judgement:
N: Criminal Appeal No. 115 of 1971.
From the judgment and order dated 16th June 1970 of the Calcutta High Court in Criminal Revision Case No. 650 of 1967 and 934 Criminal Appeals Nos.
256 and 257 of 1971 Appeals by special leave from the judgments and order dated the 27 4 67 and 28 1 71 of the Calcutta High Court in Cases Nos. 2 4/67 and 2/67 Second Criminal Sessions 1967 respectively.
D. Mookherjee and M. N. Shroff for the appellants (in all the appeals).
V. section Desai, A. G. Menseses, J. B. Dadchanji & Co. for respondents in Crl.
256 57/71.
The Judgment of the Court was delivered by BHAGWATI, J.
These three appeals arise out of the same facts and it would, therefore, be convenient to dispose of them by a common judgment.
The respondent in all the three appeals is one Haridas Mundra.
He was at all material times the managing director of section B. Industrial Development Co. (Pvt.) Ltd., who were the managing agents of a company called Richardson & Cruddas Ltd. He and his brother Tulsidas Mundra were also directors of Richardson & Cruddas Ltd. The Life Insurance Corporation of India, which was the largest shareholder, filed a petition in the High Court of Calcutta being Matter No. 357 of 1957 seeking relief against mismanagement of Richardson & Cruddas Ltd. under sections 397 and 398 of the .
The respondent and other directors were impleaded as party respondents to the petition.
The High Court, on the application of the Life Insurance Corporation, made an interim order sometime in December 1957 appointing Sir Dhirendra Mitra as Special Officer to manage the affairs of Richardson & Cruddas Ltd. There was an audit report made by M/s Gutgutia & Co., Chartered Accountants, in regard to the accounts of Richardson & Cruddas Ltd., but the Special Officer was not satisfied with this report and he, therefore, after obtaining directions from the Company Judge, appointed M/s Ferguson & Co., a reputed firm of Chartered Accountants, to examine the accounts of the Company and submit their report.
Ferguson & Co. found, as a result of their investigation, that there were two bills in the records of the Company, one for Rs. 4,12,000 dated 20th June, 1955 and the other for Rs. 6,48,900 dated 27th June, 1955 purporting to be issued by a firm called Indian Machine Tools Co. having its address at 7, Mission Row, Calcutta, showing purchase of certain machinery by Richardson & Cruddas Ltd. from Indian Machine Tools Co. and on the strength of these two bills, entries were made in the books of account of Richardson & Cruddas Ltd. on 24th June, 1955 in respect of the first bill and on 29th June, 1955 in respect of the second bill, crediting the amounts of the bills to section B. Industrial Development Co. (Pvt.) Ltd. and debiting to the machinery account.
On making inquiries, Ferguson & Co. discovered that there was no firm of Indian Machine Tools Co. in existence at 7, Mission Row, Calcutta and no machinery was in fact purchased or received by Richardson & Cruddas Ltd. as shown in the two bills supposed to have been made out by Indian Machine Tools Co. The conclusion reached by Ferguson & Co. as a result of this probe was that Richard 935 son & Cruddas Ltd. has been defrauded of an aggregate sum of Rs. 10,60,900 representing the amounts of the two bills and that amount had been siphoned off to section B. Industrial Development Co. (Pvt.) Ltd. by using these two bills, which were forged, as genuine and they made a report to this effect to the Special officer.
The Special Officer, on receipt of the report, made an application to the Company Judge for a direction that he might be authorised to lodge a complaint with the police for further investigation into these facts set out in the report.
The Company Judge gave the necessary direction and the Special officer thereupon moved the police for making further investigation in the matter.
The Special Police Establishment started the investigation and ultimately submitted a chargesheet against the respondent and Tulsidas Mundra in the Court of the Chief Presidency Magistrate.
The respondent and Tulsidas Mundra were committed by the Chief President Magistrate to stand their trial before the High Court on charges under sections 120B, 409, 471 read with section 468 and section 477A against the respondent and sections 120B and 409 of the Indian Penal Code against Tulsidas Mundra.
When the trial commenced before the High Court, the Public Prosecutor made two applications on 17th April, 1967, one for amending the charges against the respondent by dropping sections 120B and 409 adding section 418 and the other for withdrawing the prosecution against Tulsidas Mundra.
Both these applications were allowed by the High Court, with the result that the trial proceeded only against the respondent on charges under sections 418, 471 read with section 468 and section 477A. Mr. Justice Bagchi, before whom the trial proceeded, felt that he had no jurisdiction to proceed with the trial in view of section 195(1)(c) of the Code of Criminal Procedure, 1898 and he, therefore, requested the Public Prosecutor as well as the counsel for the respondent to argue the point as to the applicability of that section.
The learned Judge, after hearing the arguments advanced before him on both sides, delivered an elaborate judgment holding that by reason of section 195(1) (c) of the Code of Criminal Procedure, 1898, which applied in the present case, he had no jurisdiction to proceed further with the trial of the respondent and he accordingly discharged the respondent by an order dated 27th April 1967.
The State being aggrieved by this judgment and order passed by Mr. Justice Bagchi in the exercise of original criminal jurisdiction, preferred a revision application against the same on the appellate side of the High Court.
The respondent raised a preliminary objection against the maintainability of the revision application on the ground that it was not competent to the High Court to exercise revisional jurisdiction against an order made by a judge of the High Court in a Sessions trial.
Since this preliminary objection raised a question of some importance it was referred to a full Bench and by a judgment dated 16th June, 1970, the Full Bench upheld the preliminary objection and held that the High Court had no jurisdiction in revision of some importance, it was referred to a Full Bench and by a judge of the High Court in the exercise of its original criminal jurisdiction and accordingly rejected the revision application.
936 It appears that the State had in the meantime filed an application in the High Court for leave to appeal to this Court against the judgment and order of Mr. Justice Bagchi.
This application was rejected by the learned Judge by an order dated 28th January, 1971 on the ground that it was not a judgment or a final order or a sentence falling within article 134(1)(c) of the Constitution.
The State thereupon preferred two petitions in this Court for special leave to appeal, one against the judgment and order of Mr. Justice Bagchi discharging the respondent and the other against the judgment and order of the same learned Judge rejecting the application of the State for leave to appeal to this Court.
This Court allowed both the petitions and granted special leave and hence we have Criminal Appeal No. 256 of 1971 directed against the judgment and order of Mr. Justice Bagchi discharging the respondent and Criminal Appeal No. 257 of 1971 against the judgment and order of that learned Judge refusing leave to appeal to the State.
The State also preferred an application in the High Court for leave to appeal to this Court against the judgment and order of the Full Bench rejecting the revision application of the State and on this application, leave was granted by the High Court under article 134(1) (c) of the Constitution and that is how Criminal Appeal No. 115 of 1971 is before us.
We will first deal with Criminal Appeal No. 256 of 1971.
If that criminal appeal is allowed and it is held that section 195(1) (c) has no applicability in the present case, it would become unnecessary to consider the other two criminal appeals.
Now, section 195(1)(c) provides that no court shall take cognisance of an offence described in section 463 or punishable under sections 471, 475 and 476 of the Indian Penal Code where such offence is alleged to have been committed by a party to any proceeding in any court in respect of any document produced or given in evidence in such proceeding, except on the complaint in writing of such court or of some other court to which such court is subordinate.
Obviously, on its plain language, the inhabitation in section 195(1) (c) applies only where a person is being tried for an offence described in section 463 or punishable under sections 471, 475 or section 476.
Here, the respondent was being tried for three distinct offences under sections 418, 471 and 477A. So far as the offences under sections 418 and 477A are concerned, they were plainly not covered by section 195(1)(c) and even if section 195(1)(c) were otherwise applicable, it is difficult to see how the trial of the respondent for these two offences could be said to be vitiated on the ground that no complaint in writing was made by the Company Judge.
The High Court had, therefore clearly and indubitably jurisdiction to proceed with the trial against the respondent in respect of the offences under sections 418 and 477A.
The question of lack of jurisdiction in the High Court to proceed with the trial could arise only in regard to the offence under section 471 which is one of the offences specified in section 195(1) (c).
But in regard to this offence also, we do not see how, on the facts of the present case, the applicability of section 195 (1) (c) could be invoked on behalf of the respondent.
The offence under section 471 which was charged against the respondent was that he had used the two forged bills of Indian Machine Tools Co. as 937 genuine on 24th and 29th June, 1955 by making, on the strength of these two bills, false entries in the books of account of Richardson & Cruddas Ltd. crediting the aggregate sum of Rs. 10,60,900/ in the account of section B. Industrial Development Co. (Pvt.) Ltd. and debiting it in the machinery account.
