judgement:
iminal Appeal No. 142 & 205 of 1973.
Appeals from the Judgment and Order dated the 12th April 1973 of the Allahabad High Court in Govt.
Appeal No. 2847/72 and by Special Leave from the Judgment and order dated the 12th April, 1973 in Crl.
A. No. 1954 of 1972 and Ref.
No. 87 respectively.
D. B. Mukherjee, K. C. Agarwal, M. M. L. Srivastava and E. C., Agarwala, for the appellant.
D. P. Uniyal and O. P. Rana, for the respondent.
The Judgment of the Court was delivered by CHANDRACHUD, J.
These two appeals by special leave arise out of the judgment of the High Court of Allahabad dated April 12, 1975.
Three brothers by the name of Sia Ram, Shri Ram and Ram Chandra; a woman by the name of Violet; and her son Ramesh were tried by.
9 L319Sup.
CI/75 624 the learned Sessions Judge Farrukhabad, in connection with the murder of one Kunwar Singh.
The learned Judge convicted Sia Ram under section 302, Penal Code and sentenced him to death.
Violet was convicted, under section 302 read with section 109 and was sentenced to imprisonment for life.
The remaining three accused were acquitted by the Sessions Court.
Sia Ram and Violet challenged their conviction by filing an appeal in the High Court while the State of U.P. filed an appeal against the acquittal of Shri Ram, Ram Chandra and Ramesh.
The High Court confirmed the conviction and sentence of Sia Ram and Violet.
It dismissed the appeal filed by the State Government except in regard to Shri Ram whom it convicted under section 302 read with section 109.
He was sentenced to imprisonment for life.
The incident in question took place at about 5 p.m. on October 20, 1970.
The deceased Kunwar Singh was a practising lawyer and after finishing his work for the day he left the Fatehgarh court along with the brother lawyers, Brijendra Singh Yadav and Om Prakash Dubey.
They were proceeding on their bicycles and as they reached a spot near Barhpur Block, Violet is alleged to have shouted : "The Vakil has come".
Sia Ram and his companions who were hiding behind a Shisham tree came out and confronted Kunwar Singh and his companions.
Sia Ram, Ram Chandra and Shri Ram are alleged to have been armed with guns while Ramesh and an unknown person were carrying hockey sticks.
Sia Ram fired a shot from a point blank range as a result of which Kunwar Singh fell down.
All the accused thereafter ran away.
Brijendra Singh removed Kunwar Singh to a nursing home but the latter succumbed to his injury at 5 25 p.m.
The other lawyer, Om Prakash Dubey, contacted the District Magistrate and the Superintendent of Police vainly attempting to have the dying declaration of Kunwar Singh recorded.
A person called Soney Lal, also alleged to be an eye witness, lodged the First Information Report at the police station at about 5 45 p.m.
The Superintendent of Police K. N. Daruwala reached the spot of occurrence shortly before 6 p.m. R. N. Singh, the Sub Inspector, held an inquest on the dead body of Kunwar Singh and sent it for postmortem examination.
Dr. Rizvi who performed the postmortem examination found.
a firearm wound on the left upper chest of the deceased.
There were tattooing, and scorching marks around the injury.
The evidence of Brijendra Singh Yadav (P.W. 4) is clear on the part played by the appellant Sia Ram.
That evidence shows that Sia Ram fired a shot from his gun as a result of which Kunwar Singh fell down and died within half an hour, Brijendra Singh 's evidence has been accepted by both the courts and we are unable to see any valid reason for rejecting it.
Brijendra Singh is a natural witness for he, like the deceased Kunwar Singh, had left the court after the court hours.
Apart from the fact that he was a colleague of the deceased he was not in any manner concerned with the deep seated enmity between the appellant Sia Ram and the deceased.
The order of conviction and,sentence in regard to Sia Ram must therefore be confirmed.
625 Different considerations, however, arise in regard to Violet.
The only part attributed to her is that on seeing Kunwar Singh she shouted: "The Vakil has come".
It is difficult to believe that Violet was assigned the particular role, especially when Sia Ram and his companions could themselves have detected the presence of Kunwar Singh more easily and with lesser ado.
Violet 's brother Ramesh, a lad of 16, could have with greater ease and effectiveness played the swift role of alerting the assailants of Kunwar Singh.
But the Sessions Court and the High Court have accepted the evidence that Violet did give the particular shout and in accordance with our usual practice we would not like to take a different view of these simple facts.
The question which then arises for consideration, a question to which the Sessions Court and the High Court have not paid enough attention, is whether the only inference which arises from the fact that violet gave the particular shout is that by so doing, she intended to facilitate the murder of Kunwar Singh,, Section 107 of the Penal Code which defines abetment provides to the extent material that a person abets the doing of a thing who "Intentionally aides, by any act or illegal omission, the doing of that thing.
" Explanation 2 to the section says that "Whoever, either prior to or at the time of the commission of an act, does anything in order to facilitate the commission of that act, and thereby facilitates the commission thereof, is said to and the doing of that act.
" Thus, in order to constitute abetment, the abettor must be shown to have "intentionally" aided the commission of the crime.
Mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough compliance with the requirements of section 107.
A person may, for example, invite another casually or for a friendly purpose and that may facilitate the murder of the invite.
But unless the invitation was extended with intent to facilitate the commission of the murder, the person inviting cannot be said to have abetted the murder.
It is not enough that an act on the part of the alleged abettor happens to facilitate the commission of the crime.
Intentional aiding and therefore active complicity is the gist of the offence of abetment under the, third paragraph of section 107.
Apart from the words attributed to Violet, there is nothing at all to show that she was aware of the nefarious design of Sia Ram and his associates.
Violet who was working as a Nurse with a doctor was friendly with Sia Ram who was his compounder but that may rather explain why, if at all, she agreed to do as directed.
Learned counsel for the State contended that Sia Ram and his companions were carrying guns and hockey sticks and therefore she would know that they had all gathered to commit the murder of Kunwar Singh.
That is a far not a fair inference to draw.
We cannot heap one assumption on another to give, to Violet 's conduct a meaning which it does not naturally bear.
The words of Violet are at best in the nature, of a circumstance and they do not, without more, necessarily justify the inference that she was a party to the murderous design.
6 26 The High Court concluded on the complicity of Violet by a process of reasoning which does not commend to us.
It says "In case Smt.
Violet had not given intimation of the arrival of the advocate, the persons concealing themselves behind the SHISHAM tree may not have noticed the arrival of kunwar Singh in time to assault him.
In case the, accused were not assisted by Smt.
Violet, they would have to sit in such a manner that they could watch persons moving about on the road.
They could not have concealed their identity completely.
They could realise that if they were not assisted by Smt.
Violet and they had to act on their own, the deceased may notice their presence and may not proceed further.
In case the accused persons concealed themselves thoroughly, they may not notice the arrival of the deceased in time to successfully aim at him.
Assistance asked for and rendered by Smt.
Violet was real and valuable." This chain of reasoning contains a multiplicity of inferences hardly justified by the solitary circumstance that Violet informed Sia Ram and his colleagues of the presence of Kunwar Singh.
The High Court found fault with Violet for not having offered any explanation during the trial as to why she uttered the particular words.
This approach is impermeable.
The burden was on the prosecution to establish its case and no adverse inference could be raised against Violet for her failure to explain her utterance.
Besides, an accused cannot while being examined under section 342 of the Code of Criminal Procedure be subjected.
to cross examination and a bald assertion to explain a piece of conduct almost always fails to convince.
We are, accordingly, unable to agree with the High Court that Violet would not have announced the arrival of Kunwar Singh " unless she was aware that the accused persons were lying in wait on the other side of the road and it was necessary to inform them so that they might accomplish their aim".
In regard to Shri Ram, yet different considerations prevail because the High Court was dealing with an appeal against an order of acquittal in his favour.
There are certain important considerations which lend weight to the view of the trial court that it was unsafe to convict Shri Ram.
Shri Ram, along with Ram Chandra, had moved an application before the Additional District Magistrate (Judicial) who was conducting the committal proceedings that he was not known to the witnesses and therefore he should be put up for being identified in an identification parade.
The Public Prosecutor objected to that request.
The learned Magistrate upheld the objection and refused to direct that a parade be held.
The circumstance that Shri Ram had voluntarily accepted the risk of being identified, in a parade but was denied that opportunity was an important point in his favour.
The High 627 Court rejected it was inconsequential by observing that the oral testimony of witnesses even if not tested by holding an identification parade, can be made the basis of conviction if the request made by the accused is groundless and the witnesses knew the accused prior to the occurrence.
It is correct to say that no rule of law requires that the oral testimony of a witness should be corroborated by evidence of identification.
In fact, evidence of identification is itself a weak type of evidence.
But the point of the matter is that the court which acquitted Shri Ram was justifiably influenced by the consideration that though at the earliest stage he had asked that an identification parade be held, the demand was, opposed by the prosecution and the parade was there fore not held, That is not the only point in favour of Shri Ram.
