judgement:
Appeal No. 1177 of 1975.
(From the judgment and order dated 10 10 1974 of the Kerala High Court in Civil Revision Petition No. 734/74).
K.T. Harindranath, and K.M.K. Nair, for the appellants.
T.C. Raghavan and P.K. Pillai, for the respondent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal is by special leave from the judg ment dated 10 October, 1974 of the High Court of Kerala.
The respondent in the High Court challenged the order of the Land Board directing him to surrender 8.78 acres of land.
The High Court declared on a revision petition that the respondent was not liable to surrender the lands speci fied in the order of the Land Board.
The respondent flied a statement under section 85(a) of the Kerala Land Reforms Act 2964 hereinafter called the Act and showed there that the statement related to the family consisting of himself, his wife and children.
Two of his children were minors on 1 January, 1970.
The ceiling area allowed under section 82(1) of the Act for a family consisting of two or more but not more than five members is 10 standard acres which should not be less than 12 and more than 15 ordinary acres in extent.
On this footing the respondent would be entitled to have not less than 12 acres on the notified date, namely, 1 January, 1970.
He was found to have a total area of 28.38 acres.
He alone was the owner of all the lands.
Out of 28.38 acres 3.87 acres were ex empted under section 81.
Excluding 3.87 acres and another 12 acres for the ceiling area the excess land was 12.51 acres.
A statement showing the determination was served on him and his wife.
They were asked to file objections.
Two of the respondent 's children a daughter and a son who were minors on 1 January 1970 attained majority in 1971 and 1973 respectively.
On 28 March, 1974 the respondent executed three deeds of gift transferring a total extent of 12.83 acres to his three children.
To the eldest of them a daughter, who was a major on 1 January, 1970 he transferred 3.84 acres.
To the second daughter who became a major in 1971 he transferred 3.85 acres and to his son who became a major in 1973 he transferred 5.14 acres.
The respondent flied an objection on 5 April, 1974 stating that he and his wife who were the remaining members of the statutory family did not hold more than the ceiling area available to the family and therefore he was not liable to surrender any excess land.
The Land Board recog nised the gift to the eldest daughter who was a major on 1 January 1970 and required the respondent to surrender 8.78 acres which was the subject matter of the other two deeds of gift.
The respondent 's contention which was accepted by the High Court was repeated here.
The contentions were these.
The donees were not minors on the date of the gift.
There fore, the son and the daughter would not constitute members of the family.
Section 82 of the Act only fixes the.
ceil ing area.
The ceiling is 5 acres for an unmarried person of a family consisting of one sole surviving member.
The ceiling is 6 acres for a family of two to five members, 12 acres for a family of more than 5 members, 10 acres in creased by one acre for each member in excess of 5 etc.
The respondent emphasises that the status or nature of the person or the family is relevant.
If a person is a single member family on the relevant date, he cannot claim a larger ceiling on the ground that he became a two member or five member family later.
Under section 83 of the Act the notified date is 1 January, 1970.
This notified date is relevant only for fixing such ceiling.
Section 83 does not say that the particular person or family loses its title to the excess land on that date.
Section 84 of the Act has two parts.
The first part contains body of the section.
The second part contains exceptions.
Therefore, it is said by the respon 963 dent that all voluntary transfers of excess land failing in the body of the section shall be deemed to be transfers calculated to defeat the provisions of the Act and shall be invalid.
The gifts in the present case are said by the respondent to fall under the last exception of section 84 of the Act and it is said that the transaction is saved by the last exception.
The respondent further contends that on 1 November, 1972 the Amendment 'Act 17 of 1972 deleted two exceptions in section 84 of the Act with effect from 16 August, 1968.
The two deleted exceptions were first a transfer on account of natural love and affection and second a transfer in favour of a religious charitable or educational institution.
The Amendment Act of 1972 added an exception with effect from 16 August 1968.
The exception is a transfer by way of gift in favour of his son or daughter, or the son or daughter of his predeceased 'son or daughter by any person owning or holding land in excess of the ceiling area.
The respondent contends that in the present case the two impugned gifts to a daughter and son respectively, and, therefore, they come directly under the newly added excep tion introduced by Act 17 of 1972 and the exception is deemed to be effective from 16 August, 1968.
The respond ent further contends that section 85 and section 85A of the Act lay down the procedure for surrendering the excess land.
Section 86 of the Act vests the excess land in the Government.
The vesting happens both on the determination of the extent and other particulars of the lands, the ownership or possession or both of which is or are to be surrendered.
The respondent contends that until then namely the vesting of the land the owner of the land i.e. the respondent in this case is the legal owner and his ownership or possession is not diverted.
He can therefore deal with the land in legal valid manner.
A gift under the last exception not being hit by the invalidity contemplated by section 84 of the Act is a valid gift, which the respondent was competent to make.
The respondent contends that it is incorrect to say that a gift coming within the last exception of section 84 is ineffective after 1 January, 1970 inasmuch as such a contention will make section 84 a dead letter after 1 Janu ary, 1970.
It is said that it could not have been the intention of the legislature which added the exception only on 1 November, 1972.
The exceptions introduced by the Amendment Act of 1972 to section 84 are three.
The first is partition.
The second is transfer to a person who has been a tenant from 27 July 1960 up to the date of transfer.
The third is a transfer to a son or a daughter or a grandson or grand daughter by a predeceased son or daughter.
The respondent submits that the intention of the legislature is that in all these cases a person can transfer until he is divested of his ownership under section 86.
The respondent further contends that the scheme of the Act and of the Amendment Act of 964 1972 regarding gift is this.
Until 16 August 1968 a gift to any person is valid if the gift was out of natural love and affection.
After that date namely the amendment Act of 1972 only gifts to sons daughters and grand children of prede ceased children are valid.
It is said that there is nothing in the Act which says that an owner like the respondent cannot deal with his land in a lawful and valid manner as long as he is the owner thereof or as long as ownership is vested in him.
Section 87 of the Act says that where any person acquires any land after the date notified under section 83 by gift, purchase, mortgage with possession, lease, surrender or any other kind or transfer inter vivos or by bequest or insistence or otherwise and in conse quence thereof the total extent of land owned or held by such person exceeds the ceiling area, such excess shall be surrendered to such authority as may be prescribed.
Section 87 according to the respondent indicates that after the notified date 1 January, 1970 valid gifts are possible, as such gifts are saved by exceptions to section 84.
The Kerala Land Reforms Act Of 1964 came into force on 1 April 1964.
On 1 January, 1970 the Kerala Land Reforms Act as amended by Act 35 of 1969 came into force.
The respond ent made gifts of his excess land on 28 March, 1974.
On 5 April, 1974 the Land Board served notice on the respondent saying that ' the gifts were invalid and directed the re spondent to surrender the excess Land in excess of the ceiling area as found on 1 January, 1970.
On behalf of the State it is contended that the view taken by the Single Judge in the present case has been over ruled by a Division Bench of the Kerala High Court in a decision reported in It is also said by the appel lant that the decision of the Division Bench is affirmed by the Full Bench of the Kerala High Court in the Judgment reported in Section 82 of the Act lays down the principles governing the fixation of the land ceiling area in respect of differ ent categories of persons.
Section 83 of the Act states that with effect from the notified date no person shall be entitled to own or hold or to possess under a mortgage lands in the aggregate in excess of the ceiling area.
Sec tion 84 of the Act provides that all voluntary transfers effected after the publication of the Kerala Land Reforms Bill 1963 in the Gazette, namely, 15 September 1963, other wise that in certain modes specified in section 84, shall be deemed to be transfers calculated to defeat the provisions of the Act and shall be invalid.
Section 85(1) lays down that if any person owns or holds land in excess of the ceiling area on the notified date, such excess shall be surrendered as provided in the section.
Section 86 lays down that on determination by the Land Board of the extent and other particulars of the lands to be surrendered by the person under section 85 the ownership or possession or both, as the case may be, of the lands shall vest in the Govern ment free from any encumbrance.
Section 87 deals with cases where persons have acquired lands after the notified date by transactions inter vivos, such as gift, purchase, mortgage with possession 965 lease, surrender or by bequest, or inheritance etc.
and in consequence thereof the total extent of land owned or held by such person exceeds the ceiling area, such excess lands should also be surrendered to the prescribed authority and that such land shall also vest in the Government under section 86.
These provisions in the Act establish the dominant legislative intent of the imposition of the ceiling on land holdings and the consequential obligation to surrender lands owned or held in excess of the ceiling area on the noti fied date, namely, 1 January 1970.
The legislature noticed the possibility that after the proposal to introduce the Kerala Land Reforms Bill 1963 published in the Gazette on 15 August, 1963, there might be transactions of transfers with a view to circumventing the provisions of the contem plated legislation.
It is to meet the said situation that.
section 84 of the Act lays down that all such voluntary transfers that have taken place subsequent to the date of publication of the Bill, namely, 15 August 1963, otherwise than in the limited modes specified in the said section, shall be deemed to be transfers calculated to.
defeat the provisions of the Act and shall be invalid.
It is apparent that section 84 was enacted with a view to making the provi sions of sections 83 and 85 effective.
For purposes of calculation of the ceiling area and the determination of the extent of the excess land to be surrendered by persons account will be taken not merely of the land actually owned and possessed by him on the notified date, namely, 1 January 1970, but also of land voluntarily transferred by him subsequent to the date of publication of the Bill in the Gazette on 15 August 1963 by transactions not falling within the certain categories mentioned in section 84.
Section 84 prohibits persons from transferring their excess lands after 15 August, 1963 except as provided in that section.