This offence was alleged to have been committed by the respondent on 24th and 29th June, 1955 long before the proceeding in Matter No. 357 of 1957 commenced and he became a party to that proceeding and it was not committed by him in his capacity as such party, that is, after having become a party to the proceeding.
Now, at one time there was sharp cleavage of opinion amongst various High Courts in regard to the true interpretation of section 195(1) (c).
Some High Courts held that to attract the prohibition contained in section 195(1)(c), the offence should be alleged to have been committed by the party to the proceeding in his character as such party, which means, after having become a party to the proceeding, while some others took the view that it was sufficient to attract the applicability of section 195(1) (c) even if the alleged offence was committed by the party to the proceeding prior to his becoming such party, provided that the document in question was produced or given in evidence in such proceeding.
This divergence of opinion amongst different High Courts was set at rest by this Court by its decision in Patel Lal Gbhai Somabhai vs The State of Gujarat(1) where this Court accepted the former view in preference to the latter.
This Court pointed out that the words of section 195(1) (c) clearly meant that the offence should be alleged to have been committed by the party to the proceeding in his character as such party, that is, after having become a party to the proceeding.
Sections 195(1)(c), 476 and 476A read together indicated beyond doubt that the legislature could not have intended to extend the prohibition contained in section 195(1) (c) to the offences mentioned therein when committed by a party to a proceeding prior to his becoming such party.
The scope and ambit of section 195(1) (c) was thus restricted by this Court to cases where the offence was alleged to have been committed by a party to a proceeding after he became such party and not before.
This view as to the interpretation of section 195(1) (c) was reaffirmed by this Court in Raghunath vs State of U.P.(2) and Mohan Lal vs The State of Rajasthan(3).
It must inevitably follow, on this view, that since the offence charged against the respondent was one alleged to have been committed by him before he became a party to the proceeding in Matter No. 357 of 1957, section 195(1)(c) had no application.
It may also be noted that neither of the two forged bills of Indian Machine Tools Co. was produced or given in evidence in the proceeding in Matter No. 357 of 1957.
Both these forged bills formed part of the record of Richardson & Cruddas Ltd. and they were taken possession of by the Special Officer along with the other record of the Company and nobody produced them or tendered them in evidence before the Company Judge in the proceeding in Matter No. 357 of 1957.
The requirement of section 195(1) (c) that the document in question should be 938 produced or given in evidence in the proceeding was, therefore, clearly not satisfied and on this ground also, section 195(1) (c) was not attracted in the present case.
We must, therefore, hold that the High Court was entitled to proceed with the trial of the respondent in respect of the offence under section 471 without any complaint in writing from the Company Judge before whom the proceeding in Matter No. 357 of 1957 was pending.
We accordingly allow Criminal Appeal No.256 of 1971, set aside the judgment of Mr. Justice Bagchi discharging the respondent and remand the case to the City Sessions Court, to which the original criminal jurisdiction in Sessions cases has now been transferred, for disposal according to law.
Since the case is a very old one, we would direct the City Sessions Court to take it up for hearing at an early date.
In the view taken by us in Criminal Appeal No. 256 of 1971, Criminal Appeals Nos. 115 and 257 of 1971 do not survive for consideration and we accordingly dismiss them.
P.B.R. Cr. A. 256 of 1971 allowed.
115 & 257 of 1971 dismissed.

summary:
The respondent, a director of a company was charged with offences under sections 418 and 471 read with sections 468 and 477A, I.P.C. on the ground that he defrauded the company.
At the trial, a single Judge of the High Court discharged the respondent on the view that he had no jurisdiction to proceed with the trial by reason of s.195(1)(c) of the Cr. P.C., 1898.
The full Bench of the High Court affirmed the view of the single Judge.
Allowing the appeals to this Court, ^ HELD: The High Court was entitled to proceed with the trial of the respondent in respect of offences under section 471 without any complaint in writing from the company Judge whom the proceeding was pending.
[938A] (1) Section 195(1)(c) of the Code of Criminal Procedure provides that no court shall take cognizance of an offence described in section 463 or punishable under sections 471, 475 and 476, Indian Penal Code where such offence is alleged to have been committed by a party to any proceeding in any court in respect of any document produced or given in evidence in such proceeding, except on the complaint in writing of such court or of some other court to which such court is subordinate.
The High Court had clearly and indubitably jurisdiction to proceed with the trial against the respondent in respect of offences under sections 418 and 477A. On its plain language the inhibition in section 195(1)(c) applies only where a person is being tried for an offence under section 463 or punishable under sections 471, 475 or 476.
Offences under 418 and section 477A are plainly not covered by section 195(1)(c) Cr.
P.C. [936 D G] (2) In regard to offences under section 471, I.P.C. it could not be said that the respondent could invoke the applicability of section 195(1)(c).
The offence under section 471 was committed by the respondent long before the proceeding in the Company matter commenced and he became a party to that proceeding, and it was not committed by him in his capacity as such party, i.e. after having become a party to the proceeding.
In Patel Laljibhai Somabhai vs The State of Gujarat this Court restricted the scope and ambit of section 195 (1)(c) to cases where the offence was alleged to have been committed by a party to a proceeding after he became such party and not before.
[936H, 937A D] Raghunath vs State of U.P., AIR 1973 S.C. 1100 and Mohan Lal vs The State of Rajasthan, AIR 1974 S.C. 299, referred to.
In the instant case since the offence charged against the respondent was one alleged to have been committed by him before he became a party to the proceeding in the company matter, section 195(1)(c) had no application.
Secondly, the forged bills had not been produced in evidence before the Company Judge in the proceeding before him.
The requirement of section 195(1)(c) that the document in question should be produced or given in evidence in the proceeding was, therefore, clearly not satisfied and on this ground also section 195(1)(c) was not attracted in the present case.
[937G, 938A]


judgement:
ivil Appeal No. 26 of 1955.
Appeal under Article 136 of the Constitution of India from the Judgment and Order dated the 28th February, 1953, of the Election Tribunal, Vellore, in Election Petition No. 84 of 1954.
N.C. Chatterjee, (R. Ganapathy Iyer, with him), for the appellant.
Naunit Lal, for respondent No. 1. 1955.
September, 15.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
This is an appeal by special leave against the order of the Election Tribunal, Vellore, declaring the election of the appellant to the Legislative Assembly void on the ground that there had been a violation of section 123(7) of the Representation of the People Act No. XLIII of 1951.
Under that section, it, is a major corrupt practice for a candidate or his agent to incur or authorise the incurring of expenditure in contravention of the Act or any rule made thereunder.
Rule 117 provides that: "No expense shall be incurred or authorised by a 471 candidate or his election agent on account of or in respect of the conduct and management of an election in any one constituency in a State in excess of the maximum amount specified in respect of that Constituency in Schedule V".
Under Schedule V, the maximum expense specified for election to the Madras State Legislature from a single member constituency, such as Ranipet, is Rs. 8,000.
The return of the expenses lodged by the appellant showed that he had spent in all Rs. 7,063 for the election, and that was within the limit allowed.
The charge against him in the petition was that he had failed to disclose in his return two sums of Rs. 500 each, spent for election purposes, and that with the addition of those amounts, the maximum speci fied had been exceeded.
As regards the first amount, the facts found are that on 12 9 1951 the appellant applied to the Tamil Nad Congress Committee for permission to contest the election as a Congress candidate, and along with his application he paid Rs. 500 out of which Rs. 100 was subscription for membership and Rs. 400 deposit, which was liable to be returned under the rules, in case the applicant was not adopted as the candidate, but not otherwise.
In fact, the appellant was adopted as the Congress candidate, and it was on that ticket that he fought and won the election.
The second payment of Rs. 500 was on 23 9 1951 to the North Arcot District Congress Committee, which was in charge of the Ranipet Constituency.
The Tribunal held that both these sums were paid for purposes of election and should have been included in the return made by the appellant, that if they were so included, the maximum prescribed was exceeded, and that therefore section 123(7) had been contravened, and accordingly declared the election void under section 100(2) (b) of the Act.
The appellant disputes the correctness of this order.
The Tribunal also recorded as part of the order a finding that the appellant had become subject to the disqualifications specified in section 140, sub clauses (1) (a) and (2).
The appellant attacks this finding on 60 472 the ground that it was given without notice to him, as required by the proviso to section 99.
The points that arise for decision in this appeal are (1) whether on the facts found, there was a contravention of section 123(7) of Act No. XLIII of 1951and (2) whether the finding that the appellant had become disqualified under section 140 is bad for want of notice under the proviso to section 99 of the Act.
(1) Taking first the sum of Rs. 500 paid by the appellant to the Tamil Nad Congress Committee on 12 9 1951, the contention of the appellant is that section 123(7) and Rule 117 have reference only to expenses incurred by a candidate or his agent, that the appellant was nominated as a candidate only on 16 11 1951, and that as the payment in question was made long prior to the filing of the nomination paper, the provisions aforesaid had no application.
