judgement:
ION: Criminal Appeal No. 49 of 1954.
Appeal by special leave from the judgment and order dated the 7th October, 1953 of the Orissa High Court at Cuttack in Criminal Appeal No. 108 of 1952 arising out of the judgment and order dated the 14th November 1952 of the Court of Assistant Sessions Judge at Sambalpur Sundergarh in Sessions Trial No. 7/4 (5) of 1922.
section C. Isaacs, R. Patnaik and R. C. Prasad, for the appellant.
Porus A. Mehta and P. G. Gokhale, for the respondent.
March 13.
The Judgment of the Court was delivered by SINHA J.
The main question canvassed in this appeal by special leave is whether the ruling of this Court in the case of Topan Das vs The State of Bombay(1) governs this case also, in view of the fact that the appellant is the only person out of the accused persons placed on trial, who has been convicted for the offence of conspiracy under section 120 B, Indian Penal Code.
The point arises in the following way: The appellant and four others were placed on their trial before the Assistant Sessions Judge of Sambalpur for offences under sections 120 B, 409,477 A and 109, Indian Penal Code with having committed the offences of criminal conspiracy, criminal breach of trust in respect of Government property, and falsification of accounts with a view to defraud the Government.
The appellant was the District Food Production Officer in Sambalpur and the other four accused persons were agricultural sub overseers in charge of their respective areas under the appellant.
Another such agricultural sub overseer was Pitabas Sahu at Bargarh centre.
He was examined at the trial as P.W. 25 and (1) 209 shall hereinafter be referred to as the approver.
The prosecution case is that in furtherance of the Grow More Food Scheme initiated by Government it was decided to subsidize the supply of oil cake to agriculturists with a view to augmenting the production of food crops.
Cultivators were to be supplied this variety of manure at Rs. 4 4 0 per maund, though the Government had to spend Rs. 7 12 0 per maund.
The appellant entered into a conspiracy with his subordinate staff including the agricultural sub overseers aforesaid to misappropriate the funds thus placed at their disposal for the procurement and supply of oil cake to cultivators.
To bolster up the quantity of oil cakes to be procured, they showed false transactions of purchase and distribution thereof and falsified accounts, vouchers, etc.
Thus they were alleged to have misappropriated the sum of Rs. 4,943 4 0 of Government money.
A large volume of oral and documentary evidence was adduced on behalf of the prosecution.
The three assessors who assisted at the trial were of the opinion that none of the accused was guilty.
The learned Assistant Sessions Judge in agreement with the assessors acquitted the four agricultural sub overseers aforesaid of all charges, giving them the benefit of the doubt.
But in disagreement with the assessors he convicted the appellant under all the charges and sentenced him to rigorous imprisonment for four and a half years and a fine of Rs. 2,000 under section 409, Indian Penal Code, and to rigorous imprisonment for two years each under sections 120 B and 477 A of the Code, the sentences of imprisonment to run concurrently.
The learned trial Judge observed in the course of his judgment as follows: "Hence on a consideration of all the evidence as discussed above, I find that the prosecution have fully proved their case that the accused Bimbadhar Pradhan, the D.F.P.O. has conspired to embezzle the Government money.
They have also proved that he has got an active hand and in assistance of Pitabas 210 Sahu has embezzled Government money amounting to Rs. 4,943 4 0 and in that act he has also actively helped Pitabas Sahu in falsifying the Government records by making false entries.
Hence all these three charges have been conclusively proved against him.
So far as regards the other accused persons, I have already stated that they are considerably inexperienced and the doubtful nature of evidence against these accused persons and considering the position between the first accused and the other accused persons, I give these four accused persons the benefit of doubt though I do not approve their conduct in this affair.
As per my findings given above, I may state here that this is a case in which we find a person in charge of the entire administration of agricultural and G.M.F. development of a district has not only soiled his own hands by embezzling Government money by corrupt means but has also introduced corruption into the entire administration of that department by spoiling the career of young men who are entrusted with this work and employed under him".
The appellant went up in appeal to the High Court of Orissa.
A Division Bench of that Court allowed his appeal and set aside his convictions and sentences under sections 409 and 477 A, Indian Penal Code, but upheld his conviction and sentence in respect of the charge of conspiracy under section 120 B of the Code.
We need not enter into the correctness of the findings of the trial court in respect of the acquittal of the other four accused, or of the High Court with regard to the acquittal of the appellant in respect of the charges under sections 409 and 477 A, Indian Penal Code.
The High Court held that though the appellant had withdrawn the sum of Rs. 27,000 from the Government treasury with a view to subsidizing the procurement of oil cake, it had not been proved that there was an entrustment to the appellant.
Hence the charge against him under section 409 failed.
As regards the charge under section 477 A, the High 211 Court acquitted him on the ground that the documents said to have been falsified, which were large in number, had not been mentioned in the charge and a vague statement that "accounts, cash books, stock books, petty cash sale register, cash memos, applications from cultivators, receipts, bills, vouchers, papers, documents, letters, correspondence, etc.
had been falsified" was made.
As regards the charge of conspiracy under section 120 B, the High Court observed that the most important witness to prove the charge was the approver aforesaid (P.W. 25) who had given a full description of the conspiracy on the 23rd or 25th September 1947 between the appellant and other sub overseers including himself for the purpose of showing bogus purchases and bogus distribution of large quantities of oil cake.
It also observed that "Most of the witnesses examined by the prosecution to corroborate the evidence of Pitabas are themselves accomplices in the conspiracy".
The High Court found that in respect of that conspiracy the evidence given by the approver got adequate corroboration from other independent witnesses.
After setting out the evidence the High Court recorded the following finding: "This would be strongest corroboration of the evidence of the approver about the appellant being the prime mover and the brain behind the entire fraud.
It was he who wanted to misuse his official position and persuade his subordinates to join with him in showing false procurement and distribution figures of oilcakes".
And finally the High Court came to the following conclusion: "I am therefore of the opinion that the approver 's version about the leading part in the conspiracy played by the appellant in persuading all his subordinates to join with him for the purpose of committing criminal breach of trust of the sums withdrawn from the treasury by showing false procurement and distribution of oilcake is true.
There is independent corro 212 boration of his evidence which is inconsistent with the appellant being a mere negligent superior officer who was deceived and defrauded by his dishonest subordinates.
It was then urged that in the charge under section 120 B of the Indian Penal Code, the date of the commission of the offence was stated to be the month of October 1947, whereas according to the evidence of P.W. 5, the conspiracy took place at Bargarh between the 23rd and 25th September 1947.
This discrepancy in the date is immaterial and has not prejudiced the appellant in any way".
From the concurrent orders of conviction and sentence of the appellant under section 120 B, Indian Penal Code, he was granted special leave to appeal to this Court.
The learned counsel for the appellant has raised the following points in support of the appeal: 1.
That all the persons charged with the offence of conspiracy except the appellant having been acquitted, his conviction and sentence in respect of that charge could not in law be maintained; 2.
That the appellant himself having been acquitted of the substantive charges under sections 409 and 477 A of the Code, he could not be convicted for conspiracy to commit those very offences; 3.
That the evidence of the prosecution witnesses having been disbelieved as against the other accused, the same evidence should not have been relied upon for convicting the appellant of the charge of conspiracy; 4.
That the provisions of section 342, Code of Criminal Procedure, had not been fully complied with in so far as important circumstances in the prosecution evidence had not been put to the appellant in his examination by the court under that section.
In our opinion, there is no substance in any one of these contentions and we proceed to give our reasons for our conclusions.
In support of the first contention raised on behalf of the appellant strong reliance was placed on the 213 recent decision of this Court in Topan Das vs State of Bombay(1) and the rulings relied upon in that case.
The cases, The Queen vs Manning(2), The Queen vs Thompson(3) and The King vs Plummer(4) were cited in support of the contention that where all the accused persons except one are acquitted on a charge of conspiracy, the conviction of one only on that charge cannot be sustained.
In this connection the recent decision of the Judicial Committee of the Privy Council in the case of Kannangara Aratchige Dharmasena vs The King(5) may also be referred to, though it was not cited at the Bar.
