judgement:
Appeal No. 126 of 1966.
Appeal from the judgment and order dated November 29, and December 2, 1963 of the Gujarat High Court in Special Civil Application No. 641 of 1962.
736 K. R. Chaudhuri, for the appellant.
R. M. Hazarnavis, K. L. Hathi and section P. Nayar, for the respondents.
section T. Desai and I. N. Shroff, for the intervener.
The Judgment of the Court was delivered by Hegde, J.
The main controversy in this appeal by certificate is as to the constitutional validity of section 12A(4) of the Bombay Sales Tax 1946, to be hereinafter referred to as the Act.
As in our judgment that provision is void, the same being violative of article 19(1)(f) of the Constitution, we have not thought it necessary to examine the other contentions raised ' in the appeal.
The facts material for the purpose of deciding the question formulated above, are these: The appellants are dealers registered tinder the Act carrying on business in art silk, cotton and hand loom cloth.
During the period January 26, 1950 to March 31, 1950, the appellants effected various sales outside the State of Bombay.
As those sales were protected by article 286(1)(a) of the Constitution, they were outside the reach of the Act.
But yet the sales tax officer assessed the turnover relating to those sales.
The tax levied in respect of that turnover was Rs. 4,494/3/9.
In appeal, the order of the sales tax officer was affirmed by the Assistant Collector of sales,tax.
But the Additional Collector of sales tax in revision revised the levy to some extent and, ordered a refund of Rs. 2,238/0/6.
That amount was paid to the assessees.
Not being satisfied with the order of the Additional Collector of sales tax, the appellants took up the matter in revision to the Sales Tax Appellate Tribunal.
But even before they moved the Tribunal in revision, the Additional Collector of sales tax by his letter dated May 17, 1958, informed the appellants that unless they furnished to the sales tax officer proof of their having refunded the amount paid to them in pursuance of his order to the purchasers within a period of three months from the date of that notice, the same would be liable to be forfeited under section 12A(4) The Tribunal by its 'order dated November 26, 1958, allowed the claim of the appellants in full and directed ' the refund of an addi tional sum of Rs. 2,256/2/6.
During the period April 1, 1950 to March 31, 1951 the appel lants effected various sales outside the State of Bombay.
The turn, over relating to those sales was also brought to tax by the sales tax officer and in that connection a tax of Rs. 23,806/3/6 was levied on the appellants.
In appeal, the Assistant Collector of sale tax allowed the appellants ' claim in part and ordered a refund or.
Rs. 12,154/15/ but at the same time he informed them that that amount would be forfeited to the State Government if not refunded to the purchasers from whom the same had been collected.
No being satisfied with the relief obtained, the appellants went up in revision to the Additional Collector of sales tax.
That officer by 737 his order dated November 1, 1958 granted further relief by ordering refund of an additional sum of Rs. 3,588/1/9.
But the sales tax officer did not give effect to that order.
As the Additional Collector did not accept the appellants ' claim in full, they went up in revision to the Tribunal.
The Tribunal allowed their claim in full.
The Revenue took up the matter in reference to the High Court but that reference was rejected.
From the foregoing it is seen that in respect of the period April 1, 1950 to March 31, 1951 the appellants are entitled to get a refund of Rs. 23,806/3/6.
Despite the aforementioned orders, the sales tax officer did not pay the amounts ordered to be refunded.
On the other hand, he threatened to take steps to forfeit the same by having recourse to section 12A(4).
On June 27, 1962, the sales tax officer called upon the assessees to remain present in their office on July 2, 1962 with particulars of the amount collected by them by way of sales tax from the purchasers in 'other States during the period January 26, 1950 to March 31, 1951.
At that stage, the appellants approached the High Court of Gujarat by special civil application No. 641 of 1962 under article 226 of the Constitution.
In that application, they prayed for several reliefs, the most important of which was to direct the respondents to comply with the orders of refund and to refrain from taking any action against them under section 12A(4).
The High Court dismissed that application.
Hence.
this appeal.
The Act provides for the levy of tax on the sale of goods in the then State of Bombay.
It came into force on March 8, 1946.
Any person who carries on business of selling or supplying goods in the State of Bombay whether for commission, remuneration or otherwise, is defined as a dealer in section 2(c).
Section 8 and section 8(a) of the Act provide for the registration of dealers.
As mentioned earlier the appellants are registered ' dealers.
Under section 2(k) of the Act, the assessment year is the financial year.
Section 5 prescribes the incidence of taxation.
Section 10 prescribes the returns to be made by the dealers.
The assessment is made under section 11.
Section 11 (a) provides for taxing the turnover escaping assessment.
Section 12 provides for the payment and recovery of tax.
Section 12A is the one with which we are concerned in this appeal.
It reads: "(1) No person shall collect any amount by way of tax under this Act in respect of sales or supplies of any goods which are declared, from time to time, under section 7 as sales or supplies on which the tax is not payable.
(2) No person selling or supplying any goods shall collect from the purchaser any amount by way of sales tax unless he is a registered dealer and is liable to pay tax under this Act in respect of such sale or supply: Provided that this sub section shall not apply in cases where a person is required to collect such amount of tax separately in order to comply with the conditions 738 and restrictions imposed on him under the provisions of any law for the time being in force.
(3) Every registered dealer whose gross turnover exceeds Rs. 60,000 a year shall issue a bill or cash memorandum signed and dated by him or his servant, manager or agent to the purchaser in respect of the goods sold or supplied by him showing the particulars of the goods and the price at which the goods are sold or supplied shall keep the counterfoil or duplicate of such bill or cash memorandum duly signed and dated and preserve it for a period of not less than two years from such date.
(4) If any person collects any amount by way of tax in contravention of the provisions of sub section (1) or (2) or if any registered dealer collects any amount by way of tax in excess of the amount payable by him under this Act, the amounts so collected shall, without prejudice to any prosecution that may be instituted against such person or dealer for an offence under this Act be forfeited to the State Government and such person or dealer, as the case may be, shall within the prescribed period, pay such amount into a Government treasury and in default of such payment, the amount shall be recovered as an arrear of land revenue.
" In view of article 286(1)(a) of the Constitution as it stood at the relevant time, the appellants ' sales outside the State of Bombay were not exigible to tax.