That raises the question as to when the appellant became a 'candidate ' for purposes of section 123(7).
Section 79(b) of Act No. XLIII of 1951.
defines a candidate thus: "Candidate" means a person who has been or claims to have been duly nominated as a candidate at any election, and any such person shall be deemed to have been a candidate as from the time when, with the election in prospect, he began to hold himself out as a prospective candidate".
Under this definition which applies to section 123(7), all election expenses incurred by a candidate from the time when, with the election in prospect, he holds himself out as a prospective candidate and not merely from the date when he is nominated, will have to enter into the reckoning 'under Rule 117 read with Schedule V. That the election was in prospect when the amount of Rs. 500 was paid is clear from the very application of the appellant dated 12 9 1951 wherein he states that he desires "to contest as a 'Congress candidate in the forthcoming election".
That is not disputed by the appellant.
What he contends is that though the election was in prospect, he bad not become a prospective candidate at that time, and that he became so only when the Congress 473 adopted him as its candidate on 13 11 1951.
It was argued that it was open to the Congress Committee either to adopt him as its candidate or not, that if it did not adopt him, he could not, under the rules to which he had subscribed, stand for election at all, that until he was actually adopted therefor, his candidature was nebulous and uncertain, and that the application was consequently nothing more than a preliminary step in aid of his becoming a prospective candidate.
The question when a person becomes a candidate must be decided on the language of section 79(b).
Under that section, the candidature commences when the person begins to hold himself out as a prospective candidate.
The determining factor therefore is the decision of the candidate himself, not the act of other persons or bodies adopting him as their candidate.
In The Lichfield, case(1) at page 36, Baron Pollock observed: "I think the proper mode of judging a question of this kind is to take it from the point of view of the candidate himself.
Every man must judge when he will throw himself into the arena.
But it is his own choice when he throws down the glove and commences his candidature".
When, therefore, a question arises under section 79(b) whether a person had become a candidate at a given point of time, what has to be seen is whether at that time he had clearly and unambiguously declared his intention to stand as a candidate, so that it could be said of him that he held himself out as a prospective candidate.
That he has merely formed an intention to stand for election is not sufficient to make him a prospective candidate, because it is of the essence of the matter that he should bold himself out as a prospective candidate.
That can only be if he communicates that intention to the outside world by declaration or conduct from which it could be inferred that he intends to stand as a candidate.
Has that been established in this case? When the appellant made the payment of Rs. 500 to (1) 474 the Tamil Nad Congress Committee, did he merely evince an intention to stand as a candidate, or did he hold himself out as a prospective candidate? The application contains a clear declaration of his intention to contest the election, and that declaration is backed by the solemn act of payment of Rs. 500.
The appellant had thus clearly and unambiguously conveyed to the Committee his intention to stand as a candidate, and he thereby became a prospective candidate within the meaning of section 79(b).
The possi bility that the Congress might not adopt him as its ,candidate does not, as already mentioned, affect the position, as the section has regard only to the volition and conduct of the candidate.
It is true that if the Congress did not adopt him, the appellant might not be able to stand for election.
But such a result is implicit in the very notion of a prospective candidate, and does not militate against his becoming one from the date of his application.
It was also urged for the appellant that the declaration was made not to the constituency in the North Arcot District but to the Central Committee at Madras, and that unless there was proof of holding out to the electorate, the requirements of section 79(b) were not satisfied.
It may be that the holding out which is contemplated by that section is to the Constituency; but if it is the Central Committee that has to decide who shall be adopted for election from the concerned constituency, any declaration made to the Committee is, in effect, addressed to the constituency through its accredited representative.
The question when a candidature commences is, as has been held over and over again, one of fact, and a decision of the Tribunal on that question is not liable to be reviewed by this Court in special appeal.
In the present case, the Tribunal has, in a well considered judgment, formulated the correct principles to be applied in determining when a candidature commences, examined the evidence in the light of those principles, and recorded a finding that the appellant was a prospective candidate when he made the payment of 475 Rs. 500 on 12 9 1951, and we do not find any ground for differing from it.
Then, there is the payment of Rs. 500 made to the North Arcot District Congress Committee on 23 9 1951.
The contention of Mr. Chatterjee with reference to this payment is that unlike the payment dated 12 9 1951, this was not spent for purposes of election but was donation made to the Committee out of philanthropic motives.
It has been frequently pointed out that while it is meritorious to make a donation for charitable purposes, if that is made at the time or on the eve of an election, it is open to the charge that its real object was to induce the electors to vote in favour of the particular candidate, and that it should therefore be treated as election expense.
In The Wigan Case(1), Bowen, J. observed: ". .
I wish to answer the suggestion that this was merely charity.
Charity at election times ought to be kept by politicians in the background. .
In truth, I think, it will generally be found that the feeling which distributes relief to the poor at election time, though those who are the distributors may not be aware of it, is really not charity, but party feeling following in the steps of charity, wearing the dress of charity, and mimicking her gait".
In The Kingston Case(2), Ridley, J. said: "Now assume for the moment that a man forms a design, which at the time is in prospect, for that is the point; yet if circumstances alter, and an election becomes imminent, he will go on with that design at his risk".
It would again be a question of fact whether the payment of Rs. 500 by the appellant on 23 9 1951 was a pure act of charity or was an expense incurred for election purposes.
It was admitted by the Secretary of the North Arcot District Congress Committee that it was usual for the Tamil Nad Congress Committee to consult the local Committee in the matter of adoption of candidates, and that at the time the payment was made, it was known that the appellant had ap plied to be adopted by the Congress.
Exhibit A(7) (1) , (2) , 476 which is a statement of receipts and payments of the North Arcot District Congress Committee for the period 24 9 1951 to 24 5 1952 shows that the Committee started with an opening balance of Rs. 7 12 2, and that various amounts were collected including the sum of Rs. 500 paid by the appellant and utilised for election expenses.
The Tribunal held on a consideration of these facts that the payment in question could not be regarded as innocent, and "not motivated by the desire to obtain the recommendations of the North Arcot District Congress Committee for candidature of the first respondent".
No ground has been shown for differing from this conclusion.
It was finally contended for the appellant that the two payments dated 12 9 1951 and 23 9 1951 could not be said to be expenses incurred on account of the conduct and management of an election, and reliance was placed on the decision in The Kennington Ca8e(1), where it was held that payments made for the running of a newspaper started for supporting a candidate were not expenses incurred in the conduct and management of an election.
The facts of the present case have no resemblance to those found in that case, and the following comment on that decision in Parker 's Election Agent and Returning Officer, Fifth Edition, page 241 is instructive: "But this decision could not be safely followed except where the facts are precisely similar".
On the findings recorded above, the expenses incurred by the appellant come to Rs. 8,063, and the corrupt practice specified in section 123(7) has been committed.
The election was therefore rightly set aside under section 100(2)(b) of Act No. XLIII of 1951.
(2) It is next contended for the appellant that the Tribunal was in error in recording as part of the order a finding that by reason of the contravention of section 123(7), the appellant had become subject to the disqualification specified in section 140, without giving notice to him as required by the proviso to section (1) 477 99.
The question whether a party to an election petition is entitled to a notice under the proviso in respect of the very charges which were the subject matter of enquiry in the petition itself, has been considered by this Court in Civil Appeal No. 21 of 1955, and it has been held therein that if the party had opportunity given to him in the hearing of the petition to meet the very charge in respect of which a finding is to be recorded under section 99 (1) (a), then he is not entitled to a further notice in respect of the same matter, under the proviso.
In the present case, the finding under section 99(1) (a) relates to the very payments which were the subject matter of enquiry in the election petition, and therefore no notice was required to be given to the appellant under the proviso.
This objection also fails, and the appeal must accordingly be dismissed.
The respondent has stated through his counsel Shri Naunit Lal that he does not propose to contest the appeal.
There will accordingly be no order as to costs.
Appeal dismissed.

dataset_name: IN-Abs

summary:
The appellant, who fought and won the election as a Congress candidate, had applied to the Tamil Nad Congress Committee on 12 9 51 for party nomination stating his desire "to contest as a Congress candidate in the forthcoming election '? and paid a sum of Rs. 500 of which Rs. 100 was subscription for membership and Rs. 400 a deposit, liable to he refunded in case the application was refused.
On 23 9 51 he paid another gum of Rs. 500 as donation to the District Congress Committee.
On 13 11 51 he was adopted by the Congress as its candidate.
His nomination paper for the election was filed on 16 11 51.
The charge against him in the election petition was that he had failed to include these two sums in his return of election expenses and with the addition of these sums the maximum limit of election expenses prescribed for the constituency would be exceeded.
The Tribunal found that both these sums were paid for election purposes and the maximum prescribed had been exceeded and, therefore, section 123(7) had been contravened and declared the election void under section 100(2)(b) of the Act.
