judgement:
146 of 1958.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
Veda Vyasa, section K. Kapur and Ganpat Rai, for the petitioners.
C. K. Daphtary, Solicitor General of India, R. Gopala krishnan and D. Gupta, for the respondents.
May 2.
The Judgment of the Court was delivered by SINHA, C. J.
The petitioners have moved this sin Court under article 32 of the Constitution for a writ 646 or order in the nature of mandamus and/or prohibition and/or other suitable writ, order or direction to the respondents not to levy, charge or collect any sales tax on transactions of what the petitioners characterised as hire purchase agreements, a typical example of which is contained in Annexure 'A ' to the petition, to be hereinafter examined in detail.
The first petitioner is a private limited company incorporated under the Companies Act, with its registered office at Janpath, New Delhi.
The second petitioner is the Managing Director and shareholder of that company and is directly interested in the result of this application, because it is claimed that his rights and property are directly involved.
The company has been carrying on in Delhi the business of financing the purchase of new as well as second hand motor cars and other kinds of motor vehicles.
The system adopted by the Company for financing a purchase such as aforesaid is as follows.
A person desiring to purchase a motor vehicle fixes a bargain with the owner and the petitioner Company would then advance the necessary finance on the terms and conditions appearing in a printed copy of the agreement, marked Annexure 'A ' to the petition.
According to that agreement, the Company charges the 'Hirer ' an initial deposit by way of premium as a consideration for granting the lease of the vehicle, which deposit becomes the absolute property of the Company; the premium charged as aforesaid is a substantial amount, being usually 25% of the price in respect of new vehicles.
The 'Hirer ' undertakes to pay instalments and when all the instalments are paid, the vehicle becomes the property of the 'Hirer ' at his option, on payment of rupee one to the Company, as a consideration for the option; until all the stipulated instalments have been paid and the option exercised as aforesaid, the vehicle remains the property of the Company as owners.
The 'Hirer ' is delivered possession of the vehicle and he remains responsible to the Company for damage or destruction or loss.
The 'Hirer ' has to pay interest at the rate of one per cent.
per mensem on all sums overdue.
Until the option of 647 purchase is exercised by the 'Hirer ', he is at liberty to return the vehicle and to put an end to tile Hiring Agreement, on certain terms.
Thus, under the agreement, the 'Hirer ' has the use of the vehicle, which is entrusted to him as the property of the Company, and it is open to the 'Hirer ' to become the purchaser of the vehicle as aforesaid, but he is not bound to do so.
The hire money received by the Company, it is contended, is not a part of the price of the goods sold and is thus not liable to be taxed as sale price.
The Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941) was extended to the State of Delhi, which is now the Union Territory of Delhi.
In pursuance of the provisions of that Act, the Sales Tax authorities started demanding and levying sales tax on all transactions of the nature aforesaid on the ground that the instalments paid by the hirers to the Company were sales price and, therefore, liable to Sales Tax.
The Company challenged the right of the Sales Tax authorities to levy any such tax on the ground that the law was beyond the competence of the legislature.
Ultimately, the Company moved the Punjab High Court (Circuit Bench at Delhi) under articles 226 and 227 of the Constitution.
In the Writ Petition, which was registered as Civil Writ Application No. 289 D of 1954, the Company prayed for a writ in the nature of prohibition and/or mandamus restraining the respondent from realising or levying any sales tax under the provisions of the Bengal Act, extended to Delhi.
There was also a prayer for a writ of certiorari quashing certain orders passed by the Sales Tax authorities in 1953 54.
The said application was heard by a, Division Bench, which allowed the petition and issued a mandamus to the State to forbear from enforcing its notice for the realisation of the Sales Tax.
It was held by the High Court that the State Legislature had not the power to enlarge the meaning of the words "Sale of Goods" by going beyond the meaning attached to it by the Sale of Goods Act.
After tile judgment aforesaid of the High Court of Punjab, it is further alleged, a settlement was arrived at between the companies carrying on hire purchase 648 business in Delhi and the Commissioner of Sales Tax, who issued a circular, being Circular No. 10 of 1956, containing the following decisions of the Department: "(i) Companies which are exclusively engaged in the hire purchase business will not be treated as dealers and their certificate of registration will be cancelled.
(ii) Companies which are partially engaged in the business of hire purchase will continue to be dealers as hitherto fore and their hire purchase transactions will be appropriately examined in the light of the judgment of the Punjab High Court, and will be liable to Sales Tax at one stage.
(iii) As a result of (i) above, sales made to the above Companies by the dealers in vehicles would be liable to Sales Tax at the hands of the latter.
(iv) In respect of vehicles, and machineries, etc., for which tax has been paid, at the time of purchases thereon from the market, no Sales Tax would be payable in respect of hire monies collected on them by the hire purchase companies or on their resale or rehire following repossession or on the exercise of the option of purchases by the hirer.
(v) In respect of second hand vehicles purchased by the companies from private individuals for purposes of hire purchase, the companies will not be liable to any sales tax either at the time of purchase or in respect of subsequent transaction thereon.
The Companies will be as other nonregistered dealers, in view of (i), their Registration Certificates in respect of Hire purchase business having been cancelled.
(vi) The assessment which are already made will not be reopened except in the case of M/s. Installment Supply Co. Ltd. for which there are specified orders of the High Court.
(vii) In their up to date assessment, the hire purchase Companies should take upon themselves the responsibility to pay tax which they have save by making tax free purchases either from dealers or from non registered dealers.
The assessment will, however, be made accordingly as before in the normal way.
" 649 Thereafter in the case of Mithan Lal vs State of Delhi (1) this Court examined the vires of the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi, and came to the, conclusion that the law had been validly promulgated.
According to that decision, the definition of 'sale ' could be legally extended so as to make it permissible to tax sale of goods involving the supply of materials in pursuance of building contracts.
As a result of the decision aforesaid of this Court, a press note was issued by the Commissioner of Sales Tax, Delhi, to the effect that provision regarding levy of tax on hire purchase transactions was valid and that all hire purchase dealers as come within the purview of sections 4 and 7 of the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi, are liable to pay sales tax and to get themselves registered under the Act; that all such hire purchase dealers as were formerly registered with the Sales Tax Department shall be deemed to be registered with effect from the first of April, 1958 for the purpose of the Act and that all hire purchase dealers who had not got themselves registered so far should immediately have themselves so registered in order to avoid being penalised for contravention of the provisions of the Act.