Therefore if the appellants had collected any amount from their purchasers in respect of those sales by way of tax they had undoubtedly contravened sub section 2 of section 12A.
Sub section 4 of section 12A provides for the forfeiture to State government any amount collected by a dealer by way of tax in excess of the amount payable by him under the Act.
For the purpose of deciding the point in issue it is not necessary to find out the scope of the expression "collects any amount by way of tax" in section 12A(4).
We shall assume, without deciding, the collection made by the appellants, if any, was by way of tax.
It was not contended nor could it have been contended that the impugned provision is a taxation measure bringing to tax directly or indirectly the sales effected outside the State of Bombay.
In Abdul Quadar and Co. vs Sales Tax Officer, Hyderabad,(1) interpreting section 11(2) of, the Hyderabad General Sales Tax Act 1952, a provision somewhat similar to, the impugned provision, this Court observed that legislation under Entry 54 of List II of the Constitution (similar to Entry 48 of List 11 of the Government of India Act, 1935, the entry with which we are concerned in this case) proceeds on 'the basis that the amount concerned is not a tax exigible under the law made under that entry, but (1) ; 739 even so lays down that though it is not exigible under the law, it shall be paid over to the government merely because some dealers by mistake or otherwise have collected it as tax; hence, it is difficult to see how such a provision can be ancillary or incidental to the collection of tax legitimately due under a law made under the relevant taxing entry.
Therein it was held that it cannot be said that the State legislature was directly legislating for the imposition of sales or purchase tax under Entry 54 of List 11 when it made the provisions of section 11 (2), for on the basis of the provision the amount that was collected by way of tax was not exigible as tax under the law.
According to the Revenue section 12A(4) is a penal provision; and it provides for the imposition of penalty on those who contravene section 12A(1) and (2).
It was said on its behalf that power to enact such a provision is incidental to the power to tax sales.
In support of that contention reliance was placed on the decision of the Gujarat High Court in Ram Gopal vs Sales Tax Officer, Surat and Another(1).
That decision upheld the validity of section 12A(4).
If that decision lays down the law correctly, then the appellants are out of court.
But we think that the said decision cannot be sustained.
We shall not go into the question whether from the language of the impugned provision it is possible to hold that it is a penal provision.
For our present purpose we shall assume it to be so.
We shall also assume that the legislature had legislative competence to enact that provision.
But the question is whether it is violative of article 19(1)(f) which guarantees the freedom to hold property.
Prima facie the appellants are entitled to get the amount ordered to be refunded to them.
It is for the respondents to establish that the same is liable to be forfeited.
Even according to the respondents that amount can be forfeited only as a measure of penalty for the contravention of section 12A(1) and (2).
Under our jurisprudence no one can be penalised without a proper enquiry.
Penalising a person without an enquiry is abhorrent to our sense of justice.
It is a violation of the principles of natural justice, which we value so much.
The impugned provision which provides for the forfeiture of the amount in the hands of the dealers, does not lay down any procedure for ascertaining whether in fact the dealer concerned bad collected any amount by way of tax from his purchasers outside the State and if so what that amount is.
Neither section 12A(4) nor any rule framed under the Act contemplates any enquiry much less a reasonable enquiry in which the person complained of can plead and prove his case or satisfy the authorities that their assumptions are either wholly or partly wrong.
The Act is silent as to the machinery and procedure to be followed in determining the question as to whether there has been a contravention of sections 12A(1) and (2), and if so, to what extent.
(1) 16 S.T.C. 1005.
L/P(N)7SCI 8 740 Hence it would be open to the department to evolve all the requisite machinery and procedure which means that the whole thing, from the beginning to end, is treated as of a purely administrative character, completely ignoring the legal position.
The imposition of a penalty on a person is at least of a quasi judicial character.
The impugned provision does not concern itself only with the amount admittedly collected by a person in contravention of sub sections 1 and 2 of section 12A. Even if there is any dispute either as to the facturn of collection or as to the amount collected, such a case also comes within the scope of section 12A(4).
Yet that section does not provide for any enquiry on disputed questions of facts or law.
The forfeiture provided for in section 12A(4) prima facie infringes article 19(1)(f).
Therefore it is for the respondents to satisfy the Court that the impugned provision is a reasonable restriction imposed in the interest of the general public.
Section 12A(4) does not contemplate the making of any order.
As mentioned earlier, that section prescribes that if any registered dealer collects any amount by way of tax in excess of the amount payable by him under the Act, the amount so collected shall, without prejudice to any prosecution that may be instituted against him for an offence under the Act, be forfeited to the State government and he shall within the prescribed period pay such amount into a government treasury and in default of such payment the amount shall be recovered as arrears of land revenue.
This section does not contemplate adjudication.
Nor does it, provide for making any order.
Hence, it is doubtful whether any appeal can be filed against a demand made under that section under section 21.
The question whether appellants in the instant case had been afforded a reasonable opportunity to establish their case or riot is besides the point.
The constitutional validity of a provision has to be determined on construing it reasonably.
If it passes the test of reasonableness, the possibility of powers conferred being improperly used, is no ground for pronouncing it as invalid, and conversely if the same properly interpreted and tested in the light of the requirements set out in Part III of the Constitution, does not pass the test, it cannot be pronounced valid merely because it is being administered in the manner which might not conflict with the constitutional requirements.
On a reasonable interpretation of the impugned provision, we have no doubt that the power conferred under section 12A(4) is unguided, uncanalised and uncontrolled.
It is an arbitrary power.
As held by this Court in Dr. N.B. Khare vs State of Delhi(1), whether the restrictions imposed by a. legislative enactment upon a fundamental right guaranteed by article 19(1) are reasonable within the meaning of article 19(5) would depend as much on the procedural portion of the law as the substantive part of it.
(1) ; 741 Rao(1) wherein it was observed that in considering the reasonable That view was reiterated by this Court in State of Madras vs V. G. ness of laws imposing restrictions on fundamental rights both the substantive and procedural aspects of the impugned law should be examined from the point of view of reasonableness.
This Court has taken that view consistently.
A provision like the one with which we are concerned in this case can hardly be considered reasonable.
For the reasons mentioned above, this appeal is allowed.
The order of the High Court is set aside and a writ of mandamus will be issued to the respondents to comply with the refund order set out in the petition filed before the High Court and to refrain from proceeding against the appellants under section 12A(4).
