judgement:
Appeal No. 264 of 1956.
Appeal by special leave from the Judgment and Order dated June 29, 1954, of the Bombay High Court in Appeal No. 127 of 1953.
A. V. Viswanatha Sastri, Hemendra Shah, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for,the Appellant.
J. C. Bhatt, C. J. Shah and Naunit Lal, for the Respondent. 1960.
November 30.
The Judgment of the Court was delivered by SARKAR, J.
The appellant is a commission agent and pucca aratiya and has been acting as such for the respondent since November 7, 1951, in the course of which various contracts were made between them in Greater Bombay.
On February 26, 1952, two of such contracts were outstanding, one of which was in respect of groundnuts and was a forward contract.
In March 1952, disputes arose between the parties as to whether these contracts had been closed, each side making a claim on the other on the basis of its own contention.
Eventually, on March 18, 1952, the appellant referred the disputes to arbitration under the arbitration clause contained in the contracts.
On October 7, 1952, the arbitrators made one composite award for Rs. 22,529 15 9 against the respondent in respect of the said disputes.
It is not very clear whether this award covered other disputes also.
This award was duly filed in the Bombay City Civil 99 782 Court under the , for a judgment being passed on it.
Thereafter, on July 17, 1953, the respondent made an application to the Bombay City Civil Court for setting aside the award contending that forward contracts in groundnuts were illegal as the making of such contracts was prohibited by the Oilseeds (Forward Contract Prohibition) Order, 1943, issued under the Essential Supplies (Temporary Powers) Act, 1946, and hence the arbitration clause con tained in the forward contract in groundnuts between the parties was null and void.
It was said that the award based on that arbitration clause was therefore a nullity.
The appellant 's answer to this contention was that the Essential Supplies (Temporary Powers) Act did not apply to Greater Bombay where forward contracts were governed by the Bombay Forward Contracts Control Act, 1947, hereafter called the Bombay Act, and as the contract in groundnuts had been made in terms of that Act, it was legal, and, therefore, the award in terms of the arbitration clause contained in it was a valid and enforceable award.
The learned Principal Judge of the Bombay City Civil Court accepted the respondent 's contention and set aside the award.
An appeal by the appellant to the High Court at Bombay against the judgment of the City Civil Court failed.
The appellant has now come to this Court in further appeal.
The only question in this appeal is whether the Essential Supplies (Temporary Powers) Act, which was passed by the Central Legislature in 1946, applied to Bombay? If it did, then the Oilseeds (Forward Contract Prohibition) Order, 1943, hereafter called, the Oilseeds Order, issued under it would make the contract in groundnuts illegal and no award could be made under the arbitration clause contained in it.
This is not in dispute.
Now, the Oilseeds Order was first passed in 1943 under r. 83 of the Defence of India Rules.
The Defence of India Rules ceased to be in force on September 30, 1946.
In the meantime however, as the situation had not quite returned to normal in spite of the termination of the war, the British Parliament passed 783 an Act on March 26, 1946, called the India (Central Government and Legislature) Act, 1946 (9 & 10 Geo.
VI, Ch. 39), hereafter called the British Act.
Section 2 of this Act provided that the Central Legislature of India would have power to make laws with respect to various matters therein mentioned notwithstanding anything in the Government of India Act, 1935, and that that power could be exercised during the period mentioned in section 4 and further that the laws so made to IV he extent they could not have been otherwise made, would cease to have effect at the expiration of that period.
The Governor General under the powers reserved in section 4 and subsequently, the Constituent Assembly of India, under the powers conferred on it under the Indian Independence Act, 1947, extended the period mentioned in section 4 of the British Act from time to time and eventually up to March 31, 1951.
It would be unprofitable for our purposes to refer to the various statutory provisions and orders under which this was done for, the extension is not in dispute.
Under the powers conferred by the British Act, the Governor General promulgated the Essential Supplies (Temporary Powers) Ordinance, 1946, which came into force on October 1, 1946.
On November 19, 1946, the Central Legislature under the same powers, passe the Essential Supplies (Temporary Powers) Act, 1946, hereafter called the Central Act, repealing the Ordinance and substantially incorporating its terms.
The Central Act originally provided that it would cease to have effect on the expiration of the period mentioned is section 4 of the British Act.
As the life of the British Act was extended from time to time, suitable amend ments were made in the Central Act extending its life also.
Our Constitution came into force on January 26, 1950 and by virtue of article 372 the Central Act was continued as one of the existing laws.
On August 16, 1950, under powers conferred by article 369 of the Constitution, Parliament passed the Essential Supplies (Temporary Powers) Amendment Act, 1950, Act LII of 1950, amending the Central Act in various respects and extending its life up to December 31, 1952.
By another amendment made by Act LXV of 1952, the 784 life of the Central Act was extended till January 26, 1955.
Section 3(1) of the Central Act is in these terms: "The Central Government, so far as it appears to it to be necessary or expedient for maintaining or increasing supplies of any essential commodity, or for securing their equitable distribution and availability at fair prices, may by notified order provide for regulating or prohibiting the production, supply and distribution thereof, and trade and commerce therein.
" Section 2 of the Act provides that foodstuffs would be an essential commodity within the meaning of the Act and would include edible oilseeds.
We have earlier stated that the Oilseeds Order was originally passed under the Defence of India Rules, which expired on September 30,1946.
The Ordinance of 1946 continued in force, orders issued under the Defence of India Rules in so far as they were consistent with it and provided that such orders would be deemed to be orders made under it.
Section 17(2) of the Central Act provided that an order deemed to be made under the Ordinance and in force immediately before its commencement would continue in force and be deemed to be an order made under it.
As a result of the Ordinance and the Central Act replacing it and the extension of the life of the latter from time to time, the Oilseeds Order so far as it related to edible oilseeds including groundnuts, continued in force after the expiry of the Defence of India Rules till January 26, 1955.
That Order, as so continued, prohibited the making of forward contracts, that is to say, contracts providing for delivery at a future date, in respect of certain specified oilseeds including groundnuts.
It is the respondent 's contention that it is because of this order, read with the Central Act, that the contract in groundnuts between the parties was illegal and therefore the award made under the arbitration clause contained in it was void.
Now the British Act under which the Central Act was passed, provided in sub sec.
(4) of section 2 that, "Sub section (2) of section 107 of the Government of India Act, 1935, and sub section (2) of section 126 785 of that Act shall apply in relation to a law enacted by virtue of this section with respect to any matter being a matter with respect to which a Province has power to make laws as if that matter were a matter specified in Part 11 of the Concurrent Legislative List.
" Section 107(2) of the Government of India Act, 1935, laid down that, "Where a Provincial law with respect to one of the matters enumerated in the Concurrent Legislative List contains any provision repugnantto the provisions of an earlier Federal lawthen if the Provincial law, having been reserved for the consideration of the Governor Generalhas received the assent of the Governor Generalthe Provincial law shall in that Province prevail It would follow from these provisions that if a Provincial Act which had received the assent of the Governor General, contained anything repugnant to a Central Act passed under the powers conferred by the British Act, then in the Province concerned, the Provincial Act would apply and not the Central Act.
Now, the Bombay Act which had been passed by the Provincial Legislature of Bombay in 1947, came into operation in 1948.
That Legislature had power to pass the Act and the Act had received the assent of the Governor General.
At that time the Central Act deriving its force from the British Act, was in, operation.
If, therefore, the Bombay Act was repugnant to the Central Act, in Bombay, the Bombay Act would apply and not the Central Act.
This is not in dispute.
The appellant contends that the Bombay Act is so repugnant and therefore the Central Act cannot render the forward contract in groundnuts made in, Greater Bombay, illegal and void.
The question, therefore, is whether the Bombay Act, contains any provision repugnant to the Central Act.
The preamble of the Bombay Act states that it was enacted as it was thought expedient to regulate and control forward contracts and for certain other matters.
Section 1 of this Act came into force at once and gave power to the Government to bring into force by notification the remaining sections of the Act in the 786 whole of the Province of Bombay or parts thereof on such date and in respect of such goods as might be specified.
The Government of Bombay issued notifications under this section on December 19, 1950, applying the remaining provisions of the Act to the area called Greater Bombay in respect of all varieties of oilseeds as from the said date.
Section 8 of the Bombay Act provides as follows: section 8. (1) Every forward contract for the sale or purchase of, or relating to, any goods specified in the notification under sub section (3) of section I which is entered into, made or to be performed in any notified area shall be illegal if it is not entered into, made or to be performed (a)In accordance with such bye laws, made under section 6 or 7 relating to the entering into, making or performance of such contracts, as may be specified in the bye laws, or (b) (i) between members of a recognised association, (ii) through a member of a recognised association, or (iii) with a member of a recognised association, provided that such member has previously secured the written authority or consent, which shall be in writing if the bye laws so provide, of the person entering into or making the contract, and no claim of any description in respect of such contract shall be entertained in any civil court.
