judgement:
Appeal No. 91 of 1954.
Appeal from the judgment and decree dated December 10, 1948, of the Madras High Court in Regular First Appeal No. 609 of 1946, arising out of the judgment and decree dated March 30, 1946, of the Court of the Subordinate Judge of Chicacole in Original Suit No. 1 of 1943.
A. V. Viswanatha Sastri and R. Ganapathy Iyer, for the appellant.
K. M. Rajagopala Sastri and section K. Sastri, for respondents Nos. 1, 2, 3, 5 7, 13 and 24 27.
October 6.
The Judgment of the Court was delivered by SINHA J.
The only question for determination in this appeal by the first defendant, on a certificate granted by the High Court of Madras, is whether the renewal of a lease for running a salt factory, granted by the Government in favour of the appellant and others (defendants 1 to 7), could be treated as an asset of the dissolved partnership between the contesting parties.
The trial court decided this question in favour of the contesting defendants.
On appeal by the plaintiffs and some defendants on the side of the plaintiffs, the High Court of Madras determined this controversy in favour of those appellants.
Hence, this appeal by the first defendant whose interest is identical with that of defendants 2 to 7.
The reference in this judgment to I appellant ' will, thus, include the interest of the other non appealing defendants also.
The relevant facts of this case, upon which the appeal depends, may shortly be stated as follows: The contesting parties used to carry on the business of salt manufacture in accordance with the rules laid down by the Government under the Madras Salt Act 76 (Mad. 4 of 1889) (which will, hereinafter, be referred to as the Act).
It is not permissible to manufacture salt otherwise than tinder the provisions of the Act.
The land and the factory where salt used to be manufactured by the parties, are Government property.
It appears that the first plaintiff, the father of plaintiffs 2 to 4, plaintiff 5, the first defendant and the deceased father of defendants 2 to 7, had made bids for the lease of the land and the factory, and the highest bid of the defendants aforesaid, was accepted; and in pursuance thereof, a lease for 17 years from January 1926, to December, 1942, was granted by the Government in favour of the first defendant and the father of defendants 2 to 7. 'By a deed of partnership dated March 18, 1926, the first plaintiff with a two anna share, the father of plaintiffs 2 to 4, having a similar share, and plaintiff 5 with another two anna share, on the one hand, and the first defendant, having a five anna share, and the father of defendants 2 to 7, with the remaining five anna share, entered into a partnership for running the salt factory.
The terms of the partnership will have to be discussed in detail hereinafter.
They contributed a sum of Rs. 30,000 for paying the premium for the lease and for other incidental expenses in running the factory, in proportion to the shares just indicated.
The father of defendants 2 to 7, who had a five anna share in the business, died in August, 1935, and the defendants 2 to 7 were admitted as partners in place of their father.
In accordance with the rules of the salt department, the requisite licence for the manufacture of salt, was granted to the first defendant and the father of the defendants 2 to 7, in, whose name, the lease also stood.
In or about the year 1939, differences arose between the parties, but the business continued to be carried on by the defendants 1 to 7.
In August 1941, in accordance with the changed policy of the Government, which substituted the practice of settling salt leases by renewal of the lease in favour of those lease holders whose conduct had been satisfactory in the opinion of the Department, for the old practice of settling salt leases to highest bidders, the Collector enquired from the old 77 lease holders whose record had been satisfactory from the point of view of the salt department, whether they would take renewal for a period of 25 years.
The appellant as also.
the other defendants aforesaid, their conduct having been satisfactory, were amongst those lessees who had been 2invited to make applications for the renewal of their leases.
Accordingly, they made their application in July, 1942, and a fresh lease for 25 years, was granted to them on April 15, 1943, for the period January, 1943 to December, 1967, in pursuance of the Collector 's order passed in November, 1942 (exhibit P 15(a)).
The terms of the new lease will have to be discussed later in the course of this judg ment.
As the term of the previous lease and of the licence to manufacture and sell salt which 'was the partnership business was to expire at the end of December, 1942, one of the contesting defendants, served a notice upon one of the plaintiffs to the effect that as.
the partnership was expiring at the end of the month, the partners should settle their accounts, and make arrangements for the disposal of the unsold stock of 82102 maunds of salt.
The reply to the notice was given on December 28, 1942, through an advocate, alleging inter alia that the application for the renewal of the lease for a period of 25 years had been made on behalf and with the consent of all the partners, and that, thus, the partnership business was agreed to be continued even after the expiry of the term of the previous partnership.
The answer further attributed fraud and "evil intention " to the other party.
The answer also called upon the defendants to pay a penalty of Rs. 2,500 per head, and to hand over the entire partnership lease property to the plaintiffs ' party.
Thus, the exchange of the notices aforesaid was a prelude to the institution of the suit on January 5, 1943, that is to say, even before the fresh lease had been executed by the Government in favour of the contesting defendants 1 to 7.
The suit was instituted on the footing that the original partnership continued even after December, 1942, inasmuch as the fresh lease had been obtained in pursuance of a unanimous resolution of all the partners 78 to obtain the new lease for the partnership business.
But an alternative case also was sought to be made out that even if the partnership did not continue after December, 1942, as a result of.
the acts of the defendants, the benefit of the fresh lease for 25 years should be treated as an asset of the dissolved partnership business, and should be taken into account in the process of dissolution of the partnership.
The plaint as framed contained a large number of reliefs to which, the plaintiffs claimed, they were entitled, for example, a declaration that the partnership was continuing, and that the defendants 1 to 7 had forfeited their rights in the partnership as a result of their fraudulent acts, an injunction restraining defendants 1 to 7 from carrying on the salt works independently of the partnership and on their own account, and the declaration that the renewal of the lease in the name of the defendants 1 to 7, for a further period of 25 years, was for the benefit of the partnership.
But at the trial, the plaintiffs, perhaps, realizing the weakness of their position, elected to put in a memorandum in the trial court on February 8, 1946, confining their prayers to reliefs on the basis of a dissolved partnership, and giving up other reliefs, which they claimed on the footing of the partnership still continuing.
Thus, at the trial, the reliefs claimed were confined to taking accounts between the parties of the dissolved partnership, and treating the fresh lease for 25 years, as part of the assets of the dissolved firm.
It is, therefore, not necessary to refer to the defendants ' written statement, except with reference to the plaintiffs ' claim to have the renewed lease for 25 years treated as an asset of the dissolved partnership.
The contesting defendants 1 to 7 stoutly denied that the plaintiffs ' claim in respect of the fresh lease for 25 years, was well founded.
They asserted that they only were entitled to run the business on the fresh lease and licence meant only for their benefit and not for the benefit of the dissolved partnership.
The trial court passed a preliminary decree, declaring that the partnership stood dissolved on December 31, 1942, and for taking accounts.
As regards the 79 benefit of the renewed lease for 25 years, the trial court negatived the plaintiffs ' claim that the dissolved partnership carried any firm or trade name, which(, could be said to have any tangible goodwill, and that the defendants could not be restrained from carrying on the business in their own names as they had been doing in the past.
After expressing a doubt as to whether there was any goodwill of a particular firm name, the court directed that "the Commissioner is authorized to sell the goodwill of the old firm for what it is worth by way of realization of the assets of the dissolved firm as amongst the partners.
" In effect, therefore, the trial court decided that the plaintiffs were not entitled to the benefit of the new lease.
On appeal to the High Court, the learned Chief Justice, delivering the judgment of the Division Bench, came to the conclusion that the plaintiffs ' case that the fresh lease had been obtained as a result of the resolution of the partners to carry on the business after the lapse of the specific period of the partnership which came to an end in December 1942, had not been made out.
But on the alternative plea of the plaintiffs, the Court, after an elaborate discussion of English and Indian Law on the subject, held that the plaintiffs were entitled to treat the new lease as an asset of the dissolved partnership.
The conclusion of the High Court may better be stated in its own words, as follows: "In conclusion, we hold that the new lease obtained by Defendants 1 to 7 in renewal of the old lease which formed the subject matter of the partnership, must be held by them for the benefit of the other members of the partnership, who are entitled to share in the advantage gained by Defendants 1 to 7.
As the lease itself was executed after the termination of the partnership and as it is not the case of the Appellants that any one other than defendants 1 to 7 had furnished the consideration for the new lease, the benefit of the renewal alone 'will be treated as an asset of the partnership which terminated on 31st December, 1942, and a value placed on it.
The Commissioner appointed 80 by the lower Court may, after taking such evidence as may be necessary, be directed to fix the value in the first instance.
In arriving at a value, the liability of defendants 1 to 7 to furnish capital and incur the necessary expenses for carrying on the new business with its attendant risks and also possibilities of profits, are factors to be taken into account.
" In those words, the High Court set aside the judgment and decree of the trial court, and allowed the appeal in terms which the Commissioner appointed to take accounts of the dissolved partnership, may not find it easy to implement.
In support of this appeal, the learned counsel for the appellant, has contended that the High Court has misdirected itself in construing the provisions of the Indian Trusts Act, in holding that a constructive trust had been made out in favour of the plaintiffs; that there is no absolute rule that the renewal of a lease which was the subject matter of a partnership, must always enure to the benefit of the old partners; and that the essential ingredients of section 88 of the Trusts Act, had not been made out in this case.
He also contended that the lease by itself, did not create a right to manufacture salt and to sell it, and that a licence is a necessary pre requisite to carry on the business of manufacture and sale of salt in accordance with the rules of the Department, and that it is open to the Department not to recognise any partners in the business.
In this case, it was further contended, the licence to sell salt had been granted only in 1945.
Under the English law, there may be a presumption that the renewal of a lease which formed the subject matter of a partnership, will enure for the benefit of the partners, but he contended that in the circumstances of this case, such a presumption could not arise, and even if it did, it was rebutted by the following facts.
The term of the original partnership was a fixed one, terminating with the term of the lease and of the licence to manufacture salt, which came to an end with the year 1942; the partnership deed did not contemplate that this business would be extended beyond the fixed term in the event of a fresh lease 81 being obtained from the Government.