The appellants are entitled to their costs both in this Court and in the High Court.
Y.P. Appeal allowed.

summary:
In view of article 286 (1) (a) of the Constitution, as it stood at the relevant time, the sales by the appellants (registered dealers) outside the State of Bombay were not exigible to tax.
The appellants.were directed to refund amounts collected by them from their purchasers in respect of these sales by way of tax, failing which the amounts would be forfeited under section 12A(4) of the Bombay Sales Tax Act.
The appellants filed a writ petition in the High Court to restrain the respondents from taking action against them under section 12A(4), The High Court dismissed the petition.
In appeal, this Court, Held: section 12A(4) of the Bombay Sales Tax Act was void being violative of article 19(1)(f) of the Constitution.
Prima facie the appellants were entitled to get the amount ordered.
to be refunded to them.
It was for the respondents to establish that the same was liable to be forfeited.
Even according to the respondents that amount could be forfeited only as a measure of penalty.
Under our jurisprudence no one can be penalised without a proper enquiry.
[740 E F].
The impugned provision which provided forfeiture of the amount in the hands of the dealers, did not lay down any procedure for ascertaining whether in fact the dealer concerned hid collected any amount by way of tax from his purchasers outside the State and if so what that amount was.
Neither section 12A(4) nor any rule framed under the Act contemplated any enquiry,, much less a reasonable enquiry in which the person complained of could plead and prove his case or satisfy authorities that their assumptions were either wholly or wholly wrong.
This section did not contemplate adjudication nor provide for making any order.
Hence, it was doubtful whether any appeal could be filed against a demand made under that section under section 21 (740 G H; 741 E].
Abdul Quadar and Co. vs Sales Tax Officer, Hyderabad , Dr. N. B. Khare vs State of 'Delhi. ; State of Madras vs V. G. Rao, (19521 S.C.R. 597 followed.
Ram Gopal vs Sales Tax Officer, Surat and another, 16 S.T.C. 1005 disapproved,


judgement:
Appeal No. 98 of 1965.
Appeal by Special Leave from the Judgment and Order dated the December 7, 1961 of the Madhya Pradesh High Court (Gwalior Bench) in Civil Misc.
Petition No. 77 of 1959.
A. K. Sen, B. D. Gupta, Rameshwar Nath and Mahinder Narain, for the appellant.
I. N. Shroff, for the respondent.
762 The Judgment of the Court was delivered by Shelat, J.
The appellant is the ex jagirdar of certain villages called Jagir Nevri Bhorasa.
It appears that while the jagir was in his possession he had constructed roads one of which is the road connecting Bhorasa with Dewas Astha Road.
The road about 1 1/2 miles in length was lined on both sides with mango trees.
In 1951 the Madhya Bharat Abolition of Jagirs Act, 28 of 1951 (hereinafter referred to as the Act) was passed for resumption of jagir lands in the State.
Under that Act, the right, title and interest of the appellant in his said jagir were extinguished and the jagir lands vested in the State.
In 1955, the Tehsildar put up the mangoes grown on the said trees for public auction.
By his application dated February 8, 1955 the appellant objected to the said auction claiming that the said trees were planted and reared by him, that they constituted a "grove" within the meaning of section 5(b)(iv) of the Act and therefore continued to belong to him.
The Tehsildar rejected the application.
The appellant 's appeal and thereafter a revision before the Board of Revenue were also likewise rejected.
The appellant then filed a writ petition in the High Court of Madhya Pradesh but that also was dismissed on the ground that the said trees could not be said to constitute a "grove".
The appellant has filed this appeal after obtaining special leave.
The only question arising in this appeal is whether the said trees standing on the two sides of the said road can be said to be a "grove" within the meaning of sec.
5(b)(iv).
The Act was passed for resumption of jagir lands in the State and to carry out certain land reforms in the jagir areas.
Section 3 provides for the date of resumption and sec.
4(1) lays down the consequences of resumption.
Under sub section (1) of that section, the right, title and interest of a jagirdar in his jagir lands including forests, trees, fisheries, tanks, wells, ponds, etc., stand resumed to the State as from the date of resumption.
The section also provides for resumption of the right, title and interest of the jagirdar in all buildings on jagir lands used for schools, hospitals and other public purposes.
Section 5, however, provides that notwithstanding anything contained in sec.
4 the jagirdar shall continue to remain in possession of land cultivated personally by him; of open enclosures used for agricultural or domestic purposes and in continuous possession for twelve years immediately before the date of resumption, all open house sites purchased for valuable consideration, all private buildings, places of worship, and wells situated in, and trees standing on lands included in the aforesaid enclosures and house sites and /or land appertaining of such buildings or places of worship within the limits of village sites.
Sub cl.
(iv) of sec.
5 (b) reads as under: "all groves wherever situate belonging to or held by the Jagirdar or any other person, shall continue to belong to or be held by such Jagirdar or other person, as the case 763 may be, and the land thereof with the areas appurtenant thereto shall be settled on him by the Government according to the provisions of the Madhya Bharat Revenue Administration and Ryotwari Land Revenue and Tenancy Act, Samvat 2007.
" Under cl.
(c) also the jagirdar is allowed to continue to remain in possession of all tanks, trees, wells and buildings in or on occupied land belonging to or held by the jagirdar or any other person.
These provisions show clearly that the legislature has used the word "trees" at three places in three different contexts, in secs.
4(a), 5(b) and 5(c) apart from the expression "all groves wherever situate" in sub cl.
(iv) of sec.
Whereas under sec.
4(a) the trees are to vest in the State Government along with the forests, fisheries etc.
, the trees mentioned in sec.
5(b)(iii) and (c) are allowed to continue to belong to and be held by the jagirdar.
Obviously, the word "trees" in these provisions has not been used in any uniform sense and therefore has to be construed in the context in which it is used.
For instance, the word 'trees ' in sec. 5(b)(iii) and (c) is placed in juxtaposition with other properties such as private buildings, places of worship, wells situated in lands included in the said enclosures and house sites referred to in sub cls.
(i) and (ii).