(2) Any person entering into or making such illegal contract shall, on conviction, be punishable with imprisonment for a term which may extend to six months or with fine or with both. "Recognised association" is defined in the Bombay Act as an association recognised by the Provincial Government and on December 19, 1950, the Bombay Oilseeds Exchange Limited was recognised as such an association by the Government of Bombay.
The appellant is a member of this association.
The contracts between the parties were all expressly made subject to the rules and regulations of this Association.
The case before us has proceeded on the basis that the impugned contract in groundnut had been made in compliance 787 with the requirements of section 8 and there is no finding to the contrary by the Courts below.
We have hence to proceed on the same basis.
The appellant contends that section 8 of the Bombay Act and section 3 of the Central Act are repugnant to each other.
Now section 8 of the Bombay Act, it will, be noticed, does not purport to make any contract legal.
Its only effect is to render forward contracts in all varieties of oilseeds illegal if not made in compliance with its terms.
The learned Advocate for the appellant says that the effect of section 8 was to render a forward contract in all oilseeds made in terms of it, legal and, therefore, a repugnancy arose between its terms and the terms of the Oilseeds Order issued under the Central Act which made forward contracts in edible oilseeds illegal.
The learned Advocate referred to various other provisions of the Bombay Act and the bye laws of the Association made in terms of the Act to show that the Bombay Act was intended to cover the entire field of forward contracts with respect to all varieties of oilseeds and was therefore intended to oust the operation of the Central Act in Greater Bombay with regard to the forward contracts covered by the former.
It does not seem to us that a reference to the other provisions in the Bombay Act or to the bye laws, is relevant in deciding the question.
If the effect of section 8 of the Bombay Act was not to render forward contracts made in terms of it legal, then no question of repugnancy with the Central Act can arise whatever may be the scope of the Bombay Act and the provisions in the bye laws.
Therefore, it seems to us that the question is whether section 8 of the Bombay Act by its terms makes any forward contract legal.
Section 3 of the Central Act, as already seen, gives power to the Central Government to prohibit trade and commerce in oilseeds.
That Act, therefore, enable& the Central Government to make forward contracts in essential commodities as defined in it, illegal.
That is what the Central Government did by the Oilseeds Order in so far as edible oilseeds are concerned.
We find nothing in section 8 from which it can be said 788 that it rendered any contract legal.
Its only intent and effect is to declare certain forward contracts illegal.
We think that the matter was very correctly put by Chagla, C. J., who delivered the judgment of the High Court.
He said, "All that Sec. 8 does is to declare that forward contracts will be illegal unless they comply with the procedure laid down in Sec. 8.
But it is one thing to declare a certain contract illegal.
It is entirely another thing to declare an illegal contract legal.
Sec. 8 does not even make an attempt to declare that forward contracts declared illegal by the Central legislation shall be legal if they comply with the technicalities laid down in Sec. 8.
The assumption underlying Sec. 8, it seems to us, is that forward contracts which the Legislature is dealing with are legal contracts, but even if they are legal they are declared to be illegal unless they are performed or made or entered into in the manner laid down in Sec. 8".
With these observations we fully agree.
In regard to the contention that section 8 of the Bombay Act necessarily implies that contracts made in terms of it would be legal, it seems to us that there is no such necessity indicated in the Act.
The Act clearly intends only to create an illegality, that is to say, as Chagla, C. J. said, it takes a legal contract and imposes on it certain conditions and makes it illegal if those conditions are not fulfilled.
If a contract is already illegal, there is no scope for applying the Bombay Act.
Furthermore, the Bombay Act deals with all kinds of goods.
Sub section (4) of section 2 of this Act defines goods as any kind of movable property including securities but not including money or actionable claims.
Now the Central Act only applies to essential commodities as defined in it.
Therefore, there would be many contracts to which the Central Act would not apply and such contracts may be rendered illegal by the Bombay Act if they come within its scope and are made in disregard of the conditions laid down in section 8.
We, therefore, come to the conclusion that there is no repugnancy between the Bombay Act and the Central Act.
It follows that there is no scope for 789 applying the provisions of section 107(2) of the Government of India Act, 1935.
That would be the position in 1948, when the Bombay Act came into force and the Central Act was already in existence.
Both the Acts would then be applying to Greater Bombay as there is no inconsistency between them.
Article 372 of the Constitution continued both these Acts after the Constitution came into force and there is nothing in the Constitution which provides that any one of two existing laws, both of which had applied up to the coming into force of the Constitution, would apply to the exclusion of the other.
It follows that in 1951 or 1952, when the contract in groundnuts which it is not disputed, was a forward contract within the meaning of both the Acts was made, both the Acts applied to it.
The Constitution had not affected such application.
That being the position, the contract in groundnuts must be held to be illegal under the Central Act which clearly prohibited the making of it.
The Bombay Act could not make it legal for, as we have said, it was not intended to make any contract legal.
It would follow that the arbitration clause contained in that contract was of no effect.
It has therefore to be held that the award made under that arbitration clause is a nullity and has been rightly set aside.
The award, it will have been noticed, was however in respect of disputes under several contracts, one of which we have found to be void.
But as the award was one and is not severable in respect of the different disputes covered by it, some of which may have been legally and validly referred, the whole award was rightly set aside.
The appeal, therefore, fails and is dismissed with costs.
Appeal dismissed.
100 619 of the Act.
These rules are called the Bihar Preservation and Improvement of Animals Rules, 1960.
The provisions of r. 3 have also been impugned by the.
petitioners by an amendment petition filed by them.
Rule 3 so far as it is material.
for our purpose is in these terms: "3(1).
For the purpose of section 3 of the Act, the Veterinary Officer and the Chairman or Chief Officer, as the case may be, shall be the prescribed authority: Provided that where there is no Chairman or Chief Officer in respect of any area, the Veterinary Officer shall be the sole prescribed authority.
(2) Where the authority prescribed under subrule (1) or sub rule (5) refuses to issue a certificate under the proviso to section 3, it shall record the reasons for the refusal and no such refusal shall be made unless the person 'applying for the certificate has been given a reasonable opportunity of being heard.
(3). . . . . . . . . . (4)A bull, bullock or she buffalo in respect of which a certificate has been issued under section 3 shall not be slaughtered at any place other than the place indicated in the certificate and it shall be slaughtered within 20 days of the date of the receipt of the certificate by the person in whose favour it is issued.
(5) In case of difference of opinion between the Veterinary Officer and the Chairman or Chief Officer, the matter shall be referred to the Sub divisional Animal Husbandry Officer or the District Animal Husbandry Officer, as the case may be, and the certificate shall be issued or refused according to the decision of the Sub divisional Animal Husbandry Officer or the District Animal Husbandry Officer, as the case may be.

summary:
Various contracts for sale of goods had been made between the parties in Bombay each of which contained an arbitration clause.
Disputes having arisen in March, 1952, in respect of these contracts, they were referred to arbitration and a composite award was made on October 7, 1952, against the respondent.
One of these disputes had arisen out of a forward contract in groundnuts.
The respondent applied to have the award set aside on the ground that the forward contract in groundnuts was illegal as such a contract was prohibited by the Oilseeds (Forward Contract Prohibition) Order, 1943, issued under the Essential Supplies (Temporary Powers) Act, 1946, passed by the Central Legislature.
The appellant contended that the Essential Supplies (Temporary Powers) Act, 1946, was repugnant to the Bombay Forward Contracts Control Act, 1947, passed by the Provincial Legislature of Bombay which had received the assent of the Governor General of India and therefore under section 107(2) of the Government of India Act, 1935, which applied, the Bombay Act prevailed in Bombay in preference to the Central Act and under the Bombay Act Forward Contract in groundnut was valid.
The High Court accepted the contention of the respondent and set aside the award.
Section 8 of the Bombay Act provided: "Every forward con tract for the sale or purchase of, or relating to, any goods specified in the notification under sub section (3) of section 1 which is entered into, made or to be performed in any notified area shall be illegal if it is not entered into, made or to be performed" and thereafter, set out the manner in which and the persons between whom such contracts could be made and also made punishable a person making a contract declared illegal.
Section 3 of the Central Act provided, "The Central Govern ment may by notified order provide for prohibiting trade and commerce" in any essential commodity.
Under this section the Oilseeds (Forward Contract Prohibition) Order was passed prohibiting forward contracts in groundnuts, which was one of the essential commodities specified in the Central Act.
Held, The Bombay Act did not make any contract legal.
Its only effect was to render certain forward contracts illegal if not 781 made in compliance with its terms while the Central Act made the contracts to which it applied, illegal.
There was, therefore, no repugnancy between the Bombay Act and the Central Act and both of them applied to Bombay.
Article 372 of the Constitution continued both these Acts, and so there is no provision in the Constitution under which any one of them may be said to apply to the exclusion of the other.