It was highly significant that the term of the partnership to carry on the salt business was deliberately fixed as conterminous with the terms of the lease and the licence.
The plaintiffs never took any steps to obtain a renewal of the lease, nor was there any evidence that they asked the defendants to take a renewal for the benefit of all the partners.
On the other hand, when the defendants applied on their own behalf for a fresh lease for 25 years, the plaintiffs put in a petition of protest, and prayed to the Government for being included in the category of lessees in the lease to be granted for 25 years, as co lessees, but without any success.
There is no allegation in the plaint of any attempt at concealment on the part of the appellants to the effect that they were taking the lease for their own benefit.
Nor was there any evidence that the defendants had taken any advantage of their position as partners, or had utilized any funds of the partnership for obtaining the fresh lease.
Lastly, it was contended that differences having cropped up between the parties during the years 1939 to 1942, it could not be said that the plaintiffs placed such a confidence in the defendants as to place them in the position of constructive trustees within the meaning of section 88 of the Trusts Act.
On the other hand, it was contended on behalf of the respondents that the fresh lease for 25 years, was granted to the appellants as a result of the changed policy of the Government, by which they substituted the renewal to approved parties in place of the old practice of settling the terms of the lease by open competition and by holding auction sales.
The contesting defendants obtained the lease in their names because they were entered in the Government records as the original lessees, and as the original lease was admittedly for the benefit of all the partners, the new lease also must be treated as being founded on the old lease.
It was also contended that section 88 of the Trust Act, was not exhaustive, and that even if the present case did not come strictly within the terms of that 11 82 section, the rule of English law relating to constructive trusts, applied to the case, and that, therefore, the High Court was quite justified in coming to the conclusion that the lessees were in the position of trustees when they obtained the renewed lease.
The plaintiffs failed in their attempt to be included in the category of joint lessees along with those defendants because of the changed policy and the rules of the Department.
Hence, the plaintiffs were in a position of disadvantage as compared to the defendants in whose name, the original lease and the licence stood.
In view of those facts, it was further contended, the plaintiffs could not either get the lease independently for themselves, or succeed in getting their names included in the category of joint lessees.
Lastly, it was contended that in the circumstances of the present case, the presumption of law that the defendants were constructive trustees, had not been rebutted.
Before dealing with the arguments advanced on be.
half of the parties, it is convenient to set out, in brief outline, the system of working salt factories under the Act (Mad. 4 of 1889), which was enacted to " consolidate and amend the law relating to the salt revenue in the Presidency ".
Under the Act, a " salt factory " includes any place used or intended to be used for the manufacture of salt or for the storage or keeping of the same, as defined from time to time by the Collector of salt revenue.
" Licensee ", under the Act, means a person to whom a licence to manufacture salt or saltpeter, is issued, and includes any person registered as the transferee of such licence under the provisions of the Act.
Under section 8, only licensees or public servants under the Central Government, are authorized to manufacture salt.
Section 9 of the Act, authorizes the Collector of salt revenue to grant licences for the manufacture of salt in respect of specified salt works, containing such particulars and conditions as the Central Government may prescribe from time to time.
Such a licence may be for the manufacture of salt for sale to the Central Government or for general sale; and may be transferred or relinquished in accordance with the prescribed rules.
Section 12 lays down that? 83 a licensee shall be taken to be the owner of the licence and of the salt works specified therein.
It is open to the Central Board of Revenue to establish a new salt, factory, and, subject to the payment of compensation, to close any salt factory or a portion thereof, and thus, cancel or amend the licence.
A provision has also been made by section 17 for the grant of a temporary licence for the manufacture of salt in certain contingencies.
Section 25 authorizes the Collector of salt revenue to impose upon a licensee a fine according to the prescribed scale, or to suspend a licence or even to cancel a licence for want of due diligence or default by a licensee.
Section 43 contains a prohibition against the removal of salt from a salt factory otherwise than on account of the Central Government or for transport to a place of storage authorized by the Collector of salt revenue, except under a permit and upon payment of duty at the fixed rate.
The Central Government is authorized to make rules generally for carrying out the provisions of the Act, and specially for regulating certain matters set out in section 85.
Such rules, on publication in the official gazette, have the force of law, and have to be read as part of the Act.
It is common ground that elaborate rules have been laid down by the Government, for regulating the manufacture and sale of salt, so as to safeguard public revenue and to prevent the manufacture of contraband salt.
It is, thus, clear that the business of manufacture of salt, which the parties to the agreement of partnership carried on, was not an ordinary occupation, which, is free from such strict rules and regulation as have been laid down by and under the Act.
The licensee owes a special responsibility to the Government, and, therefore, the transfer or relinquishment of licences under the Act, has to be regulated according to the rules laid down by the Government.
It is true that there is no absolute prohibition against such transfer or relinquishment, but the Government through its public officers, has the determining voice in such matters.
It is in the background of the law laid down by or under the Act, that we have to discuss the rights and 84 lease.
The first lease, a draft copy of which is on the record as ex.
P 16 at pp.
101 to 105, is an indenture between the Secretary of State for India in Council as the lessor, and the first defendant and the father of defendants 2 to 7, as the lessees.
The consideration for the lease is the sum of Rs. 25,000/ .
The lease is for a period of 17 years from January 1, 1926, subject to either party having the right to determine the lease by a notice in writing at the close of the salt manufacturing season.
It provides that on the expiry of the lease or its sooner determination as aforesaid by notice on either side, the lessees shall leave the demised premises which had been leased out exclusively for the manufacture, storage and sale of salt and for the works connected therewith, without any right to erect any dwelling houses, etc.
It also provides that the lessees shall be granted a modified excise licence in Form E 1(d).
It also contains the condition that the lessees shall not, except with the written consent of the lessor, first had and obtained, assign, underlet, or part with the possession of the leased land or any portion thereof.
The lessees may take a partner or partners, who may be approved by the Collector in the business.
The lease also contains detailed provisions as to how the business of manufacture has to be carried on under the supervision of the public authorities like the Collector.
The renewed lease, exh.
D 18, dated April 15, 1943, is between His Excellency the Governor General in Council, as the lessor and the contesting defendants as the lessees, for a period of 25 years commencing from January 1, 1943.
There is no payment of any premium for the lease.
The other terms and conditions of the lease are similar to the previous one.
Though temporary licences were granted from time to time, it was only on April 17, 1945, that a " revised permanent licence " was granted, and the temporary licence granted for 1945, was cancelled.
The " co partnership deed " as it is called, which is dated March 18, 1926, is between five individuals, and provides that those five persons should enjoy the profit 85 or bear the loss thereof, according to the shares indicated above; " that as the licence in the salt stands in the names of Chennuru Appala Narasayya Chetty and Guruswamy Chetty out of us, the said individuals only shall be responsible thereto "; and that " In case the said Appala Narasayya Chetty and Guruswamy Chetty or their heirs fail to render proper accounts whenever demanded according to the aforesaid terms to the remaining three sharers or their heirs during the salt lease period of seventeen years and commit defaults or any kind of frauds, Appala Narasayya Chetty Garu and Guruswamy Chetty Garu shall pay by way of penalty to the said three sharers at the rate of Rs. 2,500/ (two thousand five hundred) per share for the year when fraud is committed, without having anything to do with the other profits and losses.
" It is, thus, clear that the partnership was for the fixed term of 17 years, ending with the period of the lease, and the parties did not, in terms, contemplate the continuance of the partnership after the expiry of that period.
Their rights and liabilities are entirely with reference to the said period of 17 years, there being no provision for the continuance of the business by the partnership after the expiry of the said term.
If there bad been a specific stipulation in the partnership deed, or even an indication that the partnership business would continue even after the expiration of the 17 years, which was the term of the partnership, different considerations may have arisen.
It could then have justly been said that the managing partner owed a duty to the other partners to obtain a renewal of the previous lease.
It is, therefore, not without significance that in para.
12 of the plaint, the plaintiffs specifically alleged that it had been unanimously resolved by the partners that a renewal of the lease should be obtained for a further period for the benefit of the partnership, and that as a matter of fact, the renewal was obtained in pursuance of that resolution and by using the goodwill of the partnership.
This specific case has failed in both the courts below, but the High Court, in disagreement with the trial court, has accepted the alternative case as made 'out, 86 in para.
17 of the plaint, that the renewal of the lease should be treated as an asset of the partnership in ,settling the accounts and dividing the assets of the dissolved partnership.
But even in para.
17, there is no specific case made out under section 88 of the Indian Trusts Act (II of 1882).
It is not alleged, in terms, that the contesting defendants filled a fiduciary character, and were, thus, bound to protect the interest.% of all the partners in obtaining the renewal of the lease, or that, in so doing, their interests were adverse to those of the other partners, and they had, this gained a pecuniary advantage to the detriment of the other partners.
Though the plaintiffs had suggested that the contesting defendants had large funds, amounting to about Rs. 90,000, of the partnership, portion of which had been set apart for Payment of premium and for other expenses incidental to the renewal of the lease, it had been found, and there cannot be the least doubt about it, that no funds of the partnership had been utilized for obtaining the new lease.
As already indicated, no premium had to be paid for the fresh lease obtained by the contesting defendants.
Though no foundation was laid in the pleadings, strictly construed, for a case tinder section 88 of the Indian Trusts Act, we have still to examine the question ' whether the High Court was right in holding that either under that section or under the general law, apart from the statutory law, the contesting defendants bad placed themselves in such a position as to render themselves accountable as constructive trustees.
Section 88 is in these terms: " 88.
Where a trustee, executor, partner, agent, director of a company, legal adviser or other person bound in a fiduciary character to protect the interests of another person, by availing himself of his character, gains for himself any pecuniary advantage, ' or where any person so bound enters into any dealings under circumstances in which his own interests are, or may be, adverse to those of such other persons and thereby gains for himself a pecuniary advantage, he must hold for the benefit of such other person the advantage so gained.