The Tribunal also recorded a _finding that the appellant was liable to the disqualifications specified in section 140, clauses (1)(a) and (2).
Held, affirming the decision of the Tribunal, that the exact point of time from which a person must be deemed to be a candidate within the meaning of section 79(b) of the Representation of the People Act is the time when, with the election in prospect, he himself decides to stand as a candidate and communicates such decision to others leaving no manner of doubt as to his intention.
This must be an met of his own volition and not that of other persons or bodies adopting him as their candidate.
The Lichfield case, [1895] 5 p.m. & H. 1, referred to.
That the applicant was a candidate from the date of his application to the Tamil Nad Congress Committee and the two sums were election expenses incurred by him and should have been shown in his return.
470 That the commencement of candidature in a particular case is.
a question of fact to be determined by the Tribunal and its decision in this regard is not liable to be reviewed by the Supreme Court in an appeal by special leave.
That whether a particular sum paid at the time or on the eve of the election was a donation, an act of charity or an election expense must depend on whether or not such payment was open to the charge of having been made in order to induce the voters to vote in favour of the donor.
This again is a question of fact to be decided by the Tribunal.
The Wigan case, , and The Kingston case , relied on.
The Kennington case, (1886] , held inapplicable.
That it was not necessary for the Tribunal to 'serve a notice under the proviso to section 99 of the Act on the appellant, a party to the election petition, to enable the Tribunal to record his liability to disqualification under section 140 of the Act in respect of the chargelevelled against him.


judgement:
CAs Nos.
449 454 of 1971 & 888 890 of 1974.
Appeals by special leave from the judgment and order dated the 27 4 1970 and 11 4 1973 of the Orissa High Court at Cuttack in special jurisdiction Cases Nos. 74 to 77 of 1968 and 70 72 of 1971 respectively.
Hardayal Hardy, and Sukumar Ghose, for the appellant in CAs 449 454 of 1971.
Gobind Das, G. section Chatterjee for the respondent.
Sukumar Ghose, for the appellant in CAs 888 890 of 1974.
M. C. Bhandare, B. Parthasarthi for the respondent in CAs 888 and 889 of 1974.
Ex parte for respondent in appeal No. 890 of 1974.
The Judgment of the Court was delivered by FAZAL ALI, J.
These are two groups of appeals one consisting of six appeals by the firm Balabhagas Hulaschand dealing in jute.
Civil Appeal No. 449/71 arises from the Judgment of the High Court in S.J.C. No. 41 of 1968 decreed on April 22, 1970 in respect of the assessment for the quarter ending June 1960.
The other five appeals are by the same firm in respect of the sales tax levied by the State of Orissa for the quarters ending December, March 1960 and December 1960 to June 1961, decided by the judgment of the High Court in S.J.C. Nos.
73 77 of 1968 dated April 27, 1970.
As all the appeals involve a common point they were consolidated and have been heard together.
Appeals Nos.
888 890/74 have been filed by the firm M/s Kaluram Ramkaran in respect of the assessment of tax made by the State of Orissa for the quarters ending September 30, 1961, June 30, 1962 and September 30, 1962.
These appeals arise out of the judgment of the High Court given in S.J.C. Nos.
70 72/1971 dated April 11, 1973.
The High Court in these cases followed its previous judgment, which is the subject matter of the six appeals mentioned above, and held that the levy was valid.
The points of law arising in these appeals also are identical to the points arising in the other six appeals referred to above, and in view of the common points of law involved in all these appeals we propose to dispose them of by one common judgment.
The appellant Balabhagas Hulaschand is a firm dealing in buying and selling jute and has its Head Office in Calcutta.
The firm used to purchase raw jute grown in Orissa and send the same to its buyers in the State of West Bengal.
The modus operandi was that after the 942 goods were received by the appellant firm they were despatched in bags from Cuttack and Dhanmandal railway stations to the Railway Mills Siding in Calcutta.
The bags were booked in the name of the buyer mills through their broker.
The goods on arrival in the Mills Railway siding at Calcutta were inspected by the buyer firm and if they were found to be in accordance with the specifications mentioned in the agreement of sale they were accepted.
The appellants in appeals Nos.
888 890/74 are a firm dealing in similar business with this difference that it has got its purchasing centre at Kendupatna in the District of Cuttack, and it was from Cuttack that the goods were despatched to the buyers in West Bengal.
The transaction of sale was entered into through a licensed broker "East India Jute and Hessian Exchange Ltd." and the buyers were the Managing Agents of the firm Kettlewell Bullen & Co., Ltd., Calcutta.
A letter has been produced by the parties which appears at p. 24 of the Paper Book which forms the contract or agreement of sale entered into between the parties in pursuance of which the goods were despatched to the buyer firm at Calcutta.
Under the contract the responsibility in respect of the quality, moisture, shortage in weight and risk in transit lay on the seller.
It is also not disputed that in all these appeals a concluded sale takes place when the goods despatched in the name of the Calcutta firm were ultimately accepted by the said firm and the price of the said goods was paid to the appellants.
On the basis of these concluded transactions of sale the Government of Orissa levied sales tax under section 3(a) of the , on the basis that the sales were inter State sales and, therefore, fell within the ambit of that section.
The assessing authorities upto the stage of the Tribunal negatived the contention of the appellants that the sale was merely an internal sale which took place in the State of West Bengal and not an inter State sale.
Thereafter the appellants moved the Tribunal for making a reference to the High Court of Orissa but failed to persuade the Tribunal to make a reference.
The appellants then moved the High Court of Orissa under section 24(3) of the Orissa Sales Tax Act to direct the Tribunal to make a statement of the case to the High Court.
Accordingly the Tribunal referred the following points for consideration: "(1) Did title to the goods pass in Orissa or in West Bengal? (2) Even if title in the goods passed in West Bengal whether in the facts and circumstances of this case, the transaction constituted "sale in the course of inter State trade ?" After considering the entire evidence and the circumstances and the law on the subject the High Court by its judgment dated April 22, 1970 negatived the plea taken by the appellants and held that although the title in the goods passed in West Bengal and the sale took place there, since the sale occasioned the movement of the goods from Orissa to West Bengal it was an inter State sale, and, therefore, it was clearly governed by section 3(a) of the .
Thereafter 943 the appellants moved the High Court, for granting leave to appeal to this Court, which having been rejected, the appellants filed an application to this Court for grant of special leave to appeal and the same having been granted, these appeals have been set down for hearing before us.
Mr. Hardy learned counsel for the appellants in Appeals Nos. 449 454/71 has submitted only one point for our consideration.
He has contended that on the facts found it would appear that the movement of goods from Orissa to West Bengal took place in pursuance of an agreement of sale and not in pursuance of the sale itself which actually took place in West Bengal, and, therefore, the sale is not covered by section 3(a) of the and the levy made by the State of Orissa was illegal.
Mr. Ghose who followed Mr. Hardy and was appearing in appeals Nos.
888 890/74 further added that the agreements in the instant cases were merely forward contracts in respect of unascertained and future goods, and, therefore, fell beyond the ambit of the provisions of the .
Mr. Gobind Das appearing for the State of Orissa repelled the contentions of the appellants and submitted that the circumstances clearly point out to the conclusion that although the sale took place in West Bengal it undoubtedly occasioned the movement of goods from one State to another, namely, from Orissa to West Bengal, and, therefore, were clearly covered by section 3(a) of the , and the High Court was right in rejecting the contention of the appellants.
Learned counsel for both the parties have cited a number of authorities of this Court and other High Courts before us.
But before going to the authorities we would like to deal with the scope and ambit of the and try to determine the incidents of a sale which would attract the provisions of section 3(a) of the .
Before, however, taking up this point it may be necessary to mention the admitted circumstances in the case on which both the parties are agreed.
They are (1) that there was an agreement or contract of sale between the appellant firms and the Calcutta firms by which the appellants agreed to sell raw jute of certain specifications of weight and quality to the Calcutta firms; (2) that at the time when the contract of sale was entered into, the raw jute was not in existence as it was being grown; (3) that after the goods were ready the same were booked in bags by the appellants not in their names but in the names of the buyer firms in Calcutta; (4) that the goods were booked from Cuttack and Dhanmandal railway stations in Orissa to the Railway Sidings of the buyer Mills at Calcutta; and 944 (5) that all the goods which are the subject matter of the sales tax levy in all these appeals were ultimately accepted by the buyers at Calcutta and a concluded sale took place at Calcutta in West Bengal.
In view of these admitted circumstances, we have to determine the legal position.
To begin with it would appear that the was passed in the year 1956 and before that there was some amount of controversy regarding the authority which was to levy tax in case of inter State trade.