A composite award in respect of more than one dispute which is not severable, must be set aside as a whole if any of the disputes had been illegally referred.


judgement:
Appeals Nos. 187 and 190 of 1960.
Appeals from the judgment dated 22nd January, 1957, of the Punjab High Court (Circuit Bench), Delhi, in Civil Reference No. 6 of 1953.
Veda Vyasa, section K. Kapur and K. K. Jain, for the appellant.
B. Ganapathi Iyer and D. Gupta, for the respondent.
November 30.
The Judgment of the Court was delivered by KAPUR, J.
These appeals are brought by the assessee company against a common judgment and order of the Punjab High Court by which four appeals were decided in Civil Reference No. 6 of 1953.
The appeals relate to four assessment years, 1947 48, 1948 49, 1949 50 and 1950 51.
Two of these assessments, i.e., for the years 1947 48 and 1948 49 were made on the 800 appellant as successor to the two limited companies hereinafter mentioned.
Briefly stated the facts of the case are that the appellant company was incorporated in the year 1947.
Its objects inter alia were to acquire as a going concern activities, functions and business of the Delhi Stock & Share Exchange Limited and the Delhi Stock and Share Brokers Association Limited and to promote and regulate the business of exchange of stocks and shares, debentures and debenture stocks, Government securities, bonds and equities of any description and with a view thereto, to establish and conduct Stock Exchange in Delhi and/or elsewhere.
Its capital is Rs. 5,00,000 divided into 250 shares of Rs. 2,000 each on which dividend could be earned.
The appellant company provided a building and a hall wherein the business was to be transacted under the supervision and control of the appellant.
The appellant company also made rules for the conduct of business of sale and purchase of shares in the Exchange premises.
The total income for the year 1947 48 was Rs. 29,363 out of which a sum of Rs. 15,975 shown as admission fees was deducted and the income returned was Rs. 13,388.
In the profit and loss account of that year Members ' admission fees were shown as Rs. 9,000 and on account of Authorised Assistants admission fees Rs. 6,875.
The Income tax Officer who made the assessment for the year 1947 48 disallowed this deduction.
The return for the following year also was made on a similar basis but the return for the years 1949 50 and 1950 51 did not take into account the admission fees received but in the Director 's report the amounts so received were shown as having been taken directly into the balance sheet.
The Income tax Officer, however, disallowed and added back the amount so received to the income returned by the appellant.
Against these orders appeals were taken to the Appellate Assistant Commissioner who set aside the additional assessments made under section 34 in regard to the assessment years 1947 48, 1948 49 and 1949 50 and the 4th appeal in regard to the year 1950 51 was decided against the appellant.
Both sides appealed 801 to the Income tax Appellate Tribunal against the respective orders of the Appellate Assistant Commissioner and the Tribunal decided all the appeals in favour of the appellant.
It was held by one of the members of the Tribunal that the amounts received as entrance fees were intended to be and were in fact treated as capital receipts and were therefore excluded from assessment and by the other that as there was no requisite periodicity, those amounts were not taxable.
At the instance of the respondent a case was stated to the High Court on the following question: "Whether the admission fees of Members or Authorised Assistants received by the assessee is taxable income in its hands?" The High Court answered the question in favour of the respondent.
The High Court held that the appellant was not a mutual society and therefore was not exempt from the payment of income tax; that it had a share capital on which dividend could be earned and any person could become a shareholder of the company by purchasing a share but every shareholder could not become a member unless he was enrolled, admitted or elected as a member and paid a sum of Rs. 250 as admission fee.
On becoming a member he was entitled to exercise all rights and privileges of membership.
It also found that the real object of the company was to carry on business as a Stock Exchange and the earning of profits.
It was held therefore that the admission fees fell within the ambit of the expression "profits and gains of business, profession or vocation".
The further alternative argument which was raised, i.e., that the income fell under section 10(6) of the Act, was therefore not decided.
Mr. Veda Vyasa contended on behalf of the appellant that there were only 250 members of the appellant company; that the amount received as membership fees was shown as capital in the books of the company and there was no periodicity and therefore the amounts which had been treated as income should have been treated as capital receipts and therefore exempt from assessment.
It was firstly contended that the question did not arise out of the order of the 802 Tribunal and that a new question had been raised but the objection is futile not only because of the absence of any such objection at the stage of the drawing up the statement of the case but also because of failure to object in the High Court; nor do we see any validity in the objection raised.
That was the only matter in controversy requiring the decision of the court and was properly referred by the Tribunal.
It was then contended that the question had to be answered in the light of facts admitted or found by the Tribunal and that the nature of the appellant 's business or the rules in regard to membership could not be taken into consideration in answering the question.
That again is an unsustainable argument.
The statement of the case itself shows that all these matters were taken into consideration by one of the members of the Tribunal and the learned judges of the High Court also decided the matter on that material which had been placed before the Income tax authorities and which was expressly referred to in their orders and which again was placed before the High Court in the argument presented there on behalf of the appellant company.
It is wholly immaterial in the circumstances of the present case to take into consideration as to how the appellant treated the amounts in question.
It is not how an assessee treats any monies received but what is the nature of the receipts which is decisive of its being taxable.
These amounts were received by the appellant as membership admission fees and as admission fees paid by the members on account of Authorised Assistants.
As far as the latter payment is concerned that would fall within the decision of this Court in Commissioner of Income tax.
vs Calcutta Stock Exchange Association Ltd. (1) and therefore is taxable income.
The former, i.e., members admission fees has to be decided in accordance with the nature of the business of the appellant company, its Memorandum and Articles of Association and the Rules made for the conduct of business.
The appellant company was an association which carried on a trade and its profits were divisible as dividend amongst the shareholders.
(1) 803 The object with which the company was formed was to promote and regulate the business in shares, stocks and securities etc., and to establish and conduct the business of a Stock Exchange in Delhi and to facilitate the transaction of such business.
The business was more like that in Liverpool Corn Trade Association vs Monks (1).
In that case an association was formed with the object of promoting the interest of corn trade with a share capital upon which the association was empowered to declare a dividend.
The Association provided a Corn Exchange market, newsroom and facilities for carrying on business and membership was confined to persons engaged in the corn trade and every member was required to be a shareholder and had to pay an entrance fee.
The Association also charged the members and every person making use of facilities a subscription which varied according to the use made by them.
The bulk of the receipts of the Association was derived from entrance fees and subscriptions.
It was therefore contended that the Association did not carry on a trade and that it was a mutual association and entrance fees and subscriptions should be disregarded in computing assessment of the assessable profits.
It was held that it was not a mutual association whose transactions were inca pable of producing a profit; that it carried on a trade and the entrance fee paid by members ought to be included in the associations receipts for purposes of computing the profit.
Rowlatt, J. said at p. 121: "I do not see why that amount is not a profit.
The company has a capital upon which dividends may be earned, and the company has assets which can be used for the purpose of obtaining payments from its 'members for the advantages of such use, and one is tempted to ask why a profit is not so made exactly on the same footing as a profit is made by a railway company who issues a traveling ticket at a price to one of its own shareholders, or at any rate as much a profit as a profit made by a company from a dealing with its own shareholders in a line of business which is restricted to the shareholders." (1) 804 In Commissioner of Income tax, Bombay City vs Royal Western India Turf Club Ltd. (1) this Court rejected the applicability of the principle of mutuality because there was no mutual dealing between members inter se.
There was no putting up a common fund for discharging a common obligation undertaken by the contributors for their mutual benefit and for this reason the case decided by the House of Lords in Styles V. New York Life Insurance Company (2) was held not applicable.
In the present case the Memorandum of Association shows that the object with which the company was formed was to promote and regulate the business of exchange of stocks, shares, debentures, debenture stocks etc.
The income, if any, which accrued from the business of the appellant company was distributable amongst the shareholders like in every joint stock company.
According to the Articles of Association the members included shareholders and members of the Exchange and according to the rules and bye laws of the appellant company 'member ' means an individual, body of individuals, firms, companies, corporations or any corporate body as may be on the list of working members of the Stock Exchange for the time being.
In the Articles of Association cls.
7 & 8, provision was made for the election of members by the Board of Directors and Rules 9 & 10 laid down the procedure for the election of these members.
The entrance fees were payable by the trading members elected under the Rules and Bylaws of the Association, who alone with their Associates, could transact business in stocks and shares in the Association.
Therefore, the body of trading members who paid the entrance fees, and the shareholders among whom the profits were distributed were not identical and thus the element of mutuality was lacking.
It is the nature of the business of the company and the profits and the distribution thereof which are the determining factors and in this case it has not been shown that the appellants business was in any way different from that which was carried on in the (1) ; , 308.
(2) ; 805 case reported as Liverpool Corn Trade Association vs Monks (1).
In our opinion the judgment of the High Court is right and the appeals are therefore dismissed with costs.
One hearing fee.
Appeals dismissed.