Brijendra Singh Yadav who was riding on the Bicycle in the company of the deceased, Kunwar Singh did not implicate Shri Ram.
It is the other lawyer, Om Prakash Dubey, who stated in his evidence that Shri Ram was armed with a gun and he emerged from behind the Shisham trees after Violet gave the call.
Dubey is a practising lawyer and we will spare hard words.
But his evidence leaves much to be desired and, at the least, it shows that it would be unsafe to reply on his capacity or ability to identify Shri Ram.
In paragraph 4 of his evidence, repeated attempts were made by counsel for Shri tam to test the claim of Om Prakash Dubey that he knew Shri Ram and was therefore able to identify him.
Question after question put in cross examination was answered by the witness by saying either that he did not remember or that he did not know.
Dubey claimed that he had appeared for the complainant in a prosecution arising out of the murder of one Hari Singh in which Shri Ram figured as an accused.
There were two other accused in that case called.
Manphool ' and 'Balister.
Dubey admitted that he, could not say if.
he would be able to recognise Balister and that it was possible that he may not be able 'to recognise Manphool.
It is doubtful whether Dubey appeared in the case at all, which explains why he made the guarded statement that he.
had appeared on behalf of the complainant in so far as he could remember.
He was unable to say who had engaged him or who appeared the case along with him or who was examined as a witness in the case or who used to instruct him in the case.
Enveloped in this atmosphere of doubt, Dubey thought the better of it to say : "I think I had filed my Vakalatnama in that case".
The young Dubey had a standing of but 2 years in the District when he is supposed to have appeared for the complainant in the particular case.
It is unrealistic to assume that he was so flooded with work that he could remember no details of an important murder trial.
628 Soney Lal who gave the First Information Report.at the police station, also implicated.
Shri Ram but, apparently, the High Court was not impressed by his evidence.
has relied on the evidence of Om Prakash Dubey in order to hold that Shri Ram had played an important role in the murder of Kunwar Singh.
Considering the serious infirmities from which the evidence of Dubey suffers we are of the opinion that the High Court ought not to have interfered with the order of acquittal passed, by the trial.
court, in favour of Shri Ram.
Soney Lal 's evidence seems to us insufficient to sustain the conviction of Shri Ram.
In the result we dismiss the appeal of Sia Ram and confirm his conviction and sentence.
We allow the appeals of Violet and Shri Ram and acquit them.
These two shall be set at liberty forthwith.
V.M.K. Appeals partly allowed.

summary:
Three brothers by the name of Sia Ram, Shri Ram and Ram Chandra, a woman by the name of Violet, and her son Ramesh were tried by the learned Sessions Judge Farrukhabad, in connection with the murder of one Kunwar Singh.
The learned Judge convicted Sia Ram under section 302, Penal Code and sentenced him to death.
Violet was convicted under section 302 read with section 109 and was sentenced to imprisonment for life.
The remaining three accused were acquitted by the Sessions Court.
Sia Ram and Violet challenged their conviction by filing an appeal in the High Court while the State of U.P. filed an appeal against the acquittal of Shri Ram, Ram Chandra and Ramesh.
The High Court confirmed the conviction and sentence of Sia Ram and Violet.
It dismissed the appeal filed by the State Government except in regard to Shri Ram whom it convicted under section 302 read with section 109.
He was sentenced to imprisonment for life.
Shri Ram, Sia Ram and Violet have filed these appeals by special leave.
Allowing the appeals by Shri Ram and Violet and rejecting that of Sia Ram.
HELD : (i) The only part attributed to Violet is that on seeing the deceased Kunwar Singh, a practising lawyer, who was coming by cycle along with his two brother lawyers, Brijendra Singh Yadav and Om Prakash Dubey, she shouted "The Vakil has come.
" The Sessions Court and the High Court have accepted the evidence that she did give the particular shout.
In accordance with the practice of this Court, no different view ought to be taken of these simple facts.
[625A C] (ii) In order to constitute abetment, the abettor must be shown to have "intentionally" aided the commission of the crime.
Mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough compliance with the requirements of section 107.
intentional aid and therefore active complicity is the gist of the offence of abetment under the third paragraph of sec.
[625E F] (iii) Apart from the words attributed to Violet.
there is nothing at all to show that she was aware of the nefarious design of Sia Ram and his associates.
Violet who was working as a nurse with a doctor was friendly with Sia Ram who was his compounder but that may explain why, if at all, she agreed to do as directed.
it is true that the assailants were carrying guns and hockey sticks.
But on that account no fair inference can be drawn that she knew that they had all gathered to commit the murder of Kunwar Singh.
The Court cannot heap one assumption on another to give to Violet 's conduct a meaning which it does not naturally 623 bear.
The Words of Violet are at best in the nature of a circumstance and they do not, without more, necessarily justify the inference that she was a party to the murderous design.
[625G H] (iv) The High Court found fault with Violet for not having offered any explanation during the trial as to why she uttered the particular words.
This approach is impermissible.
The burden was on the prosecution to establish its case and no adverse inference could be raised against Violet for her failure to explain her utterance.
Besides, an accused cannot while being examined under section 342 of the Code of Criminal Procedure be subjected to cross examination and a bald assertion to explain a piece of conduct almost always fails to convince.
Therefore, it is not possible to agree with the High Court that Violet would not have announced the arrival of Kunwar Singh "unless she was aware that the accused persons were lying in wait on the other side of the road and it was necessary to inform them so that they might accomplish their aim." [626D F] , (v) Shri Ram, along with Ram Chandra, had moved an application ',before the Additional District Magistrate (Judicial) who was conducting the committal proceedings that he was not known to the witnesses and therefore he should be put up for being identified in 'an identification parade.
The Public Prosecutor objected to that request.
The learned Magistrate upheld the objection and refused to direct that a parade be held.
The circumstance that Shri Ram had voluntarily accepted the risk of being identified in a parade but was denied that opportunity was an important point in his favour.
The High Court rejected it as inconsequential by observing that the oral testimony of witnesses, even if not tested by holding an identification parade, can be made the basis of conviction if the request made by the accused is groundless and the witnesses knew the accused prior to the occurrence.
It is correct to say that no rule of law requires that the oral testimony of a witness should be corroborated by evidence of identification.
In fact, evidence of identification is itself a weak type of evidence.
But the point of the matter is that the court which acquitted Shri Ram was justifiably influenced by the consideration that though at the earliest stage he had asked that an identification parade be held, the demand was opposed by the prosecution and the parade was therefore not held.
But that is not the only point in favour of Shri Ram.
Brijendra Singh who was riding on bicycle in the company of the deceased did not implicate Shri Ram.
It was the other lawyer, Om Prakash Dubey, who implicated him.
His evidence shows that it would be unsafe to rely on his capacity or ability to identify Shri Ram.
Sone Lal who gave the First Information Report at the police also implicated Shri Ram.
Sone Lal 's evidence is insufficient to sustain the conviction of Shri Ram.
In view of the serious infirmities from which the evidence of Dubey suffers, the High Court ought not to have interfered with the order of acquittal passed by the trial court in favour Shri Ram.
[626 627C; 628A B]


judgement:
No. 467 of 1972.
Petition Under Article 32 of the Constitution of India.
B. Sen and R. M. Mehta, section K. Dholakia and R. C. Bhatia, for the petitioner.
L. N. Sinha, Solicitor General of India, G. A. Shah and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
By this petition under Article 32 of the Constitution of India the petitioner has challenged the constitutional validity ,of the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienation) Act, 1972, Gujarat Act No. 12 of 1972 hereinafter referred to as the Act on the around that it violates the fundamental rights of the petitioner granted under articles 14 and 19 of the Constitution.
In the writ petition the petitioner claims that he owns 9559 square yards ,of land situate in District Bulsar, sub district and Taluka Navsari, village Kohilpore.
He intends to sell the said land but is unable to do so because of the prohibition of alienation imposed under the Act.
Mr. B. Sen, learned counsel for the petitioner conceded, and in ID ,our opinion rightly, that since the Proclamation of Emergency is in operation under Article 358 of the Constitution, fundamental right guaranteed under Article 19 is under suspension and therefore the Act could not be assailed for infraction of Article 19 even if there be any.
Counsel, however, submitted that it does violate the guarantee of equal protection of the law and offends Article 14.
In the Act under section 2 is embodied a declaration that the Act is for giving effect to the policy of the State towards securing the principles specified in clauses (b) and (c) of Article 39 of the Constitution and consequently Article 31C would save the Act from attack on account of the infraction of Article 14.
But it was submitted that the Act is not directly relatable to the object of Article 39(b) and (c) and hence Article 31C cannot protect it.
In our opinion it is not necessary in this case to take recourse to Article 31C for upholding the constitutional validity of the Act as it does not infringe the equal protection of law guaranteed under Article 14 of the Constitution.
