judgement:
Appeal No. 427 of 1964.
Appeal by special leave from the judgment and order dated August 28, 1959 of the Bombay High Court in Civil Application No. 1638 of 1959.
Bishan Narain, J. P. Mehta, section N. Prasad, J. B. Dadachanji, O.C. Mathur and Ravinder Narain, for the appellant.
R. M. Hazarnavis, K. L. Hathi, Atiqur Rehman, for the res pondent.
The Judgment of the Court was delivered by Shah, J.
Respondent in this appeal is the owner of a build ing used as a cinematograph theatre.
By a registered deed dated December 23, 1960, the appellant obtained a lease of the theatre at a monthly rental of Rs. 1,801/ .
The appellant applied under section 11 of the Saurashtra Rent Control Act 22 of 1951 hereinafter called 'the Act ' for an order fixing the standard rent of the theatre.
He submitted that the rent stipulated to be paid under the lease was "excessive, exorbitant and improper" and that the standard rent of the theatre, having regard to its situation and size and the amenities provided therein, could not exceed Rs. 350/per mensem.
The respondent by his written statement submitted that the rent stipulated under the lease was reasonable.
The Court of First Instance fixed the standard rent of the whole theatre at Rs. 1,030/12/ being the one twelfth of the gross return of 6% on the cost of construction of the theatre and the cost of furniture installed therein.
But the learned Judge held that the respondent had not delivered to the appellant possession of the basement and of a part of the building which was intended to be used for a restaurant, and on that account reduced the standard rent payable by the appellant by Rs. 220/ 182 Against the order of the Civil Judge, the respondent preferred an appeal under section 28(1) of the Act to the District Court, Gohilwad, and the appellant preferred cross objections to the order appealed from.
The District Court agreed with the Trial Court that the cost of construction of the building and cost of the furniture was Rs. 2,06,150/ , and held that standard rent should be fixed on the basis of a return of 7 % of the cost of the building and furniture, and on that footing computed the standard rent at Rs. 1,200/ per mensem.
The District Court further held that possession of the space reserved for a restaurant was delivered to the appellant and since about June 1952 it was in the appellant 's occupation.
It was however common ground between the parties that possession of the cellar was not delivered by the respondent to the appellant.
It was the case of the respondent that the cellar was not included in the premises let out.
It was the case of the appellant that it was so included.
On the view that the cellar was not included in the tenancy, the District Court directed that standard rent of the premises in the occupation of the appellant be fixed at Rs. 1,150/ per mensem.
Against the order of the District Court, second appeal No. 552 of 1959 preferred by the appellant to the High Court of Judicature at Bombay was by order dated March 30, 1959 dismissed under 0. 4 1, r. 11 (1) of the Code of Civil Procedure.
The respondent also preferred an appeal to the High Court.
For reasons which we are unable to ascertain this appeal was not made ready for hearing before the Bombay High Court, and on reorganisation of the State of Bombay that appeal was transferred to the High Court of Gujarat and we were informed at the Bar that the appeal is now pending before that High Court.
Against the order of the Bombay High Court dismissing his appeal, the appellant has appealed to this Court.
It is somewhat unfortunate that the appeal filed by the res pondent has been admitted to the file and is to be heard on the merits, while the appeal filed by the appellant was summarily dismissed.
Counsel for the appellant submitted that we should set aside the order of the High Court of Bombay, since a second ap.
peal under section 28 of the Act Jay to the High Court on a question of fact as well as of law, and as there was "voluminous evidence" on the record which had to be considered in determining the appropriate standard rent, the High Court of Bombay committed a grave error in summarily dismissing the appeal.
We are unable to agree with that plea.
Section 28(1) of the Act provides: "Notwithstanding anything contained in any law, but subject to the provisions of the Provincial Small Cause Court Act, as adapted and applied to the State of 183 Saurashtra, an appeal shall lie from a decree or order made by a Civil Judge or a Munsiff exercising jurisdiction under section 27 to the District Court and a second appeal to the High Court.
" It was said that the expression "second appeal" in section 28(1) of the Act means an appeal from an appellate decree, but restrictions imposed by section 100 of the Code of Civil Procedure upon the power of the High Court are not attracted to a "second appeal" under s 28 of the Act.
Ordinarily, says counsel for the appellant, an appellate Court is competent to examine the correctness of the decision appealed from on the ground that the decision is erroneous in point of law or fact, and in the absence of any express provision to the contrary, restrictions imposed on the power of the High Court under one statute cannot be imported merely because of similarity of nomenclature, when exercising jurisdiction under another statute unless those restrictions are imposed by express enactment or necessary intendment.
It was said that the State of Saurashtra has not imposed restrictions upon the power of the High Court in dealing with a second appeal under section 28 of the Act, and the High Court was competent and was indeed bound to entertain all objections to the correctness of the judgment appealed from.
It is true that in the body of section 100 of the Code of Civil Procedure the Legislature has not used the expression "second appeal".
That expression however occurs in the marginal note of section 100 and in the text of sections 101, 102 & 103.
Section 101 is enacted to make explicit what is clearly implied in section 100 Code of Civil Procedure: section 102 prohibits second appeals from decrees in certain classes of suits; and section 103 confers power upon the High Court to determine questions of fact in certain conditions.
It is clear therefore that the expression "second appeal" in the Code means an appeal to a High Court from the decision in a civil suit or proceeding of a first appellate Court subordinate to the High Court.
Section 27 of the Act does not confer any special jurisdiction upon the courts described therein, for the Act creates no new rights; it only seeks to regulate the rights and obligations of landlords and tenants in respect of certain classes of tenancies in urban areas.
The disputes directed to be dealt with under the Act are essentially disputes of a civil nature: and the courts invested with Power under section 27 of the Act have to adjudicate upon the disputed right in the light of the special provisions and not by the Transfer of Property Act and the Contract Act.
The Act has again merely declared that a second appeal will lie to the High Court against decrees or orders passed by the courts exercising jurisdiction under section 27, but thereby the essential character of a second appeal under the Code is not altered.
The procedure in the trial of suit, 184 applications and proceedings under the Act is the procedure prescribed by the Code of Civil Procedure, except where it is other.
wise provided expressly or by clear implication.
It is true that certain orders contemplated to be made under the Act determining rights and obligations of the parties are made appealable under section 28, though such orders are not appealable under the Code, but that is not a ground for holding that the Legislature intended to confer upon litigants a right of second appeal unhampered by the restrictions imposed by section 100 of the Code.
In Doshibai Khanna vs Sandhi Suleman Gulmamad(1) a single Judge of the Gujarat High Court, following an unreported judgment of that Court in Nagardas Harichand vs Modi Mohanlal(1) observed that in a second appeal under the Act correctness of the decision of the District Court on questions of fact was liable to be canvassed in the High Court.
For reasons already mentioned, we are unable to agree 'With the view that in a second appeal under section 28 of the Act, questions which may not be raised in an appeal under section 100 of the Code of Civil Procedure may be raised.