It appears that the policy of the legislature was that jagir lands including forests, trees in such forests, fisheries, wells, tanks, ponds, ferries, pathways, village sites etc., which were used by, the public and in which the members of the public were interested were resumed while the land in personal cultivation of the jagirdar, enclosures used for agricultural and domestic purposes, house sites purchased for valuable consideration, private buildings, places of worship, wells, trees standing on lands in such enclosures and house sites and tanks, trees, private wells and buildings in or on occupied land belonging to or held by the jagirdar were allowed to continue to belong to and be held by him.
It will be seen that groves in sub cl.
(iv) of sec.
(b) are included amongst properties allowed to continue to belong to and be held by the jagirdar.
Subclause (iv) also shows that such groves need not be of fruit trees nor need the trees thereof have been planted by the jagirdar.
The words "wherever situate" indicate that it is not necessary that they should be on lands or properties allowed to be retained by the jagirdar under section 5.
If a grove belonged to or was held by him, whether planted by him or of natural growth and wherever situate it is allowed to continue to belong to him and be held by him.
The intention of the legislature appears therefore to be that properties which the jagirdar was in personal use and possession of or in respect of which he had paid valuable consideration are to be retained by him.
It is in this context that we should construe subcl.
(iv) of sec.
A grove irrespective of where it is situate, but belonging to or held by the jagirdar is to continue to belong to or to be held by him.
To secure the full and proper use and, enjoyment of such a grove, if it is on land other than that which is 764 allowed to be retained by him, sub clause (iv) further provides that the land on which such a grove stands with the areas appurtenant thereto also shall be settled upon him in accordance with the M.B. Revenue Administration and Ryotwari Land Revenue and Tenancy Act, Samvat 2007.
What then is the meaning of the word "grove" within the meaning of sec. 5(b)(iv)9 Though the Act contains a definition section the legislature has not chosen to include therein any definition of a "grove".
It intended therefore that it should be understood in its ordinary dictionary sense.
In Webster 's New World Dictionary, p. 641, a grove has been defined as a small wood; groups of trees standing together without undergrowth.
The Shorter Oxford English Dictionary, Vol. 1, 838 also defines it as a small wood, a group of trees affording shade or forming avenues or walks.
In Corpus Juris Secundum, Vol.
98, p. 688 a grove is defined to mean a cluster of trees not sufficiently extensive to be called a wood; a group of trees of indefinite extent but not large enough to constitute a forest; especially such a group considered as furnishing shade for avenues and walks.
Though a grove in this sense may consist of a group of trees of indefinite extent it cannot be divorced from the idea of a homogeneous or at any rate.
a substantially homogeneous unit consisting of a cluster of trees close to each, other so as to serve as a shade to walks or avenues.
Apart from the meaning that the dictionaries offer the word "grove" has also been the subject matter of a number of decisions.
The case of Daropadi vs Mannu Lal(1) was, of course an extreme case of only 4 fruit trees in an area of 3 bighas and that too on the boundaries.
Ashworth J. could therefore easily discard the contention that the said trees formed a grove or that the land on which they stood was a grove land within the meaning of sec.
3 of the Agra Tenancy Act, 1926 which provided that so long as any considerable portion of a plot had a sufficient number of trees to prevent that plot from being cultivated, assuming the trees to have reached their full size, the entire plot would retain the character of grove but not otherwise.
It is true that when the learned Judge made, this observation he had in mind the definition of grove in section 3 of that Act, but he also observed that that was the sense in which a "grove" and "grove land" 'were ordinarily understood and that the definition did no more than to bring out the sense in which these terms were generally understood.
In Kashi vs Jagoo Bai(2) also, Bennet J. held that isolated trees cannot be said to constitute a grove.
But unlike these two cases, the land in Shiv Sahai vs Hari Nandan(3) had 13 mango trees fully grown, big in size and covering a major part of it.
It was held that the land was a grove land within the meaning of sec.
3(5) of the U. P. Tenancy Act, 1939, in spite of the fact that there was some cultivation on the land.
The Court there observed that the definition merely (1) A.I.R. 1929 All 557 (2) A.I.R. 1934 All 290.
(3) A.I.R. 1963 All 413.
765 required that the trees must be in sufficiently large number to preclude the land from being used primarily for a purpose other than as grove land.
In Hasan vs State of Bombay(1) the High Court was concerned with section 5(h) of the Madhya Pradesh Abolition of Proprietory Rights (Estates, Mahals, Alienated Lands) Act, 1 of 1951 which is in almost identical terms as section 5(b)(iv) of the present Act.
The Court interpreted the word "grove" to mean an area covered by a cluster of trees specially planted by human agency but not large enough to constitute a forest.
It would seem therefore that the word "grove" conveys com pactness or at any rate substantial compactness to be recognized as a unit by itself which must consist of a group of trees in sufficient number to preclude the land on which they stand from being primarily used for a purpose, such as cultivation, other than as a grove land.
The language of sec.
5(b)(iv) does not require however that the trees needs be fruit bearing trees nor does it require that they should have been planted by human labour or agency.
But they must be sufficient in number and so standing in a group as to give them the character of a grove and to retain that character the trees would or when fully grown preclude the land on which they stand from being primarily used for a purpose other than that of a grove land.
Cultivation of a patch here and a patch there would have no significance to deprive it of its character as a grove.
Therefore, trees standing in a file on the road sidle intended to furnish shade to the road would not fulfil the requirements of a grove even as understood in ordinary parlance.
Counsel, however, contended that although the trees in ques tion are situate on the road sides along the said road there may at some places be a group or groups of trees sufficiently large in number and closely standing together to preclude that particular area from being used for cultivation or for any other purpose.
In that case, be argued, there was nothing in subcl.
(iv) to prevent such a cluster of trees from being regarded as a grove.
We think there is some force in this argument which requires consideration.
Neither the revenue authorities nor the High Court approached the question from this point of view and no inquiry at any stage seems to have been made whether there are at any place or places such group or groups of trees to constitute a grove or groves.
All of them appear to have dismissed the appellant 's claim only because of the fact that the trees stand along the two sides of the road.
It is possible that the road might have been constructed in this particular area because of a number of trees standing on both sides of it which would provide shade over it and form an avenue.
In fairness to the appellant, we think it necessary that he should have an opportunity to establish that at some place or places along the said road there are trees sufficient in number and proximity to constitute a grove or groves.