In The Bengal Immunity Company Ltd. vs The State of Bihar and Others(1), Venkatarama Ayyar, J., speaking for the Court quoted Rottschaefer on Constitutional Law (1939 Edition) where sale in the course of inter State commerce was defined thus: (p. 785): "The activities of buying and selling constitute inter State commerce if the contracts therefor contemplate or necessarily involve the movement of goods in inter State commerce.
" The learned Judge also observed in that case: "A sale could be said to be in the course of inter State trade only if two conditions concur: (1) A sale of goods, and (2) a transport of those goods from one State to another under the contract of sale.
Unless both these conditions are satisfied, there can be no sale in the course of inter State trade.
" This Court, therefore, accepted the ingredients of an inter State sale.
It appears that soon after the decision in the Bengal Immunity Company Ltd 's case(1) was handed down it received statutory recognition in the shape of section 3(a) of the , which was enacted by the Parliament to remove any doubts or misgivings regarding the competence of a State Legislature to levy tax on inter State sales.
Section 2(g) of the defines "sale" thus: " 'sale ', with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on the hire purchase or other system of payment by instalments, but does not include a mortgage or hypothecation of or a charge or pledge on goods;" Analysing this definition it would appear that it postulates the following conditions: (i) there must be a transfer of property in goods by one person to another; 945 (ii) the transfer must be for cash or for deferred payment or for any other valuable consideration; and (iii)that such a transfer includes a transfer of goods on the hire purchase or other system or payment by instalments, etc.
It would thus be seen that the word 'sale ' has been given a very wide connotation by the Parliament so as to include within its fold not only sales of goods which are usually known in common parlance but also transactions which legally cannot be called sales, for instance, a transfer of goods on the hire purchase system.
It seems to us that the Parliament wanted to give the widest amplitude to the word 'sale ' and that is why, while in section 3 the words 'sale of goods ' have been used in section 4(2) clauses (a) & (b) which deal with the situs of the sale the words 'contract of sale ' have been used in the same sense.
In other words, the word 'sale ' defined in clause (g) of section 2 and used in section 3 and other sections is wide enough to include not only a concluded contract of sale but also a contract or agreement of sale provided the agreement of sale stipulates that there was a transfer of property or movement of goods.
In The Sales Tax Officer, Pilibhit vs Budh Prakash Jai Prakash(1) quoting Benjamin on Sale, (8th Edn.) Venkatarama Ayyara, J., who spoke for the Court observed as follows: " "The distinction between a sale and an agreement to sell under Section 1 of the English Act is thus stated by Benjamin on 'Sale ', Eighth Edition, 1950: "In order to constitute a sale there must be (1) An agreement to sell, by which alone the property does not pass; and (2) an actual sale, by which the property passes.
It will be observed that the definition of a contract of sale above cited includes a mere agreement to sell as well as an actual sale.
" This distinction between sales and agreements to sell based upon the passing of the property in the goods is of great importance in determining the rights of parties under a contract.
" It would thus appear that this Court clearly held that an agreement to sell by which the property did not actually pass was also an element of sale.
Of course in that case the Court had to decide a different point, namely, whether it was within the competence of a State Legislature to tax not a sale but even an agreement to sell where an actual sale had not taken place.
This Court held that the State Legislature was not competent to make such a levy under any statute passed by it 946 Section 3 of the runs thus: "3.
A sale or purchase of goods shall be deemed to take place in the course of inter State trade or commerce if the sale or purchase (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another." Section 3 consists of two clauses.
But in the instant case we are not concerned with clause (b) but only with clause (a).
Analysing clause (a) of section 3 of the it would appear that before section 3 can apply, the following facts must be established: (i) that there is a sale or purchase of goods; and (ii) that the sale occasions the movement of goods from one State to another.
If these two conditions are satisfied the sale becomes an inter State sale on which tax could be levied under the .
The serious question that arises for consideration in this case is whether or not the term 'sale of goods ' as used in section 3 includes an agreement to sell.
It has already been pointed out that an agreement to sell is undoubtedly an element of sale.
In fact a sale consists of three logical steps (i) that there is an offer; (ii) that there is an agreement to sell when the offer is accepted; and (iii) that in pursuance of the said agreement a concluded sale takes place.
When the statute uses the words "sale or purchase of goods" it automatically attracts the definition of sale of goods as given in section 4 of the which is a statute passed by the same Parliament and is to some extent in pari materia to the so far as transaction of sale is concerned.
Section 4 of the runs thus: "4.
(1) A contract of sale of goods is a contract where by the seller transfers or agrees to transfer the property in goods to the buyer for a price.
There may be a contract of sale between one part owner and another.
(2) A contract of sale may be absolute or conditional.
(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell.
(4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.
" 947 Section 4(1), therefore, clearly provides that a contract of sale of goods includes also an agreement to transfer property in goods to the buyer for a price.
The inevitable conclusion that follows from the combined effect of the interpretation of section 3 of the and section 4 of the is that an agreement to sell is also an essential ingredient of sale provided it contains a stipulation for transfer of goods from the seller to the buyer.
This being the position if there is a movement of goods from one State to another, not in pursuance of the sale itself, but in pursuance of an agreement to sell, which later merges into a sale, the movement of goods would be deemed to have been occasioned by the sale itself wherever it takes place.
In this view of the matter the question as to whether agreement to sell was a forward contract or a contract in respect of unascertainable or future goods would make no difference for the simple reason that when once a sale takes place, or for that matter when the goods start moving from one State to another in pursuance of the agreement to sell they cease to be future goods because they are in existence and they become also ascertainable.
The argument of the learned counsel for the appellant is based on a clear fallacy because it seeks to draw an artificial distinction between a contract of sale of ascertainable goods and a contract of sale of unascertainable or future goods.
This argument fails to take note of the fact that when the movement of the goods start they shed the character of either unascertained goods or future goods.
Hence for the purpose of application of section 3(a) of the the question whether the contract is a forward contract or not makes no material difference.
Further more, we can hardly conceive of any case where a sale would take place before the movement of goods.
Normally what happens is that there is a contract between the two parties in pursuance of which the goods move and when they are accepted and the price is paid the sale takes place.
There would, therefore, hardly, be any case where a sale would take place even before the movement of the goods.
We would illustrate our point of view by giving some concrete instances: Case No. I A is a dealer in goods in State X and enters into an agreement to sell his goods to in State X. In pursuance of the agreement A sends the goods from State X to State Y by booking the goods in the name of B.
In such a case it is obvious that the sale is preceded by the movement of the goods and the movement of goods being in pursuance of a contract which eventually merges into a sale the movement must be deemed to be occasioned by the sale.
The present case clearly falls within this category.
Case No. II.
A who is a dealer in State X agrees to sell goods to B but he books the goods from State X to State Y in his own name and his agent in State Y receives the goods on behalf of A. Thereafter the goods are delivered to B in State Y and if B accepts them a sale takes place.
It will be seen that in this case the movement of goods is neither in pursuance of the agreement to sell nor in the movement occasioned by the sale.
The seller himself takes the goods to 948 State Y and sells the goods there.
This is therefore, purely an internal sale which takes place in State Y and falls beyond the purview of section 3(a) of the not being an inter State sale.
Case No. III B a purchaser in State Y comes to State X and purchases the goods and pays the price thereof.
After having purchased the goods he then books the goods from State X to State Y in his own name.
This is also a case where the sale is purely an internal sale having taken place in State X and the movement of goods is not occasioned by the sale but takes place after the property is purchased by B and becomes his property.
Generally these are the only type of cases that can occur in the day to day commercial transactions.
It is, therefore, manifest that there can hardly be a case where once a sale takes place the movement is subsequent to the sale.
Mr. Hardy was unable to cite a single instance where such a contingency could arise and he accordingly submitted with his usual fairness that if no such contingency arose, then section 3(a) of the will have no application and the levy cannot be made.
We are unable to accept this contention because it is well settled that a statutory provision cannot be interpreted in a way which defeats the very object of the Act.
It is equally well settled that the Legislature does not waste words or introduce useless or redundant provisions.
In Indian Chamber of Commerce vs C.I.T. West Bengal II, Calcutta(1) a Division Bench of this Court to which I was also a party observed as follows: "Section 2(xv) must be interpreted in such a manner that every word is given a meaning and not to treat any expression as redundant or missing the accent of the amendatory phrase." In view of these circumstances we cannot hold that section 3(a) of the was redundant or would apply to contingencies which may not happen at all.
In these circumstances, therefore, the conclusions at which we arrive may be summarised as follows: (1) That the word 'sale ' appearing in section 2(g) as also in section 3(a) of the includes an agreement to sell also provided the said agreement contains a stipulation regarding passing of the property.