It is true that in Union of India vs Mohindra Supply Com pany(1) this Court held that by providing in section 39(2) of the , that "no second appeal shall lie from an order passed in appeal under this section", it was intended to prohibit an appeal under the Letters Patent.
But the Court reached that conclusion because of the scheme of the .
The Legislature having prohibited a second appeal under the , obviously the limits of the power which the Court could.
exercise if such an appeal were entertained could not fall to be determined in that case.
Section 11 of the Act does not contemplate that the decision of the Court determining standard rent shall be incorporated into a decree of the Court, and by section 28 of the Act a second appeal lies to the High Court against an order determining standard rent.
The orders which determine on the merits, rights and obligations of the parties arising out of the relation of landlord and tenant, may have serious consequences, and the Legislature has conferred a right of appeal to the party aggrieved by those orders.
But the right of appeal on that account is not released from the restriction which are attracted by its very nature.
We are of the view that a second appeal under section 28 of the Act may be entertained by the, High Court within the limits prescribed by section 100 of the Code of Civil Procedure, and it is not open to the parties to demand reappraisal of the evidence by the High Court on the ground that the District Court has erred in its view of the evidence.
The High Court of Bombay was apparently of the view that no question of law arose in the appeal, and it was competent to dismiss the appeal under 0. 4 1, r. 1 1 (1) of the Code.
(1) (2) S.A. No. 381 of 1960 decided on Septr. 21, 1954.
(3) 185 It was then urged that the judgment of the Distt.
Court proceeded upon misconception of the evidence on the record, and on that account a second appeal would lie within the limits prescribed by section 100 of the Code of Civil Procedure.
It was said that in computing the cost of construction, the appellate Court had taken into consideration several items of expenditure which may not properly enter into the cost of construction.
According to the books of account of the respondent the total cost incurred by the respondent was Rs. 2,11,790/5/ .
This amount included the cost of transport, miscellaneous items, pan Biding, distribution of sweets, and Puja totaling Rs. 8,855/15/3.
The trial Judge was of the view that certain miscellaneous items were not allowable in the computation of the total cost of the building and he held that an amount of Rs. 5,640/5/ should be disallowed and with that view the appellate Court agreed.
We do not think that the Courts below committed any error of law or misconceived the evidence in holding that only Rs. 5,640/5/ be disallowed out of the total cost of construction on the ground that they could not reasonably enter the computation.
It was then said that the Courts below committed an error in taking into consideration the whole price paid by the respondent for the land and building purchased by him.
The appellant had purchased for Rs. 30,701 / an area of land together with houses thereon and had demolished the houses and had erected the theatre in respect of which this dispute has arisen.
The houses had, it appears, been let out and rent was being received by the owner.
It was urged.
by the appellant that the rent should be capitalised and the value of the land determined by deducting from the price paid by the respondent such capitalised value of the structure.
But that would be a wholly faulty method of valuation.
Rent received from a structure, is determined not merely by the nature of the structure and the accommodation provided thereby, but also by the situation and the amenities provided by the land on which the structure stands.
A building when let out forms a composite unit with the land on which it stands, and the rent received from the building cannot be wholly attributed to the building.
The respondent purchased the property with a view to pull down the houses thereon and to put up a building adapted for use as a cineniatograph theatre.
It is true that some rent was recovered from the tenants before the structures were pulled down.
But since the respondent purchased the land and the buildings for putting up a new building thereon, he may reasonably be regarded as having paid for the property purchased the value of the land and of the debris of the superstructures.
The debris which by sale fetched Rs. 9,171/3/ has been given credit for in arriving at the total cost of the theatre.
It is also worthy of note that one Masataram, a consulting architect, estimated the cost of the structure to be Rs. 2,35,777/1/2 186 at the rates prevailing in 1950.
He stated that the prices prevailing in 1954 when he gave evidence were a little lower than the prices prevailing in 1950, "though in respect of certain items the prices may have gone up".
The Trial Court and the District Court regarded his evidence as reliable, but having regard to the fact that in constructing the theatre the respondent had used some second hand material, the Courts below held that the cost of the structure was truly shown by the accounts of the respondent, and that conclusion must be accepted.
It is then urged that ordinarily in towns like Bombay, Ahmedabad and Poona standard rent is determined as equivalent to one twelfth of the gross return on the sum invested by the landlord at the rate of 8.66 % on the cost of the building, and at the rate of 6 % on the value of the land, and since the cross rate includes municipal taxes which vary between 25% to 33 33% of the letting value standard rent is considered as reasonable if it fetches to the landlord 4 1/2% per annum on the value of the land and 5 1/2 % on the cost of building.
It is true that in the city of Bhavnagar no municipal taxes and rates were, at the material time, charged by the Municipality, and therefore some adjustment would have to be made in ascertaining the percentage of gross return on the investment in determining standard rent.
It is common ground that charges for water supply arc made by the Municipality.
There is however no evidence on the record to show as to what the rates for water supplied by the Municipality were.
It was faintly suggested by counsel for the appellant that the water charges are payable by the tenant, but there is nothing to support that contention.
The appellate Court has, on a consideration of the evidence, come to the conclusion that an overall rate of 7 % on the investment for the building and land may be regarded in the town of Bhavnagar as an adequate return to the landlord.
What rate of return in respect of the landed property may be regarded as reasonable in determining the standard rent under section II of the Act depends upon certain vs friable factors.
Normal expected yield from immovable property in the locality, return from alternative investments, municipal and other charges, the use to which the property is to be put, its condition, repairs it needs to keep it in tenantable condition and a host of other related circumstances must enter into the determination.
On a review of the reasons given, it cannot be said that the District Court committed any error of principle in coming to the conclusion that 7% gross return on the cost of construction should be regarded as an adequate return from the property in the town of Bhavnagar which is utilised for a cinematograph theatre.
Two other questions remain to be considered.
Eventhough it was not pleaded in the petition filed by the appellant that possession of a part of the building let out was not delivered, the appellant was permitted, without objection, to raise that question at 187 the trial.
It was the case of the appellant that possession of the cellar and the space reserved for a restaurant were not delivered to him, and on that account appropriate deduction should be made from the standard rent.
The respondent conceded that possession of the cellar was not given to the appellant, but his case was that he did not deliver the cellar because it was not included in the premises demised in favour of the appellant.
Unfortunately the lease has not been printed in the paper book and the parties have not chosen to produce for our perusal a copy of the lease.
We have not thought it necessary to hold up the proceeding in this Court in view of the ultimate order we propose to make in this appeal.
The trial Court was of the view that having regard to the carpet area of the cellar Rs. 100/ per mensem should be deducted from the standard rent of the entire building.
The District Court without giving any reasons observed that fair standard rent for the cellar would be Rs. 501 per mensem.
In our view the Court was not right in reducing the proportionate rent of the cellar from Rs. 100/ to Rs. 501 .
The question whether the cellar was let out to the appellant under the terms of the lease will be determined by the High Court of Gujarat before which the appeal filed by the respondent is pending.
We have for the purpose of this appeal held, agreeing with the Distt.
Court, that the standard rent of the entire building is Rs. 1,200/ per mensem.
