judgement:
PETITION (CIVIL) Nos.
13325 37.
13366, 13683 to 13687 of 1983, 256 260 & 579 81 of 1984 (Under article 32 of the Constitution of India) Anil Dev Singh, Ashok Sen and S.B. Bhasme R. Satish, S.S. Gupta, J.L. Kotidhar and S.S. Khanduja, for the Petitioners.
Y.S. Chitale, G.L. Sanghi, S.N. Kacker and V.M. Tarkunde Altaf Ahmad for Respondents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Writ petitions questioning admissions to the medical colleges at Srinagar and Jammu appear to have become an annual feature in this court.
In the previous years, there was some justification.
It does not appear to be so this year.
In these writ petitions, the selection of candidates for admission to the two medical colleges at Srinagar and Jammu as well as the nominations by the Government of Jammu & Kashmir to medical colleges outside the State are in question.
On Max 24, 1983, the Government of Jammu 585 & Kashmir issued an advertisement inviting applications from permanent residents of Jammu & Kashmir State for admission to the first year MBBS in the medical colleges at Jammu & Srinagar.
One of the conditions of eligibility was that a candidate should have passed the "First TDC (Medical Group) examination from Jammu & Kashmir Board of School Education with not less than 50% of the total marks in English and Science subjects taken together".
There was some relaxation in favour candidates belonging to the Scheduled Castes, etc.
with which we are not now concerned.
We are also not concerned in these writ petitions with the 'reservations ' made in favour of various classes.
We are only concerned with the seats or places available for open competition.
The advertisement expressly mentioned that the candidates would have to appear in a written test of 'TDC Part I Standard, comprising of two papers, one paper consisting of the subjects, Physics and Chemistry and the other, Biology and English.
It was also mentioned in the advertisement that the candidates would be required to appear at a Viva voce examination.
On 7th July, 1983, the Government of Jammu & Kashmir published a notification called the Jammu & Kashmir Government Medical Colleges (Selection of Candidates for Admission to First Year MBBS Course) Procedure Order 1983.
Paragraph 4 of the order which is relevant is as follows: "4.
Merit: The inter se merit of the candidates shall be determined on the basis of the following: (i) Written test . 85 Points (ii) Viva voce . 15 Points Total 100 Points The points earmarked for viva voce will further be subdivided into the following factors: (a) Aptitude . 8 Points (b) G.K.GI . 7 Points Total . 15 Points" 586 On 26th August 1983, a Selection Committee was constituted consisting of the Chairman of the Jammu and Kashmir Public Service Commission as Chairman and two members, namely, the Principals of the two Government Medical Colleges at Srinagar and Jammu.
The quorum for a meeting of the Committee was stipulated as the Chairman and one member.
On the same day by another notification it was directed that the Selection Committee should arrange and conduct the written test and evolve its own procedure for appointing examiners and for the conduct of the examination, etc.
The Selection Committee held its first meeting on September 2, 1983 when one of the members, the Principal of the Government Medical College, Srinagar informed the Committee that his daughter was one of the candidates and that it would not be desirable for him to be associated, at any stage, with the written test to be conducted by the Committee and further that he would not like to be present when his daughter was interviewed.
The Committee took note of the information and agreed with the suggestion.
As the Government had also fixed a quorum for a meeting of the Committee, it was not considered necessary to have a substitute member appointed.
Thereafter a detailed procedure was evolved for the written test and interviews.
The Chairman was authorised to consult the Chairman of the Jammu & Kashmir Board of School Eduction and select the required number of examiners and pacesetters.
The written test was conducted simultaneously at Jammu & Kashmir on September 22, 1983.
The written test was followed by interviews from September 22, 1983 to October 11, 1983.
One important factor which requires to be mentioned here is that the marks secured in the written test by the respective candidates was not available to the Selection Committee when the Committee interviewed the candidates.
The Committee met again on October 25, 1983 by which time the results of the written test were also available.
The Selection Committee proceeded with the task of finalising the selection.
The selected candidates were sent individual intimations and on December 3, 1983, a notification was published by the Government of Jammu & Kashmir informing the public that the result of the written test/Viva Voce held for admission to the First year of the MBBS Course for the Medical Colleges of the State was available in the offices of the Principals of the Government Medical Colleges at Jammu and Srinagar.
Candidates were also told that marks card would be issued on payment of a fee of Rs. 5/ and that any candidate interested in seeing his/her answer book could do so on payment of Rs. 20/ as fee for each paper.
Some of the facts mentioned above were taken by us from the counter affidavits filed on behalf of the Government of Jammu & Kashmir and were not admitted by the petitioners.
We do not however have the slightest 587 doubt about the correctness of these facts, as they are fully supported by contemporaneous official records.
The petitioners have filed these writ petites impugning the selection made by the Committee on various grounds.
In their petitions, they have indulged in several allegations and insinuations for which there is no basis whatsoever.
Shri Anil Dev Singh, learned counsel for some of the petitioners raised three contentions.
The first was that the entire selection was vitiated the presence on the Committee of the father of a candidate.
The second contention was that the entire procedure was bad as the marks obtained by the candidates at the qualifying examination (TDC Part I Medical Group) were not taken into account and not given any weightage whatever.
The third contention was that the viva voce test provided for 7 points for general knowledge and general intelligence whereas it would have been more appropriate to test the general knowledge and general intelligence of candidates by holding a written test instead of a viva voce test.
Shri Anil Dev Singh also generally submitted that the viva voce test was a mere manoeuvre designed to bring in candidates who had fared badly in the written test.
Shri A.K. Sen, learned counsel who appeared for some of the other petitioners made only one submission and it was that 'the viva voce test had worked in an unreasonable and arbitrary manner, in fact and as a matter of principle '.
He elaborated the submission by arguing that though the two papers in the written test carried 550 marks, they were reduced to 85 points as against 15 points for the viva voce test.
The result, according to him, was that candidates who got a lead of 20 25 marks in the written test had to bow down to candidates who got a lead of 3 or 4 points in the viva voce test as the marks obtained in the written test were reduced to points in the ratio of 50 to 85.
Shri Sen also submitted that the questions put to the candidates at the interview were not designed to test either aptitude or general knowledge or general intelligence and for that reason, the selection was vitiated.
He suggested that the final results bore eloquent testimony to the injustice done to the minority community in the State.
We find no substance whatever in any of the submission made by Shri Anil Dev Singh and Shri A.K. Sen.
We may straightway observe that the insinuation that the interviews were so conducted as to do injustice to the minority community appears to us to be uncharitable and Impetuous.
We find that there are candidates belonging to both the majority and the minority communities among the candidates who were able to secure admission because of the points scored by them in the viva voce test, as also amongst the candidates who 588 failed to secure admission because of their low score in the viva voce test.