dataset_name: IN-Abs

summary:
The object with which the appellant company was formed was to promote and regulate the business in shares, stocks and securities etc., and to establish and conduct a Stock Exchange in order to facilitate the transaction of such business.
Its capital was divided into shares on which dividend could be earned.
it provided a building wherein business was to be transacted under its supervision and control.
It made rules for the conduct of business of sale and purchase of shares in the Exchange premises.
During the assessment year in question the company 's receipts consisted of certain amounts received as admission fee from Members and Authorised Assistants and the question stated to the High Court for its opinion was whether these fees in the hands of the appellant were taxable income.
The High Court answered the question in the affirmative.
It held that the appellant was not a mutual society, that dividends could be earned on its share capital, that any person could become a share holder but every share holder was not a member unless he paid the admission fee and the real object of the company was to carry on business of exchange of stocks and earn profits.
The case of the appellant, inter alia, was that as the amount received as membership fee was shown as capital in the books of the company and there was no periodicity, it should be treated as capital receipt exempt from assessment.
799 Held, that the High Court was right in its decision and the appeals must be dismissed.
It was wholly immaterial how the appellant treated the amounts in question.
It is the nature of the receipt and not how the assessee treated it that must determine its taxability.
AS: Since the fee received on account of Authorised Assisstants fall within the decision of this Court in Commissioner of Income tax vs Calcutta Stock Exchange Association Ltd., , it must be held to be taxable income.
The question as to whether the Members ' admission fee was taxable income was to be determined by the nature of the business of the company, its profits and the distribution thereof as disclosed by its Memorandum and Articles of Association and the rules made for the conduct of business.
They showed that the income of the company was distributable amongst its shareholders ;is in any other joint stock company, and the body of trading members who paid the entrance fees and share holders were not identical.
The element of mutuality was, therefore, lacking.
Liverpool Corn Trade Association vs Monks, (1926) 2 K. B. 110, applied.
Commissioner of Income tax, Bombay City vs Royal Western India Turf Club Ltd., ; and Styles vs New York Life Insurance Co., ; , referred to.


judgement:
Appeal No. 30 of 1958.
Appeal by special leave from the judgment and order dated March 24, 1955, of the Punjab High Court in Civil Reference No. 3 of 1953.
Gopal Singh, for the appellants.
K. N. Rajagopala Sastri and D. Gupta, for the respondent.
212 1960.
August 17.
The Judgment of the Court was delivered by HIDAYATULLAH J.
This appeal, by special leave of this Court, is against the judgment 'and order dated March 24, 1955, of the Punjab High Court by which the High Court, purporting to act under section 66(4) of the Indian Income tax Act, called for a supplemental statement of the case from the Income tax Appellate Tribunal.
The special leave granted by this Court is limited to the question whether the High Court had jurisdiction in this case to call for the supplemental statement.
The assessee, Messrs. section Zoraster & Co., Jaipur, consists of three partners.
Two of them are coparceners of a joint Hindu family, and the third is a stranger.
They had formed this partnership in June, 1940, for the manufacture and sale of blankets, felts and other woollen articles.
A deed of partnership was also executed on March 16, 1944.
The assessee entered into contracts with Government for the sup ply of goods, and in the assessment year 1942 43, Rs. 10,80,658 0 0 and in the assessment year 1943 44, Rs. 17,45,336 0 0 were assessed as its income by the Income tax Officer, Contractor 's Circle, New Delhi.
The supplies to Government were made for.
Jaipur by the assessee, and payment was by cheques which were received at Jaipur and were endorsed in favour of the joint Hindu family, which acted as the assessee 's bankers.
The contention of the assessee was that this income was received at Jaipur outside the then taxable territories.
This contention was not accepted by the Income tax Appellate Tribunal, Delhi.
The assessee then applied for a reference to the High Court under section 66(1) of the Indian Income tax Act, and by its order dated December 10, 1952, the Income tax Appellate Tribunal referred the following question for the decision of the High Court: " Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government of India were received by the assessee in the taxable territories ? " 213 The Tribunal had stated in the statement of the case as follows: "The payment was made by the Government of India by cheques drawn on the Reserve Bank of India, Bombay Branch.
These cheques were received in Jaipur.
" It may be pointed out that in the contract of sale between the assessee and the Government of India, the following clause was included to determine the system of payment: " 21.
System of payment: Unless otherwise agreed between the Purchaser and the Contractor payment for the delivery of the stores will be made by the Chief Auditor, Indian Stores Department, New Delhi, by cheque on a Government treasury in India or on a branch of the Imperial Bank of India or the Reserve Bank of India transacting Government business.
" In dealing with the Reference, the High Court passed an order under section 66(4) of the Income tax Act observing, ". . it would be necessary for the Appellate Tribunal to find, inter alia, whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, had the assessee firm given to the Department in the matter ".
The High Court thereafter remanded the case to the Tribunal for a supplemental statement of the case on the lines indicated.
This order is questioned on the authority of the decision of this Court in The New Jehangir Vakil Mills Ltd. vs The Commissioner of Income tax(1) which, it is claimed, completely covers this case.
In that case also, the High Court of Bombay had called for a supplemental statement of the case, and it was ruled by this Court that the High Court had exceeded its jurisdiction.
Before dealing with this question, it is necessary to go back a little, and refer briefly to some cases decided earlier than The New Jehangir Vakil Mills case (1) and Jagdish Mills Ltd. vs Commissioner of Income tax (2), on which reliance has been placed in this case.
ID (1) ; (2) ; 214 Keshav Mills Co., Ltd. vs Commissioner of Income tax (1), the High Court of Bombay called for a supplemental statement of the case, but it expressed the view that if a cheque was received by a creditor on a British Indian Bank and he gave the cheque to his bank for collection, the bank must be treated as his agent and that, on the realisation of the amount of the cheque in the taxable territory, the creditor must be regarded as having received it in the taxable territory, even if he was outside it.
In Sir Sobha Singh vs Commissioner of Income tax (2), it was held by the Punjab High Court that where cheques were given to a bank for purposes of collection, the receipt of the money was at the place where the bank on which the cheques were drawn was situated.
These views found further amplification, and were applied in two other cases by the Bombay If high Court.
They are Kirloskar Bros. Ltd. vs Commissioner of Income tax (3 ) and Ogale Glass Works Ltd. vs Commissioner of Income tax (4).
In both these cases, it was held that unless the payee expressly constituted the post office as his agent, the mere posting of the cheque did not constitute the post office the agent of the payee, and that the amount of the cheque was also received at the place where the cheque was received.
In Kirloskar Bros. Ltd. vs Commissioner of Income tax(3), it was held that the mere posting of the cheque in Delhi was not tantamount to the receipt of the cheque in Delhi, because the payee had not requested the Government to send the cheque by post.
In Ogale Glass Works case (4), the Bombay High Court asked for a supplementary statement of the case from the Tribunal as to whether there was any express request by the assessee that the cheque should be sent by post, and held that as there was no such express request, the receipt of the money was not where the cheque was posted but at the place where the money was received.
(1) (2) (3) (4) I. Tax Reference No. 10 of 1949 of the Bombay H. C. decided on September 17, 1951.
215 The last two decisions of the Bombay High Court were reversed by this Court, and it was held that an intimation to the payer " to remit " the amount by cheque was sufficient nomination of the post office as the agent of the payee: vide Commissioner of Income tax vs Ogale Glass Works Ltd. (1) and Commissioner of Income tax vs Kirloskar Bros. Ltd. (2).
Later, the principle was extended still further by this Court in Jagdish Mills case(3).
It was held that where the bills had an endorsement Government should pay the amount due by cheque and the cheques were received in full satisfaction unconditionally, this constituted a sufficient implied request for the purpose of the application of the rule in Ogale Glass Works case of this Court.
Jagdish Mills case (3) and the New Jehangir Vakil Mills case (4) were decided by this Court on the same day.
In the latter case, the Department had to deal with a non resident Company which, at all material times, was situate at Bhavnagar, one of the Indian States.
Cheques in payment for supplies to Government were sent from British India to Bhavnagar.
The Department contended in the case that though the cheques were received at Bhavnagar, they were, in fact, cashed in British India and until such encashment, income could not be said to have been received but that on encashment in British India, the receipt of income was also in British India.
The Tribunal held that the cheques having been received at Bhavnagar the income was also received there.
In doing so, the Tribunal followed the Bombay decision in Kirloskar Brothers case (5).
The Tribunal, however, observed that if the Bombay view which was then under appeal to this Court were not upheld, then an enquiry would have to be made as to whether the Mills ' bankers at Ahmedabad acted as the Mills ' agents for collecting the amount due on the cheques.
The question whether the posting of the cheques from British India to Bhavnagar at the request, express or (1) (3) ; (2) (4) ; (5) 216 implied, of the Mills or otherwise, made any difference was not considered at any stage before the case reached the High Court of Bombay.