In that case the Judicial Committee held that where only two persons are involved in a charge of conspiracy, if a new trial has to be directed in respect of one it should be ordered in respect of both, because the only possible conclusion in such a case was either that both were guilty or that neither was guilty of the offence.
The recent decision of this Court so strongly relied upon by the appellant lays down a similar rule, but is clearly distinguishable from the case in hand inasmuch as in that case the only persons alleged to have been guilty of the offence of conspiracy were the persons placed on trial.
There was no allegation nor any evidence forthcoming that any other persons were, though not placed on trial, concerned with the crime.
In those circumstances this Court laid it down that it was essential to bring the charge of conspiracy home to the accused person or persons to prove that there was an agreement to commit an offence between two or more persons.
On the findings in that case only one person, after the acquittal of the rest of the accused was concerned with the crime and stood convicted of the charge of conspiracy.
As a person cannot be convicted of conspiring with himself to commit an offence, this Court gave effect to the contention that on the findings and on the evidence, (1)[1955] 2 S.C.R. 881.
(2) (3) ; (4) (5) 28 214 as also on the charge in that case the conviction could not be sustained.
But in the instant case, as already indicated, on the findings of the courts below, apart from the persons placed on trial, there was the approver who implicated himself equally with the other accused persons and a number of other prosecution witnesses as having been privy to the conspiracy.
The evidence of the approver has been found by the courts below to have been materially corroborated both as to the unlawful agreement and as to the persons concerned with the conspiracy.
In the first information report lodged on the 28th June 1948 the approver Pitabas Sabu, one of the agricultural sub overseers, was named along with the other five accused as the persons concerned with the conspiracy.
Subsequently Pitabas Sahu aforesaid was granted pardon on condition of his making a full and true statement of the facts of the case and was examined as an approver, on whose evidence mainly rested the case against the accused.
His evidence, as indicated above, was supported by the dealers in oilcake who supplied the commodity which was the subject matter of the conspiracy.
It cannot therefore be said that this case is on all fours with the recent decision of this Court referred to above.
But it was argued on behalf of the appellant that be was charged only with a conspiracy with the other accused persons and not with any conspiracy with the approver along with those others.
The charge under section 120 B is in these terms: "First, that you, on or about the month of October, 1947 in the district of Sambalpur agreed with Hemchandra Acharya and other accused persons to do or caused to be done an illegal act by illegal means and that you did some acts in pursuance of the said agreement to wit, the offence of criminal breach of trust under section 409, I.P.C. and falsification of accounts under section 477 A punishable with R. I. for more than two years and thereby committed an offence punish 215 able under section 120 B, I.P.C. , and within the cognizance of court of Sessions".
It will thus appear from the words of the charge that the approver was not specifically named as having been one of the conspirators, unless he could be brought within the category of "other accused persons".
Something will have to be said as to what those words denote, whether the approver was also included within that description.
Counsel for the appellant contended that they did not.
Counsel for the State Government contended to the contrary.
In England an indictment consists of three parts: (1) the commencement, (2) the statement of the offence, and (3) the particulars of the offence.
The English law of indictment from very early times has been based on very technical rules.
Those rules have now been codified by the Indictments Act, 1915 (5 & 6 George 5, Chapter 90).
In Rule 2 (Schedule 1) of the Act as amended by the Administration of Justice (Miscellaneous Provisions) Act of 1933, the form of "the commencement of the indictment" has been prescribed.
The form of "Statement of the offence" has been prescribed by Rule 4 of the Act and below that has to follow "Particulars of offence" as re quired by Rule 5.
Those rules more or less correspond to the rules laid down in Chapter XIX of the Code of Criminal Procedure.
Section 221, Code of Criminal Procedure, requires that the charge shall state the offence with which the accused is charged, giving the specific name of the offence, if such a name has been given by the law which creates the offence, which in this case means the offence of criminal conspiracy, defined by section 120 A, Indian Penal Code.
The naming of the section is, under sub section (5) of section 221 , Code of Criminal Procedure, equivalent to a statement that every legal condition required by law to constitute the offence of criminal conspiracy charged against the appellant was fulfilled.
Section 222 of the Code requires that the particulars as to the time and place of the alleged offence, and 216 the person (if any) against whom, or the thing (if any) in respect of which, the offence was committed, shall be stated.
It is noteworthy that section which requires the particulars of the offence to be stated does not in terms further require that in an offence,like conspiracy the names of the co conspirators should also be mentioned.
Hence in England it is enough if the indictment states that the accused along with other persons unknown had committed the offence of criminal conspiracy.
Though the statute law in India does not make it obligatory that the persons concerned in the crime of criminal conspiracy should be specifically named along with the person or persons charged in a particular trial, it is always advisable to give those particulars also in order to give a reasonable notice to the accused that he has been charged with having conspired with so and so (persons named), as also persons unnamed, to commit a certain offence.
In this case the charge against the five accused persons with reference to section 120 B, Indian Penal Code, named only those five persons as the conspirators and omitted to name the approver also as having been privy to the conspiracy.
This is clearly brought out with reference to the charge framed against the other four accused (who have been acquitted by the trial court as aforesaid).
It states: "That you, on or about the month of October 1947 in the district of Sambalpur, agreed with Bimbadhar Pradhan to do or caused to be done an illegal act by illegal means. . . . .
We find with reference to the records of the trial court that the trial has not been characterised by thoroughness or circumspection.
The date of the offence as given in the charge is different from the date as disclosed in the evidence, as pointed out by the High Court, which found that mistake bad not caused any prejudice to the accused.
Similarly, the charge under section 477 A had not, as held by the High Court, been framed with sufficient parti 217 cularity as a result of which the appellant had to be acquitted of that charge on appeal.
If the charge under section 120 B had added the words "and other persons, known or unknown", there would have been no ground for a grievance on the part of the appellant.
But even so, in our opinion, the provisions of section 225, Code of Criminal Procedure, are clearly applicable to the facts and circumstances of the present case.
It has not been shown to us how the omission to mention the name of the approver in the charge under section 120 B, Indian Penal Code, has misled the appellant or has occasioned a failure of justice.
The prosecution case throughout has been, as is clear with reference to the petition of complaint, that the appellant with his subordinates in the Food Department had conspired to misappropriate the funds allocated to the procurement of oil cake with a view to helping agriculturists with manure to raise more food crops.
The approver has been very much in the picture all the time and, as a matter of fact, as found by the courts below, his evidence is the main plank in the prosecution case.
Of course, there is the other corroborative evidence, as pointed out in the judgments of the courts below.
The provisions of section 537 are equally attracted to this case.
With reference to the provisions of that section it is pertinent to note that though the other accused had been acquitted by the trial court and though he was the only appellant in the High Court, he did not raise the points with reference to the alleged illegality or irregularity in the charge, before that court.
Hence applying the Explanation to that section to this case, it cannot be urged that the omission in the charge has occasioned a failure of justice.
But the learned counsel for the appellant has invited our pointed attention to the observations of Mr. Justice Mathew at p. 243 of Queen vs Manning(1) that it is "an imperative rule of law" that "in a (1) 218 charge for conspiracy in a case like this where there are two defendants, the issue raised is whether or not both the men are guilty, and if the jury are not satisfied as to the guilt of either, then both must be acquitted".
But Lord Coleridge, C. J., whose direction to the jury in that case was the subject matter of the judgment does not put it as high as Mr. Justice Mathew, but understood it "to be the established rule of practice".
Reliance was placed by the learned counsel for the appellant on the case of The King vs Plummer(1), in which it has been observed that with the acquittal of the only alleged conspirators no verdict of guilty against the appellant could be passed because the verdict would be regarded as repugnant, in so far as it would amount to saying that there was a criminal agreement between the appellant and the others and none between them and him.
Hence it was contended that in a situation such as the present case presents, the conviction of the appellant would amount to a similar repugnancy.
This aspect of the matter has been well discussed in a judgment of the Calcutta High Court delivered by Mr. Justice Mukerji in the case of I. G. Singleton vs The King Emperor(2).