The inconsiderateness of the allegation is evident from the fact that the marks obtained by the candidates in the written test were not even available to the Selection Committee when they conducted the viva voce test.
This circumstance is sufficient to repudiate the broad allegation freely made by Shri Anil Dev Singh that the viva voce test was designed to facilitate the selection of candidates who had fared badly in the written test.
The submission that the questions put to the candidates at the interview were not designed to test either the aptitude, general knowledge or general intelligence of the candidates is equally without substance.
In the writ petitions, no such averment was made and no instances were given.
In the petition a general allegation was made that the viva voce test had been abused to dilute the otherwise high merit of the petitioners.
On behalf of the respondents, one of the members of the Selection Committee, Dr. S.L. Verma, Principal of the Government Medical College, Jammu filed a counter affidavit in which, he stated '. .
Not less than six minutes were spent on each candidate though in certain cases interview lasted for more than ten minutes.
All the candidates were fully and fairly assessed and it is denied that the candidates were interviewed only to manipulate the results.
The candidates were questioned by the members of Selection Committee only in respect of factors of interview prescribed in SRO 380 dated 7 7 1783 and the entire process was above board and extremely fair.
I submit that the result of the written test became available to the members of the selection committee only after the interviews had been completed", After this counter affidavit had been filed, some of the petitioners chose to file 'rejoinder affidavits ' to suggest that their interviews lasted for about two to three minutes only and that questions relating to the aptitude, general knowledge or general intelligence of the candidates were not asked.
It was stated that some of the candidates were asked the names and occupations of their parents or brothers, and some were asked why he or she wanted to become a doctor and so on.
Aarti Kaul stated in her affidavit that she was also asked to give an example of Collard (?) of the human body, that she replied that it was blood and she was then asked what the constitution of blood was, to which she replied "Plasma Haemoglobin RBC Serum".
Rajesh Gupta, another candidate, stated that his interview lasted for two or three minutes and apart from questions relating to the name and occupation of his father and brothers, he was also asked to define 'absolute zero ' and 'international ampere '.
He answered both the questions.
He claimed that he was asked no que 589 stion relating to aptitude, general knowledge or general intelligence.
We are of the view that there is no genuine basis for any complaint in regard to the nature of the questions which the candidates were asked in the viva voce test.
We accept the statement of D. Verma that the Selection Committee put relevant question to the candidates to test their aptitude, general knowledge and general intelligence.
Anyone who has served on a Selection Committee and interviewed candidates knows that a large number of candidates are nervous and in order to put them at ease, it is necessary to ask them to start with, innocuous questions, such as, what is your father 's occupation ?, which part of the country do you come from?, what is your mother tongue? and so on.
Such questions are intended to enable the candidate to feel at ease and get over his nervousness.
No complaint can surely to made that candidates were put such questions.
We also fail to see how any complaint can be made of the fact that questions on science subjects were asked of candidates seeking admission to medical colleges, Surely such questions are at least as good as questions about the name of the capital of an obscure Latin American State or who captained India in the Second test match against Pakistan in 1980.
We entertain on doubt that the questions asked were proper and relevant.
We add that it is not for the court to sit in judgment over the nature of the questions to be put by the members of the Selection Committee.
It is for the members of the Selection Committee to decide what questions they should ask and so long as the questions are not such as to indicate that the interview was nothing but a make believe.
we must allow the matter to rest there.
It is not the function of the court to weigh each question to find out the extent to which it is related to aptitude, general knowledge or general intelligence.
If the question is not flippant, it is not for the court to say that the question was irrelevant and should not have been asked at an interview.
Perhaps irrelevant questions may also be asked to explore the candidate 's capacity to detect irrelevancies.
It is not for the court to claim to itself the task of determining the nature of the questions to be put to candidates appearing at an interview.
The persons constituting the Selection Committee who may generally be assumed to be men of experience and knowledgeable in regard to men and matters may surely be expected to put the right questions.
In the absence of malafides, the matter is best left to them.
Mr. Sen made a complaint that the marks obtained in the written test were reduce to points and this had resulted in candidates who had fared well in the interview stealing a march over some candi 590 dates who had fared well in the written test.
The rules require that pints should be awarded for the written test and 15 points for the viva voce test.
Therefore, although the written tests carried a total of 550 marks, the marks obtained by each candidate had to be necessarily reduced on the points on the basis that 85 points equalled 550 marks The grievance is plainly imaginary.
Both Mr. Anil Dev Singh and Mr. A.K. Sen invited our attention to the observations of this court in Ajay Hastas case in regard to the desirability of holding viva voce test to select candidates for admission to professional colleges and in regard to the manner of conducting such tests.
The Court after referring to the criticism levelled against viva voce test observed: "Now this criticism cannot be said to be said to be wholly unfounded and it reflects a point of view which has certainly some validity" The court then quoted M.P. Sharma on 'Public Administration ' in 'Theory and Practice ' and Glenn Stahl on 'Public personnel Administration ' and observed "But, despite all this criticism, the oral interview method continues to be very much in vogue as a supplementary test for assessing the suitability of candidates wherever test of personal traits is considered essential.
Its relevance as test for determining suitability based on personal characteristics has been recognised in a number of decisions of this court which are binding upon us".
The Court then quoted from Chitra Lakha and Others vs State of Mysore and Others(2) and A. Pseriakaruppan vs State of Tamil Nadu & Others(3) and observed:, "Its is therefore, not possible to accept the contentions of the petitioners that the oral interview test is so defective that selecting candidates for admission on the basis of oral interview in addition to written test must be regarded as arbitrary.
The oral interview test is undoubtedly not a very satisfactory test for assessing and evaluating the capacity and calibre of candidates, but in the absence of any better test for measuring personal characteristics and traits, the oral interview test must, at the present stage, be regarded as not irrational or irrelevant though it is subjective and based on first impression, its result is influenced by many uncertain factors and it capable of abuse.
We would, however, like to point out that in the matter of admission to college or even in the matter of public employment, the 591 oral interview test as presently held should not be relied upon as exclusive test, but it may be resorted to only as an additional or supplementary test and, moreover, great care must be taken to see that persons who are appointed to conduct the oral interview test are men of high integrity, calibre and qualification".
The Court then proceeded to consider whether the allocation of as high percentage as 331/3 of the total marks for the viva voce test did not render the admission procedure arbitrary.
It was held that it did make the selection procedure arbitrary but even so the selection was not set aside as 18 months had elapsed since the selection and no mala fides had been established.
The court finally considered the argument that each candidate was not interviewed for more than two or three minutes and relevant questions were not asked.