This was expressly found to be so by this Court in these words: " The only ground urged by the Revenue at all material stages was that because the amounts which were received, from the merchants or the Government were received by cheques drawn on banks in British India which were ultimately encashed in British India, the monies could not be said to have been received in Bhavnagar though the cheques were in fact received at Bhavnagar.
" The reference was held back by the Tribunal till the decision of this Court in Ogale Glass Works case (1) and Kirloskar Brothers ' case (2).
Even after seeing that in those two cases the request for payment by cheques to be sent by post made all the difference, the Tribunal did not frame its statement of the case or the question to include this aspect, because that aspect of the matter was never considered before. ' The question referred was thus limited to the legal effect of the receipt of the cheques at Bhavnagar without advertence to the fact whether the cheques were so sent by post at the request, express or implied, of the Mills.
The question framed was: " Whether the receipt of the cheques in Bhavnagar amounted to receipt of the sale proceeds in Bhavnagar ? " The question as framed and the statement which accompanied it brought into controversy the only point till then considered by the Tribunal and the taxing authorities.
When the case *as heard by it, the High Court desired to consider it from the angle of the Kirloskar Brothers(2) and Ogale Glass Works (1) cases.
It called for a supplemental statement of the case.
In doing so, the High Court went beyond the ambit of the controversy as it had existed till then and also the statement of the case and the question.
The High Court directed the Tribunal as follows: "On the finding of the Tribunal that all the cheques were received in Bhavnagar, the Tribunal to find (1) (2) 217 what portion of these cheques were received by post, whether there was any request by the assessee, express or implied, that the amounts which are the subject matter of these cheques should be remitted to Bhavnagar by post." In repelling the objection that such an enquiry was alien to the point decided by the Tribunal and might require fresh evidence, the High Court justified itself by saying: " But we cannot shut out the necessary inquiry which even from our own point of view is necessary to be made in order that we should satisfactorily answer the question raised in the Reference.
It must not be forgotten that under section 66(4) of the Income tax Act we have a right independently of the conduct of the parties to direct the Tribunal to state further facts so that we may properly exercise our own advisory jurisdiction.
" This Court pointed out that the High Court exceeded its jurisdiction under section 66(4) of the Indian Income tax Act.
It was observed: " If the question actually referred does not bring out clearly the real issue between the parties, the High Court may reframe the question so that the matter actually agitated before the Tribunal may be raised before the High Court.
But section 66(4) does not enable the High Court to raise a new question of law which does not arise out of the Tribunal 's order and direct the Tribunal to investigate new or further facts necessary to determine this new question which had not been referred to it under section 66(1) or section 66(2) and direct the Tribunal to submit a supplementary statement of the case.
" It was also pointed out that the facts admitted and/ or found by the Tribunal could alone be the foundation of the question of law which might be said to arise out of the Tribunal 's order.
The case thus set two limits to the jurisdiction of the High Court under section 66(4), and they were that the advisory jurisdiction was confined (a) to the facts on the record and/or found by the Tribunal and (b) the question which 28 218 would arise from the Tribunal 's order.
It was pointed out by this Court that it was not open to the High Court to order a fresh enquiry into new facts with a view to amplifying the record and further that it was equally not open to the High Court to decide a question of law, which did not arise out of the Tribunal 's order.
This was illustrated by comparing the question as framed by the Tribunal with the question which the High Court desired to decide.
Whereas the Tribunal had only referred the question: " Whether the receipt of the cheques at Bhavnagar amounted to receipt of sale proceeds in Bhavnagar ?", what the High Court intended deciding was: " Whether the posting of the cheques in British India at the request express or implied of the appellant, amounted to receipt of sale proceeds in British India ?" These were two totally different questions, and it was held that the High Court could not decide a matter which was different from that decided by the Tribunal, nor call for a statement of the case bearing on this new matter.
The proposition laid down in the Jehangir Vakil Mills case (1), finds support from yet another case of this Court decided very recently.
In Kusumben D. Mahadevia vs Commissioner of Income tax Bombay (2), it was observed: " In our opinion, the objection of the assessee is well founded.
The Tribunal did not address itself to the question whether the Concessions Order applied to the assessee.
It decided the question of assessability on the short ground that the income had not arisen in Baroda but in British India.
That aspect of the matter has not been touched by the Bombay High Court.
The latter has, on the other hand, considered whether the Concessions Order applies to the assessee, a matter not touched by the Tribunal.
Thus, though the result is the same so far as the assessment is concerned, the grounds of decision are entirely different.
(1) ; (2) ; ,421.
219 Section 66 of the Income tax Act which confers jurisdiction upon the High Court only permits a reference of a question of law arising out of the order of the Tribunal.
It does not confer jurisdiction on the High Court to decide a different question of law not arising out of such order.
It is possible that the same question of law may involve different approaches for its solution, and the High Court may amplify the question to take in all the approaches.
But the question must still be the one which was before the Tribunal and was decided by it.
It must not be an entirely different question which the Tribunal never considered.
" It follows from this that the enquiry in such cases must be to see whether the question decided by the Tribunal admits the consideration of the new point as an integral or even an incidental part thereof.
Even so, the supplemental statement which the Tribunal is directed to submit must arise from the facts admitted and/or found by the Tribunal, and should not open the door to fresh evidence.
The fact that in Ogale Glass Works case (1), the Bombay High Court had asked for a supplemental statement in the same way as in the Jehangir Vakil Mills case (2 ), and this Court did not rule out the new matter, cannot help the assessee in the present case, because the jurisdiction of the High Court was not questioned, as it had been done in the Jehangir Vakil Mills case, or has been done here.
We have thus to see whether in this case the question which was decided and which has been referred to the High Court admits the return of the case for a supplemental statement on the lines indicated by the High Court in the order under appeal.
At the very start, one notices a difference in the question of law in this case and the Ogale Glass Works case (3), on the one hand, and the question of law in the Jehangir Vakil Mills case (2), on the other.
In the former two cases, the question is very wide, while in the latter it is extremely narrow.
This can be Been by placing the three questions side by side as below : (1) I. Tax Reference No. 19 of 1949 of the Bombay H. C. decided on September 17, 1951.
(2) ; (3) 220 Jehangir Vakil Mills case " Whether the receipt of the cheques in Bhav nagar amounted to receipt of the sale proceeds in Bhavnagar ?" Ogale Glass Works case " Whether on the facts of the case, income, profits and gains in respect of sales made to the Government of India was received in British India within the meaning of Section 4(1)(a) of the Act ?" This case "Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government of India were received by the assessee in taxable territories ?" It is thus quite plain that the question as framed in this case can include an enquiry into whether there was any request, express or implied, that the amount of the bills be paid by cheques so as to bring the matter within the dicta of this Court in the Ogale Glass Works case (2) or Jagdish Mills case (3).
The first limit to the jurisdiction of the High Court as laid down by this Court is thus not exceeded by the High Court in exercising its powers under section 66(4) of the Income tax Act.
The question is wide enough to include the alternative line of approach that if there was a request, express or implied, to send the amount due under the bills by cheque, the post office would be the agent of the assessee, and the income was received in the taxable territory when the cheques were posted.
(1) ; (2) (3) ; 221 The next question is whether the High Court has transgressed the second limitation implicit is section 66(4), that is to say, that the question must arise out of the facts admitted and/or found by the Tribunal.
The High Court has observed that, ". . it would be necessary for the Appellate Tribunal to find inter alia whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, bad the assessee firm given to the Department in that matter.
" If the Tribunal has to make a fresh enquiry leading to the admission of fresh evidence on the record, then this direction offends against the ruling of this Court in the Jehangir Vakil Mills case (1).
If, however, the direction be interpreted to mean that the Tribunal in giving the finding must confine itself to the facts admitted and/or found by it, the direction cannot be described as in excess of the jurisdiction of the High Court.
It would have been better if the High Court had given directions confined to the record of the case before the Tribunal; but, in the absence of anything expressly to the contrary, we cannot bold that the direction would lead inevitably to the admit ting of fresh evidence.
This, at least, now cannot be done, since the Jehangir Vakil Mills case (1), has prohibited the admission of fresh evidence.
In our opinion, the present case does not fall within the rule in the Jehangir Vakil Mills case (1), and is distinguishable.
In the result, the appeal fails, and is dismissed with costs.
Appeal dismissed.

summary:
The appellant entered into contract with Government for the supply of goods, and in the assessment year 1942 43 Rs. 10,80,653 and in the assessment year 1943 44, Rs. 7,45,336 were assessed as its income by the Income tax Officer.
The supplies to Government were made for.
Jaipur by the appellant, and payment was by cheques which were received at Jaipur.
The contention of the appellant was that this income was received at Jaipur outside the then taxable territories.
This contention was not accepted by the Income tax Appellate Tribunal, Delhi.