If the cellar is not included in the tenancy, Rs. 100/will have to be deducted and the standard rent will be Rs. 1,100/per mensem.
The other matter in dispute relates to the space intended to be used for a restaurant.
The respondent contended that possession of that room was delivered to the appellant: the appellant denied that it was so delivered.
It is common ground that it was part of the premises leased.
Enquiry into the question whether by reason of default on the part of the landlord in delivering possession of a part of the premises let out under the lease any loss was occasioned to the tenant and to what relief the tenant is entitled on that account is foreign to the determination of standard rent.
We therefore decline to enter into the question whether possession of the space intended for use as restaurant was delivered by the respondent to the appellant.
The decision of the Courts below on that part of the case is vacated.
We accordingly modify the order passed by the District Court and declare that the standard rent of the whole building including the space for the restaurant and the cellar is Rs. 1,200/ per mensem.
We further declare that if the cellar is not included in the tenancy, standard rent of the premises let out will be Rs. 1,100/per mensem.
The appellant has substantially failed in this appeal.
He will pay 7/8th of cost of the respondent in this appeal.
Appeal dismissed and decree modified.

summary:
The respondent was the owner of a building used as a cinematograph theatre.
By a registered deed dated December 23, 1960, the appellant obtained a lease of the theatre at a monthly rental of Rs. 1801/ .
He then applied under section 11 of the Saurashtra Rent Control Act 22 of 1951 for an order fixing the standard rent of the theatre.
The Court of First Instance taxed the standard rent of the whole theatre at Rs. 1030/12/ .
Against this order the respondent filed an appeal under section 28(1) of the Act to the District Court.
That court fixed the rental at Rs. 1150/ .
Against the order of the District Court second appeal under section 28(2) of the Act was preferred by the appellant to the High CouRT.
It was dismissed under 0.41, r. 11(1); of the Code of Civil Procedure.
Aggrieved, the appellant came to this Court.
It was contended, inter alia, that (i) a second appeal under section 28 of the Act was not governed by section 100 of the Code of Civil Procedure, (ii) that in calculating the cost of the building the courts below erred in taking into consideration the whole price paid by the respondent for the land as well as the buildings standing on it at the time of purchase, and that (iii) the District Court erred in taking 7% as an adequate return in respect of the property in question.
HELD: (i) The second appeal under section 28 of the Act may be entertained by the High Court within the limits provided by section 100 of the Code of Civil Procedure, and it is not open to the parties to demand reappraisal of the evidence by the High Court on the ground that the District Court had erred in its view of the evidence.
The High Court was competent to dismiss the appeal under 0.41, r, 11(1) of the Code.
[184 G] The expression 'second appeal ' in the Code means an appeal to the High Court from the decision in a civil suit or proceeding of a first appellate court subordinate to the High Court.
[183 F] The disputes directed to be dealt with under the Act are essentially disputes of a civil nature and the courts invested with the power under section 27 of the Act have to adjudicate upon the disputed rights in the light of its special provisions.
The procedure in the trial of suits, applications and proceedings under the Act is the procedure prescribed by the Code of Civil Procedure except when it is otherwise provided expressly or by clear implication.
[183 G] It is true that the proceedings under section 11 do not result in 2 decree and that certain orders under the Act are made appealable under section 28 though such orders are not appealable under the Code.
But the right of appeal On that account is not released from the restrictions which are attracted by its very nature.
[184 A B, F G] 181 Doshibai Khanna vs Sandhi Suleman Gulmamad, and Nagardas Harichand vs Modi Mohanlal, S.A. No. 381 of 1960 dt.
21 9 1964, disapproved.
Union of India vs Mohindra Supply Co. ; , distinguished.
(ii) The courts below did not commit any error in taking into consideration the whole price paid by the respondent for the land and building purchased by him.
A building when let out forms a composite unit with the land on which it stands and the rent received from the building cannot be wholly attributed to the building.
[185 F G] (iii) On a review of the reasons given it could not be said that the District Court committed any error of principle in coming to the conclusion that 7% gross return on the cost of construction should be regarded as an adequate return from the property in question.
[186 G]


judgement:
vil Appeal No. 211 of 1964.
Appeal from the judgment and order dated February ,22, 1961 of the Bombay High Court in Miscellaneous Application No. 352 of 1959.
Niren De, Additional Solicitor General, R. Ganapathy lyer and R.N. Sachthey, for the appellants.
A.V. Viswanatha Sastri, T.A. Ramachandran, J.B. Dadachanji, O.C. Mathur and Ravinder Narain, for the respondents.
The Judgment of the Court was delivered by Sikri, J.
This appeal is in pursuant to a certificate of fitness granted by the High Court of Maharashtra at Bombay under article 133(1)(c)of the Constitution is directed against the judgment of the said High Court in a petition under article 226 of the Constitution filed by the respondent.
The India Fisheries (P) Ltd. hereinafter called the respondent was a private limited company and was directed to be wound up by an order of the Bombay High Court, dated October 11, 1950, and a Court Liquidator was appointed as the Official Liquidator thereof with all powers under section 179 of the Indian Companies Act.
1913 (VII of 1913) to be exercised by him under section 180 without sanction or intervention of the Court save and except in case of sales of immovable property belonging to the respondent.
For the assessment year 1948 49, the respondent was assessed on December 8. 1950, the tax being assessed at Rs. 8,737/15/ .
On or about March 15.
1951, the Income Tax Officer lodged a claim in respect of this tax with the Official Liquidator.
That claim was adjudged and allowed as an ordinary claim and certified as such on April 2 1952.
in August, 1954, the Official Liquidator declared a dividend of 9 1/2 annas in a rupee and paid to the Income Tax Department a sum of Rs. 5,188/3/ against the claim made by the Income Tax Officer as an ordinary creditor.
Thus a balance of Rs. 3,549/12 still remained payable to the Income Tax Department from the assets of the respondent.
For the year 1955 56, the Department made a demand from the respondent on June 22, 1954, for a sum of Rs. 2,565/6/ as advance tax.
This was paid by the Official Liquidator.
On a 681 regular assessment being made for the said year, only Rs. 1,1 26/12/was assessed as payable by the respondent.
After adjusting this sum against the advance payment of Rs. 2,565/6/ , Rs. 1,460/1/became refundable to the respondent, inclusive of interest.
Instead refunding the said balance to the respondent, the Income Tax Officer set off the said amount against the balance of Rs. 3,549/12/which was still outstanding in respect of the Income tax demand for the year 1948 49.
The respondent filed a revision petition to the Commissioner of Income tax, but the said petition was rejected by the Commissioner on September 21.
holding that the action of the Income Tax Officer was perfectly justified under the provision of section 49E of the Income Tax Act.
On November 25, 1959, the respondent filed a petition under article 226 of the Constitution and prayed for a writ, direction or order for setting aside the orders of the Income Tax Officer and the Income Tax Commissioner.
He further prayed for any further writ, direction or order restraining the Department from setting off the refund against the tax dues and directing them to hand over the balance to the Official Liquidator.
