend for general welfare. The Federal Government has no power, inherent or sovereign, other than those specifically or explicitly granted to it by 307 the Constitution. At page 1197, it is further stated thus: "The Government acts according to due process standards for the due process clause is quite up to that task without the rule. Alterations of Government contracts are not desirable in a free country even when they do not constitute a 'tak ing ' of property or impinge on questions of fundamental fairness of the type comprehended in due process. The gov ernment may make changes, but only if war or commerce re quire them and not on the broader and more ephemeral grounds that the general welfare would be served by the change. Any other rule would allow the Government to which almost at will. These principles were accepted and followed by the Andhra Pradesh High Court in V. Raghunadha Rao vs State of Andhra Pradesh, dealing with A.P. Stand ard specification Clauses 11, 29, 59, 62(b) and 73 and declared some clauses to be ultra vires of Articles 14, 19(1)(g) and 21 of the Constitution and Sections 23 and 27 of the Contract Act. In Brojonath 's case (supra) after elaborate consid eration of the doctrine of "reasonableness or fairness" of the terms and conditions of the contract vis a vis the relative bargaining power of the contracting parties this Court laid down that the principles deductable from the discussion made therein is in consonance with right or reason intended to secure socio economic justice and con forms to mandate of the equality clause in Article 14. The principle laid was that courts will not enforce and will, when called upon to do so, strike down an unfair and unrea sonable contact or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power . . It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscienable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal or where both parties are businessmen and the contract is a commercial transaction. 308 22. In today 's complex world of giant corporations with their vast infra structural organisations and with the State through its instrumentalities and agencies has been entering into almost every branch of industry and commerce and field of service, there can be myriad situations which result in unfair and unreasonable bargains between parties possess wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circum stances. Public policy whether changeable. This Court also angulated the question from the perspective of public policy or contract being opposed to public policy. The phrases "public policy", "opposed to public policy", or "contrary to public policy" are incapable of precise definition. It is valued to meet the public good or the public interest. What is public good or in the public interest or what would be injurious or harmful to the public good or the public interest vary from time to time with the change of the circumstances. New concepts take place of old one. The transactions which were considered at one time as against public policy were held by the courts to be in public interest and were found to be enforceable. Therefore, this Court held in Brojonath 's case that "there has been no well recognised head of public policy, the courts have not shirked from extending it to new transactions and changed circumstances and have at times not even flinched from inventing a new head of public." Lord Wright in his legal Essays and Addresses Vol. III p. 76 and 78 stated that public policy like any other branch of the common law ought to be and I think is, governed by the judicial use of precedents . . If it is said that rules of public policy have to be moulded to suit new condi tions of a changing world, that is true, but the same is true with the principles of the cannon law generally; Lord Lindley held in Janson vs Driefontein Mines Ltd., [1902] A.C.p. 484 and 507 that "a contract or other branch which is against public policy i.e. against the general interest of the country is illegal. In Anson 's Law of Contract, 24th Edition by A.G. Guest at p. 335 stated the scope of variability of public policy attune to the needs of the day and the march of law thus: "At the present time, however, there is an increasing recog nition of the positive function of the Courts in matters 309 of public policy: 'The law relating to public policy cannot remain immutable. It must change with the passage of time. The wind of change blows upon it '. Some aspects of public policy are more susceptible to change than others, during the policy of the law has, on certain subjects, been worked into a set of tolerably definite rules. The principles applicable to agreements in restraint of trade, for example, have on a number of occasions been modified or extended to accord with prevailing economic conditions, and this process still continues. In law of Contract by G.H. Treitei, 7th Edition at p, 366 on the topic 'scope of the public policy ' it is stated thus: "Public policy is a variable notion, depending on changing manners, morals and economic conditions. In theory, this flexibility of the doctrine of public policy could provide a judge with an excuse for invalidating any contract which he violently disliked. On the other hand, the law does adapt itself to change in economic and social conditions, as can be seen particularly from the development of the rules as to contracts in restraint of public policy has often been recognised judicially. Thus Lord Haldane has said; "What the law recognises as contrary to public policy turns out to vary greatly from time to time. " And Lord Denning has put a similar point of view. "with a good man in the saddle, the unruly horse can be kept in control. It can jump over obsta cles. " The present attitude of the Courts represents a compromise between the flexibility inherent in the notion of public policy and the need for certainty in commercial affairs. From this perspective, it must be held that in the absence of specific head of public policy which covers a case, then the court must in consonance with public con science and in keeping with public good and public interest invent new public policy and declare such practice or rules that are derogatory to the constitution to be opposed to public policy. The rules which stem from the public policy must of necessity be laid to further the progress of the society in particular when social change is to bring about an egalitarian social order through rule of law. In deciding a case which may not be covered by authority courts have before them the beacon light of the trinity of the Constitu tion and the play of legal light and shade must lead on the path of justice social, 310 economical and political. Lacking precedent, the court can always be guided by that light and the guidance thus shed by the trinity of our Constitution. Public policy can be drawn from the Constitution. Sutherland, in his Statutes and Statutory Construc tion Third Edition Vol. 3 paragraph 5904 at page 13 1 132 has stated that the most reliable source of public policy is to be found in the federal and state constitutions. Since constitutions are the superior law of the land, and because one of their outstanding features is flexibility and capaci ty to meet changing conditions, constitutional policy pro vides a valuable aid in determining the legitimate bound aries of statutory meaning. Thus public policy having its inception in constitutions may accomplish either a restrict ed or extended interpretation of the literal expression a statute. A statute is always presumed to be constitu tional and where necessary a constitutional meaning will be inferred to preserve validity. Likewise, where a statute tends to extend or preserve a constitutional principle, reference to analogous constitutional provisions may be of great value in shaping the statute to accord with the statu tory aim or objective. Article 14 sheds the light to public policy to curb arbi trariness. 26A. In Basheshar Nath vs The Commissioner of Income Tax & Anr., [1959] Suppl. 1 SCR 528 S.R. Das, CJ., held that Article 14 is founded on a sound public policy recognised and valued in all States and it admonishes the State when it disregards the obligations imposed upon the State. 26B. In E.P. Royappa vs State of Tamil Nadu & Ant., ; Bhagwati. J. (as he then was) held that Article 14 is the genus while Article 16 is a specie. Arti cle 16 gives effect to the doctrine of equality in all matters relating to public employment. The basic principle which. therefore, informs both Articles 14 and 16 is equali ty and inhibition against discrimination. "Equality is a dynamic concept with many aspects and dimensions and it cannot be "cribbed, cabined and confined" within traditional and doctrinaire limits. From a positivistic point of view. equality is antithetic to arbitrariness. In fact, equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and ca price of an absolute monarch. Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore 311 violative of Article 14, and if it affects any matter relat ing to public employment, it is also violative of Article 16. Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment. In Menaka Gandhi 's case it was further held that the principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non arbitrariness pervades Article 14 like a brooding omnipresence. In Rama na 's case it was held that it is merely a judicial formula for determining whether the legislative or. executive action in question is arbitrary and therefore constituting denial of equality. If the classification is not reasonable and does not satisfy the two conditions namely, rational rela tion and nexus the impugned legislative or executive action would plainly be arbitrary and the guarantees of equality under Article 14 would be breached. Wherever, therefore, there is arbitrariness in State action whether it be of legislature or of the executive or of an "authority" under Article 12, Article 14, "immediately springs into action and strikes down such State action. " In fact, the concept of reasonableness and non arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the constitution. In Volga Tellies 'Case it was held that the Constitu tion is not only paramount law of the land but also it is a source of sustenance of all laws. Its provisions are con ceived in public interest and are intended to serve public purpose. Therefore, when the provisions of an Act or Regula tions or Rules are assailed as arbitrary, unjust, unreasona ble, unconstitutional, public law element makes it incumbent to consider the validity there 'of on the envil of inter play of articles 14 ', 16(1), 19(1)(g) and 21 and of the inevitable effect of the impugned provision on the rights of a citizen and to find whether they are constitutionally valid. Interplay of articles 14, 16(1), 19(1)(g) & 21 as guarantors of public employment as a source of right to livelihood. It is well settled constitutional law that different Articles in the Chapter on Fundamental Rights and the Direc tive Principles in Part IV of the Constitution must be read as an integral and incorporeal whole with possible overlap ping with the subject matter of what is to be protected by its various provisions particularly the Fundamental Rights. By the Full Court in R.C. Cooper vs Union of India, ; it was held that the law must not impair the guarantee of any 312 of the fundamental rights in Part III. The law authorising to impose reasonable restrictions under Article 19(1) must be intended to advance the larger public interest. Under the Constitution, protection against impairment of the guarantee of the fundamental rights is determined by the nature of the right, interest of the aggrieved party and the degree of harm resulting from the state action. Impairment of the right of the individual and not the object of the State in taking the impugned action is the measure of protection. To concentrate merely on the power of the State and the object of the State action in exercising that power is, therefore, to ignore the true intent of the constitution. The nature and content of the protection of the fundamental rights is measured not by the operation of the State action upon the rights of the individual but by its objects. The validity of the State action must be adjudged in the light of its opera tion upon the rights of the individuals or groups of the individual in all their dimensions. It is not the object of the authority making the law imparing the right of the citizen nor the form of action taken that determines the protection he can claim; it is the effect of the law and of the action upon the right which attract the jurisdiction of the court to grant relief. In Minerva Mills Ltd. vs Union of India, ; the fundamental rights and directive principles are held to be the conscience of the Constitution and disregard of either would upset the equibalance built up therein. In Menaka Gandhi 's case, it was held that different articles in the chapter of Fundamental Rights of the Consti tution must be read as an. integral whole, with possible overlapping of the subject matter of what is sought to be protected by its various provisions particularly by articles relating to fundamental rights contained in Part III of the Constitution do not represent entirely separate streams of rights which do not mingle at many points. They are all parts of an integrated scheme in the Constitution. Their waters must mix to constitute that grand flow of unimpeded and impartial justice; social, economic and political, and of equality of status and opportunity which imply absence of unreasonable or unfair discrimination between individuals or groups or classes. The fundamental rights protected by Part III of the constitution, out of which Articles 14, 19 and 21 are the most frequently invoked to test the validity of executive as well as legislative actions when these actions are subjected to judicial scrutiny. Fundamental Rights are necessary means to develop one 's own personality and to carve out one 's own life in the manner one likes best, subject to reasonable restrictions imposed in the paramount interest of the Society and to a just, fair and reasonable procedure. The effect of restriction or deprivation and not of the form adopted to deprive the right is the conclusive test. It is already seen that the right to a public employ 313 ment is a constitutional right under article 16(1). All matters relating to employment include the right to continue in service till the employee reaches superannuation or his service is duly terminated in accordance with just, fair and reasonable procedure prescribed under the provisions of the Constitution or the Rules made under proviso to Article 309 of the Constitution or the statutory provision or the Rules, regulations or instructions having statutory flavour made thereunder, But the relevant provisions must be conformable to the rights guaranteed in Parts III & IV of the Constitu tion, Article 21 guarantees the_ right to live which in cludes right to livelihood, to a many the assured tenure of service is the source, the deprivation thereof must be in accordance with the procedure prescribed by law conformable to the mandates of Articles 14 and 21 as be fair, just and reasonable but not fancyful oppressive or at vagary. The need for the fairness, justness or reason ableness of the procedure was elaborately considered in Menaka Gandhi 's case (supra) and it hardly needs reiteration. Principles of natural justice in Part of Article 14. The Menaka Gandhi 's case is also an authority for the proposition that the principles of natural justice is an integral part of the guarantee of equality assured by Arti cle 14 of the Constitution. In Union of India & Anr. vs Tulsiram Patel & Ors., [1985] Suppl. 