Learned counsel for the petitioner endeavoured to make out the following points for attacking the Act as being violative of Article 14.
(1) That the limit of Prohibition in respect of the area of the vacant land is the same irrespective of its situation and value thus putting unequals as equals.
(2) That it does not apply to building lands and building areas have been left out.
(3) That there is discrimination between the permissible limit of alienation on the basis of the irrational consideration of the area forming part of a compact block or not.
66 9 (4) That there is no rational basis for not applying the Act in respect of the alienation of vacant in favour of the State, Govt., the Central Govt.
, Local authorities, Govt.
companies, Govt.
Corporations or the Cooperative House Building Societies.
(5) There is no guideline provided in section 7 of the Art for exercise of the power of exemption.
Learned Solicitor General appearing for the respondent, the State of Gujarat, submitted that none of the points urgea on behalf of the ,petitioners has got any substance and there is no violation of the equal protection of law guaranteed under Article 14 of the Constitution.
We shall first refer to and wherever necessary read some of the relevant provisions of the Act.
The Preamble of the Act indicates that it is an Act to prohibit alienation of certain vacant lands in urban areas in the State of Gujarat.
The object of the Act is to prohibit alienation of the vacant lands so that ultimately the ownership and control of the material resources of the Community may be so distributed as best to sub serve the common good and may prevent the concentration of wealth to the common detriment.
It may be pointed ,out here that the impugned Act is a temporary one.
Originally it was to remain in force for one year but the period is being extended from time to time in order to enable the State Legislature to pass the Urban Property Ceilings Act.
Prohibition of alienation by the Act is a preparatory measure for distribution of the material resources of the community.
The definition section of the Act is section 3.
Clause (b) defines "City" to mean a City as constituted under the Bombay Provincial Municipal Corporations Act, 1949.
The definition of "Collector" includes certain other officers also as mentioned in clause (c).
It is necessary to read clause (d) which defines the "compact block" to mean "any block of vacant land in an urban area exceeding one thousand square metres in extent, (whether owned by one person or jointly by more than one person or owned in contiguous parts separately by one or more members of a family unit) and whether or not divided by a private road, street, lane, footway, passage or drain, natural or artificial.
" Under clause (dd) "family unit" means an indi vidual, his or her spouse and their children.
" Clause (e) defines " 'municipal borough" to mean "a municipal borough as constituted or deemed to be constituted under the Gujarat Municipalities Act, 1963.
" It is necessary to read clauses (i) and (j) of section 3 in full.
(i) "urban area" means (1) any area which is comprised for the time being in a City or a municipal borough and also any such area in the vicinity thereof, within a distance, not exceeding sixteen kilometres from the local limits of the City, or as the case may be, of the municipal borough concerned, as the State Govt.
may, having regard to the extent of and the scope for the urbani 670 sation of that area or other relevant considerations, by a notification in the Official Gazette, specify in this behalf; and (2) any other area which the State Government may, by notification in the Official Gazette declare to be an urban area.
having regard to any project existing in that area on the appointed day or having regard to the possibility in the near future of any project being established in that area where any such project, in the opinion of the State Government, has led to or is likely to lead to urbanisation of that area; (j) "vacant land" means land in an urban area, agricultural or non agricultural, other than land on which any building has been or is being constructed in accordance with any law regulating such construction and the land appurtenant to such, building to the minimum extent required under such law or under the provisions of the Bombay; Town Planning Act, 1954 or any other corresponding law for the time being in force '.
Explanation for the purposes of this clause any land which is vacant on the appointed day shall be 'deemed to be vacant land, notwithstanding that the construction of 2 a building thereon has been commenced on or after the said day.
" Section 4 provides for prohibition of alienation etc.
in these terms (1) No person who owns any vacant land shall, on or after the appointed day, alienate such land by way of sale, gift, exchange (mortgage other than simple.mortgage), lease or otherwise, or effect a partition or create a trust of such land ', and any alienation made, or, partition effected, or trust created in contravention of this section shall be null and void : Provided that nothing in this sub section shall apply to the alienation by any person of any one plot of vacant land owned by him not exceeding one thousand square metres in extent and not forming part of a compact block or to the effecting of a partition or creation of a trust of any such plot.
(2) The provisions of sub section (1) shall apply to any sale, partition or creation of trust, of vacant land of any person in execution of a decree or order of a civil court or of any award or order of any other authority.
Restrictions on registration of documents have been put in section 5.
Section 6(1) says that "Nothing in this Act shall apply to any transfer of vacant land by or in favour of (a) A State Government or the Central Government or local authority;, 671 (b) A Government Company as defined in section 617 of the ; (c) a corporation established by or, under a Central Provincial or State Act, which in controlled or managed by a State Government or the Central Government; (d) such cooperative house building societies established for the purpose of providing housing accommodation to weaker sections of people, as may be approved by the State Government in this behalf.
" Sub section (2) of section 6 makes a distinction in the application of sub section (2) of section: 4 in relation to the execution of a decree or an order of a civil court in favour of the Government or the local authority.
Under subsection (1) of section 7 "the State Government, may, by a general or special order in writing and for reasons to recorded therein, exempt any area or any alienation or other transfer of any vacant land from all or any of The provisions of this Act." Under sub section (2), to avoid any hardship also, the State Government may, if it considers it necessary so to do, exempt, by an order in writing, any alienation or other transfer of any vacant land from all or any of the provisions of this article Subject to any rules that may be made in this behalf or to any general or special orders of the State Government, the Collector has.
been authorised under sub section (3) of section 7 by order in writing, to exempt any alienation or other transfer of any vacant land from the Provisions of this Act in case the land is to be used for ;my educational, scientific, industrial or commercial purpose or for such other purpose as may be prescribed.
"Prescribed" means under clause (g) of the third section "prescribed by rules made under this article ', The State Government has power under section 12 to make the rules.
Sub section (4) enjoins that every order issued by the State Government, under sub sections (1) and (2) and by the Collector under section 3 shall be laid before the State Legislature as soon as possible after its issue.
Alienation etc.
made on or after the 1st July, 1972 but before the appointed day under the Act has also been affected under section 8.
Section 9 gives a right to appeal against the order of the Collector under sub section (3) of section 7 to the State Government within the prescribed period and in the prescribed manner.
The jurisdiction of the Civil Court has been barred under section 10.
A penalty has been provided under section 11.
The act overrides other laws in view of section 13.
It would be noticed that the urban 'area means any area which is comprised in the City or a Municipal Borough.
Surrounding, distance of the City or municipal borough has to,.be fixed by a notification of the State Government 'in the Official Gazette having regard to the relevant considerations.
The maximum distance of such an area cannot exceed sixteen kilometres.
We were informed at the Bar by, the learned Solicitor General that notifications have been issued fixing the maximum limit of 16 kilometres in case of big cities like Ahmedabad, Baroda etc.
but lesser limits of distances have been notified in case of small municipal boroughs.
Under the proviso to sub section (1) of L319SupCI/75 672 section 4 a person is not_ prohibited from alienating one plot of vacant land owned by him not exceeding 1000 sq. metres provided it does not form part of a compact block.
When the limit of the distance outside the City or town area differed from place to place it was not necessary to fix the limit of permissible area of transfer with reference to the value of the land.
It was neither feasible nor expedient to do so.
From the permissible limit of transfer the area forming part of the compact block had to be excluded as it would have led to manipulations and manoeuvrings by persons belonging to the same family unit.
The land belonging jointly to more than one person or owned in contiguous part separately by one or more members of a family unit, which unit is a narrow one as defined in clause (dd) of section 3, comes under the definition of compact block.
Then only the permissible limit of transfer does not apply.
Excluding the land on which any building has been or is being constructed in accordance with any law regulating such construction and only the permissible limit of the vacant land appertaining to it is a reasonable classification distinguishing the vacant land from the building land.
The object of the act is to prevent alienation of certain vacant lands and that being so it is rightly excluded the building lands from its operation.
It is plain that the main object of the act being ultimately to distribute the ownership and control of the material resources of the community as best to subserve the common good and to prevent concentration of wealth, a transfer in favour of the Government, local authorities, Government companies or Corporations had to be excluded as such transfer could not possibly defeat the object of the Act, rather, it would give a fillip to it.
Permitting transfers of vacant lands in favour of Cooperative Housing Building Societies is obviously a step for the fulfilment of the object of the Act.
The Act cannot be held to be discriminatory on such grounds.
The power of the State Government under sub section (1) of section 7 to exempt any area or any alienation or other transfer of vacant land from all or any of the provisions of the Act is a power which is to be exercised for the reasons to be recorded in the general or the special order and in furtherance of the object of the Act.
The guideline is to be found in the object of the act itself.
The power under sub section (2) has to be exercised by the State Government for avoiding any hardship.
There is sufficient guideline for exemption in case of hardship which will depend upon the facts and circumstances of each case.
The order ;if exemption to be made by the Collector can only be in a case where the land is to be used for any educational, scientific, industrial or commercial purposes.