The High Court held that the demand of Rs. 8.737/12/ in respect of the assessment year 1948 49.
being adjudged and certified, came to have all the incidents and character of an unsecured debt payable by the Official Liquidator to the Department.
The High Court observed that "this claim thereafter was governed by the provisions of the Company law and could be paid to the creditor only in accordance with the provisions of the Company law.
No other remedy nor any other method of obtaining satisfaction of this claim was available to the creditor thereafter.
It was no longer the amount of tax remaining payable by a person to whom the refund was due within the meaning of Section 49E of the Income Tax Act.
In our opinion, therefore.
the provision of Section 49E was not available to the Department for setting off the amount of the excess towards the balance of its claim of Rs. 8,737/15/ which the department had proved in the insolvency of the company and was being dealt with in the Insolvency." The High Court accordingly set aside the orders passed by the Department in so far as they set off the amount of the refund towards the tax remaining payable, and directed the Income Tax Officer to deal with and dispose of the claim of the present respondent for the refund and pass appropriate orders in respect of the said amount of refund under the provisions of section 48 of the Income Tax Act.
The learned Additional Solicitor General on behalf of the appellant.
contends that s, 49E gives statutory power to the Income tax Officer.
inter alia, to set off the amount to be refunded or any part of that amount against the tax remaining payable by the person to whom the refund is due, and this statutory power is not subject to any provision of any other law.
He says that the Companies Act 682 does not take away this power.
Section 49E is in the following terms: "Where under any of the provisions of this Act, a refund is found to be due to any person, the Income tax Officer, Appellate Assistant Commissioner or Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded, or any part of that amount against the tax, interest or penalty, if any, remaining payable by the person to whom the refund is due.
" On the face of this provision, there is no doubt that this section is not subject to any other provision of law.
But it will be surprising if this power can be exercised in such a way as to defeat the provisions of the Indian Companies Act.
It is not denied by the learned Additional Solicitor General that the State has no priority in respect of this claim.
The question then arises whether section 49E is subject to the Insolvency Rules contained in the Companies Act.
Section 228 of the Companies Act, 1913, provides: "228.
Debts of all descriptions to be proved.
In every winding up (subject in the case of insolvent companies to the application in accordance with the provisions of this Act of the law of insolvency) all debts payable on a contingency, and all claims against the company, present or future, certain or contingent, shall be admissible to proof against the company, a just estimate being made, so far as possible, of the value of such debts or claims as may be subject to any contingency or for some other reason do not bear a certain value.
" Section 229 provides: "Application of insolvency rules in winding up of insolvent companies.
In the winding up of an insolvent company the same rules shall prevail and be observed with regard to the respective rights of secured and unsecured creditors and to debate provable and to the valuation of annuities and future and contingent liabilities as are in force for the time being under the law of insolvency with respect to the estates of persons adjudged insolvent; and all persons who in any such case, would be entitled to prove for and receive dividends out of the assets of the company may come in under the winding up, and make such claims against the company as they respectively are entitled to by virtue of this section.
" The effect of these statutory provisions is, inter alia, that an unsecured creditor must prove his debts and all unsecured debts 683 are to be paid pari passu.
Therefore, once the claim of the Department has to be proved and is proved in the liquidation proceedings, the Department cannot by exercising the right under section 49E of the Income Tax Act get priority over the other unsecured creditors.
If we were to read section 49E in the way suggested by the learned Additional Solicitor General, it would be defeating the very object underlying sections 228 and 229 of the Companies Act, 1913.
If there is an apparent conflict between two independant provisions of law, the special provision must prevail.
Section 49E is a general provision applicable to all assessees and in all circumstances; sections 228 and 229 deal with the proof of debts and their payment in liquidation.
In our opinion, section 49E can be reconciled with sections 228 and 229 by holding that section 49E applies when insolvency rules do not apply.
Accordingly, agreeing with the High Court, we hold that the Income Tax Officer was in error in applying section 49E and setting off the refund due.
The Commissioner was equally in error in affirming this order.
The learned Additional Solicitor General also urged that the application under article 226 was misconceived because the Income Tax Officer had jurisdiction.
But if we interpret section 49E as we have done, it is a clear case of lack of jurisdiction.
At any rate, there is an error apparent on the face of the orders and the High Court was quite right in exercising its jurisdiction under article 226.
The appeal is accordingly dismissed with costs.
Appeal dismissed.

dataset_name: IN-Abs

summary:
The respondent company was directed to be wound up and an official liquidator appointed by an order of the High Court in October, 1950.
In December, 1950, the respondent was assessed to tax amounting to Rs. 3737/ for the year 1948 49.
A claim made for this tax on the official liquidator was adjudged and allowed as an ordinary claim and certified as such in April, 1952.
The Liquidator declared a dividend of 91/2 annas in the Rupee in August, 1954 and paid a sum of Rs. 5188 to the Department, leaving a balance of Rs. 3549.
In June, 1954.
the Department made a demand from the respondent and was paid Rs. 2565 as advance tax for the year 1955 56.
On a regular assessment being made for that year, only Rs. 1126 was assessed as payable, so that a sum of Rs. 1460, inclusive of interest, became refundable to the respondent.
However, the Income Tax Officer, purporting to exercise the power available to him under section 49E of the Income Tax Act, 1922, set off this amount against the balance of Rs. 3549 due for the year 194849.
A revision petition filed by respondent in respect of this set off was rejected by the Commissioner of Income Tax.
Thereafter, a petition under article 226 filed by the respondent to set aside the orders of the Income Tax Officer and the Commissioner was allowed by the High Court, mainly on the ground that the demand for Rs. 8737 in respect of 1948 49, being adjudged and certified came to have all the incidents and character of an unsecured debt payable by the liquidator to the Department; it was therefore governed by the provisions of Company Law and no other remedy or method to obtain satisfaction of the claim was available to the creditor.
In the appeal to this Court it was contended on behalf of the appellant that section 49E gave statutory power to Income tax Officer to set off a refundable amount against any tax remaining payable and that this power was not subject to any provision of any other law.
HELD:The Income Tax Officer was in error in applying section 49E and setting off the refund due to the respondent.
[683C D] The effect of sections 228 and 229 of the Companies Act, 1913, is, inter alia, that an unsecured creditor must prove his debts and all unsecured debts are to be paid part passu.
Once the claim of the Department has to be proved and is proved in liquidation proceedings, it 680 cannot, by exercising the right under section 49E get priority over the other unsecured creditors and thus defeat the very object of sections 228 and 229 of the Companies Act.
Furthermore, if there is an apparent conflict between two independant provisions of law, the special provision must prevail.
Section 49E is a general provision applicable to all assessees in all circumstances; sections 228 and 229 deal with proof of does and their payment in liquidation.
Section 49E can be reconciled with sections 228 and 229 by holding that section 49E applies when insolpency rules do not apply.
[682H 683D]


judgement:
Civil Appeals Nos. 976 and 977 of 1964.
Appeals from the judgment and decree dated March 26, 1964 of the Patna High Court in Election Appeals Nos. 8 and 10 of 1963.