2 SCR 13 1 at 233, this Court held that the principles of natural justice have thus come to be recognised as being a part of the guarantee contained in Article 14 because of the new and dynamic interpretation given by this Court to the concept of equali ty which is the subject matter of that Article. Shortly put, the syllogism runs thus: "Violation of a rule of natural justice results in arbi trariness which is the same as discrimination; where dis crimination is the result of the State action, it is a violation of article 14, therefore, a violation of a principle of natural justice by a State action is a violation of Art 14. Article 14, however; is not the sole repository of the principles of natural justice. What it does is to guarantee that any law or State action violating them will be struck down. The principles of natural justice, however, apply not only to the legislation and State action but also where any tribunal, authority or body of men, not coming within the definition of 'State ' in article 12, is charged with the duty of deciding a matter. In such a case, the principles of natural justice require that it must decide such a matter fairly and impartially. " 314 In Moti Ram Deka 's case this Court already held that "the rule making authority contemplated by Article 309 cannot be validly exercised so as to curtail or affect the rights guaranteed to public servants under article 311(2). Article 311(2) is intended to afford a sense of scrutiny to public servants who are substantively appointed to a permanent post and one of the principle benefits which they are entitled to expect is the benefit of pension after rendering public service for the period prescribed by the Rules. It would, we think, not be legitimate to contend that the right to earn a pension to which a servant substantively appointed to a permanent post is entitled can be curtailed by Rules framed under article 309 so as to make the said right either ineffec tive or illusory. Once the scope of article 311(1) and (2) is duly determined, it must be held that no rule framed under article 309 can trespass on the rights guaranteed by article 311. This position is of basic importance and must be borne in mind in dealing with the controversy in question. In A.K. Kraipak & Ors etc. vs Union of India & Ors., this Court held that Rules of natural justice aims at securing justice or to prevent injustice. They operate only in the areas not covered by any law valid ly made. In Union of India vs Col. J.N. Sinha and Anr., [197 1] 1 SCR 791 it was held that principles of natural justice do not supplant the law but supplement it. If a statutory provision either specifically or by necessary implication excludes the application of any rules of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision of the principles of natural justice. In that case this Court held that principles of natural justice cannot be read into Fundamental Rule and no opportunity need be given before compulsorily retiring an employee as that implication does not arise by reason of express statutory language. The principle of natural justice embodied as an integral part of equality clause. Article 14 is the general principle while article 311(2) is a special provision applica ble to all civil services under the State. Article 311(2) embodies the principles of natural justice but proviso to Clause (2) of article 311 excludes the operation of principles of natural justice engrafted in article 311(2) as an exception in the given circumstances enumerated in three clauses of the proviso to article 311(2) of the Constitution. Article 14 read with articles 16(1) and 311 are to be harmoniously inter preted that the proviso to article 311(2) excludes the applica tion of the principles of natural justice as an exception; and the applicability of article 311(2) must, therefore, be circumscribed to the civil services and to be construed accordingly. In respect of all other 315 employees covered by article 12 of the Constitution the dynamic role of article 14 and other relevant Articles like 21 must be allowed to have full play without any inhibition, unless the statutory rules themselves, consistent with the mandate of articles 14, 16, 19 & 21 provide, expressly such an exception. Article 19(1)(g) empowers every citizen right to avoca tion or profession etc., which includes right to be contin ued in employment under the State unless the tenure is validly terminated consistent with the scheme enshrined in the fundamental rights of the Constitution. Therefore, if any procedure is provided for deprivation of the right to employment or right to the continued employment till the age of superannuation as is a source to right to livelihood, such a procedure must be just, fair and reasonable. This Court in Fertilizer Corporation Kamgar Union (Regd.), Sindri & Ors. vs Union of India & Ors. , ; at 60 61 held that article 19(1)(g) confers a broad and general right which is available to all persons to do works of any partic ular kind and of their choice. Therefore, whenever there is arbitrariness in state action whether it be of the legisla ture or of the Executive or of an authority under article 12, articles 14 and 21 spring into action and strikes down such an action. The concept of reasonableness and nonarbitrariness pervades the entire constitutional spectrum and is a golden thread which runs through the whole fabric of the Constitu tion. Therefore, the provision of the statute, the regula tion or the rule which empowers an employer to terminate the services of an employee whose service is of an indefinite period till he attains the age of superannuation, by serving a notice of pay in lieu thereof must be conformable to the mandates of articles 14, 19(1)(g) and 21 of the Constitution. Otherwise per se it would be void. In Motiram Deka 's case, Gajendragadkhar, J , (as he then was) after invalidating the rules 149(3) and 148(3) under article 311(2) which impari materia Rule 9(b) of the Regulation also considered their validity in the light of article 14 and held thus: "Therefore, we are satisfied that the challenge to the validity of the impugned Rules on the ground that they contravene article 14 must also succeed. " This was on the test of reasonable classification as the principle then was applied. Subba Rao, J., (as he then was) in a separate but concurrent judgment, apart from. invali dating the rule under Article 311(2) also held that the Rule infringed Article 14 as well, though there is no elaborate discussion in that regard. But, Das Gupta, J., considered 316 elaborately on this aspect and held: "Applying the principle laid down in the above case to the present rule, I find on the scrutiny of the Rule that it does not lay down any principle or policy for guiding the exercise of discretion by the authority who will terminate the service in the matter of selection or classification. Arbitrary and uncontrolled power is left in the authority to select at its will any person against whom action will be taken. The Rule, thus enables the authority concerned to discriminate between two railway servants to both of whom R. 148(3) equally applied by taking action in one case and not taking it in the other. In the exercise of the discretion by the authority the rule has therefore to be struck down as contravening the requirements of article 14 of the Constitu tion. Even in Tulsiram Patel 's case (supra) this Court declared that it must satisfy the test of justness, fairness and reasonableness of the procedure prescribed. But the proviso to article 311(2) was upheld for the reason that the Constitution itself made proviso an exception to the prin ciple of audi alteram partem engrafted in article 311(2) of the Constitution. As a fact, it expressed thus: "As the making of such laws and the framing of such rules are subject to the provisions of the Constitution, if any such act or rules violates any of the provisions of the Constitution, it would be void. Thus, as held in Moti Ram Deka 's case ; if any such act or rule tres passes on the rights guaranteed to government servants by article 311, it would be void. Similarly, such acts and rules cannot abridge or restrict the pleasure of the President or the Governor of a State exercisable under article 3 10(1) further than what the Constitution has expressly done. In the same way, such Act or rule would be void if it violates any fundamental right guaranteed by part III of the Consti tution. " Gurdev Singh 's case declares the rules that empowered to order compulsory retirement of the Government employee after putting ten years of service as ultra vires. In S.S. Muley vs J.R.D. Tata, my learned brother Sawant, J. (as he then was) held that Regulation 48 which empowered the employer uncanalised, unrestricted and arbi trary power to terminate the service of an employee with notice or pay in lieu thereof without any opportunity of 317 hearing as violative of principles of natural justice under article 14 of the Constitution. In Superintendent of Post Office vs K. Vasayya, [1984] 3 Andhra Pradesh Law Journal 9 the respondent Vasayya was denied of the appointment as a Clerk on the ground that the Confidential Reports submitted by the Police disclosed adverse comments on the conduct of the respondent. When the appointment was denied on that basis it was held that though the selection to a public office is a privilege and no vested right has been accrued till the candidate is appoint ed, in the context of fair play in action subserving the mandate of article 14 held at p. 45 thus: "Often times, convenience and justice are not on speaking terms. It is the actual administration of law and not only the manner in which it is done that reflects the action of the State in assuring the equal protection to a citizen. In adopting the procedure, as held by Frankfurther, J. in Joint Anti Facist Refugee Commission vs Mc. Grath, 34 ; that a conclusion satisfies one 's private conscience does not attest its reliability. The validity and moral authority of a conclusion largely depends on the mode by which it was reached. Secrecy is not congenial to truth. Seeking and self righteousness gives too slander an assurance of right ness. No better instrument has been devised for arriving at the truth than to give a person in jeopardy of a serious loss, a notice of the case against him and an opportunity to meet it, nor has a better way been found for generating the feeling so important to a popular Government that justice has been done. " Bradley, J. in United States vs Samuel D. singleton; , has held that: "No State shall make or enforce any law which abrogate the privileges or immunities of citizens of the United States. " In Ramana 's case (supra), it has been held that: is indeed unthinkable that in a democracy governed by the rule of law, the executive Govt. or any of its offi cers should possess arbitrary power over the interests of the individual . . 318 The procedure adopted should match with what justice de mands. History shows that it is always subtle and insidious encroachments made ostensibly for a good cause that imper ceptibly but surely erode the foundations of liberty. " Doughlas, J. in Joint Anti Facist Refugee Commission 's case (supra) held that: "This is a Government of laws not of men. The powers being used are the powers of the Government over the reputation and fortunes of citizens. In situations far less severe or important than those a party is told the nature of the charge against him." Harry W. Jones in his "Rule of law and Welfare State", at 146 stated that: "What is needed then is to make the welfare state itself a source of new "rights" and to surround the "rights" in public benefaction with legal safeguards both procedural and substantive comparable to those enjoyed by the traditional right of property in our law. " Accordingly it was held that prior opportunity of hearing before denying appointment is a mandate of article 14 of the Constitution. In West Bengal Electricity Board & Ors. vs D.B. Ghosh & Ors., [1985] 2 SCR 1014 in similar circumstances, it was held that the regulation as "Herry VIII Clause as ultra vires of article 14 of the Constitution. The same principle was reiterated in Brojonath 's case. In Workman of Hindustan Steel Ltd. & Anr. vs Hindustan Steel Ltd. & Ors. , ; the standing order that empowers the manager to dispense with the enquiry and to dismiss an employee without any obligation to record reasons was held to be drastic power but directed to amend the standing orders consistent with proviso to article 311(2) of the Constitution. This Court in O.P. Bhandari vs Indian Tourism Development Corpn. Ltd. & Ors., ; struck down the similar rule on the same doctrine of 'hire and fire ' and that it is impermissible under the constitu tion of the scheme to sustain the doctrine of 'hire and fire '. In Chandrabhan 's case, Rule 15(1)(ii)(b) of Bombay Service Rule was held to be void. In A.P.S.R.T. Corpn. vs 319 Labour Court, AIR (1980) A.P. 132 a Full Bench of Andhra Pradesh High Court held that the legislature is not compe tent to make law abridging the right to work. In R.M.D. Chamarbaugwalla vs State of Punjab, ; it was held that any Act violating fundamental rights is void. In Kanhialal vs District Judge & Ors., this Court held that termination of the service of a tempo rary employee without affording opportunity is penal in character and violates article 311(2) and was void. In M.K. Agarwal v, Gurgaon Gramin Bank & Ors., [1987] Suppl. 643 this Court struck down regulation 10(2)(a) of the Gurg aon Gramin Bank (Staff) Services Rules, 1980. In this light it is not open to the State to contend that "look here; though Constitution enjoins and admonishes us saying that it is no longer open to the State to make law or rule violating the rights created under articles 14 and 21, the citizen, with a view to secure public employment from us had contracted out of the constitutional rights and agreed to abide by rules including the termination of his/her services at any time at our will without notice or opportunity even for misconduct, negligence, inefficiency, corruption or rank nepotism, so we are free to impose the said punishment. " Even in the case of minority institutions, when the employ ees are dismissed on the principle of hire and fire, this Court held it to be impermissible vide All Saints High School vs Government of A.P., ; & 938 e to f; Frank Anthoney Public School vs Union of India, ; & 269 b to e; Christian Medical College Hospital Employ ees ' Union & Anr. vs Christian Medical College, Veilore Association & Ors., ; & 562. In Moti Ram Deka 's case this Court held that rules 148(3) and 149(3) trespassed upon the rights guaranteed to government servants by article 311(2) and would be void. In Kameshwar Prasad vs State of Bihar, [1962] Suppl. 3 SCR 369. Rule 4A of the Bihar Government Servants ' Conduct Rules, 1956, in so far as it prohibited any form of demon stration was struck down by this Court as being violative of sub clauses (a) and (b) of clause (1) of article 19. In O.K. Ghosh vs EZX Joseph, [1963] Suppl. 1 SCR 789 this Court 'struck down Rule 4A of the Central Civil Services (Conduct Rules), 1955, on the ground that it violated sub clause (c) of clause (1) of article 19 of the Constitution and that por tion of Rule 4A which prohibited participation in any demon stration as being violative of sub clauses (a) and (b) of clause (1) of Article 19. It must, therefore, be hold that any act or provision therein, Rules or Regulations or 320 instructions having statutory force violating fundamental rights under Articles 14, 16(1), 19(1)(g) and 21 are void. Thus it could be hold that article 14 read with 16(1) accords right to an equality or an equal treatment consist ent with the principles of natural justice. Any law made or action taken by the employer, corporate statutory or instru mentality under Article 12 must act fairly, justly and reasonably. Right to fair treatment is an essential inbuilt of natural justice. Exercise of unbridled and uncanalised discretionary power impinges upon the right of the citizen; vesting of discretion is no wrong provided it is exercised purposively judiciously and without prejudice. Wider the discretion, the greater the chances of abuse. Absolute discretion is destructive of freedom. than of man 's other inventions. Absolute discretion marks the beginning of the end of the liberty. The conferment of absolute power to dismiss a permanent employee is antithesis to justness or fair treatment. The exercise of discretionary power wide of mark would bread arbitrary, unreasonable or unfair actions and would not be consistent with reason and justice. The provisions of a statute, regulations or rules that empower an employer or the 'management to dismiss, remove or reduce in rank of an employee, must be consistent with just, rea sonable and fair procedure. It would, further, be held that right to public employment which includes right to continued public employment till the employee is superannuated as per rules or compulsorily retired or duly terminated in accord ance with the procedure established by law is an integral part of right to livelihood which in turn is an integral facet of right to life assured by article 21 of the Constitu tion. Any procedure prescribed to deprive such a right to livelihood or continued employment must be just, fair and reasonable procedure. In other words an employee in a public employment also must not be arbitrarily unjustly and unrea sonably be deprived of his/her livelihood which is ensured in continued employment till it is terminated in accordance with just, fair and reasonable procedure. Otherwise any law or rule in violation thereof is void. Need for harmony between social interest and individual right 34. Undoubtedly efficiency of the administration and the discipline among the employees is very vital to the successful functioning of an institution or maximum produc tion of goods or proper maintenance of the services. Disci pline in that regard among the employees is its essential facet and has to be maintained. The society is vitally interested in the due discharge of the duties by the govern ment employees or 321 employees of corporate bodies 'or statutory authorities or instrumentalities under article 12 of the Constitution. As held in Tulsiram Patel 's case the public are vitally interested in the efficiency and integrity of the public service. The government or corporate employees are, after all, paid from the public exchequer to which everyone contributes either by way of direct or indirect taxes. The employees are charged with public duty and they should perform their public duties with deep sense of responsibility. The collective responsi bility of all the officers from top most to the lowest maximises the efficient public administration. They must, therefore, be held to have individual as well as collective responsibility in discharge of their duties faithfully, honestly with full dedication and utmost devotion to duty for the progress of the country. Equally the employees must also have a feeling that they have security of tenure. They should also have an involvement on their part in the organi sation or institution, corporation, etc. They need assurance of service and they need protection. The public interest and the public good demand, that those who discharge their duties honestly, efficiently and with a sense of devotion and dedication to duty should receive adequate protection and security of tenure. Equally inefficient, dishonest and corrupt or who became security risk should be weeded out so that successful functioning of the industry or manufacture of the goods or rendering or services would be available at the maximum level to the society and society thereby re ceives optimum benefit from the public money expanded on them as salary and other perks. Therefore, when a situation envisaged under statute or statutory rule or regulation or instructions having statutory force to remove or dismiss an employee the question arises whether they need at least minimum protection of fair play in action. 