The learned Judge has there pointed out the difference between the position as it obtains in India and that in England.
The rule of English law as to the acquittal of an alleged conspirator following from the acquittal of the other when the conspiracy was said to be only between the two and in a joint trial of both is based upon a rule of practice and procedure, namely, that repugnancy or contradiction on the face of the record is a ground for annulling a conviction.
But such a repugnancy is not by itself a sufficient ground for quashing a conviction in India where the matter is governed by statutory law both as to the offence and the procedure for bringing the offender to justice.
In India there is no provision in the statutory law justifying an interference with a conviction on the (1) (2) 219 ground of repugnancy in the record.
That is not to say that the court is to shut its eyes to the inconsistency in convicting one person of the offence of conspiracy on the same evidence on which the other alleged conspirator had been acquitted.
If the matter is as simple as that, ordinarily the courts will have no difficulty in setting aside the conviction, when there was absolutely nothing on the record to distinguish the case against the one from that against the other.
Such was the case which was decided by this Court in Topan Das vs State of Bombay(1).
Learned counsel for the appellant pressed upon us the consideration that notwithstanding the state of affairs as disclosed in the evidence, the appellant was entitled to an acquittal because in the charge as framed against him there was no reference to the approver.
He contended that the rule upon which the accused was entitled to an acquittal was not a matter of practice but of principle.
In the instant case we are not sure that the acquittal of the co accused by the trial court was well founded in law or justified by the evidence in the case.
The trial court has not disbelieved the evidence led on behalf of the prosecution.
It has only given the benefit of the doubt to the accused whom it acquitted on grounds which may not bear scrutiny.
But as the case against those acquitted persons is not before us, we need not go any further into the matter.
It has further been contended by the learned counsel for the appellant that the High Court having acquitted him in respect of the two substantive charges of criminal breach of trust and of falsification of documents he should not have been convicted of the offence of criminal conspiracy because the conspiracy was alleged to have been for those very pur poses.
It is a sufficient answer to this contention to say that the offence of criminal conspiracy consists in the very agreement between two or more persons to commit a criminal offence irrespective of the (1) 220 further consideration whether or not those offences have actually been committed.
The very fact of the conspiracy constitutes the offence and it is immaterial whether anything has been done in pursuance of the unlawful agreement.
But in this case the finding is not that Government money had not been misappropriated or that the accounts had not been falsified.
The charge under section 477 A relating to the falsification of the documents has failed because the High Court found that particular charge was wanting in sufficient particulars, thus causing prejudice to the accused.
The charge under section 409, Indian Penal Code, was set aside by the High Court on the ground that there was "practically no evidence of entrustment with the appellant of the price of 1500 maunds of oil cakes, a substantial portion of which he was said to have misappropriated".
How far this observation of the High Court is well founded in law with reference to the official position of the appellant who had the spending of the Government money in his hands is not a matter on which we need pronounce.
It is enough to point out that it has not been found by the courts below that the object of the criminal conspiracy had not been achieved.
On the other hand, there is enough indication in those judgments that the object of the conspiracy had been to a large extent fulfilled.
Hence it must be held that there is no substance in this contention also.
Another contention raised on behalf of the appellant was that the other accused having been acquitted by the trial court the appellant should not have been convicted because the evidence against all of them was the same.
There would have been a great deal of force in this argument, not as a question of principle but as a matter of prudence, if we were satisfied that the acquittal of the other four accused persons was entirely correct.
In this connection the observations of this Court in the case of Dalip Singh vs State of Punjab(1), and of the Federal Court in (1) ; , 156.
221 Kapildeo Singh vs The King(1) are relevant.
It is not essential that more than one person should be convicted of the offence of criminal conspiracy.
It is enough if the court is in a position to find that two or more persons were actually concerned in the criminal conspiracy.
If the courts below had come to the distinct finding that the evidence led on behalf of the prosecution was unreliable, then certainly no conviction could have been based on such evidence and all the accused would have been equally entitled to acquittal.
But that is not the position in this case as we read the judgments of the courts below.
Lastly, it was contended that the examination of the appellant by the learned trial Judge was not in full compliance with the requirements of section 342, Code of Criminal Procedure.
Two points have been sought to be made in this connection.
Firstly, it has been contended that though the other accused who have been acquitted by the trial court were questioned with reference to the conspiracy with the approver Pitabas Sahu, no such question was put to the appellant.
It is true that the court questioned him about his "conspiracy with the other accused persons".
Counsel for the parties before us did not agree as to the significance of the words "in conspiracy with the other accused persons".
The contention on behalf of the appellant was that they referred only to the persons actually standing trial before the court, whereas counsel for the State con tended that they had reference to all the accused persons named in the petition of complaint including the approver.
A number of rulings of the different High Courts as to what is the position of an approver, whether he continues to be an accused person even after the grant of pardon or whether he is only in the position of a witness on behalf of the prosecution, were cited before us.
But we do not think it necessary in this case to pronounce upon that because we have, as already indicated, come to our conclusions (1) , 837, 838.
29 222 on the assumption that there is an omission in the charge in so far as the approver has not been specifically named in the charge under section 120 B, Indian Penal Code.
Secondly, it was contended that the evidence of P.W. 27 who had been chiefly relied upon in the courts below as corroborating the approver had not been specifically put to the appellant though the evidence of the approver Pitabas Sahu was pointedly put to him.
In our opinion, it is not ordinarily necessary to put the evidence of each individual witness to the accused in his examination under section 342, Code of Criminal Procedure.
The appellant was put the question "Have you got anything to say on the evidence of the witnesses?" That, in our opinion, is sufficient in the circumstances of this case to show that the attention of the accused was called to the prosecution evidence.
As to what is or is not a full compliance with the provisions of that section of the Code must depend upon the facts and circum stances of each case.
In our opinion, it cannot be said that the accused has been in any way prejudiced by the way he has been questioned under that section.
As all the contentions raised on behalf of the appellant fail, the appeal must stand dismissed.

summary:
The appellant and four others were placed on their trial before the Assistant Sessions Judge of Sambalpur for offences under sections 120 B, 409, 477 A and 109, I.P.C. with having committed the offences of criminal conspiracy, criminal breach of trust in respect of Government property and falsification of accounts with a view to defraud the Government.
The appellant was the District Food Production Officer and the other four accused persons were agricultural sub overseers under the appellant and another agricultural sub overseer namely P. was examined at the trial as an approver.
The Assistant Sessions Judge convicted the appellant under all the three charges but acquitted the four sub overseers giving them the benefit of doubt.
The High Court in appeal allowed the appeal of the appellant in respect of charges under sections 409 and 477 A, I.P.C. but upheld his conviction and sentence in respect of the charge of conspiracy under section 120 B, I.P.C. observing that in respect of that charge the evidence given by the approver got corroboration from other independent evidence.
On appeal by special leave to the Supreme Court the main question for consideration was whether the ruling of the Supreme Court in the case of Topan Das vs The State of Bombay ([1955] 2 S.C.R. 881), governed the present case in view of the fact that the appellant was the only person out of the accused persons on trial who had been convicted of the offence of conspiracy under section 120 B, I.P.C. Held (i) that the case of Topan Das vs State of Bombay was, clearly distinguishable from the present case as in that case the only persons alleged to have been guilty of the offence of conspiracy 'Were the persons placed on trial.
There was no allegation nor any 207 evidence forthcoming that any other persons though not placed on trial, were concerned with the crime.
On the findings in that case, only one person, after the acquittal of the rest of the accused, was concerned with the crime and stood convicted of the charge of conspiracy.
As a person cannot be convicted of conspiring with himself to commit an offence, the Supreme Court gave effect to the.
contention that on the findings and on the evidence, as also on the charge in that case, the conviction could not be sustained.
But in the instant case on the findings of the courts below, apart from the persons placed on the trial, there was the approver who implicated himself equally with the other accused persons and a number of other prosecution witnesses as having been privy to the conspiracy.
And therefore the present case was not on all fours with the case of Topan Das vs State of Bombay.