In pursuance of the aforesaid circular of the Department, the petitioner company was also called upon to comply with the requirements of the Act.
The Company made representation to the Commis sioner of Sales Tax that the Company and other such companies which deal in hire purchase were not liable to pay sales tax, but the Commissioner of Sales Tax refused to accept the Company 's contention and answered to the following effect: "1.
The incidence of Sales Tax on such transactions is to be governed by the provisions of Sections 3 and 4 of the .
If however, the vehicles are purchased by a Company having its place of business in Delhi from a dealer outside Delhi on payment of Sales Tax of that State and the vehicle is hire purchased to the party in that very State, neither Delhi Sales Tax (1) ; 650 nor Central Sales Tax will be leviable on the Delhi firm irrespective of the fact that the Hire purchase Agreement is entered into at Delhi.
If, however, vehicle is purchased in State 'A ' but is hire purchased to a party in State 'B ', Central Sales Tax will be leviable in the State according to the rules in force in that State.
The hire purchase transactions of secondhand vehicles, where the owner approaches the Hire Purchase Co. for finances against the vehicles, will be leviable to Sales Tax, because according to the Hire purchase Agreement the property in the vehicle vests in the Hire Purchase Co. and this property is to be transferred to the so called owner by virtue of the Hire purchase transactions.
Secondhand vehicles purchased outside Delhi and hire purchased to the parties outside Delhi or hire purchase transactions conducted outside Delhi in which owner approaches the Hire purchase Co. for finance will be governed by the clarification given in 1 above.
In the case of vehicles purchased by the Hire purchase Companies from the local registered dealers, they will not be required to pay any Sales Tax because all Hire purchase companies will be registered and will be entitled to make tax free purchases of such vehicles.
It is, therefore, regretted that it is not possible to accede to the request made in this behalf.
Sales Tax will be payable on total amounts charged by the Hire purchase Co. from the hirer and it is not possible to waive Sales Tax on the so called incidental charges.
It is regretted that it is not possible to alter the date of liability of the Hire purchase Co. which has already been fixed with effect from 1st of April, 1958, in pursuance of the Supreme Court Judgment.
It is true that the Press Note was issued in the month of June and so Hire purchase Companies have been making purchases of vehicles on payment of sales tax.
The Hire purchase companies are advised to approach the dealers for 651 refund of the Sales Tax paid by them on such purchases.
If, however, it is not possible for any Hire Purchase Co. to obtain refund of the Sales Tax so paid by them, the amounts so paid may be adjusted towards their liability on the hire purchase transactions.
" On receipt of the answer of the Department, as set out in the previous paragraphs, the petitioners moved this Court under article 32 of the Constitution on the ground that the "threatened action of the respondents is illegal and unconstitutional as the petitioner company is not liable to pay sales tax on the transactions" described above.
In support of the petition, the learned counsel for the petitioners has raised the following contentions: (1) that the transactions in respect of which the petitioners are sought to be taxed are not covered by the explanation to section 2(g) of the Bengal Finance (Sales Tax) Act, as extended to Delhi; (2) alternatively, that is to say, if it is held that the explanation covers the transactions of the nature aforesaid, then the explanation, extending the concept of 'sale ' is unconstitutional; (3) That in any case it is unconstitutional as it infringes article 14 of the Constitution in so far as the State of Delhi has been selected for hostile discrimination; (4) that the judgment of the Punjab High Court in Installment Supply Ltd., New Delhi vs State of Delhi (1) is final and conclusive as between the parties to that judgment; (5) that if it is held that the judgment of the Punjab High Court, referred to above, has been superseded by the judgment of this Court in Mithan Lal 's case (2), that judgment cannot be given retrospective operation; and (6) lastly, that the settlement between the Department and the Companies transacting business in "Hire purchase" is binding until the decision of this Court in Mithan Lal 's case (3), aforesaid.
We shall examine these arguments in the order in which they have been stated.
The most important question in this case is: What (1) A.I.R. 1956 Puaj.
(2) [1959] S.C.R 445.
652 is the true nature and character of the transaction which is the subject matter of the present controversy? Do the terms and conditions of the agreement typified by Annexure 'A ' to the petition, as described above, constitute a mere agreement of hiring, as contended on behalf of the petitioners, or do they constitute a contract of hire purchase, within the meaning of explanation (1) to the definition of 'sale ' contained in the statute in question, as contended on behalf of the respondents? There is no doubt that the concept of 'sale ', as it appears from the following words of the definition, along with explanation (1), is rather extended.
In the definition of the term 'sale ' for the purposes of the Act, the words are as follows: " 'Sale ' means any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge.
Explanation I. A transfer of goods on hire purchase or other instalment system of payment shall, notwithstanding that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale.
" It is clear from the definition that it includes not only what may be compendiously described as a sale under the Sale of Goods Act, but also transactions, which, strictly speaking, are not sales, not even 'contracts of sale ' but only contain an element of sale, that is the option to purchase, and that is the reason why the explanation ends with the words "be deemed to be a sale", thereby indicating that a legal fiction has been introduced into the concept of sale ' as ordinarily understood.
The explanation has included within its amplitude a mere transfer of goods without the transfer of title to the goods, if it is in the course of an agreement of the nature of "hire purchase", or other instalment system of payment.
A contract of hiring, under the Common Law, is one of the species of a contract of bailment and has, during the last 60 70 653 years, undergone a series of refinements as a result of modern industrial and commercial developments.
The term 'hire purchase ' has not been defined in the Act.
We have, therefore, to construe the expression in its ordinary Common Law sense, which may best be expressed in terms of the Dictionary of English Law by Earl Jowitt at pages 913 914, which runs as follows: "Hire purchase a system whereby the owner of goods lets them on hire for periodic payments by the hirer upon an agreement that when a certain number of payments have been completed, the absolute property in the goods will pass to the hirer, but so that the hirer may return the goods at any time without any obligation to pay any balance of rent accruing after return; until the conditions have been fulfilled, the property remains in the owner.