It has not been left open to the Collector to decide for what other purpose he can grant the exemption.
Such other purpose can be only that as may be prescribed by the State Government by rules made under section 12 of the Act.
Sub section (4) of section 7 is a good safety valve.
The State Legislature will act as a Supervisor of the orders of exemption 673 made by the State Government or the Collector.
The exercise of the power of exemption by the Collector is further controlled by providing an appeal to the State Government under section 9 of the Act.
In our opinion, therefore, there is no violation of the equal protection of law guaranteed under article 14 of the Constitution.
Classifications are all reasonable and there is a clear nexus between the object of the act and the classifications.
They have neither put unequals as equals nor has discriminated between equals.
In the result the writ petition fails and is dismissed with costs.
P.H.P. Petition dismissed.

dataset_name: IN-Abs

summary:
The Gujarat Vacant Lands in Urban Area (Prohibition of Alienation) Act,, 1972 is enacted to prohibit the alienation of certain vacant lands in urban areas in the State of Gujarat.
Section 2 of the Act embodies a declaration that the Act is for giving effect to the policy of the State towards securing the principles specific in clauses (b) and (c) of article 39 of the Constitution.
Section 4 prohibits the alienation of vacant land after the appointed day.
It however exempts one plot of vacant land owned by a person not exceeding 1000 sq. metres and not forming part of a compact block.
The transfers in favour of the State Government, Central Government, local ' authority, Government company, statutory corporations and cooperative house building societies are also exempted.
The State Government has been empowered by general or special order to exempt any area or any alienation from all or any of the provisions of the Act.
This is subject to the rules made by the State Government.
Every order made by the State Government and the Collector exempting any area or alienation from, any of the provisions of the Act is required to be laid before the State Legislature.
The Learned Counsel for the petitioner conceded that in view of the proclamation of emergency fundamental right guaranteed under Article 19 is under suspension.
It was contended that the Act offended Article 14 and that the Act was not directly relatable to the object of Article 39 (b) and (c) and, therefore, Article 31C could, not protect it.
HELD : (i) It is not necessary to take recourse to Article 31C for upholding constitutional validity of the Act as, it does not infringe equal protection of law guaranteed under Article 14 of the Constitution.
Urban area means any area which is comprised in the city or a municipal Borough.
Surrounding area not exceeding 16 kms.
has to be fixed ' by a notification of the State Government.
By notifications limit of 16 kms. has been fixed in case of big cities like Ahmedabad, Baroda, etc.
but lesser limits of distance have been notified in case of small municipal boroughs.
When the limit of the distance outside the city or town area differed from place to, place it was not necessary to fix the limit of permissible area of transfer with reference to the value of the land.
It was neither feasible nor expedient to do so.
From the permissible limit of transfer the area forming part of the compact block had to be excluded as it would have led to monopolisation and monoeuvrings by persons belonging to the same family unit.[668F; 672 B] (ii) There is reasonable classification and there is a clear nexus between the object of the Act and the classification.
The Act has neither put unequals as equals nor has it discriminated between equals.
The object of the Act being to prevent alienation of vacant lands it rightly excludes the building lands from its operation.
Since the object of the Act is to ultimately distribute ownership and control of the material resources to subserve the common good transfer in favour of Government, Local Authorities, Government Companies and Statutory Corporations has been excluded.
Formation of Cooperative House Building Societies is obviously a step for fulfilment of the object of the Act.
The power of the State Government to exempt any area or any alienation from all or any of the provisions of the Act is a power which is to be exercised for the reasons to be recorded and in furtherance of the object of the Act.
The guideline is to be found in the object of the Act.
The order of exemption to be made by the Collector is only where the land is to be used for any educational, scientific, industrial or commercial purposes.
The exercise of the power by the Collector is further controlled by providing an appeal to the State Government.
The orders are to be placed before the State Legislature which will act as a supervisory of the orders of exemption made by the State Government or this Collector.
[672D H] 668


judgement:
Appeal No. 441 of 1973.
From the Judgment & Order dated the 12th February, 1973 of the Assam & Nagaland High Court in Election Petition No. 5 of 1972.
P. K. Chatterjee, A. Sharma and Rathin Das, for the appellant.
section K. Hom Choudhury and section K. Nandy, for respondent No. 1.
The Judgment of the Court, was delivered by ALAGIRISWAMI, J.
In the election held to the Meghalaya Legislative Assembly from Songsak Constituency on 9th March 1972 the appellant was declared elected having received 819 votes as against 176 received by the 1st respondent and 98 votes received by the 2nd respondent.
The appellant was a candidate set up by the All Party Hills Leaders Conference and the 1st respondent was supported by the Hill State People 's Democratic Party (H.S.P.D.P.), though that party was not a recognised party.
The symbol allotted to the 1st respondent by the Election Commission was "two leaves".
The 1st respondent filed an election petition questioning the election of the appellant on the ground that be was guilty of a corrupt practice falling under section 123(4) of the Representation of the People Act, 1951.
That election petition having been allowed and appellant 's election set aside by the High Court of Assam, Nagaland, Meghalaya, Manipur and Tripura this appeal has been filed against the decision of the High Court.
802 The allegations in support of the petition were that on 3 days before the election, that is on the 25th of February 1972, the 5th of March 1972 and the 7th of March 1972, the appellant distributed dummy ballot papers in three places, Bollonggiri, Daggal Bazar and Songsak respectively.
The dummy ballot papers marked as Ext.
4 in this case contained a "boat" as the election symbol of the 1st respondent instead of the "two leaves" allotted to him as the election symbol.
The case of the respondent was that this was a false statement reasonably calculated to prejudice the prospects of his election.
The appellant 's case was that the dummy ballot papers were got printed by A. M. Sangma, the Secretary of the A.P.H.L.C., that he took the bundle of dummy ballot papers from Tura, the headquarters of the A.P.H.L.C. and when he was staying at the rest house in Bollonggiri he found out the mistake that had crept in the dummy ballot papers, that after consultation with the Chief Minister of Meghalaya, W.A. Sangma, who has been examined as R.W. 12, he issued a correction statement marked as Ext.
E, that the dummy ballot papers were not distributed, that there was therefore no publication and that it was not calculated to prejudice the prospects of the 1st respondent 's election.
The High Court after a very close, careful and restrained appreciation of the evidence in this case has come to the conclusion that the dummy ballot papers were distributed by the appellant at Bollonggiri and Daggal Bazar and we have also come to the same conclusion.
As we agree with the learned Judge we do not think it necessary to refer in elaborate detail to the evidence.
We shall refer to the evidence in broad outline and show that his conclusion is fully justified, With regard to the distribution of ballot papers like Ext. 4 in Bollonggiri on the 25th of February, the two witnesses who gave evidence are Willingson Sangma, P.W.8 and Jangnal Marak, P.W.4.
According to them the appellant distributed the dummy ballot papers and they produced two ballot papers as having been handed over to them.
They further stated that on enquiry as to how the dummy papers did not contain the "two leaves" symbol allotted to the 1st respondent the appellant stated that they were Government papers and the symbol allotted to the 1st respondent had been cancelled.
The High Court has held, and rightly so, that the alleged statement of the appellant that they were Government papers cannot be admitted in evidence on the ground that it was not so pleaded in the election petition.
We cannot also help feeling that in deposing that the appellant told them that they were Government papers and the symbol allotted to the 1st respondent had been cancelled P.Ws.8 and 4 are embellishing the story to make their evidence stronger.
In the election petition itself it is stated that at Bollonggiri and Daggal Bazar the appellant had stated that the "two leaves" election symbol allotted to the 1st respondent was withdrawn by the Government and he was nowhere whereas in the evidence given there is no mention about the appellant having said that the petitioner was nowhere.
While the election petition does not state that the dummy ballot papers were Government papers P.Ws. 4 and 8 say that the appellant stated that they were Government papers.
We therefore conclude that it would be safe and reasonable to hold that the evidence of P.Ws. 8 and 4 cannot be accepted in so far as they add any 803 thing more than that the appellant distributed the dummy ballot papers.
We shall Presently mention why we think that the dummy ballot papers like Ext.
4 should have been distributed by the appellant.
On the 26th of February the 1st respondent filed a complaint Ext.
3 before the Returning Officer and along with the complaint he filed a, dummy ballot paper Ext.
4 could not have become available to him unless it had been distributed by the appellant.
We are not perpared to accept the contention on behalf of the appellant that they, should have been pilfered because no evidence to that effect was given.
Nor are we able to accept his evidence and that of Constant Marak R.W. 8 as to how the mistake in the dummy ballot paper was found.
It sounds too artificial.
Admittedly the appellant had given a lift to P.Ws ' 8 and 4 on his journey from Tura to Bollonggiri and as admittedly he had passed through villages included in his constituency during the course of that journey it is quite likely that he distributed those dummy ballot papers.