(ii) The provisions of section 225, Cr.
P.C. were clearly applicable to the facts and circumstances of the present case.
It had not been shown how the omission to mention the name of the approver in the charge under section 120 B, I.P.C. had misled the appellant or had occasioned a failure of justice.
(iii) The provisions of section 537 of the Code of Criminal Procedure were equally applicable to the facts of the case.
As the appellant did not raise the point with reference to the alleged illegality or irregularity in the charge before the High Court it must be held, applying the Explanation to that section, that the omission in the charge bad not occasioned a failure of justice.
The contention that with the acquittal of the alleged conspirators no verdict of guilty against the appellant could be given, because the verdict would be regarded as repugnant in so far as it would amount to saying that there was a criminal agreement between the appellant and the others and none between them and him, the conviction of the appellant would amount to a similar repugnancy was without substance because the rule of English law as to the acquittal of an alleged conspirator when the conspiracy was said to be only between the two is based upon a rule of practice and procedure, namely that repugnancy or contradiction on the face of the record is a ground for annulling a conviction.
But such a repugnancy is not by itself a sufficient ground for quashing a conviction in India where the matter is governed by statutory law both as to the offence and the procedure for bringing the offender to justice.
In India there is no provision in the statutory law justifying an interference with a conviction on the ground of repugnancy in the record.
Topan Das vs State of Bombay ([1955] 2 S.C.R. 881), The Queen vs Manning ([1883] , The Queen vs Thompson ([1851] 16 Q.B. 832), The King vs Plummer ([1902] 2 K.B. 339), Kannangara Aratchige Dharmasena vs The King ([1951] A.C. 1), I. G. Singleton vs The King Emperor ([1924] , Dalip Singh vs State of Punjab ([1954] S.C.R. 145) and Kapildeo Singh v, The King ([1949 50] F.C.R. 834), referred to. 208


judgement:
ition No. 449 of 1979 (Under Article 32 of the Constitution) R. K. Garg and D. K. Garg for the Petitioner.
The Order of the Court was delivered by KRISHNA IYER, J.
The adventurous petitioner imaginatively challenges the vires of Section 7 read with Section 16 of the Prevention of Food Adulteration Act and the relevant rules framed thereunder.
The gravamen of his charge is that the above provisions, read together, impose an inflexible minimum sentence of six months R.I. of offender 's guilty of sale of adulterated food, excluding in the process even the need to prove mens rea in the accused.
This absolute liability, with mandatory sentence, dependent on sophisticated chemical tests and complicated formulae, is oppressively unreasonable in the illiterate, agrestic realities of little Indian retail trade.
Such, in one sentence, is the submission of counsel.
The primary props to support this broad submission may be briefly noticed.
Counsel complains that there is no classification as between injurious pollutants and innocuous adulterants while proscribing the sentence.
Nor is there any intelligent differentiation between petty dealers and giant offenders, and vendors, big and small, are put on the Procrustean bed of stern punishment alike.
Articles 14, 19 and 21 are the constitutional artillery employed by counsel to shoot down the said provisions of the Act.
Frankly, we are not impressed with the consternation about the constitutionality even if the potential for victimisation affecting smaller people may be real and elicit our commiseration.
We may dwell for a moment on the latter grievance against the law a little later.
First, we will repel the vice of unconstitutionality.
Let us be clear about the basics.
Policy is for Parliament, constitutionality for the Court.
Protection of public health and regulation of noxious trade belong to the police power of the State and legislation like the Prevention of Food Adulteration Act is of that genre.
If a sentence, as here, is prescribed as a mandatory minimum and that is too cruel to comport with article 21 and too torturesome to be reasonably justifiable or socially defensible under article 19 then a case for judicial review may arise.
But we see none here.
Nor can we agree that judge proof sentencing is per se bad.
Sometimes judicial 257 fluctuations in punishment, especially on the softer side where white collar criminals are involved, induce legislative standardisation of sentences, to avoid giving societal protection in hostage to fortune.
There is a wide play still left for the court, and mandatory minima are familiar from the days of the Penal Code (Vide Sec. 302).
The prescription of equal protection is not breached either, because within the range of judicial discretion the court deals out to each what he deserves according to established principles.
Shri R. K. Garg feelingly urged that the poor and the weak, who are the larger, lower sector of retail traders, will have to suffer the standardised imprisonment if Food Inspectors can challan them in Court and, on some minor variation in the chemical composition of food sold, get them convicted sans mens rea merely because, along the chain, some bigger trader has fobbed off inferior commodities on them.
We are disturbed that it is possible that small men become the victims of harsh law when there is no executive policy which guides prosecution of offenders.
Petty victuallers and big sharks operate on society in different degrees and draconian equality will be tempered by flexible policy.
This is a matter of penal policy in constitutionality and so it is, in a sense, out of bounds for judicial advice.
Even so, we feel constrained to state that public authorities entrusted with the enforcement of regulatory provisions to protect society may, in proper cases, examine those prosecutions which are harassments to the humbler folk even if they technically violate the law and cause only minimal harm to society and decide whether they should at all sanction their prosecution.
The Legislature, in its wisdom, may also consider the advisability of resting power somewhere to reduce the sentence without the bigger offender escaping through these wider meshes meant for the smaller offenders.
Even otherwise, there is a general power in the Executive to commute sentences and such power can be put into action on a principled basis when small men get caught by the law.
We dismiss the Writ petition since there is no constitutional invalidity made out and the grounds urged are more appropriately an appeal to the Parliament and the Executive.
V.D.K. Petition dismissed.

dataset_name: IN-Abs

summary:
HELD: Section 7 read with Section 16 of the Prevention of Food Adulteration Act is constitutionally valid.
[257G] Policy is for Parliament, constitutionality is for the Court.
Protection of public health and regulation of noxious trade belong to the police power of the State and Legislation like the Prevention of Food Adulteration Act is of that genre.
[256F G] If a sentence, as in the instant Act, is prescribed as a mandatory minimum and that is too cruel to comport with article 21 and too torturesome to be reasonably justifiable or socially defensible under Article 19, then a case for judicial review may arise.
[256 G H] Judge proof sentencing is not per se bad.
Sometimes judicial fluctuations in punishment, especially on the softer side where white collar criminals are involved, induce legislative standardization of sentences, to avoid giving societal protection in hostage to fortune.
There is a wide play still left for the Court, and mandatory minima are familiar from the days of the Penal Code.
[256H, 257A] The prescription of equal protection is not breached either, because within the range of judicial discretion the Court deals out to each what he deserves according to established principles.
[257B] Observation (a) Public authorities entrusted with the enforcement of regulatory provisions to protect society may, in proper cases, examine those prosecutions which are harassments to the humbler folk even if they technically violate the law and cause only minimal harm to society and decide whether they should at all sanction their prosecution.
[257D E] (b) The Legislature, in its wisdom, may also consider the advisability of resting power somewhere to reduce the sentence without the bigger offender escaping through these wider meshes meant for the smaller offenders.
Even otherwise, there is a general power in the Executive to commute sentences and such power can be put into action on a principled basis when small men get caught by the law.
[257E F] 256


judgement:
Civil Appeal Nos.
2330 2331 of 1969.
Appeals by Special Leave from the Judgment and order dated 17/ 18 1 69 of the Gujarat High Court in Second Appeal No. 187 and 857/61.
H. section Parihar and I. N. Shroff for the Appellant.
K. J. John for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
These two Civil Appeals are by the Kathiawar Industries Ltd. by special leave against the judgment of the Gujarat High Court holding that the appellants are liable to pay octroi duty on uncrushed salt which is brought by the appellant to the factory situate within the octroi limits and crushed there.
The appellant is running a salt manufacturing works at Jaffrabad called "Nawabsidi Mohmad Khan Salt Works".
The company had constructed salt works, grinding mills, trolly tracks and a jetty at e port site.
The major portion of the salt works is situate out of the Municipal limits.
The salt is manufactured outside the municipal limits.
The grinding mills and the part of the trolly track leading to jetty come within the municipal limits of the respondent Jaffrabad Municipality.