The instrument by which the hire purchase is effected does not ordinarily require registration as a bill of sale (Exp.
Crawcour ; the hirer is 'reputed owner ' within the Bankruptcy Act, 1914 (Exp.
Brooks ; but the hirer does not 'agree to buy ' within the Factors Act or the Sale of Goods Act, 1893, so as to be able to sell or pledge the goods as if he were a mercantile agent (Helby vs Matthews ; Brooks vs Bernstein (1909) 1 K.B. 98).
Such agreements are to be distinguished from agreements such as in Lee vs Butler , which are in fact a sale, the price being paid in instalments with the condition that the property passes when all the instalments have been paid; here there is a binding agreement for the party to purchase, where in a true hire purchase agreement there is not.
" In Halsbury 's Laws of England, Third Edition, Volume 19, paragraph 823, at pages 510 511, the nature of a hire purchase transaction is thus expressed: "The contract of hire purchase is one of the variations of the contract of bailment, but it is a modern development of commercial life, and the rules with regard to bailments, which were laid down before 83 654 any contract of hire purchase was contemplated, cannot be applied simpliciter, because such a contract has in it not only the element of bailment but also the element of sale.
At common law the term 'hire purchase ' properly applies only to contracts of hire conferring an option to purchase, but it is often used to describe contracts which are in reality agreements to purchase chattels by instalments, subject to a condition that the property in them is not to pass until all instalments have been paid.
The distinction between these two types of hire purchase contracts is, however, a most important one, because under the latter type of contract there is a binding obligation on the hirer to buy and the hirer can therefore pass a good title to a purchaser or pledge dealing with him in good faith and without notice of the rights of the true owner, whereas in the case of a contract which merely confers an option to purchase there is no binding obligation on the hirer to buy, and a purchaser or pledge can obtain no better title than the hirer had, except in the case of a sale in market overt, the contract not being an agreement to buy within the Factors Act, 1889, or the Sale of Goods Act, 1893." The observations quoted above are based mostly on two leading cases which have come to be regarded as the locus classics upon the subject, namely, Lee vs Butler (1) in which the transaction was described by Lord Esher, M.R., as "Hire and Purchase Agreements" and Helby vs Matthews (2) in which the House of Lords distinguished the former case on the ground that in that case there was a binding contract to buy and not merely an option to buy, without any obligation to buy.
Both these cases were decided in terms of Factors Act of 1889 (52 & 53 Vict. c. 45, section 9).
Both the kinds of agreements exemplified by the two leading cases aforesaid would now be included in the definition of 'hire purchase ' as contained in section 21 of the Hire Purchase Act, 1938 (1 & 2 Geo., 6, c. 53): " 'Hire purchase agreement ' means an agreement for the bailment of goods under which the bailer (1) (2) 655 may buy the goods or under which the property in the goods will or may pass to the bailee, and where by virtue of two or more agreements, none of which ' by itself constitutes a hire purchase agreement, there is a bailment of goods and either the bailee may buy the goods, or the property therein will or may pass to the bailee, the agreements shall be treated for the purposes of this Act as a single agreement made at the time when the last of the agreements was made.
" It is clear that under the Law, as it now stands, which has now been crystallised into the section of the Hire Purchase Act, quoted above, the transaction partakes of the nature of a contract or bailment with an element of sale, as aforesaid, added to it.
In such an agreement, the hirer may not be bound to purchase the thing hired; he may or may not be.
But in either case, if there is an obligation to buy, or an option to buy, the goods delivered to the hirer by the owner on the terms that the hirer, on payment of a premium as also of a number of instalments, shall enjoy the use of the goods, which ultimately may become his property, the transaction amounts to one of hire purchase, even though the title to the goods has remained with the owner and shall not pass to the hirer until a certain event has happened, namely, that all the stipulated instalments have been paid, or that the hirer has exercised his option to finalise the purchase on payment of a sum, nominal or otherwise.
But it has been contended on behalf of the petitioners that there is no binding agreement to purchase the goods and that title is retained by the owner not as a security for payment of the price but absolutely.
According to third term of the agreement, on the hirer duly performing and observing the terms of the agreement, with particular reference to the payment of the monthly instalments, "the hiring shall come to an end and the vehicle shall, at the option of the hirer, become his absolute property; but until such payments as aforesaid have been made, the vehicle shall remain the property of the owners.
The hirer shall also have the option of purchasing the vehicle at any 656 time during the currency of this Agreement, by paying in one lump sum the balance of all the hire hereinbefore mentioned and any other expenses incurred by the owners relating to the transaction.
" It is clear, therefore, that in addition to the contract of hiring an option has been given to the hirer to purchase or not to purchase.
The more serious question on this part of the petitioners ' contention is whether the non obstante clause in the explanation "notwithstanding that the seller retains a title to any goods as security for payment of the price" governs the main clause of the explanation.
In our opinion, it does not.
The non obstante clause has been added only to emphasise the categorical statement of the law contained in the main clause to the effect that a transfer of goods on hire purchase, etc., shall be deemed to be a sale ' even though there may be a stipulation to the effect that in spite of the transfer of goods to the hirer, the owner retains title to those goods until the happening of the ultimate event, namely, completion of title at the option of the hirer.
There is, thus, no doubt that the agreement in question does contain not only a contract of bailment simpliciter but also an element of sale, which element has been seized upon by the legislature for the purpose of subjecting a transaction like that to the Sales Tax.
This leads us to the second ground of attack raised by the petitioners, namely, that the explanation, if it has the effect of extending the concept of 'sale ' to what, in law, is not a real sale, but only an incipient or inchoate sale, then in so far as the law has extended the definition of sale ' it is unconstitutional.
This contention has lost all its force, if ever it had any, in view of the decision of this Court in Mithan Lal 's case (1).
But then it is argued that Mithan Lal 's case (1) requires reconsideration and that, in any view of the matter, this Court did not consider the further attack based on article 14 of the Constitution.
It is true that in Mithan Lal 's case (1) the contention that the enactment in question had infringed article 14 of the (1) ; 657 Constitution had not been raised.