The effect of sections 83 and 85 has been noticed by this Court in the decision dated 20 August, 1976 in Civil Appeals No. 907 909 of 1974 and Civil Appeals No. 1354 and 1355 of 1975 (State of Kerala & Ors.
vs Philomina(1).
It has been held there that the prohibition against ceiling area under section 83 of the Act and the surrender of the excess land under section 85 of the Act are both to be determined with reference to the position as on the noti fied date under section 83 of the Act.
The crucial date for determining and surrendering the surplus land is 1 January 1970 and not any earlier date.
Transfers which have been effected between 15 August 1963 and 1 January 1970 will be treated as valid provided they come within the excepted categories enumerated in section 84 of the Act.
The lands covered by such valid transfers will be treated as properties belonging to.
the transferors on the notified date for purposes of determining a ceiling area and the extent of excess land to be surren dered by him.
In respect of transfers effected after 1 January 1970 the ceiling area applicable to a person and the extent of his liability to (1) ; 966 surrender, which became crystallised on 1 January 1970, will determine the excess land to be surrendered.
The obligation to surrender the excess land owned or possessed by person as on 1 January 1970 cannot be affected by voluntary transfers even of the excepted varieties mentioned in section 84 of the Act subsequent to the notified date.
The transferor will continue to be liable to surrender to the Government the full extent of the excess land that was in his posses sion as on 1 January 1970.
The High Court erred in holding that the respondent was not to surrender the land.
The appeal is accepted for the foregoing reasons and the judgment is set aside.
Parties will pay and bear their own costs.
P.H.P. Appeal allowed.

summary:
The respondent held 28.4 acres of land and, therefore, filed a return under Section 85(a) of the Kerala Land Re forms Act, 1964.
In the return, he showed his family as consisting of himself, his wife and 3 children.
Section 84 of the Act provided that all voluntary transfers effected after publication of the Kerala Land Reforms Bill, 1963, except certain transfers which were excepted shall be deemed to be transfers calculated to defeat the provisions of the Act and invalid.
The Act was amended by Act 35 of 1969 ' which came into force on 1 1 1970.
By virtue of the said amendment, 1 1 1970 was declared as the notified date.
Section 83 provides that with effect from the notified date no person shall be entitled to own, hold or to possess land in excess of certain acres of land.
Section 85(1) provides that any person holding land in excess on notified date shall surrender the excess.
Section 85 and 85A are the sections laying down the procedure for surrender of the excess land.
Section 86 provides that on determination of the excess land under section 85 the same will vest in the State.
On 1 1 1970, the respondent had one major child and two minor children.
One minor child attained the age: of majority in 1971 and another attained majority in 1973.
In March, 1973, 3 gift deeds were executed one in favour of each one of the children.
The respondent was called upon to hand over the excess land on.
the ground that the transfers executed after 1 1 1970 in favour of the children who were minor on 1 1 1970 will be ignored and the land will be treated as land owned by the respondent.
The respondent filed his objections and contended that he and his wife were the only members of the family and that if the transfers were excepted he did not hold land in excess of the ceiling.
The Land Board came to the conclusion that out of the 28.4 acres of land held by respondents 3.9 acres were exempted under section 81 and that the land measuring 3.8 acres gifted to the major child was a valid gift and in addition the respondent was entitled to hold 12 acres of land.
He came to the conclusion that the respondent was holding excess land to the extent of 8.78 acres.
The respondents filed a Revision Petition in the High Court which allowed the same.
In an appeal by Special Leave the respondent contended: (1) Section 83 is relevant only for fixing ceiling.
It does not say that a person or a family loses his title on the notified date.
(2) Donees were not minors on the date of gift.
That would not constitute the members of the family.
961 (3) Gifts in the present case are saved by the last exception to section 84 which permit ted gifts to any person out of natural love and affection or, at any rate, they are saved by Amendment Act 17 of 1972 by which the exception to Section 84 was made effective from 16 8 1968, in favour of transfers by way of gifts in favour of son or daughter or other near relations.
(4) Sections 85 & 85A lay down the proce dure ' for surrendering the excess land.
Section 86 vests the excess land in the State.
The vesting takes place after the procedure under sections 85 and 85A is over and till then the respondent was the legal owner and could have and in fact validly gifted the land in question.
The appellants contended: (1) The gifts made after 1 1 1970 were not saved by exception to section 84.
(2) The view taken by the Single Judge has been over ruled by a Division Bench and Full Bench of the same High Court.
Allowing the appeal, HELD: (1,) The provisions of the Act dearly establish the dominant legislative intent of the imposition of the ceiling on laud holdings and the consequential obligation to surrender laud owned or hold in excess of the ceiling area on the notified date, namely, 1 1 1970.
Section 84 was enacted because the Legislature anticipated transfers with a view to.
circum vent the provisions of law.
Transfers between 15 8 1963 and 1 1 1970 ' will be valid if within the exceptions provided by section 84.
Transfers made after 1 1 1970 even of the excepted varieties are to be ignored and obligation to surrender the excess land on 1 1 70 cannot be excepted by voluntary transfers made subsequent to.the notified date.
[964 G H, 965 C D] (2) Notified date is 1 1 1970.
That is the relevant date for fixing ceiling.
Subse quent changes in the constitution of family are irrelevant [965 H]


judgement:
Civil Appeal Nos.
1739 1740 of 1968.
(From the Judgment and Decree dated 14 2 1967 of the Delhi High Court in Regular First Appeal Nos.
5 D, and 54 D of 1958).
969 V. section Desai and Girish Chandra, for the Appellant.
Sachin Chaudhary, B.P. Maheshwar and Suresh Sethi, for the Respondent No. 1 in (CA.
1739/68) and for Respondent No. 2 in 1739/68) and Respondent No. 1 in (CA.
No. 1740/68).
A. K. Sen and D. Goburdhan, for Respondent No. 2 in (CA.
No. 1740/68).
The Judgment of the Court was delivered by SHINGHAL, J.
, These two appeals by certificate have been consolidated by an order of this Court dated April 15, 1969.
They are directed against a common judgment of the Delhi High Court dated February 14, 1967, in Regular First Appeals Nos.
5 D and 54 D of 1958, by which the judgment and decree of the trial court dated January 13, 1958 have been set aside with costs throughout.
As this has resulted in the dismissal of the suit raised by the Union of India, it has filed the present appeals.
The facts giving rise to the appeals are quite simple.
Harjas Rai Malhotra, defendant No. 3, is the father of Krishan Lal Malhotra, defendant No. 2.
The liability of defendant No. 3 to income tax and super tax for the as sessment year 1947 48, was fixed Rs. 1,25,090/11/ in March, 1952.
A demand was made for its payment, but he neglected to meet it and a certificate was issued on October 8, 1952 to the Collector of Delhi for its recovery as ar rears of land revenue.
The Collector was asked to attach house No. 15, Keeling Road and house No. 9, Hailey Road in New Delhi, of defendant No. 3.
Both the houses were attached on October 13, 1952.
Meanwhile, defendant No. 3 appealed against the order of assessment.
The Appellate Assistant Commissioner allowed the appeal on May 12, 1953, set aside the assessment and directed a fresh assessment.
The order of fresh assessment was made on November 30, 1953 and the incometax demand was reduced to Rs. 1,05,769.13.
The as sessments for 1944 45 and 1948 49 were completed on March 28 and 31, 1953, respectively, raising a tax demand for Rs. 1,94,738.15.
A recovery certificate was issued to the Collector for the same on May 4, 1953 and the house at No. 15, Keeling Road was again attached on August 6, 1953.
We are not concerned with the house at No. 9, Hailey Road, for the controversy before us relates to house No. 15, Keeling Road, hereinafter referred to as the house.
That house had been ostensibly purchased by defendant No. 2 in December, 1946 for Rs. 60,000/ .
He filed an application objecting to the attachment on the ground that the house belonged to him, but the Collector dismissed the objection holding that the house belonged to defendant No. 3.
Defend ant No. 2 did not appeal against that order and did not question it by a suit.
Thus far, the facts are not in dispute.
970 It was alleged in the plaint that the house was pur chased by defendant No. 3, "benami", in the name of his son defendant No. 2, out of his "own funds drawn from his bank account" and that 'the "full beneficial ownership, right, title and interest in the said property has always belonged and continues to this day to belong to the 3rd defendant.
" The plaintiff alleged further that during the pendency of his appeal to the Appellate Assistant Commissioner against the assessment which had been made in March 1952 for 1947 48 and the assessment proceedings for 1944 45 and 1948 49, defendant No. 3 "in collusion and conspiracy with the 2nd defendant and certain other persons, and with the view, intent and purpose of defeating and delaying his creditors including the plaintiff, had recourse to diverse ways and means" as detailed in the plaint.
He was thus alleged that, in February 1953, defendants Nos. 2 and 3 and five other persons purported to form a limited company known as Moksh Builders and Financiers Ltd., hereinafter referred to as the Company, which was arrayed as defendant No. 1 in the suit, with an authorised capital of Rs. 5,00,000/ divided into 5000 shares of Rs. 100/ each.
There were 7 subscribers to the Memorandum and the Articles of Association of the Compa ny and each of them took 10 shares, Soon after the Appel late Assistant Commissioner made his aforesaid order dated May 12, 1953 for fresh assessment of the income tax liabili ty of defendant No. 3, a sale deed dated May 25, 1953 was brought into existence whereby defendant No. 2 "purported to convey" the house to defendant No. 1 for Rs. 1,00,000/ of which Rs. 90,000/ were payable in the shape of shares in the Company, Rs. 8,000/ payable to Sunrise .Investors Ltd. and Rs. 2000/ in cash.