The appellant then applied for a reference to the High Court under section 66(1) of the Indian Income tax Act, and by its order dated December 10, 1952, the Tribunal referred the following question for the decision of the High Court.
" Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government 211 of India were received by the assessee in the taxable terri tories ?" The High Court remanded the case to the Tribunal for a supplemental statement of case calling for a finding on the question " whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, had the assessee firm given to the department in the matter ".
The appellant questioned the order of the High Court relying on the decision in New Jehangir Vakil Mill 's case; , Held, that the enquiry in such cases must be to see whether the question decided by the Tribunal admits of the consideration of the new point as an integral or an incidental part thereof.
The supplemental statement which the Tribunal is directed to submit must arise from the facts admitted and/or found by the Tribunal and should not open the door to fresh evidence.
Held, further, that the question as framed in this case was wide enough to include an enquiry into whether there was any request, express or implied, that the amount of the bills be paid by cheques so as to bring the matter within the dicta of this Court in the Ogale Glass Works case, [1955] 1 S.C.R. 185 or Jagdish Mills case; , In the absence of anything expressly said in the Order of the High Court to the contrary, it cannot be held that the direction given would lead inevitably to the admitting of fresh evidence as that has been prohibited by the New Jehangir Vakil Mills case.
The New Jehangir Vakil Mills Ltd. vs The Commissioner of Income tax, ; , distinguished.
Jagdish Mills Ltd. vs Commissioner of Income tax, ; , Keshav Mills Co. Ltd., vs Commissioner of Income tax, , Sir Sobha Singh vs Commissioner of Income tax, , Kirloskar Bros. Ltd.v.
Commissioner of Income tax, [1952] 21 I.T.R. 82, Commissioner of Income tax vs Ogale Glass Works Ltd. , Commissioner of Income tax vs Kirloskar Bros. Ltd., and Mrs. Kusumben D. Mahadevia, Bombay vs Commissioner of Income tax, Bombay, ; , referred to.


judgement:
y of the view that the almost unanimous opinion of experts is that after the age of 15, bulls.
bullocks and buffaloes are no longer useful for breeding, draught and other purposes and whatever little use they may have then is greatly offset by the economic disadvantages of feeding and maintaining unserviceable cattle disadvantages to which we had referred in much greater detail in Md. Hanif Quareshi 's case (1).
Section 3 of the Bihar Act in so far as it has increased the age limit to 25 in respect of bulls, bullocks and she buffaloes, imposes an unreasonable restriction on the fundamental right of the petitioners, a restriction moreover which cannot be said to be in (1) ; 623 the interests of the general public, and to that extent it is void.
We may here repeat what we said in Chintaman Rao vs The State of Madhya Pradesh (1): "The phrase 'reasonable restriction ' connotes that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public.
The word 'reasonable ' implies intelligent care and deliberation, that is, the choice of a course which reason dictates.
Legislation which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in article 19(1)(g) and the social control permitted by clause (6) of article 19, it must be held to be wanting in that quality.
" As to r. 3 the grievances of the petitioners are these.
Under the rule the prescribed authority for the purpose of section 3 of the Act consists of the Veterinary Officer and the Chairman or Chief Officer of a District Board, Municipality etc.
Unless both of them concur, no certificate for slaughter can be granted.
It is pointed out that the Chairman or Chief Officer would be a layman not in a position to judge the age or usefulness of cattle.
The result would be that the animal in respect of which a certificate is required may have to be shown to the Veterinary Officer as also the Chairman or Chief Officer, who may not be staying at the same place as the Veterinary Officer.
If the two differ, the matter has to be referred to the Sub divisional Animal Husbandry Officer.
This procedure, it is contended, will involve the expenditure of so much money and time that it will not be worthwhile for the petitioners to ask for a certificate, or having got a certificate, to slaughter the animal.
An animal which is above 15 or which has become useless generally costs much less than a young, serviceable animal.
If the petitioners have to incur all the expenditure which the procedure laid down by r. 3 must necessarily cost them, then they must close down their trade.
As to the right of appeal from an order refusing to grant a (1) ; ,763.
624 certificate, it is contended that that right is also illusory for all practical purposes.
To take the animal to the Deputy Director of Animal Husbandry or the District Animal Husbandry Officer or the Sub divi sional Animal Husbandry Officer, as the case may be, and to keep and feed the animal for the period of the appeal and its hearing will cost more than the price of the animal itself.
We consider that these grievances of the petitioners have substance, and judged from the practical point of view, the provisions of r. 3 impose disproportionate restrictions on their right.
It is difficult to understand why the Veterinary Officer, who has the necessary technical knowledge, cannot be trusted to give the certificate and why it should be necessary to resort to a complicated procedure to resolve a possible difference of opinion between two officers, later followed by a still more expensive appeal.
We, therefore, hold r. 3 also to be bad in so far as it imposes disproportionate restrictions indicated above, on the right of the petitioners.
(2) We now proceed to consider the Uttar Pradesh Prevention of Cow Slaughter (Amendment) Act, 1958.
After the decision of this Court in Md. Hanif Quareshi vs The State of Bihar (1) an Ordinance was passed called the Uttar Pradesh Prevention of Cow Slaughter (Amendment) Ordinance, 1958.
This Ordinance was later repealed and replaced by the Act.
The petitioners say that in the Bill as originally drafted the age limit below which slaughter was not permissible was put at 15 years; but the Select Committee increased it to 20 years.
It will probably be best, for clearness sake, to set forth not the whole provisions of the Act, for that would be too lengthy, but those which form most directly the subject matter on which the controversy turns.
Section 3 of the Act reads (omitting portions not relevant for our purpose) "section 3(1) Except as hereinafter provided, no person shall slaughter or cause to be slaughtered or offer or cause to be offered for slaughter (a). . . . . . . (1) ; 625 (b) a bull or bullock, unless he has obtained in respect thereof a certificate in writing, from the competent authority of the area in which the bull or bullock is to be slaughtered, certifying that it is fit for slaughter. (2) No bull or bullock, in respect of which a certificate has been issued under sub section (1)(b) shall be ' slaughtered at any place other than the place indicated in the certificate or within twenty days of the date of issue of the certificate.
(3) A certificate under sub section (1)(b) shall be issued by the competent authority, only after it has, for reasons to be recorded in writing, certified that(a) the bull or bullock is over the age of twenty years; and (b) in the case of a bull, it has become permanently unfit and unserviceable for the purpose of breeding and, in the case of a bullock, it has become permanently unfit and unserviceable for the purposes of draught and any kind of agricultural operation: Provided that the permanent unfitness or unserviceability has not been caused deliberately.
(4) The competent authority shall, before issuing the certificate under sub section (3) or refusing to issue the same, record its order in writing.
Any person aggrieved by the order of the competent authority, under this section, may, within twenty days of the date of the order, appeal against it to the State Government, which may pass such orders thereon as it may deem fit.
(5) The State Government may, at any time, for the purposes of satisfying itself as to the legality or propriety of the action taken under this section, call for and examine the record of any case and may pass such orders thereon as it may deem fit.
(6) Subject to the provisions herein contained any action taken under this section, shall be final and conclusive and shall not be called in question.
" On behalf of the petitioners it has been argued that section 3 imposes a number of unreasonable restrictions.
Firstly, it is urged that the age limit with regard to bulls or bullocks is put too high, viz. at 20 years.
This is an 626 aspect which we have already considered in relation to the Bihar Act.
What we have said about the age s limit in that connexion applies equally to the Uttar Pradesh Act.
The 8th Live stock Census, 1956 shows that in Uttar Pradesh bulls and bullocks over 3 years of age, not in use for breeding or work, numbered as many as 126,201 in 1956 as compared to 162,746 in 1951.
The Municipal Manual, Uttar Pradesh, Vol. 1, contains a direction that for slaughter of animals, bullocks and male buffaloes in good state of health below ten years of age should be included.
Secondly, it is pointed out that not being content with fixing an unreasonably high age limit, the impugned provision imposes a double restriction.
It says that the animal must be over twenty years in age and must also be permanently unfit and unserviceable; and in the case of a bullock, the unfitness must be for "any kind of agricultural operation" and not merely for draught purposes.
The result of this double restriction, it is stated, is that even if the animal is permanently unserviceable and unfit at an earlier age, it cannot be slaughtered unless it is over twenty years in age.
Before a certificate can be given, the animal must fulfil two conditions as to (1) age and (2) permanent unfitness.
We consider this to be a demonstrably unreasonable restriction.
In Md. Hanif Quareshi 's case (1) this Court had said that a total ban on the slaughter of bulls and bullocks after they had ceased to be capable of breeding or working as draught animals was not in the interests of the general public.
Yet this is exactly what the impugned provision does by imposing a double restriction.
It lays down that even if the animal is permanently unserviceable, no certificate can be given unless it is more than 20 years in age.
The restriction will in effect put an end to the trade of the petitioners.