This Court, therefore, had no occasion to pronounce on that aspect of the controversy We have, therefore, to consider the contention under head (3), namely, that though the Parliament may have had the power to tax something which was not strictly speaking a 'sale ', the law is open to the attack that it discriminates against traders in Delhi inasmuch as, it is further contended, such a law has not been made applicable to the whole of India.
In our opinion, there is no substance in this contention because no proper foundation was laid in the pleadings for supporting such a contention.
It has not been averred that other Part II States have not been similarly treated.
On the other hand, it does appear that under the (LXXIV of 1956), the definition of 'Sale ' contains the extended definition, without the non obstante clause, discussed above.
Section 2(g) of the , has the following definition: " 'Sale ' with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on the hire purchase or other system of payment by instalments, but does not include a mortgage or hypothecation of or a charge or pledge on goods.
" It would, thus appear 'that hire purchase transactions have been included within the definition of sale ' for the purpose of Central Sales Tax, and this definition has become applicable throughout India, and it cannot, therefore, be said that the State of Delhi, and now the Union Territory of Delhi, has been selected for hostile discrimination.
In our opinion, therefore, there is no substance in the contention that the extended definition of ',sale ' in the main statute infringes article 14 of the Constitution.
Now, the remaining contentions raised on behalf of the petitioners may be disposed of by observing that what the Sales Tax Department does, or does not do, cannot change the law.
The Department issued its 658 instructions to the Sales Tax Officers, in conformity with the law as laid down in the judgment of the Punjab High Court in Instalment Supply Ltd., New Delhi vs State of Delhi (1).
This Court later laid down the law more authoritatively in Mithan Lal 's s case (2) and the Department was bound to take notice of what this Court had laid down.
It cannot, therefore, be argued that the Department had, in any sense estopped itself by issuing those instructions, or that this Court, by laying down the law in Mithan Lal 's case (2) had laid down a new rule of law which has no application to pending proceedings for levy, assessment and realisation of sales tax, either in Delhi or elsewhere.
There is another answer to the point of res judicata raised on behalf of the petitioners, relying upon the decision of the Punjab High Court in Instalment Supply Ltd., New Delhi vs State of Delhi (1).
It is well settled that in matters of taxation there is no question of res judicata because each year 's assessment is final only for that year and does not govern later years, because it determines only the tax for a particular period.
(See the decision in the House of Lords in Society of Medical Officers of Health vs Hope (Valuation Officer) (3) approving and following the decision of the Privy Council in Broken Hill Proprietary Company Limited vs Municipal Council of Broken Hill (4).
As all the contentions raised on behalf of the petitioners fail, this petition is dismissed with costs.
Petition dismissed.
(1) A I.R. 1956 Punj I77.

summary:
Section 2(g) of the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi State, provided as follows, " 'Sale ' means any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge.
Explanation I. A transfer of goods on hire purchase or other instalment system of payment shall, notwithstanding that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale.
" The hire purchase agreement entered into by the petitioner company provided that after all the monthly instalments had been paid, "the hiring shall come to an end and the vehicle shall, at the option of the hirer, become his absolute property; but until such payments as aforesaid have been made, the vehicle shall remain the property of the owners.
The hirer shall also have the option of purchasing the vehicle at any time during the currency of this agreement by paying in one lump sum the balance of all the hire hereinbefore mentioned and any other expenses incurred by the owners relating to the transaction.
" The question for determination was whether the agreement was a transaction of mere hiring or one of hire purchase within the meaning of Explanation 1 to section 2(g) of the Act.
645 Held, that the language of Explanation 1 to section 2(g) of the Act was wide enough to include a mere transfer of goods without the transfer of the title thereto, if such transfer took place in the course of an agreement of hire purchase or any other instalment system of payment.
As the Act did not define the term 'hire purchase ', it had to be construed in its ordinary Common Law sense, i.e., that it partook of the nature of a contract of bailment with an element of sale added to it.
Lee vs Butler, [1893] z Q. B. 318 and Helby vs Matthews, , referred to.
The non obstacle clause in Explanation 1 to section 2(g) of the Act did not govern the main clause of the said Explanation and its sole purpose was to emphasise the categorical statement of the law Contained therein.
Since the agreement in the instant case contained not merely a contract of bailment simpliciter but also an element of sale, the transaction had rightly been subjected to sales tax.
There could be no force in the contention that the Act in so far as it sought to extend the concept of sale to what in law was not a real sale, was unconstitutional.
Mithan Lal vs State of Delhi, ; , referred to.
Nor was there any substance in the contention that the extended definition of the word 'sale ' in the Act infringed article 14 of the Constitution.
It is well settled that in matters of taxation there can be no question of res judicata.
Society of Medical Officers of Health vs Hope (Valuation Officer), and Broken Hill Proprietary Company Ltd. vs Municipal Council of Broken Hill, [1925] A. C. 94, referred to.
Installment Supply Ltd., New Delhi vs State of Delhi, A.I.R. 1956 Punj.
177, considered.


judgement:
minal Appeal No. 220 of 1960.
Appeal from the judgment, and order dated August 4, 1960, of the Punjab "High Court, in Criminal Revision No. 31 D of 1960.
C. K. Daphtary, Solicitor General of India, R. H. Dhebar and D. Gupta, for the appellant.
The respondent did not appear.
May 3.
The Judgment of K. Subba Rao and Raghubar Dayal, JJ., was delivered by Raghubar Dayal, J. J. R. Mudholkar, J., delivered a separate judgment.
RAGHUBAR DAYAL, J.
The only point for consideration in this appeal, by certificate granted by the High Court of Judicature at Punjab, is whether a police officer, who is neither a special police officer under the Suppression of Immoral Traffic in Women and Girls Act, 1956 (Act CIV of 1956), hereinafter called the Act, nor a police officer subordinate to a special police officer, can validly investigate the offences under the Act.
Ram Singh, respondent, was suspected of having committed an offence under section 8 of the Act.
Jet Ram, Sub Inspector, who had not been appointed a special police officer by the State Government, investigated the case and submitted the charge sheet to the Magistrate.
The Magistrate quashed the charge sheet, holding that the special police officer alone was competent 696 to investigate the case and that Jet Ram could not have investigated it.