Taking note of the circumstance that no affidavit had been filed either by a member of the Selection Committee or by any other officer who was present at the interview, it was thought that the allegations of the petitioners had to be accepted.
It was then said that "If that be so, the oral interview test must be held to be vitiated and the selection made on the basis of such test must be hold to be arbitrary".
However, for the reason that 18 months had already elapsed, it was not thought proper to strike down the selections already made.
Thereafter the following observations were made: "We may point out that, in our opinion, if the marks allocated for the oral interviewed not exceed 15 % of the total marks and the candidates are properly interviewed and relevant questions are asked with a view to assessing their suitability with reference to the factors required to be taken into consideration, the oral interview test would satisfy the criterion of reasonableness and non arbitrariness.
We think that it would also be desirable if the interview of the candidates is tape recorded, for in that even there will be contemporaneous evidence to show what were the questions asked to the candidates by the interviewing committee and what were the answers given and that will eliminate a lot of unnecessary controversy besides acting as a check on the possible arbitrariness of the interviewing committee".
It would be noticed that most of the observations were made with a view to enable the Government to devise a selection procedure which would be above reproach.
It was never intended to lay down 592 any hard and fast rules.
In the very nature of things it would not be within the province or even the competence of the Court and the Court would not venture into such exclusive thickets to discover ways out, when the matters are mere appropriately left to the wise expertise of medical academicians interested in the quality and integrity of medical education and public administrators conversant with various administrative and socioeconomic problems, needs and requirements.
The Court 's duty lies in preventing arbitrariness and denial of equal opportunity.
The question as to the subjects in which an entrance test may be held is hardly a matter for the court, unless, of course, the subjects are so arbitrarily chosen as to have not the slightest connection with the object of the examination.
Such a situation is not likely to arise as the authorities may be expected to act reasonably.
Again it is not for the court to lay down whether an interview test should be held at all or how many marks should be allotted for the interview test.
Of course, the marks must be minimal so as to avoid charges of arbitrariness but not necessarily always.
There may be posts and appointments where the only proper method of selection may be by an interview test.
Even in the case of admission to higher degree courses, it may some times be necessary to allot a fairly high percentage of marks for the interview test.
For admission to a Ph. D course, for example, candidates may have to be consummately interviewed, each of them for a few hours, perhaps, before any decision can be taken as to who may be admitted.
That is why we say rigid rules cannot be laid in these matters, and not by Courts.
The expert bodies are generally the best judges, All that we may say is that allocation of a high percentage of marks for admission to under Graduate courses should be avoided as there is a risk of a certain amount of arbitrariness which may lead to frustration of the very object of the selection and disrepute of the system.
Courts interfere when the risk of arbitrariness is so high that arbitrariness is inevitable.
Again the court is not the best judge of what questions may be asked at the interview.
As mentioned by us earlier, all that is necessary is that the questions should not be a mere pretence.
All that we have said above is only to supplement what has been said in Ajay Hasia 's case and in the case of Lila Dhar vs State of Rajasthan(1).
In the latter case after referring to the Kothari Committee 's report on Recruitment Policy and Selection Methods, we said: 593 "It is now well recognised that while a written examination assesses a candidate 's knowledge and intellectual ability, an interview test is valuable to assess a candidate 's overall intellectual and personal qualities.
While a written examination has certain distinct advantage over the interview test there are yet no written tests which can evaluate a candidates 's initiative, alertness, resourcefulness, dependableness, cooperativeness, capacity for clear and logical presentation, effectiveness, in discussion, effectiveness in meeting and dealing with others, adaptability, judgment, ability to make decision, ability to lead, intellectual and moral integrity.
Some of these qualities may be evaluated, perhaps with some degree of error, by an interview test, much depending on the constitution of the interview Board.
" We then referred to Glenn Stahl on 'Public Personnel ' Administration and the United Nations Handbook on Civil Service Law and Practice".
We further said: "Thus, the written examination assesses the man 's intellect and the interview test the man himself and "the twain shall meet" for a proper selection.
If both written examination and interview test are to be essential features of proper selection, the question may arise as to the weight to be attached respectively to them.
In the case of admission to a college, for instance, where the candidate 's personality is yet to develop and it is too early to identify the personal qualities for which greater importance may have to be attached in later life, greater weight has per force to be given to performance in the written examination.
The importance to he attached to the interview test must be minimal.
That was what was decided by this Court in Periakaruppan vs State of Tamilnadu, Ajay Hasia etc.
vs Khalid Mujib Seharvardi & Ors.
, (supra) and other cases.
On the other hand in the case of services to which recruitment has necessarily to be made from persons of mature personality, interview test may be the only way, subject to basic and essential academic and professional requirements being satisfied.
To subject such persons to a written examination may yield unfruitful and negative results, apart from its being an act of cruelty to those persons.
There are, of course, many services to which recruitment is made from younger candidates whose personalities are on the threshold of development and who show signs of great promise, and the discerning may in an interview test, catch a glimpse of the future personality.
594 In the case of such services, where sound selection must combine academic ability with personality promise, some weight has to be given, though not much too great weight, to the interview test.
There cannot be any rule of thumb regarding the precise weight to be given.
It must vary from service to service according to the requirements of the service, the minimum qualifications prescribed, the age group from which the selection is to be made, the body to which the task of holding the interview test is proposed to be entrusted and a host of other factors.
It is a matter for determination by experts.
It is a matter for research.
It is not for Courts to pronounce upon it unless exaggerated weight has been given with proven or obvious oblique motives.
The Kothari Committee also suggested that in view of the obvious importance of the subject, it may be examined in detail by the Research Unit of the Union of Public Service Commission.
" At this juncture while we are quoting from the earlier decision of the court in Liladhar vs State of Rajasthan, we may as well refer to the criticism of Shri Anil Dev Singh that block marks should not have been allocated for general knowledge and general intelligence.
Our observations in Liladhar 's case, which we have extracted below, answer this point also: "The rules themselves do not provide for the allocation of marks under different heads at the interview test.
The criteria for the interview test has been laid down by the rules.
It is for the interviewing body to take a general decision whether to allocate marks under different heads or to award marks in a single lot.
The award of marks under different heads may lead to a distorted picture of the candidate on occasions.
On the other hand the totality of the impression created by the candidate on the interviewing body may give a more accurate picture of the candidate 's personalty.
It is for the interviewing body to choose the appropriate method of marking at the selection to each service.
There cannot be any magic formulate in these matters and courts cannot sit it judgment over the methods of marking employed by interviewing bodies unless, as we said, it is proven or obvious that the method of marking was chosen with oblique motive.