Thirdly, the impugned provision provides (1) that the animal shall not be slaughtered within 20 days of the date of the issue of the certificate and (2) that any person aggrieved by the order of the competent authority may appeal to the State Government within 20 days.
It is to be noted that the right of appeal is not (1) 627 confined to a refusal to grant a certificate as in the Bihar Act, but the right is given to any person aggrieved by the order of the competent authority.
In other words, even when a certificate is given, any person, even a member of the public, who feels aggrieved by it may prefer an appeal and hold up the slaughter of the animal for a long time.
From the practical point of view these restrictions really put a total ban on the slaughter of bulls and bullocks even after they have ceased to be useful, and we must hold, following our decision in Md. Hanif Quareshi 's case (1) that section 3 of the Uttar Pradesh Act in so far as it imposes unreasonable restrictions on the right of the petitioners as to slaughter of bulls and bullocks infringes the fundamental right of the petitioners and is to that extent void.
(3) Now, we come to the Madhya Pradesh Act.
Several provisions of this Act have been challenged before us as imposing unreasonable restrictions on the fundamental right of the petitioners.
Section 4 deals with prohibition of slaughter of agricultural cattle.
The expression 'agricultural cattle ' means an animal specified in the schedule: it means cows of all ages; calves of cows and of she buffaloes; bulls; bullocks; and male and female buffaloes.
As we have stated earlier, we are concerned in these cases with the validity of the restrictions placed on the slaughter of bulls, bullocks and buffaloes.
Now, section 4 is in these terms: "section 4(1) Notwithstanding anything contained in any other law for the time being in force or in any usage or custom to the contrary, no person shall slaughter or cause to be slaughtered or offer or cause to be offered, for slaughter (a) cows, calves of cows, or calves of she buffaloes, or (b) any other agricultural cattle unless he has obtained in respect of such cattle a certificate in writing issued by the Competent Authority for the area in which the cattle is to be slaughtered that the cattle is fit for slaughter.
(1) [1959] S.C.R.29.
628 (2) No certificate under clause (b) of sub section (1) shall be issued by the Competent Authority .unless the Veterinary Officer after examining the cattle certifies that (a) the cattle is over twenty years of age and is unfit for work or breeding or has become permanently incapacitated from work or breeding due to age, injury, deformity or an incurable disease; and (b) the cattle is not suffering from any disease which makes its meat unwholesome for human consumption.
(3) The Competent Authority shall, before issuing or refusing to issue a certificate under this section, record its order in writing.
Any person aggrieved by the order of the Competent Authority under this section, may, within ten days of the date of the order, prefer an appeal against such order to the Collector of the district or such other officer as may, by notification, be authorised in this behalf by the State Government, and the Collector or such other officer may pass such orders thereon as he thinks fit.
(4) Subject to the orders passed in appeal, if any, under sub section (3), the order of the Competent Authority shall be final and shall not be called in question in any Court.
" Section 5 places a restriction as to the place and time for slaughter and the objection taken before us relates to the time rather than to the place of slaughter.
It says in effect that no cattle in respect of which a certificate has been issued under section 4 shall be slaughtered within ten days of the date of issue of the certificate and where an appeal is preferred against the grant of such certificate, till the time such appeal is disposed of.
The provision of appeal is contained in sub section
(3) of section 4 of the Act which we have quoted earlier.
That sub section lays down that any person aggrieved by the order of the Competent Authority, may, within ten days of the date of the order, prefer an appeal against the order to the Collector of the district or such other officer as may, by notification, be authorised in this behalf by the State Government.
629 Section 6 imposes a restriction on the transport of agricultural cattle for slaughter and reads: "section 6.
No person shall transport or offer for transport or cause to be transported any agricultural cattle from any place within the State to any place outside the State, for the purpose of its slaughter in contravention of the provisions of this Act or with the knowledge that it will be or is likely to be, so slaughtered.
" Section 7 prohibits the sale, purchase or disposal otherwise of certain kinds of animals.
It reads .
"section 7.
No person shall purchase, sell or otherwise dispose of or offer to purchase, sell or otherwise dispose of or cause to be purchased, sold or otherwise disposed of cows, calves of cows or calves of shebuffaloes for slaughter or knowing or having reason to believe that such cattle shall be slaughtered.
" Section 8 relates to possession of flesh of agricultural cattle and is in these terms: "section 8.
Notwithstanding anything contained in any other law for the time being in force, no person shall have in his possession flesh of any agricultural cattle slaughtered in contravention of the provisions of this Act.
" Section 10 imposes a penalty for a contravention of section 4(1)(a) and section 11 imposes penalty for a contravention of any of the other provisions of the Act.
On behalf of the petitioners it has been pointed out, and rightly in our opinion, that cl.
(a) of sub section
(2) of section 4 of the Act imposes an unreasonable restriction on the right of the petitioners.
That clause in its first part lays down that the cattle (other than cows and calves) must be over 20 years of age and must also be unfit for work or breeding; and in the second part it says, "or has become permanently incapacitated from work or breeding due to age, injury, deformity or an incurable disease.
" It is a little difficult to understand why the two parts are juxtaposed in the section.
In any view the restriction that the animal must be over 20 years of age and also unfit for work or breeding is an excessive or unreasonable restriction as we have 80 630 pointed out with regard to a similar provision in the Uttar Pradesh Act.
The second part of the clause would not be open to any objection, if it stood by itself.
If, however, it has to be combined with the agelimit mentioned in the first part of the clause, it will again be open to the same objection; if the animal is to be over 20 years of age and also permanently incapacitated from work or breeding etc.
,then the agelimit is really meaningless.
Then, the expression 'due to age ' in the second part of the clause also loses its meaning.
It seems to us that cl.
(a) of sub section (2) of section 4 of the Act as drafted is bad because it imposes a disproportionate restriction on the slaughter of bulls, bullocks and buffaloes it is a restriction excessive in nature and not in the interests of the general public.
The test laid down is not merely permanent incapacity or unfitness for work or breeding but the test is something more than that, a combination of age and unfitness ' Learned Counsel for the petitioners has placed before us an observation contained in a reply made by the Deputy Minister in the course of the debate on the Bill in the Madhya Pradesh Assembly (see Madhya Pradesh Assembly Proceedings, Vol.
5 Serial No. 34 dated April 14, 1959, page 3201).
He said that the age fixed was very much higher than the one to which any animal survived.
This observation has been placed before us not with a view to an interpretation of the section, but to show what opinion was held by the Deputy Minister as to the proper agelimit.
On behalf of the respondent State our attention has been drawn to a book called The Miracle of Life (Home Library Club) in which there is a statement that oxen, given good conditions, live about 40 years.
Our attention has also been drawn to certain extracts from a Hindi book called Godhan by Girish Chandra Chakravarti in which there are statements to the effect that cows and bullocks may live up to 20 or 25 years.
This is an aspect of the case with which we have already dealt.
The question before us is not the maximum age upto which bulls, bullocks and buffaloes may live in rare cases.
The question before us is what is their average longevity and at what age 631 they become useless.
On this question we think that the opinion is almost unanimous, and the opinion which the Deputy Minister expressed was not wrong.
Section 5 in so far as it imposes a restriction as to the time for slaughter is again open to the same objection as has been discussed by us with regard to a similar provision in the Uttar Pradesh Act.
A right of appeal is given to any person aggrieved by the order.
In other words, a member of the public, if he feels aggrieved by the order granting a certificate for slaughter, may prefer an appeal and hold up for a long time the slaughter of the animal.
We have pointed out that for all practical purposes such a restriction will really put an end to the trade of the petitioners and we are unable to accept a restriction of this kind as a reasonable restriction within the meaning of cl.
(6) of article 19 of the Constitution.
Section 6 standing by itself, we think, is not open to any serious objection.
It is ancillary in nature and tries to give effect to the provision of the Act prohibiting slaughter of cattle in contravention of the Act.
Section 7 relates to the prohibition of sale, purchase etc., of cows and calves and inasmuch as a total ban on the slaughter of cows and calves is valid, no objection can be taken to section 7 of the Act.
It merely seeks to effectuate the total ban on the slaughter of cows and calves (both of cows and she buffaloes).
Section 8 is also ancillary in character and if the other provisions are valid no objection can be taken to the provisions of section 8.
Sections 10 and 11 impose penalties and their validity cannot be seriously disputed.
However, we must say a few words about section 12 of the Act which has also been challenged before us.
Section 12 is in these terms: "section 12.
In any trial for an offence punishable under section 11 for contravention of the provision of sections 5, 6 or 7 of this Act the burden of proving that the slaughter, transport or sale of agricultural cattle was not in contravention of the provisions of this Act shall be on the accused.
" The argument is that section 12 infringes the fundamental 632 right of the petitioners inasmuch as it puts the burden of proof on an accused person not only for his own knowledge or intention but for the knowledge or intention of other persons.