34A. In Vasayya 's case when a similar contention was raised I have stated at p. 47 in Para 130 & 13 1 that. The Audi alteram partem rule must be flexible; malleable and an adaptable concept to adjust and harmonise the need for speed and obligation to act fairly. When the rights of the Government are widely stressed, the rights of the person are often threatened, when the latter are ever emphasised Government becomes weak to keep order. Therefore, the rule can be tailored and the measure of its application cut short in reasonable proportion to the exigencies of the situation. The administrative agency can develop a technique of deci sion worthy being called "ethos of adjudication". Meaningful statutory standards, realistic procedural requirements and discriminatory techniques of judicial review are among the tools to control the discretionary 322 power. It makes no difference whether the occasion for the exercise of power is personal default or act of policy. Good administration demands fair consultation in each case and this the law can and should enforce. The insistence of the observance of fundamental fairness in the procedure becomes a balancing balm to alleviate apprehension of arbitrary decision by the executive Government while assuring opportu nity to disabuse the prima facie impression formed against the person to usher in a era of largest good to largest number of people with proper checks and balances between needs of the State and the rights of the individual. The brooding omni benevolence and omnicompetency of the need for expediency and claim for justness interplay ethos of fair adjudication in action. 34B. Therefore, it is no well tuned solace to say that in a court of law at the fag end of the currier or after superannuation in the interregnum which often over takes the litigation, that the employee would be meted out with jus tice (a grave uncertainty and exposing to frustrating pro crastination of judicial process and expenses and social humiliation). Before depriving an employee of the means of livelihood to himself and his dependents, i.e. job, the procedure prescribed for such deprivation must, therefore, be just, fair and reasonable under articles 21 and 14 and when infringes article 19(1)(g) must be subject to imposing reasona ble restrictions under article 19(5). Conferment of power on a high rank officer is not always an assurance, in particular when the moral standards are generally degenerated that the power would be exercised objectively, reasonably, conscien tiously, fairly and justly without inbuilt protection to an employee. Even officers who do their duty honestly and conscientiously are subject to great pressures and pulls. Therefore, the competing claims of the "public interest" as against "individual interest" of the employees are to be harmoniously blended so as to serve the societal need con sistent with the constitutional scheme. Statutory Construction: 35. Statutory construction raises a presumption that an Act or a provision therein a constitutionally valid unless it appears to be ultra vires or invalid. The legislature, subject to the provisions of the Constitution, has undoubt edly unlimited powers to make law. In fairness to the learned Attorney General, he agrees that the impugned provi sions are per se invalid. But he attempted to salvage them by resorting to the doctrine of reading down. 323 Reading a provision down when permissible. The question emerges whether the doctrine of reading down would be applied to avoid a void law vesting with arbitrary power with a naked hire and fire draconian rule. It is difficult to give acceptance to extreme contention raised by Sri Garg and Sri Rama Murthy that the Courts cannot in the process of interpretation of the Statute would not make law but leave it to the legislature for necessary amendments. In an appropriate case Judges would articulate the inarticulate major premise and would give life and force to a Statute by reading harmoniously all the provisions ironing out the freezes. But the object is to alongate the purpose of the Act. In this regard 1 respectfully agree with my learned brother, my Lord the Chief Justice, on the prin ciple of statutory construction. The question is whether Legislature intended to confer absolute power or would it be construed in such a way that would supplant the law but not supplement law made by the Legislature. 35A. Natural construction. The golden rule of statutory construction is that the words and phrases or sentences should be construed according to the intent of legislature that passed the Act. All the provisions should be read together. If the words of the statutes are in themselves precise and unambiguous, the words, or phrases or sentences themselves alone do, then no more can be necessary than to expound those words or phrases or sentences in their natural and ordinary sense. But if any doubt arises from the terms employed by the legislature, it has always been held a safe means of collecting the inten tion, to call in aid the ground and cause of making the statute, and to have the recourse to the preamble, which is a key to open the minds of the makers of the statute and the mischiefs which the Act intend to redress. In determining the meaning of statute the first question to ask always is what is the natural or ordinary meaning of that word or phrase in its context. It is only when that meaning leads to some result which cannot reasonably be supposed to have been the intent of the legislature then it is proper to look for some other possible meaning then the court cannot go fur ther. Craie 's Statute Law, Seventh Edition in Chapter 5, at page 64 it is stated that where the words of an Act are clear, there is no need for applying any of the principles of interpretation which are merely presumptions in cases of ambiguity in the statute. The safer and more correct course of dealing with the question of construction is to take 324 the words themselves and arrive, if possible, at their meaning without in the first place refer to cases. Where an ambiguity arises to supposed intention of the legislature, one of the statutory constructions, the court profounded is the doctrine. of reading down. Lord Reid in Federal Steam Navigation Co. vs Department of Trade and Industry, at p. 100 (as also extracted by Cross Statutory Interpretation, Butterworths ' Edition, 1976 at page 43 in preposition 3) has stated thus: "the judge may read in words which he considers to be neces sarily implied by words which are already in the statute and he has a limited power to add to, alter or ignore statutory words in order to prevent a provision from being unintelli gible, absured or totally unreasonable, unworkable, or totally irre concileabIe with the rest of the statute. " At page 92 of the Cross Statutory Interpretation, the author has stated that "The power to add to, alter or ignore statutory words is an extremely limited one. Generally speaking it can only be exercised where there has been a demonstrable mistake on the part of the draftsman or where the consequence of applying the words in their ordinary, 6r discernible secondary, meaning would be utterly unreasona ble. Even then the mistake may be thought to be beyond correction by the court, or the tenor of the statute may be such as to preclude the addition of words to avoid an unrea sonable result. " Therefore, the Doctrine of Reading Down is an internal aid to construe the word or phrase in statute to give reasonable meaning, but not to detract distort or emasculate the language so as to give the supposed purpose to avoid unconstitutionality 35C. This Court in Saints High School, Hyderabad vs Govt. of A.P.; , held that: "this Court has in several cases adopted the reading down the provisions of the Statute. The reading down of a provi sion of a statute puts into operation the principle that so far as is reasonably possible to do so, the legislation should be construed as being within its power. It is the principle effect that where an Act is expressed in language of a generality which makes it capable, if read literally, of applying to matters beyond relevant legislative power, the Court would construe it in a more limited sense so as to keep it within the power. " 325 Similarly restricted meaning was ascribed by Maxwell in his Interpretation of the Statutes XII Edn. at p. 109 under the caption "Restriction of operation" that sometimes to keep the Act within the limits of its scope and not to disturb the existing law beyond what the object requires, it is construed as operative between certain purposes only even though the language expresses no such circumspection of field of operation. It is, thus, clear that the object of reading down is to keep the operation of the statute within the purpose of the Act and consitutionally valid. In this regard it is equally of necessity to remind ourselves as held by this Court in Minerva Mills ' case that when the effect of article 31 was asked to be read down so as to save it from unconstitu tionality this Court held that it is not permissible to read down the statutory provisions when the avowed purpose is to confer power on an authority without any limitation whatever and that at p. 259D and G it was held that the principle of reading down cannot be used to distort when words of width are used even advertantly. In Elliott Ashton Welsh, II vs United States. ; (26 Lawyer 's Edition 2nd, 308 at 327) Herfan, J. at 327 held that "when the plain thrust of a legislative enactment can only be circumvented by distortion to avert constitutional collision, it can only by exalting form over substance that one can justify veering of the path that has been plainly marked by the Statute. Such a course betrays extreme skepticism as to constitutionality and in this instance reflects a groping to preserve conscientious objecter exemption at all costs I cannot subscribe wholly to emasculated construction of a statute to avoid facing con stitutional question in purported fidelity to the statutory doctrine of avoiding unnecessary resolution of constitution al issues. " 36A. In Nalinakhya Bysack vs Shyam Sunder Haldar & Ors., ; at 544 45 this Court has refused to rewrite legislation to make up omissions of the Legislature. In Moti Ram Deka 's case when Rule 148(3) and Rule 149(3) of the Railway Establishment Code were sought to be sus tained on the 'principle of reading down ', this court held thus: "There is one more point which still remains to be consid ered and that is the point of construction. The learned Addl. Solicitor General argued that in construing the im pugned R. 148(3) as well as R. 149(3), we ought to take into account the fact that the Rule as amended has been so 326 framed as to avoid conflict with or non compliance of, the provisions of article 311(2), and so, he suggests that we should adopt that interpretation of the Rule which would be consistent with article 311(2). The argument is that the termi nation of services permissible under the impugned rules really proceeds on administrative grounds or considerations of exigencies of service. If, for instance, the post held by a permanent servant is abolished, or the whole of the cadre to which the post belonged is brought to an end and the railway servant 's services are terminated in consequence, that cannot amount his removal because the termination of his service is not based on any consideration personal to the servant. In support of this argument, the Addl. Solici tor General wants us to test the provision contained in the latter portion of the impugned rules. We are not impressed by this argument. What are not impressed by this argument. What the latter portion of the impugned Rules provide is that in case a railway servant is dealt with under that portion, no notice need be served on him. The first part of the Rules can reasonably and legitimately take in all cases and may be used even in respect of cases falling under the latter category, provided, of course, notice for the speci fied period or salary in lieu of such notice is given to the railway servant. There is no doubt that on a fair construc tion, the impugned Rules authorise the Railway Administra tion to terminate the services of all the permanent servants to whom the Rules apply merely on giving notice for the specified period or on payment of salary in lieu thereof and that clearly amounts to the removal of the servant in ques tion. Therefore, we are satisfied that the impugned rules are invalid inasmuch as they are inconsistent with the provisions contained in article 311(2). The termination of the permanent servant 's tenure which is authorised by the said Rules is no more and no less than their removal from serv ice, and so, article 311(2) must come into play in respect of such cases. That being so, the Rule which does not require compliance with the procedure prescribed by article 311(2) must be struck down as invalid. I am, therefore, inclined to hold that the Courts though, have no power to amend the law by process of inter pretation, but do have power to mend it so as to be in confirmity with the intendment of the legislature. Doctrine of reading down is one of the principles of 327 interpretation of statute in that process. But when the offending language used by the legislature is clear, precise and unambiguous, violating the relevant provisions in the constitution, resort cannot be had to the doctrine of read ing down to blow life into the void law to save from uncon stitutionality or to confer jurisdiction on the legislature. Similarly it cannot be taken aid of to emasculate the pre cise, explicit, clear and unambiguous language to confer arbitrary, unbridled and uncanalised power on an employer which is a negation to just, fair and reasonable procedure envisaged under Articles 14 and 21 of the Constitution and to direct the authorities to record reasons, unknown or unintended procedure, in the manner argued by the learned counsel for the appellants. At the cost of repetition it is to reiterate that when the authority intends to take disciplinary action for imposing penalty of dismissal, removal or reduction in rank of an employee, an elaborate procedure has been provided in Regulation 15 to conduct an enquiry into misconduct after giving reasonable opportunity. Residuary power has been avowedly conferred in Regulation 9(b) with wide discretion on the appropriate authority to take actions on similar set of facts but without any guidelines or procedure at the absolute discretion of the same authority. The language of Regulation 9(b) is not capable of two interpretations. This power appears to be in addition to the normal power in Regulation 15. Thereby the legislative intention is manifest that it intended to confer such draconian power couched in language of width which hangs like Damocles sword on the neck of the employee, keeping every employee on tenterhook under constant pressure of uncertainty, precarious tenure at all times right from the date of appointment till date of superannuation. It equally enables the employer to pick and choose an employee at whim or vagary to terminate the serv ice arbitrarily and capriciously. Regulation 9(b), thereby deliberately conferred wide power of termination of services of the employee without following the principle of audi alteram partem or even modicum of procedure of representation before terminating the services of permanent employee. It is well settled rule of statutory construction that when two interpretations are possible one which would preserve and save constitutionality of a particular Statute, would be preferred to the other that would render it unconstitutional and void. When the language is clear, unambiguous and specific and it does not lead to the constructions, it is not permissible to read into those provisions something which is not intended. It is undoubtedly true as rightly contended by 328 Mr. Ashok Desai, the learned Solicitor General that the power to take appropriate and expeditious action to meet the exigencies of weeding out inefficient, corrupt, indolent officers or employees from service should be provided and preserved to the competent authority. Any action taken without any modicum of reasonable procedure and prior oppor tunity always generates an unquenchable feeling that unfair treatment was meted out to the aggrieved employee. To pre vent miscarriage of justice or to arrest a nursing grievance that arbitrary, whimsical or capricious action was taken behind the back of an employee without opportunity, the law must provide a fair, just and reasonable procedure as is exigible in a given circumstances