The plaintiff pleaded that "these transactions were all sham, colorable, and effected and entered into with the active aid, instigation and advice of the 3rd defendant and to subserve and carry out the object of placing his property, viz., No. 15, Keeling Road out of the reach of his creditors".
It was further urged as fol lows, "The consideration mentioned in the sale deed of 25th May, 1953 was illusory.
In effect and substances the 2nd defendant pur ported to sell a house to the I st defendant in which company in return was to become a holder of shares .
of controlling interest, the shares being the alleged price.
, Except for the legal fiction of the I st defendant Company being juristic person the 'sale was by the vendor to himself.
None of these de vices and subterfuges could divest the 3rd ', defendant of his ownership of the property in question.
The 1st defendant company by its_promoters directors and office bearers was fully aware of all the facts of the case, including the true state of the title to the property No. 15, Keeling Road, the highly embarrassed financial circumstances of the 3rd defendant the facts that he owed to the plain tiff" alone taxes to the amount of several lakhs of rupees etc.
The 1st defendant is not a purchaser in good faith for consideration of the said property or without notice of the title of the 3rd defendant.
On the other hand the sale deed dated 25th May, 1953 to the 1st defendant was executed by the name lender the 2nd defendant at the instance of the true owner of 971 the 3rd defendant with intent to defeat or delay the latter 's creditors, and is voidable at the option of any of such creditors includ ing the present plaintiff.
" Defendant No. 1 objected to the attachment of the house for the realisation of the arrears of income tax of defend ant No. 3.
The Additional Collector allowed the objection by a summary inquiry, and the Chief Commissioner dismissed the appeal on April 1, 1954.
Both those officers, according to the plaintiff, proceeded on "prima facie considerations" and left the parties to seek their redress in the civil court.
With these specific averments the,plaintiff raised its suit seeking leave to sue on behalf and for the benefit of itself and the other creditors, if any, of defendant No 3.
It prayed for a declaration that (i) the sale deed dated May 25, 1953 was void as against the plaintiff and all other creditors of defendant No. 3, and (ii) the house is and continued to be owned by defendant No. 3.
In the alterna tive, the plaintiff prayed for a declaration that the shares allotted to defendant No. 2 belonged to defendant No. 3.
It also prayed for a declaration that it was entitled to pro ceed against the "properties which may be declared to be of 3rd defendant 's" by attachment and sale to realise the tax arrears due from him.
A prayer was made for setting aside the orders of the Additional Collector and the Chief Commis sioner on the objection petition of defendant No. 2.
Defendant No. 3 did not appear to contest the suit in spite of personal service and the trial court made an order on April 15, 1955 to proceed against him ex parte.
Separate written statements were filed by the Company and defendant No. 2 The Company took the plea, inter alia, that it had been genuinely and properly formed and that it was a bona fide purchaser for value and the "transaction was quite real and genuine".
It denied that the sale deed dated May 25, 1953, was executed at the instance of defendant No. 3, or that it was intended to defeat or delay his creditors.
P was pleaded that defendant No. 2 was the rightful owner of the house which he had rightfully purchased with "his own money (Rupees 10,000/ ' by cheque No. 32920 dated 14.11.1946 on the New Bank of India Ltd., New Delhi drawn by his mother K. Rani and Rs. 50,000/ paid in cash before Sub Registrar)".
The Company also pleaded that the transaction of sale in its favour was without notice of any body else 's claim and was binding.
Defendant No. 2 filed a short written statement stating that he was the owner of the house having purchased it with "his own money".
He pleaded that he had paid Rs. 10,000/ by cheque on New Bank of India Ltd., New Delhi, and Rs. 50,000/ were paid before the SubRegistrar.
He pleaded further that he had no knowledge of the Collector 's order and that his order, if any, was ex parte.
As regards the Company, defendant No. 2 pleaded that it was a real and genuine Company and that out of his shares worth Rs. 90,000/ he had sold shares worth Rs. 74,000/ .
12 1338SCI/76 972 The trial court found that the house was purchased "benami" in the name of defendant No. 2, by defendant No. 3 with his own money and that the sale of the house to the Company by defendant No. 2, was "sham and was effected in order to defeat or to delay the creditor of defendant No. 3 and that defendant No. 1 had no real existence.
" The trial court therefore granted a decree declaring that the sale deed dated May 25, 1953 was void as against the plain tiff and all other creditors, if any, of defendant No. 3 and that the House" is and continues to be owned by the 3rd defendant and that the plaintiff is entitled to proceed against the said properties by way of attachment and sale to realise the tax arrears due from him.
" The trial court set aside the orders dated October 9, 1953 of the Additional Collector on the objection petition of defendant No. 2 and of the Chief Commissioner dated April 1, 1954.
As the High Court has set aside the judgment ' and decree of the trial court, the present appeals have been filed by the plaintiff as aforesaid.
We shall refer to the findings of the High Court as and when necessary.
The main point in controversy was whether the house was purchased by defendant No. 3 'benami ' in the name of defend ant No. 2? This was the subject matter of issue No. 1 in the trial court.
We have made a reference to the plaintiff 's plea that the purchase was "benami" and payment was made out of the funds of defendant No. 3, which were drawn by him from his own account.
As has been mentioned, defendant No. 3 did not care to appear and contest the suit even though he was served and knew the nature of the plaintiff 's claim and the basis thereof.
Defendant No. 2 appeared at the trial and pleaded that he purchased the property "with his own money".
The source of the money was within his special knowledge, but it will be recalled that he contended himself by pleading that Rs. 10,000/ were paid by him by a cheque and Rs. 50,000/ were paid before the Sub Registrar.
We have made a reference to the plea of the Company in this respect.
It is no body 's case that the sale of the house to defendant No. 2 was fictitious and that the title of the transferor was not intended to pass.
What we have to examine is whether the title, on sale of the house in Decem ber 1946, was transferred to defendant No. 3, who was.
the real purchaser, and not to defendant No. 2, who was only the ostensible transferee and was no more than a "benamidar".
It has been held in Gangadara Ayyar and others vs Subrarnania Sastrigal and others(1) that "in a ease where it is asserted that an assignment in the name 011 one person is in reality for the benefit of another, the real test is the source whence the consideration came" It is also necessary to examine in such eases who actually has enjoyed the benefits of the transfer.
Both these tests were applied by this Court in Meenakshi Mills, Madurai vs The Commissioner of IncomeTax Madras.(2) It is therefore necessary, in the present case, to (1) A I.R. (2) ; 973 find out the source of the consideration for the. transfer, as also to find out who has been in enjoyment of the bene fits of the transaction.
It is equally well settled that, although the onus of establishing that a transaction is 'benami ' is on the plaintiff, 'where it is not possible to obtain evidence which conclusively establishes or rebuts the allegation, the case must be dealt with on reasonable proba bilities and legal inferences arising from proved or admit ted facts.
" The burden of proof is, however not static, and may shift during the course of the evidence.
Thus while the burden initially rests on the party who would fail if no evidence is led at all after the evidence is recorded, it rests upon the party against whom judgment would be given if no further evidence were adduced by 'either side, i.e. on the evidence on record.
As has been held by this Court Kalwa Devadattam and others vs The Union of India and oth ers(1) that where evidence has been led by the contesting parties on the question in issue, abstract considerations of onus and out of place, and the truth or otherwise of the case must.
always be adjudged on the evidence led by the parties.
This will be so if the court finds that there is no difficulty in arriving at a definite, conclusion.
It is therefore necessary to weigh the evidence in this case and to decide whether, even if it were assumed that there was no conclusive evidence to establish or rebut the "benami" allegation, what would, on a careful assessment of the evi dence, be a reasonable probability and a legal inference from relevant and admissible evidence.
The sale in question was admittedly made in December 1946.
Defendant No. 2 had admitted in his statement date May 29, 1957 that he was born in 1928.
He was therefore 18 years old at that time.
His father (defendant No. 3) was also alive at that time, and it is not his case that he (defendant No. 2) had any money ' of his own, for he has stated that he got Rs. 10,000/ from his mother and Rs. 50,000/ from his grandfather to constitute the sum of Rs. 60,000/ for which he purchased the house.
It is however a significant fact that the defendant No. 2 did not disclose any such source of the money in his written state ment dated April 15, 1955.
It took ,him two years to come out with such a case.
He was given an opportunity, during the course of his cross examination, to explain the omission regarding the disclosure of the source of the sum of Rs. 50,000/ in his written statement, but he contented himself by saying that he could not give "any reason as to why he (I) omitted to mention in the written statement about receipt of Rs. 50,000/ from ' his (my) grandfather".
Similarly he failed to explain why he did not mention in his written statement that the cheque for Rs. 10,000/ was drawn by his mother.
It is true that there is a mention in document exhibit D1 that out of the sum of Rs. 60,000/ "a sum of Rs. 10,000/ has already been paid to the vendor by the vendee by cheque No. 32920 dated November 14, 1946, on the New Bank of India Ltd., New Delhi," but it is again signifi cant that while the document states that the payment of Rs. 10,000/ was made by (1) ; 974 the vendee (defendant No. 2) 'by the aforesaid cheque, he has stated in the trial court that the cheque for Rs. 10,000/ was issued by his mother, in favour of the vendor.
He was not able to explain the discrepancy: and merely stated that his written statement (which did not disclose the source and the name of the person who drew the cheque for Rs. 10,000/ ) was correct.