On revision by the State, the High Court agreed with the view of the Magistrate and dismissed the revision.
The High Court, however, granted a certificate under article 133(1)(c) of the Constitution and hence this appeal by the Delhi Administration.
The learned Solicitor General, appearing for the Delhi Administration, has submitted that in the absence of any definite provision in the Act de barring the police to exercise its powers with respect to cognizable offences, the regular police can exercise those powers and that, consequently there is nothing wrong in the Sub Inspector of the regular police making an investigation in a case under the Act.
He also submits that the special police officer is not competent to investigate offences, his powers being confined to what may come within the expression 'dealing with offences under the Act ', and which expression, accord ing to him, does not cover the power to investigate into offences.
It is urged for the respondent that it is only the special police officer who is competent to investigate the offences under the Act.
Before dealing with the merits of the question for determination, we may set out the object of the enactment and the relevant provisions thereof.
The Act was enacted in pursuance of the International Convention signed at New York on the 9th day of May, 1950, for the suppression of immoral traffic in women and girls.
Section 2 deals with definitions and, according to its clause (1), special police officer ' means a police officer appointed by or on behalf of the State Government to be in charge of police duties within a specified area for the purposes of the Act.
Sections 3 to 9 create new offences and provide punishment for them.
It is not necessary to detail the nature of the offences.
Section 10 deals with release of convicted persons convicted for certain offences, on probation of good conduct, in the manner provided in sub section
(1) of section 562 of the Code of Criminal Procedure, hereinafter called 697 the Code, or with admonition as provided in sub section
(1A) of section 562 of the Code.
Certain provisions of sections 562, 563 and 564 apply to such cases.
The provisions of section 11 of the Act correspond to those of section 565 of the Code.
Section 12 provides for taking security for good behaviour from habitual offenders at the time of passing sentence on them and thus correspond, in a way to the provisions of section 106 of the Code.
The provisions of sections 112 to 126 of the Code apply to such a case.
Sections 13, 14, 15 and 16 of the Act are as follows: "13.
(1) There shall be for each area to be specified by the State Government in this behalf, a special police officer appointed by or on behalf of that Government for dealing with offences under this Act in that area.
(2) The special police officer shall not be below the rank of (a) an Assistant Commissioner of Police in the presidency towns of Madras and Calcutta; (b) a Superintendent of Police in the presidency town of Bombay; and (c) a Deputy Superintendent of Police else where.
(3) For the efficient discharge of his functions in relation to offences under this Act (a) the special police officer of an area shall be assisted by such number of subordinate police officers (including women police officers wherever practicable) as the State Government may think fit; and (b) the State Government may associate with the special police officer a non official advisory body consisting of not more than five leading social welfare workers of that area (including women social welfare workers wherever practicable) to advise him on questions of general importance regarding the working of this Act.
Notwithstanding anything contained in the Code of Criminal Procedure ' 1898 (5 of 1898) any offence punishable under this Act shall be deemed to 698 be a cognizable offence within the meaning of that Code: Provided that, notwithstanding anything contained in that Code, (i) arrest without warrant may be made only by the special police officer or under his direction or guidance, or subject to his prior approval; (ii) when the special police officer requires any officer subordinate to him to arrest without warrant otherwise than in his presence any person for an offence under this Act, he shall give that subordinate officer an order in writing, specifying the person to be arrested and the offence for which the arrest is being made; and the latter officer before arresting the person shall inform him of the substance of the order and, on being required by such person, show him the order; (iii) any police officer not below the rank of inspector specially authorized by the special police officer may, if he has reason to believe that on account of delay involved in obtaining the order of the special police officer, any valuable evidence relating to any offence under this Act is likely to be destroyed or concealed, or the person who has committed or is suspected to have committed the offence is likely to escape, or if the name and address of such a person is unknown or there is reason to suspect that a false name or address has been given, arrest the person concerned without such order, but in such a case be shall report, as soon as may be, to the special police officer the arrest and the circumstances in which the arrest was made.
(1) Notwithstanding anything contained in any other law for the time being in force, whenever the special police officer has reasonable grounds for believing that an offence punishable under this Act has been or is being committed in respect of a woman or girl living in any premises, and that search of the premises with warrant cannot be made without undue delay, such officer may, after recording the grounds of his belief, enter and search such premises without a warrant.
(2) Before making a search under sub section (1), 699 the special police officer shall call upon two or more respectable inhabitants (at least one of whom shall be a woman) of the locality in which the place to be searched is situate, to attend and witness the search, and may issue any order in writing to them or any of them so to do.
(3) Any person who, without reasonable cause, refuses or neglects to attend and witness a search under this section, when called upon to do so by an order in writing delivered or tendered to him, shall be deemed to have committed an offence under section 187 of the Indian Penal Code (45 of 1860).
(4) The special police officer entering any premises under sub section (1) shall be entitled to remove therefrom any girl, if in his opinion she is under the age of twenty one years and is carrying on or is being made to carry on, or attempts are being made to make her carry on, prostitution.
(5) The special police officer, after removing the girl under sub section (4) shall forthwith produce her before the appropriate magistrate.
(6) The special police officer and other persons taking part in, or attending, and witnessing a search shall not be liable to any civil or criminal proceedings against them in respect of anything lawfully done in connection with, or for the purpose of, the search.
(1) Where a magistrate has reason to believe from information received from the police or other.
wise, that a girl apparently under the age of twenty.
one years, is living, or is carrying on, or is being made to carry on prostitution, in a brothel, he may direct the special police officer to enter such brothel, and to remove therefrom such girl and produce her before him.
(2) The special police officer after removing the girl shall forthwith produce her before the Magistrate issuing the order.
" Section 17 provides for intermediate custody of girls removed under section 15 or rescued under section 16.
Sections 18 to 21 provide for matters unconnected with offences.
700 Section 22 provides that no Court inferior to that of a Magistrate as defined in cl.
(c) of section 2 shall try the offences mentioned in the section.
The Magistrates mentioned in this clause are District Magistrates, Sub Divisional Magistrates, Presidency Magistrates or a Magistrate of the First Class specially empowered by the State Government by notification in the official gazette to exercise jurisdiction under the Act.