as adumbrated in proviso to article 311(2) of the Constitution. If an individual action is taken as per the procedure on its own facts its legality may be tested. But it would be no justification to confer power with wide discretion on any authority without any procedure which would not meet the test of justness, fair ness and reasonableness envisaged under articles 14 and 21 of the Constitution. In this context it is important to empha sise that the absence of arbitrary power is the first essen tial of the rule of law upon which our whole constitutional system is based. In a system governed by rule of law, dis cretion, when conferred upon executive authorities, must be confined within defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any princi ple or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law. (See Dicey "Law of the Constitution" 10th Edn., Introduction cx). "Law has reached its finest moments", stated Douglas, J. in United States vs Wunderlick; , "then it has freed man from the unlimited discretion of some rules . . where discre tion is absolute, man has always suffered". It is in this sense that the rule of law may be said to be the sworn enemy of caprice. Discretion, as Lord Mansfield stated it in classic terms in the case of John Wilkes "means should discretion guided by law. It must be governed by rule, not by humour; it must not be arbitrary, vague and fanciful," as followed in this Court in S.G. Jaisinghani vs Union of India. , ; 40. In an appropriate case where there is no sufficient evidence available to inflict by way of disciplinary meas ure, penalty of dismissal or removal from service and to meet such a situation, it is not as if that the authority is lacking any power to make Rules or regulations to give a notice of opportunity with the grounds or the material on records on 329 which it proposed to take action, consider the objections and record reasons on the basis of which it had taken action and communicate the same. However scanty the material may be, it must form foundation. This minimal procedure should be made part of the procedure lest the exercise of the power is capable of abuse for good as well as for whimsical or capricious purposes for reasons best known to the authority and not germane for the purpose for which the power was conferred. The action based on recording reasoning without communication would always be viewed with suspicion. There fore, 1 hold that conferment of power with wide discretion without any guidelines, without any just, fair or reasonable procedure is constitutionally anathema to articles 14, 16(1), 19(1)(g) and 21 of the Constitution. Doctrine of reading down cannot be extended to such a situation. It is undoubted that in In re Hindu Women 's Right to Property Act, involve the interpretation of single word "property" in the context to legislative compe tency but that cannot be extended to the facts of these cases. R.M.D. Charnarbaugwalla 's case is of severability and of a single word competition. The interpretation therein also cannot be extended to the facts of these cases. Even the case of K.N. Singh vs State of Bihar, [19621 Suppl. 2 SCR 769 involve interpretation of Section 124(A) I.P.C. in the context of freedom of speech enshrined under article 19(1)(a) of the Constitution. The interpretation was put as to subserve the freedom under article 19(1)(a). R.L. Arora vs State of U.P.; , does not involve of the doctrine of reading down so as to cut down the scope of Fundamental Right. Similarly Jagdish Pandey vs Chancellor of the Bihar, 1 also does not concern with application of doctrine of reading down so as to sacrifice the principle of natural justice which are considered as essential part of rule of law. In Amritsar Municipality vs State of Punjab; , the court ascertained the intention of the Legislature and interpreted the Act con sistent with the said intention. Sunil Batra vs Delhi Admn. , ; is also a decision where it was found that the intention of the Legislature was not to confer arbitrary power. N.C. Dalwadi vs State of Gujarat, is also a case giving reasonable interpretation of the inten tion of the provisions of the Statute and is not capable of the meaning. In Charanlal Sahu vs Union of India, [1989] Suppl. Scale (1) at p. 61 on which strong reliance was placed by both the learned Attorney General and Solicitor General, is a case capable of two interpretations to Sec. 4. The decisions cited by Shri Ashok Desai i.e. Delhi Transport 330 Undertaking vs Balbir Saran Goel, ; ; Air India Corporation vs Rebellow, ; ; Municipal Corporation of Greater Bombay vs P.S. Malvankar, ; concern the industrial Iaw wherein the validity of rules on the touch stone of the reasonableness, fairness or justness was not considered. The prevailing doctrine of reasonable classification and nexus had their play to uphold the validity of the provisions. It is undoubtedly true as contended by Sri Bhasin, learned counsel for the intervener, that it is open to the authorities to terminate the services of a temporary employ ee without holding an enquiry. But in view of the match of law made, viz., that it is not the form of the action but the substance of the order is to be looked into, it is open to the Court to lift the veil and pierce the impugned action to find whether the impugned action is the foundation to impose punishment or is only a motive. A larger Bench of seven Judges of this Court in Shamsher Singh vs State of Punjab, elaborately considered the question and laid down the rule in this regard. The play of fair play is to secure justice procedural as well as substantive. The substance of the order, the effect thereof is to be looked into. Whether no misconduct spurns the action or whether the services of a probationer is terminated without imputation of misconduct is the test. Termination simpliciter, either due to loss of confidence or unsuitability to the post may be a relevant factor to terminate the services of a proba tioner. But it must be hedged with a bonafide over all consideration of the previous conduct without trained with either mala fide or colourable exercise of power or for extraneous considerations. Such actions were upheld by this Court. The action must be done honestly with due care and prudence. In view of the march of law made by article 14, in particular after Maneka Gandhi 's case, it is too late in the day to contend that the competent authority would be vested with wide discretionary power without any proper guidelines or the procedure. The further contention that the preamble, the other rules and the circumstances could be taken aid of in reading down the provisions of the impugned rules or the regulations is also of no assistance when it is found that the legislative intention is unmistakably clear, unambiguous and specific. Thus considered, I have no hesitation to conclude that the impugned regulation 9(b) of the Regula tions are arbitrary, unjust, unfair and unreasonable offend ing articles 14, 16(1), 19(1)(g) and 21 of the Constitution. It is also opposite to the public policy and thereby is void under Section 23 of the . 331 44. It is made clear that, as suggested by this Court in Hindustan Steel Case that it is for concerned to make appro priate rules or regulations and to take appropriate action even without resorting to elaborate enquiry needed consist ent with the constitutional scheme. The correctness of the decision in Tulsiram Patel 's case though was doubted in Ram Chunder vs Union of India, it is unneces sary to go into that question. For the purpose of this case it is sufficient to hold that proviso to article 311(2) itself is a constitutional provision which excluded the applicabil ity of article 311(2) as an exception for stated grounds. It must be remembered that the authority taking action under either of the clauses (b) or (c) to proviso are enjoined to record reasons, though the reasons are not subject to judi cial scrutiny, but to find the basis of which or the ground on which or the circumstances under which they are satisfied to resort to the exercise of the power under either of the two relevant clauses to proviso to article 311(2) of the Con stitution. Recording reasons itself is a safeguard for preventing to take arbitrary or unjust action. That ratio cannot be made applicable to the statutory rules. Accordingly I hold that the ratio in Brojonath 's case was correctly laid and requires no reconsideration and the cases are to be decided in the light of the law laid above. From the light shed by the path I tread, I express my deep regrets for my inability to agree with my learned brother, the Hon 'ble Chief Justice on the applicability of the doctrine of reading down to sustain the offending provi sions. I agree with my brothren B.C. Ray and P.B. Sawant, JJ. with their reasoning and conclusions in addition to what I have laid earlier. The appeal is accordingly dismissed, but without costs. Similarly Civil Appeal No. 1115 of 1976 is allowed and the monetary relief granted is reasonable, but parties are directed to bear their own costs. Rest of the matters will be disposed of by the Division Bench in the light of the above law. In view of the majority judgment, Civil Appeal No. 2876 of 1986 (Delhi Transport Corporation vs D.T.C. Mazdoor Con gress) is dismissed. Civil Appeal No. 11 15 of 1976 (Satnam Singh vs Zilla Parishad Ferozepur & Ant., is allowed and the other cases snail be placed before a division bench for final disposal. C.A. 2876/86 is dismissed N.P.V. &C.A. 1115/76 isallowed. [/INST]The respondent State had acquired a large extent of land out of the appellant 's estate under the Kerala Land Acquisi tion Regulation, 1089 for river valley irrigation project and to establish an industrial project. The notification under Section 4(1) of the Regulation was published on Octo ber 31, 1961. This was followed by the declaration under Section 6(1) published on February 22, 1962. The Collector by his awards dated March 29, 1962 deter mined the market value under Section 22(1) of the Regulation at Re.O.04 per cent for certain lands, Re.O.12 per cent for certain other lands, and Rs.30 per cent for the wet lands as against the claim of Rs.40 and 50 per cent. Compensation for the trees at timber value was also given. The total compen sation fixed was Rs.4.84 lakhs. Dissatisfied therewith the appellant sought reference under Section 18 of the Regulation. They also claimed sepa rate value for fruit bearing trees on potential value and charges for severence and injurious effects on the remaining lands. In support of the claim they relied on exhibit P. 7 dated March 9, 1951 and exhibit P. 9 dated April 4, 1957 which worked out at Rs.52.50 and Rs.43.50 per cent respectively, and the acquisition forming subject matter of exhibit P. 10 pertaining to the land in the vicinity of the industrial project award ed at the rate of Rs.80 per cent for paddy lands and Rs.43 for dry land. The Government pleader stated before the civil court that exhibit P. 9 could form the basis for determining the market value. The court enhanced the market value @ Rs.40 50 per cent as claimed in addition to a sum of Rs.30 to 38 per cent. It awarded in all Rs.20.20 lakhs on all counts includ ing severence and injurious effects, 15 per cent solatium and also 6 per cent interest on additional compensation from the date of taking possession till date of payment. 363 The High Court found that the lands covered by exhibit P. 7 and exhibit P. 9 were paddy lands cultivated by irrigation sources and situated about four miles away from the acquired lands which were not irrigated and therefore held that these could not form the basis for determining market value. Similarly, it found exhibit P. 10 could not form a base to fix the market value. The High Court did not accept the evidence adduced by the State, which was rejected by the civil court as well. The statement made by the State Advocate General across the bar that the market value could be fixed at Rs. 18 per cent was also not taken into account. Consequently, it reversed the awards and decrees of the civil court. In these appeals by special leave it was contended for the appellant that having rejected the documents produced by the State the High Court ought to have relied upon the documents produced by the appellant as comparable sales and consumed the compensation awarded by the civil court, that exhibit P. 7, 9 and 10 furnished the best material, that the Government pleader had conceded before the trial court that exhibit P. 9 could form the basis for determining the market value, that they had incurred huge expenditure on civil works for protection of the rest of the estate from injuri ous effects for which they should be recompensated, that the potential value of the trees had to be taken into account in determining the market value, that they were entitled to compensation for severence due to submersion of the lands and that they were also entitled to payment of interest on solatium. Allowing the appeals partly, the Court, HELD: 1.1 When the Courts are called upon to fix the market value of the land in compulsory acquisition, the best evidence of the value of property is the sale of the ac quired land to which the claimant himself is a party, in its absence the sales of the neighbouring lands possessed of similar potentiality or fertility or other advantageous features made within a reasonable time of the date of noti fication in bona fide transactions on the hypothesis of a willing seller and a willing purchaser but not too anxious a buyer, dealing at arms length nor facade of sale or ficti tious and unreal transactions of speculative nature brought into existence in quick succession or otherwise to inflate the market value. This, however, does not preclude the Court from taking any other special circumstances into considera tion, the requirement being always to arrive at as nearly as possible an estimate of the market value judged by an objec tive standard. [181C 182D] 364 Gajapati Raju vs Revenue Divisional Officer, ; Special Land Acquisition Officer vs Adinarayana Setty, [1959] Suppl. 1 S.C.R. 404; Tribeni Devi & Ors. vs Collector of Ranchi; , ; Dollor Co. Madras vs Collector of Madras, ; Chandra Bansi Singh & Ors. etc vs State of Bihar & Ors. etc.; , ; Tahsildar, Land Acquisition Visakhapatnam vs P. Narasingh Rao & Ors., ; Collector, Raigarh vs Hari Singh Thakur & Anr., ; ; Administrator General of West Bengal vs Collector, Varanasi, ; ; Mehta Ravindrarai Ajitrai vs State of Gujarat, ; and Hindustan Oil Co. Ltd. vs Special Duty Collector (Land Acquisition), [1990] 1 S.C.R. 59, referred to. 1.2 The prices fetched for smaller plots cannot form basis for valuation of large tracts of land as the two are not comparable properties. Smaller plots always would have special features like the urgent need of the buyer, the advantageous situation, the like of the buyer etc. Similar ly, the land situated on the frontage have special advantage and the land situated in the interior undeveloped area will not have the value at par since the latter will have lower value then the former. So is the case with orchard land and agricultural land, the former being superior in quality as compared to the latter. If such sales are relied upon rea sonable reduction should be given. [182B C] Smt. Kaushalva Devi Bogra & Ors. vs The Land Acqui sition Officer, Aurangabad & Anr., ; ; Pridviraj vs State of Madhya Pradesh, ; ; Padma Uppal etc. vs State of Punjab & Ors., [1977] 1 S.C.R. 329; Chimanlal Hargovinddas vs Special Land Acquisition Officer, Poona & Anr., ; and Mantaben Manibhai vs Special Land Acquisition Officer, Baroda, A.I.R. , referred to. 1.3 In some cases for lack of comparable sales it may not be possible to adduce evidence of sale of the neighbour ing lands possessed of same or similar quality. So, insist ence on abduction of precise or scientific evidence would cause disadvantage to claimants in not getting the reasona ble and proper market value. The courts of facts should, therefore, keep before them always the even scales to adopt pragmatic approach without indulging in facts of imagination and assess the market value which is capable to fetch rea sonable compensation. They may in that process sometimes trench on the border of the guess work but mechanical as sessment should be eschewed. Misplaced sympathies or undue emphasis solely on the claimants ' right to compensation would 365 place heavy burden on the public exchequer to which everyone contributes by direct or indirect taxes. [185D G; 184F G] 1.4 In the instant case, the High Court found that exhibit P. 7 and P. 9 relied on by the civil court were not applica ble as the lands covered by them were paddy fields cultivat ed by irrigation sources and situated four miles away from the acquired unirrigated lands. Similarly, it also found that exhibit P. 10 could not be relied on. The High Court, therefore, could not be said to be unjustified in reversing the awards and decrees of the civil court. [186B D] 2. The amount awarded by the Land Acquisition Collector forms an offer. It is for the claimants to adduce relevant and material evidence to establish that the acquired lands were capable of fetching higher market value and the amount offered by the Land Acquisition Collector was inadequate and he proceeded on a wrong premise or principle. It is also the duty of the State to adduce evidence in rebuttal. [183B, G] Ezra vs Secretary of State for India, I.L.R. ; Raja Harish Chandra vs Dy. Land Acquisition