C.B. Agarwala, Jagdish Panday, Chinta Subbarao, M. Rajagopalan and B.P. Jha, for the appellant, (In both the appeals).
K.P. Varma and D. Goburdhun, for the respondent (In both the appeals).
The Judgment of the Court was delivered by Ramaswami, J.
Both these appeals are brought by certificate against the judgment and decree of the High Court of Judicature at Patna dated March 26, 1964, pronounced in Election Appeals Nos. 8 and 10 of 1963.
The appellant Kedar Pandey and the respondent Narain Bikram Sah '(hereinafter called Narain Raja) were the contesting candidates in the year 1962 on behalf of the Congress and Swatantra Party respectively for the election to Bihar Legislative Assembly from Ramnagar Constituency in the district of Champaran.
The nomination papers of the appellant and the respondent and two others Parmeshwar Prasad Roy and Suleman Khan were accepted by the Returning Officer without any objection on January 22, 1962.
Later on the two candidates Parmeshwar Prasad Roy and Suleman Khan withdrew their candidatures.
After the poll the respondent, Narain Raja was declared elected as member of the Bihar Legislative Assembly by majority of valid votes.
On April 11, 1962 Kedar Pandey filed an election petition challenging the election of the respondent.
It was alleged by Kedar Pandey that the respondent was not duly qualified under article 173 of the Constitution of India to be a candidate for election as he was not a citizen of India.
According to Kedar Pandey the respondent, his parents and grand parents were all born in Nepal and, therefore, on the date of the election, the respondent Narain Raja was not qualified to be chosen to fill the Assembly seat for which he had been declared to have been elected.
According to Kedar Pandey the respondent was related to the royal family of Nepal and the father of the respondent Rama Raja owned about 43 bighas of land and a house at Barewa in Nepal in which the respondent had a share along with his three other brothers.
The election petition was contested by the respondent who said that he was an Indian citizen and there was no disqualification incurred under article 173 of the Constitution.
The further case of the respondent was that he had lived in India since his birth and that he was a resident of Ramnagar in the district of Champaran and not of Barewa in Nepal.
The respondent claimed that he was born in Banaras and not at Barewa.
795 Upon these rival contentions it was held by the Tribunal that the respondent Narain Raja was not a citizen of India and, therefore, was not qualified under article 173 of the Constitution for being chosen to fill a seat in the Bihar Legislative Assembly.
The Tribunal, therefore, declared that the election of the respondent was void.
But the Tribunal refused to make a declaration that Kedar Pandey was entitled to be elected to Bihar Legislative Assembly for that Constituency.
Both the appellant and the respondent preferred separate appeals against the judgment of the Election Tribunal to the High Court of Judicature at Patna.
The High Court in appeal set aside the judgment of the Tribunal and upheld the election of the respondent Narain Raja.
The High Court found, on examination of the evidence, that Narain Raja, the respondent before us, was born in Banaras on October 10, 1918 and that the respondent was living in India from 1939 right upto 1949 and even thereafter.
The High Court further found that long before the year 1949 Narain Raja had acquired a domicile of choice, in Indian territory and, therefore, acquired the status of a citizen of India both under article 5(a) and (c) of the Constitution.
On these findings the High Court took the view that Narain Raja was duly qualified for being elected to the Bihar Legislative Assembly and the election petition filed by the appellant Kedar Pandey should be dismissed.
The main question arising for decision in this case is whether the High Court was right in its conclusion that the respondent Narain Raja was a citizen of India under article 5 of the Constitution of India on the material date.
The history of the family of Narain Raja is closely connected with the history of Ramnagar estate.
It appears that Ramnagar estate in the district of Champaran in Bihar originally belonged to.
Shri Prahlad Sen after whose death the estate came into the possession of Shri Mohan Vikram Sah, popularly known as Mohan Raja.
After the death of Mohan Raja the estate came into the possession of Rani Chhatra Kumari Devi, the vidow of Mohan Raja, and after the death of Rani Chhatra Kumari Devi, the estate came into the possession of Rama Raja alias Mohan Bikram Sah, the father of the respondent Narain Raja.
It is in evidence that the daughter of Prahlad Sen was married to Shri Birendra Vikram Sah, the father of Mobart Raja.
Mohan Raja died without any male issue but during his lifetime he had adopted Rama Raja, the father of the respondent and by virtue of a will executed by Mohan Raja in the year 1904 in favour of his wife Rani Chhatra Kumari Devi the Rani became entitled to the Ramnagar estate on the death of Mohan Raja (which took place in 1912), in preference to the adopted son Rama Raja since the properties belonged to Mohan Raja in his absolute right and not as ancestral properties.
After the death of Rani L/P(D)5SCI 12 796 Chhatra Kumari Devi in 1937 Rama Raja came into the possession of the Ramnagar estate.
In the year 1923, Rani Chhatra Kumari Devi had filed R.S. No. 4 of 1923 against Rama Raja the Court of Sub Judge, Motihari with regard to a village which Rama Raja held in Ramnagar estate on the basis of a Sadhwa Patwa lease.
Rama Raja in turn filed T.S. No. 34 of 1924 in the Court of Subordinate Judge of Motihari against Rani Chhatra Kumari Devi and others claiming title to Ramnagar estate and for possession of the same on the basis of his adoption by Mohan Raja.
The Title Suit and the Rent Suit were heard together by the Additional Sub Judge, Motihari who, by his judgment dated August 18, 1927 decreed the Title Suit filed by Rama Raja and dismissed the Rent Suit filed by Rani Chhatra Kumari Devi.
There was an appeal to the High Court of Patna which dismissed the appeal.
Against the judgment of the High Court appeals were taken to the Judicial Committee of the Privy Council.
The appeal was decided in favour of Rani Chhatra Kumari Devi and the result was that the Title Suit filed by Rama Raja was dismissed and Rent Suit filed by Rani Chhatra Kumari Devi was decreed.
In the course of judgment the Judicial Committee did not disturb the finding of the trial Court that Rama Raja was an adopted son of Shri Mohan Vikiram Sah alias Mohan Raja and accepted that finding as correct; but the Judicial Committee held that Ramnagar estate was not the ancestral property of Mohan Raja, but he got that property by inheritance, he being the daughter 's son of Prahlad Sen, the original proprietor of that estate.
In view of this circumstance, the Judicial Committee held that though Rama Raja was the adopted son of Mohan Raja, Rama Raja was not entitled to the estate in view of the will executed by Mohan Raja in favour of Rani Chhatra Kumari Devi in the year 1904.
It appears that in the year 1927 Rama Raja had taken possession of Ramnagar estate and got his name registered in Register D and remained in possession till the year 1931 when he lost the suit in Privy Council.
After the decision of Privy Council, Rani Chhatra Kumari Devi again came into possession of Ramnagar estate and continued to remain in possession till she died in 1937.
It is in evidence that after the death of Rani Chhatra Kumari Devi, Rama Raja obtained possession of Ramnagar estate and continued to remain in possession thereof from 1937 till 1947, the year of his death.