The Municipality by a notice dated 3 1 1955 demanded from the appellant Rs. 7289 6 0 as arrears of octroi.
The appellant paid under protest and filed the suit out of which this appeal arises before the Civil Judge Gohilwad, District Bhavnagar, against the respondent for a declaration that the salt manufactured by the appellant at its salt works at Jaffrabad and exported uncrushed and/or crushed was not liable to octroi duty and that the goods passing through municipal limits from the salt works are not liable to octroi duty, and for an injunction restraining the respondent from recovering an amount of Rs. 7289 6 0 and for a further injunction restraining the Municipality from hindering or obstructing the free passage of salt and goods and for the refund of Rs. 250.
The appellant also filed another suit for the refund of Rs. 1271 14 O paid under protest.
These two suits were decreed, the court declaring that the salt manufactured by 246 the appellant company is not liable to octroi duty.
The court also granted an injunction as prayed for.
The Municipality preferred appeals.
The appellate court while dismissing the appeals and confirming the decree of the trial court observed that the perpetual injunction granted by the trial court would not apply to the salt entering the octroi limits for consumption or use for the factory situated within the octroi limits of the municipality.
The Municipality preferred two Second Appeals to the High Court of Gujarat at Ahmedabad.
A Bench of the High Court allowed the appeals except to the extent of confirming the declaration that uncrushed salt of the appellant company which is directly sent from the stacking ground to the jetty is not liable to octroi provided the plaintiff company followed the prescribed rules and formalities.
The other claims in the suits were dismissed.
Against the judgment of the High Court the plaintiff company has preferred these two appeals.
The only question that falls for consideration in these civil appeals is whether the salt manufactured by the appellant outside the octroi limits of the respondent and brought by the appellant within those limits for the purpose of being crushed into powder in the appellant 's factory situate within those limits and then exported is liable to octroi.
The facts as found by the High Court and which cannot be questioned are that the salt works consists of (i) salt pans; (ii) stacking ground for the salt collected from the pans; (iii) trolly track for carrying salt from stacking ground to the factory within the octroi limits of the Municipality and to the jetty which is outside the octroi limits; (iv) jetty; (v) Power house; (vi) store room; (vii) workshop and (viii) grinding mill which is referred to in the evidence as the crushing factory.
(f these, the crushing factory and part of the trolly track (about 1400 feet) are within the octroi Limits of the Municipality and the rest outside those limits.
Thus it is not in dispute that only the crushing factory and part of the trolly track are within the octroi limits.
salt is prepared is the salt pans outside the octroi limit and the salt which is to be crushed is taken to the crushing factory and the salt which is not to be crushed is taken in uncrushed form directly to the jetty over the trolly track part of which passes through the octroi limits of the Municipality.
The salt that is crushed in the crushing factory is also after crushing taken by the trolly to the Jetty.
From the jetty the salt whether crushed or uncrushed, as the case may be, is exported by steamers.
The High Court has found that the salt which is taken to the crushing factory within the octroi limits for the purpose of crushing and is crushed and later taken to the jetty is liable to octroi.
The question is whether this levy is sustainable in law.
247 In 1948, on the formation of Saurashtra State, Jaffrabad came with in the territorial limits of the Saurashtra State and the Bombay District Municipal Act, 1901, as adapted and applied to Saurashtra State became applicable to Jaffrabad.
The Jaffrabad Municipality, the predecessor of the respondent, was constituted under the Bombay District Municipal Act.
1901 .
The State of Saurashtra, within the territorial limits of which the said Municipality was situate, published an ordinance on 31 8 1949 being ordinance, No. 47 of 1949 called the Saurashtra Terminal Tax and octroi ordinance, 1949.
The ordinance extended to the whole of The State of Saurashtra and came into force from 31 8 1949.
Section 2 clause (2) of the ordinance defines 'octroi ' as including a terminal tax.
Section 3 empowers the Government to impose terminal tax and octroi duty.
It provided that octroi may be imposed on "animals or goods, or both, within the octroi limits brought for consumption or use therein".
Under section 4 Government is empowered to make rules.
In exercise of the powers under the ordinance the State Government n made rules relating to octroi known as the Saurashtra octroi and Terminal Tax Rules on 8th December, 1949 which was published in the Saurashtra Gazette on 15th December, 1949.
Rule 3 is the charging rule which provides that octroi is payable in respect of goods set out in the Schedule I attached to the Rules and prescribed that octroi shall be payable at the nakas at rates set out therein.
Item No. 23 is "Salt for Factory".
Schedule II which gives a list of items which are exempt from octroi duty contains in item No. 6, a sub item in Gujarat which means "Salt".
Thus under item 23 "Salt for Factory" is liable to octroi duty.
The octroi duty may be imposed under section 3 on "animals or goods, or both, within the octroi limits brought for consumption or use therein".
Oh the facts found, namely that uncrushed salt was brought into the factory situate within the octroi limits and crushed salt taken away for export from the octroi limits can it be said that the salt thus brought are goods for consumption or use therein.
It is the common case that the uncrushed salt as brought into the octroi limits is crushed and in the crushed form sent to the jetty for export.
The finding of the High Court is that the crushing of the uncrushed salt and sending the crushed salt to the jetty within the octroi limits will be used therein as required under section 3.
In this appeal it is necessary for us to consider the scope of the I words "consumption" and "use".
The precise meaning to be given to the words "consumption" and "use will depend upon the context in 17 475 SCI/79 248 which they are used.
These words are of wide import.
In the Constitution of India, Entry 52 in List II in Seventh Schedule a right to impose tax "on entry of goods into the local area for consumption, use or sale" is conferred.
In Burmah Shell oil Storage & Distributing Co. India Ltd. vs The Belgaum Borough Municipality this Court after tracing the history of octroi and terminal tax observed that while terminal tax is a kind or octroi which is concerned only with the entry of goods in a local area irrespective of whether they would be used there or not, octrois were taxes on goods brought into the area for consumption.
use or sale.
They were leviable in respect of the goods put to some use or the other in the area but only if they were meant for such user.
In considering the meaning of the words "consumption" and "use" this Court observed in Burmah Shell case (supra) that the word consumption; its primary sense means the act of consuming and in ordinary parlance means the use of an article in a way which destroys, wastes or uses up that article.
But in some legal contexts, the word "consumption '? has a wider meaning.
It is not necessary that by the act of consumption the commodity must be destroyed or used up.
n M/s.
Anwarkhat Mahboob Co. vs The State of Bombay (now Maharashtra) and others, the question that arose was whether conversion of one commodity into another commercially different article would amount to consumption.
The facts of the case were that tobacco was purchased and in the Bombay State the stem and dust from the tobacco was removed.
It was contended that removing the stem and dust from the tobacco did not amount to consumption of tobacco or had the effect of converting tobacco into an article commercially different.
The Court held that when the tobacco was delivered in the State of Bombay for the purchase of changing it into a commercially different article, viz., biddipatti the delivery was for the purpose of consumption.
This Court followed the decision in State of Travancore Cochin and ors.
v Sanmugha Vilas Cashew Nut Factory and Ors.
wherein it was held that the raw cashew nuts were put through a process and new articles of commerce, namely cashew nut oil and edible cashew nut kernels were obtained.
The Court expressed the view that the raw cashew nut is consumed in the process.
On the facts the High Court found alter referring to the different processes of baking or roasting.
Shelling pressing, pealing etc.
that although most of the process is done by hand, part of it is also done mechanically by drums.
Oil is extracted out of the outer shells as a result of roasting.
After roast 249 ing the outer shells are broken and the nuts are obtained.
The i J poison is eliminated by pealing oil the inner skin.
By this process of manufacture.
the respondents really consume the raw cashew and produce new commodities.
This Court accepted this finding and observed at p. 113 that the raw cashew nuts, after they reach the respondents, are put through a process and new articles of commerce, namely, cashew nut oil and edible cashew nut kernels, are obtained.