Furthermore, according to the appellant he had distributed another pamphlet Ext.
E after coming to realise that the dummy ballot paper was wrong.
If dummy ballot papers were not distributed at all there was no need to distribute pamphlets like Ext.
These pamphlets were printed on 29th February and taken delivery of on the 1st of March.
The 1st respondent 's case that these pamphlets were not distributed does not seem to be true because one of his witnesses, P.W.8, admits having seen such a pamphlet and another witness, P.W. 5, makes an half hearted admission of the same fact.
We, are, therefore, satisfied that pamphlets like Ext.
E were in fact distributed by the appellant.
That could have been done only to counteract the effect of the distribution of the dummy ballot papers.
It is not the appellant 's case that he distributed the dummy ballot papers at all.
If so there was no need to distribute pamphlets like Ext.
E. Quite.
possibly realising rather a little late the damage likely to be done to his case the appellant tried to repair the dam age by the distribution of pamphlets like Ext.
As regards the distribution of dummy ballot papers in Duggal ' Bazar the evidence was that of P.Ws. 7, 9 and 10 who also produced the dummy ballot papers marked as Exts.
41, 42 and 43.
According to them the appellant distributed these dummy ballot papers and said that the symbol of "two leaves" bad been cancelled by the Government.
This is said to have taken place on the 5th of March and on the 6th of March the 1st respondent filed a criminal complaint against the appellant and A. M. Sangma, R.W. 2, complaining about the publication of the dummy ballot papers.
The importance of the publication on the 5th March is because if the distribution of the dummy ballot papers had been only on the 25th of February it might possibly be argued that he 'had not till then seen them and as soon as be realised the mistake he tried to undo the harm by distributing pamphlets like exhibit E.
As Ext.
E is said to have been distributed from It March onwards, the case of the bona fide mistake in the printing of the dummy ballet papers would not be sustained if their distribution on the 5th of March at Daggal Bazar is proved.
Just an in the case of evidence of P Ws. 8 and 4, we also think that the evidence of P.Ws. 7. 9 and 10 is exaggerated in so far as they say that appellant told them that the 804 1st respondent 's symbol had been cancelled by the Government.
The learned Judge of the High Court holds that the distribution of the dummy ballot papers in Daggal Bazar is proved because the appellant is unable to explain how P.Ws. 7, 9 and 10 were able to get dummy ballot papers like Exts. 41, 42 and 43.
It cannot be urged that those ballot papers were those obtained when the appellant distributed them in Bollonggiri because the appellant 's case is that he had not distributed them at all.
The appellant produced 497 ballot papers and stated that 3 ballot papers were missing and he was producing the ,other 497.
But as six ballot papers have been produced before the Court and marked as Exts.
4, 35, 41 to 43 and Ext.
P.W. 6/1 it is not possible to accept this explanation.
The question reduces itself to this : Were these 497 ballot papers produced by the appellant got printed later, as was the suggestion put to him, or did the 1st respondent get dummy ballot papers printed and produce them as the six exhibits marked by the Court ? Such a suggestion %,as not put to him.
We have already held that we cannot accept the explanation sought to be put forward on behalf of the appellant before the High ,Court that they must have been pilfered.
It is, therefore, reason able to conclude that the appellant should have distributed at least the six ,;dummy ballot papers exhibited before the Court, if not more in which case the logical conclusion would be that the 497 dummy ballot papers produced before the Court were merely an attempt to cover up what the appellant had done and to make it appear that no dummy ballot papers were distributed.
In view of the fact that the 1st respondent bad filed a complaint on the 26th of February before the Returning Officer and a criminal complaint on the 6th of March we would, in agreement with the high Court, hold that the distribution of the dummy ballot papers at Bollonggiri as well as Daggal Bazar is proved.
If the distribution of the dummy ballot papers in Daggal Bazar is proved then there can be no question of the printing of the dummy ballot papers with the wrong symbol being due to a mistake but must be deliberate.
The appellant might have distributed pamphlets like Ext.
E realising at a later stage the mistake he had committed in distributing the wrong dummy ballot papers but that cannot help him.
In a constituency admittedly consisting of more than 80 per cent illiterate electors the consequences of distribution of dummy ballot papers with wrong symbols can well be imagined.
Voters who went to the polling stations would have been confused even if they did not go there with the intention of voting for the 1st respondent and people who went there with the intention of voting for the 1st respondent might well have cast their vote either to the appellant or to the other candidate finding that the 1st respondent 's symbol was not there or they might have 805 even gone back home without voting.
In a case where a corrupt practice is alleged and proved it is not necessary further to show the exact number of votes which the 1st respondent lost or the appellant gained.
The corrupt practice itself is enough to invalidate the election.
There is a small matter to which reference may be made at this stage.
The allegation in the election petition also was that the 1st respondent 's name had been wrongly spelled in the dummy ballot papers distributed by the appellant.
As admittedly the electorate is, 80 per cent illiterate this is not likely to have any effect and no importance can be attached to it.
In the result we uphold the decision of the High Court and dismiss this appeal, the costs of the 1st respondent to be, paid by them appellant.
V. P. section Appeal dismissed.

summary:
On three days before the election to the Meghalaya Assembly the appellant, who was the successful candidate, distributed dummy ballot papers in various places.
The dummy ballot papers contained.
as the election symbol of the first respondent, who was a rival candidate, a symbol different from that allotted to the first respondent by the Election Commission.
The first respondent successfully challenged in the High Court the election of the appellant on the ground that he was guilty of a corrupt practice under s.123(4) of the Representation of the People Act, 1951.
Dismissing the appeal to this Court, HELD: In a constituency consisting of more than 80% illiterate electors the consequences of such distribution of dummy ballot papers with wrong symbols would be, (a) the voters who went to the polling station would have been confused even if they did not go there with the intention of voting for the first respondent, (b) people who went there with the intention of voting for the first respondent might well have cast their votes either for the appellant or for the other candidates finding that the first respondent 's symbol was not there, or (c) they might have gone away without voting.
Therefore, the distribution must have prejudiced the prospects of the first respondent 's election.
In a case where a corrupt practice is alleged and proved it is not necessary to further show the exact number of votes which the first respondent lost or the appellant gained.
The corrupt practice itself is enough to invalidate the election.
[804G 805B]


judgement:
Appeal No. 1554 of 1970.
Appeal.
by Special Leave from the Judgment & Order dated the 19th August, 1968 of the Madras High Court in Tax Case No. 18 of 1 965.
G. B. Pai, A. G. Manessea, D. C. Mathur and K. K. John, for appellant.
B. B. Ahuja and section P. Nayar, for the respondent.
807 The Judgment of the Court was delivered by GUPTA, J.
This is an appeal by special leave from a judgment of the Madras High Court in a reference under section 66(1) of the Income Tax Act, 1922.
The appellant, Nonsuch Estate Limited, is a public limited company incorporated in the 'year 1924 under the Companies Act, 1913.
The appellant, referred to hereinafter as the Company, derives its income from tea grown in its estate for which it is assessed to income tax.
M/s. Harrisons and Crosfield Limited have been the managing agents of the Company from the beginning.
The following question relating to the assessment year 1959 60 was referred to the High Court : "Whether on the facts and in the circumstances of the case, the sum of Rs. 97,188/ representing the Managing Agency remuneration for the period 1 4 1956 to 30 6 1957 was deductible in the computation of the income of previous year ending on 30th June 1958, relevant for the assessment year 1959 60.
" The relevant facts leading to the reference are these.
The managing agents of the Company were entitled to commission at the rate of 11 per cent on all sales of tea and other produces of the Company and a further sum of Rs. 12,000/ per annum for secratarial work.
There was, however, no written.
agreement embodying the terms.
After the came into force on April 1, 1956 it was decided that there should be a fresh managing agency agreement between the Company and its managing agents in conformity with the provisions of the said Act.
A fresh agreement drawn up and submitted by the managing agents was approved by the Company.
The new agreement proposed the reappointment of M/s. Harrisons & Crosfield Limited as the managing agents of the Company for a period of 10 years on a remuneration of 5 per cent commission on the net profits of the Company computed in the manner laid down in sections 349 to 351 of the subject to a minimum remuneration of Rs. 12,000/ per annum.
The revised terms were to take effect from April 1, 1956.
As required by sec.
326 of the , the new agreement was sent to the Central Government for approval by a communication dated august 3, 1957 enclosing a formal application for the purpose in Form 25, On September 2, 1957 by a letter addressed to the Company the Government conveyed its approval to "the appointment of M/s. Harrisons & Crosfields Ltd. as the Managing agents. . for a period of 10 years with effect from 1st April 1956, on a remuneration of 5 per cent commission on the net profits of the Company computed in the manner as laid down in Sections 349 to 351 of the subject to a minimum remuneration of Rs. 12,000/ (Rupees twelve thousand only) per annum payable to the Managing Agents, in the event of absence or inadequacy of profits in any financial year.