If it had been a fact that defendant No. 2 really obtained a cheque for Rs. 10,000/ from his mother, in the vendor 's name, and, if it was not really a cheque drawn by his father, there was nothing to prevent him from establishing that f. act with reference to the counter foil of his mother 's cheque book or her account with the bank.
The defendant has also not stated whether he repaid the money to his mother and, if so, when, or whether it was a gift to him and, if so, why, when she had another son also.
As it is, it cannot be said that defendant No. 2 has been able to establish that it was he who paid the sum of Rs. 10,000/ to the vendor.
According to the written statement of defendant No. 2, the balance of Rs. 50,000/ was paid before the Sub Regis trar.
He has stated that about 7 or 8 days before his death, his grandfather Sohna Mal (who died in October 1946) paid him Rs. 50,000/ ' after taking.
out the money which was "lying underneath his pillow.
" He could not however stand the test of cross examination, for he could not state where the money was kept by his grandfather and whether, he at all had a bank account.
The High Court did not care to examine the reliability of the defendant 's evidence regarding the source from which he received Rs. 60,000/ even though it was an important question and had been examined by the trial court with reference to all the other evidence on the record including the statement of Amar Nath Sharma D.W.3.
We find that there is no reason for us to disagree with the trial court 's view in the matter, based on the parol evi dence on the record.
In arriving at this conclusion, we have not relied on that part of the trial court 's judgment where it has made a reference to the admission of defendant No. 3, for we shall deal with them separately.
The reason able preponderance of probability therefore is that defendant No. 2 has failed to establish the source of the consideration of Rs. 60,000/ even though it was art impor tant fact within his special knowledge.
He could not therefore be said to be the real owner of the house.
It is also an important fact that defendant No. 2 has failed, to prove that he enjoyed the benefit of the sale.
He claimed that he had shown the rent of the house in his income tax returns, but he did not produce any rent note.
Even the tenant who was 9aid to be living in the house on the date of the sale, has not been examined.
While the trial court has examined this aspect of the controversy, the High Court has missed it altogether.
The High Court went by the view that statement exhibit P. 1 of defendant No. 3, the income tax return of defendant No. 3 showing the house as his property, his statement of account and the assessment order for the year 1948 49 showing the same, were not admissible 975 in evidence against defendant No. 2 and that there was no evidence either of the plaintiff or the defendants on which a finding as to the "benami" nature Of the transaction could be based.
That decision is obviously based on a misap preciation of the law relating to "benami" transactions for, as has been stated, it was necessary to find out whether it was defendant No. 3 who had enjoyed the benefit of the transaction.
Moreover, the finding of the High Court is against the evidence on the record, and must be set aside.
We have therefore no hesitation in holding that the purchase of the house was "benami" and that its ostensible owner defendant No. 2 was not the real owner but was a "benamidar.
" The ancillary question is as to who was the real owner of the house for whom defendant No. 2 was the "benamider"?.
We have not taken the admissions of defendant No. 3 into consideration so far, but they have a direct bearing on the question now before us.
lie recorded a state ment exhibit P. 1 dated August 12, 1950 before Puran Chand P.W. 1, Income tax Officer, which has been proved by the wit ness.
It has been stated there as follows, "I purchased 15 Keeling Road on 12.12.46 for Rs. 60,000/ in the name of my son (Major Krishan Lal).
This money was paid out of my bank accounts and I have shown the details and payments from my bank pass books.
" 0 Then there is document exhibit P. 6 which is a copy.
of the personal account of defendant No. 3.
It was filed in connection with the return of his income tax for 1947 48.
An attempt was made to argue that the document had not been proved or marked as an exhibit.
We have seen the original document and we have no doubt that the whole of it was tendered in evidence and was marked as exhibit P. 6.
The identity of the document has been established by the state ment of Puran Chand P.W. 1 that the scribbling on it was made by him.
The document has therefore been proved beyond doubt.
It shows that it was defendant No. 3 who spent Rs. 60,000/ on "property" in that assessment year.
Both exhib its P. 1 and P. 6 go to prove that the house was purchased by defendant No. 3 out of his own funds in the name of his son defendant No. 2 who, it will be recalled, was admittedly only 18 years old at that time and did not have any money of, his own.
Moreover defendant No. 3 showed the income accruing from the house as his own income in his return for the years 1947 48 and 1948 49.
Counsel for the respondents have urged for the exclusion of these admissions.
The main attack was that they were admissions of a co defendant and were not admissible against defendant No. 2.
As has been stated, we have not taken them into consideration as evi dence against that defendant.
There is however no force in the other argument that they are not admissible in evidence against defendant No. 3 as he was not confronted with them in the, trial court and they were not adverse to the inter est of their maker at the time when they were made.
It has 976 been held by this Court in Bharat Singh and another vs Bhagirath(1) that an admission is substantive evidence of the fact admitted, and that admissions duly proved are "admissible evidence irrespective of whether the party making them appeared in the witness box or not and whether that party when appearing as witness was confronted with those statements in case it made a statement contrary to those admissions.
" In taking.this view this Court has noticed the decision in Ajodhya Prasad Bhargava vs Bhawani Shanker Bhargava and another(2) also.
The point has been considered and answered as follows in Wigmore on Evidence, Volume IV, 1048 (at page 3), "The theory of the Hearsay rule is that an extra judicial assertion is excluded unless there has been sufficient opportunity to test the grounds of assertion and the credit of the witness, by cross examination by the party against whom it is offered (post, 1362); e.g. if Jones had said out of court.
"The party opponent Smith borrowed this fifty dollars", Smith is entitled to an opportunity to cross examine Jones upon that assertion.
But if it is ,Smith himself who said out of court, I borrowed this fifty.
dollars, cer tainly Smith cannot complain of lack of opportunity to cross examine himself before his assertion is admitted against him.
Such a request would be absurd.
Hence the objection of the Hearsay rule falls away, because the very basis of the rule is lacking, viz, the need and prudence of affording an opportunity of crossexamination.
" Moreover, the defendant No.3 had full opportunity,. to appear and defend himself, but he did not do so and the case proceeded against him ex parte.
The plaintiff even tried to examine him as his own witness, but his appearance could not be secured in spite of the prayer for the issue of summonses and a warrant.
There is therefore force in the argument to the contrary.
So also, there is no force in the argument that the aforesaid admissions or statements of defendant No. 3 could not be read against him as they were not adverse to his interest when made.
There is no such requirement of the Evidence Act and the argument is untenable as it unreasona bly restricts the opportunity to prove the true state of affairs on the party 's own showing and to demolish his subsequent claim as self contradictory.
This point has also been dealt with in Wigmore on Evidence, 1048 (at page 4) in this way, "It follows that the subject of an admission is not limited to facts against the party opponent 's interest at the time of making it.
No doubt the weight of credit to be given to such statements is increased when the fact stated is against the person 's interest at the time; but that circumstance has no bearing upon their admissibility.
On principle, it is plain that the probative reason why a party opponent 's utterance is sought to be used against him is ordinarily the reason noted above, in par.
(1)b,.
viz. that it exhibits (1) ; (2) A.I.R. 1957 All. 1. 977 an inconsistency with his present claim, thus tending to throw doubt upon it, whether he was.
at the time .speaking, apparently in his own favour or against his own interest. ' The contrary view, has been characterised by Wigmore as "a fallacy.
in the fullest sense.
" Another argument which has been advanced against the admissibility of the aforesaid admissions of defendant No. 3 is that they could be evidence only in terms of section 33 of the Evidence Act.
That argument is also quite untenable because section 33 deals with statements of persons who cannot be called as witnesses, and does not restrict or override the provisions relating to admissions in the Evidence Act.
The High Court also committed a similar error of law in its impugned judgment.
The aforesaid admis sions of defendant No. 3 are therefore satisfactory evidence to prove.that he himself was the owner of the house and his son, defendant No. 2 was merely a "benamidar" for him.
It would thus appear that the finding of the trial court on issue No. 1 which dealt with the question whether the house was purchased by defendant No. 3 "benami" in the name of defendant No. 2, was correct and should be restored as the High Court 's finding to the contrary has been viti ated by the substantial errors of law mentioned above.
The other important question is whether the sale of the house in favour of the Company (defendant No. 1 ) was a sham transaction and was effected to defeat and delay the creditors of defendant No. 3.
This was the subject matter of issue No. 2 and the trial court 's finding in affirmative has not even been examined by the High Court.
We find that the admitted facts of the case are by themselves sufficient to show that the finding of the trial court is justified and does not call for any interference.
Defendant No. 3 was assessed to income tax for a sum of Rs. 1,25,090/11/ for assessment year 1947 48 in March 1952.
Defendant No. 3 failed to pay that amount on demand and a recovery certificate was issued on October 8, 1952.
The house was therefore attached on October 13, 1952.
Defendant No. 2 raised an objection, and prayed for the release of the house.
The Collector rejected the objection on March 3,.
No appeal, or other remedy was sought against .that order.
The Appellate Assistant Commissioner however allowed the appeal of defendant No. 3 against the assessment of income tax and ordered a fresh attachment by his order dated May 12, 1953.
In the meantime, the Company was incorporated in February, 1953.
The assessment of incometax for the years 1944 45 and 1948 49 was completed in March 1953 raising the tax demand to Rs. 1,94,735.15, and a recovery certificate was issued on May 4, 1953.
It was in these circumstances that defendant No. 2, who had failed to obtain an order for the release of the house as aforesaid, has tened to sell it to the Company 22 on May 25, 1953.
As has been stated, a fresh recovery certificate was issued to the Collector on May 4, 1953 and the house was again attached on August 6, 1953.