In Anwarkhan Mahboob Co. (supra) this Court gave the example of the process through which cotton is put through before ultimately the final product the wearing apparel is consumed by men, women and children.
The Court observed: "But before cotton has become a wearing apparel, it passes, through the hands of different producers, each of whom adds some utility to the commodity received by him.
There is first the act of ginning; ginned Cotton is spun into yarn by the spinner; the spun yarn is woven into cloth by the weaver; the woven cloth is made into wearing apparel by the tailor.
" At each of these stages distinct utilities are produced and what is produced is at the next stage consumed.
It is usual, and correct to speak of raw cotton being consumed in ginning.
Applying this test the conclusion is irresistible that when uncrushed salt is crushed in the factory it is commercially a different article and the uncrushed salt must be held to have been consumed.
The word "use" is of wider import than "consumption".
It cannot be denied that the uncrushed salt has been used and by the user a new product crushed salt has come into existence.
On a consideration of the facts and circumstances of the case we are satisfied that octroi is leviable on the uncrushed salt which is brought to the octroi area and crushed as the activity would amount to both consumption and use of the uncrushed salt.
In the result the appeals fail and are dismissed with costs.
N.V.K. Appeals dismissed.

summary:
In 1948 on the formation of Saurashtra State, Jaffrabad came within its territorial limits and the Bombay District Municipal Act, 1901 as adapted and applied to the said State became applicable to Jaffrabad.
Jaffrabad Municipality the predecessor of the respondent was constituted under the Bombay District Municipal Act, 1901.
The State of Saurashtra, within the territorial limits of which the said Municipality was situate, promulgated ordinance No. 47 of 1949 on 31 X 49 called the Saurashtra Terminal octroi ordinance, 1949.
Section 2 cl.
(2) of the said ordinance defines "octroi" as including a terminal tax.
Section 3 empowered the Government to impose terminal tax and octroi duty, and provided that octroi may be imposed on "animals or goods, or both, within the octroi limits brought for consumption or use therein.
" Section 4 empowered the Government to make rules in exercise of which the State Government made the Saurashtra octroi and Terminal Tax Rules on 8th December, 1949.
Rule 3, the charging rule provided that octroi is payable in respect of goods set out in Schedule I of the Rules and prescribed that it shall be payable at the nakas at rates set out therein.
Item No. 23 is "Salt for Factory".
Schedule II enumerated a list of items which are exempt from octroi duty and contained in Item No. 6, a sub item in Gujarat which means "salt".
The appellant was running a salt manufacturing works at Jaffrabad.
The company had constructed salt works, grinding mills, trolly tracks and a jetty at the port site.
The major portion of the salt works is situated out of the municipal limits.
The salt is manufactured outside the municipal limits.
The grinding mills and the part of the trolly track leading to jetty came within the municipal limits of the respondent Jaffrabad Municipality.
The salt is prepared in the salt pans outside the octori limit and the salt which is crushed is taken to the crushing factory and the salt which is not to be crushed is taken in uncrushed form.
directly to the jetty over the trolly track part of which passes through the octroi limits of the municipality.
The salt that is crushed in the crushing factory is also after crushing taken by trolly to the jetty.
From the jetty the salt whether crushed or uncrushed, as the case may be is exported by steamers.
244 The Municipality demanded from the appellant octroi in respect of salt manufactured by it.
The appellant paid under protest and filed a suit against the respondent for declaration that the salt manufactured by the appellant at its salt works at Jaffrabad and exported uncrushed and/or crushed was not liable to octroi duty and the goods passing through municipal limits from the salt works are not liable to octroi duty and for an injunction restraining the respondent from recovering the amount claimed as octroi.
Another suit claiming refund of the octroi paid was also filed.
The two suits were decreed, the court declaring that the salt manufactured by the appellant company is not liable to octroi duty.
The Municipality being aggrieved preferred appeals and the appellate court while dismissing the appeals and confirming the decrees of the trial court held that the perpetual injunction granted by the trial court would not apply to the salt entering the octroi limits for consumption or use for the factory situated within the octroi limits of the Municipality.
The Municipality preferred second appeals to the High Court, which allowed them except to the extent of confirming the declaration that uncrushed salt of the appellant company which is directly sent from the stacking ground to the jetty is not liable to octroi provided the plaintiff company followed the prescribed rules and formalities.
The other claims in the suits were however dismissed.
On the question whether the salt manufactured by the appellant outside the octroi limits of the respondent and brought within those limits for the purpose of being crushed into powder in the appellant 's factory situated within those limits and then exported is liable to octroi.
^ HELD: 1.
Octroi is leviable on the uncrushed salt which is brought to the octroi area and crushed as the activity would amount to both consumption and use of the uncrushed salt.
[249 F] Burmah Shell oil Storage Distributing Co. India Ltd. vs The Belgaum Borough Municipality [1963] Supp.
2 SCR 216; M/s. Anwarklan Mahboob Co. vs The State of Bombay (now Maharashtra) [161] 1 SCR 709, State of Travancore Cochin & Ors.
vs Shanmugha Vilas Cashew Nut Factory & ors.
; , referred to.
In the Constitution of India, Entry 52 in List II in Seventh Schedule a right to impose tax "on entry of goods into the local area for consumption, use or sale" is conferred.
The precise meaning to be given to the words "consumption" and "use" will depend upon the context in which they are used.
These words are of wide import, the word "use" being of wider import than "consumption".
[248A. 247H, 249E].
While terminal tax is a kind of octroi which is concerned only with the entry of goods in a local area irrespective of whether they would be used there or not, octrois were taxes on goods brought into the area for consumption, use or sale.
They are leviable in respect of the goods put to some use or the other in the area but only if they were meant for such use.
[248B] 4.
The word "consumption" in its primary sense means the act of consuming and in ordinary parlance means the use of an article in a way which destroys, wastes or uses up that article.
But in some leal contents the word 245 "consumption" has a wider meaning.
It is not necessary that by the act of consumption the commodity must be destroyed or used up.
[248C D] In the instant case the uncrushed salt is crushed in the factory which is commercially a different article and the uncrushed salt must be held to have been consumed.
The uncrushed salt has been used and by the use a new product crushed salt has come into existence.
[249E]


judgement:
Civil Appeals Nos.
1864 1869 of 1972.
Appeals by Special Leave from the Judgment and Order dated 17 9 1971 of the Delhi High Court in Income Tax Reference Nos. 22, 25 and 26 of 1970.
section C. Manchanda and A. D. Mathur for the Appellants.
T. A. Ramachnadran and Miss A. Subhashini for the Respondent.
There was a Hindu undivided family consisting of the karta, Lala Sham Nath and his three sons, Rajinder Nath, Ram Chander Nath and a minor, Surinder Nath.
The family carried on business.
On April 29, 1949, land was acquired in Sunder Nagar, New Delhi in the name of the karta, and the price was paid out of the books of the family.
A building was constructed on the land and was completed in September 1954.
Another building was constructed in the following year on a plot at Golf Links, New Delhi.
On March 18, 1950, there was a partial partition of the Hindu undivided family, and its business was taken over by a partnership firm Messrs. Faqir Chand Raghunath Dass consisting of Lala Sham Nath and the two elder sons, Rajinder Nath and Ram Chander Nath.
The partnership firm debited a sum of Rs. 98,418/ in the building account of the firm towards the cost of construction of the Sunder Nagar property during the assessment year 1955 56.
In the assessment year 1956 57, the partnership firm debited a sum of Rs. 99,148/ on account of the construction of the Golf Links property.
The assessees, who are members of the partnership firm, field separate returns in their individual status for the assessment years 1955 56 and 1956 57.
They claimed that the Sunder Nagar and the Golf Links properties belonged to the four members of the family in their individual capacity.
But the Income Tax officer regarded the properties as belonging to the partnership firm, and in the assessment proceedings of the firm for those years, he estimated the cost of construction at a higher figure than the cost disclosed, and made additions accordingly to the returned income of the firm.
The partnership firm appealed.
Allowing the appeals, the Appellate Assistant Commissioner deleted the additions.