There is evidence that Rama Raja died in Bombay and his dead body was cremated in Banaras.
It is also in evidence that during the lifetime of Rama Raja there was a partition suit in the year 1942 No.
40 of 1942 for the partition of the properties of the Ramnagar estate among Rama Raja and his sons including the respondent.
This suit was filed on September 29, 1942 in the Court of the Subordinate Judge at Motihari.
A preliminary decree exhibit
1(2) was passed on April 16, 1943 on compromise and the final decree Ex 1(1) in the suit 797 was passed on May 22, 1944.
From the two decrees it appears that Ramnagar.
estate was comprised of extensive properties including zamindariinterest in a large number of villages and the.
estate 'had an extensive area of Bakasht lands.
By the said partition the estate was divided among the co sharers but certain properties including forests in the estate were left joint.
On behalf of the appellant Mr. Aggarwala put forward the argument that the High Court was not justified in holding that Narain Raja was born in Banaras in the year 1918.
According the case of the appellant Narain Raja was born at a place called Barewa in Nepal.
In order to prove his case the appellant examined two witnesses Sheonath Tewari (P.W. 18) and N.D. Pathak (P.W. 15).
The High Court held that their evidence was acceptable.
There was also a plaint (exhibit 8) produced on behalf the appellant to show that Narain Raja was born at Barewa.
This plaint was apparently filed in a suit brought by the respondent for the realisation of money advanced by the respondent 's mother to one Babulal Sah.
The place of birth of the respondent is mentioned in this plaint as Barewa Durbar.
The High Court did not attach importance to exhibit 8 because it took the view that the des cription of the place of birth given in the document was only for the purpose of litigation.
It further appears from exhibit 8 that it was not signed by the respondent but by one Subhan Mian Joiaha described as 'Agent '.
On behalf of the respondent R.W. 9 G. section Prasad was examined to prove that Narain Raja was born at Banaras.
The High Court accepted the evidence of this witness and also of the respondent himself on this point.
It was submitted by Mr. Aggarwala that there were two circumstances which indicate that the respondent could not have been born at Banaras: In the first place, it was pointed out, the municipal registers of Banaras for the year 1918 exhibit
2 series did not mention the birth of the respondent.
It was explained on behalf of the respondent that house at Mamurganj in which the respondent was born was not included within the limits of the municipality in the year 1918, and that the omission of the birth of the respondent in the municipal registers was therefore, of no significance.
It was contended behalf of the appellant that there was litigation with regard to properties of Ramnagar estate between the respondent 's father Rani Chhatra Kumari Devi and therefore the evidence of P.W. G.S. Prasad that Rama Raja was living with Rani Chhatra Kurnari Devi at Ramnagar even during her lifetime cannot be accepted as true.
It was, therefore, suggested that it was highly improbable that Narain Raja should have been born at Banaras in the year 1918, as alleged, in the house belonging to Ramnagar estate.
We do not, however, think it necessary to express any concluded opinion on this question of fact but proceed to decide the case the assumption that Narain Raja was not born in the territory ,of India, in the year 1918.
The reason is that the place of birth 798 of Narain Raja has lost its importance in this case in view of the concurrent findings of both the High Court and the Tribunal that for a period of 5 years preceding the commencement of the Constitution Narain Raja was ordinarily resident in the territory of India.
Therefore the requirement of article 5(c) of the Constitution is fulfilled.
Mr. Aggarwala on behalf of the appellant did not challenge this finding of the High Court.
It is.
therefore, manifest that the requirement of article 5(c) of the Constitution has been established and the only question remaining for consideration is the question whether Narain Raja had his domicil in the territory of India at the material time.
Upon this question it was argued before the High Court on behalf of the respondent that the domicil of origin of Mohan Raja may have been in Nepal but he had acquired a domicile of choice in India after inheriting Ramnagar Raj from his maternal grandfather Prahlad Sen.
It was said that Mohan Raja had settled down in India and had married all his 4 Ranis in Ramnagar.
It was argued, therefore, that at the time when Mohan Raja had adopted Rama Raja in 1903 Mohan Raja 's domicil of choice was India.
It was said that by adoption in 1903 Rama Raja became Mohan Raja 's son and by fiction it must be taken that Rama Raja 's domicil was india as if he was Mohan Raja 's son.
It was contended in the alternative that whatever may have been Rama Raja 's domicil before 1937 when Rani Chhatra Kumari Devi died, Rama Raja acquired a domicil of choice in India when he came to India on the death of Rani Chhatra Kumari Devi.
It was also stated on behalf of the respondent that Rama Raja remained in possession of the Ramnagar estate until his death in 1947.
The High Court, however.
held, upon examination of the evidence, that there was no material on the record to decide the question of Mohan Raja 's domicil.
It was also held by the High Court that it was not possible to ascertain from the evidence whether there was any intention of Rama Raja to settle down in India and make it his permanent home.
In any event.
Narain Raja was born in the year 1918 and unIess the domicil of Rama Raja in 1918 was ascertained the domicil of origin of Narain Raja will remain unknown.
The High Court therefore, proceeded upon the assumption that Narain Raja had his domicil of origin in Nepal: and examined the evidence to find out whether Narain Raja had deliberately chosen the domicil of choice in India in substitution for the domicil of origin.
The crucial question for determination in this case, therefore.
is whether Narain Raja had acquired the domicil of choice in India.
The law on the topic is well established but the difficulty is found in its application to varying combination of circumstances in each case.
The law attributes to every person at birth a domicil 799 which is called a domicil of origin.
This domicil may be changed and a new domicil, which is called a domicil of choice, acquired; but the two kinds of domicil differ in one respect.
The domicil of origin is received by operation of law at birth; the domicile of choice is acquired later by the actual removal of an individual to another country accompanied by his animus manendi.
The domicil of origin is determined by the domicil, at the time of the child 's birth, of that person upon whom he is legally dependent.
A legitimate child born in a wedlock to a living father receives the domicil of the father at the time of the birth; a posthumous legitimate child receives that of the mother at that time.
As regards change of domicil, any person not under disability may at any time change his existing domicil and acquire for himself a domicil of choice by the fact of residing in a country other than that of his domicil of origin with the intention of continuing tO reside there indefinitely.
For this purpose residence is a mere physical fact, and means no more than personal presence in a locality, regarded apart from any of the circumstances attending it.
If this physical fact is accompanied by the required state of mind, neither its character nor its duration is in any way material.
The state of mind, or animus manendi, which is required demands that the person whose domicil is the object of the inquiry should have formed a fixed and settled purpose of making his principal or sole permanent home in the country of residence, or, in effect, he should have formed a deliberate intention to settle there.
It is also well established that the onus of proving that a domicil has been chosen in substitution for the domicil of origin lies upon those who assert that the domicil of origin has been lost.
The domicil of origin continues unless a fixed and settled intention of abandoning the first domicil and aquiring another as the sole domicil is clearly shown (see Winarts vs Attorney General.
(1) In Munro vs Munro(2) Lord Cottonham states the rule as follows: "The domicil of origin must prevail until the party has not only acquired another, but has manifested and carried into execution an intention of abandoning his former domicil, and acquiring another as his sole domicil.