These facts speak for themselves and are quite sufficient to justify the trial court 's finding that sale of the house to the Company was a sham transaction and arose out of the anxiety to save the house some how from sale for realisation of the income tax.
The Company was in fact dominated by defendant No. 2 and his close relations and did not even pay the sale price in cash.
It is also significant that the shares of the other 'relations were insignificant.
Moreover the.
Company could not lead evidence to show that it was able to transact any substantial business whatsoever.
We have therefore no reason to disagree with the trial court 's finding that the Company was formed just to transfer the house to it in an effort to save it from attachment and sale for realisation of the income tax arrears of defendant No. 3.
The finding of the trial court on the issue is quite correct and the High Court committed a serious error of law in not examining this aspect of the matter at all even though it had a great bearing on the controversy.
In the result, we are constrained to allow the appeals.
The impugned judgment and decree of the High Court dated February 14.
1967 are set aside and the decree of the trial court is restored with costs throughout one hearing fee.
V.P.S. Appeals allowed.

dataset_name: IN-Abs

summary:
The appellant (plaintiff) filed a suit on behalf of and for the benefit of itself and of other creditors against the respondents (3 defendants) and prayed for a declaration that,, (1) the sale deed of the house in dispute by the 2nd defendant in favour of the 1st defendant was void as against the plaintiff and all other creditors of the 3rd defendant; and (2) that the house was and continued to be owned by the 3rd defendant.
The house was sold in the name of the 2nd defendant for Rs. 69,000.
He is the son of the 3rd defend ant who was alleged to be the real purchaser.
As the 3rd defendant failed to pay the arrears of income tax due from him the house was attached as his property.
The 2nd defendant raised an objection but the objection was reject ed.
The 3rd defendant filed an appeal against the assess ment of income tax and while the appeal was pending before the Appellate Assistant Commissioner, the 2nd and 3rd de fendants, and five other persons formed a limited company, namely, the 1st defendant.
The Appellate Assistant Commis sioner allowed the 3rd defendant 's appeal and ordered a fresh assessment of his income, and the Income Tax Officer made a fresh assessment.
Soon after the 2nd defendant purported to convey the house of the 1st defendant for Rs. 1,00,000 of which Rs. 90,000/ were payable to the 2nd de fendant in the shape of shares in the company.
The house was again attached for recovery of the tax due from the 3rd defendant.
The 1st defendant objected to that attachment.
The objection was allowed and the parties were referred to the Civil Court for.
redress and the suit was filed.
The trial court decreed the suit, but the High Court, in appeal, set aside the judgment.
Allowing the appeal to this Court, HELD: The evidence disclosed that the 3rd defendant 'was the owner of the house, and his son, the 2nd defendant, was merely a benamidar for him; and that the 1st defendant Company was formed just to transfer the house to it in an effort to save it from attachment and sale for realisation of the income tax arrears of the 3rd defendant.
[978 A C] (a) In a case where it is asserted that an assignment in the name of one person is in reality for the benefit of another, it is necessary to find out the source whence the consideration came, and to examine who actually was enjoying the benefits of the transfer.
[907 F G] Gangadara Ayyar and others vs Subramania Sastrigal and others (A,I.R. referred to Meenakshi Mills, Madurai vs The Commissioner of In come tax, Madras [(1956) S.C.R. 691] followed.
(b) Although the.
onus of establishing.
g that a transaction is benami is on the plaintiff, where it is not possible to obtain evidence which conclusively establishes or rebuts the allegation.
, .the case must be dealt with on reasonable probabilities and legal inferences arising from proved.
or admitted facts.
While the burden initially rests on the party who would fail if no evidence is led at all, after the evidence is recorded, it rests upon the party against whom judgment would be given if no further evidence were adduced by either side.
Thus, the burden of proof is not static, and may shift during the course of the trial Where the 968 entire evidence has been led by the contesting parties on the question in issue, abstract considerations of onus are out of place, and the truth or otherwise of the case must always be.
adjudged on the evidence: led by the parties.
It is therefore necessary to weigh the evidence in this case and to decide whether.
even if it were assumed that there was nO conclusive evidence to establish or rebut the benami allegation, what would, on a careful assessment of the evidence, be a reasonable.
probability and a legal inference from relevant and admissible evidence.
[973 A D] Kalwa Devadattam and two Others vs The Union of India and others ; followed.
In the present case, the 2nd defendant, at the time of the sale, was just 18 years old, and did not have any money of his own.
His father the.
3rd defendant was alive.
The High Court did not examine the reliability of the 2nd defendant 's evidence regarding the source.
from which he received the sum of Rs. 60,000/ even though it was an important question and had been examined by the trial court with reference to the entire evidence on record.
The rea sonable preponderance of probability on the evidence is, that the 2nd defendant had failed to establish the source of the consideration of Rs. 60,000/ even though it was an important fact within his special knowledge.
[973 E H] (d) The 2nd defendant had also failed to prove that he enjoyed the benefit of the sale.
[974 G] In order to find out whether the 3rd defendant was enjoying the benefit of the transaction, the finding of the High Court was clearly against the evidence on record.
The admissions contained in the records before the Income Tax Officer proved that the house was purchased by the 3rd defendant out of his own funds in the name, of his son, the 2nd defendant, and that the 3rd defendant was enjoying the income accruing from.
it as his own income.
[975 E F] (f)(i) The admissions by the 3rd defendant were substan tive evidence of the facts admitted and such admissions, duly proved, were admissible evidence irrespective of wheth er the party making them appeared in the witness box or not, and whether that party when appearing as a witness was confronted with those statements in case a statement con trary to those admissions was made.
They were taken into consideration against the 3rd defendant and not against the 2nd defendant.
[975 H, 976 A B] Bharat Singh and another vs Bhagirath ; , followed.
(ii) There is no requirement of the Evidence Act that unless the admissions were adverse to his interests when made, they could not be read against the person making them.
[976 F] (iii) The contention that the evidence of the admissions is admissible only in terms of section 33 of the Evidence Act was untenable because that section deals with statements of persons who cannot be called as witnesses and does not restrict or override the provisions relating to admissions in the Evidence Act.
[977 A C] (g) The 2nd defendant, who had failed to obtain an order for the release of the house from attachment when it was first attached, hastened to sell the house when the assess ment proceedings were pending before the Income tax De partment.
The 1st defendant Company was in fact dominated by the 3rd defendant and his close relations, it did not even pay the sale price.
in cash, and there was no evidence ' to show that it was able to transact any substantial busi ness.
Therefore, the sale of the house in favour of the 1st defendant was a sham transaction and was effected only to defeat and delay the creditors of the 3rd defendant.
[978 A B]


judgement:
Civil Appeal No. 984 of 1975.
Appeal by Special Leave from the judgment and Order dated the 10th February 1975 of the Andhra Pradesh High Court in W.A. No. 752 of 1974.
P. Ramachandra Reddy, Advocate General, A.P., P. P. Rao and V. Seetharaman, for the appellant.
R. C. Raghavan, G. Vedanta Rao and B. Kanta Rao, for the respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
The short question that arises for determination, in this appeal is whether a person whose parents belonged to a Scheduled Caste before their conversion to Christianity can on conversion or reconversion to Hinduism, be regarded as a member of the Scheduled Caste so as to be eligible for the benefit of reservation of seats for Scheduled Castes in the matter of a admission to a medical college.
The parents of the respondent originally professed Hindu religion and belonged to Madiga caste which is admittedly a caste deemed to be a Scheduled Caste in the State of Andhra Pradesh as specified in Part I of the Schedule to the Constitution (Scheduled Castes) Order, 1950.
They were both converted to Christianity at some point of time 1048 which does not appear clearly from the record, but it was the case of the respondent in his Writ Petition that he was born after their conversion.
This was also the assumption on which the arguments proceeded before the High Court and before us, too.
The counsel or the respondent expressed his readiness to argue the case on the same assumption, namely, that the respondent was born after the conversion of his parents, or, in other words, he was born of Christian parents.
It appears that in the State of Andhra Pradesh, for the purpose inter alia of admission to medical college, converts to Christianity are treated as belonging to backward class and, therefore, when the respondent applied for admission to Gandhi Medical College in 1973, he described himself as a member of a backward class.
But he did not succeed in getting admission.
Thereupon he got himself converted to Hinduism on 20th September, 1973 from Andhra Pradesh Arunchatiya Sangham stating that he had renounced Christianity and embraced Hinduism after going through Suddhi ceremony and he was thereafter "received back into Madiga caste of Hindu fold".
On the strength of this certificate, claiming to be a` member of Madiga caste, the respondent applied for admission to Guntur Medical College and on the basis that he was a member of a Scheduled Caste, he was provisionally selected for admission.
But subsequently he was informed by the Principal of the Medical College that his selection was cancelled as he was not a Hindu by birth.
The Principal apparently relied on Note (b) to clause (C) of rule 2 of the Rules issued by the Government of Andhra Pradesh under GO Rt.
No. 1315 dated 4th December, 1973 for admission to the M.B.B.S. Course in Government Medical Colleges for the Academic year 1973 74.
This Note was in the following terms: "No candidate other than Hindu including a Sikh can claim to belong to Schedule Castes.
No candidates can claim to belong to the Scheduled Caste except by birth.
" The respondent thereupon preferred a writ petition in the High Court of Andhra Pradesh challenging the validity of cancellation of his admission on the ground that Note (b), which required that a candidate, in order to be eligible or a seat reserved for Scheduled Caste, should belong to a Scheduled Caste by birth, went beyond the scope of the Constitution (Scheduled Castes) order, 1950 and was, therefore, void and the Principal was not entitled to cancel his admission on the ground that he was not a Hindu or a member of a Scheduled Caste by birth.