"It is true that in Periakaruppan 's case the Court held that the non allocation of marks under various heads in the interview test was illegal but that was because the instructions 595 to the Selection Committee provided that marks were to be awarded at the interview on the basis of five distinct test.
It was thought that the failure to allocate marks under each head or distinct test was an illegality".
The criticism that the Selection procedure was bad because the marks obtained by the candidates at the respective qualifying examinations were not taken into account, but only the marks in the written test and the oral test conducted by the Selection Committee, has also no force.
We were told that the qualifying examination, that is, the First TDC (Medical Group) examination was held at different times in Jammu and Srinagar.
Naturally the question papers, etc. must have been different.
The Selection Committee apparently thought that it would be better to have a common entrance test.
It appears to us to be a perfectly reasonable procedure.
Even otherwise it is always open to a Selection Committee to insist on taking into consideration marks obtained at the examination held by it only and excluding from consideration marks obtained examinations held by other bodies.
We are unable to see anything wrong in this procedure.
A similar contentio was negatived in Ajay Hasia 's case also where it was observed: "It is difficult to appreciate how a procedure for admission which does not take into account the marks obtained at the qualifying examination but prefers to test the comparative merit of the candidates by insisting on an entrance examination can every be said to be arbitrary".
Two other submissions which were made in the course of the argument may also be disposed of here.
One was that general knowledge and general intelligence were not matters to be tested in the viva voce test but should have been tested in a written examination.
That is not a matter for this Court to decide.
It was a matter for the Selection Committee to decide whether general knowledge and general intelligence could be more appropriately tested in the viva voce test or in the written test.
The other submission was that there was delay in the announcement of results and the delay made the selection suspect.
We find that there was in fact no delay and we only add that the suspicion, if any, was unfounded.
We finally come to the submission on which Shri Anil Dev Singh laid considerable emphasis, namely, that the entire selection was vitiated by the presence on the Selection Committee of the father of one 596 of the candidates.
This was said to be a gross violation of one of the principles of natural justice.
The grievance is not real.
The Principal of Medical College, Srinagar, whose daughter was a candidate for admission to the Medical College informed the Selection Committee at the very outset about this fact and told them that he would not have anything to do with the written test and would not be present when his daughter was interviewed.
The other members of the Selection Committee accepted the suggestion of the Principal and did not think it necessary to address the Government to appoint a substitute member of the Selection Committee since the Government had fixed the quorum for a meeting of the Selection Committee as the Chairman and one other member and it was possible to have a quorum without the Principal of the Medical College.
Srinagar.
The procedure adopted by the Selection Committee and the member concerned was in accord with the quite well known and generally accepted procedure adopted by the Public Service Commissions every where it is not unusual for candidates related to members of the Service Commission or other Selection Committee to seek employment.
Whenever such a situation arises, the practice generally is for the member concerned to excuse himself when the particular candidate is interviewed.
We notice that such a situation had also been noticed by this court in the case of Nagarjan vs State of Mysore (1) where it was pointed out that in the absence of mala fides, it would not be right to set aside the selection merely because one of the candidates happened to be related to a member of the Selection Commission who had abstained from participating in the interview of that candidate.
Nothing unusual was done by the present Selection Committee.
The girl 's father was not present when she was interviewed.
She was one among several hundred candidates.
The marks obtained by her in the written test were not even known when she was interviewed.
And, in fact, we find that as a result of her performance at the interview, she lost rather than gained some places.
Great reliarlce was placed by the learned counsel on A.K.Kraipk & Ors.
vs Union of India (2) on the question of natural justice.
We do not think that the case is of any assistance to the petitioners.
It was a case where one of the persons, who sat as member of the Selection Board, was himself one of the persons to be considered for selection.
He participated in the deliberations of the Selection Board when the clams of his rivals were considered.
He participated in the decisions 597 relating to the orders of preference and seniority.
He participated at every stage in the deliberations of the Selection Board and at every stage there was a conflict between his interest and duty.
The court had no hesitation coming to the conclusion that there was a reasonable likelihood of ibis and therefore, there was a violation of the principles of natural justice.
In the case before us, the Principal of the Medical College, Srinagar, dissociated himself from the written test and did not participate in the proceedings when his daughter was interviewed.
When the other candidates were interviewed, he did not know the marks obtained either by his daughter or by any of the candidates.
There was no occasion to suspect his bona fides even remotely.
There was not even a suspicion of bias, leave alone a reasonable likelihood of bias.
There was no violation of the principals of natural justice.
One last submission, which we may note, was that there was a contravention of one of the regulations made by the Indian Medical Council.
It was said that the regulation prescribed that the marks obtained at the qualifying examination should be taken into consideration in States having only one Medical College and one University/Board/Examination Body conducting the qualifying examination.
This regulation has no application because there are two Medical Colleges in this State.
Though only one Board conducted the qualifying examination, the examinations were conducted separately for Jammu and Srinagar areas and on two different occasions.
In the second place, these regulations, have been held to be directory and not mandatory by this court in State of Madhya Pradesh vs Kr.
Nivedita Jain.(1) We have considered the various points raised by the petitioners at some length, we have said so much and we have quoted from the previous judgments of this Court in extense not because we find any substance in any of the contentions, but because these contentionsare being repeatedly raised in many such cases and we desire to discourage the raising of unnecessary hope in the minds of the young men and women seeking the aid of courts for admission into professional colleges, ready as they are to clutch at any straw.
We dismiss all the Writ petitions but in the circumstances without costs.

summary:
The State Government issued an advertisement inviting application for admission to the first year MBBS course in the two medical colleges in the State.
It was mentioned therein that the candidates would have to appear in a written test which would be followed by a Viva voce test and that 85 points were allowed for the written test and 15 points were Viva voce test.
The Selection Committee for the selection was constituted to consist of the Chairman of the State Public, Service Commission as Chairman, and two members, viz, the Principals of the two Medical Colleges.
The quorum for a meeting of the Committee was stipulated as the Chairman and one member.
When the Selection Committee held its first meeting one of the members, the Principal of the College informed the Committee that as his daughter was one of the candidates competing for admission, it would not be desirable for him to be associated, at any stage, with the written test, and that he would not like to be present when his daughter was interviewed.
The Committee took note of the information and agreed with the suggestion.
The petitioners in their writ petitions under Article 32, questioned the selection of candidates for admission : It was contended on their behalf that: (1) the entire selection was vitiated by the presence on the Committee of the father of a candidate, and this was a gross violation of one the principles of natural justice: (2) the entire procedure was bad as the marks obtained by the candidates at the qualifying examination (T.DC Part I Medical group) were not taken into account and not given any weightage; (3) the viva voce test provided for 7 points for general knowledge and general intelligence whereas it would have been more appropriate to test general knowledge and general intelligence of candidate by holding a written instead of a viva voce test; (4) general knowledge and general intelligence were not matters to be tested in a written examination; (5) there was delay in the announcement of the results and the delay made the selection suspect, and (6) the regulations made by the Indian Medical Council prescribed that the marks obtained in the qualifying examination should be taken in to consideration.