" 87 The section is in two parts.
In order to bring the case within the first part, it has to be shown that the contesting defendants had a fiduciary character, and were thus, in duty bound to protect the interests of the other partners in the matter of obtaining the lease; and that they obtained the lease for themselves instead, by availing themselves of that character.
As already pointed out, it was not within the scope of the partnership in accordance with the terms of the deed, to obtain a renewal of the lease.
At the time of entering into the partnership, the parties were fully cognizant of the rules of the Department then in force, according to which a fresh lease could be granted to the highest bidder irrespective of any other con siderations as to whether any one of the bidders war, a previous lessee.
The renewal of the lease without payment of any premium, was the result of the changed policy of the Government, according to which the personal conduct of the lessees, and not the amount of premium, was the determining factor in the grant of a fresh lease.
Because the contesting defendants bad managed the factory well and to the satisfaction of the Revenue Authorities, they were able to obtain the fresh lease, and it cannot be said that they had availed themselves of their character as partners in obtaining the renewal of the lease.
The plaintiffs ' allegation that the goodwill of the firm had been utilized for obtaining the renewal, has also not been found by the courts below to be true, because the basic allegation that there was a partnership firm with a goodwill, had not been established as a fact.
In our opinion, therefore, the plaintiffs have failed to bring the case within the first part of section 88.
We shall now examine the position whether the plaintiffs have made out a case in terms of the second part of the section.
In order to do so, it bad to be shown that the contesting defendants, while obtaining renewal of the lease, had placed themselves in such a position as to render their interests adverse to those of the other partners, and had thereby obtained a pecuniary advantage, which they.
must hold for the benefit 88 of the other partners as well.
In this connection, illustrations (d) and (e) under the section, are instruc tive.
If the plaintiffs had succeeded in proving, as they had attempted to do, that any funds or any goodwill of the alleged firm name, had been utilized for obtaining the renewal of the lease, the case would have directly come under illustration (d).
illustration (e), on the face of it, does not apply, because on the findings, the defendants were not negotiating for the renewal of the lease on behalf of the entire body of partners, nor is there any allegation that they had clandestinely stipulated for themselves a benefit to the detriment of the partnership business or funds.
In this connection, it has to be noted that the suit was instituted months before the renewed lease was actually granted, and years before a permanent licence for the manufacture and sale of salt, was issued to the contesting defendants.
It has also to be noted that the grant of the lease by itself does confer on the grantee the right to manufacture and sell salt.
The lease has to be followed by a permanent licence in order to enable the grantee to carry on the business of manufacturing, storing and selling salt.
Hence, the lease by itself has no value unless it is followed by a licence to manufacture and sell salt, which was granted only on April 17, 1945, about two years and four months after the expiry of the previous lease and licence, which, as already indicated, were conterminous with the term of the partnership.
That is the reason why the High Court granted the decree in favour of the plaintiffs in terms which are rather amorphous and which do not easily lend themselves to conversion in terms of money.
This is a business in which the personal factor of the persons in charge of managing the business, is more important than anything else.
Another important matter which has a bearing on the case, has also to be adverted to.
Between the years 1939 and 1942, that is to say, during the last three years of the term of the partnership, the partners Were not on cordial terms, and there does not appear to have been much of confidence between them.
The" had already started quarreling and attributing 89 unworthy motives.
There is, therefore, hardly any room for importing the idea of such confidence amongst partners as would render the contesting(, defendants occupying a fiduciary position, apart from the fact that they were partners.
As already indicated, the partnership stood automatically terminated at the end of the year 1942.
The actual grant of the lease in question was made in April 1943, and the permanent licence to manufacture and sell salt, was granted only in 1945.
Hence, strictly speaking, when the suit was instituted in January, 1943, legally, there was no lease in existence, nor could the business of manufacture and sale of salt be effectively carried on until the grant of the permanent licence.
The plaintiffs could have a cause of action in respect of the renewed lease if their substantive case of continuing partnership had been established.
But that case having failed, it is a little difficult to appre ciate how they could claim any interest in the renewed lease as an asset of the partnership business.
The fiduciary character as between the partners had ceased on the termination of the original lease and of the partnership business.
On such a termination, there was no interest of the partners, which the contesting defendants were bound to protect.
For the same reasons, the defendants ' character as partners had ceased, and they could not, therefore, be said to have availed themselves of their character as partners in obtaining the fresh lease.
For all these reasons, it must be held that the plaintiffs have failed to bring the case strictly within the terms of section 88 of the Indian Trusts Act.
A passing reference was made by the learned counsel for the respondents to the terms of section 90 of the Trusts Act.
But it will be noticed that whereas section 88, quoted above, makes a specific reference to partners and agents, etc., section 90, in terms, applies to a tenant for life, a co owner, a mortgagee, or any other qualified owner of any property.
Section 90, therefore, in terms, could not apply to the case.
Even if it did, it does not carry the case any further in favour of the plaintiff respondents.
12 90 that even though the provisions of the Trusts Act, did not, in terms, apply to the case, the general principles of law as applied in the English courts, support the plaintiffs ' case.
In this connection, reliance was placed upon the cases of Featherstonhaugh vs Fenwick (1), Clegg vs Fishwick (2), Clements vs Hall (3), Clegg vs Edmondson (4), In re Biss, Biss vs Biss (5), Griffith vs Owen (6) .
The law in England has been summarized in Halsbury 's Laws of England, 2nd Ed., Vol. 24 (Lord Hailsham 's Edition) in article 863 at p. 450, as follows: " The renewal of a lease of the partnership property by one or more of the partners without the privity of the others enures for the benefit of all.
The rule is the same when the intention to renew is communicated to the others if the latter are prompt to assert their rights; and it is immaterial whether the term of the partnership is definite or indefinite, or whether the lessors would have refused to renew to the partners who are not privy to the renewal.
The representatives of a deceased partner may have a right to share in the profits derived from a renewal of the lease by the surviving partner.
" Most of the cases relied upon on behalf of the respondents, form the basis of the statement of the law in England, quoted above.
On a close examination of the English precedents aforesaid, it will be found that there is no absolute rule of law or equity that a renewal of a lease by one partner, must necessarily enure for the benefit of all the partners.
There is a presumption of fact, as distinguished from a presumption of law, that there is an equity in favour of the renewal of the lease enuring for the benefit of all the partners.
But such a presumption being one of fact, is rebuttable, and must, therefore, depend upon the facts and circumstances of each case.
The Indian Legislature has substantially adopted the English law quoted above, while enacting (1) ; (3) ; (5) (2) ; (4) ; (6) [1907] I. ch.
91 the rules laid down in the Indian Trusts Act, particularly, sections 88 and 90 of the Trusts Act.
In the instant case, the facts that.
the parties deliberately chose to fix the term of the partnership as conterminous with the term of the lease and licence ending with the year 1942; that they did not, in express terms, or by necessary implication, make any provision for extending the period of the partnership or for obtaining renewal of the lease and the necessary licence; that there was no averment or proof of any clandestine acts on the part of the contesting defendants in the matter of obtaining the renewal of the lease; that the plaintiffs themselves made attempts, though unsuccessful, to get themselves included in the category of grantees at the time of the renewal of the lease ; that the special nature of the business required personal efficiency and good conduct on the part of the actual managing agents; that no funds of the expiring partnership or any goodwill of the partnership was utilized for obtaining the fresh lease; that the fresh lease and licence were granted to the contesting defendants in consideration of their personal qualities of good management and good conduct; that the parties were not on the best of terms during the last few years of the partnership, and finally, that the lease and the permanent licence were actually granted after the partnership stood automatically dissolved at the end of 1942, are all facts and circumstances which point to only one conclusion, namely, that the renewal of the lease was not intended to be for the benefit of all the quondam partners.
Those facts and circumstances amply rebut any presumption of fact that the lease should enure to the benefit of all the parties.
For the reasons given above, it must be held that the judgment and decree passed by the High Court, in so far as they reverse those of the trial court, are erroneous, and must be set aside.
The appeal is, accordingly, allowed with costs throughout, which are attributable to the single issue which has been decided in this Court.
Appeal allowed.

summary:
The appellant, defendant No. 1 in the suit, from which the appeal arises, and the father of defendants 2 to 7, as the highest bidders, obtained a seventeen years ' lease of a salt factory from the Government and the license to manufacture and sell salt under the Madras Salt Act, 1889.
They entered into a partnership with the plaintiffs to carry on their business for the period of the lease.
On the death of their father, defendants 2 to 7 were admitted into the partnership.
The partnership agreement made no provision for the continuation of the partnership on expiry of the lease or for the acquisition of a fresh lease on behalf of the partnership.
The lease expired, the license came to an end and the partnership stood automatically dissolved.
The Government changed its old policy of granting leases to the highest bidders and adopted one of renewing them in favour of previous lessees in whom they had confidence.
The appellant 10 74 and defendants 2 to 7 applied for the renewal of the lease that stood in their names.
The plaintiffs also applied for a grant of it to them.
No premium was called for and none had to be paid.
The Revenue Authorities chose to renew the lease in favour of the appellant and the said defendants f or a further period of 25 years.
The plaintiffs filed the suit claiming that the renewal of the lease was an asset of the dissolved partnership.
The trial Court found against them but the High Court on appeal reversed that finding.
The suit was instituted months before the renewal of the lease and years before the renewal of the license, which alone could enable the licensee to manufacture and sell salt.
The Courts below found that the allegation of the plaintiffs that the goodwill and assets of the firm had been utilised for obtaining the renewal of the lease was unfounded, as they had failed to prove that a partnership firmatall existed.
It was also found that during the last three years of the existence of the partnership, the parties had fallen apart and lost mutual confidence.