This ground of challenge was accepted by a Single Judge of the High Court and on appeal, a Division Bench of the High Court also took the same view.
In fact, it was conceded before the Division Bench by the learned Government Pleader appearing on behalf of the State that Note (b) was repugnant to the provisions of cl.
(3) of the Constitution (Scheduled Castes) order, 1950, since the only requirement of that clause was that in order to be a member of a Scheduled Caste, person should be professing Hindu or Sikh religion and it did not prescribe that he should be a Hindu by birth.
The State did not succeed in obtaining leave to appeal from the High Court and hence it preferred a special leave petition to this Court.
When the special leave petition came up for hearing, there was no decision of 1049 this Court dealing with the question as to whether a convert or reconvert to Hinduism can become a member of a Scheduled Caste and of so, in what circumstances and hence we granted special leave to the State, on the State agreeing that whatever be the result of the appeal, the admission of the respondent will not be disturbed and that the State will, in any event, pay the costs of the respondent.
It may be pointed out that since then a decision on this question has been rendered by a Bench of three judges of this Court to which we shall refer later.
It is clear on a plain reading of clause (4) of article 15 that the State has power to make special provision for scheduled Castes and in exercise of this power, the State can reserve seats in a medical college for members of Scheduled Castes without violating article 1 S or cl.
(2) of article 29.
The expression 'Scheduled Castes ' has a technical meaning given to it by cl.
(24) of article 366 and it means "such castes, races or tribes or parts or groups within such castes, races or tribes as are deemed under article 341 to be Scheduled Castes for the purposes of this Constitution.
" The President in exercise of the power conferred upon him under article 341 has issued the Constitution (Scheduled Castes) order, 1950.
paragraphs (2) and (3) of this; order are material and they read as follows: "2.
Subject to the provisions of this order, the castes, races or tribes or parts of or groups within caste or tribes specified in Part I to XIII of the Schedule to this order shall, in relation to the States to which these parts respectively relate, be deemed to be scheduled castes so far as regards members thereof resident in the localities specified in relation to them in those Parts of that Schedule.
Notwithstanding anything contained in Paragraph 2, No. person who professes a religion different from the Hindu or the Sikh religion shall be deemed to be a member of a Scheduled Caste.
" F The Schedule to this Order in part I sets out the castes, races or tribes or parts of or groups within castes or tribes which shall in the different areas of the State of Andhra Pradesh be deemed to be Scheduled Castes.
One of the castes specified there is Madiga caste and that caste must, therefore, be deemed to be a Scheduled Caste.
But by reason of c].
(3), a person belonging to Madiga caste would not be deemed to be a member of a Scheduled Caste unless he professes Hindu or Sikh religion at the relevant time.
It is not necessary that he should have been born a Hindu or a Sikh.
The only thing required is that he should at the material time be professing Hindu or Sikh religion.
Now, Note (b) was interpreted by the Principal of the Medical College to require that a candidate, in order to be eligible for a seat reserved for Scheduled Castes, should be a Hindu by birth.
This interpretation was plainly erroneous because what Note (b) required was not that a candidate should be a Hindu by birth but that 1050 he should belong to a Scheduled Caste by birth.
But even this requirement that a candidate in order to be eligible for a reserved seat should be a member of a Scheduled Caste by birth went beyond the provision in cl.
(3) of the Constitution (Scheduled Castes order.
1950 and was rightly condemned as void and no reliance was placed upon it on behalf of the State.
The principal argument advanced on behalf of the State was that when the respondent was converted to Hinduism, he did not automatically become a member of the Madiga caste, out it was open to the members of the Madiga caste to accept him within their fold and it was only if he was so accepted, that he could claim to have become a member of the Madiga caste.
There was no evidence in the present case, contended the State, showing that the respondent, on his conversion to Hinduism, was accepted as a member of the Madiga caste by the other members of that caste and, therefore, he was not at the time of his application for admission a member of a Scheduled caste Now, before we proceed to consider this contention, it is necessary to point out that there is no absolute rule applicable in all cases that whenever a member of a caste is converted from Hinduism to Christianity, he loses his membership of the caste.
This question has been considered by this Court in C. M. Arumugam vs section Rajgopal and it has been pointed out there that ordinarily it is true that on conversion to Christianity, a person would cease to be a member of the caste to which he belongs, but that is not an invariable rule.
It would depend on the structure of the caste and its rules and regulations.
There are some castes, particularly in South India, where this consequence does not follow on conversion, since such castes comprise both Hindus and Christians.
Whether Madiga is a caste which falls within this category is a debatable question.
The contention of the respondent in his writ petition was that mere are both Hindus and Christians in Madiga caste and even after conversion to Christianity, his parents continued to belong to Madiga caste and he was, therefore, a member of Madiga caste right from the time of his birth.
It is not necessary for the purpose of the present appeal to decide this question.
We may assume that, on conversion to Christianity, the parents of the respondent lost their membership of Madiga caste and that the respondent was, therefore, not a Madiga by birth.
The question is: could the respondent become a member of Madiga caste on conversion to Hindusim ? That is a question on which considerable light is thrown by the decision of this Court in C. M. Arumugam vs section Rajgopal (supra).
The main question which arose for decision in C. M. Arumugamr vs section RaJgopal (supra) was whether section Raigopal, who belonged to Adi Dravida caste before his conversion to Christianity, could, on reconversion to Hinduism once again become a member of the Adi Dravida caste.
This Court, after examining the question on principle and referring to the decided cases, pointed out that the consistent view taken in this country since 1886 was that on reconversion to 1051 Hinduism, a person can once again become a member of the caste in which he was born and to which he belonged before conversion to another religion, if the members of the caste accept him as a member.
This Court observed that there was no reason, either on principle or on authority, which should compel it to disregard this view which has prevailed for almost a century and lay down a different rule on the subject and concluded that on reconversion to Hinduism, section Rajgopal could once again revert to his Adi Dravida caste, for he was accepted by the other members of the caste.
The reasoning on which this decision proceeded is equally applicable in a case where the parents of a person are converted from Hinduism to Christianity and he is born after their conversion and on his subsequently embracing Hinduism, the members of the caste to which the parents belonged prior to their conversion accept him as a member within the fold.
It is for the members of the caste to decide whether or not to admit a person within the caste.
Since the caste is a social combination of persons governed by its rules and regulations, it may, if its rules and regulations so provide, admit a new member just as it may expel an existing member.
The only requirement for admission of a person as a member of the caste is the acceptance of the person by the other members of the caste, for, as pointed out by Krishnaswami Ayyangar, J., in Durgaprasada Rao vs Sudarsanaswami,"in matters affecting the well being or composition of a caste, the caste itself is the supreme judge".
(emphasis supplied).
It will, therefore, be seen that on conversion to Hinduism, a person born of Christian converts would not become a member of the caste to which his parents belonged prior to their conversion to Christianity, automatically or as a matter of course, but he would become such member, if the other members of the caste accept him as a member and admit him within the fold.
This view would have ordinarily required us to find whether, on the material on record, it could be said to have been established by the respondent that, on conversion to Hinduism, he was accepted as a member of Madiga caste by the other members of that caste, for it is only if he was so accepted that he could claim to be a member of a Scheduled Caste.
But it is not necessary for us to undertake this inquiry because, as already pointed out, it has been agreed by the State that, whatever be the result of this appeal, the admission of the respondent will not be disturbed.
We accordingly dismiss the appeal with costs in favour of the respondent.
P.H.P. Appeal dismissed.

summary:
The parents of the respondent originally professed Hindu religion and belonged to Madiga caste which is a scheduled caste, in the Andhra Pradesh as specified in the schedule to the Constitution (Scheduled Castes) order, 1950.
Respondent 's parents were converted to Christianity and thereafter the respondent was born.
The respondent got himself converted to Hinduism renouncing Christianity.
Thereafter, he applied for admission to Guntur Medical College on the basis that he was a member of a Scheduled Caste.
He was provisionally selected for admission but subsequently was informed by the principal the College that his selection was cancelled as he was not a Hindu by birth.
The Principal relied on Note (b) to Clause of rule 2 of the Rules issued by the Government of Andhra Pradesh for admission to the M.B.B.S. course in Government Medical College.
The said note provides that no candidate other than Hindu can claim to belong to Scheduled Caste.
It further provides that no candidate can belong to Scheduled Caste except by birth.
The respondent filed a Writ Petition in the High Court challenging the validity of Note (b) as going beyond the scope of the Constitution (Scheduled Castes) order, 1950.
The respondent succeeded before the learned single Judge as well as the Division Bench of the High Court.
In fact, it was conceded by the appellant before the High Court that note (b) was repugnant to the said order.
Dismissing the appeal by Special Leave, ^ HELD: 1.
It is clear on a plain reading of clause 4 of Article 15 that the State has power to make special provision for scheduled castes and in exercise of its power the State can reserve seats in a Medical College for members of Scheduled Castes without violating Article 15 or Article 29(2).
Article 366(24) defines Scheduled Castes to mean such castes, races or tribes as are deemed under Article 341 to be scheduled castes.
The President in exercise of the powers conferred upon him under Article 341 has issued Constitution (Scheduled Castes) order 1950.
Madiga caste is included in the schedule to the said order.
The said order itself, however, provides that no person who.
professes a religion other than Hindu or Sikh shall be deemed to be a member of a scheduled caste.