Dismissing the writ petition; ^ HELD: 1.
It is not unusual for candidates related to members of the Service Commission or other Selection Committee to seek employment.
Whenever such a 583 situation arises.
the practice generally is for the member concerned to excuse himself when the particular candidate is interviewed.
In the instant case, the Principal of the Medical College, whose daughter was a candidate for admission to the Medical College informed the Selection Committee at the very outset about this fact and told them that he would not have anything to do with the written test and would not be present when his daughter was interviewed.
The other members of the Selection Committee accepted the suggestion of the Principal and did not address the Government to appoint a substitute member of the Selection Committee, since the Government had fixed the quorum for a meeting of the Selection Committee, as the Chairman and one other member and it was possible to have a quorum without the Principal.
The procedure adopted by the Selection Committee and the member concerned was in accord with the quite well known and generally accepted procedure adopted by the Public Service Commissions everywhere.
Nagarajan vs State of Mysore, [1966]3 S.C.R. 682, referred to.
[596A C] 2.
It is not for the Court to sit in judgment over the nature of the questions to be put by the members of the Selection Committee.
It is for the members of the Selection Committee to decide what they should ask and so long as the questions are not such as to indicate that the interview was nothing but a make believe, the matter must be allowed to rest there.
It is not the function of the Court to weigh each question to find out the extent to which it is related to aptitude, general knowledge or general intelligence.
If the question is not flippant, it is not for the Court to say that the question was irrelevant and should not have been asked at any interview.
Perhaps irrelevant questions may also be asked to explore the candidate 's capacity to detect irrelevancies.
It is not for the Court to claim to itself the test of determining the nature of the questions to be put to candidates appearing at an interview.
The persons constituting the Selection Committee who may generally be assumed to be men of experience and knowledgeable in regard to men and matters may surely be expected to put the right questions.
In the absence of malafides, the matter is best left to them.
[589 E G] 3(i) The question as to the subjects in which an entrance test may be held is hardly a matter for the Court, unless, of course, the subjects are so arbitrarily chosen as to have not the slightest connection with the object of the examination.
Such a situation is not likely to arise as the authorities may be expected to act reasonably.
Again it is not for the Court to lay down whether an interview test should be held at all or how many marks should be allotted for the interview test.
Of course, the marks must be minimal so as to avoid charges of arbitrariness but not necessarily always.
There may be posts and appointments where the only proper method of selection may be by an interview test Even in the case of admission to higher degrees courses, it may sometimes be necessary to allot a fairly high percentage of marks for the Interview test.
That is why rigid rules cannot be laid down in these matters, and not by courts.
The experts are generally the best judges.
The Courts duty lies in preventing arbitrariness and denial of equal opportunity.
[592C E, 592B] 3(ii) There is interfere when the risk of arbitrariness is so high that arbitrariness is inevitable.
Again the Court is not the best judge of what questions may be asked at the inter view.
All that is necessary is that the questions should not be amere pretence.
[592F] 584 Ajay Hasia 's case; , ; Chitra Lekha and Ors.
vs State of Mysore and Ors.
, ; ; A. Peeriankaruppan vs State of Tamil Nadu & Ors., [1971] 2 S.C.R. 430; and Lila Dhar vs State of Rajasthan, [1982] 1 S.C.R. 320 referred to.
4(i) The Selection Committee apparently thought it would be better to have a common entrance test.
It appears to be a perfectly reasonable procedure.
Even otherwise it is always open to a Selection Committee to insist on taking into consideration marks obtained in the examination held by it and excluding from consideration marks obtained in examinations held by other bodies.
There is nothing wrong in this procedure.
[595C D] 4(ii) It was a matter for the Selection Committee to decide whether general knowledge and general intelligence could be more appropriately tested in the viva voce test or in the written test.
That is not a matter for the court to decide.
[595F] 5.
There was in fact no delay in the announcement of results and the suspicion, if any, was unfounded.
[595G] 6.
The regulation of the Indian Medical Council prescribing that the marks obtained at the qualifying examination should be taken into consideration has no application because there are two Medical colleges in the state.
Though only one Board conducted the qualifying examination, the examinations were conducted separately for Jammu and Srinagar areas and on two different occasions.
Moreover, the regulations of the Council have been held to be directory and not mandatory by this Court.
[597 D E] Madhya Pradesh vs Kr.
Nivedita Jain [1981] 4 S.C.C. 296, referred to.


judgement:
ivil Appeal Nos. 1238 to 1240 of 1973, 636 From the Judgment and order dated the 17th September, 1971 of the Patna High Court in Tax Cases Nos. 2 of 1965 and 19 and 20 of 1966.
B.B. Ahuja & Ms. A. Subhashihi, for the Appellant.
Y.S. Chitale and U.P. Singh, for Respondent The judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
These appeals by certificates arise against a decision of the Full Bench of the Patna High Court.
Several questions were referred to the High Court of Patna under Section 27 (1) of the Wealth Tax, Act, 1957, hereinafter referred to as the Act.
Two of these questions have been answered against the assessee, one was held to be not entertainable and one misconceived.
The question answered against the revenue in that reference before the High Court was question No. (iii) mentioned.
in the judgment of B.D. Singh.
J. and the question is as follows: "Whether, on the facts and circumstances of the case, the Tribunal was right in including in the assessees net wealth a positive figure, on account of zamindary compensation without taking into consideration the arrears of agricultural in come tax instead of taking the figure of compensation receivable from Government of Bihar at nil" In order to appreciate the question, it may be necessary to refer to some facts.
The question involved before the Full Bench was for the assessment years 1959 60, 1960 61, and 1961 62, corresponding valuation dates of which were the 31st October, 1950, 3rd October, 1959 and 31st October, 1960.
The assessee is an individual.
His estate vested in the State of Bihar under the Bihar Land Reforms Act, 1950 on and from 1st July, 1952, and he is entitled to receive compensation under the Act from the government Under section 3 of the Act, the question arose about the inclusion in the assessee 's "net wealth" the value of the estimated amount of compensation receivable by him 637 from the Bihar Government under the Bihar Land Reforms Act, 1950.
In the assessment year 1959 60, the Wealth tax officer estimated the value at Rs. 10,25,123 and included it in the net wealth or the assessee.