The question for decision was whether section 88 of the Indian Trusts Act applied and the renewal of the lease in favour of the appellant and the said defendants for running the salt factory could be treated as an asset of the dissolved partnership between the contesting parties.
Held, that in order that a case might be brought within the purview of section 88 of the Indian Trusts Act, it must be shown either that (1) a person had a fiduciary character and was thus in duty bound to protect the interests of others or that (2) he had placed himself in such a position as to render his interest adverse to those of the others and had thereby obtained a pecuniary interest which he must hold for their benefit as well.
As in the instant case the fiduciary character of the partners came to an end with the termination of the original lease and of the partnership business along with it, there could no longer be any subsisting interest in a partner which another was bound to protect nor could one partner be said to have availed of his character as a partner when he obtained the fresh lease.
Section 88 of the Indian Trusts Act or the illustrations (d) or (e) thereto could, therefore, have no application, nor could section go of the Act, which in terms had no application even if applied, improve the position of the plaintiffs.
No question of a constructive trust could also arise under the general law apart from the statute.
There is no absolute rule of law or equity in England that renewal of a lease by one partner must necessarily enure to the benefit of all the partners.
There is, however, a presumption of fact that there is an equity in favour of the renewal of the lease enuring to the benefit of all the partners.
Such a presumption may be rebutted by the facts of a particular case.
The Indian law as enacted in the Indian Trusts Act, and particularly sections 88 and go of that Act, is substantially the same.
In the instant case, the facts and circumstances amply rebut that presumption.
75 Featherstonhaugh vs Fenwick, ; , Clegg vs Fishwick; , , Clements vs Hall, ; , Clegg vs Edmondson, ; , In Ye Biss, Biss vs Biss, and Griffith vs Owen, [1907] I Ch. 195, G considered.


judgement:
ivil Appeal Nos.
188 89 of 1987.
From the Judgment and Order dated 21.11.
1986 of the Punjab & Haryana High Court in First Appeal Order Nos.
620 & 619 of 1986.
571 K.K. Jain and Pramod Dayal for the Appellant.
Meera Chhabra and Ms. Pani Chhabra for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
These are appeals by special leave challenging the reversing common decision of the Punjab & Haryana High Court holding the insurer liable for compensa tion under the of 1939.
The insurer repudiated its liability by maintaining that the policy had been taken after the accident and, therefore, it had no liability to meet the award of compensation against the owner.
The Tribunal accepted this stand and rejected the claim against the insurer.
In appeal, the High Court took the view relying upon certain decisions that the insurance policy obtained on the date of the accident became operative from the commencement of the date of insurance i.e. from the previous mid night and since the accident took place on the date of the policy the insurer became liable.
Apart from the judgment under appeal, we find that this view is supported by two judgments of the Madras High Court and an earlier decision of the Punjab & Haryana High Court Two Division Benches of the Madras High Court have taken the view after discussing the law at length that the policy taken during any part of the day becomes operative from the commencement of that day.
Besides these judgments a Division Bench decision of the Allahabad High Court in Jaddoo Singh & Anr.
vs Smt.
Malti Devi & Anr., AIR 1983 All. 87 supports this view on principle.
There is evidence in this case that the vehicle was insured earlier upto 31.8.
1984 and the same was available to be renewed but instead of obtaining renewal, a fresh insurance was taken from 28th of September, 1984, which is the date of the accident.
We are inclined to agree with the view indicated in these decisions that when a policy is taken on a particular date its effectiveness is from the commencement of the date and, therefore, the High Court, in our opinion, was right in holding that the insurer was liable in terms of the Act to meet the inability of the owner under the award.
As pointed out in Stroud 's judicial Dictionary 'Date ' means day, so that where a cover not providing for temporary insurance of a motor 572 car expires 15 days after date of commencement, it runs for the full 15 days after the day on which it was to commence.
" Similarly it has been stated in Stroud that "a bill of exchange, or note, is of the date expressed on its face, not the time when it is actually issued." 'To the same effect is the decision in Re F & B Warren, where it has been held that a judicial act will be referred to the first moment of the day on which it is done.
A payment made by a bankrupt in the morning of a day is, therefore, not made, within section 45 of the Bank ruptcy Act, 1914 before the date of a receiving order made later in the same day.
The ratio of these also supports the view we have taken.
The appeals fails and are dismissed.
There would, howev er, be no order for costs.
N.P.V. Appeals dis missed.

dataset_name: IN-Abs

summary:
In a claim for compensation, the Motor Accident Claims Tribunal held that the insurer was not liable to meet the award of compensation against the owner of the vehicle, as the policy had been taken after the accident.
On appeal, the High Court held that the insurance policy obtained on the date of accident became operative from the commencement of the date of insurance, i.e. from the previous mid night, and since the accident took place on the date of the policy, the insurer became liable.
Dismissing the appeals by the insurer, this Court.
HELD: When a policy is taken on a particular date, its effectiveness is from the commencement of the date.
In the instant case, the insurance was taken from 28th September, 1984, which is the date of the accident.
The High Court was, therefore, right in holding that the insurer was liable in terms of the Act to meet the liability of the owner under the award.
[571F G] Jaddoo Singh & Anr.
vs Smt.
Malti Devi & Anr., AIR 1983 All. 87, approved.
In re.
F.B. Warren, , referred to.
Stroud 's Judicial Dictionary, referred to.


judgement:
ivil Appeal No. 673 of 1986.
From the Judgment & Order dated 17.2.1986 of the Madhya Pradesh High Court in Election Petition No. 41 of 1985.
S.S. Khanduja, Y.P. Dhingra and B .K.
Satija for the Appel lant.
Mrs. J. Wad for the Respondent.
The Judgment of the Court was delivered by KASLIWAL, J.
This appeal under Section 116 A of the Representation of People Act, 1951 (in short "the Act") is directed against the Judgment of the High Court of Madhya Pradesh dated 17th February, 1986.
Election of Legislative Assembly of the State of Madhya Pradesh was held in the month of February, 1985.
One of the Constituencies was No. 14 Lahar (District Bhind).
The nomination papers were filed before 6th February, 1985 and the scrutiny was done on 7th February, 1985.
Several persons filed their nomination papers.
The nomination paper of Ramprakash was rejected by the Returning Officer in the scrutiny.
The order passed by the Returning Officer rejecting the nomination paper reads as under: "Candidate is not identified as per electoral roll.
His representative has accepted this mistake also.
Hence reject ed.
Advised for correction but did not correct.
The candi date did not correct after advising to correct mistake.
Even did not appear at the time of scrutiny to correct mistake.
Hence rejected.
See section 33(4) R.P.A." Result of the election was declared on 5th March, 1985 and Shri 506 Mathura Prasad appellant declared elected.
Ajeem Khan one of the voters of the Constituency filed an election petition under Sec. 88 of the Act challenging the election of Mathura Prasad on several grounds but it is not necessary to state all the grounds as the controversy in the present appeal centres round the wrongful rejection of the nomination paper of Ramprakash.
The ground in this regard taken in the election petition was that the nomina tion paper of Ramprakash was wrongly rejected as the defect in his nomination paper was not of a substantial character.
It was alleged that in the nomination paper filed by Rampra kash the column meant for stating the candidate 's serial number in the electoral roll was left blank.
1t was thus alleged that the said defect was not of a substantial char acter and the nomination paper should not have been rejected in view of the provisions contained in Section 36(4) of the Act.
On the other hand the case of Mathura Prasad, the elect ed candidate was that neither Ramprakash nor any other person on his behalf was present before the Returning Offi cer when the nomination paper of Ramprakash was taken up for scrutiny.
At the time of scrutiny, the Returning Officer had pointed out that voter number was not mentioned in the nomination paper and Jaiprakash (RW.3) who 'was the proposer of Ramprakash had told the Returning Officer that he would inform Ramprakash regarding the above defect.
The Returning Officer then put that nomination paper aside and took other nomination papers for scrutiny.
Jaiprakash remained present in the hail awaiting the arrival of Ramprakash.
The Return ing Officer after scrutinising all the other nomination papers again called out the name of Ramprakash.
As Rampra kash had not arrived till then, Jaiprakash left the hall after informing the Returning Officer that he would fetch Ramprakash.
Jaiprakash left the place and went in search of Ramprakash but his efforts to search Ramprakash went in vain and he did not return back before the Returning Officer.
In view of the above circumstances, the Returning Officer passed the order rejecting the nomination paper of Rampra kash under sec.
33(4) of the Act.
On the pleadings of the parties Learned Single Judge of the High Court who tried the election petition framed Issue No. 1 in this regard which reads as under: (i) Whether rejection of the nomination paper of Ramprakash by the Returning Officer was illegal, as alleged? 507 Both the parties lead evidence in support of their case.
The petitioner in support of his case regarding the above issue examined himself, Mitthookhan, Gourishanker and Pahalwan.
By the evidence of the aforementioned witnesses a story was put forward that shortly before the nomination paper of Rampra kash was taken up for scrutiny, Ramprakash had gone out for passing urine.
He had left behind Mitthookhan as his repre sentative and when the nomination paper of Ramprakash was taken up for scrutiny and the defect was pointed out, Mit thookhan after informing the Returning Officer went out for calling Ramprakash.
He alongwith Ramprakash returned back after five minutes only but the nomination paper had already been rejected by the Returning Officer.
On the contrary Mathura Prasad examined himself and Jaiprakash who was not only the proposer of Ramprakash but was also his cousin.
Jaiprakash fully supported the case of Mathura Prasad.
Learned Single Judge after analysing the evidence of both the parties arrived to the conclusion that the entire story as advanced by the election petitioner and his wit nesses was obviously a fabrication.
He further held that such story being fabricated it deserved to be rejected outright.
He further observed as under: "The versions of the respondent (R.W. 1) are corroborated not only by the returning officer Shri Hoshiyarsingh, exam ined by the petitioner himself as P.W. 1, but also by the petitioner 's cousin Jaiprakash (R.W. 3) who was also his proposer and the evidence is also consistent with the grounds of rejection stated by the returning officer in his order.