It, however, does not require that the should have been born a Hindu or a Sikh.
The only thing required is that at the material time he should profess Hindu or Sikh religion.
The requirement of the note that a candidate in order to be eligible for a reserved seat should be a member of a Scheduled Caste by birth went beyond the said order and was rightly condemned as void.
[1049B H, 1050A] 2.
There is no absolute rule applicable in all cases that whenever a member of a caste is converted from Hinduism to Christianity he loses his membership of the caste.
It would depend upon r the structure of the caste and its rules and regulations.
There are some castes, 1047 particularly ill South India, where this consequence does not follow on conversion since such castes comprise both Hindus and Christians.
Whether Madiga caste falls in this category is a debatable question.
For the purposes of the present appeal it is not necessary to decide the contention of the respondent that there are both Hindus and Christians in Madiga caste and even after conversion to Christianity his parents continued to belong to Madiga caste.
[1050 C F] 3.
A similar question about the effect of re conversion was decided by this Court in the case of C. R. Arumugam vs section Rajagopal.
In that case this Court laid down that there is no reason to hold that a person on reconversion to Hinduism cannot once again become a member of the caste in which he was born and to which he belonged before conversion to another religion.
The reasoning on which this decision proceeded is equally applicable will a cause where the parents of a person are converted from Hinduism to Christianity and he is born after their conversion and on his subsequent embraching Hinduism, the members of the caste to which the parents belong prior to their conversion accept him as a member within the fold.
It is for the members of the caste to decide whether or not to admit a person within the caste.
Since the caste is a social combination of persons governed by its rules and regulations, it may, if its rules and regulations so provide, admit a new member just as it may expel an existing member.
The only requirement for admission of a person as a member of the caste is the acceptance of the reason by the other members of the caste.
On conversion to Hinduism a person would not become a member of the caste to which his parents belonged prior to their conversion, automatically or as a matter of course but he would become such member if the other members of the caste accept him as a members and admit him within the fold.
[1050G, 1051B E] There is nothing on record to show whether the respondent was accepted by Madiga caste.
However, it is not necessary to undertake this enquiry because it has been agreed by the appellants that whatever be the result of the appeal, the admission of the respondent would not be disturbed.
[1051 FG]


judgement:
ivil Appeal Nos.
313 315 1974.
From the Judgment and Order dated 8 8 1972 of the Jammu and Kashmir High Court in Civil First Appeals Nos. 46 to 48 of 1972.
Naunit Lal, for the Appellant.
V.C. Mahajan and R.N. Sachthey, for the Respondent.
The Judgment of the Court was delivered by BEG, J.
These are three appeals by certification against the judgment of a Division Bench of the High Court of Jammu & Kashmir, allowing appeals from the judgment of a learned single Judge.
938 Jammu and Kashmir Government had filed three applications under section 20 of .the
Jammu & Kashmir Arbitration Act, 2002, to refer disputes arising out of three agreements between it and the appellant Company to arbitration under the arbitration clauses of agreements between the parties.
The applications had been dismissed by the learned single Judge on the ground that the arbitration clause was, in each case, a part of an agreement which was not duly executed in accordance with the provisions of Section 122(1) of the Constitution of Jammu & Kashmir which correspond to those of Article 199(1) of the Constitution of India.
The Division Bench had allowed the appeals of the Conservator of Forests, Jammu Circle, after holding that the provisions of section 122(1) of the Constitution of Jammu & Kashmir could not be said to have been infringed if contracts were signed by the Conservator of Forests in compliance with an order of the Government.
The main stay of the case of the appellant company was an instruction or rule contained in "The book of the Finan cial Powers" which reads as follows: " 'section 13.
The power to sanction or cancel the terms of instruments, leases, agreements is delegated in the follow ing cases: section Nature of power To whom delgated.
Extent No. 1 2 3 4 X X X X X X 9.
To sell forest produce Chief Conser Upto Rs. 7000/ and to enter into con vator of forest in value in tract for the same each case provided the highest tender conservators of upto Rs.3000/ in forests each case provided the highest tender is accepted.
Divisional upto Rs.1000/in each forest case provided the officer highest tender is accepted.
The Division Bench observed that this rule existed prior to the coming into force of the Constitution of Jammu and Kashmir.
It may also be pointed out that this rule deals with the power to "sanction or cancel" leases, agreements and other instruments which was delegated to the officers mentioned there with limitation on their powers specified there.
But, the Constitutional provision, relied upon on behalf of the appellant, relates to the manner of the execu tion of the formal 939 document containing the contract after its sanction.
It is true that the contract could not be executed without the sanction.
Nevertheless, if the sanction could be either expressly or impliedly given by or on behalf of the Govern ment, as we think it could, and, if some acts of the Govern ment could fasten some obligations upon the Government, the lessee could also be estopped from questioning the terms of the grant of the sanction even where there is no written contract executed to bind the lessee.
In the case before us, we have agreements from which the appellant company has derived benefits.
And, there are contracts validly executed on behalf of the Government of Jammu & Kashmir by the Conservator of Forests.
It is true that, if the appellant could take up the legal plea that the contracts were not duly executed, in accordance with section 122(1) of the Constitution of Jammu & Kashmir, it could urge that they did not have any effect at all as contracts whatever other legal consequences its acts or conduct may have had.
But, this does not mean that, if a party obtains benefits on the understanding that it would abide by certain conditions, as the appellant company had done, it could not be compelled to observe those conditions, such as the condi tion to refer disputes to arbitration.
However, in the instant case, we need not go into that question because the plea of a violation of Section 122(1) of the Jammu & Kashmir Constitution is itself not sustainable for the reasons indicated below.
As the Division Bench of the High Court had pointed out, there was a Government order and notification of 23rd February, 1957 which reads as follows: In exercise of the powers conferred by sub section (1) of Section 122 of the Consti tution, the Sadar i Riyasat is pleased to direct that the under mentioned contracts and assurances of property made in the exercise of the executive powers of the State may be executed on his behalf by various Officers subject to any limit fixed by Government rules and orders as follows: VI.
In the Department of Development: (1) Agreements relating to Forest Leases and appropriation of forest products: By the secretary to Government, Chief Conser vator, Conservators of Forests and Divisional Forest Officers".
The three leases, containing the arbitration clauses which the appellant wants to avoid, were executed on 27th Febru ary, 1963, and 28th February, 1963, and 19th March, 1963, after the notification mentioned above.
The leases were duly signed by Conservators of Forests, who were expressly authorised, without any limits imposed on the valuation of the leases, to sign and execute them on behalf of the Gov ernment.
The delegation of power made prior to the Jammu 10 1338SCI/76 940 and Kashmir Constitution related to grants of sanction and their cancellation.
It did not expressly refer to powers to execute leases which is a separate matter.
The notification of 1957, however, is specifically related to the execution of formal documents including leases.
Hence, it will cover the three leases before us even if the former rules relating to the limits of the authority of Forest Officers to give or cancel certain sanctions could be said to be in existence at all after the enactment of the new Constitution of Jammu & Kashmir and the notification of 23rd February, 1957, cited above.
We may mention that, as has been indicated in the separate judgment of the learned Chief Justice of the High Court, the Jammu & Kashmir Government had tried to remove the doubts it entertained about the validity of past leases executed by the Conservator of Forests.
It, therefore, passed two orders: one of 14th April, 1965, and the other of 29th April, 1971.
The order of 14th April, 1965, ran as follows: "In supersession of previous orders regarding signing of lease agreement it is ordered that the Conservator of Forests will sign agreements relating to all cases of For ests leases and appropriation of forest products and Chief Conservator of Forests will act as the arbitrator as provided under C1.
44 of the Agreement.
By order of the Government of Jammu & Kashmir.
Sd/ Bharat Bhushan Secre tary to Govt.
Forests Department".
The order of 29th April, 1971, runs as fol lows: "Government Order No. FST 31 dated 14 4 65 shall bedeemed to have taken effect from 29 1 63 and all actions taken by the Conser vators of Forests in executing the lease agreements by virtue of the said order are hereby regularised.
By order of the Government of Jammu & Kashmir.
Sd/ R.C. Bhargava, Secretary to Government, Agricultural Department".
The learned Chief Justice had observed that these orders, purporting to ratify the leases which were valid, did not have any legal effect whatsoever and were unneces sary.
If there had been any question to be decided as to whether the Government had sanctioned the leases, its ac tions, apart from the execution of leases, could be consid ered.
But, once there has been a valid execution of leases by duly authorised officers, the documents would be the best evidence of sanction also.
That was one of the objects of.
prescribing a formal mode of execution of instruments on behalf of the Government apart from the need to protect its interests against mala fide and other unauthorised acts of its servants or agents as indicated by this Court in Mulam Chand vs State of Madhya Pradesh(1) 1) [1968] 3S.C.R. 214.
941 In the cases before us the only question which needed decision was whether formal execution of the leases by duly authorised officers had been proved.
We are of opinion that the Conservator of Forests was, for the reasons given by us, duly authorised to execute the leases.
Accordingly, we affirm the orders of the Division Bench so that matters in dispute between the parties could be validly referred to Arbitration under the appropriate clauses of the agreements.
These appeals are, therefore, dismissed with costs.
Civil Miscellaneous Petition No. 8573 of 1975 for interim orders is also dismissed as infructuous.
S.R. Appeals dismissed.

summary:
All the three applications filed by the respondent state for a reference to an arbitrator under section 20 of the Jammu & Kashmir Arbitration Act, 2002 were dismissed by a single judge of the Jammu & Kashmir High Court on the ground that the arbitration clause was, in each case, a part of an agreement which was not duly exercised in accordance with the provisions of action 122(1) of the J&K constitution which correspond to those of article 299(1) of the Constitution of India.