(1) 766 The appeal is allowed, the judgment and order of the High Court are set aside and the case is remanded to the High Court to decide the writ petition in the light of the observations hereinabove made after calling a finding from the Board of Revenue on the question whether there are trees at any place or places along the said road sufficient in number and proximity to constitute a grove or groves.
The Board will give an opportunity to the parties to adduce on the aforesaid question such further evidence, as they may think necessary.
In the circumstances, there will be no order as to costs.
Y.P. Appeal allowed.

dataset_name: IN-Abs

summary:
After the resumption of the appellant 's Jagir lands in the State by the enactment of the Madhya Bharat Abolition of Jagirs Act, he claimed the mango trees, planted by him on both sides of a long road, as constituting a "grove" within the meaning of section 5(b)(iv) of the Act, and therefore continued to belong to him.
HELD: A grove irrespective of where it was situate, but belonging to or held by the jagirdar was to continue to belong to or to be held by him.
To secure the full and proper use and enjoyment of such a grove, if it was on land other than that which was allowed to be retained by him, sub clause (iv) of section 5(b) further provides that the land on which such a grove stood with the areas appurtenant thereto also shall be settled upon him in accordance with the M. B. Revenue Administration and Ryotwari Land Revenue and Tenancy Act Samvat 2007.
The intention of the legislature appeared to be that properties which the jagirdar was in personal use and possession of or in respect of which he had paid valuable consideration were to be retained by him.
[764 H; 765 A].
The language of sec.
5(b) (iv) does not require that the trees need be fruit bearing trees nor does it require that they should have been planted by human labour or agency.
But they must be sufficient in number and so standing in a group as to give them the character of a grove and to retain that character the trees would or when fully grown preclude the land on which they stand from being primarily used for a purpose other than that of a grove land.
Cultivation of a patch here and a patch there would have no significance to deprive it of its character as a grove.
Therefore, trees standing in a file on the road side intended to furnish shade to the road would not fulfil the requirements of a grove even as understood in ordinary parlance.
[766 C E].
Daropadi vs Mannu Lal, A.I.R. 1929 All. 557.
Kashi vs Jagoo Bai.
A.I.R, 1934 All.
290, Shiv Sahai vs Hari Nandan, A.I.R 1963 All. 413, Hasan vs State of Bombay, , referred to.


judgement:
Appeal No. 32 of 1965.
Appeal by special leave from the judgment and order dated May 13, 1963 of the Calcutta High Court in Award Case No. 119 of 1963.
Sachin Chowdhury, M. G. Poddar and D. N. Mukherjee, for the appellant.
Sardar Bahadur, for the respondent.
The appellants applied to the High Court of Judicature at Calcutta on its original side under section 33 of the Indian Arbitration Act 10 of 1940 for an order, inter alia, declaring that "there exists a valid arbitration agreement contained in contract No. 750 dated September 16, 1960 between the petitioners" and the respondents.
The appellants claimed that they entered into a contract with the respondents on September 16, 1960, for the purchase of 6,00,000 bags of B Twill at the rate of Rs. 132.50 nP per 100 bags, "on their own account" in Transferable Specific Delivery Form prescribed under the byelaws of the Association.
and on terms and conditions set out therein The respondents denied the existence of the contract and also its validity.
The High Court dismissed the application holding that M/J(N)6SCI 13 610 the contract was invalid in that it did not comply with the requirements of section 15 sub section
(4) of the Forward Contracts (Regulation) Act, 1952.
By special leave, the appellants have appealed to this Court.
The relevant recitals in the notes, which, it was claimed, constituted the contract between the parties may first be set out: "7A, Clive Row, Calcutta 1 Sunder Lal & Son.
Contract No. 750 Messrs. Bharat Handicrafts (Private) Ltd. Dear Sirs, We have, subject to the terms and conditions hereinafter referred to, this day sold to Messers.
, Sunderlal & Son by Your order, and on your account: Yours faithfully, Sunderlal & Sons. "Calcutta, 16th September, 1960 Messrs. Sunderlal & Son No. 750 Dear Sirs, We have, subject to the terms and conditions hereinafter referred to this day bought from Bharat Handicrafts (Private) Ltd., by your order, and on your account: Yours faithfully, Sunderlal & Son.
Validity of the contract was challenged by the respondents on, two grounds (1) that the appellants were not at the relevant time members of the Association; and (2) that the requirements of section (4) of the Forward Contracts (Regulation) Act were not complies with and the contract was on that account invalid.
The High Court decided both the grounds in favour of the respondents.
The appellants averred in their petition that they were at all" material times members of the Association.
Baburam Saraf principal officer of the.
Company in his affidavit in reply merely states 611 that he did not admit that averment.
The learned Judge observed that he was "unable to hold that the appellants had proved that the appellants were members of the Association at the time of the formation of the contract".
It is unfortunate that the attention of the learned Judge was not invited to the admission made by the respondents in paragraph 6 of the plaint filed by them in the City Civil Court, Calcutta, for a declaration that there was in fact no contract between them and the appellants bearing No. 750 dated September 16, 1960, in which the respondents had averred that they had discovered that the appellants "at all material times were the members of the said East India Jute & Hessian Exchange Ltd".
In view of this evidence, counsel for the respondents did not seek to support the decision of the High Court on the first ground, and nothing more need be said in that behalf.
In dealing with the second ground, it is necessary to summarise the relevant provisions of the Forward Contracts (Regulation) Act, 1952.
The Act was enacted to provide for the regulation of certain matters relating to forward contracts, the prohibition of options III goods and for matters connected therewith.
By Ch.
II the Central Government is given authority to establish and constitute a Forward Markets Commission with certain functions and powers.
By Ch.
Ill provision is made for granting recognition to associations, withdrawal of recognition and other incidental matters.
By section 11 sub section
(1) any recognised association may, subject to the previous approval of the Central Government, make bye laws for the regulation and control of forward contracts.
By sub section
(2), it is provided that such bye laws may provide inter alia for the terms, conditions and incidents of contracts, including the prescription of margin requirements, if any, and conditions relating thereto, and the forms of contracts in writing.