Officer, ; Khorshed Shapoor Chenai, etc. vs As sistant Controller of Estate Duty; , ; Dr. G.H. Grant vs State of Bihar, ; ; Asstt. Development Officer vs Tayaballi, AIR ; Tah sildar, Land Acquisition, Visakhapatnam vs P. Narasingh Rao Secretary of State, AIR 1919 Cal. 1008; Naresh Chandra Bose vs State of West Bengal & Ors., AIR 1955 Cal. 398; Smt. Kusumgauri Ramray Munshi & Ors. vs The Special Land Acquisi tion Officer, Ahmedabad, ; Maharao Shri Madansinhji vs State of Gujarat, AIR 1969 Gujarat 270 and Chaturbhuj Panda & Ors. vs Collector, Raigarh, ; , referred to. 2.2 In the instant case the evidence produced by the appellant was found untrustworthy by the High Court. It also did not accept the evidence adduced by the State. [186E F] 3.1 The Appellate Court after rejecting the evidence may have to find whether there are any circumstantial or other material evidence on record to fix reasonable market value. The State Advocate General having stated across the bar in the High Court that the market value can be fixed at Rs.18 per cent, a concession made by him with all responsibility on behalf of the State, the High Court was not justified in 366 not taking into account this submission. [186G I87B] 3.2 Any concession made by the Government pleader in the trial court cannot bind the Government as it is always unsafe to rely on the wrong or erroneous or wanton conces sion made by the counsel appearing for the State unless it is in writing on instructions from the responsible officer. Otherwise it would place undue and needless heavy burden on the public exchequer. [187C] 3.3 The claimants are, therefore, entitled to the market value @ Rs.18 per cent to the lands other than those to which the Collector awarded @ Rs.30 per cent, as the refer ence court shall not reduce the market value to less than that awarded by the Collector as enjoined under the statute. From the very nature of compulsory acquisition, 15 per cent solatium as additional compensation was statutorily fixed. Therefore, determination of additional market value is unwarranted. [187E] 3.4 Section 25(3) of the Regulation contemplates payment of interest on solatium to recompensate the owner of the land for loss of user of the land from the date of taking possession tilldate of payment into court. The claimants are, therefore, entitled to interest on solatium. It is fixed at 6 per cent on the excess market value determined under the judgment including solatium from the date of taking possession till the date of payment. In other re spects judgment of the High Court is confirmed. [189G 190B] Union of India vs Shri Ram Mehar & Anr., [1973] 2 S.C.R. 720, referred to. 4. The Commissioner who collected the evidence in re spect of the injurious effects on the remaining lands of the claimants admitted in the cross examination that the appel lant did not expend any money on civil works. Though from the date of the acquisition till the date of evidence more than six years had passed by the appellant had not produced any material or account books of the estate to establish that they have expended any money in this regard. Both the engineers examined on behalf of the State and also appel lant 's witnesses admitted that the road passing through the lands was being used by the appellant to carry its forest produce etc. Though during rainy season that too for a short period, at some places the water gets stagnated on the roads at lower levels but that stand no impediment for the car riage of the goods. This phenomena was prevalent even before acquisition. The value of the land of the appellant had not been injuriously effected due to acquisition. No 367 damage due to severence was caused. Under these circum stances, the appellant was not entitled to compensation in this regard. [187F 188D] 5. The Sub Judge appears to be too anxious to award whatever is asked for on mechanical appreciation without subjecting the evidence to legal and critical scrutiny and analysis. In such a case, even if the assessment of valua tion is modified or affirmed in an appeal as apart of the judicial process, the conduct of the judicial officer, drawable from an overall picture of the matter would yet be available to be looked into. In appropriate cases it may be opened to draw inferences even from judicial acts of the misconduct. The person concerned shall not, therefore, camouflage the official act to a hidden conduct in the function of fixing arbitrary or unreasonable compensation to the acquired land. V.R. Katarki vs State of Karnataka & Ors., Civil Appeal No. 4392 of 1986 decided on March 22, 1990, referred to. </s>
<s>[INST] Summarize the judgementecial Leave Petition (C) No. 5628 of 1988. From the Judgment and Order dated 4.1.1988 of the Punjab and Haryana High Court in Regular Second Appeal No. 9 18 of 1987. P.P. Rao and Shakeel Ahmed for the Petitioner. S.C. Maheshwari, P.K. Chakravarti, Ms. Sandhya Goswami and V.K. Bhardwaj for the Respondent. The following Order of the Court was delivered We have heard this case arising out of Haryana Urban (Control of Rent and Eviction) Act 1973. We feel that this case is fully covered by the decision of Hon 'ble Mr. Justice Sabyasachi Mukharji & Hon 'ble Mr. Justice Ranganathan in Atma Ram Mittal vs Ishwar Singh Punia, 122 ; We respectfully agree with the princi ple enunciated in that decision. The special leave petition is dismissed. Learned counsel for the respondent Mr. S.C. Maheshwari states that the decree will not be executed till 30th April, 1990 subject to an undertaking on usual terms being filed in this Court within four weeks from today. If the undertaking is not filed, the decree shall become executable forthwith. G.N. Petition dis missed. [/INST]The High Court, in an appeal against a decision of the Forest Tribunal, under the provisions of the Kerala Forests (Vesting & Assignment) Act, 1971, held that 92 acres of forest land were to be given back to the appellants. Accord ingly, the Forest Department returned certain lands. Later on they realised that the lands constituted thick forests and had valuable trees thereon and refused the timber trans it permits applied for by the appellants. Aggrieved against the decision, the appellants ap proached the High Court by way of a Writ Petition. The High Court held that the appellants were not entitled to any relief with regard to rosewood and other trees cut from the lands that did not form part of the land ordered to be restored to them. The High Court directed the Forest Depart ment to consider the application of the appellants and pass appropriate orders after giving an opportunity to the appel lants to put forward their contentions. This appeal, by special leave, is against the said order of the High Court. Allowing the appeal in part, HELD: 1.1 The appellants are entitled to return of 92 acres of land and not 80 acres. This is on the ground that the direction of the High Court in the first appeal became final and in terms of such direction 92 acres were to go back to the appellants. Government had no authority to alter the decision by an administrative order as has been done in this case. [41D] 1.2 There is no dispute that 56.31 acres have been restored to the appellants. By the affidavit of 24th June, 1989, 23.69 acres have been 38 offered to be restored from three survey numbers indicated therein. With the restoration of 23.69 acres the appellants would have got back 80 acres of land. There would still be 12 acres to be returned to the appellants. The respondents shall have a direction to trace these 12 acres in the local ity and make over vacant possession to the appellants there of within four months. [41E] 1.3 In case 23.69 acres or any part thereof as indicated in the affidavit Cannot be delivered possession and the balance 12 acres are not identified and possession thereof cannot be delivered, the appellants shall be entitled to compensation in respect of the shortfall out of 35.69 acres in all which remain to be delivered and compensation for such shortfall shall be determined as if it were acquisition under the provisions of the Land Acquisition Act, the date of the preliminary notification being deemed to be the date of judgment of the Division Bench in MFA 401/78. The direc tions indicated above shall be worked out by the respondents within a total period of six months. [41F G] 2. The High Court called upon the respondents to consid er the appellants ' plea for timber transit permits in re spect of trees cut from certain other lands. There is no material on record as to whether that has been complied with. In case the respondents have not done the same yet, they are directed to comply with the order of the High Court within three months. [41H; 42A] </s>
<s>[INST] Summarize the judgementiminal Appeal No. 137 of 1970. Appeal by special leave from the judgment and order dated February 6, 1970 of the Calcutta High Court in Criminal Appeal No. 5 of 1964. O. P. Rana, for the appellant. section P. Mitra and Sukumar Basu, for the respondent. The Judgment of the Court was delivered by Sikri, C.J. In this case special leave was limited to the question of sentence only The relevant facts for determining this point are as follows : The appellant, Vivian Rodrick, was tried by the High Court of Calcutta, in exercise of its original jurisdiction, having been committed to stand his trial by the Presidency Magistrate as early as July 31, 1963. The substance of the charges against the appellant were as follows : 547 (i) that on January 13, 1963 the appellant was a member of an unlawful assembly guilty of rioting, being armed with deadly weapons and as such punishable under section 148, I.P.C.; (ii)that on January 13, 1963 the appellant committed the murder of one Vincent D 'Rozaric and thereby committed an offence punishable under section 302, I.P.C.; and (iii)that on January 13, 1963 the appellant was in possession of explosive substances for unlawful object and thereby committed an offence under section 5 of the Explosive Substances Act. Four other persons, Stanley Rodrick, Ranjit Mandal, Simon Das and Ranjit Biswas were also tried jointly with the appellant and ,convicted under section 302 read with section 149, and also under section 148, I.P.C. The jury returned a unanimous verdict of guilty against the appellant and on September 4, 1964 the Presiding Judge convicted the appellant under section 302, I.P.C., and sentenced him to death. At the trial the appellant was also convicted for offences under section 148, I.P.C., and section 5 of the Explosive Substances Act, and sentenced to, rigorous imprisonment for two years and three years respectively. The terms of imprisonment were directed to run concurrently. The appellant filed a petition of appeal under section 411A, Cr. P.C., on September 7, 1964, challenging his conviction and the sentences imposed on him. The High Court, by its judgment dated September 19, 1967 in Criminal Appeal No. 5 of 1964, confirmed the conviction and sentences imposed on the appellant. In considering the question of sentence the High Court observed that "the murder was a premeditated and cold blooded one. There was not the slightest provocation from the side of the deceased. This is undoubtedly a fit case for capital punishment. No question of showing any leniency on the ground of tenderness of age arises as the appellant is now aged about 35 years. " It was urged before the High Court that the sentence of death should be reduced to rigorous imprisonment for life on account of the long delay that had taken place in hearing the appeal. Although the High Court regretted the delay and the consequent mental suffering undergone by the condemned prisoner, it felt that the "delay in executing the death sentence was not by itself a sufficient ground for which the court should exercise its jurisdiction to commute the death sentence to one of imprisonment for life. " The appellant sought leave to appeal to this Court against the judgment of the High Court on October 21, 1967, and the same 548 was refused on January 8, 1968. Having obtained special leave, the appellant filed an appeal to this Court (Criminal Appeal No. 190 of 1968). By its judgment dated April 30, 1969, this Court set aside the the judgment and order of the High Court, dated September 19, 1967, and remanded the appeal to the High Court for fresh disposal and hearing in accordance with law and in the light of the observations contained in this Court 's judgment. This Court in its judgment in Cr. No. 190 of 1968 observed, regarding the four other co accused, as follows "Though the conviction was for an offence under section 302 read with section 149, I.P.C., curiously they were sentenced to varying terms of imprisonment, and none of them challenged their conviction in appeals. " On remand the appeal was again dismissed by the High Court on February 6, 1970. Chakrabarti, J., with Whom Amaresh Chandra Roy, J., agreed, again considered the question of Sentence and held that although there had been a delay of more than five years in executing the death sentence that was not by its, If sufficient ground for commuting the death sentence. The High Court referred to Nawab Singh vs The State of Uttar Pradesh(") and Piare Dusadh vs King EMperor(2). As the High Court did not find any extenuating circumstances whatsoever that 'would .justify its taking a lenient view in the matter, it left to the State Government to take a decision as to whether it should, on account of inordinate delay in executing the sentence, exercise its powers under section 402, Cr. The learned counsel for the appellant contends that the matter should not have been left to the State Government. In Nawab Singh vs The State of Uttar Pradesh("), which has been referred to by the High Court in its judgment dated February 6, 1970, it is observed "It is true that in proper cases an inordinate delay in the execution of the death sentence may be regarded as a ground for commuting it, but we desire to point out that this is no rule of law and is a matter primarily for consideration of the local Government. If the Court has to exercise a discretion in such matter, the other facts of such case would have to be taken into consideration. In the case before us, we find that the murder was a cruel and deliberate one and there was no extenuatin circumstance whatsoever which would justify using ordering a commutation of the death sentence. " (1) A.I.R. 1954 S.C. 278. (2) 549 It seems to us that the extremely excessive delay in the disposal of the case of the appellant would by itself be sufficient for imposing a lesser sentence of imprisonment for life under section 302. Section 302, I.P.C., prescribes two alternate sentences, namely, death sentence or imprisonment for life, and when there has been inordinate delay in the disposal of the appeal by the High Court it seems to us that it is a relevant factor for the High Court to take into consideration for imposing the lesser sentence. In this particular case, as pointed out above, the appellant was committed to trial by the Presidency Magistrate as early as July, 31, 1963, and he was convicted by the Trial Judge on September 4, 1964. It is now January 1971, and the appellant has been ' for more than six years under the fear of sentence of death. This must have caused him unimaginable mental agony. In our opinion it would be inhuman to make him suffer till the Government decides the matter on a mercy petition. We consider that this is now a fit case for awarding the sentence of imprisonment for life. Accordingly we accept the appeal, set aside the order of the High Court awarding death sentence and award a sentence of imprisonment for life. The sentences under section 148, I.P.C., and section 5 of the Explosive Substances Act and under section 302, I.P.C., shall run concurrently. V.P.S. Sentence modified. [/INST]On October 5, 1960 the appellant agreed to do certain construction work for the respondents company registered under the Indian Companies Act and having its principal place of business at Bombay On the terms and conditions of a written tender. Clause 12 of the tender provided for arbitration in case of dispute. Clause 13 provided that notwithstanding the place where the work under the contract was to be executed the contract shall be deemed to have been entered into by the parties at Bombay and the court in Bombay alone shall have jurisdiction to adjudicate thereon. On disputes arising between the parties the appellant submitted a petition to the Court at Varanasi for an order under section 20 of the that the agreement be filed and an order of reference be made to an arbitrator or arbitrators appointed by the court. The respondent contended that in view% of cl. 13 of the arbitration agreement only the courts at Bombay had jurisdiction. The trial court held that the entire cause of action had arisen at Varanasi and the parties could not by agreement confer jurisdiction on the courts of Bombay which they did not otherwise possess. The High Court at Allahabad in exercise of its revisional jurisdiction held that the courts at Bombay had jurisdiction under the general law and hence could entertain the petition. It further held that in view of cl. 13 of the arbitration agreement the petition could not be entertained at Varanasi. Against the order of the High Court directing the petition to be returned for presentation to the proper court, the appellant appealed to this Court by special leave. The question that fell for consideration were : (i) whether the courts at Bombay alone had jurisdiction over the dispute; (ii) whether Explanation 11 to section 20(a) of the Code of Civil Procedure refers only to Government corporations and not to companies registered under the. Indian Companies Act. HELD : (i) The Code of Civil Procedure in its entirety applies to proceedings under the by virtue of section 41 of the latter Act. The jurisdiction of the courts under the to entertain a proceeding for filing an award is accordingly governed by the provisions of the Code of Civil Procedure. By the terms of section 20(a) of the Code .of Civil Procedure read with Exp. 11th thereto, the respondent company which had its principal place of business at Bombay, was liable to be sued at Bombay. [316 G] It is not open to the par ties by agreement to confer jurisdiction on any Court which it did not otherwise possess under the Code. But where two courts have under the Code of Civil Procedure jurisdiction to try a suit of proceeding an agreement between the parties that the dispute between 315 them shall be tried in one of such courts is not contrary to Public Policy Such an agreement does not contravene section 28 of the Contract Act. [316 H] Since in the present case the courts at Bombay had jurisdiction under the Code of Civil Procedure the agreement between ,the parties that the courts in Bombay alone shall have jurisdiction to try the proceedings relating to arbitration was binding between them. [318 A] (ii) Order 29 of the Code of Civil Procedure deals with suits by or against a corporation and there is nothing in the Code to support the contention that a Corporation referred to under section 20 means only a statutory corporation and not a company registered under the Indian Companies Act. [317 G H] </s>