For the assessment years 1960 61 and 1961 62, the assessee produced a letter from the District Collector, Arrah, to show that the assessee is entitled to compensation of Rs. 4,39,713 only.
The Wealth tax officer estimated 75% thereof as the market value of the right of the assessee to receive the compensation.
Accordingly he included in the assessees net wealth Rs. 3,29,78.4.
On appeal, the Appellate Assistant Commissioner reduced the valuation for the 1st year to Rs. 3,29,784.
For the next two years namely 1960 61 and 1961 62.
the Appellate Assistant Commissioner held that it would be reasonable to estimate the market value of the compensation to be received by the assessee at 65% of the face value.
The assessee preferred appeals before the Appellate Tribunal regarding assessments for the aforesaid three years and reiterated, his contention that the right to receive compensation under the Lands Reforms Act was not an asset within the meaning of Section 2(m) of the Act and could not be included in the assessees net wealth.
The Tribunal held that the estimated amount of zamindari compensation payable to the assessee 's was an asset and had to be included in the assessees net wealth.
However, it directed the Wealth tax officer to estimate the value and compensation to be received by the assessee at 65% even for the 1st year, i.e. 1959 60, as was done by the Appellate Assistant Commissioner with regard to the second and third years i.e. 1960 61 and 1961 62.
The contention of the asessee further was that the unpaid agricultural income tax as a debt was deductible while computing his net wealth.
His claim was that this debt was Rs. 5,10,831 in the first year, Rs. 4,76,461.00 in the second year and Rs. 4,75,706 in the third year.
A sum of Rs. 24,430 being agricultural income tax demand for 1363 fasli was allowed to be deducted by the Wealth tax Officer for the second and third year 's arrears of agricultural income tax, the assessee had produced Government letter to show that the amount of compensation receivable by the assessee would be nil.
According to the enquiries from the revenue department it also appeared that the final compensation money payable in respect of the assesse 's zamindari was less than the agricultural income tax dues outstanding against him, and so it was not possible to effect realisation of the dues 638 of agricultural income tax only by adjustment from the final compensation money.
The Tribunal, therefore, held that except Rs. 24,430 which was agricultural income tax demand for 1363 fasli and which was allowed to be deducted by the Wealth tax Officer, the other amounts as claimed by the assessee were not deductible as the arrears were outstanding for more than 12 months, in view of the provisions contained u n der Section 2(m) of the Act and the Government letter was not at all helpful to the assessee.
Then reference was made to the High Court under Section 27(1) of the Act raising five questions out of which question No.(iii) as set out hereinbefore is before us.
The question before the High Court including the question which is before us were referred to a Full Bench of the Court and the reference was disposed of by the Full Bench of Patna High Court on 17th September, 1971, and the decision is reported in 84 I.T.R. p. 240.
The Full Bench decided the question in issue before us against the revenue and in favour of the assessee holding thereby that in the facts and circumstance of the case as nothing was receivable by the assessee in view of the arrears of agricultural income tax, the value of the asset to the assessee was nil.
Though at one point of time there was certain controversy a to whether the right to receive compensation on the vesting of the estate of the appellant in the Government was an asset and as such its value had to be taken in computing the net value of assets or not, There is no doubt that it is and it was not urged before us that it is not an assets.
The only question, is, how should it be valued.
It was contended before us that the Act prohibits setting off of deductions of debts which are outstanding for more than 12 months on account of the arrears of tax on income, agricultural or otherwise.
Therefore it was urged that if the arrears of agricultural income tax due as in this case arc taken into account against the value of the compensation receivable by the assessee, then it would not be in accordance with the scheme of the Act and it would permit defeating the intention the legislature, namely, permitting deduction of arrears of agricultural income tax outstanding for more than 12 months by indirect method which is prohibited directly in terms of Section 2 (m) (iii) cf the Ac This is tile question for our consideration in these appeals.
639 We may at a glance examine the provisions of the Bihar Land A Reforms Act, under which compensation was payable to the assessee and the value of which was under consideration in this case.
Before we do that it is necessary to note the relevant provisions of the Wealth Tax Act and to find out the scheme under the Wealth Tax Act as to how the assets have to be valued.
Section 3 of the said Act is the charging section which imposes a tax for every assessment year in respect of the net wealth on the corresponding valuation date.
Section 4 makes some deeming inclusion of certain assets as assets of the assessee.
It is not necessary to deal with these in detail but it may be mentioned that certain assets which are not standing in the name of the assessee are included in the net wealth, for, example, assets transferred to spouse or minor child or partner of a firm etc.
These deal with the assets which are not in the name or standing in the name of assessee but which really belong to the assessee according to the scheme of the legislation.
We may note here as it was convassed before us that under sub section (3) of Section 4 of the Act which provides that where the value of any asset is to be included in the net wealth of an assessee in accordance with clause (a) of sub section (I) or sub section (1A).
there shall be deduced from such value any debts owing on the valuation date by the transferee mentioned in that clause in so far as such debts are referable to such assets, and the provisions of Section 5 shall apply in relation to such assets as if such assets were assets belonging to the assessee.
Section S deals with the exemption of certain assets.
Section 6 excludes certain assets and debts outside India ' Section 7 is important which provides the method how the is to be assessed.
It provides that it shall be estimated to be the price which in the opinion of the Wealth tax officer it would fetch if sold in the open market on the valuation date.
Section 2 (m) deals with "net wealth" upon which tax is levied and reads as follows: "2 (m) "net wealth" means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in G excess of the aggregate value of all the debts owed by the assessee on the valuation date other than (i) debts which under section 6 are not to be taken into account; 640 (ii) debts which are secured on or which have been incurred in relation to any property in respect of which wealth tax is not chargeable under this Act; and (iii) the amount of the tax, penalty or interest apayable inconsequence of any order passed under or in pursuance or this Act or any law relating to taxation of income or profits, or the estate Duty Act, 1953 (34 of 1953), the Expenditure Tax Act, 1957 (29 of 1957), or the (18 of 1958), (a) which is outstanding on the valuation date and is claimed by the assessee in appeal, revision or other proceeding as not being payable by him; or.
(b) which, although not claimed by the assessee as not being payable by him, is nevertheless outstanding for a period of more than twelve months on the ' valuation date", The main contention of the revenue is that the amount of tax penalty or interest payable ill consequence of any order passed under or in pursuance of the Act or any law relating to taxation of income or profits, or the Estate Duty Act which is outstanding on the valuation date and is claimed by the assessee in appeal, revision or other proceedings as not being payable by him and which, although not claimed by the assessee as not being payable by him, is nevertheless outstanding for more than/twelve months on the valuation date should not be considered to bye debt entitled to be deducted from net wealth.