Sub sections (1), (2) and (4) of section 15 in force it the date of the contract were these: "(1) The Central Government may by notification in the Official Gazette, declare this section to apply to such goods or class of goods and in such areas as may be specified in the notification, and thereupon, subject to the provisions contained in section 18, every forward contract for the sale or purchase of any goods specified in the notification which is entered into in the area specified therein otherwise than between members of a recognised association or through or with any such member shall be illegal.
(2) Any forward contract in goods entered into in pursuance of sub section (1) which is in contravention of any of the bye laws specified in this behalf under clause (a) of sub section (3) of section 11 shall be void (i) as respects the rights of any member of the recognised association who has entered into such contract in contravention of any such bye law, and also 612 (ii) as respects the rights of any other person who has knowingly participated in the transaction entailing such contravention.
(3) (4) No member of a recognised association shall, in respect of any goods specified in the notification under sub section (1), enter into any contract on his account with any person other than a member of the recognised association, unless he has secured the consent or authority of such person and discloses in the note, memorandum or agreement of sale or purchase that he has bought or sold the goods, as the case may be, on his own account: Provided that where the member has secured the consent or authority of such person otherwise than in writing he shall secure a written confirmation by such person of such consent or authority within three days from the date of such contract: Provided further Section 20 prescribed, penalties for breach of the provisions of the Act.
The relevant section at the date of the contract insofar as it relates to the penalty for infringement of section 15(4) read as follows: (2) any person who enters into any forward contract in contravention of the provisions contained in subsection (4) 'of section 15 shall on conviction be punishable with fine.
" It is common ground that the Central Government has issued a notification declaring section 15(1) of the Act as applicable to forward contracts in jute and jute goods.
The appellants entered into the contract with the respondents who are not members of the association for buying jute bags on their own account.
Sub section (4) of section 15 imposes a prohibition against the entry into a contract on his own account by a member of the association with any person who is not a member of that association, unless the member has secured the consent of such other person and discloses in the note, memorandum or agreement of $ale or purchase that he has bought or sold the goods, as the case may be, on his own account.
The prohibition is removed only if two conditions exist (i) that the note must disclose that the purchase or sale is on the account of the member of the recognised association; and (ii) consent or authority of the other person has been secured independently of the disclosure in the note.
Where the consent or authority of the other person is secured but not in writing, the member has to secure a written confirmation 'of such consent or authority within three days from the date of such contract.
613 The "bought" and "sold" notes which are set out earlier are in the form prescribed in the Appendix to the Bye laws of the association.
At the foot of the prescribed form of the note there is a slip in which normally the confirmation of the other party to the contract would be obtained,.
The confirmation slip was it appears detached from the "sold" note, but it was not produced before the High Court by the appellants.
Counsel for the appellants says that the respondents did give a slip confirming the contract in the " sold" note, but it was unfortunately not tendered in evidence in the High Court, and he applies for leave to tender in evidence that confirmation slip in this Court.
The confirmation slip sought to be produced in this Court purports to bear the confirmation by a person who has signed it as 'M.L. Bahati '.
This document was admittedly in the possession of the appellants and could have been produced by them in the High Court.
No rational explanation is fur nished for not producing the document before the High Court.
Again the document does not prove itself: to make out the case that the respondents had consented in writing to the terms of the contract, evidence that the signature "M. L. Bahati" was subscribed by the person bearing that name and that he was authorised to confirm the note on behalf of the respondents would be necessary.
The " sold" note is addressed to the appellants: it purports to be made out in the name of the respondents, and is signed by the appellants as "Member Licensed Broker of the Association" " It is claimed that the appellants subscribed their signature to the sold" note under the authority of the respondents.
The authority of the appellants from the respondents to enter into the transaction does not appear from the terms of.
, the "sold" note.
But it is urged on behalf of the appellants that the bye laws framed by the association prescribe that this form of the note shall be adopted even in transactions in which a broker is entering into a contract on his own account, and if the contract is not in the form prescribed under the bye laws the contract would be void.
We need not dilate upon that question, for we ' are only concerned to point out that there is no evidence on the record that the appellants had secured the written consent or authority of the respondents to the contract.
Where the Appellate Court requires any document to be produced or witnesses to be examined to enable it to pronounce judgment, or for any other substantial cause, the Court may allow such document to be produced or witnesses to be examined.
We do not, require additional evidence to be produced in this case to enable us to pronounce judgment, nor do we think that any substantial cause is made out which would justify an order allowing additional evidence to be led at this stage.
The document relied upon was admittedly in the possession of the appellants, but they did not rely upon it before the High Court.
It was said at the Bar that the importance of the document was not realized by those in charge of the case.
We do not think that the plea would bring the case within the expression "other substantial cause" in 0.
41 r. 27 of the Code of Civil Procedure.
We therefore decline to allow this additional evidence to be brought on the record 614 There is accordingly no writing evidencing the consent or authority A to the appellants entering into a contract on their own account with the respondents in respect of jute goods, and it is 'not the case of the appellants that they had secured written confirmation of such consent or authority by the respondents within three days from the date of the contract.
Counsel for the appellants, however, contends that sub section
(4) of section 15 does not invalidate a contract merely because there is no writing evidencing or confirming the consent or authority of the non member, even if the member has entered into a contract in respect of goods purchased or sold on his own account.
Counsel says that the prohibition imposed by the Parliament against the entry into such a contract does not make it void: only by entering into the contract the appellants are rendered guilty of an offence under section 20 sub section
(2) of the Act.
In support of that contention, counsel says, that since in sections 15(1), 15(2), 17(2) and 19 the Parliament has expressly enacted that in certain eventualities forward contracts shall be illegal or void, but in section 15(4) no such consequence is indicated, a contract even in breach of the prohibition is enforceable, though it may expose the appellants to a criminal prosecution.
Reliance is placed in support of that plea upon Shri Bajrang Jute Mills Ltd. vs Lalchand Dugar(1), in which the Calcutta High Court observed in dealing with the validity of a contract entered into by a member of a recognised association on his own account with a non member in respect of specified goods: ". . .
We think that the first proviso to section 15(4) is directory in the sense that the securing of the written confirmation of the contract is no more than a condition subsequent as to which the responsible members may be blamable or punishable if be does not secure it, but his failure to do so does not invalidate the contract.