<s>[INST] Summarize the judgementAppeal No. 207 of 1975. From the Judgment and Order dated the 19 4 74 of the Gujarat High Court in Special Civil Appln. No. 306 of 1973. S.T. Desai and Girish Chandra for the Appellants. I. N. Shroff and H.S. Parihar for Respondent. The Judgment of the Court was delivered by RAY, C.J. This appeal is by certificate against the judgment and order dated 19 April 1974 of the High Court of Gujarat in Special Civil Application No. 306 of 1973. The question for consideration in this. appeal is wheth er the petitioner before the High Court, who was the Regis trar of the Small Causes Court, Ahmedabad was subject to the disciplinary jurisdiction of the High Court. The Registrar was appointed on 12 September, 1969 by an order of the Governor of Gujarat. The High Court said that in view of the fact that the High Court is not the appointing authority the High Court has no disciplinary jurisdiction over the Registrar. The High Court was in error in considering that the question of appointing authority is relevant in regard to the disciplinary jurisdiction of the High Court. Under Article 235 the control over district Courts and Courts subordinate thereto including the posting and promo tion of, and the grant of leave to, persons belonging to the judicial service of a State and holding any post inferior to the post of district judge shall be vested in the High Court. The expression 'judicial service ' is defined in Article 236 to. mean "a service consisting exclusively of persons intended to fill the post of district judge and other civil judicial posts inferior to the post of district judge". These two articles 235 and 236 are relevant for the purpose. of ascertaining the extent of disciplinary juris diction of the High Court. The Registrar of the Court of Small Causes is a person holding a civil judicial post inferior to the Post of district judge and is 'in Judicial service. ' Reference to the presidency Small Causes Courts Act 1882 is necessary to find out the powers, position and duties of the Registrar 712 of the Small Causes Court. Section 13 of the Act states :. "There shall be appointed an officer to be called the Regis trar of the Court who shall be chief ministerial officer of the Court". The other provisions in the Act which deal with the Powers of the Registrar are to be found in Sections 9(1) 2(aa), 14, 33, 34, 35 and 36, which read as follows: "9(1) (aa). The High Court may, from time to time, by rules having the force of law empow er the Registrar to hear and dispose of unde fended suits and interlocutory applications or matters. 14 The Provincial Government may invest the Registrar with the powers of a Judge under this Act for the trial of suits in which the amount or value of the subject matter does not exceed twenty rupees. And subject to the orders of the Chief Judge, any Judge of the Small Cause Court may, whenever he thinks fit, transfer from his own file to the file of the Registrar any suit which the latter is competent to try. 33 Any non judicial or quasi judicial act which the Code of Civil Procedure as applied by this Act requires to be done by a Judge, and any act which may be done by a Commission er appointed to examine and adjust accounts under section 394 of that Code as so applied, may be done by the Registrar of the Small Cause Court or by such other officer of that Court as that Court may, from time to time, appoint in this behalf. 34 The suits cognizable by the Registrar under section 14 shall be heard and determined by him in like manner in all respects as a Judge of the Court might hear and determine. the same. 35 The Registrar may receive applications for the execution of decrees of any value passed by the Court, and may commit and dis charge judgment debtors, and make any order in respect thereof which a Judge of the Court might make under this Act. 36 Every decree and order made by the Regis trar in any suit or proceeding shall be sub ject to the same provisions in regard to new trial as if made by a Judge of the Court. " These provisions of the Act indicate in No. uncertain manner that the Registrar of a Small Causes Court exercises judicial powers, hears suits, passes decrees and an appeal is preferred from a decree of the Registrar. Counsel for the appellant is right in his contention that the Registrar, Small Causes Court, inasmuch as he exercises judicial functions, is a judicial officer in Judicial Service and comes within the scope and intent of Articles 235 and 236. 713 The High Court was in error in holding 'that the High Court had no power to order disciplinary proceedings. It is significant that the High Court abdicated its own discipli nary jurisdiction. The independence of the judiciary has been emphasised by this Court in un mistakable terms in the following two decisions: 1. High Court of Punjab & Haryana etc. vs State of Haryana & Ors., reported in ; and 2. Shamsher Singh & Anr. vs State of Punjab, reported in 1975 (1) S.C.R.814. The Gujarat High Court like other High Courts is compe tent to enquire into such disciplinary matters. In the present appeal there were five contentions before the High Court on behalf 0f the Registrar. The first contention falls in view of our conclusion that the High Court is the competent authority to hold departmental en quiry. The second contention of the Registrar was that the High Court had no authority to direct further inquiry to be made in respect of recording the statement of Bhatt or to consider the reports made by the inquiry officer and come to a conclusion about the guilt of the Registrar. The third contention of the Registrar was that the direction of the High Court that the statement of Bhatt be recorded was passed without hearing the Registrar and was violative of the rule of natural justice. It will appear that the High Court issued directions and the statement of Bhatt was recorded by the Inquiry Officer. Bhatt is a Lawyer. He was busy in Court. He could not appear before the Inquiry officer on the date fixed for taking his evidence. The High Court asked the Inquiry Officer to record the evidence of Bhatt. The Registrar was given a copy of the statement of Bhatt after recording of Bhatt 's evidence. The Registrar was given an opportunity to deal with the evidence of Bhatt. It is idle to contend that the Registrar ought to have been heard before the High Court directed that the statement of Bhatt should be recorded. The fourth contention of the Registrar was that there was failure to give copies of documents demanded by him; therefore he did not have reasonable opportunity to defend himself. The High Court did not go into this question in view of the fact that the High Court did not consider this question. Counsel for the Registrar submitted that he wanted to address the Court on the materials which were not available now. We are of opinion that the matter should be remitted to the High Court only on this question viz 'fail ure to give copies of certain documents demanded by the Registrar thus depriving him of a resonable opportunity to defend himself and therefore, the inquiry was contrary to the provisions of Article 311 of the Constitution '. The fifth contention that the impugned order was passed by the Government without consulting the Public Service Commission does not survive in view of our conclusion that the High Court is the competent authority to make departmen tal inquiry. 714 For the foregoing reasons the judgment of the High Court is set aside and the matter is remitted to the High Court for consideration only of the fourth question as indicated above. Parties will pay and bear their own costs. S.R. Appeal allowed and case remitted. [/INST]Pursuant to the departmental enquiry conducted by the High Court and on its recommendation, the Gujarat Governor dismissed the respondent from the service of Registrar, Small Causes Court, Ahmedabad. The respondent challenged by way of a writ the said order contending: (1) The High Court was not his appointing authority and he being the member of general State service, the High Court has no authority to initiate proceedings, the appointment of the enquiry offi cer, framing of charges of misconduct and taking discipli nary proceedings etc. (2) The High Court has no authority to direct further enquiry to be made in respect of recording the statement of one Mr. Bhatt, an advocate or to consider the reports made by the enquiry officer and come to the conclusion about his guilt or to issue show cause notice of punishment. (3) The direction of the High Court that the statement 0f Mr. Bhatt is recorded was passed without hear ing the petitioner and this violated the rules of natural justice. (4) The failure to give copies of certain documents demanded by the petitioner deprived him of a reasonable opportunity to defend himself and, therefore, the enquiry was contrary to the provisions of article 311 of the Constitu tion; and (5) .The impugned order was passed by the Govern ment without consulting the Public Service Commission and the same was illegal and bad in law. The High Court held: (1 ) The post of the Registrar of Small Causes Court does not fall within the expression "judicial service" within the meaning of article 235 and (2) The High Court has no disciplinary jurisdiction over the Registrar in view of the fact that the High Court is not the "appointing authority". Accepting the State 's appeal by certificate and remitting the case, the Court, HELD: (1 ) The Registrar of the Court of .Small Causes is a person holding a civil judicial post inferior to the post of District Judge and he is in judicial service. Sections 9(1), 13 14, 33 to 36 of the indicate in no uncertain manner that the Registrar of Small Causes Court exercises judicial powers, Inasmuch as the Registrar Small Causes Court exer cises his judicial function, he is a judicial officer in judicial service and comes within the scope and intent of article 235 and 236. [711 H, 712 G H] (2) The High Court was in error in considering the question of "appointing authority" as relevant in regard to the disciplinary jurisdiction of the High Court and also in holding that it had no power to order disciplinary proceed ings. The High Court abdicated its own disciplinary juris diction. The High Court is the competent authority to hold departmental enquiries. [711 D E, 713 A C]. High Court of Punjab & Haryana etc. vs State of Haryana and Ors. ; and Shamsher Singh & Anr. vs State of Punjab ; , referred to. 711 (3) In the instant case the enquiry was contrary to the provisions of article 311 of the Constitution due to the fail ure to give copies of certain documents demanded by the Registrar, thus deprived him of a reasonable opportunity to defend himself. [713 G] </s>
<s>[INST] Summarize the judgementCivil Appeal No. 453 of 1969. (From the Judgment and order dated 12 9 68 of the Orissa High Court in Misc. Appeal No. 208 of 1966). Sardar Bahadur Saharya and Vishnu Bahadur Saharya for the appellant. Nemo for the respondent. CHANDRACHUD, C.J. Respondent 1 obtained a money decree on August 18, 1962 against respondent 3 and his mother respondent 4. On June 28, 1963 respondent 1 filed an execution petition for recovering the decretal amount and prayed therein for attachment of the Immovable property belonging to respondent 3. The property was attached by an order passed by the Executing Court on July 13, 1963. On November 27, 1963 respondent 1 filed an application in the Executing 198 Court praying that permission be obtained of the Revenue Divisional officer for sale of the property since respondent 3 to whom the property belonged was a member of the Scheduled Tribe. The permission was considered necessary by reason of the provisions contained in Clause 6 of the ""Orissa Scheduled Areas Transfer of Immovable Property by Scheduled Tribes Regulation No. 2 of 1966". It provides: In execution of money decree against a member of a Scheduled Tribe no right title or interest held by him in any immovable property within any scheduled area shall be liable to be attached and sold except as and if prescribed. Rule 4 made under the aforesaid Regulation provides: There shall be no attachment or sale of immovable property in execution of a money decree against a member of a Scheduled Tribe within any scheduled area without the writ ten permission of the competent authority. The property at such a sale shall be sold only to a member of a Scheduled Tribe unless otherwise specifically directed in writing by the competent authority. The Revenue Divisional officer, Nowrangpur, was the competent authority for the present purpose. Respondent 3 who was in the meantime negotiating for the private sale of the property moved the R.D.O., Nowrangpur on June 18, 1963 for permission to sell the property to a non Scheduled Tribe person. He obtained the requisite permission by an order dated October 23, 1963 for the sale of the property for Rs. 4,000/ . On the strength of the aforesaid permission respondent 3 sold the property to the appellant on January 2, 1964 by a registered deed of sale. A copy of the order passed by the R.D.O. was produced by respondent 1 in the Executing Court whereupon on May IS, 1964 the property was put to sale. Respondent 2, who is the son of respondent 1 purchased the property in the auction sale. On June 22, 1964 the appellant filed an application under order 21 Rules 89 and 90 and Sections 47 and 151 of the Code of Civil Procedure praying that the auction sale should be set aside on the ground that the attachment and the auction sale were void since they were effected without obtaining the permission of the competent authority under Orissa Regulation No. 2 of 1956. The appellant also alleged that the decree holder had played a fraud on the Court by inducing it 23, 1963 which was passed by the competent authority at the instance 23, 1963 which was passed by the competent authority at the instance of the appellant. 