To effect this abandonment of the domicil of origin, and substitute another in its place, it required animo et facto, that is, the choice of a place, actual residence in the place then chosen and that it Should be the principal and permanent residence, the spot where he had placed larem rerumque ac fortunarum suarum summam.
In fact, there must be both residence and intention.
Residence alone has no effect, per so, though it may be most important as a ground from which to infer intention.
" (1) (2) 7 C.I. & Fin .
876. 800 In Aikman vs Aikman(1), Lord Campbell has discussed the question of the effect on domicil of an intention to return to the native country, where such intention is attributable to an undefined and remote contingency.
He said: "If a man is settled in a foreign country, engaged in some permanent pursuit requiring his residence there, a mere intention to return to his native country on a doubtful contingency, will not prevent such a residence in a foreign country from putting an end to his domicil of origin.
But a residence in a foreign country for pleasure, lawful or illicit, which residence may be changed at any moment, without the violation of any contract or any duty, and is accompanied by an intention of going back to reside in the place of birth, or the happening of an event which in the course of nature must speedily happen, cannot be considered as indicating the purpose to live and die abroad.
" On behalf of the appellant Mr. Aggarwala relied on the decision.
of the House of Lords in Moorhouse vs Lord(2) in which it was held that in order to lose a domicil of origin, and to acquire a new domicil, a man must intend quatenus in illo exuere patriam and there must be a change of nationality, that is natural allegiance R is not enough for him to take a house in the new country, even with the probability and the belief that he may remain there all the days of his life.
But the principle laid down in this case was discussed in Udny vs Udny(3) which decision is the leading authority on what constitute a domicil of choice taking the place of a domicil of origin.
It is there pointed out by Lord Westbury that the expressions used in Moorhouse vs Lord(2), as to the intent exuere patriam, are calculated to mislead, and go beyond the question of domicil.
At page 458 Lord Westbury states: "Domicil of choice is a conclusion or inference which the law derives from the fact of a man fixing voluntarily his sole or chief residence in a particular place, with the intention of continuing to reside there for an unlimited time.
This is description of the circumstances which create or constitute a domicil and not a definition of the term.
There must be residence freely chosen and not prescribed or dictated by any external necessity, such as the duties of office, the demands of creditors, or the relief from illness, and it must be a residence fixed, not for a limited period or particular purpose, but general and indefinite in its future contemplation.
It is true that residence, originally temporary or intended for a limited (1) 3 Mac Q., H.L.C. 854.
(2) 10 H.L. Cas. 272.
(3) L.R. 1 H.L. Sc.
801 period, may, afterwards become general and unlimited; and in such a case, so soon as the change of purpose, or animus manendi, can be inferred, the fact of domicil is established .
" In the next case Doucet vs Geoghegan (1) the Court of Appeal decided that the testator had acquired an English domicil; and one of the main facts relied on was that he had twice married in England in a manner not conforming to the formalities which are required by the French Law for the legalisation of marriages of Frenchmen in a foreign country.
James L. J. stated as follows: "Both his marriages were acts of unmitigated scoundrelism, if he was not a domiciled Englishman.
He brought up his children in this country; he made his will in this country, professing to exercise testamentary rights which he would not have if he had not been an Englishman.
Then with respect to his declarations, what do they amount to? He is reported to have said that when he had made his fortune he would go back to France.
A man who says that, is like a man who expects to reach the horizon and finds it at last no nearer than it was at the beginning of his journey.
Nothing can be imagined more indefinite than such declarations.
They cannot outweigh the facts of the testator 's life.
" In our opinion, the decisions of the English Courts in Udny vs Undy(3) and Doucet vs Geoghegan(1) represent the correct law with regard to change of domicil of origin.
We are of the view that the, only intention required for a proof of a change of domicil is an intention of permanent residence.
In other words, what is required to be established is that the person who is alleged to have changed his domicil of origin has voluntarily fixed the habitation of himself and his family in the new country, not for a mere special of temporary purpose, but with a present intention of making it his permanent home.
Against this background of law we have to consider the facts in the present case for deciding whether Narain Raja had adopted India as his permanent residence with the intention of making a domicil of choice there.
In other words, the test is whether Narain Raja had formed the fixed and settled purpose of making his home in India with the intention of establishing himself and his family in India.
(1) 9 Ch.
(2) L.R. 1 H.L. So.
802 The following facts have been either admitted by the parties found to be established in this case.
Narain Raja was educated in Calcutta from 1934 to 1938.
From the year 1938 onwards Narain Raja lived in Ramnagar.
After Rama Raja 's death in 1947 Narain Raja continued to live in Ramnagar, being in possession of properties obtained by him under compromise in 1944.
In the course of his statement Narain Raja deposed that his father had built a palace in Ramnagar between 1934 and 1941 and thereafter Narain Raja himself built a house at Ramnagar.
Before he had built his house, Narain Raja lived in his father 's palace.
There is the partition suit between Narain Raja and his brothers in the year 1942.
Exhibits 1(2) and 1(1) are the preliminary and final decrees granted in that suit.
After the partition Narain Raja was looking after the properties which were left joint and was the manager thereof.
The extensive forests of Ramnagar estate were not partitioned and they had been left joint.
Narain Raja used to make settlement of the forests on behalf of the Raj and pattas used to be executed by him.
After partition, he and his wife acquired properties in the district of Champaran, in Patna and in other places.
Narain Raja and his wife and children possessed 500 or 600 acres of land in the district of Champaran.
Narain Raja managed these properties from Ramnagar.
He had also his houses in Bettiah, Chapra, Patna and Benaras.
The forest settlements are supported by Exhibits X series, commencing from 1943, and by exhibit W of the year 1947.
Then, there are registered pattas excluded by Narain Raja of the year 1945, which are Exs.
W/3, W/4, and W/5.
There are documents which prove acquisition of properties in the name of Narain Raja 's wife F(D, F(2).
F(3) and F(5).
Exhibit F(4) shows the purchase of 11 bighas and odd land at Patna by Narain Raja.
It is also important to notice that Narain Raja had obtained Indian Passport dated March 23, 1949 from Lucknow issued by the Governor General of India and he is described in that Passport as Indian by birth and nationality and his address is given as Ramnagar of Champaran district.
In the course of his evidence Narain Raja said that he had been to Barewa for the first time with his father when he was 10 or 12 years old.
He also said that he had not gone to Barewa for ten years before 1963.
The High Court considered that for the determination of the question of domicil of a person at a particular time, the course of his conduct and the facts and circumstances before and after that time are relevant.
We consider that the view taken by the High Court on this point is correct and for considering the domicil of Narain Raja on the date of coming into force of the Constitution of India his conduct and facts and circumstances subsequent to the time should also be taken into account. 'This view is borne 803 out by the decision of the Chancery Court in In re Grove Vaucher vs The Solicitor to the Treasury(1) in which the domicil of one Marc Thomegay in 1744 was at issue and various facts and circumstances after 1744 were considered to be relevant.