We think that on a true construction of section 15(4) the failure of the member to obtain the written confirmation of the oral consent or authority to enter into the forward contract on his own account does not render the contract either illegal or void." In our judgment that view cannot be accepted as correct.
The Legislature has by the Act imposed diverse restrictions upon the liberty of contract in respect of forward transactions in commodities specified in a notification under section 15(1).
By the first sub section of section 15 it is provided that contracts in respect of the specified goods or classes of goods in certain areas not between persons who are members of a recognized association or through or with any such member shall be illegal.
The effect of the sub section is that a forward contract for the sale or purchase of specified goods may be entered into (1) 615 only between members of a recognized association or with a member or through any member of such an association: otherwise the contract will be invalid.
The Act then proceeds to enact in sub section
(2) that a forward contract in goods entered into in pursuance of sub section
(1) shall still be void if it is made in contravention of the bye laws in that behalf under cl.
(a) of sub section
(3) of section 11.
By sub section
(4) the Parliament has then imposed a prohibition upon every member of a recognized association against entry into a contract on his own account with a non member in respect of specified goods: the prohibition is lifted when in the memorandum, agreement of sale or purchase or in the bought and sold notes it is expressly disclosed that the contract is by the member on his own account and that he has secured the consent or authority of the other person who is a party to the contract, and if such consent or authority be not in writing, the member has obtained a written confirmation by such person of such consent or authority within three days from the date of the contract.
It is therefore contemplated that for an enforceable 'contract to arise there shall be a writing evidencing or confirming the consent or authority of such person.
The prohibition imposed by cl.
(4) is not imposed in the interest of revenue; the clause is apparently conceived in the larger interest of the public to protect them against the malpractices indulged in by members of re cognized associations in respect of transactions in which their duties as agents conflict with their personal interest.
The Parliament has clearly made a writing evidencing or confirming the consent or authority of a non member as a condition of the contract, if the member has entered into a contract on his own account.
So long as there is no writing as is contemplated by section 15(4) or the proviso thereto, there is no enforceable contract: it is the consent or authority in writing or confirmation of such consent or authority which brings into existence an enforceable contract.
Any other view.
would attribute to the Parliament an intention to impose a prohibition which would be rendered for all practical purposes futile.
Under section 20 sub section
(2) of the Act a penalty is imposed on any person who enters into a forward contract in contravention of the provisions contained in sub section
(4) of section 5.
The penal clause is not clearly expressed.
A reasonable reading of that clause is that a person who enters into a contract without disclosing that he contracts on his own account is liable to be punished.
It could obviously not have been intended by the Parliament to punish a person for failing to secure the consent or authority of the other party to the contract an act which depends solely upon the volition of that other person.
The apparent obscurity in the penal provision cannot however be utilized to restrict the prohibition contained in section 15(4).
What is penalised under section 20(2) is entry into a forward contract by a member on his own account without disclosing to the non member contracting party that the contract is on the member 's own account.
We therefore bold that 616 the High Court was right in holding that the contract did not comply with the requirements of sub section
(4) of section 15 and was on that account invalid.
The appeal therefore fails and is dismissed with costs.
V.P.S. Appeal dismissed.

summary:
Under section 15(1) of the Forward Contracts (Regulation) Act 1952, forward contracts for the sale or purchase of specified goods may be entered into only between members of a recognised association or with a member or through any member of such association otherwise, the contract will be invalid.
By sub section
(4), Parliament imposed a prohibition upon every member of a recognised association against entry into a contract on his own account.
with a non member, in respect of the specified goods: the prohibition is lifted when in the memorandum, agreement of sale or purchase, or in the bought and sold notes it is expressly disclosed that the contract is by the member on his own account and that he has secured the consent or authority of the other person who is a party to the contract, and.
if such consent or authority be not in writing, the member has obtained a written confirmation by such person of such consent or authority within three days from the date of the contract.
A notification was issued by the Central Government declaring section 15(1) to be applicable to forward contracts in jute goods, and the appellants, who were members of an Association recognised by the Act, entered into a contract with the respondents who were not members of any such association for buying jute bags on their own account.
The appellants applied to the High Court.
under section 33 of the , for an order declaring that there existed a valid arbitration agreement contained in the relevant bought and sold notes.
No evidence was tendered in the High Court to show that the appellants had secured the written consent or authority of the respondents, to the contract, and it was not their case that they had secured any written confirmation of an oral consent or authority by the respondents.
within three days of the date of the contract.
The High Court held that the requirements of section 15(4) were not complied with.
and that the contract was therefore invalid.
In appeal to this Court.
the appellants contended (1) that section 15(4) was complied with, because, the respondents did confirm the contract in the slip provided for such confirmation at the foot of the sold note, that the slip was detached from the sold note but was not tendered in evidence in the High Court as its importance was not realised, and that this Court should receive the document in evidence: and (2) that even if there was a breach of the prohibition in section 15 (4) the contract was enforceable, and the breach would merely expose the appellants to a criminal prosecution under section 20(2).
HELD: (1) The additional evidence could not be allowed to be brought on record.
[613H] 609 The document was in the possession of the appellants and no rational explanation Was furnished for not producing it before the High Court.
Further, the document did not prove itself and did not establish that the respondents had consented in writing to the terms of the contract.
This Court as the appellate court, did not require the additional evidence to enable it to pronounce judgment, nor was any substantial cause made out which would justify an order allowing additional evidence to be led in this Court, within the meaning of O. XLI, r. 27 of the Civil Procedure Code.
[613C D, G H] (2) The prohibition imposed by section 15(4) is not imposed in the interest of revenue: the clause is conceived in the larger interest of the public to protect them against the malpractices indulged in by members of recognised associations in respect of transactions in which their duties as agents conflict with their persona interest.
parliament has made a writing, evidencing or confirming the consent or authority of a non member, as a condition of the contract, if the member has entered into a contract on his own account.
So long as there is no such writing, as is contemplated by section 15(4) or its proviso there is no enforceable contract.
[615D F] The penal clause in section 20(2) cannot be utilised to restrict the prohibition contained in section 15(4).
What is penalized under section 20(2) Is entry into a forward contract by a member on his own account without disclosing to the non member contracting party that the contract is on the member 's own account; and not, for failing to secure the consent or authority of the other party to the contract.
[615G H] Shri Bajrang Jute Mills Ltd. vs Lalchand Dugar, , overruled.