The returning officer Shri Hoshiyarsingh (P.W. 1) is an independent witness and Jaiprakash (R.W. 3), who is cousin and proposer of Ramprakash (P.W. 4), also has no reason to tell lies.
I, therefore, see no reason to disbe lieve the versions of the respondent (P.W. 1) as to what transpired when the nomination paper of Ramprakash (P.W. 4) came up for scrutiny and under which circumstances it was rejected by the returning officer".
After recording the above finding the Learned Single Judge took into consideration the fact that in the nomination paper of Ramprakash, his name, his father 's name, his postal address, the number and name of the Constituency to which nomination paper related and the 508 number of the part of the electoral roll of the same con stituency in which part his name was entered as a voter were duly and correctly filled up.
It was further observed that Exhibit P. 1 a certified copy of that part of the electoral roll showed that the total number of voters registered therein was 10 11 and the name of Ramprakash was entered therein at serial No. 735.
At the time of scrutiny, the Returning Officer must have naturally been assisted by some members of his subordinate staff.
Learned Single Judge further observed that according to the Returning Officer himself the nomination paper was put of by him in the midst of the scrutiny proceedings and it was rejected subsequently after the scrutiny of all other nomination papers was over.
There was thus ample time to locate the serial number of the candidate in the above mentioned part of the electoral roll.
The Returning Officer had admitted that no effort was made by him to locate it.
Learned Single Judge thus concluded that it was not the contention of the Returning Officer that it was not possible for him to locate the name of Ramprakash in the electoral roll and find out his serial number but in fact the Returning Officer made no effort in this regard.
Learned Single Judge distinguished a decision of this Court in Lila Krishan vs Mani Ram Godara & Ors., [1985] Suppl.
S.C.R. 1 592.
He further held that candidate 's absence was immaterial and the Returning Officer could have himself found out the electoral number of the candidate Ramprakash readily with a very little effort by referring to the elec toral roll part mentioned in the nomination paper and the same being also available with him at the time of scrutiny the electoral number could have been found out without the assistance of any of the persons mentioned in Sec.
36(1) of the Act and the defect in the nomination paper cannot be held to be of a substantial character.
Issue No. 1 was thus decided in favour of the petitioner Ajeem Khan and as a result of which the election petition was allowed and the election of Mathura Prasad was declared void.
Aggrieved against the decision of the High Court, Mathu ra Prasad the winning candidate filed the present appeal before this Court.
We have heard learned counsel for both the parties and in our view this appeal has to be allowed.
As already mentioned above the Learned Single Judge himself did not accept the story as put forward by the petitioner Ajeem Khan, rather it was held that the entire story narrated by him was a fabrication and the same de served to be rejected outright.
The Returning Officer who was an independent witness and Jaiprakash who was a proposer of Ramprakash were believed and it was held that the entire 509 circumstances under which the nomination paper of Ramprakash came up for scrutiny and was rejected were correct.
Thus a perusal of the circumstances put forward by these witnesses at the time of scrutiny and rejection of the nomination paper of Ramprakash shows that Ramprakash himself was not present and even his proposer Jaiprakash after having gone to fetch Ramprakash did not return back and ultimately the Returning Officer rejected the nomination paper of Rampra kash.
The order passed by the Returning Officer rejecting the nomination paper of Ramprakash clearly makes a mention that the candidate was not identified as per electoral roll.
His representative had accepted the mistake also and was advised for correction but did not correct the same.
The candidate did not correct after advising to correct the mistake.
It further makes a mention that the candidate even did not appear at the time of scrutiny to correct the mis take.
In the circumstances mentioned above we have no hesi tation at all in holding that the Returning Officer was perfectly justified in rejecting the nomination paper of Ramprakash.
It depends on the facts and circumstances of each case to find as to what mistake in a nomination paper can be considered a mistake of substantial nature.
It is correct that the Returning Officer should not reject a nomination paper merely on a mistake of technical or formal nature, where the identity of the candidate can be ascer tained by him on the material made available to him.
He should also give an opportunity to the candidate or his representative present at the time of scrutiny to remove the defect.
However, in case neither the candidate nor his representative be present and without removing such defect in the nomination paper the identity of the candidate cannot be ascertained, then there is no statutory duty cast on the Returning Officer to make a roving enquiry by going through the Material placed before him and to remove such defect himself.
We may also refer to some cases cited before us at the bar.
Dalip Kumar Gon vs Durga Prasad Singh, AIR 1974 SC 2343 is the case on which strong reliance has been placed by Learned counsel for Ajeem Khan.
In the above case in the column of printed nomination form meant for making a decla ration of the candidates of the Scheduled Caste/Tribe con testing for a reserve seat, Abdul Hamid contesting from general constituency had not (a) filled his specific caste in the blank meant for that purpose and further (b) he had in that column left the words 'Scheduled Castes ' unscored.
The Returning Officer rejected the nomination papers on the ground that the failure of the candidate to delete the words 'Scheduled Castes ' means that "he belongs to Scheduled Caste which is not true" and consequently, the 510 nomination papers were not filled up properly.
An electoral of the constituency filed an election petition on the ground that the nomination papers of Abdul Hamid and Khatir Ali had been improperly rejected.
Learned Single Judge of the High Court upheld the above rejection of nomination paper by the Returning Officer and held that the candidate 's filling of these enteries were on the face of it, not proper and did not comply with the requirements of law.
It was further held that this defect was not trivial or technical but of a substantial character.
On appeal before the Supreme Court the Judgment of the High Court was set aside and it was held as under: "The High Court 's view that in scoring out only the word 'Jan Jati ' (tribe) and leaving the word 'Jati ' (caste) untouched in the aforesaid column of the nomination form, Abdul Hamid had failed "to comply with the requirement of the law on the subject" 'was entirely misconceived.
It overlooked the fact that the Jamtara Constituency was a 'General ' Constituency and the seat for which the candidates wanted to contest the election was not a Reserved seat.
Section 33(2) of the Representation of the People Act, 195 1, or any other statutory provision does not enjoin upon a candidate who is contesting the election for a General Seat, and not for a Reserved Seat, to specify in his declaration his caste or tribe.
Further, the 'Returning Officer appear ing as R.W. 2, had clearly admitted that at the time of the scrutiny of the nomination papers, he was aware that Abdul Hamid was not a member of the Scheduled Caste and that he had deposited Rs.250 as security.
The omission to strike off the column in the printed nomination form relating to Sched uled Caste/Tribe did not amount to a defect in the eye of law, much less was it a defect of a substantial character, warranting rejection of the nomination papers in Amolak Chand vs Raghuveer Singh, ; 1968 SC 1203.
The nomination papers of two candidates contesting for a general constituency were rejected on a similar ground.
Holding that the rejection was improper, Ramaswami, J. Speaking for the Court stated the law on tile point thus: "The printed form 2 A is meant both for general and reserved constituencies but why it is obligatory for candidates in the reserved constituency to make a declaration in the proper 511 column that he is a member of a particular caste or tribe there is no such rule with regard to general constituency.
33(2) of the Act imposes an obligation on the candidate in the reserved constituency to make a declaration in the proper column but there is no such direction in the statute with regard to the general constituencies.
In our opinion, the mention of the caste of the candidate in the nomination form was a clear superfluity because it was not necessary for the candidate to fill in the column when he was contest ing in a general constituency.
In the light of what has been said above, we would, reverse the finding of the High Court and hold that the nomination papers of Abdul Hamid were improperly reject ed by the Returning Officer".
In the above case the facts were entirely different and it lends no assistance to the case set up by Ajeem Khan, respondent before us.
In the above case it was clearly held that Sec.
33(2) of the Act or any other Statutory provision does not enjoin upon a candidate who is contesting the election for a general seat, and not for a reserved seat, to specify in his declaration his caste or tribe.
However, the Returning Officer had clearly admitted that at the time of the scrutiny of the nomination papers, he was aware that Abdul Hamid was not a member of the Scheduled Caste and that he had deposited Rs.250 as security.
Thus it was held that the omission to strike of the column in the printed nomina tion form relating to Scheduled Castes/Tribe did not amount to a defect in the eye of law, much less it was a defect of a substantial character.
In Brij Mohan vs Sat Pal, ; one Dog Ram had filed his nomination papers for contesting election to the Haryana Legislative Assembly from Jind Constituency.
His name was proposed by Ram Pratap, an elector of the Constitu ency.
Dog Ram was registered as an elector at serial No. 177 and house number 57 in part 39 of the electoral roll of the constituency whereas his proposer Ram Pratap was registered as electoral at serial No. 313.
and house number 6 in part 39 of the same constituency.
The name and postal address of Dog Ram were correctly given in the nomination papers but the part of the electoral roll was mentioned as 57 instead of 39 by an inadvertant mistake committed by the person who filed the nomination papers.
512 Similarly in the case of the proposer the serial number of the elector and the members of the constituency were given correctly but the number of his house was wrongly entered in the column meant for the part of the electoral roll.
At the time of scrutiny no other candidate or proposer objected to the acceptance of the nomination paper of Dog Ram but the Returning Officer of his own rejected the nomination paper on the ground that particulars of the candidate and the proposer had been wrongly entered in the nomination papers.
The High Court considered the question as to whether the nomination paper of Dog Ram was improperly rejected.
On the evidence led by the parties the Single Judge found that the candidate Dog Ram and his proposer were registered as voters in the constituency and were qualified to contest the elec tion and propose the candidate respectively.
It was further found that errors in regard to electoral roll numbers of the candidates and the proposer in the electoral roll and the nomination paper do not constitute defects of a substantial character as mentioned in the Proviso to Section 33(4) of the Act.
Learned Single Judge accepted the evidence of the proposer (P.W.2) to the effect that when he and the candi date presented the nomination paper, the Returning Officer told them that it was in order and that the Returning Offi cer had tripped them into an error and if the Returning Officer had told them that there were some discrepancies in the nomination paper they would have either made corrections then and there and could have gone more fully prepared to make objections at the time of the scrutiny.