" On receipt of the approval, the Company by a resolution adopted at an extraordinary general meeting of its shareholders held on October 4, 1957 reappointed M/s. Harrisons & Crosfield Limited on the terms stated above.
In terms of the new agreement the existing agency agreement between the parties stood cancelled with the expiry of March 31, 1956.
808 The Company follows the mercantile system of accounting.
For the period April 1, 1956 to June 30, 1956, the Company credited a sum of Rs. 9320/ to the account of the managing agents as their remuneration in accordance with the terms of the proposed new agreement.
This was disclosed in the published accounts of the Company for the year July 1, 1955 to June 30, 1956 relevant to the assessment year 1957 58.
For the purpose of assessment of income tax, however, the Company added back the said sum of Rs. 9,320/ to its taxable income.
In the next accounting year ending on June 30, 1957 relevant to the assessment year 1958 59 the same process was followed with regard to the remuneration payable to the managing agents.
For the assessment year 1959 60 for which the previous year was July 1, 1957 to June 30, 1958, a total sum of Rs. 97,188/ was shown as managing agents ' remuneration payable during that year.
This amount was made up as under Amount .lm15 " Proportionate remuneration for 3 months at 5 per cent on the net profits for the period ending on 30 6 1956 paid during the year ending on 30 6 1958 9,320 Remuneration at 5 per cent on the net profit of the year ending on 30th June 1957 paid during the year ending on 30 6 1958 71,368 Managing Agents expenses for the year ending 30th June 1957 recouped during the year ending on 30th June 1958.13,200 Proportionate Managing Agent 's expenses for the year ending on 30th June 1956 recouped during the year ending on 30 6 19583,300 97,188.
Though this sum did not pertain to the previous year relevant to the assessment year 1959 60, the Company claimed it as deductible expenditure for that year on the ground that the sum became payable only during that year when the Government accorded its approval to the new 'agreement.
The Income tax Officer rejected this claim on the view that the approval of the Central Government was necessary only for actual payment and "the assessee should have ascertained the liability for each year and claimed it on the mercantile basis which was the system adopted by the assessee company.
" The Appellate Assistant Commissioner and the Tribunal also took the same view.
The High Court answered the question referred to it against the assessee on the following reasoning : ". .
There was undoubtedly an understanding between the managing agency and the assessee as to the new terms of remuneration which actually were given effect to by making debit entries in the remuneration account then and there.
It is true that at the time the debit entries were made, approval of the Central Government had not come.
But when it came actually later, it gave legal effect to the debit 809 entries, not from the date of the approval but from April 1, 1956.
That being the case, the refusal of the deduction, in our opinion was right.
" In our judgment the High Court was in error in answering the question referred to it against the assessee.
It appears that the Income tax authorities, the Tribunal and the.
High Court all laid special emphasis on the fact that the Company followed the mercantile system of accounting.
The distinction between the two methods of accounting, one on the cash basis and the other on the mercantile basis is well known.
In Commissioner of Income tax, Madras vs A. Gajapathy Naidu(1), this Court explained the difference between the two methods quoting with approval an extract from a Judgment of the, Allahabad High Court in Commissioner of Income tax vs Singari Bai(2).
In Gajapathy Naidu 's(1) case this Court said: " It is commonplace that there are two principal methods of accounting for the income, profits and gains of a business one is the cash basis and the other, the mercantile basis.
The latter system of accountancy "brings into credit what is due immediately it becomes legally due and before it is actually received; and it brings into debit expenditure the amount for which a legal liability has been incurred before it is actually disbursed"." However, even an assessee following the mercantile system of accounting is not entitled to claim a deduction until liability for the sum for which deduction is claimed has accrued.
The reasons given by the High Court overlook the plain terms of sec.
326 of the .
326 so far it is material for the question involved in this case, is in these terms : "Sec.
326.)1) In respect of any company. . (a). . (b) unless the approval of the Central Government has been obtained for such appointment or re appointment.
(2) The Central Government shall not accord its approval under sub section (1) in any case, unless it is satisfied (a) that it is not against the public interest to allow the company to have a managing agent; (b) that the managing agent proposed is, in the opinion, a fit and proper person to be appoi nted or re appointed as such, and that the conditions of the managing agency agreement proposed are fair and reasonable; and (c) that the managing agent proposed has fulfilled any conditions which the Central Government requires him to fulfil.
" (1) (2) 810 Section 326 prohibits the appointment or re appointment of a managing agent unless the Central Government approved such appointment or re appointment.
The Central Government would not accord its approval unless the requirements specified in clauses (a), (b) and (c) of sub section (2) of the section have been fulfilled.
Therefore, it cannot be assumed that the Central Government will approve every proposed appointment or reappointment of a managing agent.
Thus in the instant case it is only when the Central Government conveyed its approval to the appointment of M/s. Harrisons and Crosfield Limited as managing agents by its letter dated September 2, 1957 that the appointment became effective and the Company 's liability to pay the remuneration of the managing agents accrued.
The position here is not that the liability had arisen earlier and its quantification only depended on the approval of the Central Government.
It is true that the liability became effective from April 1, 1956, a date anterior to the relevant previous year, but 'that is because the Central Government chose to give its approval retrospective operation.
The liability in these circumstances cannot be said to have arisen from any date prior to September, 2, 1957 when the approval was given as sec.
326 contains an absolute prohibition against the appointment or re appointment of a managing agent before the approval of the Central Government was obtained.
In our opinion, the position is quite clear from the terms of sec.
326 and we do not consider it necessary to refer to the authorities cited by the learned counsel for either side.
The appeal is accordingly allowed, the answer given by the High Court to the question referred to it is discharged and the question is answered in the affirmative and in favour of the assessee.
The appellantwill be entitled to its costs in this Court and in the High Court.
P.E.R. Appeal allowed.

summary:
The assessee who followed the mercantile system of accounting debited in its account books certain sums of money as remuneration of the managing agents for the assessment years 1957 58 to 1959 60.
For the purpose of income tax the company added back the sum to its taxable income and claimed the whole sum as a deductible expenditure in the assessment year 1959 60 on the ground that the sum became payable only during that year when the Government accorded its approval to the new managing agency agreement.
The income tax Officer rejected the claim holding that the approval of the Central Government was necessary only for actual payment and the assessee should have ascertained the liability for each year and claimed it since he followed the mercantile system of accounting.
This view was upheld by the Appellate Assistant Commissioner and the Income tax Appellate Tribunal.
The High Court held that although at the time the debit entries were made in the account books of the assessee, approval of the Central Government had not been received, when it came later, it gave legal effect to the debit entries with retrospective effect from April 1. 1956 and that the refusal of deduction by the Income tax Officer was right.
Allowing the appeal to this Court, HELD : The High Court was in error in answering the question against the assessee.
Even an assessee following the mercantile system of accounting is not entitled to claim a deduction until liability for the sum for which deduction is claimed has accrued.
The High Court overlooked the plain terms of s.326 of the under which it could not be assumed that the Central Government would approve every proposed appointment or re appointment of managing agent.
[809A; D; 810A] In the instant case it is only when the Central Government conveyed its approval to the appointment of managing agents by its letter dated September 2, 1957 that the appointment became effective and the Company 's liability to pay the remuneration of the managing agents accrued.
The liability became effective from April 1, 1956 because the Central Government chose to give its approval retrospective operation.
The liability could not be said to had &risen from any date prior to September 2, 1957 when the approval was given.
Section 326 of the contains an absolute prohibition against the appointment or re appointment of a managing agent before the approval of Central Government was obtained.
[810B C]


judgement:
Appeal No. 1968 of 1972.
Appeal by Special Leave from the Judgment and Order dated the 4th August 1971 of the Madhya Pradesh High Court in Misc.
Petition No. 41 of 1970 O. P. Malhotra, O. C. Mathur, and R. N. Mishra, for the Appellant.
M. K. Ramamurthi and J. Ramamurthi for Respondents Nos 14.
25. 31.
46. 47, 59, 61, 68, 70, 72, 76, 79, 80, 83, 84.
95, 96, 102, 126 and 129.
The Judgment of the Court was delivered by SARKARIA, J.
This appeal by special leave is directed against the judgment, dated August 4, 1971, of the Madhya Pradesh High Court 875 whereby the apPellant 's Writ Petition under Articles 226 and 227 of the Constitution was dismissed.
The appellant is the Jhagrakhan Collieries (P) Ltd., a Company incorporated under the Indian Companies Act.
The Company owns three collieries in Jhagrakhan in Surguja District of Madhya Pradesh.
These collieries employ over 4,200 workmen.
At the relevant time there were three Trade Unions functioning at the collieries, namely, (1) Madhya Pradesh Koyla Mazdoor Panchayat (for short, the 'Panchayat ' ); (2) Azad Koyla Shramik Sabha (for short, the 'Sabha '), (3) Madhya Pradesh Colliery Workers ' Federation (for short.
the Federation) At the material time, the Panchayat, according to the allegations of the Company, had about 75 per cent of the workers on its rolls.