Even in the Bengal Immunity Company Ltd 's case (supra) this Court observed thus: ". the expression "contract of sale" in this context has the same meaning as the words "contract of buying and selling" in the definition of inter State commerce given by Rottschaefer in the passage already quoted, and they both refer to the bargain resulting in the sale irrespective of whether it is in the stage of an agreement to sell, or whether it is a sale in which title to the goods has passed to the purchaser.
That is also the definition of "contract of sale" in section 5(1) of the Indian .
" 949 (2) That the following conditions must be satisfied before a sale can be said to take place in the course of inter State trade or commerce: (i) that there is an agreement to sell which contains a stipulation express or implied regrading the movement of the goods from one State to another; (ii) that in pursuance of the said contract the goods in fact move form one State to another; and If these conditions are satisfied then by virtue of section 9 of the it is the State from which the goods move which will be competent to levy the tax under the provision of the .
This proposition is not, and cannot, be disputed by the learned counsel for the parties.
Lastly another aspect of the matter is that in order to determine whether a sale has taken place in the course of inter State trade or commerce the matter has to be approached only after a concluded sales has taken place because unless the sale takes place or in other words the agreement to sell merges into a concluded sale the question regarding the application of the provisions of the Central sales Tax Act does not arise at all because the tax is on sale and not on an agreement to sell or a forward contract.
Finally if all these conditions are satisfied the question whether the agreement to sell is in respect of ascertained or unascertained goods, existing or future goods, makes no difference whatsoever so far as the interpretation of section 3(a) of the is concerned.
Applying these principles let us see what is the position in the present appeals? The letter at p. 24 of the Paper Book in Civil Appeals Nos.
449 454/71 which may be quoted in extenso runs thus: "THE EAST INDIA JUTE & HESSIAN EXCHANGE LTD., CALCUTTA Transferable Specific Delivery Contract for Raw Jute.
Calcutts 1st April 1960 No. S.G.M./16/21 To Messrs Balabhagas Hulaschand 161/1, Mahatma Gandhi Road, Calcutta.
Dear Sirs, We have, subject to the terms and conditions hereinafter referred to, this d ay sold to M/s Fort Gloster Industries Ltd., New Mill 950 M/Agents M/s Kettlewell Bullen & Co. Ltd., Cal., by your order and on your account, the following goods which are Jute: Crop 1959 1960 .
1400 (one thousand four Cuttuck; Dhanmandal .
hundred only) maunds of the White Jute.
mark, assortment and quality as per margin and in sound dry storing 748 mds.
Bot @ Rs.34/ per md.
condition at the rate of: 748 mds.
Bot @ Rs.34/ per md.
Rupees Thirty four only for 652 mds.
Bot @ Rs.32/ per md.
white B. Br.
jute. __________ 1400 mds.
Rupees thirty two only for Marks: B.H. .
white Jute Bot.
free to Jute Bales of: .
buyer 's mill, siding and/or 1 1/2 to 5 mds. .
Weight guarantee at buyers ' mill.
Delivery to .
Fort Gloster, New Mill.
Shipment or despatch during .
April: May 1960.
Payment: . 90% Cash against documents and rest on approval.
Arbitration .
M/s Bengal Chamber of Commerce Industry L. M. D. Re weighment .
As per rules of M/s Bengal Chamber.
Insurance .
M/s. Marine & General insurance Co. Ltd. Cal.
"The foregoing terms and conditions as well as other terms and conditions applicable to this contract are as per the terms and conditions of the transferable Specific Delivery Contract for Raw jute of the East India Jute & Hessian Exchange Ltd., Calcutta, and are subject to the Bye Laws of that Exchange for trading in Transferable Specific Delivery Contracts for Raw Jute in force for the time being.
Brokerage at one per cent.
Yours faithfully, Shree Gopalji Sahay Meghraj Sd./ Illegible Licensed Broker The East India Jute & Hessian Exchange Ltd." It is conceded by counsel for the appellants that this letter or other letters in identical terms form the basis of the contracts of sale.
The first part of the contract clearly mentions that the goods have been sold by the seller to the buyer.
But of course that does not make the letter a concluded sale because the letter read as a whole would show that it is in respect of some future goods which have yet to be grown.
We are, however, unable to agree with the learned counsel for the appellant that this contract is in respect of unascertained goods because the quality and the colour of the jute, the weight, the price, the markings etc.
are all mentioned in the contract.
Therefore the goods are no doubt ascertainable and must be according to the specifications mentioned in the agreement.
This contract was entered into on April 1, 1960 and in some appeals a little later.
A perusal of this contract 951 also shows that the appellant undertook to send the goods from Cuttack to the buyers ' Mills siding in Calcutta and it is not disputed that after the jute was ready it was to be booked in bags from railway stations in Orissa to the Mills Siding of the buyer in Calcutta.
It is, therefore, clear that the goods moved in pursuance of the terms of the agreement from the seller in Orissa to the buyer in Calcutta.
It is also clear that the movement of the goods from Orissa to West Bengal forms a clear stipulation or incident of the agreement to sell.
The agreement also provides that there has been a transfer of property from the seller to the buyer which is the effect of the first para referred to above.
It is also not disputed that after the goods reached Calcutta they were finally accepted by the buyers and a concluded sale took place in Calcutta in the State of West Bengal.
In view of these circumstances there can be no manner of doubt that the sale falls squarely within section 3 (a) of the and since the goods moved from the State of Orissa it is the State of Orissa alone which is competent to levy the tax under section 9 of the .
We shall now discuss the various authorities cited by counsel for the parties to show that the view taken by us in this case is amply supported by a long catena of decisions of this Court handed down during the last two decades.
The learned counsel for the appellant heavily relied on the observations made by the Madras High Court in Cement Distributors (P) Ltd. vs Deputy Commercial Tax Officer, Lalgudi & Ors.(1): "Thus if the goods are unascertained, then until it is appropriated to the contract by a known process, sale is not complete.
Central sales tax is not leviable by the despatching State in such cases, notwithstanding inter State movement of the goods, as they are considered in section 4 as "out of State.
" To begin with, this case has no application to the facts of the present case, because the decision in the Cement Distributors (P) Ltd. 's case (supra) was governed by the provisions of section 4 of the and the High Court of Madras came to a finding that the sale was not at all complete, in view of the fact that the goods were unascertained.
Further more, the decision was given on the peculiar facts in that case by which the branch at Calcutta had merely been authorised by the State Trading Corporation of India Ltd to receive the goods despatched and it is doubtful whether there was a complete transaction of sale in that case.
If however, that case is taken to be an authority for the proposition that where the goods are unascertained and even if there is an inter State movement of goods the sale is not an inter State sale, we find ourselves difficult to agree with that view which is not in consonance with our interpretation of the provisions of the .
The appellant then relied on another decision of the Madras High Court in Larsen and Toubro Ltd. Madras 2 & others vs Joint Commercial Tax Officer(2).
To begin with, this case appears to have been 952 overruled by this Court in The State of Madras vs N. K. Nataraja Mudaliar(1) on another point.
Even so, we are unable to see how this case is of any assistance to the appellant.
Veeraswami, J., as he then was, speaking for the Court, observed as follows: "The essential tests of a sale or purchase in the course of inter State trade, commerce and inter course or import into or export out of the territory of India are, (1) whether there is movement of goods from one State to another or into or out of the territory of India, (2) whether such movement is occasioned by the contract of sale or purchase and (3) alternatively whether, during such movement, the sale or purchase is effected by transfer of documents of title to the goods." The learned Judge also observed: "A sale could be said to be in the course of inter State trade only if two conditions concur: (1) A sale of goods, and (2) a transport of those goods from one State to another under the contract of sale.
Unless both these conditions are satisfied, there can be no sale in the course of inter State trade.
" Thus the ratio laid down by the Court is entirely in consonance with the view taken by us regarding the conditions of an inter State sale.
Reliance was also placed on Tata Iron and Steel Co. Ltd. vs S.R. Sarkar and Others(2) where Shah, J., while delivering the majority judgment of the Court, observed as follows: "In our view, therefore, within cl.
(b) of section 3 are included sales in which property in the goods passes during the movement of the goods from one State to another by transfer of document of title thereto: cl.
(a) of section 3 covers sales, other than those included in cl.
(b), in which the movement of goods from one State to another is the result of a covenant or incident of the contract of sale, and property in the goods passes in either State.
" Sarkar, J., who gave a dissenting judgment observed as follows: (pp. 407 & 408) "The question then arises, when does a sale occasion the movement of goods sold ? It seems clear to us that a sale can occasion the movement of the goods sold only when the terms of the sale provide that the goods would be moved; in other words, a sale occasions a movement of goods when the contract of sale so provides.
" "We have then come to this that cl.
(a) of section 3 contemplates a sale where the contract of sale occasions the movement of the goods sold and cl.
(b), a sale where transfer of 953 property in the goods sold is effected by a transfer of documents of title to them.