The High Court in these circumstances allowed the election petition on the ground that the nomination paper of Dog Ram was improperly rejected.
On appeal to this Court by the elected candidate it was held that the Returning Officer could not be said to have improperly rejected the nomination paper of Dog Ram.
This Court did not believe the evidence of proposer (P.W.2) which was not corroborated by the evidence of any other witness.
In the facts and circumstances of the case it was held that the Single Judge was not justified in accepting the evidence of P.W.2 and in holding that the Returning Officer was guilty of tripping the candidate and the proposer by any assertion on his part into anyone believing that there was nothing wrong in the nomination paper.
In the above case this Court observed as under: "It is not possible to say generally and in the abstract that all errors in regard to electoral rolls or nomination papers do not constitute defects of a substantial character.
They 513 would not be defects of a substantial character only if at the time of the scrutiny the Returning Officer either by himself with the materials placed before him during the scrutiny or with the assistance of the candidate or his proposer or any other person is able to find out the correct serial number of the candidate and the proposer in the electoral roll.
If that is not the case, he would be commit ting a grave error by accepting the nomination paper without verifying whether the candidate is a voter in that or any other constituency of the State and whether the proposer is a voter in that constituency".
"The candidate and,the proposer are always expected to go fully prepared to meet any objection that may be raised by any candidate or even by Returning Officer himself suo motu at the time of the scrutiny and they cannot be expected to go any the less prepared merely because the Returning Offi cer had received the nomination paper without raising any objection.
It is at the time of scrutiny which is done in the presence of all concerned that the nomination papers come up for more detailed consideration at the hands of the Returning Officer against whom there is no estoppel in regard to the statutory duty of scrutiny".
In the above case this Court clearly held that the defects would not be of a substantial character only if at the time of scrutiny the Returning Officer either by himself with the materials placed before him during the scrutiny or with the assistance of the candidate or his proposer or any other person is able to find out the correct serial number of the candidate and the proposer in the electoral roll.
It no where lays down that it is the statutory duty of the Returning Officer himself to cure the defect at the time of the scrutiny.
We cannot read in the above authority, as sought to be argued by the Learned counsel for the respond ent, that in the case before us even though Ramprakash or any other representative on his behalf was not present to cure the defect, still it was the duty of the Returning Officer himself to find out the correct identity of Rampra kash.
As already discussed above the learned Single Judge had himself held that the case set up by Ajeem Khan was a fabricated one and the story put forward by the winning candidate Mathura Prasad and his witnesses was correct.
From the evidence of Returning Officer it was clear that the defect in the nomi 514 nation paper of Ramprakash was brought to the notice of his proposer Jaiprakash and the nomination paper was not reject ed in the first round.
An ample opportunity was given to Jaiprakash to bring Ramprakash but he failed to turn up.
The nomination paper was then rejected after the scrutiny of all other nomination papers was over.
The Returning Officer in the above circumstances was perfectly justified in rejecting the nomination paper of Ramprakash.
Learned Single Judge wrongly distinguished the case of Lila Krishan vs Mani Ram Godara & Ors., [1985] Suppl.
1 S.C.R. 592 (supra).
In this case the .election of Lila Krishan from Fatehbad Constituen cy of Haryana Assembly was challenged on the ground that the nomination papers of two candidates being Mani Ram Chhapola and Raj Tilak had been improperly rejected by the Returning Officer.
The Proposer of Mani Ram Chhapola was one Brij Bhushan while proposer of Raj Tilak was one Upendra Kumar.
Brij Bhushan 's serial number in the electoral roll was 26 while Upender Kumar 's was 77.
In form 3A these numbers were correctly indicated but in the nomination papers the numbers had been shown as 126 and 177 respectively.
The Returning Officer rejected these nomination papers as the serial numbers of the proposers as disclosed in the nomination papers did not tally with reference to the electoral roll.
The High Court set aside the election of Lila Kishan holding that the Returning Officer acted mala fide and had either directly or indirectly been responsible for the alteration in the nomination papers, since the nomination papers when filed were in order and while they were in the custody of the Returning Officer 's establishment, interpolations have been made and on the basis thereof of nomination papers had been rejected.
Appeal filed in Lila Krishan was allowed by this Court and it was held that the conclusion of the High Court that the Returning Officer either by himself or through somebody caused the interpolation to be done was totally unwarranted.
On the basis of the above facts it was held as under: Indisputably the insistence on disclosure of the serial number in the prescribed column against the proposer is for the purpose of indentifying the proposer and ascertaining that he is competent to propose.
The scope of scrutiny is obviously to verify the contents of the nomination paper with a view to ascertaining whether the form is in order and what is required to be complied with by the election law has been duly complied with.
This Court has repeatedly held that election proceedings are strict in nature and what is 515 required to be performed in a particular manner has to be done as required or the Rules made thereunder.
That is why an exception has been made by inserting Sub section
(4) of Sec tion 36 of the Act.
Therefore, to cast the obligation of the Returning Officer to look through the entire electoral roll of a particular part with a view to finding out the identity of the proposer is not the requirement of the law.
To read that as an obligation is likely to lead a unworkable posi tion".
"In the instant case, no one was available, for instance, when the Returning Officer took up the nomination paper of Mani Ram Chhapola to indicate to the Returning Officer that his serial number in the electoral roll was 26 and not 126.
If this had been pointed out and on summary enquiry the identity of Brij Bhushan was not in dispute, there would have been end of the matter.
If the correlation has not been made and the Returning Officer has no assistance to fix up the identification it cannot be said to be a defect not of substantial character.
Moreover, it could not be statutory obligation of the Returning Officer to scrutinise the elec toral roll for finding out the identity of the proposer when the serial number turns out to be wrong.
But if interested and competent persons point out to the Returning Officer that it is a mistake, it would certainly be his obligation to look into the matter to find out whether the mistake, is inconsequential and has, therefore, either to be permitted to be corrected or to be overlooked.
When scrutiny was taken up Mani Ram Chhapola and Raj Tilak on their own showing were not present before the Returning Officer.
Similarly, the proposers, Brij Bhushan and Upender Kumar were also absent.
Though there is evidence on the side of the election peti tioners that the Assistant Returning Officer was present at the time of scrutiny, he as P.W. 4 has categorically denied that fact.
The Returning Officer, R.W. 3, has stated that the Assistant Returning Officer was not present when he took up scrutiny on the nomination papers.
There is also evidence from the side of the appellant that the Assistant Returning Officer was not present.
In the circumstances, if the nomi nation papers have been rejected for mistake in 516 the nomination papers it is the candidates themselves who have to thank their lot and no mistake can be found with the Returning Officer.
Therefore, the nomination papers were validly rejected".
Thus in the above case it was clearly laid down that to cast an obligation on the Returning Officer to look through the entire electoral roll of a particular part with a view to finding out the identity of the proposer is not the requirement of the law.
In the case before us even if it may be considered for a moment that by making some effort by the Returning Officer, the identity of Ramprakash could have been ascertained, there being no statutory duty cast on him to do so coupled with the fact that neither the candidate Ramprakash nor any representative on his behalf was ready to assist the Return ing Officer in curing the defect and in proving the correct identity of Ramprakash, it cannot be said that the Returning Officer committed any error in rejecting the nomination paper of Ramprakash.
The Returning Officer not only granted ample time but even brought the defect to the notice of Jaiprakash proposer but still the defect in the nomination paper was not removed.
In the result this appeal is allowed, the Judgment of the High Court dated 17th February, 1986 is set aside and it is held that the Returning Officer rightly rejected the nomination paper of Ramprakash.
The appellant would also be entitled to costs.
R.N.J. Appeal al lowed.

summary:
Election to the Legislative Assembly of the State of Madhya Pradesh was held in February, 1985.
For Constituency No. 14 Lahar (Distt.
Bhind) nomination papers were filed before 6th February, 1985 and scrutiny done on February 7, 1985.
During the scrutiny the nomination paper of Ramprakash who was one of the candidates was rejected by the Returning Officer.
The order rejecting the paper reads as under: "Candidate is not identified as per electoral roll.
His rep resentative has accepted this mistake also.
Hence rejected.
Advised for correction but did not correct.
The candidate did not correct after advising to correct mistake.
Even did not appear at the time of Scrutiny to correct mistake.
Hence rejected.
See Section 33(4) R.P.A." Result of the election was declared on ' 5th March, 1985 and the appellant declared elected.
The election of the appellant was challenged by the Respondent who was one of the voters of the constituency through an election petition on several grounds the main ground being the wrongful rejection of the nomination paper of Ramprakash.
On the pleadings of the parties the High Court framed issue No. 1 which reads as under: (i) Whether rejection of the nomination paper of Rampra kash by the Returning Officer was illegal, as alleged? The High Court on an analysis of the evidence came to the conclusion that the entire story advanced by the elec tion petitioner and his witnesses was a fabrication and deserved to be rejected outright.
How 504 ever after recording this finding the learned single judge of the High Court went on to hold that the candidate 's absence was immaterial and the Returning Officer could have himself found out the electoral number of the candidate Ramprakash readily with a little effort without the assist ance of any of the persons mentioned in Section 36(1) of the Act and that the defect in the nomination paper cannot be held to be of a substantial character.
Issue No. 1 was thus decided in favour of the election petitioner as a result of which the election petition was allowed and the election of the appellant declared void.
Hence this appeal by the elect ed candidate.
Allowing the appeal and setting aside the judgment of the High Court, this Court, HELD: There is no statutory duty cast on the Returning Officer to himself look through the entire electoral roll of a particular part with a view to finding out the correct identity of a candidate at the time of the scrutiny even though neither the candidate himself nor any other represen tative on his behalf was present to cure the defect.