At page 242 of the report Lopes, L.J. has stated: "The domicil of an independent person is constituted by the factum of residence in a country, and the animus manendi, that is, the intention to reside in that country for an indefinite period.
During the argument it was con,ended that the conduct and acts of Marc Thomegay subsequently to February, 1744, at the time of the birth of Sarah were inadmissible as evidence of Marc Thomegay 's intention to permanently reside in this country at that time.
It was said that we must not regard such conduct and acts in determining what the state of Marc Thomegay 's mind was in February, 1744.
For myself I do not hesitate to say I was surprised at such a contention; it is opposed to all the rules of evidence, and all the authorities with which I am acquainted.
I have always understood the law to be, that in order to determine a person 's intention at a given time, you may regard not only conduct and acts before and at the time, but also conduct and acts after the time, assigning to such conduct and acts their relative and proper weight of cogency.
The law, I thought, was so well established on that subject that I should not have thought it necessary to allude to this contention, unless I had understood that the propriety of admitting this evidence was somewhat questioned by Lord Justice Fry, a view which I rather now gather from his judgment he has relinquished.
" We are, therefore, of opinion that.
the conduct and activities of Narain Raja subsequent to the year 1949 are relevant but we shall decide the question of his domicil in this case mainly in the light of his conduct and activities prior to the year 1949.
Reverting to the history of Narain Raja 's life from 1950 onwards, it appears that he had married his wife in 1950.
His wife belonged to Darkoti in Himachal Pradesh near Patiala.
The marriage had taken place at Banaras.
Narain Raja had a son and a daughter by that marriage and according to his evidence the daughter was born in Banaras and the son was born in Bettiah.
The daughter prosecutes her studies in Dehradun.
In 1950 or 1951 Narain Raja had established a Sanskrit Vidalya in Ramnagar in the name of his mother, called Prem Jananl Sanskrit Vidyalaya.
The story of Narain Raja 's political activities is as follows: There was a Union Board in Ramnagar before Gram Panchayats had come into existence, of which Narain Raja was the Chairman or President.
(1) (1889) 40 Oh. D. 216.
804 After Gram Panchayats were established, the Union Board was abolished.
Narain Raja was a voter in the Gram Panchayat and he was elected as the Vice President of the Union called C.D.C.M. Union of Ramnagar.
For the General Elections held in 1952 Narain Raja was a voter from Ramnagar Constituency.
In the General Election of 1957 he stood as a candidate opposing Kedar Pandey.
Thereafter, he became the President of the Bettiah Sub divisional Swatantra Party and then Vice President of Champaran District Swatantra Party.
Taking all the events and circumstances of Narain Raja 's life into account we are satisfied that long before the end of 1949 which is the material time under article 5 of the Constitution, Narain Raja had acquired a domicil of choice in India.
In other words, Narain Raja had formed the deliberate intention of making his home with the intention of permanently establishing himself his family in India.
In our opinion, the requisite animus manendi has been proved and the finding of the High Court is correct.
On behalf of the appellant Mr. Aggarwala suggested that there were two reasons to show that Narain Raja had no intention of making his domicil of choice in India.
Reference was made, in this context, to exhibit 10(c) which is a khatian prepared in 1960.
showing certain properties standing in the name of Narain Raja and his brothers in Nepal.
It was argued that Narain Raja had property in Nepal and so he could not have any intention of living in India permanently.
It is said by the respondent that the total area of land mentioned in the khatian was about 43 bighas.
The case of Narain Raja is that the property had belonged to his natural grandmother named Kanchhi Maiya who had gifted the land to Rama Raja.
The land was the exclusive property of Rama Raja, and after his death, the property devolved upon his sons.
The case of Narain Raja on this point is proved by a Sanad (exhibit AA).
In any event, we are not satisfied that the circumstance of Narain Raja owning the property covered by exhibit 10(c) can outweigh the fact that Narain Raja alone had extensive properties in India after the partition decree of the year 1944.
It was also pointed out on behalf of the appellant that Narain Raja, and before him Rama Raja, had insisted upon designating themselves "Sri 5, ' indicating that they belonged to the royal family of Nepal It was argued on behalf of the appellant that Narain Raja had clung tenaciously to the title of "Sri 5", thereby indicating the intention of not relinquishing the claim to the throne of Nepal if at any future date succession to the throne falls to a junior member of the family of the King of Nepal.
We do not think there is any substance in this argument.
It is likely that Narain Raja and his father Rama Raja had prefixed the title of "Sri 5" to their names owing to the pride of their ancestry and sentimental 805 attachment to the traditional title and this circumstance has no bearing on the question of domicil.
Succession to throne of Nepal is governed by the rule of primogeniture and it cannot be believed that as the second son of his father, Narain Raja could ever hope to ascend to the throne of Nepal, and we think it is unreasonable to suggest that he described himself as "Sri 5" with the intention of keeping alive his ties with Nepal.
There was evidence in this ease that Narain Raja 's eider brother Shiv Bikram Sah has left male issues.
For the reasons expressed, we hold that Narain Raja had acquired domicil of choice in India when article 5 of the Constitution came into force.
We have already referred to the finding of the High Court that Narain Raja was ordinarily resident in India for 5 years immediately preceding the time when article 5 of the Constitution came into force.
It is manifest that the requirements of article 5(c) of the Constitution are satisfied in this case and the High Court rightly reached the conclusion that Narain Raja was a citizen of India at the relevant time.
We accordingly dismiss both these appeals with costs.
One set Appeals dismissed.

summary:
The appellant and respondent were contesting candidates for election to the State Legislative Assembly.
The respondent was declared elected, and the appellant filed an election petition challenging the election on the ground that the respondent was not duly qualified under article 173 of the Constitution as he was a citizen of Nepal and not a citizen of India.
The Tribunal held that the respondent was not a citizen of India, but the High Court in appeal set aside that order and upheld the election of the respondent.
On the question whether the respondent was a citizen of India under article 5 of the Constitution, 0n the material date, HELD: Assuming that the respondent was not born in the territory of India, on a consideration of all the events and circumstances of his life, he had acquired a domicile of choice in India long before the end of 1949 which is the material time under article 5 of the Constitution.
He had formed the deliberate intention of making India his home with the intention of permanently establishing himself and his family in India and therefore had the requisite animus manendi.
He was ordinarily resident in India for 5 years immediately preceding the time when article 5 came into force.
Since the requirements of article 5(c) were satisfied, the High Court rightly reached the conclusion, that he was a citizen of India at the relevant time.
[805 C D] The only intention required for a proof of a change of domicile is an intention of permanent residence.
What is required to be established is that the person who is alleged to have changed his domicile of origin has voluntarily fixed the habitation of himself and his family in, the, new country, not for a mere special.
or temporary purpose, but with a present intention of making it his permanent home, On the question of domicile at a particular time the course of his conduct and the facts and.
circumstances before and after that time are relevant.
[801 F G; 803 F] Udny vs Udny,L.R. 1 H.L. Sc.
441 and, Doucet vs Geoghegan, 9Ch.
441, applied. 794