It is clear from the various provisions that the Act is a complete Code with respect to what is to be done under it.
It deals with the suppression of immoral traffic in women and girls, a matter which has to be tackled with consideration, intelligence and understanding of the problem.
This is evident from the provisions of cl.
(b) of sub section
(3) of section 13 which provides for the association of a non official advisory body consisting of not more than five leading social welfare workers of that area (including women social welfare workers wherever practicable) with the special police officer in order to advise him on questions of general importance regarding the working of the Act.
The Act creates new offences, provides for the forum before which they would be tried and the orders to be passed on conviction of the offenders.
Necessary provisions of the Code of Criminal Procedure have been adopted fully or with modifications.
The Act provides machinery to deal with the offences created and its necessary implication must be that new machinery is.
to deal with those offences in accordance with the provisions of the special Act and, when there is no specific provision in such Act, in accordance with the general procedure and that no other machinery is to deal with those offences.
It does not appear reasonable that the investigation of offences would have been left unprovided and was to be done by the regular police, in accordance with the regular procedure laid down under the Code.
On the other hand, there are certain provisions which are such that the regular police cannot comply with them and thus they point to the conclusion that it is the special police officer alone who is to take any 701 action which the police has to take in connection with the offences under the Act.
Section 14 makes offences under the Act cognizable, which, according to the Code means that persons accused of those offences can be arrested without a warrant, and section 157 of the Code specially mentions that the investigating officer, if necessary, is to take measures for the discovery and the arrest of the offender; and yet, the power to arrest without a warrant is not given to the regular police, but under the proviso to this section, is to be exercised by the special police officer or under his direction or guidance or subject to his prior approval.
The provisions of proviso (iii) correspond to the provision of section 57 of the Code and others refer to special circumstances in which a police officer not below the rank of an inspector specially authorised by the special police officer can arrest without warrant.
Section 15 provides for searches without warrant, by the special police officer.
This section does not specifically state that the special police officer alone will,search without warrant, but it is clear from the provisions of this section that officers of the regular police force will not search without warrant and thus will not exercise the power given under section 165 of the Code.
All the provisions of section 15 correspond to those of section 165 of the Code.
Further, in view of sub section
(2) of section 15, the special police officer is required to include at least one woman among the search witnesses.
There is no such restriction in section 103 of the Code.
If a regular police officer is to conduct search in pursuance of the powers conferred under section 165 of the Code, he is not bound to include a woman among the search witnesses.
Further, sub sections
(4) and (5) of section 15 authorise a special police officer to remove any girl found in the promises searched, if she be under twenty one years of age and is carrying on prostitution.
Such a girl is to be pro duced before the appropriate Magistrate.
The ordinary regular police officer conducting search under section 165 of the Code, will not be able to do anything with respect to such a girl found in the premises 89 702 searched by him.
These provisions clearly indicate that the regular police officers are not to exercise any powers in connection with the offences and the other purposes of this Act.
The entire police duties in connection with the purposes of the Act within a certain area have been put in the charge of a special police officer.
There must be a definite purpose behind the provision of appointing a police officer in charge of the police duties within a specified area for the purpose of this Act.
If the ordinary police can also perform the police duties for the purposes of the Act, there can be no special reason for making the provision for the appointment of a special police officer.
The expression 'police duties ' will include all the functions of the police in connection with the purpose of the Act and in the special context of the Act they will include the detection, pre vention and investigation of offences and the other duties which have been specially imposed on them under the Act.
According to section 13 of the Act, 'there shall be, for each area to be specified by the State Government, a special police officer appointed by or on behalf of that Government for dealing with offences under the Act in that area '.
The expression 'dealing with offences ' is of wide import and will include any act which the police has to do in connection with the offences under the Act.
In this connection, we have been referred to the provisions of section 5 of the Criminal Procedure Code, which reads: "All offences under the Indian Penal Code shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained.
(2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences.
" It is submitted that the expression 'dealt with ' must 703 mean something which is not included in investigation, inquiry or trial.
This does not necessarily follow from the provisions of this section.
The word ,otherwise ' points to the fact that the expression 'dealt with ' is all comprehensive, and that investigation, inquiry and trial were some aspects of 'dealing with ' the offences.
Further, according to sub section
(3) of section 13, the special police officer is to be assisted, for the efficient discharge of his functions in relation to offences under this Act, by a number of subordinate police officers and will be advised by a non official advisory body.
The expression 'functions in relation to offences ' do include his functions connected with the investigation of the offences.
There is no reason to exclude such functions from the functions contemplated by sub section
The suggestion that the special police officer would be very heavily worked in case he had to perform all the ordinary duties of the police connected with the investigation of offences in addition to the duties conferred on him under the Act, does not go far in putting a different interpretation on the powers of the special police officer.
He is to be assisted by his sub.
ordinate police officers.
They can investigate both under the implication of the provisions of section 13, as they are to assist the special police officer, and also on deputations by the special police officer, in view of section 157 of the Code.
Section 5A of the Prevention of Corruption Act, 1947 (Act 11 of 1947) provides that notwithstanding anything contained in the Code of Criminal Procedure, no police officer below the rank of officers mentioned in clauses (a), (b) and (c) shall investigate any of the offences mentioned in that Section.
The provision was made in a prohibitive form because the police officers below the ranks mentioned were not to exercise their power of investigation unless a Magistrate specially ordered them to investigate.
The provision was not with respect to conferring any special powers on any particular officer.
It was just to restrict the powers of certain officers with respect to investigating certain offences in certain circumstances.
704 The difference in the language of section 5A of the Prevention of Corruption Act from that of section 13 of the Act, is therefore of no help to the contention for the State.
If the power of the special police officer to deal with the offences under the Act, and therefore to investigate into the offences, be not held exclusive, there can be then two investigations carried on by two different agencies, one by the special police officer and the other by the ordinary police.
It is easy to imagine the difficulties which such duplication of proceedings can lead to.
There is nothing in the Act to co ordinate the activities of the regular police with respect to cognizable offences under the Act and those of the special police officer.
The special police officer is a police officer and is always of the rank higher than a Sub Inspector and therefore, in view of section 551 of the Code, can exercise the same powers throughout the local area to which he is appointed as may be exercised by the officer in charge of a police station within the limits of his station.