But the Division Bench allowed the appeals hold ing that if contracts were signed by the Conservator of Forests in compliance with an order of the Government, the provisions of Section 122(1) of J&K constitution could not be said to have been infringed.
" Dismissing the appeals of the appellant company by certifi cates the Court.
HELD : It is true that the contract could not be execut ed without the sanction.
Nevertheless, if the sanction could be either expressly or impliedly given by or on behalf of the Government, as it.could, and, if some acts of the Government could fasten some obligations upon the Govern ment, the lessee could also be estopped from questioning the terms of the grant of the sanction even where there is no written contract executed to bind the lessee.
[938 G H, 939 A] But, once there had been a valid execution of lessee by duly authorised officers, the documents would be the best evidence of sanction also.
That was one of the objects of prescribing a formal mode of execution of instruments on behalf of the Government apart from the need to protect its interest against mala fide and other unauthorised acts of its servants or agents.
[940 G H] Mulamchand vs State of Madhya Pradesh, ; , applied.
In this case the contracts were executed by duly autho rised officials under Government 's orders.


judgement:
Appeal No. 1762 of 68.
(Appeal from the Judgment and Decree dated 18 5 1967 of the Calcutta High Court in Appeal from Original Decree No. 183/56).
980 G.L. Sanghi and Girish Chandra, for the Appellant.
Purushottam Chatterjee and Sukumar Ghose, for the respond ent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal by certificate is from the judgment dated April 11, 1968 of the High Court at Calcutta.
The respondent filed this suit against the appellant in the High Court at Calcutta and claimed Rs. 76,691 2 0 with interest or in the alternative Rs. 78,204 8 4.
The respond ent 's case in short is that the respondent delivered to the defendant appellant pursuant to several orders from time to time goods described as Mac Intyre Sleeves and other goods.
The respondent alleged in the plaint that the appellant "wrongfully purported to reject the Mac Intyre Sleeves" supplied by the respondent.
The respondent further alleged that the rejection was unlawful inasmuch as the rejection was after lapse of reasonable time.
The respondent claimed the sum mentioned in the plaint as reasonable price of the goods.
The alternative case of the respondent is that the plaintiff respondent was entitled to the sum for supply of Mac Intyre Sleeves because the same were not supplied gratu itously.
The appellant denied in the written statement that there was any enforceable contract, and, therefore, the respondent was not entitled to sue for price of the goods delivered.
The appellant took the plea bar of the suit that there was no contract in compliance with section 175 of the Gov ernment of India Act, 1935.
The appellant pleaded to.
the alternative case of the respondent by alleging that the goods were lawfully rejected because the goods were found not to be of the correct description and quality.
The appellant further denied that the rejected goods were re tained after lapse of reasonable time without intimating the rejection.
At the trial the respondent found that the claim for the sum of money as price of goods could not be sustained be cause of lack of enforceability of contract.
The respondent therefore sought to make the appellant liable to compensate the respondent by reason of provisions contained in section 70 of the Indian Contract Act.
Counsel for the appellant raised the plea at the trial that there.
was ' no foundation in the plaint for any case under section 70 of the Indian Contract Act.
The three ingredients to support the cause of action under section 70 of the Indian Contract Act are these: First, the goods are to be delivered lawfully or anything has to be done for another person lawfully.
Second, the thing done or the goods delivered is so done or delivered "not intending to do so gratuitously".
Third, the person to whom 'the goods are delivered "enjoys the benefit thereof".
It is only when the three ingredients are pleaded in the plaint that a cause.
of action is constituted under section 70 of the Indian Contract Act.
981 If any plaintiff pleads the three ingredients and proves the three features the defendant is then bound to make compensa tion in respect of or to restore the things so done or delivered.
The allegation in the plaint in the present case was as follows.
"In any event the plaintiff is entitled to the said sum of Rs. 26,248 7 0, and Rs. 50,442 11 0 with interest for the said Mac Intyre Sleeves, Copper Strips and Stay Shackles for the same were not supplied gratuitiously".
The plaint lacked the two other essential features to constitute a cause of action under section 70 of the Indian Contract Act.
These were that the respondent delivered the goods lawfully to the appellant and that the appellant enjoyed the benefits thereof.
The Court should not have allowed the respondent to go to trial in the present case with a Claim under section 70 of the Indian Contract Act in the absence of proper pleadings.
In view of the fact that parties went to trial and issues were raised on claims under section 70 of the Indian Con tract Act and the litigation went through the course of trial and appeal we do not desire to non suit the respondent at this stage.
The trial court held that the goods were not properly rejected.
But the trial court also held that the wordings of the rejection memos negatived any case of enjoyment of benefit.
The trial court said that the documents show that the goods were not utilised or used by the appellant and the appellant disclaimed interest in the goods.
The trial court also found that the respondent accepted the goods.
The findings are inconsistent.
The trial court held that the appellant offered to restore the goods to the respondent but the respondent refused to take them back.
The trial court dismissed the suit.
When the trial court found that the goods were accepted there could be no question of restora tion.
The trial court should have decreed the suit.
The Division Bench on appeal held that the goods were accepted by the appellant.
The Division Bench held that title to the goods passed and if title passed then the whole context of section 70 of the Indian Contract Act would be irrelevant.
The judgment of the Division Bench is con fused.
The Division Bench treated the case of the respond ent to be "a claim for damages for wrongful rejection".
Under the Sale of Goods Act when there is any enforceable contract the seller may claim for price of goods sold or damages for non acceptance.
The present case could not be supported on the footing of any enforceable contract giving rise to damages for non acceptance or wrongful rejection.
The reasoning of the Division 'Bench in allowing the claim is erroneous.
The evidence in the present case as found by the trial court is that the signatures of Rodericks and Francis on the challans indicate acceptance of the goods, and, ,therefore, the rejection is wrongful.
The finding of the trial court that there was acceptance of the goods obviously repels any plea of rejection of the goods.
The error of the trial court was that it found the goods were accepted and yet dismissed the suit on the rea soning that the appellant 982 offered to restore the goods.
The error of the Division Bench was in decreasing the suit not _on the principles of section 70 of the Indian Contract Act but 'on damages for non acceptance of goods on the footing of unenforceable contract for sale of goods.
In view of the fact that there was acceptance of the goods no question of restoration arises.
Counsel for respondent argued that restoration under section 70 of the Indian Contract Act meant that the defendant would have to restore the goods to the plaintiff by delivering the same to the plaintiff.
This contention of the plaintiff respondent is utterly unsound.
As long as there is intimation by the defendant to the plaintiff that the plaintiff can take back the goods the defendant evinces intention of restoration.
In the present case no question of restoration arises be cause of the acceptance of the goods.
The respondent in view of the trial court and the Divi sion Bench of the High Court allowing the respondent to go on with the claim under section 70 of the Indian Contract Act became entitled to compensation for the goods accepted.
The High Court found that the respondent had received a sum of Rs. 7,602 0 0 out of the claim of the claim under sec tion 70 of the Indian contract Act and the respondent has been given a decree for Rs. 69,069 1 0 we order that the parties will pay and bear their own costs in this appeal.
We specify the period of two months for payment of the aforesaid sums of money Rs. 76,671 1 0.
The High Court gave a decree for the sum of Rs. 69,069 1 0.
For the foregoing reasons there will be a decree for Rs. 69.0169 1 0.
The High Court awarded half costs of the trial and full costs of the appeal.
We do not wish to disturb those two orders for costs.
In view of the fact that there was no proper case pleaded to support Appeal dismissed.

summary:
In a suit for the recovery of price of "Mac Intyre Sleeves, "supplied to the appellant, but alleged to have been wrongfully ' rejected after a considerable time, the respondent/plaintiff sought to make the appellant/defendant liable to compensate by reasons of provisions containing in Section 70 of the Indian Con tract Act.
The trial Court found that the goods were accepted and it dismissed the suit on the reasoning that the appellant offered to restore the goods.
But .on appeal, the Division Bench decreed the suit, not on the principles of Section 70 of the Contract Act, but treating the case of the respondent to be a claim for dam ages for wrongful rejection and for non acceptance of goods on the footing of uninforceable contract for sale of goods".
Dismissing the appeal by certificate the.
Court, HELD: (1) The three.
ingredients to support the cause of action undersection 70 of the Indian Contract Act are: First, the goods are to be delivered lawfully or anything has to be done for another person lawfully.
Second, the thing done.
or the ' goods delivered is so, done or delivered "not intending to do so gratuiously".
Third, the person to whom the goods are delivered "enjoys the benefit thereof".
It is only when the three ingredients are.
pleaded in the plaint that a cause of action is constituted under section 70 of the India Contract Act.
If any plaintiff pleads three ingredients and proves the three features the defendant is then bound to make compensation in respect .of or to re store the things so done or delivered.
[980 G H, 981 A] (2) Courts should not allow the parties to go to trial in the absence of proper pleadings.
In the instant case, the Court should not have allowed the respondent to go to trial with a claim under section 70 of the Indian Contract Act.
[981 B C] (3) When parties went to trial and issues were raised on claims and the litigation also went through the. course of trial and appeal, non suiting for want of proper plead ings at the appellate stage, by the Supreme Court is not desirable.
[981 C] (4) Restoration under section 70 of the Indian Contract Act does not mean restoration of "goods by actual delivery".
Intimation to take back the goods rejected evinces intention of restoration.
[982 B C]