199 Respondent 2 resisted the appellant 's application on the ground that he was a bona fide purchaser in a court sale, that the aforesaid sale was held after the competent authority had granted permission for the sale of the property and that therefore his title to the property was not liable to be displaced at the instance of the appellant. The learned District Munsif who dealt with the matter accepted the contention of the appellant and set aside the auction sale. In Civil Miscellaneous Appeal No. 9 of 1965 filed by respondent 1, the Appellate Judge confirmed the order of the District Munsif and dismissed the appeal. Respondent l then filed a second appeal in the Orissa High Court, being Miscellaneous Appeal No. 208 of 1966. Before the High Court respondent 1 raised two contentions only viz., (1) that the judgment debtor, respondent 3, was not a member of the Scheduled Tribe and therefore the attachment and the court sale were not void; and (2) that the judgment debtors, having failed to take objection to the attachment on the ground that they belonged to a Scheduled Tribe, were debarred from objecting to the sale of the property on the principle of constructive res judicata. The High Court rejected the first contention relying mainly on the circumstance that respondent 1, the decree holder, had accepted the position that respondent 3 whose property was being put to sale was a member of the Scheduled Tribe. The High Court however accepted the second contention on the ground that neither respondent 3 nor the appellant had taken any objection in the execution proceedings that since the former had no saleable interest in the property the auction sale could not be held or that the permission given by the, R.D.O. did not authorise the sale. Being apprieved by the judgment of the High Court dated September 12, 1968, the, private purchaser from the decree holder has filed this appeal. We are in agreement with the view of the High Court that it is not open to respondent 1, the decree holder, to contend that respondent 3 whose property was put to sale in the execution proceedings was not a member of the Scheduled Tribe. Respondent 1 filed his execution petition for the purpose of recovering the decretal dues by attachment and sale of the property belonging to one of the judgment debtors, respondent 3. Respondent 1 himself asked the Executing Court to secure the permission of the competent authority for sale of the property on the ground that respondent 3 whose property was to be put to sale belonged to the Scheduled Tribe. The permission from the competent authority was later obtained by the appellant, with whom respondent 3 was negotiating for a private sale of his property. The 200 permission which was granted by the R.D.O., Nowrangpur at the instance of the appellant was produced by respondent I in the execution proceedings as if the permission was granted in his favour for the sale by respondent 3 of his property. Respondent 1 cannot then be permitted to dispute that respondent 3 did not belong lo a Scheduled Tribe and therefore the permission of the competent authority was not needed to validate the sale. The contention that respondent 3 did not belong to a Scheduled Tribe was founded solely on the consideration that he belonged to the Bhotra tribe which is not expressly mentioned as on of the Scheduled Tribes in the schedule to the Constitution (Scheduled Tribes), order 1950. It may be assumed that respondent 3 is a Bhotra. But paragraph 2 of the Scheduled Tribes order, 1950 provides to the extent material that the Tribes, or parts of, or groups within the Tribes specified in the Schedule to the order shall also be deemed to be Scheduled Tribes. Whether Bhotras fall within any of the sub groups or the Scheduled Tribes enumerated in Part IX of the Schedule to the 1950 order is a question which could not have been permitted to be raised for the first time in the second appeal. Much less can it be allowed to be raised before us. This appeal, like the second appeal before the High Court, must therefore be disposed of on the basis that respondent 3 is a member of the Scheduled Tribe. Upon that footing, the appellant must succeed because after the R.D.O., Nowrangpur granted permission to sell the property on October 23, 1963, the property was purchased by the appellant from respondent 3 on January 2, 1964. Prior to that sale the property was undoubtedly attached in execution proceedings on July 13, 1963 but the order of attachment was void, being contrary to the express inhibition contained in Clause 6 of Regulation No. 2 of 1956 read with Rule 4 made thereunder. Both Clause 6 and Rule 4 provide that no immovable property belonging to a member of the Scheduled Tribe is liable to be attached or sold except in accordance with the Permission granted by the competent authority. Under the registered sale, Ext. 4, executed by respondent 3 in favour of the appellant, the title to the property vested in the appellant. The appellant having become an owner of the property on account of the aforesaid private sale, respondent 3 had no saleable interest left in the property which could be put to sale in the court auction. It is elementary that what can be brought to sale in a court sale is the right, title and interest of the judgment debtor and therefore, the auction purchaser can get nothing more than that right, title and interest. The judgment debtor not having any saleable interest in the property at all on the date of the auction sale, there was nothing that respondent 2 could get in the auction sale which was 201 held in execution of the money decree obtained by his father, respondent 1. The auction sale therefore cannot displace the title of the appellant which is the same thing as saying that as between the title of the appellant and the so called title of the auction purchaser, the appellant 's title must prevail. It must follow that the auction sale is bad and must be set aside. There is an additional reason why the auction sale is not valid By the permission granted by the R.D.O., Nowrangpur on October 23, 1963 for sale of the property, one of the conditions imposed on the judgment debtor was that the property shall be sold for a sum of Rs 4,000/ . In the private sale, the appellant purchased the property for Rs. 4,000/ and therefore the condition of the permission was complied with. But the auction sale was held in satisfaction of the decretal dues which were far less than Rs. 4,000/ , the decree itself being in the sum of Rs. 1,000 odd and the highest bid at the auction being of Rs. 3,000/ only. As the condition imposed by the R.D.O. regarding the price was violated by the auction sale, the auction purchaser cannot get a valid title to the property under that sale. In this view, no question of res judicata can arise because the basic issue ill the appeal is as regards the validity of the auction sale in favour of respondent 2. The appellant claims through the judgment debtor and neither the latter nor the decree holder ever disputed that he, the judgment debtor, was a member of the Scheduled Tribe. On the other hand both of them were conscious of the situation that the property could not be sold without the sanction of the R.D.O., Nowrangpur. The decree holder himself, apprised the Executing Court of that position. The failure, there, of the judgment debtor to raise any particular contention cannot operate as res judicata, actually or constructively, either against him or against the appellant. For these reasons we allow the appeal, set aside the judgment of the High Court and confirm that of the learned Subordinate Judge, Koraput, setting aside the court sale in favour of respondent 2. There will be no order as to costs. S.R. Appeal allowed. [/INST]Section 6(1) of the U.P. Agricultural Income tax Act, 1948 gives an option to an assessee to select one of the two alternative methods of computation of agricultural income as provided in section 6(2), whichever is more advantageous to him. Such option is required to be indicated along with his return submitted under section 15 of the Act. While submitting its return for the assessment year 1954 55 the assessee chose the option to be assessed under section 6(2) (b) of the Act. It later submitted a revised return under section 15(4) but stuck to the option to be assessed under section 6(2) (b) . The assessing authority, notwithstanding the filing of these two returns by the assesses, called upon it to file a return of the income computed under section 6(2)(a). Thereafter the assessing authority served a notice on the assesses requiring it to produce evidence in support of it return. After the assesses produced the required evidence, the assessing authority issued a notice to the effect that certain income escaped assessment and called for its objections, if any. The assesses asked for inspection of records; but it was refused. At the instance of the assesses the Revision Board directed true assessing authority to permit inspection of the record. After inspection of the record he assesses filed a fresh (third) return. At this stage the assesses preferred the method of computation of income provided under section 6(2)(a) instead of section 6(2)(b) which it chose earlier. Without deciding the question as to whether the assesses was entitled to change the option, the assessing authority made a best judgment assessment under section 6(2)(b). On appeal the Commissioner directed the assessing authority to first decide the question relating to change of option whereupon the assessing authority held that the assesses had no right to change its earlier option. On further appeal the Revision Board upheld the order of the assessing authority. In the assessee 's writ petition challenging the order of the assessing authority a single Judge of the High Court held that it was open to the assesses to change its option at the time of filing a subsequent or fresh return. But the Division Bench was of the view that the assesses had no right to change its option. In its appeal the assessee contended before this Court that (1) it is open to the assessee to change its option not merely every year but during the year by filing a fresh return or a revised return provided it is done before tho assessment is completed (2) although the assessee filed its first return and the 110 revised return, the assessing authority issued a notice under 8. 15(3) along with a statement of provisional estimate computed in accordance with section 6(2) (a) pursuant to which the assessee filed the third return exercising the option for computation in accordance with section 6(2) (a) and, therefore, the assessing authority had to make the assessment in accordance with section 6(2) (a) and (3) in any event since the assessing authority had proceeded to make a best judgment assessment under section 16(4) it had no option but to make the assessment with due regard to the provisional estimate served under section 15(3B) notwithstanding any option exercised under section 6(1) of the Act. Allowing the appeals, ^ HELD: The Division Bench of the High Court was wrong in holding that when once the option is exercised by an assessee by filing the requisite declaration he will have no right to change the option by filing a fresh return or revised return before the assessment is made for that year. [121 Cl 1. Whatever restrictions had been imposed on the change of option by the original proviso to section 6(1) had been removed and the concept of "first return ' was deleted from r. 5 That being so, the expression "his return of income" occurring in r. S would apply to any of returns contemplated under section 15, In fact r. 5 is obligatory and makes it incumbent upon an assessee to file, along with his return, a, declaration indicating his option under section 6(1). The exercise of such option. including a change of option indicated in the declaration filed along with a subsequent return or a fresh return or a revised return, will be valid provided the return itself is validly submitted. [120 G H] 2. If the return was filed under section 15(4), then in order to avail of the change of the option the assessee will have to show that it was really a revised return in the sense that the same had been filed because of a wrong statement discovered in the earlier returns. Clearly the third return was filed in response to) the notice issued by the assessing authority under section 15(3). This return was rejected by the assessing authority not on the ground that it had been filed beyond time but on the ground that the assessee had no right to change its option which suggests that the return was treated by the assessing authority as having been filed within time but was rejected on merits holding that the assessee was not entitled to change its option. Therefore the third return was not a revised return under section 15(4) but a fresh return filed within time in response to the notice under section 15(3) and as such the assessee was entitled to change its option and have the computation made in accordance with section 6(2) (a). The fact that the assessee had produced come evidence in pursuance to the notice in relation to its earlier returns or that it took inspection of the records cannot and does not amount to acquiescence or waiver of its right to file a declaration indicating its option afresh along with the return validly filed in response to the notice under section 15(3) of the Act. [121 F G;122D; G H] 3. Moreover, irrespective of whatever option might have been exercised by the assessee the best judgment assessment has to be made by the assessing authority by having due regard to the statement of provisional estimate of agricultural income made in accordance with section 6(2) (a). Under section 16(4) whenever the assessing authority proceeds to make the assessment the same is required to be made "with due regard to the statement, if any, sent under 111 section 15(3 B) notwithstanding any option exercised under section 5(1). " The scheme of section 16(4) clearly shows that in regard to the best judgment assessment there is nothing sacrosanct about the option exercised by the assessee under section 6(1); equally it can be said that in regard to the assessments other that best judgment assessments under the scheme of section 15 there is nothing sacrosanct about tho particular option previously exercised by the assessee and he need not be held bound by it provided he changes the option by filing a subsequent or a fresh or a revised return in accordance with the applicable provisions in section 15. So far as the assessing authority is concerned such option, whether original or subsequent, would be binding on it. [124F; H] </s>
<s>[INST] Summarize the judgementAppeal No. 830 of 1993. From the Judgment and Order dated 6.4.87 of the Allahabad High Court in Civil Misc. W.P. No. 20544 of 1986. section Markandeya for the Appellant 152 Pankaj Kalra for the Respondents. The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J. The appeal is directed against the judgment and order of a Division Bench of the Allahabad High Court allowing Writ Petition 20544 of 1986 with certain directions. The first respondent Gem Cap (India) Pvt. Ltd. is a private limited company. Second respondment is its Managing Director. At the request of the respondents, the appellant, U.P. Financial Corporation, sanctioned a loan of Rs. 29.70 lakhs. The terms and conditions of loan and the manner of repayment of the loan are contained in the agreement and hypothecation deeds executed in 1981. Suffice it to note that loan was repayable in certain specified instalments alongwith interest. A sum of Rs. 26, 29, 578 was released to the respondents. The first respondent went into production in December 1982. Within a few months i.e., in March 1983 its operations ceased. By an order dated February 21, 1984 the first respondent unit was declared a sick unit. The respondents did not make any repayment as stipulated in the agreement and hypothecation deeds whereupon the Corporation took steps to take over the unit under Section 29 of the for recovering an amount of Rs. 38.57 lakhs due to it by that date vide notice dated July 10, 1984. Then started a series of Writ Petitions by the respondents, all designed to stall the appellant from taking over and/or recovering the amount due to it. It is not necessary to trace the course of the several writ petitions except the one from which the present appeal arises. Writ Petition 20544 of 1986 was filed questioning the taking over of the first respondent unit by the appellant Corporation under Section 29 of the Act and for a direction to the appellant to reschedule the repayment of debt in accordance with the earlier orders of the High Court. The writ petition has been allowed with the following directions : "(1) Having regard to the discussion made above we direct the U.P. Financial Corporation : (1) to consider expeditiously the resolution dated 29.1.1986aimed at the rehabilitation of the industrial concern in question in the light of the feasibility report of the U.P. Industrial Consultants Ltd. the Financial aid 153 forthcoming from the Bank of Baroda and other financial institutions and the reports of the managing director of the corporation dated 18.12.85 and 29.1.1986; (2) to restore back possession of the unit to the petition No. 1 forthwith. The notice dated 11.6.1986 issued by the Corporation under Section 29 of the State Financial Corporation Act, 1951 shall, however, remain alive it being open to the Corporation to proceed further in pursuance thereof in case the rehabilitation deal is given a fair trial but does not bear fruit. The petition is allowed accordingly with no order, however, as to costs." With great respect to the Learned Judges who allowed the writ petition we feel constrained to say this : a reading of the judgment shows that they have not kept in mind the well recognised limitations of their jurisdiction under Article 226 of the Constitution. The judgment reads as If they were setting as an Appellate Authority over the appellate Corporation. Not a single provision of law is said to have been violated. The exclusive concern of the court appears to be to revive and resurrect the respondent Company, with the aid of public funds, without giving any thought to the interest of public financial institutions. The approach is : "the Corporafion is supposed to act in the best interest of the industrial concern with the object primarily to promote and advance the industrial activity without, of course, undue involvement or risk of its financial commitment 'section . It needs no emphasis to say that the Corporation is conceived '.Regional Development Bank with the principal object to accelerate the industrial growth in the State by providing financial assistance mainly to small and smaller of the medium scale industries. The approach has to be business like in conformity with the declared policy of the State Govt. If the unit is potentially viable or such as maY be capable of being rehabilitated, it would deserve being administered proper treatment and not lead to its liquidation. " Here was a company which drew substantial public funds and became sick within three months of its going into production. One of the main reasons for its sickness appears to be the inter necine fight between the two groups controlling the Company. The 154 unit was closed. It