We do not think that this contention is correct.
The accused person, so far as sections 5 and 7 are concerned, must be the person who has slaughtered the animal or who has purchased, sold or otherwise disposed of the animal etc.
Therefore, the only question will be his knowledge and the legislature was competent to place the burden of proof on him.
So far as section 6 is concerned, it specifically refers to the knowledge of the person who has transported or offered for transport or caused to be transported any agricultural cattles from any place within the State to any place outside the State.
Therefore, when the section talks of knowledge, it talks of the knowledge of that person who has transported or offered for transport etc.
The knowledge of no other person comes into the purview of section 6.
We are, therefore, ' of the view that section 12 is not invalid on the ground sug gested by the petitioners.
Therefore, the result of our examination of the various provisions of the Act is that the impugned provisions in cl.
(a) of sub section
(2) of section 4, in sub section
(3) of section 4 relating to the right of appeal by any person aggrieved by the order, and in section 5 relating to the time of slaughter, impose unreasonable and disproportionate restrictions which must be held to be unconstitutional.
As to the Madhya Pradesh Agricultural Cattle Preservation Rules, r. 3 says "that an application for a certificate under section 4 shall be made to the competent authority," and r. 4 says that on receipt of the application, the competent authority shall by an order direct the person keeping the animal to submit it for examination by the Veterinary Officer Rule 5 reproduces the provisions of cls.
(a) and (b) of sub section
(2) of section 4 and in so far as we have held that the provision in el.
(a) of sub section
(2) of section 4 is unconstitutional, the rule must also fall with it.
There is one other aspect of these cases which has been emphasized before us, to which a reference must 633 now be made.
It is open to the legislature to enact ancillary provisions to give effect to the main object of the Act, namely, the prevention of slaughter of animals like bulls, bullocks or buffaloes which are still useful for the purposes for which they are generally used.
It is pointed out that acts innocent in themselves may be prohibited and the restrictions in that regard would be reasonable, if the same were necessary to secure efficient enforcement of valid provisions.
For example, it is open to the legislature, if it feels it necessary, in order to reduce the possibilities of evasion to a minimum, to enact provisions which would give effect to the main object of the legislation.
We have not ignored this aspect and have kept in mind the undisputed right of the legislature to decide what provisions are necessary to give effect to the main object of the legislation.
In these cases the petitioners have complained that the main object of the impugned provisions is not the prohibition of slaughter of animals which are still useful; the impugned provisions as they are worded really put a total ban on the slaughter of bulls, bullocks and buffaloes and for all practical purposes they put a stop to the profession and trade of the petitioners.
We have held that this complaint is justified in respect of the main provisions in the three Acts.
We, therefore, allow the three writ petitions and direct, as we directed in Md. Hanif Quareshi 's case (1) the respondent States not to enforce the Acts or the rules made thereunder in so far as they have been declared void by us.
The petitioners will be entitled to their costs of the hearing in this Court.
Petitions allowed.

summary:
In order to put the sugar industry on a stable footing, for which it was necessary to develop the cane area, the Ruler of the erstwhile Gwalior State by an order dated 27 7 1946 sanctioned the levy of cess of one anna per maund on all sugar cane purchased by the respondent company.
When the Government of Madhya Bharat, which was the successor state of the former Gwalior State, made a demand for payment of the cess, the respondent filed a petition before the High Court of Madhya ,Bharat challenging the legality of the levy on the grounds (1) that the order dated 27 7 1946 was only an executive order and not a law under article 265 of the Constitution of India and that, therefore, there was no authority for the imposition of the cess after January 26, 1950, and (2) that the levy was discriminatory and violated article 14 inasmuch as while the respondent was made liable to pay the cess the other sugar factories in the State were exempt.
It was found that at the time when cess was first levied there was no sugar factory in existence in the Gwalior State other than that of the respondent.
Held, that (i) the Ruler of an Indian State was an absolute monarch in which there was no constitutional limitation to act in any manner he liked, he being the supreme legislature, the supreme judiciary and the supreme head of the executive.
I Consequently, the order dated 27 7 1946 issued by the Ruler of Gwalior State amounted to a law enacted by him and became an existing law under article 372 of the Constitution of India.
The levy of cess was therefore by authority of law within the meaning of article 265; Madhaorao Phalke vs The State of Madhya Bharat, ; , followed.
(2) the levy of cess did not contravene article 14 because (a) the object was cane development in the particular area and a geographical classification based upon historical factors was a permissible mode of classification, and (b) a tax could not be struck down as discriminatory unless it was found that it was imposed with a deliberate intention of differentiating between 620 (ii) where the order is passed by the Sub divisional Animal Husbandry Officer, under sub rule (5), to the District Animal Husbandry Officer and (iii) where the order is passed by the authority prescribed under sub rule (1) to the Sub divisional Animal Husbandry Officer, if there is one; if not, to the District Animal Husbandry Officer; (b) The appeal shall not be decided against the appellant unless he has been given a reasonable opportunity of being heard.
" The argument on behalf of the petitioners is that they are "Kassais" by profession and they earn their living by slaughtering cattle only (not goats or sheep which are slaughtered by "Chiks"); that they have the fundamental right to carry on their profession and trade; and that section 3 of the Act read with r. 3 imposes unreasonable restrictions restrictions not in the interests of the general public on their fundamental right and therefore they are not saved by cl.
(6) of article 19 of the Constitution.
Some of these arguments were considered by this Court in Md. Hanif Quareshi vs The State of Bihar (1) and it was pointed out that the test of reasonableness should be applied to each individual statute impugned and no abstract standard, or general pattern, of reasonableness can be laid down as applicable to all cases.
It referred to the decision in State of Madras vs V. G. Row (2) and repeated what was said therein that "the nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict." 'Another consideration which has to be kept in mind is that "the legislature is the best judge of what is good for the community,.
by whose suffrage it comes into existence. . . . (See The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga (3)).
But the ultimate responsibility for determining the validity of the law must rest with the (1) (2) ; (3) 621 Court and the Court must not shirk that solemn duty cast on it by the Constitution.
We must, therefore, approach the problem before us in the light of the principles laid down by this Court.
The most pertinent question is having regard to all the relevant circumstances, is the age of 25 years laid down in section 3 a reasonable restriction on the right of the petitioners in the interests of the general public ? We are unable to say that it is.
Apart from the affidavits made on behalf of the petitioners and the respondent State, a large volume of authoritative and expert opinion has been placed before us which shows beyond any doubt that a bull, bullock or she buffalo does not remain useful after 14 or 15 years and only a few of them live up to the age of 25.
In the Report of the Cattle Preservation and Development Committee, published by the Ministry of Agriculture, it is recommended by the Committee that the slaughter of animals over 14 years of age and unfit for work as also animals of any age permanently unable to work owing to injury or deformity, should be allowed.
In the Report on the Marketing of Meat in India (published by the Ministry of Food and Agriculture) there is a reference to a draft Bill circulated by the Ministry of Agriculture (page 112 of the Report) which contains a clause that animals over 14 years of age and unfit for work may be slaughtered on a certificate from a Veterinary Officer.
In the Report on the Marketing of Cattle in India, again published by the Ministry of Food and Agriculture, occurs the following passage as to the price of animals with reference to their age: "Young draught animals up to the age of 4 years being raw and untrained fetch comparatively low prices.
Between 4 and 8 years of age, the animals are in the prime of their youth and tender best service, and fetch maximum prices.
From the 8th year onwards old age sets in, and a graded decline is observed in their capacity to work and consequently prices depreciate considerably." .
In a Food and Agricultural Organisation study of cattle in India and Pakistan (Zebu Cattle of India and 79 622 Pakistan, page 94) it is stated that the active breeding life of a bull is estimated to be about 10 years.
In Black 's Veterinary Dictionary (edited by W. C. Miller and G. P. West, fifth edition) it is stated that pedigree ,bulls may reach 12 or 14 years of age before being discarded; and cattle seldom live longer than 15 or 16 years, and when they do, their age is usually of no immediate importance.
In another publication of the Ministry of Agriculture called 'Problems of Cattle Insurance ' under Indian conditions, it is stated that the life of cattle is comparatively much shorter, the maximum age being only about 15 years.
There is an interesting chart relating to the determination of age in cattle in a publication called 'Cattle Development in Uttar Pradesh ' by R. L. Kaura, Director of Animal Husbandry; that chart shows that at II years incisors appear smaller due to wearing out; at 12 years space appears between the teeth, and after 12 teeth wear out constantly and roots remain far apart from one another.
As against all this expert opinion the respondent State has relied on the chart embodying some useful data about domestic animals, prepared by Major A. C. Aggarwala, Director of Veterinary Services, Punjab, and R. R. Gulati, Superintendent, Veterinary Department, Jullandur, which shows the sterility age of a buffalo at 15 and average age at 25, and of a cow sterility at 15 and 16 years and average life 22 years.