This Union conducted a complete strike for 57 days in the months of March and April 1968 at the collieries.
The Central Wage Board for Coal Mining Industry by its award recommended payment of Variable Dearness Allowance (for short, V.D.A.), correlated to the cost of living index prevailing from time to time.
The Company accepted these recommendations.
The workers represented by *,he various Unions, on the basis of the Wage Board 's award demanded V.D.A. at the rate of Rs. 1.47 per day with effect from April 1, 1968 while the Company was paying it at the rate of Rs. 1. 11 per day.
The Company refused to pay more than Rs. 1.11 per day.
Thereupon, in December 1968.
the Federation, which had a membership of 169 workers (Respondents 4 to 173 herein) made an application before the Central Labour Court cum Industrial Tribunal Jabalpur (for short, the Labour Court) under Section 33 C(2) of the Industrial Dispute ,; Act (for short the 'Act ') for determination of the amount of V.D.A. due to the workers The Company submitted its written statement on May 13.
1969, challenging the jurisdiction of the court and raised other legal objections.
On October 4, 1969, the Panchayat served a notice of strike under Section 22(1) of the Act on the Company together with a charter of 29 demands and threatened to strike on or after November 7, 1969 if their demands were not conceded.
Thereupon.
the counciliation Proceedings purporting to be under section 22 read with section 12(1) of the Act were held by Mr. B. D. Sharma, Assistant Labour Commissioner (C) Shahdol on the 21st and 22nd October.
In the course of these conciliation proceedings on October 22, 1969, besides other matters.
the dispute relating to V.D.A. was settled.
On October 22, 1969, the Assistant Labour Commissioner (Mr. Sharma) sent a report together with a copy of the settlement to the Government, as required by Section 12(3) of the Act.
Subsequent to the signing of this conciliation agreement, dated October 22, 1969.
the Company filed a supplementary statement on November 5, 1969, submitting that in view of the said settlement, the application under section 33C(2) of the Act filed by the Federation, had become infructuous.
The Labour 876 Court by its order, dated December 20, 1969 framed this additional issue : "Whether the claim stands settled by 'reason of settlement dated 22 10 1969, if any".
On behalf of the workers several objections were raised to the enforceability of.
this settlement, Their ultimate stand was that the settlement was not in accordance with the provisions of the Act, inasmuch as it had not been brought about in proceedings before a duly appointed Conciliation Officer.
The Labour Court tried this issue as a preliminary issue.
It held that Shri Sharma was not a duly appointed Conciliation Officer on the date on which the settlement was arrived at, and consequently, it did not put an end to the dispute pending before the Labour Court.
To impugn this order of the Labour Court, the Company through its agent and Mining Engineer filed a Writ Petition under Article 226 and 227 of the Constitution, which as stated before, was dismissed by the High Court.
Hence this appeal.
Mr. Malhotra, learned Counsel for the appellant raised three points in the course of his arguments before us : (1) In holding that the settlement, dated October 22, 1969 was not a settlement in the course of conciliation proceedings, the courts below have misconstrued Section 4 of the Act , inasmuch as, they have relied only upon sub section (1) and have not taken into account its sub section (2) and the relevant notification thereunder.
(2) (a) Assuming that the settlement in question was not a settlement in the course of conciliation proceedings and binding under section 18(3) on the Act, it was still a settlement binding on the workman, including respondents 4 to 173 herein, when 99 per cent of the total workmen had accepted the terms of the settlement, including V.D.A. (b) The Labour Court 's order refusing permission to the appellant Company to lead evidence to prove the implementation and acceptance of the, aforesaid settlement by 99 per cent of the workers, was.
violative of the principles of natural justice.
(3) There is nothing in the Act which prohibits the employee and the workmen from entering into a settlement during the pendency of proceedings under section 33 C(2) of the Act.
On the other band, settlements inter se between the parties have always been preferred by this Court to the adjudicatory process.
Subsequently, however, Mr. Malhotra withdrew his contention with regard to point No. (1) and requested the Court not to give any finding thereon.
We, therefore, refrain from going into the same.
877 For points (2) and (3), Mr. Malhotra placed reliance on two decisions of this Court, namely : Amalgamated Coffee Estates Ltd. and ors.
vs Their workmen and others(1) and The Sirsilk Ltd. and ors.
vs Government of Andhra Pradesh and anr.(2) Before dealing with the points canvassed, it will be appropriate to examine the relevant provisions of the Act.
Section 2(p) of the Act defines settlement to mean " a settlement arrived at in the course of conciliation proceedings and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding 'where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to (an officer authorised in this behalf by) the appropriate Government and the conciliation officer." As analysis of.
the above definition would show that it contemplates only two kinds of settlement (i) A settlement arrived at in the course of conciliation,proceedings under the Act and (ii) a written agreement between the employer and the workmen arrived at otherwise than in the course of conciliation proceedings.
But a written agreement of the latter kind in order to fall within the definition must satisfy two more conditions, namely : (a) it must have been signed by the parties thereto in the prescribed manner, and (b) a copy thereof must have been sent to the authorities indicated in section 2(p).
The effect of a settlement of the first kind is indicated in subsection (3) and that of the second in sub section
(1) of section 18 of the Act.
The material part of section 18 reads "18)1) A settlement arrived at by agreement between the employer and workmen otherwise than in the course of conciliation proceedings shall be binding on the parties to the agreement.
(2) Subject to the provisions of sub section (3), an arbitration award which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration.
" (3) A settlement arrived at in the course of conciliation proceedings under this Act (or an arbitration award in a case where a notification has been issued under ,sub section (3A) of Section (10A) or (an award of a Labour Court, Tribunal or National Tribunal) which has become enforceable shall be binding on (a) all parties to the industrial dispute; (b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, (arbitrator) (Labour Court, Tribunal or National (1) (2) [1964]S.C.R. 448. 878 Tribunal), as the case may be, records the opinion that they were summoned without proper cause; (c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates; (d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part.
" It is clear from a perusal of Section 18, that a settlement arrived at in the course of conciliation proceedings is binding not only on the actual parties to the industrial dispute but also on the heirs, successors or assigns of the employer on the one hand, and all the workmen in the establishment, present or future, on the other.
In extending the operation of such a settlement beyond the parties thereto, sub section (3) of the Section departs from the ordinary law of contract and gives effect to the principle of collective bargaining.
Thus, had Mr. B. D. Sharma been a duly appointed Conciliation Officer, the settlement arrived at in the conciliation proceedings, duly conducted by him under Section 12, would have been binding on the entire body of the workers including Respondents 4 to 173 represented by the Federation.
and others who 'are members of the Sabha.
Since the finding of the High Court to the effect that the settlement between the Panchayat and the management cannot be deemed to be settlement arrived at in the course of conciliation proceedings under the Act, now stands unassailed.
the aforesaid sub section (3) cannot be invoked to make it binding on Respondents 4 to 173.
The question remains : Can it be enforced against these Respondents by virtue of sub section (1) of the Section ? This further narrows down into the issue : Were these respondents parties and signatories to the agreement between the management and the Panchayat ? The answer to this question is undoubtedly in the negative.
Even Mr. Malhotra has conceded that at the time when the settlement was arrived at on October 22, 1969, these respondents and the members of the Sabha. were not Parties to it.
But his argument is that subsequently by drawing V.D.A. in accordance with the settlement, 99% of the workers have accepted the settlement which, in consequence, would be as effective against them as if they were parties to it.
The argument is attractive but does not stand a close examination.
We have already noticed that according to the scheme of section 18, read with section 2(d), an agreement, made otherwise than in the course of conciliation proceedings, to be a settlement within the meaning of 879 the Act must be a written agreement signed in the manner prescribed by the Rules framed under the Act.
As rightly pointed out by Mr. Ramamurthy, learned Counsel for the Respondents an implied agreement by acquiescence, or conduct such as acceptance of a benefit under an agreement in which the worker acquiescing or accepting the benefit was not a party being outside the purview of the Act, is not binding on such a worker either under sub section (1) or under sub section (3) of section 18.
It follows, therefore, that even if 99% of the workers have impliedly accepted the agreement arrived at on October 22, 1969, by drawing V.D.A., under it, it will not whatever its effect under the general law put an end to the dispute before the Labour Court and make it functus officio under the Act.
The refusal of the Labour Court to allow the appellant to lead evidence at this stage, has not caused any prejudice to the appellant.
The issue decided as a preliminary issue involved a question of law which could be decided on the, basis of material on record.
For its it was not necessary to prove that 99% of the workers had accepted the agreement dated October 22, 1969.
Even on an assumption of that fact in favour of the Company, the claim before the Labour Court could not be deemed to have been settled qua respondents 4 to 173.
Furthermore.
the decision of the Labour Court neither debars the appellant from bringing on record evidence relevant to the issues; which still remain to be decided, nor does it rule out the agreement dated October 22, 1969, for all purposes.