We are therefore of opinion that the special police officer is competent to investigate and that he and his assistant police officers are the only persons competent to investigate offences under the Act and that police officers not specially appointed as special police officers cannot investigate the offences under the Act even though they are cognizable offences.
The result is that this appeal by the Delhi Administration fails and is hereby dismissed.
MUDHOLKAR, J.
The point which arises for consideration in this appeal is whether a charge sheet presented by a station house officer alleging against the respondent certain offences under the Suppression of Immoral Traffic in Women and Girls Act, 1956 (Act No. CIV of 1956) (hereinafter called the Act) is bad because the investigation into those offences was carried out not by a special police officer appointed under the Act but by the station house officer.
The respondent is alleged to be a pimp and said to 705 have committed offences under section 8 of the Act.
Inves tigation into the offences was made by the officer incharge of the Kamla Market Police Station and a charge sheet was presented by him before a First Class Magistrate in Delhi.
Similar charge sheets were put up against certain other persons.
An objection was taken before the Magistrate in all these cases that the charge sheets were bad because the investigation into the various offences was not made by the special police officer referred to in the Act.
This objection was upheld by the Magistrate and the charge sheets were rejected.
An application for revision was preferred by the Delhi Administration before the High Court of Punjab.
But that application was also rejected.
Thereupon the Administration sought a certificate from the High Court under article 134(1)(c) of the Constitution which the High Court granted.
That is how the present appeal came to be preferred before this Court.
The High Court, following the decision in Kuppammal, In re (1) held that an offence under the Act must be investigated only by one of the officers mentioned in section 13 and that a charge sheet based upon the investigation made by any other police officer is bad and must be quashed.
In my opinion the view taken by the Madras High Court and accepted by the Punjab High Court is untenable.
The Act creates certain new offences, prescribes the placing of certain restrictions upon persons found guilty of those offences, provides for the appointment of a special police officer and for the constitution of an Advisory Board, confers certain special powers upon the special police officer, em.
powers Magistrates to order the closure of brothels and eviction of the offenders from the premises occupied by them as well as for the removal of prostitutes from any place and also makes a provision for the establishment of protective homes as well as em.
powers Magistrates to order detention of women and girls in such protective homes in certain circumstances.
In addition it provides for the making of rules.
(1) I.L.R. 706 According to my brother Raghubar Dayal, J., since the Act creates new offences and prescribes the procedure for dealing with them it is a complete code in itself Therefore, according to him, to that extent the provisions of the Act must prevail over those of the Code of Criminal Procedure, 1898.
Further according to him, since the Act provides for the appointment of a special police officer for dealing with offences under this Act in the area within his jurisdiction, it is he and he alone who can investigate into an offence under the Act committed within that area.
It would be convenient to refer to the provisions of section 5 of the Code of Criminal Procedure which runs thus: "(1) All offences under the Indian Penal Code shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained.
(2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offen ces.
" Sub section (2) would prima facie apply to cases arising under the Suppression of Immoral Traffic in Women and Girls Act except to the extent that its provisions are abrogated or superseded by the aforesaid Act.
While sub section
(1) provides that only an offence under the Penal Code must be investigated in accordance with the provisions of the Code of Criminal Procedure, sub section
(2) provides that offences under any other law shall be investigated, inquired into, tried and otherwise dealt with according to the provisions of the Code subject to any enactment for the time being in force "regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences.
" What has to be ascertained, therefore, is whether in the Act in question there are any provisions which regulate the manner of carrying out an investigation of offences thereunder because 707 here we are concerned only with the limited question of the power of a station house officer to investigate into an offence under the Act.
A bare perusal of the Act would show that there is no provision therein which confers upon the special police officer appointed thereunder the power to investigate into an offence made punishable by the Act.
Such power is, however, sought to be deduced from the provisions of sub section
(1) of section 13 which reads thus: "There shall be for each area to be specified by the State Government in this behalf a special police officer appointed by or on behalf of that Government for dealing with offences under this Act in that area.
" It is said that the words underlined are wide enough to include the power to investigate into offences.
These are general words and are undoubtedly of wide import.
But they must be construed in the light of the other provisions of the Act.
The Act confers certain specific powers and imposes certain specified duties on a special police officer.
It is to these matters that the words "dealing with offences" must be confined.
If it were the intention of the legislature to confer upon a special police officer the sole power to investigate into an offence under the Act it would have enacted a provision similar to section 5A in the Prevention of Corruption Act, 1947 (2 of 1947).
This Act was before the Parliament when it enacted the Act in question and it would be reasonable to presume that if Parliament intended to confer similar power upon a special police officer appointed under this Act it would have used the same language for expressing its will as it did in section 5A of the Prevention of Corruption Act.
Offences under the Act have been made cognizable by section 14 thereof.
Therefore, prima facie section 156(1) of the Code of Criminal Procedure would apply and an officer in charge of a police station would have the power to investigate into such an offence.
No doubt, by virtue of the provisions of sub section
(2) of section 5 of the Code of Criminal Procedure, the provisions of section 156, Criminal Procedure Code would be subject to those provisions of the Act which bear on the question of 708 investigation into offences.
Had Parliament desired that the provisions of section 156 of the Code of Criminal Procedure should not apply to offences under the Act it would, in view of the provisions of sub section
(2) of section 5 of the Code of Criminal Procedure, have been careful enough to make express provisions in the Act regulating the manner of investigation of offences thereunder and specifying the officer entitled to make the investigation so as to exclude a police officer entitled under the Code of Criminal Procedure to investigate into offences.
In my judgment it would not have left the matter to mere conjecture and rested content by using the expression "dealing with offences under this Act", which on its face is inadequate for excluding the operation of section 166, Code of Criminal Procedure.
Investigation, inquiry and trial of offences are definite stages in the process of bringing a delinquent to book.
Each stage is distinct from the other and the legislature has made it quite clear in section 5 of the Code of Criminal Procedure itself that they are important enough to be mentioned specifically.
To make the point clearer it would be useful to compare the provisions of sub section
(1) of section 13 of the Act with those of sub sections
(1) and (2) of section 5 of the Code of Criminal Procedure.