was not paying a single pie in repayment of the loan neither the principal nor the interest. Already a huge amount was due to the appellant. There was no prospect of its recovery. And yet other financial corporations were being asked by the court, four years after its closure, to sink more money into the sick unit. Though a passing reference is made to the financial risk of appellant. this concern was not translated into appropriate directions. The Corporation was not allowed to sell the unit when it wanted to in 1984 85. Now, it is difficult to sell it, because it has been lying closed for about 8 years and more. The machinery must have become junk. While the Company could not be revived, the appellant corporation now stands to lose more than a crore of rupees all public money in this one instance. To continue the factual narration against the judgment of the Allahabad High Court aforesaid (dated April 6, 1987) the appellant filed this appeal and on May 8, 1987 this Court while issuing notice on the SLP directed stay of operation of the judgment of the High court. After the respondents filed a counter affidavit this Court made the following order on September 18, 1987 : "Stay made absolute with the direction that there shall be no sale of the industrial unit. Hearing expedited. To be heard alongwith Civil Appeal No. 568 of 1987. " The S.L.P. could not be heard finally though it was posted for hearing on certain dates. On November 13, 1991, the counsel for the respondents made an offer which is recorded in the order of that date. It reads "This matter is adjourned for 11.12.91. Mr. Shanti Bhushan, Sr. Adv., suggests that in view of the lapse of time of more than 5 years the position has changed and the Corporation should now consider the feasibility of taking over the assets in liquidation of the dues by making an assessment and consider relieving the directors from their personal responsibilities to the corporation and the other creditors. " The subsequent order dated December 12, 1991, however, shows that the appellant corporation refused to bite the bait. The amount due to it had risen to over a crore of rupees by now. Whereupon, this Court passed 155 the following order : "The appellant in consultation with the other creditors is permitted to put up the industrial undertaking of the firstrespondent for sale. It may do so either by public auction or by inviting tenders or by an combination of both. It may proceed to do so within a period of two months from today. While permitting the appellant to take steps for the sale, we make it clear that before accepting the offers, the appellant should obtain prior permission of this Court. List this matter after 10 weeks, i.e., in the first week of March, 92. " It is clear as to why the unit could not be sold . On March 13, 1992, this Court passed the following further order: "We have heard learned counsel on both sides. Apart from the merits of the issues raised, it appears to us that the present impasse is to nobody 's advantage. The dispute has to be resolved in some meaningful way. We accordingly direct the respondent Company and Sri K.P. Chaturvedi, who claims to be in charge of the affairs of the Company, to confirm in writing to the petitioner Cor poration within three weeks from today that they unconditionally agree to settle the claims of the. Financial Corporation at a figure which would represent the principal amount said to be Rs. 26.30 lacs and interest thereon from the inception at 13.5% per year with half yearly rests calculated upto 25.7.1986. If such an offer is made, the Financial Corporation will assess the merit and acceptability of that offer and take within six weeks thereafter, an appropriate decision including the manner in which and the period over which the payment should be completed, and if the Financial Corporation agrees to grant time for payment, the rate of interest for the deferred period. The decision taken by the Corporation will be placed before this Court. 156 If, however, any offer, as indicated above, is not communicated by the company or Sri Chaturvedi within a period of three weeks from today, then the Financial Corporation shall be at liberty to initiate, with notice to the respondents, steps for the sale by public auction of the subjectmatter of the security in its favour and to treat and hold the proceeds of sale as substituted security in the place of the subject matter of the security, subject to the final result of this S.L.P. Call this matter in the 3rd week of May, 1992. " Pursuant to the said order the second respondent, Managing Director of the first respondent Company merely wrote a letter addressed to the appellant Corporation, to the following effect : "We, herewith, attach a photo copy of the captioned order which is self explicit. We, however, unconditionally agree to abide with the directions given to us by the Hon 'ble Supreme Court. Further, as the Corporation is aware that the Unit (Company) as well as The Registered Office of the Company, both are in possession of the Corporation, we shall feel obliged if you kindly communicate your views to us at the below given address. " It is evident that the letter written by the second respondent is not in terms of the order to this Court dated March 13, 1992. No figure is mentioned nor is it mentioned as to how and in what manner the said huge debt is sought to be repaid by the respondents. Evidently, the appellant corporation could not pay any heed to such a letter. When the matter came before this Court the second respondent appeared in person stating that he has discharged his advocate and that he will argue the matter himself. The matter again came up before us on 19.2.1993 when we heard the appellant 's counsel and the second respondent in person. We allowed the appeal stating that the reasons would follow. There are the reasons for the order. It is true that the appellant Corporation is an instrumentality of the 157 State created under the State Finance Corporation Act, 1951. The said Act was made by the Parliament with a view to promote industrialisation of the States by encouraging small and medium industries by giving financial assistance in the shape of loans and advances, repayable within a period not exceeding 20 years from the date of loan. We agree that the Corporation is not like an ordinary money lender or a Bank which lends money. It is a lender with a purpose the purpose being promoting the small and medium industries. At the same time, it is necessary to keep certain basic facts in view. The relationship between the Corporation and the borrower is that of creditor and debtor. The corporation is not supposed to give loans once and go out of business. It has also to recover them so that it can give fresh loans to others. The Corporation no doubt has to act within the four corners of the Act and in furtherance of the object underlying the Act. But this factor cannot be carried to the extent of obligating the Corporation to revive and resurrect every sick industry irrespective of the cost involved. Promoting industrialisation at the cost of public funds does not serve the public interest; it merely amounts to transferring public money to private account. The fairness required of the Corporation cannot be carried to the extent of disabling it from recovering what is due to it. While not insisting upon the borrower to honour the commitments undertaken by him, the Corporation alone cannot be shackled hand and foot in the name of fairness. Fairness is not a one way street, mote particularly it? matters like the present one. The above narration of facts shows that the respondents have no intention of repaying any part of the debt. They are merely putting forward one or other ploy to keep the Corporation at bay. Approaching the Courts through successive writ petitions is but a part of this game. Another circumstance. These Corporation are not sitting on King Solomon 's mines. They too borrow monies from Government or other 'financial corporation. They too have to pay interest thereon. The fairness required of it must be tempered nay, determined, in the light of all these circumstances. Indeed, in a matter between the Corporation and its debtor, a writ court has no say except in two situation : (1) there is a statutory violation on the part of the Corporation or (21) Where the Corporation acts unfairly i.e., unreasonably. While the former does not present any difficulty, the latter needs a little reiteration of its precise meaning. What does acting unfairly or unreasonably mean? Does it mean that the High Court exercising its jurisdiction under Article 226 of the Constitution can sit as an Appellate Authority over the acts and deeds of the corporation and seek 158 to correct them ? Surely, it cannot be. That is not the function of the High Court under Article 226. Doctrine of fairness, evolved in administrative law was not supposed to convert the writ courts into appellate authorities over administrative authorities. The constraints self imposed undoubtedly of writ jurisdiction still remain. Ignoring them would lead to confusion and uncertainty. The jurisdiction may become rudderless. The obligation to act fairly on the part of the administrative authorities was evolved to ensure the Rule of Law and to prevent failure of justice. This doctrine is complementary to the principles of natural justice which the Quasi Judicial Authorities are bound to observe. It is true that the distinction between a quasi judicial and the administrative action has become thin, as pointed out by this Court as far back as 1970 in A.K. Kraipak & Ors. vs Union of India & Ors., AIR 1970 S.C. 150. Even so the extent of judicial scrutiny/judicial review in the case of administrative action cannot be larger than in the case of quasi judicial action. If the High Court cannot sit as an appellate authority over the decisions and orders of quasi judicial authorities it follows equally that it cannot do so in the case of administrative authorities. In the matter of administrative action, it is well known, more than one choice is available to the administrative authorities; they have a certain amount of discretion available to them. They have "a right to choose between more than one possible course of action upon which there is room for reasonable people to hold differing opinions as to which is to be preferred ' (Lord Diplock in Secretary of State for Education vs Tameside Metropolitan Borough Counsel, ; at 1064). The Court cannot substitute its judgment for the judgment of administrative authorities in such cases. Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action, can the Court intervene. To quote the classic passage from the judgment of Lord Greene MR in Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, (1948) 1 KB at 229. "It is true the discretion must be exercised reasonably. Now what does than mean ? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word "unreasonable" in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the 159 things that must not be done. For instance, a person entrusted with the discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably '. Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority. ' While this is not the occasion to examine the content and contours of the doctrine of fairness, it is enough to reiterate for the purpose of this case that the power of the High Court while reviewing the administrative action is not that of an appellate court. The judgment under appeal precisely does that and for that reason is liable to be and is herewith set aside. On behalf of the appellant reliance has been placed upon the decision of this court in Mahesh Chandra vs Regional Manager, U.P. Financial Corporation & Ors., (1992) 2 J.T. 326. We have perused the decision. That was a case where the debtor was anxious to pay off the debt and had been taking several steps to discharge his obligation. On the facts of that particular 'case it was found that the corporation was acting reasonably. In that context certain observations were made. The decision also deals with the procedure to be adopted by the Corporation while selling the units taken over under Section 29. That aspect is not relevant in this case. We are, therefore, of the opinion that the said decision is of no help to the appellant herein. The appeal is accordingly allowed. The respondents shall pay the .costs of the appellant assessed at Rs. 10,000 consolidated. T.N.A. Appeal allowed. [/INST]The respondent Company obtained loan from the appellant Financial Corporation. Soon after obtaining the loan it ceased to, operate and was declared a sick unit. Consequently, it did not make any repayment of loan as stipulated in the agreement and the hypothecation deeds. Thereafter, the appellant Corporation issued notice under section 29 of the for taking over the respondent 's unit for recovery of the amount due Rs.38.57 lakhs. Ile respondent Company filed a writ petition in the Allahabad High Court questioning the appellant 's action. Ile High Court allowed the petition and directed (1) expeditious rehabilitation of the concern and (2) to restore back the 150 possession of the unit to the respondent Company. Against the judgment of the High Court the Financial Corporation riled an appeal in this Court. Allowing the appeal and setting aside the order of the High Court, this Court, HELD : 1. It is true that the appellant Corporation which Is an instrumentality of the State created under the is not like an ordinary money lender or a Bank which lends money. It is a lender with a purpose the purpose being promoting the small and medium industries. At the same time, It is necessary to keep certain basic facts In view. The relationship between the Corporation and the borrower is that of creditor and debtor. the Corporation is not supposed to give loans once and go out of business. It has also to recover them so that it can give fresh loans to others. Corporations too borrow monies from Government or other financial corporations and they too have to pay interest thereon. No doubt it has to act within the four corners of the Act and in furtherance of the object underlying the Act. But this factor cannot be carried to the extent of obligating the Corporation to revive and resurrect every sick industry irrespective of the cost involved. [156H, 157A C,F,] Promoting industrilisation at the cost of public funds does not serve the public interest; it merely amounts to transferring public money to private account. The fairness required of the Corporation cannot be carried to the extent of disabling it from recovering what Is due to it. While not insisting upon the borrower to honour the commitments undertaken by him, the Corporation alone cannot be shackled band and foot in the name of fairness. Fairness is not a one way street more particularly in matters like the present one. The fairness required of it must be tempered nay, determined in the light of all these circumstances. In the instant case the respondents have no intention of repaying any part of the debt. They were merely putting forward one or other ploy to keep the Corporation at bay. [157D F] Mahesh Chandra vs Regional Manager, U.P. Financial Corporation Ors., (1992) 2 J.T. 326, held Inapplicable. In a matter between the corporation and Its debtor, a writ court has no say except in two situations : (1) there is a statutory violation on the part of the Corporation or (2) where the Corporation acts unfairly i.e. 151 unreasonably. The High Court exercising its jurisdiction under Article 226 of the Constitution cannot sit as an Appellate Authority over the acts and deeds of the Corporation and seek to correct them. Doctrine of fairness. evolved in administrative law was not supposed to convert the writ courts into appellate authorities over administrative authorities. The constraints self imposed undoubtedly of writ jurisdiction still remain. Ignoring them would lead to confusion and uncertainty. The jurisdiction way become rudderless. [157G H, 158A] 2.1. The obligation to act fairly on the part of the administrative authorities was evolved to ensure the Rule of law and to prevent failure of justice. This doctrine is complementary to the principle of natural justice which the Quasi judicial Authorities are bound to observe. It is true that the distinction between a quasi judicial and the administrative action has become thin. But even so the extent of judicial scrutiny/judicial review in the case of administrative action cannot be larger than in the case of quasi judicial action. If the High Court cannot sit as an appellate authority over the decisions and orders of quasi judicial authorities it follows equally that it cannot do so in the case of administrative authorities. The Court cannot substitute its judgment for the judgment of administrative authorities in such cases. Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action, can the Court intervenes. [158C F] A.K Kraipak & Ors. vs Union of India & Ors. , A.I.R. 1970 S.C. 150; Secretary of State for Education vs Talimeside Metropolitan Borough Council, ; and Associated Provincial Picture Houses Ltd., vs Wednesbury Corporation, ; , relied on. While passing the impugned order the High Court has not kept in mind the well recognised limitations of its jurisdiction under Article 226 of the Constitution. While reviewing the administrative action it was not justified in acting as an appellate court. [153D,159C] </s>

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