Indeed, the Labour Court has in its order, towards the end, expressly said that the settlement, dated October 22,_ 1969, can be binding under section 18 (1) of the Act between the contracting parties.
In view of the above, we would negative contention (2) canvassed by Mr. Malhotra.
This takes us to the third contention.
Assuming that the Act does not inhibit the employers and the workmen from arriving at a settlement during the pendency of proceedings under section 33 C(2) of the Act, such a settlement, not being one arrived at in the course of conciliation proceedings would be enforceable only against the parties thereto.
In the present case, Respondents 4 to 173 and others who were not parties to the settlement dated October 22, 1969, would not be bound by it.
In the case of Amalgamated Coffee Estates Ltd. vs Their workmen (supra) cited by Mr. Malhotra, pending the appeals by the management before this Court, the subject matter of the award were settled between most of the managements and most of their employees represented by 'certain Unions.
An application was made requesting the Court to dispose of the appeals in terms of such settlement.
It was opposed on behalf of some of the employees.
This Court called for a finding from the Industrial Tribunal on this issue 880 "In view of the fact that admittedly a large number of workmen employed by the appellants have accepted payments consistently with the terms of the agreements set up by the employers.
in their present petition, is it shown by the respondents that the said agreement is not valid and binding on them ?" The Tribunal submitted the finding that in every estate payments were made in terms of the settlement and such payments were voluntary and knowingly accepted by the workmen.
It also held that the terms of the settlement were fair.
This Court accepted the finding of the Tribunal holding that "the settlement appears to us also to be a fair one".
It therefore, decided the appeals in terms of the settlement.
It will be seen that the decision in Amalgamated Coffee Estates case (supra) stands on its own facts.
There the appeals arose, out of an award of the Special Industrial Tribunal for plantations in a dispute between 228 coffee, tea and rubber estates in South India and their employees referred to it under section 10(1) whereas the instant appeal arises out of proceedings under section 33 C(2) for the recovery of money on the basis of the Wage Board 's award and the dispute, if any, is about the computation of V.D.A. in implementation of that award.
The scope of section 33 C(2) is not the same as that of section 10(1) of the Act.
In East India Coal Company Ltd. Banares Colliery, Dhanbad vs Raweshwar and Ors.(1) this Court held that although the scope of section 33 C(2) is wider than that of a 33 C(1), cases which would appropriately be adjudicated under section 10(1) are outside the purview of section 33 C(2).
The provisions of section 33 C are, broadly speaking, in the nature of executing provisions.
An appeal being a rehearing of the case, in Amalgamated Coffee Estates ' case, the jurisdiction of the Court to decide the dispute in a just manner was co extensive with that of the Tribunal to which it was referred under section 10(1).
This Court found in agreement with the report of the Tribunal that the settlement arrived at between the most of the Unions representing most of the workers and the manage ments was fair and conducive to industrial peace, and therefore, it was just and appropriate to decide the dispute and dispose of the appeals in terms of the settlement.
In the case before us, the jurisdiction of the Labour Court is not only circumscribed by s 33 C(2) but the matter also is yet at the initial stage.
The controversy between the parties still remains to be determined on merits.
therefore, do not think it necessary to say anything more with regard to contention No. 3 than what we have broadly indicated above.
For the foregoing reasons, the appeal fails and is dismissed with costs.
Appeal Dismissed.
V.M.K. 1.

summary:
The three collieries owned by the appellant company employ over 4,200 workmen.
At the relevant time, there were three Trade Unions functioning at the collieries namely, Madhya Pradesh Koyla Mazdoor Panchayat, Azad Koyla Shramik Sabha and Madhya Pradesh Colliery Workers ' Federation.
At the material time, the Panchayat, according to the allegations of the Company, had about 75 per cent of the workers on its rolls.
This Union conducted a complete strike for 57 days in the months of March and April 1968 at the collieries.
The Central Wage Board for Mining Industry by its award recommended payment of Variable Dearness Allowance (V.D.A.), correlated to the cost of living index prevailing from time to time.
The Company accepted those recommendations.
The workers represented by the various Unions, on the basis of the Wage Board 's award, demanded V.D.A. at the rate of Rs. 1.47 per day with effect from April 1, 1968 while the Company was paying it at the rate of Re. 1. 1 1 per day.
The Company refused to pay more than Re. 1. 11 per day.
Thereupon, in December 1968.
the Federation.
which had a membership of 169 workers (Respondents 4 to 173) made an application before the Central Labour Court cum Industrial Tribunal Jabalpur (the Labour Court) under section 33 C(2) of the Industrial Disputes Act for determination of the amount of V.D.A. due to the workers.
The Company submitted its Written Statement on May 13, 1969, challenging the jurisdiction of the court and raised other legal objections.
In consequence of the notice of strike under Sec.
22(1) of the Act by the Panchayat, the conciliation proceedings to be under section 22 read with sec.
12(1) of the Act were held by Mr. B. D. Sharma.
Assistant Labour Commissioner.
In the course of these conciliation proceedings besides other matters, the dispute relating to V.D.A. was settled.
Subsequent to the signing of the conciliation agreement, the company filed a supplementary statement before the Labour Court that, in view of the settlement, the application filed by the Federation had become infructuous.
The stand taken by the workers Was that the settlement was not in accordance.
with the provisions of the Act.
The Labour Court tried this issue as a preliminary issue.
It held that Shri Sharma was not a duly appointed ,conciliation officer on the 'date on which the settlement was arrived at and consequently, it did not put an end to the dispute pending before the Labour Court.
The Writ Petition filed by the Company in the High Court impugning the order of the Labour Court was dismissed.
Hence this appeal by special leave.
It was contended for the appellant (i) Assuming that the settlement in question was not a settlement in the course of conciliation proceedings and binding under section 18(3) of the Act, it was still a settlement binding on the workmen, including respondents 4 to 173 herein, when 99 per cent of the total workmen had accepted the terms of the settlement, including V.D.A; (ii) The Labour Court 's order refusing permission to the appellant Company to lead evidence to prove the implementation and acceptance of the aforesaid settlement by 99 per cent of the workers, was violative of the principles of natural justice, and (iii) There is nothing in the Act which prohibits the employers and the workmen 874 from entering into a settlement during the pendency of proceedings under section 33 C(2) the Act.
On the other hand, settlements inter se between the parties have always been preferred by this Court to the adjudicatory process.
HELD (i) A perusal of sec.
18 of the Act makes it clear that a settlement at rived at in the course of conciliation proceedings is binding not only On the actual parties to the industrial dispute but also on the heirs, successors or assigns ,of the employer on the one hand, and all the workmen in the establishment, present or future.
on the other.
Thus had Mr. B. D. Sharma been a duly appointed Conciliation Officer, the settlement arrived at in the conciliation proceedings, duly conducted by him under sec.
12, would have been binding on the entire body of the workers.
Since the finding of the High Court to the effect, that the settlement between the Panchayat and the management cannot be deemed a, settlement arrived at in the course of conciliation proceedings under the Act, now stands unassailed, sub sec.
(3) of sec.
18 cannot be invoked to make it binding on Respondents 4 to 173 represented by the Federation.
An implied agreement by acquiescence or conduct such as acceptance of a benefit under an agreement to which the worker acquiescing or accepting the benefit was not a party being out side the purview of the Act is not binding on such a worker either under sub sec.
(1) or under sub sec.
(3) of sec.
18 of the Act.
It follows, therefore, that, even if 99% of the workers have impliedly accepted the agreement by drawing V.D.A. under it, it will not whatever its effect under the general law put an end to the dispute before the Labour Court and make it functus officio under the Act, [878C E; 879A B] (ii) The refusal of the Labour Court to allow the appellant to lead evidence at this stage, has not caused any prejudice to the appellant.
The issue decided as a preliminary issue involved a question of law which could be decided on the basis of material on record.
Furthermore, the decision of the Labour Court neither debars the appellant from bringing on record evidence relevant to the issues which still remain to be decided, nor does it rule out the agreement for all purposes.
[879C E] ' (iii) In East India Coal Company Ltd., Benares Colliery, Dhanbad vs Rameshwar and ors.
, this Court held that although the scope of section 33C(2) is wider than that of sec. 33 C(1), cases which would appropriately be adjudicated under sec.
10(1) are outside the purview of sec.
33C(2).
The provisions of section 33 C are broadly speaking in the nature of executing provisions.
The jurisdiction of the Labour Court, in the present case, is not only circumscribed by sec.33 C(2) but the matter also is yet at the initial stage.
The controversy between the parties still remains to be determined on merits.
[880F & G] Amalgamated Coffee Estates Ltd. and Ors.
vs Their workmen and Ors.
discussed and The Sirsilk Ltd. and Ors.
vs Govt.
of Andhra Pradesh and Anr, [1964] S.C.R. 448, referred to.