[516B D] A perusal of the circumstances put forward by the wit nesses at the time of scrutiny and rejection of the nomina tion paper of Ramprakash shows that Ramprakash himself was not present and even his proposer Jaiprakash after having gone to fetch Ramprakash did not return back and ultimately the Returning Officer rejected the nomination paper of Ramprakash.
The order passed by the Returning Officer re jecting the nomination paper of Ramprakash clearly makes a mention that the candidate was not identified as per elec toral roll.
His representative had accepted the mistake also and was advised for correction but did not correct the same.
The candidate did not correct after advising to correct the mistake.
It further makes a mention that the candidate even did not appear at the time of scrutiny to correct the mis take.
In the circumstances mentioned above we have no hesi tation at all in holding that the Returning Officer was perfectly justified in rejecting the nomination paper of Ramprakash.
[509A C] .
It depends on the facts and circumstances of each case to find as to what mistake in a nomination paper can be considered a mistake of substantial nature.
It is correct that the Returning Officer should not reject a nomination paper merely on a mistake of technical or formal nature, where the identity of the candidate can be ascertained by him on the material made available to him.
He should also give an opportunity to the candidate or his representative present at the time of scrutiny to remove the defect.
Howev er, in case neither the candidate nor his representative be present and without removing such defect in the 505 nomination paper the identity of the candidate cannot be ascertained, then there is no statutory duty cast on the Returning Officer to make a roving enquiry by going through the material placed before him and to remove such defect himself.
[509D F] Lila Krishan vs Mani Ram Godara & Ors., [1985] Suppl.
S.C.RI 592; Dalip Kumar Gon.
vs Durga Prasad Singh, AIR 1974 SC 2343; Amolak Chand vs Raghuveer Singh, ; and Brij Mohan vs Sat Pal, ; , referred to.


judgement:
ivil Appeal No. 1929 of 1990.
619 From the Judgment and Order dated 29.7.1988 of the Central Administrative Tribunal Madras in Transferred Appli cation No. 244 of 1987.
Ambrish Kumar for the Appellant.
Anil Dev Singh, R.B. Misra and Ms. Sushma Suri for the Respondents.
J. Special leave granted.
The workmen of the Ordinance Clothing Factory, Avadi, Madras are represented by the petitioner/appellant Union.
The workers of the factory are divided into two categories, namely, (i) day workers and (ii) piece rated workers.
The day workers are paid wages in the time scale of Rs.260 400 on the basis of their actual attendance whereas the piece rated workers are paid on actual out put or production calculated on the basis of time required for making the item by multiplying the same by the hourly rate worked out by dividing the mean of the time scale by monthly working hours e.g., Rs.330 + 195 hours = Rs.1.69 (Rs.330 being the mean of the time scale of Rs.260 400 and 195 hours being the total monthly hours).
The appellant Union contends that the daily normal working hours of the workmen are 8 during the week except on Saturdays when the working hours are 4 3/4 only.
Thus the total working hours during the week comes to 44 3/4 hours.
If the piece rated workers are required to work beyond the aforesaid normal working hours they are entitled to overtime wages under section 59 of the .
That section, in so far as is relevant, reads as under: "Section 59(1) ' Where a worker works in a factory for more than nine hours in any day or for more than fortyeight hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.
" This sub section postulates payment of extra wages at twice the ordinary rate of wages for those workers of the factory who are required to work for more than 9 hours in a day or for more than 48 hours in a week.
The appellant union filed a Writ Petition No. 2356 of 1985 in the 620 High Court of Madras praying for an appropriate writ or direction to the respondents to pay the piece rated workers extra or overtime wages at the rate prescribed by section 59(1) if the total working hours of any workman exceeded 44 3/4 hours in a week.
The appellant union contended that the piece rate system was introduced sometime in 1963 and since then the piece rate workers were paid overtime wages accordingly for work done beyond the normal working hours but the same was abruptly discontinued from 1983; so much so that they were even denied the wage at the normal rate for work done beyond 44 3/4 hours and upto 48 hours, i.e, 3 1/4 hours.
It is, however, admitted that if the workmen are required to work beyond 48 hours in a week, they are paid extra wages in accordance with section 59(1) of the Facto ries Act.
Thus the controversy is in respect of the rate at which piece rate workers should be paid wages for the work put in between 44 3/4 and 48 hours in a week.
The workers claim they are entitled to extra wages for these 3 V4 hours at double the normal rate in accordance with section 59(1) of the .
In support reliance is placed on the Ministry of Defence letter No. F. 8(5)/56/D(Civ.
II) dated 1st September, 1959 which inter alia provides that in all cases where overtime pay is admissible to civilian person nel, both under the provisions of the and Departmental Rules, the overtime pay should be calculated as under: (i) For work in excess of normal working hours and upto 9 hours on any day or 48 hours in a week, overtime will be paid at the rate prescribed in the departmental rules.
For calculation of overtime pay under this item only basic pay and Dearness allowance shall be taken into account.
(2) For work in excess of 9 hours on any day or 48 hours in a week overtime will be paid at the rates prescribed in the .
For calculating overtime pay under this item total pay including all allowances will be taken into account.
By a subsequently communication dated 13th February, 1963 the Ministry clarified that having regard to the revision of piece work rates effected in the Ordinance Factories co relating them to the monthly scales of pay sanctioned by the Ministry 's letter dated 16th January, 1954, the distinction between High Paid and Low Paid piece workers stood abolished and keeping in mind the Ministry 's letter dated 1st Septem ber, 1959, the President was pleased to sanction the follow ing methods of calculation and payment of overtime to piece rate workers: 621 (i) Piece workers under P & A Regulations Part I 1923.
(a) No overtime will be admissible for working overtime in the day shift.
But for the purposes of distribution of P.W. profits, the time wages element in respect of overtime upto 9 hours per day or 48 hours a week will be determined at the rate of P/200 per hours, where 'P ' represents the monthly basic pay and dearness pay where admissible.
(b) An extra 1/2 hour pay calculated at the hourly rate of 1/200 of the monthly basic pay or the monthly basic pay and dearness pay, where admissible, for every hour of systematic overtime worked on the night shifts in addition to their piece work earnings.
(ii) Piece workers under the For each hour of overtime in excess of 9 hours on any day or 48 hours in a week a piece worker will be 1/200 of the monthly basic pay plus 25% of basic pay plus twice all allowances.
In other words, if 'P ' represents the monthly basic pay and 'D ' stands for all allowances such as dearness allowance, house rent allowance, compensatory (city) allow ance, overtime for each hour will be P/200 + 1/4P/200 +2D/200.
This order was directed to take effect from 1st March, 1954.
Thereafter, by a corrigendum issued on 21st October, 1965, sub paragraph (1) of the Ministry 's letter of 1st September, 1959 was directed to be substituted w.e.f.
2nd July, 1965 by the following: "1.
For work in excess of normal working hours and upto 9 hours on any day or 48 hours in a week, overtime will be paid at the rate prescribed in the departmental rules.
For calculating overtime pay under this item, basic pay, dear ness allowance, special pay, personal pay, pension (to the extent taken into account for the fixation of pay) in the case of re employed pensioner and city compensatory allow ance shall be taken into account.
House Rent Allowance, conveyance allowance, traveling and daily allowances, permanent travelling allowance, clothing allowance, uniform allowance, washing allowance and children education allow ance shall not be included.
" 622 But by a Circular No. 1823/LB dated 2nd February, 1983 it was stated that orders had since been received from the Ordinance Factory Board 'to stop payment of Departmental Overtime when piece workers work beyond normal working hours and upto 9 hours a day or 48 hours a week '.
It was further clarified that they would be entitled to piece work earnings only for the period they work extra hours.
Thus the payment of departmental overtime for January, 1983 in February, 1983 was stopped.
However, with regard to workmen of the Ordi nance Factories and other industrial establishments under the Defence Ministry governed by the , it was laid down by the communication dated 11th September, 1987 that such workmen shall be entitled to overtime allowance at time rate for work done in excess of prescribed hours and upto 48 hours a week, in accordance with Ministry 's O.M. dated 25th June, 1983, but it was clarified that the time rate of wages will be calculated with reference to pay in the revised scale w.e.f.
the date the worker has been brought on the revised scale introduced from 1st January, 1986.
In the light of the above, the appellant union con tends that as the prescribed hours of work were 44 3/4 hours per week, the workmen were entitled to overtime wage or allowance for work done beyond 44 3/4 hours and upto 48 hours a week at double the ordinary rates, which has been wrongly and illegally discontinued.
The case set up by the respondents is that the workers of the petitioner/appellant union are mostly doing tailoring work, stitching uniforms, tents, parachutes, covers etc.
, in the Ordinance Clothing Factory, a Govt.
of India Undertak ing, and are paid wages on piece rate basis.
It is submitted that while fixing the piece work rate the labour involved in the production of each article is analysed in detail and the basic time is determined to which 25% incentive is added and the wage is paid on the basis of time so calculated by taking the arithmatic mean of the scale to which the worker belongs and dividing the same by the figure 195 representing the number of standard hours for a month.
Thus if a piece worker completes his job allotted to him he would earn his basic time wage plus an extra 25% as incentive.
It is fur ther stated that the payment of overtime wages for the work done beyond the normal working hours of 44 3/4 and upto 48 hours in a week is regulated by the Departmental Rules and for the period exceeding 48 hours in a week or 9 hours on a single day is regulated as per the requirements of the .
According to the respondents the Defence Ministry letter of 1st September, 1959 as amended by the corrigendum of 21st October, 1965 does not apply to piece workers but their case in regard to the grant of overtime payment is governed by 623 the Defence Ministry letter dated 13th February, 1983 as amended by the Corrigendum of 18th January, 1970.
In fact the former letters apply to day workers who are paid wages on the basis of attendance.
Thus according to the respondents piece workers are not entitled to overtime wages at double the rate for work done in excess of 44 3/4 hours upto 48 hours in a week because they are entitled to piece work profit in the form of earning which is included in their wage structure itself to compensate them for the extra working hours upto 48 hours in a week.