Of course, in the first case, the movement of the goods must be from one State to another and in the second, the document of title must be transferred during such movement.
" In State Trading Corporation of India Ltd. vs State of Mysore(1) this Court observed as follows: "Since the permits with which we are concerned provided that the supply had to be made from one or other factory situate outside Mysore, the contracts must be deemed to have contained a covenant that the goods would be supplied in Mysore from a place situate outside its borders.
A sale under such a contract would clearly be an inter State sale as defined in section 3 (a) of the .
" Similarly in Tata Engineering & Locomotive Co. Ltd. vs The Assistant Commissioner of Commercial Taxes & Anr.(2) while describing the incidents of an inter State sale, this Court observed as follows: "A sale being transfer of property becomes taxable under section 3(a) 'if the movement of goods from one State to another is under a covenant or incident of the contract of sale '.
" The same view was taken in a later decision of this Court in M/s Kelvinator of India Ltd. vs The State of Haryana(3) where Khanna, J., speaking for the Court observed as follows: "It is also plain from the language of Section 3(a) of the Act that the movement of goods from one State to another must be under the contract of sale.
A movement of goods which takes place independently of a contract of sale would not fall within the ambit of the above clause.
Perusal of Section 3 (a) further makes it manifest that there must be a contract of sale preceding the movement of the goods from one State to another, and the movement of goods should have been caused by and be the result of that contract of sale.
If there was no contract of sale preceding the movement of goods, the movement can obviously be not ascribed to a contract of sale nor can it be said that the sale has occasioned the movement of goods from one State to the other.
" In that case, however, on the facts found by the High Court this Court held that the sale was not an inter State sale but an internal sale which took place in Delhi.
In that case there was no movement of the goods from one State to another in pursuance of the contract of sale.
In other words, the facts of this case clearly fell within Case No. II, which has been described by us, above.
To the same effect is the recent decision of this Court in The State of Tamil Nadu vs The Cement Distributors (P) Ltd. and Others(4) in which reliance was placed on the earlier decision of this Court in Tata Iron and Steel Co. Ltd. vs section R. Sarkar & Ors.
(supra).
954 In oil India Ltd. vs The Superintendent of Taxes and Others (1), while lucidly describing the incidents of an inter State sale, Mathew, J., observed as follows: "This Court has held in a number of cases that if the movement of goods from one State to another is the result of a covenant or an incident of the contract of sale, then the sale is an inter State sale.
x x x x x x Even though Clause 7 of the supplemental agreement does not expressly provide for movement of the goods, it is clear that the parties envisaged the movement of crude oil in pursuance to the contract from the State of Assam to the State of Bihar.
In other words, the movement of crude oil from the State of Assam to the State of Bihar was an incident of the contract of sale.
No matter in which State the property in the goods passes, a sale which occasions "movement of goods" from one State to another is a sale in the course of inter State trade.
The inter State movement must be the result of a covenant express or implied in the contract of sale or an incident of the contract.
It is not necessary that the sale must precede the inter State movement in order that the sale may be deemed to have occasioned such movement.
It is also not necessary for a sale to be deemed to have taken place in the course of inter State trade or commerce, that the covenant regarding inter State movement must be specified in the contract itself.
It would be enough if the movement was in pursuance of and incidental to the contract of sale.
" We might mention here that the case cited above appears to be on all fours with the facts of the present case.
In that case also the goods were supplied from Assam to Bihar through the pipelines in Assam to Barauni in Bihar.
This Court observed that no matter in which State the property in goods passes the sale undoubtedly occasioned movement of the goods which was sufficient to bring the case within the ambit of section 3(a) of the .
Thus the authorities discussed above by us fully support the principles and the ratio laid down by us.
We have already pointed out that even though the sale took place at Calcutta, as rightly found by the High Court, since the movement of goods preceded the sale in pursuance of the contract of sale which contained a clear stipulation that the goods were to move from Orissa to Calcutta in West Bengal, the movement of goods was occasioned by the sale itself which took place in Calcutta.
In these circumstances, therefore, the High Court was legally justified in holding that in all these appeals the cases were clearly covered by the provisions of section 3(a) of the .
We, therefore, find no merit in these appeals which are accordingly dismissed, but in the circumstances without any order as to costs.
S.R. Appeals dismissed.

summary:
The appellant, a firm dealing in buying and selling jute with headquarters at Calcutta, used to purchase raw jute grown in Orissa and despatch them in bags from Cuttack and Dhanmandal Railway Station to the Railway Mills Siding Station in Calcutta.
The goods were booked in the name of the buyer "KB & Co" through its licensed broker "EIJ & HE Ltd." and on the arrival of the goods the buyer inspected the goods and if they were found in accordance with the specifications mentioned in the agreement of sale, accepted them and paid their price.
On the basis of these concluded transactions of sale the respondent State, levied sales tax under section 3(a) of the on the basis that the sales were interstate sales.
Since the assessing authorities negatived the contention of the appellant that the sale was merely an internal sale which took place in the State of West Bengal and since the Tribunal refused to make a reference, the appellant moved the High Court under section 24(3) of the Orissa Sales Tax Act to direct the Tribunal to make a statement of the case to the High Court.
The Tribunal referred two points, viz., (i) Did the title to the goods pass in Orissa or in West Bengal and (ii) Even if the title in the goods passed in West Bengal, whether in the facts and circumstances of this case, the transaction constituted "sale in the course of inter state trade" ? The High Court held that although the title in the goods passed in West Bengal and the sale took place there, since the sale occasioned the movement of goods from Orissa to West Bengal it was an inter State sale, and, therefore, it was clearly governed by section 3(a) of the .
Affirming the judgment of the High Court and dismissing the appeals by special leave, the Court, ^ HELD: (1) The definition of "sale" in section 2(g) of the postulates the following conditions.
(i) There must be a transfer of property in goods by one person to another; (ii) The transfer must be for cash or for deferred payment or for any other valuable consideration; and (iii) That such a transfer includes a transfer of goods on the hire purchase or other system of payment by instalment etc.
The word "sale" defined in cl.
(g) of section 2 and used in section 3(a), 4(2) (a) and (b) is wide enough to include not only a concluded contract of sale but also a contract or agreement of sale provided the agreement of sale stipulates that there was a transfer of property or movement 940 of goods.
An agreement to sell by which the property did not actually pass was also an element of sale.
[944H, 945A, C, G] Bengal Immunity Co. Ltd. vs The State of Bihar and others, , relied on.
Sales Tax Officer, Pilibhit vs Budh Prakash Jai Prakash, 5 S.T.C. 193, 196, followed.
(2) When the statute uses the words "sale or purchase of goods", it automatically attracts the definition of "sale of goods" as given in section 4 of the , and is to some extent pari materia to section 3 of the so far as the transactions of sale is concerned.
The inevitable conclusion that fellows from the combined effect of the interpretation of section 3 of the and section 4 of the is that an agreement to sell is also an essential ingredient of sale provided it contains a stipulation of transfer of goods from the seller to the buyer.
[946E F, 947A] (3) Since the word "sale" appearing in section 2(g) as also in section 3(a) of the Act includes an agreement to sell provided the said agreement contains a stipulation regarding passing of the property, if there is a movement of goods from one State to another, not in pursuance of the sale itself, but in pursuance of an agreement to sell, which later merges into a sale, the movement of goods would be deemed to have been occasioned by the sale itself wherever it takes place.
When the movement of goods start, they shed the character of either unascertained goods or future goods.
For the purpose of application of section 3(a) of the , the question whether the contract is a forward contract or not makes no material difference.
[947B, C D, 948F] (4) A statutory provision cannot be interpreted in a way which defeats the very object of the Act.
It is equally well settled that the Legislature does not waste words or introduce useless or redundant provisions.
The contention that section 3(a) of the was redundant or would apply to contingencies which may not happen at all, is not correct.
[948D] Indian Chamber of Commerce vs C.I.T., West Bengal II Calcutta, 1976(1) SCR 830, applied.
(5) The following conditions must be satisfied before a sale can be said to take place in the course of interstate trade or commerce: (i) that there is an agreement to sell which contains a stipulation express or implied regarding the movement of the goods from one State to another.
(ii) that in pursuance of the said contract the goods, in fact, move from one State to another; and (iii) that ultimately a concluded sale takes place in the State where the goods are sent which must be different from the State from which the goods move, because the tax is on sale and not on an agreement to sell or a forward contract.
If these conditions are satisfied then by virtue of section 9 of the it is the State from which the goods move which will be competent to levy the tax under the provisions of the .
The question whether the agreement to sell is in respect of ascertained or unascertained goods, existing or future goods, make no difference whatsoever so far as the interpretation of section 3(a) of the Central Sales Tax is concerned.
[949A C, E] Cement Distributors (P) Ltd. vs Deputy Commercial Tax Officer, Lalgudi and others, 23 S.T.C. 86, 94, distinguished.