Net wealth ' as we have noticed means the amount by which the aggregate value computed in accordance with the provisions of the Act of all the assets wherever located, belonging to the assessee is in excess of the aggregate value of all debts excluding the debts mentioned in section 2 (m) of the Act.
Therefore the scheme of imposition of wealth tax in case of an assessee which is not a company and the present assessee is not a company and the computation of the wealth tax of an assessee which is a company might be done under sub section (2) of Section 7 of the Act must be done by first estimating the value of the assets in accordance with the provisions of the Act.
That is the first step.
Therefore the estimating of the value of the assets is first necessary 641 in accordance with the provisions of the Act.
The material provision of the Act for this purpose in the said Act would be Section 7 (1) which ' enjoins the Wealth tax Officer in case of an asset other than cash to estimate the price which, in his opinion, it would fetch if sold in the open market on the valuation date.
Therefore the first step in the facts and circumstances of this case was that the wealth tax Officer to estimate the price which in his opinion the right to compensation of the assessee would fetch if sold in the open market, and after determining the value in the manner aforesaid to deduct therefrom debts owed by the assessee excluding however the debts which are mentioned in clause (i), (ii) and (iii) of Section 2 (m) of the Act.
Keeping this scheme of the Act in mind, we have to examine the nature of compensation under Bihar Land Reforms Act, 1950.
Section 3 provides for the notification vesting an estate or tenure in the State and from the date specified in the notification, the estates or tenures of a proprietor or tenure holder, specified in the notification, will pass on to and become vested in the State.
It is not disputed that in this case this has happened in respect of the property in question.
Section 4 deals with the consequences of the vesting of an estate or tenure in the State and stipulates different consequences.
We are not really concerned with all the various consequences.
We may, however, mention clause (c) of Section 4 which is important for our present purpose.
It provides as it indicates that the arrears of revenue and oesses remaining lawfully due in respect of the estate or tenure shall continue to be recoverable from him in spite of the vesting of the estate and "shall without prejudice to any other mode of recovery, be recoverable (emphasis supplied), when so ordered by the Collector, by the deduction thereof from the amount payable to such intermediary under Section 32, Section 32A or Section 33.".
Reference was made to Section 14 which deals with provisions relating to certain debts of proprietors and tenure holders.
sections 19, 23 and 24 were also referred to which were we do not think are material for our present purpose.
Section 26 onwards deal with the publication of Compensation Assessment roll.
Section 32 provides for the manner of payment of compensation.
Section 32A provides as follows: "32A Where the Compensation Officer considers that delay is likely to occur in payment of compensation under section 32, he may, subject to the provisions of section 32B, pay in the manner, so far as may be applicable, provided in section 32, 642 to the person entitled thereto under this Act a sum not exceeding fifty per centum of the approximate amount of compensation payable in him under section 32 calculated in the manner prescribed in this behalf.
Provided that, if subsequently it is found by the Compensation Officer or the Collector that any amount has been paid to any person in excess of the amount payable to him under section 32 or that the person to whom the amount has been paid was not entitled to it under this Act.
the amount so paid shall, after giving the person concerned a reasonable opportunity of being heard, be recoverable from him together with interest at 6/1/2 per cent annum as if it were a public demand.
" Section 40 is also important and is as follows "40 (1) The Collector, the Claims Officer or the Compensation Officer may, at any time either before or after the date of vesting by a written order served in the prescribed manner require any intermediary or any other person in possession of an estate.
or tenure or any part thereof or any agents or employees of such intermediary or other person, as the case may be, to produce, at a time and place specified in the order, such documents or to furnish an affidavit otherwise such information relating to any estate or tenure of such intermediary as the Collector, Claims Officer or the Compensation Officer may, from time to time require for any of the purposes of this Act or for giving effect to any provision thereof.
(2) Where any intermediary or other person, referred to in sub section (1), if so required by a written order of the Collector, fails without sufficient cause, to produce such documents, or to furnish such information at such time and place as may be, specified in the order, such intermediary or other person, as the case may be, shall be liable to a penalty which may extend to fifty rupees for every day after the expiration of such time until such documents have been produced or such information has been furnished and such penalty shall be realised as a public demand: 643 Provided that where the sum of such penalty exceeds five hundred rupees, the Collector shall refer the matter to the Commissioner whose orders thereon shall be final: Provided further that the Commissioner may at any time, of his own motion or on the application of any intermediary, revise any order of the Collector imposing any penalty and the order of the Commissioner on revision shall be final".
Section 33 which provides for making ad interim payments to proprietors, sub section (2) of which contains the following proviso: "Provided that the Collector shall have the power to refuse, suspend or stop any such ad interim payment in the case of any proprietor or tenure holder who in his opinion has failed or neglected to comply with any order under section 40".
The Patna High Court was of the opinion that in view of the facts and specially the letter given by the Collector, the market value of the right of the assessee to receive ad.
interim compensation should be determined in view of the provision of Section 4(c) of Bihar Land Reforms Act, 1950, and keeping in view the correspondence passing between the collector and the assessee.
It is true that the taxing authority has adopted 65% of the face value of the amount discounting the rest on account of delayed payment.
It may be mentioned that these compensations were payable in 40 years.
That is a factor which has to be taken into account and discounted but the other vital factor affecting the value of the asset namely, the liability and the obligation to have the amount deducted under Section 4 (c) of the Bihar Land Reforms Act has not been taken into account at all.
In case where bonds have been issued after taking into consideration the liability under Section 4 (c) of the Bihar Land Reforms Act or where liability under Section 4 (c) has been determined and deducted from the compensation, in such a case no question of deduction on account of the arrears of agricultural income tax mentioned in Section 4 (c) of the Bihar Land Reforms Act would arise but in all other cases, this is a liability, a hazard, a factor, a clog or a jeopardy which detracts from the value of the asset and in estimating the value which one has to do on the basis which a willing purchaser 644 would pay for buying the said asset in open market, the Wealth tax Officer must take that factor into account, otherwise it would be an unreal estimate.
This chance and hazard must influence all buyers.
There are two different stages.
One is estimation of the value of the assets and the other deduction therefrom the debts owed by the assessee.
In last mentioned stage, surely in view of the provisions of Section 2 (m), the debt in respect of income tax which is outstanding for more than 12 months cannot be deducted.
But in estimating the value of the assets, this possibility, which is indeed in the nature of an obligation of the Compensation officer, is a hazard, a clog or a hindrance which If a proper estimate is made under Section 7(1) by the Wealth tax Officer, he has to take into consideration.
It is not a question of deducting the debt but a question of estimation of the value of the asset in question.