Yet on account of a mistake such payment was made till December, 1982 but when it came to light the same was discontinued by the Circular letter dated 2nd February, 1983.
This discontinuance was challenged in Writ Petition No. 10095/83 in the Madras High Court which was repelled by Mohan, J. by his order dated 6th December, 1983.
The appeal filed against the decision of Mohan, J. was still pending in the High Court when the proceedings giving rise to this appeal were initiated by this Union.
Lastly it is pointed out that according to the terms of section 59 of the , the question of payment of overtime at double the rate can arise any if the piece worker has worked for more than 9 hours per day or 48 hours per week and not to cases of the present type.
The respondents, therefore, pray that the present appeal is not maintainable and deserves to be dismissed.
In the rejoinder filed on behalf of the appellant union it is contended that the 25% incentive is not to compensate for overtime work beyond 44 3/4 hours and upto 48 hours in a week but is a measure to provide for rest intervals, minor mechanical breakdowns, tools sharpening or grinding or hold ups for want of raw materials, etc., to arrive at the operational time for production of an item.
The appellant, therefore, contends that the contention that the letters dated 1st September, 1959 and 12th October, 1969 applied only to the monthly rated day workers is misconceived.
This is apparent from the subsequent letter dated 13th February, 1963 as amended by the corrigendum of 18th January, 1970.
Therefore, according to the appellants, the contention that piece work profit is incorporated in the wage structure applicable to piece rated workers is not correct and clearly manifests that the discontinuance of overtime is based on a wrong understanding of the relevant orders.
In support strong reliance is placed on this Court 's decision in Union of India vs
G.H. Kokil, Lastly it is contended that the respondents were not justified in abrupt ly discontinuing the grant of overtime wages on the pretext of a so called 'mistake ' and their action in so doing is clearly high handed amounting to unfair labour practice not expected from a governmental 624 undertaking.
It is also contended that the circular letter of 2nd February, 1983 is a document of doubtful origin and can not in any case override the prior orders contained in the letters of the Ministry of Defence earlier referred to.
The appellants, therefore, contend that the impugned deci sion needs to be set aside and the overtime payments which have been unilaterally and arbitrarily discontinued re stored.
From the above resume it is clear that the controversy is limited to the question of non payment of overtime wages for work done beyond the normal hours of 44 3/4 hours and upto 48 hours in a week i.e., for 3 14 hours in a week.
There is no dispute that the workers are paid overtime wages for work done in excess of 9 hours on any day or 48 hours in any week in accordance with section 59 of the .
This section does not provide for overtime wages for work done in excess of the normal working hours and upto 48 hours.
In Kokil 's case (supra) the point for consideration was whether the employees working in the factory of the Indian Security Press, Nasik, were entitled to overtime wages under section 59 of the read with sec tion 70 of the Bombay Shops & Establishments Act, 1948, for the work done beyond the normal working hours.
According to them their normal working hours were 44 per week, they were required to work in excess thereof but they were paid over time wages for the extra hours of work at the basic rates though they were entitled to overtime wages at double the normal rate.
In that case three contentions were raised, viz., (i) since none of the respondents was a 'worker ' under section 2(1) of the , their case was not gov erned by section 59 of the said Act read with section 70 of the Bombay Shops & Establishments Act; (ii) assuming the respondents were entitled to claim the benefit of section 59 read with section 70 as aforesaid even though none of them was a worker, section 59 became inapplicable by virtue of Rule 100 made under section 64 of the ; and (iii) since none of the respondents was a 'workman ' under section 2(s) of the , the application under section 33C(2) thereof was not maintain able.
This Court, on a true interpretation of section 70 of the Bombay Shops & Establishments Act, came to the conclu sion that the non obstante clause found therein made it clear that section 59 would apply and the same non obstante caluse kept out the application of section 64 read with Rule 100.
On the third question this Court confirmed the Labour Court 's finding that the respondents were workmen under the .
In this view of the matter this Court held that the employees were entitled to overtime wages under section 59 of the . 625 Now under the Presidential order of 1st September, 1959 overtime wage was payable 'for work in excess of normal working hours and upto 9 hours on any day or 48 hours in a week ' at the rate prescribed in the departmental rules.
By the subsequent Presidential order of 13th February, 1963 the method of calculation and payment of overtime wage to piece workers was outlined.
Under these orders the day workers are allowed overtime wages for working beyond the normal working hours whereas piece workers are allowed piece work profits as may be earned by them for working beyond normal working hours and upto 48 hours in a week.
This is clear from clause (i) of the letter dated 13th February, 1963.
Even the Manual of Cost Accounting (1986) meant for Ordinance and Ordinance Equipment Factories indicates that in the case of piece workers no separate payment for overtime is permissible under the departmental rules for day shift workers but they are entitled to piece work earnings only.
That is why in the earlier Writ Petition No. 10095 of 1983 filed in the Madras High Court a contention was based on Article 14 of the Constitution that the management was guilty of discrimina tion inasmuch as day workers of day shifts were entitled to overtime wages whereas piece workers were denied the same.
The contention was turned down by Mohan, J. whose decision was challenged in appeal before the High Court which appeal has since been dismissed for default.
It is indeed surpris ing why another Writ Petition No. 2356 of 1985 was filed in the same High Court, notwithstanding the pendency of the said appeal, which writ petition on transfer to the Central Administrative Tribunal came to be disposed of by the im pugned judgment and order.
In fact it is doubtful if this second Writ Petition would have been entertained in view of the earlier decision of Mohan, J. rendered several years back soon after the discontinuance of grant of overtime by the circular letter of 2nd February, 1983 merely because a different union was espousing the cause, since the cause was identical.
The decision of this Court in Kokil 's case is clearly distinguishable on facts.
1n that case there was no dispute that if section 59 of the applied the workers were entitled to overtime wages for work done beyond the normal hours and upto 48 hours.
That would naturally depend on the relevant service rules since section 59 stric to sensu applies to cases of overtime work done beyond 9 hours a day or 48 hours a week.
In the present case the grant of overtime wages for the period in excess of the normal working hours of 44 3/4 per week and upto 48 hours is governed by the relevant departmental rules and section 59(.1) of the comes into play only if a piece worker has worked beyond 9 hours in a day or 48 hours in a week and not otherwise.
Further, piece workers are denied overtime wage for these 3 1/4 hours of work in a week 626 because this factor is taken care of in the calculation of the piece rate.
We are, therefore, of the opinion that the ratio of Kokil 's case has no application to the facts of the present case.
For the above reasons we see no merit in this appeal.
The appeal, therefore, fails and is dismissed.
No order as to costs.
Y. Lal Appeal dis missed.

summary:
The controversy that requires determination in this appeal is whether piece rated workers are entitled to over time wages for work done beyond the normal hours of 44 3/4 hours and upto 48 hours in a week, i.e. for 3 1/4 hours in a week and the rate at which they should be paid the overtime wages for those hours.
The workers of the Clothing Factory are divided into two categories viz., (i) day workers and (ii) piece rated work ers.
Whereas the day workers are paid wages in the scale of Rs.260 400, on the basis of their actual attendance the piece rated workers are paid on actual output or production calculated on the basis of time required for making the item at an hourly rate to be arrived at in accordance with the formula prescribed for the purpose.
According to the appel lants, the piece rate system was introduced sometime in 1963 and since then the piece rate workers were paid overtime wages accordingly for work done beyond the normal working hours i.e. 44 3/4 hours (8 hours per day other than Satur days when the working hours are 4 3/4 hours), but the same was abruptly stopped from 1983 so much so that they were even denied the wage at the normal rate for work done beyond normal hours and upto 48 hours.
Being dissatisfied, the appellant Union filed a writ petition in the High Court of Madras praying for a suitable direction to the respondents to pay the piece rate workers extra or overtime wages at the rate prescribed by section 59(1) of the Factories Act if the total working hours of any workman exceeded 44 3/4 hours in a week.
The learned Single Judge of the High Court by his order dated 6th December 1983, dismissed the writ petition.
An appeal was preferred by the appellant Union but whilst the said appeal was yet pending disposal by the High Court, the appellant Union filed yet another writ 618 petition in the same High Court, which was later transferred to the Central Administrative Tribunal and which has been disposed of by the Tribunal by the impugned order.
Hence this appeal by the Union after obtaining special leave.
The appeal preferred against the order of the learned single Judge of the High Court was later dismissed for default.
The workers claim that they are entitled to extra wages for these 3 1/4 hours at double the normal rate in accord ance with section 59(1) of the Factories Act whereas the Union denies such liability.
Dismissing the appeal, this Court, HELD: There is no dispute that the workers are paid overtime wages for work done in excess of 9 hours on any day or 48 hours in any week in accordance with section 59 of the Factories Act.
This section does not provide for overtime wages for work done in excess of the normal working hours and upto 48 hours.
[624C] Under the Presidential order of 1st September, 1959, overtime wage was payable for work in excess of normal working hours and upto 9 hours on any day or 48 hours in a week at the rate prescribed in the departmental rules.
By the subsequent Presidential Order of 13th February, 1963, the method of calculation and payment of overtime wage to piece workers was outlined.
Under these orders the day workers are allowed overtime wages for working beyond the normal working hours whereas piece workers are allowed piece work profits as may be earned by them for working beyond normal working hours and upto 48 hours in a week.
[625A B] In the instant case, the grant of overtime wages for the period in excess of the normal working hours of 44 3/4 per week and upto 48 hours is governed by the relevant depart mental rules and Section 59(1) of the Factories Act comes into play only if a piece worker has worked beyond 9 hours in a day or 48 hours in a week and not otherwise.
Further, piece workers are allowed piece work profits as may be earned by them for working beyond normal working hours and upto 48 hours in a week.
[625G H] Union of India vs
G.H. Kokil, , distinguished.