Larsen and Toubro Ltd., Madras 2 & others.
vs Joint Commercial Tax Officer, 20 S.T.C. 150, 186 & 187; The State of Madras vs N. K. Nataraja Mudaliar ; , 391; Tata Iron and Steel Co. Ltd. vs section R. Sarkar and others ; , 391; State Trading Corporation of India Ltd. vs State of Mysore, , 797 798; Tata Engineering & Locomotive Co. Ltd. 941 vs The Assistant Commissioner of Commercial Taxes & Anr., ; , 866; M/s. Kelvinator of India Ltd. vs The State of Haryana , 560; The State of Tamil Nadu vs The Cement Distributors (P) Ltd. and others and Oil India Ltd. vs The Superintendent of Taxes and others, referred to.


judgement:
Civil Appeals Nos.
972 973 of 1968.
From the Judgment and Decree dated the 1st December 1961, of the Allahabad High Court in First Appeal No. 285 of 1958.
Gobind Das and section P. Nayar for the appellants in Appeal 972 and for Respondents in C.A. 973/68.
section M. Jain, J. P. Goyal, section K. Jain and Shripal Singh for Respondent in Appeal 972 and for the Appellant in C.A. 973/68.
The Judgment of the Court was delivered by FAZAL ALI J.
This is a defendant 's appeal by certificate granted by the High Court of Allahabad under article 133(1) of the Constitution of India.
The plaintiff which is a registered partnership firm at Banaras dealing in Bidi tobacco filed the present suit for damages against the defendant Union of India on the allegation that it had 903 despatched a consignment containing tobacco at Banaras for Gaya in Bihar for delivery to the firm Chaturbhai M. Patel & Co. at Gaya.
This consignment was booked under Invoice No. 107 Railway Receipt No. 89551 dated July 9, 1954.
The plaintiff 's allegation was that due to negligence of the Railway the identical goods despatched by the plaintiff did not reach the consignee at Gaya but the goods containing inferior type of tobacco reached there which caused serious loss to the plaintiff.
The suit was filed after notice under section 80 of the Code of Civil Procedure was given.
The plaintiff also claimed refund of the excise duty which was paid by the plaintiff.
The suit was resisted by the defendant mainly on the ground that due to fraud and collusion between the plaintiff in Banaras and his father 's firm in Gujarat, the consignment at Benaras was interchanged by manipulation and deliberation so that the inferior goods were sent to Gaya and the superior goods were sent to Gujarat which were sold by the firm at Gujarat and huge profit was earned by the aforesaid firm.
The Trial Court framed a number of issues and accepted the defence and accordingly dismissed the suit.
The plaintiff then filed an appeal in the High Court of Allahabad which reversed the judgment and decree of the Trial Court and decreed the plaintiff 's suit for damages but refused to pass a decree regarding the amount of the excise duty said to have been paid by the plaintiff.
Mr. Gobind Das appearing for the appellant submitted that there were number of suspicious circumstances which clearly went to show that some amount of fraud had been played on the defendant by the collusion of the plaintiff with his father at Gujarat whose firm was known as Mangal Bhai Prabhu Das.
In support of his contention he has relied on three or four circumstances which have been fully discussed by the High Court.
On a perusal of the judgment of the High Court we find that the case is concluded by findings of fact and normally the appellant could not have been granted the certificate for leave to appeal but for the fact that the judgment of the High Court was one of reversal and the valuation of the suit was over Rs. 20,000/ .
Nevertheless the High Court has discussed the suspicious circumstances relied upon by the defendant/appellant and has held that there was no conclusive or reliable evidence to prove the fraud or collusion as alleged by the defendant.
One of the circumstances was that on June 9, 1954 a consignment of 191 bags of tobacco was booked by Mangal Bhai Prabhu Das the father of the plaintiff from Railway Station Vasad in Gujarat to Indian Zarada Factory, Banaras which was owned by the plaintiff.
This consignment was taken delivery of by one Mohanlal an agent of the Indian Zarada Factory at Benaras and was re warehoused in the bonded warehouse of the Factory at Benaras.
On the same day the consignment of the plaintiff was also warehoused at the same place.
Thereafter a forwarding note was presented at Benaras on June 24, 1954 on behalf of the Indian Zarada Factory for despatch of 174 bags of tobacco to his father Mangal Bhai Prabhu Das Patel in Gujarat on the ground that the goods were of an inferior quality.
It is said that the goods of inferior quality were deliberately despatched to Gaya, 904 Whereas the other consignment was sent to Gujarat by changing the marks on the bags.
The High Court, however, has pointed out that there was absolutely no evidence to show that such a manipulation or changing the marks was done either by the plaintiff or his agent at Benaras.
Similarly reliance was placed on the fact that although the consignment reached Gaya on July 17, 1954 yet the delivery of the aforesaid consignment was taken by the plaintiff cousin at Gaya more than a month thereafter i.e. on August 25, 1954 and that too after the Railway authorities at Gaya wrote a letter to the consignee on August 23, 1954.
The High Court has pointed out that there is no evidence to show that the consignee at Gaya knew that the goods had arrived there on July 17, 1954 and the letter which was sent to the uncle of the plaintiff at Gaya was received by him after a long time.
There is no doubt that there was some amount of negligence on the part of the Railway authorities because they wrote a letter to the consignee at Gaya more than a month after the goods were received and if they had sent the letter immediately after receipt of the consignment, and if in spite of that there was delay in taking delivery, something could be said for the plaintiff.
Lastly it was urged by Mr. Gobind Das for the appellant that the plaintiff who was the owner of the Indian Zarada Factory at Benaras and his father who was the owner of the firm in Gujarat appear to have entered into a conspiracy to defraud the defendant in view of their close relationship.
The High Court has rightly pointed out that the plaintiff is a separated son and has nothing in common with his father, except the business in tobacco which is carried on at two different places.
It has also been pointed out by the High Court that the father has married a second wife and that shows that there is no close affinity between the plaintiff and his father.
Further more, there is absolutely no evidence to show any prior meeting of minds between the plaintiff and his father before the consignment was sent either to Gujarat or Gaya so as to raise an inference that these two persons had hatched up a conspiracy in order to defraud the defendant.
This argument, therefore, has no force and must be overruled.
The High Court has carefully considered the various circumstances relied upon by the appellant and has held that they are not at all conclusive to prove the case of fraud.
It is well settled that fraud like any other charge of a criminal offence whether made in civil or criminal proceedings, must be established beyond reasonable doubt; per Lord Atkin in A. L. N. Narayanan Chettyar vs Official Assignee, High Court Rangoon.
However suspicious may be the circumstances, however strange the coincidences, and however grave the doubts, suspicion alone can never take the place of proof.
In our normal life we are sometimes faced with unexplainable phenomenon and strange coincidences, for, as it is said, truth is stronger than fiction.
In these circumstances, therefore, after going through the judgment of the High Court we are satisfied that the appellant has not been able to make out a case of fraud as found by the High Court.
As such the High Court 905 was fully justified in negativing the plea of fraud and in decreeing the suit of the plaintiff.
Cross objections have been filed by the plaintiff/respondent for disallowing the amount of excise duty paid by the plaintiff.
After persuing the judgment of the High Court, we find absolutely no merit in these cross objections.
The result is that the appeal and the cross objections are dismissed, but in the circumstances of the case without any order as to costs.
P.B.R. Appeals dismissed.

summary:
The resondent filed a suit against the Union of India alleging that due to negligence of the railways a consignment of tobacco despatched by him to Gaya was substituted in transit and that in its place inferior tobacco was delivered at Gaya.
The railways on the other hand alleged fraud and collusion between the respondent and his father, also a bidi tobacco merchant in Gujarat, because by deliberate manipulation, the respondent consigned inferior goods to Gaya and superior goods to Gujarat.
The trial court dismissed the respondent 's suit.
The High Court allowed the suit for damages but refused refund of excise duty said to have been paid by the respondent.
Dismissing the appeal to this Court, ^ HELD: (1) The appellant had not been able to make out a case of fraud.
The High Court was justified in negativing the plea of fraud and in decreeing the suit.
[904 FG] (2) Fraud, like any other charge of criminal offence, whether made in civil or criminal proceedings must be established beyond reasonable doubt.
However suspicious may be the circumstances, however strange the coincidences and however grave the doubts, suspicion alone can never take the place of proof.
[904 FG] A. L. N. Narayanan Chettyar vs Official Assignee, High Court Rangoon, A.I.R. 1941 P.C. 93, referred to.
In the instant case there is absolutely no evidence to show any prior meeting of the minds between the respondent and his father before the consignment was sent either to Gujarat or Gaya so as to raise an inference that these two persons had hatched up a conspiracy in order to defraud the appellant.
[904 EF]