Learned counsel for the assessee drew our attention to the decision of this Court in the case of Standard Mills Co. Ltd. vs Commissioner of Wealth tax, Bombay(1) and to Bench decision of the Bombay High Court in the case of Commissioner of Wealth tax Bombay City II vs Purshottam N. Amersey and Another(2).
These decisions, in our opinion, are not relevant at all.
Reliance was also placed on a decision of this Court in the case of Pandit Lakshmi Kant Jha vs Commissioner of Wealth tax, Bihar and Orissa(3).
This question was not in issue but it was reiterated that under the Bihar Land Reforms Act, 1950 as soon as the estate or a tenure of a proprietor or tenure holder vested in the State, he became entitled to receive compensation.
The right to receive compensation from the State was a valuable right.
The fact that compensation was not payable immediately and its payment might be spread over a period of 40 years would be relevant only for the purpose of evaluating his right of compensation.
The right to receive compensation even though the date of payment is deferred is property and constituted an asset for the purpose of Wealth Tax Act.
We are clearly of the opinion that the possibility of deduction of the dues of the assessee for agricultural income tax under Section 645 4 (c) of the Bihar Land Reforms Act from the compensation money is a factor that affects price or value of the compensation money receivable by the assessee under the Bihar Land Reforms Act and until it has been finally determined that no arrears of agricultural income tax is payable at all, will remain a hindrance and the value of which must be quantified and deducted before a proper estimate of the value of the asset money receivable by the assessee is prepared.
Except in cases where the question of arrears of agricultural income tax is settled, this is a factor which goes to the diminution of the value of the asset.
To what extent that would affect the value of the asset is a matter of quantification.
We are not concerned with that question of actual quantification.
We are concerned with the question whether that factor is a matter which has to be taken into consideration in estimating the value of the asset in question.
We are of the opinion that it is a factor certainly to be taken into consideration in estimating what. it would fetch in the open market.
It is not a case as was contended on behalf of the revenue, that this was permitting indirectly deduction of debt which was prohibited by the legislation.
Section 7 and 2 (m) of the Act though must be read harmoniously apply to two different stages.
Section 7 is the estimation of the market value of the asset, section 2 (m) enjoins that from the same the debt owed by the assessee to be deducted.
Such debt owed would be computed in accordance with Section 2 (m) but the estimation of the value of asset is on the basis which such asset would fetch in the open market taking into consideration the view point of a willing purchaser.
We must mention that our attention was drawn to certain other provisions of the Income tax Act and, also Wealth Tax Act and it was contended that any debt which is excluded under the provisions of Wealth Tax Act cannot be deducted and on the same principle a debt which is not deductible because of provision of Section 2 (m) should not be taken into consideration in estimating the value of an asset.
We are unable to accept this position in the facts and circumstances of this case.
Our attention was drawn to certain other rules namely, Rule 34 of the Bihar Land Reforms Rules, 1951.
We do not think it is material to discuss these rules any further.
In the view we have taken, we are of the opinion that the Full Bench of the Patna High Court was right in its conclusion.
The appeals therefore fail and are accordingly dismissed with costs.
H.S.K. Appeal dismissed.

dataset_name: IN-Abs

summary:
While computing the net wealth of the respondent assessee for purposes of wealth tax assessment under the Wealth Tax Act, 1957, the wealth tax officer included certain amount as the value of the assessee 's right to compensation which had accrue;! to him on vesting of his estate in the State of Bihar under the Bihar Land Reforming Act, 1950 on the basis of market value on the valuation date.
This was contested by the assessee on the ground that after adjusting his outstanding agricultural income tax liability the compensation payable to him was nil.
The assessee also produced Collector 's letter to show that the amount of compensation receivable by the assessee would be nil.
The Appellate Assistant Commissioner agreed with the view of the Wealth Tax officer.
In appeal before the Tribunal the assessee contended that the unpaid agricultural income tax as a debt WAS deductible while computing his net wealth.
The Tribunal accepting the Revenue 's contention held that the amounts claimed by the assessee were not deductible as a debt under s.2(m) as the arrears of agricultural income tax were outstanding for more than twelve months.
On a reference being made, a Full Bench of the High Court was of the opinion that the market value of the right of the assessee to receive ad interim compensation should be determined in view of the provisions of s.4(c) of the Bihar Land Reforms Act, 1950 and held that in the facts and circumstances of the case as nothing was receivable by the assessee from the State of Bihar in view of the arrears of agricultural income tax, the value of the asset to the assessee was nil.
635 Hence this appeal.
Dismissing the appeal, ^ HELD: For computing net wealth under s.2(m) of the Wealth Tax Act, 1957 there are two different steps.
The first and essential step would be to estimate the value of the assets in accordance with the provisions of the Act and the second step would be to deduct therefrom the debts owed by the assessee except the debts excluded by that section.
For estimating the value of the assets the material provision would be $7(1) of the Act which enjoins the Wealth Tax officer to estimate the price which, in his opinion, an asset other than cash would fetch if sold in the open market on the valuation date.
The Wealth Tax officer must take into account any factor which detracts from the value of an asset which a willing purchaser would Pay for buying that asset in open market.
[643 B C] C Section 4 of the Bihar Land Reforms Act, 1950 deals with the consequences of the vesting of all estate or tenure in the State and stipulates different consequence Clause (c) of s.4 provides that the arrears of revenue and cesses remaining lawfully due in respect of the estate or tenure shall continue to be recoverable in spite of the vesting of the estate and shall without prejudice to any other mode of recovery, be recoverable, when so ordered by the Collector by the deduction thereof from the amount payable.
[643 G H] In the instant case , the possibility of deduction of the dues of the assessee for agricultural income tax under s.4(c) of the Bihar Land Reforms Act from the compensation money is a factor that affects price or value of the compensation money receivable by the assessee under the Bihar Land Reforms Act and until it has been finally determined that no arrears Of agricultural income tax is payable at all, will remain a hindrance and the value of which must be qualified and deducted before a proper estimate of the value of the asset money receivable by the assesses is prepared.
Except in cases where the question of arrears of agricultural income tax is settled, this is a factor which goes to the domination of the value of the asset.
To what extent that would affect the value of the asset is a matter of quantification.
The court is not concerned with the question of actual qualification.
The Court is concerned with the question whether 'that factor is a matter which has to be taken into consideration in estimating the value of the asset is a matter of qualification.
The court b. Of the opinion that it is a factor certainly to be taken into consideration in estimating what it would fetch in the open market.
[644 H; 645 A C] The contention that a debt which is not deductible because of provisions ' of s.2(m) should not be taken into consideration in estimating, the value of an asset is not acceptable in the facts and circumstances of this case.
[645 F]