He found that when the construction of the buildings was commenced the moneys were advanced by the New Delhi branch of the firm, and the debit in its books was transferred to the Head Office where one fourth of the total expenditure was debited to the account of each co owner.
On that he held that the partneship firm was not the owner of the properties, and, therefore, it could not be said to have earned any concealed income.
The Income Tax Officer then initiated proceedings under section 147(a) of the Income Tax Act, 1961 against the individual assessees 276 for the assessment years 1955 56 and 1956 57, and the additions on account of concealed income originally made in the assessments of the partnership firm were now divided between the assessees and included in their individual assessments.
The Income Tax officer rejected the plea of the assessees that as they had already disclosed that they had invested in the properties when filing their original individual returns there was no case for invoking section 147(a).
The Appellate Assistant Commissioner, on appeal, agreed that there was no default on the part of the assessees to warrant proceedings under section 147(a) and that ordinarily the assessments would have been barred by limitation.
But the maintained the assessments on the ground that section 153(3) (ii) of the Act applied.
In second appeal, the Income tax Appellate Tribunal, while rejecting the contention that the assessees were not covered by the expression "any person" in section 153(3)(ii), pointed out that nevertheless that provision could not be availed of by the Income Tax Officer because there was neither any "finding" nor a "direction" in the earlier order of the Appellate Assistant Commissioner in consequence of which, or to give effect to which, the impugned assessments can be said to have been made.
It also observed that no opportunity had been afforded to the assessees of being heard, as was required by Explanation 3 to section 153(3) before that earlier order was made.
The Tribunal further expressed the view that the Appellate Assistant Commissioner had no jurisdiction in the appeals before him to convert the assessments made by the Income Tax Officer under section 147(a) to "assessments passed under section 153(3) (ii)".
The Commissioner of Income Tax obtained a reference to the High Court of Delhi on the following two questions: "1.
Whether on the facts and in the circumstances of the case, the Appellate Assistant Commissioner was legally justified in holding that the provisions of section 147(a) of the Income tax Act, 1961, were not applicable to the case for the assessment years 1955 56 and 1956 57 respectively ? 2.
Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Appellate Assistant Commissioner in appeals before him could not convert the provisions of section 147(1) into those of Section 153(3)(ii) of the Income tax Act, 1961 and that provisions of section 153(3) (ii) of the Act were not applicable to the instant case ?" 277 The High Court noted the finding of the Appellate Assistant Commissioner that the properties did not belong to the partnership firm, and therefore the excess amount of the cost of construction could not be regarded as the concealed income of the firm.
The High Court observed that such a finding was necessary for the disposal of of the appeals filed by the firm, and as a corollary it was held that the buildings belonged to the co owners.
This, according to the High Court, necessitated the "direction" to the Income Tax Officer that he was free to assess the excess amount in the hands of the co owners.
The High Court, taking the view that the co owners were partners of the firm and, therefore, covered by the expression "any person" in section 153(3)(ii) of the Income tax Act, held that the bar of limitation for making the impugned assessments was raised by that provision, and that the assessments could be sustained by reference to that provision.
It answered the second question referred by the Tribunal in favour of the Revenue and, in the circumstances, considered it unnecessary to answer the first question.
The present appeals have been filed by individuals who are partners of the firm.
No appeal has been filed by Surinder Nath who, at the time when the partnership was constituted was a minor and was not admitted to the benefits of the partnership.
The case has been dealt with throughout on the basis that if section 153(3) (ii) of the Act applies, and the bar of limitation thereby removed, it is immaterial that the assessments have been made under section 147(a) of the Act.
The question, therefore, is whether section 153(3)(ii) can be invoked.
It is not contended on behalf of the assessees that they are not covered by the expression "any person" in section 153(3)(ii) of the Act.
The only contention is that there is no "finding" or "direction" within the meaning of section 153(3) (ii) of the Act in the order of the Appellate Assistant Commissioner in consequence of which or to give effect to which the impugned assessments have been made.
The expressions "finding" and "direction" are limited in meaning.
A finding given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of the particular assessee and in relation to the particular assessment year.
To be a necessary finding, it must be directly involved in the disposal of the case.
It is possible in certain cases that in order to render a finding in respect of A, a finding in respect of B may be called for.
For instance, where the 278 facts show that the income can belong either to A or B and to no one else, a finding that it belongs to B or does not belong to B would be determinative of the issue whether it can be taxed as A 's income.
A finding respecting B is intimately involved as a step in the process of reaching the ultimate finding respecting A.
If, however, the finding as to A 's liability can be directly arrived at without necessitating a finding in respect of B, then a finding made in respect of B is an incidental finding only.
It is not a finding necessary for the disposal of the case pertaining to A.
The same principles seem to apply when the question is whether the income under enquiry is taxable in the assessment year under consideration or any other assessment year.
As regards the expression "direction" in section 153(3)(ii) of the Act, it is now well settled that it must be an express direction necessary for the disposal of the case before the authority or court.
It must also be a direction which the authority or court is empowered to give while deciding the case before it.
The expressions "finding" and "direction" in section 153(3) (ii) of the Act must be accordingly confined.
Section 153(3)(ii) is not a provision enlarging the jurisdiction of the authority or court.
It is a provision which merely raises the bar of limitation of making an assessment order under section 143 or section 144 or section 147.
Income Tax Officer, A Ward, Sitapur vs Murlidhar Bhagwan Das and N. Kt.
Sivalingam Chettiar vs Commissioner of Income tax, Madras.
The question formulated by the Tribunal raises the point whether the Appellate Assistant Commissioner could convert the provisions of section 147(1) into those of section 153(3)(ii) of the Act.
In view of section 153(3)(ii) dealing with limitation merely, it is not easy to appreciate the relevance or validity of the point.
In the present case, the Appellate Assistant Commissioner found that the cost of constructing the two buildings had not been met by the partnership firm.
The firm had merely advanced money to the individual four co owners, whose personal accounts in the books of the firm had been debited accordingly.
On that material the Appellate Assistant Commissioner held that the partnership was not the owner of the property and consequently any excess over the disclosed cost of construction could not be added in the assessments of the firm.
All that has been recorded is the finding that the partnership firm is not the owner of the properties.
It is true that the finding proceeds on the basis that the cost has been debited in the accounts of the four co owners.
But that does not mean, without anything 279 more, that the excess over the disclosed cost of construction constitutes the concealed income of the assessees.
The finding that the excess represents their individual income requires a proper enquiry and for that purpose an opportunity of being heard is needed to be given to the assessees.
Indeed, that is now plainly required by Explanation 3 to section 153(3).
The expression "another person" in the Explanation would include persons intimately connected with the person in whose case the order is made in the sense explained by this Court in Murlidhar Bhagwan Das (supra).
It is one thing for the partners of a firm to be required to explain the source of a receipt by the firm, it is quite another for them in their individual status to be asked to explain the source of amounts received by them as separate individuals.
On such opportunity being provided it would have been open to the assessees to show that the excess alleged over the disclosed cost of construction did not constitute any taxable income.
The finding contemplated in Explanation 3, it will be noted is a finding that the amount represents the income of another person.
We are unable to hold that the observation of the Appellate Assistant Commissioner can be described as such a finding in relation to the assessees.
It is also not possible to say that the order of the Appellate Assistant Commissioner contains a direction that the excess should be assessed in the hands of the co owners.
What is a "direction" for the purposes of section 153(3)(ii) of the Act has already been discussed.
In any event, whatever else it may amount to, on its very terms the observation that the Income Tax Officer "is free to take action" to assess the excess in the hands of the co owners cannot be described as a "direction".
A direction by a statutory authority is in the nature of an order requiring positive compliance.
When it is left to the option and discretion of the Income Tax Officer whether or not to take action it cannot, in our opinion, be described as a direction.
Therefore, in our judgment the order of the Appellate Assistant Commissioner contains neither a finding nor a direction within the meaning of section 153(3)(ii) of the Income Tax Act in consequence of which or to give effect to which the impugned assessment proceedings can be said to have been taken.
Reliance was placed by the Revenue on Commissioner of Income Tax, Andhra Pradesh vs Vadde Pullaiah & Co. In that case.