While in the former, Parliament has merely used the words "dealing with offences under the Act" in the latter the words used are "investigating, in quiring into, trying or otherwise dealing with such offences." No doubt the expression "dealing with offences" would, according to its ordinary connotation, include the stages of investigation, inquiry and trial.
But the legislature has specifically referred to the aforesaid three stages because of their importance and apparently for obviating any doubt as to its intention.
When Parliament had before it the Code of Criminal Procedure and in particular the provisions of section 5 and section 156 thereof it would have used in sub section
(1) of section 13 of the Act language similar to that used by it in sub& (2) of section 5, Criminal Procedure Code if it were its intention to include in sub section
(1) of section 13 matters like investigation, inquiry and trial or any of 709 them.
It would, therefore, be legitimate to infer that when Parliament spoke in section 13(1) of a special police officer being empowered to deal with offences under the Act it did not intend to confer upon him the power to investigate into an offence under the Act.
It was pointed out to us that a special police officer shall not be below the rank of an Assistant Commissioner of Police in the towns of Madras and Calcutta and a Superintendent of Police in.
the Presidency Town of Bombay and a Deputy Superintendent of Police elsewhere and, therefore, such police officer would have the power to investigate into an offence.
That, however, would be not by force of the provisions of sub section
(1) of section 13 of the Act but by that of the provisions of section 551 of the Code of Criminal Procedure, which runs thus: "Police officers superior in rank to an officer incharge of a police station may exercise the same powers, throughout the local area to which they are appointed, as may be exercised by such officer within the limits of his station.
" I would like to make it clear that it is not my view that a special police officer appointed under the Act cannot have the power to investigate into an offence under the Act but what I hold is that he does not derive such power from sub section (1) of section 13 of the Act.
It is only under section 551 of the Code of Criminal Procedure that he may be able to exercise the power to investigate into an offence under the Act.
It was said by reference to the definition of special police officer in section 2(1) of the Act that since such an officer is to be in charge of "police duties" within a specified area he would have the power to investigate into an offence.
The expression "police duties" is not defined anywhere in the Act.
But we were referred to section 23 of the Police Act in this connection.
The relevant part of that section runs thus: "It shall be the duty of every police officer promptly to obey and execute all orders and warrants lawfully issued to him by any competent authority; to collect and communicate intelligence affecting the 90 710 public peace; to prevent the commission of offences and public nuisances; to detect and bring offenders to justice. . " The suggestion is that the words "to detect and bring offenders to justice" are comprehensive enough to include the power to investigate.
It is sufficient to say that the duties enjoined upon police officers by section 23 are something quite apart from those which are enjoined upon them by the Code of Criminal Procedure.
The investigation into an offence is a matter of some importance.
Statements recorded therein have considerable value and can be used for contra.
dieting witnesses questioned during investigation.
It is for this reason that detailed provisions have been incorporated in the Code of Criminal Procedure dealing with this subject.
It is only when an investigation is completed that a police officer is empowered to present a charge sheet.
Neither the Police Act nor the Suppression of Immoral Traffic in Women and Girls Act contains any provision whatsoever with regard to the making of an investigation or presentation of a charge sheet.
It would, therefore, not be appropriate to read in the words "deal with offences" the power to investigate into them and present a charge sheet.
The High Court of Punjab as well as the High Court of Madras have held not only that section 13(1) of the Act confers power upon special police officer to investigate into an offence under the Act but that the power conferred is exclusive.
I am unable to appreciate how even assuming that the words "deal with offences" confer upon a special police officer the power to investigate into an offence under the Act and present a charge sheet, the powers of an officer in charge of a station house within whose jurisdiction an offence under the Act has been committed are excluded.
There is not a whisper in section 13(1) of the Act of the exclusion of the powers of an officer in charge of a police station.
It is suggested that unless it is so held a confusion will result because the special police officer as well as the officer in charge of a police station will 711 each exercise his power to investigate into an offence under the Act.
I do not think that there would be a danger of such simultaneous exercise of the power to investigate by two officers.
The offence will have to be registered at the police station within the limits of the jurisdiction of which the offence has taken place.
Thereafter it would be investigated into by the officer at whose instance it was registered.
If that officer happens to be a station house officer the special police officer may take out the investigation from his hands or allow him to continue it.
If the offence is registered at the instance of the special police officer, the station house officer would be bound to know of it from the station house records and would stay his hands.
Upon this view, therefore, I would allow the appeal, set aside the judgment of the High Court and of the Magistrate and remit the case to the latter for being dealt with according to law.
By COURT: In accordance with the opinion of the majority, this appeal is dismissed.
Appeal dismissed.

dataset_name: IN-Abs

summary:
The respondent was prosecuted for an offence under section 8 of the Suppression of Immoral Traffic in Women and Girls Act, 1956, and a charge sheet was presented before a First Class Magistrate in Delhi by a sub inspector, who, as the officer in charge of the Police Station, had investigated the case.
On an objection raised by the respondent, the Magistrate quashed the charge sheet on the ground that only the special police officer appointed under the Act was competent to investigate the offences under the Act.
Held, (Mudholkar, J., dissenting), that since the Suppression of Immoral Traffic in Women and Girls Act, 1956, created new offences and prescribed the procedure for dealing with them, it was a complete code in itself and to that extent the provisions of the Act must prevail over those of the Code of Criminal Procedure, 1898; that as the Act provided for the appointment of a special police officer for dealing with offences under the Act in the area within his jurisdiction, he and his assistant police officers were the only persons who could investigate offences under the Act committed within that area, and that police officers not specially appointed as special police officers could not 695 investigate the offences under the Act even though they were cognizable offences.
per Mudholkar, J. A special police officer appointed under the Suppression of Immoral Traffic in Women and Girls Act, 1956, and empowered to deal with offences under the Act under section 13(1) derives the power to investigate into such offences not from that section but only under section 551.
of the Code of Criminal Procedure.
Even assuming that the words "deal with offences".
in section 13(1) confer upon a special police officer the power to investigate into an offence under the Act and present a charge sheet, the powers of an officer in charge of a station house within whose jurisdiction an offence under the Act has been committed are not excluded by any of the provisions of the Act.