280 there were two appeals before the Appellate Assistant Commissioner, an appeal by the firm and another by Pulliah, a partner of the firm, filed in his individual status.
The question was whether the business was the business of the firm or that of Pullaiah.
In order to decide the appeal of the firm as well as that of Pullaiah, the Appellate Assistant Commissioner had to decide whether the business was that of the firm or that of Pullaiah.
In finding that the business was that of the firm and not of Pullaiah, the Appellate Assistant Commissioner had necessarily to inquire into a matter which covered the subject matter of both the appeals.
In the circumstances, differing from the High Court, we held that the provisions of section 153(3) (ii) of the Income Tax Act are not applicable to the instant case.
The question is answered in favour of the assessees and against the Revenue.
The High Court did not enter into the first question formulated for its opinion, that is to say, whether the provisions of section 147 (a) of the Income Tax Act are applicable for the assessment years 1955 56 and 1956 57.
It is agreed by the parties that if section 153 (3) (ii) of the Act cannot be invoked by the Revenue, it is necessary to decide the first question formulated by the Tribunal.
In view of the opinion expressed by us on the application of section 153(3)(ii) of the Act, the case must go back to the High Court for its opinion on the first question.
The appeals are allowed, the judgment dated September 17, 1971 of the High Court governing the cases of the different assessees for the assessment years 1955 56 and 1956 57 is set aside.
The provisions of section 153(3)(ii) of the Income Tax Act, 1961 are not applicable to the instant case.
Accordingly, the second question is answered in favour of the assessees and against the Revenue.
The cases are remanded to the High Court for its opinion on the first question formulated by the Income Tax Appellate Tribunal.
The assessees are entitled to their costs of these appeals.
N.V.K. Appeals allowed.

summary:
A Hindu undivided family consisting of the father (Karta) and his three sons carried on business.
Land was acquired in the name of the Karta and the price was paid out of the books of the family, and a building was constructed on the land.
Another building was constructed on another plot of land.
On a partial partition of the above Hindu undivided family its business was taken over by a partnership firm consisting of the Karta and the two elder sons and the firm debited a certain sum of money in the building account of the firm for the assessment year 1955 56 and a similar sum in respect of the other property for the assessment year 1956 57.
The appellants (assessees) who were members of the partnership firm, filed separate returns in their individual status for the assessment years 1955 56 and 1956 57 claiming that the two properties belonged to the four members of the family in their individual capacity.
The Income Tax Officer however regarded the properties as belonging to the partnership firm, and in the assessment proceedings of the firm for the said years, estimated the cost of construction at a higher figure, than the cost disclosed, and made additions accordingly to the returned income of the firm.
Allowing the appeals of the partnership firm the Appellate Assistant Commissioner deleted the additions holding that as the money was advanced by the firm and debited to the account of each co owner, the partnership firm was not the owner of the properties and therefore it could not be said to have earned any concealed income.
The Income Tax Officer then initiated proceedings under section 147(a) of the I.T. Act 1961 against the individual assessees for the assessment years 1955 56 and 1956 57 and the additions on account of concealed income originally made in the assessments of the partnership firm were divided between the assessees and included in their individual assessment, rejecting the plea of the assessees that there was no case for invoking the said section, as they had already disclosed that they had invested in the properties when filing their original individual returns.
On appeal the Appellate Assistant Commissioner though agreeing that there was no default on the part of the assessees to warrant proceedings under section 147(a) and though ordinarily the assessments would be barred by limitation, maintained the assessments on the ground that section 153(3)(ii) of the Act applied.
273 The Income Tax Appellate Tribunal though rejecting the contention that the assessees were not covered by the expression "any person" in section 153(3)(ii), pointed out that the provision could not be availed of by the Income Tax Officer as there was neither any "finding" nor a "direction" on the earlier order of the Appellate Assistant Commissioner in consequence of which, or to give effect to which, the impugned assessment could be said to have been made and that no opportunity had been afforded to the assessees of being heard as was required by Explanation 3 to section 153(3) before that earlier order was made.
It held that the Appellate Assistant Commissioner had no jurisdiction to convert the assessments made by the Income Tax Officer under section 147(a) to "assessments passed under section 153(3)(ii)".
The High Court on Reference by the Tribunal observed that the finding that the properties did not belong to the partnership firm and therefore the excess amount of the cost of construction could not be regarded as the concealed income of the firm, was necessary for the disposal of the appeals filed by the firm and as a corollary it was held that the buildings belonged to the co owners.
This necessitated the "direction" to the Income Tax officer that he was free to assess the excess amount in the hands of the co owners.
It held that the Appellate Assistant Commissioner could convert the provisions of section 147(i) into those of section 153(3)(ii) of the Act and that the provisions of section 153(3)(ii) of the Act applied to the case.
In the assessee 's appeals to this Court on the question whether section 153(3)(ii) can be invoked.
Allowing the appeals, ^ HELD: (1) The provisions of section 153(3)(ii) of the Income Tax Act, 1961 are not applicable to the instant case.
[280 C] (2) The expression "finding" and "direction" are limited in meaning.
A finding given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of the particular assessee and in relation to the particular assessment year.
To be a necessary finding, it must be directly involved in the disposal of the case.
[277G] (3) Where the facts show that the income can belong either to A or B and to no one else, a finding that it belongs to B or does not belong to B would be determinative of the issue whether it can be taxed as A 's income.
A finding respecting B is intimately involved as a step in the process of reaching the ultimate finding respecting A.
If, however, the finding as to A 's liability can be directly arrived at without necessitating a finding in respect of B, then a finding made in respect of B is an incidental finding only.
It is not a finding necessary for the disposal of the case pertaining to A.
The same principles apply when the question is whether the income under enquiry is taxable in the assessment year under consideration or any other assessment year.
[278A B] (4) It is now well settled that the expression "direction" in section 153(3) (ii) of the Act must mean an express direction necessary for the disposal of the case before the authority or court.
It must also be a direction which the authority or court is empowered to give while deciding the case before it.
[278C] 274 5.
(i) Section 153(3) (ii) is not a provision enlarging the jurisdiction of the authority or court.
It is a provision which merely raises the bar of limitation for making an assessment order under section 143 or section 144 or section 147.
[278D] Income Tax Officer, A Ward, Sitapur vs Murlidhar Bhagwan Das, ; N. Kt.
Sivalingam Chettiar vs Commissioner of Income tax, Madras, ; referred to.
In the instant case all that has been recorded is the finding that the partner ship firm is not the owner of the properties.
The finding proceeds on the basis that the cost has been debited in the accounts of the four co owners.
But that does not mean, that the excess over the disclosed cost of construction constitutes the concealed income of the assessees.
The finding that the excess represents their individual income requires a proper enquiry and for that purpose an opportunity of being heard is needed to be given to the assessees.
That is plainly required by Explanation 3 to section 153(3).
The finding contemplated in Explanation 3, is a finding that the amount represents the income of another person.
[278H 279B, D] (ii) It is one thing for the partners of a firm to be required to explain the source of a receipt by the firm, it is quite another for them in their individual status to be asked to explain the source of amounts received by them as separate individuals.
[279C] (iii) The observation of the Appellate Assistant Commissioner cannot be described as such a finding in relation to the assessee.
[279D] (iv) It is also not possible to say that the order of the Appellate Assistant Commissioner contains a direction that the excess should be assessed in the hands of the co owners.
The observation that the Income Tax Officer "is free to take action" cannot be described as a "direction".
A direction by a statutory authority is in the nature of an order requiring positive compliance.
When it is left to the option and direction of the Income Tax Officer whether or not to take action it cannot be described as a direction.
[279E F] (v) The order of the Appellate Assistant Commissioner contains neither a 'finding ' nor a 'direction ' within the meaning of section 153(3)(ii) of the Act in consequence of which or to give effect to which the impugned assessment proceedings can be said to have been taken.
[279G] Commissioner of Income tax, Andhra Pradesh vs Vadde Pullaiah & Co., ; referred to.