judgement:
Appeal No. 248 of 1953.
Appeal under Article 132(1) of the Constitution of India from the Judgment and Order dated the 1st October, 1953, of the High Court of Judicature at Allahabad in Civil Miscellaneous Writ No. 379 of 1953.
N.C. Chatterjee (P.K. Chatterjee, with him) for the appellant.
C. K. Daphtary, Solicitor General for India, K. L. Misra, Advocate General of Uttar Pradesh (C. P. Lal, with them) for respondent No. 1.
C. K. Daphtary, Solicitor General for India (Porus A. Mehta, with him) for respondent No. 2. 1954.
March 30.
The Judgment of the Court was delivered by DAS J.
This appeal arises out of an application made by the appellant to the High Court of Allahabad under, article 226 of the Constitution praying for an appropriate writ quashing the order made by the President of India on the 17th April, 1953, ordering the compulsory retirement of the appellant who had completed 25 years ' qualifying service.
The High Court by its judgment dated the 1st October, 1953, dismissed the application but, as the case involved a substantial question of the interpretation of the Constitution, the High Court granted leave to the appellant to appeal to this Court.
The material facts may be shortly stated as follows: The appellant passed his Civil Engineering degree examinaion from the Thomason College.
Roorkee, in 1922.
He stood first in order of merit and carried away the Gold Medal and other prizes awarded to the best student of that year.
He was appointed by the Secretary of State for India in Council to the Indian Service of Engineers as an Assistant Executive Engineer with effect from the 20th October, 1923.
The conditions governing the appellant 's terms of appointment, promotion, leave, pension, etc., will be found recorded in 28 a letter issued from India Office, London, on the 13th February, 1924.
A copy of that letter is annexed to the Petition filed under article 226.
He was posted in ,the United Provinces.
In 1944 the appellant was promoted to the rank of officiating Superintending Engineer.
After the attainment of independence by India a fresh agreement was entered into by and between the appellant the Governor of the United Provinces and the Governor General of India on the 16th September, 1948 confirming the appellant 's terms of appointment contained in the letter of the 13th February, 1924.
At or about this time the appellant along with several other officers was recommended by the Chief Engineer for confirmation as Superintending Engineer. 'The appellant, however, was not confirmed but continued to officiate as Superintending Engineer until the time hereinafter stated.
On the 4th January, 1950, the Public Works Department of the U.P. Government addressed a letter to the Chief Engineer, Irrigation Branch U.P. requesting him to communicate the letter enclosed therewith to the appellant and to ask him to submit as early as possible whatever explanation he might desire to give.
The enclosed letter called upon the appellant to show cause within three weeks why he should not be compulsorily retired under the provisions of article 465 A, Civil Service Regulations,as it appeared (1) that he had been making systematic and gross overpayments apparently for no other reason than to benefit the contractors concerned and (2) that he had spent large ' amounts of public money for his own personal convenience and (3) that he had taken recourse to devious and unscrupulous methods.
No less than, six instances on which these charges were based.
were them set out.
The covering letter concluded with the following remarks: "Under the rules Government reserve the right to compulsorily retire any officer whose retention in service they consider not to be in the public interest.
This is not, therefore, a formal enquiry under the Classification.
Control and Appeal Rules but before taking the action indicated above Government were pleased to and an opportunity to Shri Shyam Lal, I.S.E., 29 to show cause why he should not be compulsorily retired.
" A copy of the letter of the 4th January, 1950, together with a copy of the enclosure was sent to the appellant with the request that his explanation might be forwarded,.
within the period mentioned by the Government.
The appellant submitted his explanations which, together with the Chief Engineer 's comments thereon, were placed before the Union Public Service Commission.
The Commission came to the conclusion that five out of the six charges had been proved and submitted their report accordingly.
On the 17th April, 1953, the President, after considering the case and the recommendations of the Commission, decided that the appellant should retire forthwith from service under Note I to article 465 A of the Civil Service Regulations.
Before this order could be served on him the appellant on the 24th April, 1953, filed before the Allahabad High Court a petition under article 226 of the Constitution praying that the order made by the President on the 17th April, 1953, be quashed on the ground, inter alia, that the order was illegal and void in that it was made without affording him any opportunity to show cause against the action proposed to be taken in regard to him.
As already stated, the High Court dismissed the application on, the 1st October, 1953.
The present appeal is directed against that order of dismissal.
The order of the President which is imppgned by the appellant shows that action was purported to be taken in regard to the appellant under Note 1 to article 465 A of the Civil Service Regulations.
Chapter XVIII of the Civil Service Regulations deals with Conditions of Grant of Pension.
Article 465 A appears in that Chapter under section V the heading of which is " Retiring Pension.
" There are two notes appended to the article of which the first one is important for our present purpose.
The relevant part of article 465 A and Note 1 thereto are set out below: " 465 A. For officers mentioned in article 349 A, the rule for the grant of retiring pension is as follows: 30 (1). . . . . . . . . . (2) A retiring pension is also granted to an officer who is required by Government to retire after completing twenty five years ' qualifying service or more.
Note I. Government retains an absolute right to retire any officer after he has completed twenty five years ' qualifying service without giving any reasons, and no claim to special compensation on this account will be entertained.
This right will not be exercised except when it is in the public interest to dispense with the further services of an officer.
" Officers of the Indian Service of Engineers are included amongst 'the officers mentioned in article 349 A of the Civil Service Regulations.
The contentions urged before us are that the President 's Order of the 17th April, 1953, is invalid and inoperative for the following reasons : (1)that article 465 A of the Civil Service Regulations is not applicable to or binding on the appellant; (ii)that compulsory retirement is nothing but removal from service and the provisions of article 311 of the Constitution apply to the case of compulsory retirement; (iii)that Note I to article 465 A of the Civil Service Regulations, in so far as it confers on the Government an absolute right to retire an officer, who has completed twenty five years ' qualifying service without giving any 'reason, is repugnant to article 311 of the Constitution.
It will be necessary to deal with the above points seriatim.
It will be remembered that the appellant was employed by the Secretary of State in Council in October, 1923, that is to say, after the Government of India Act, 1919, came into operation.
Sub section (4) of section 96B of that Act provided, for removal of doubts, that all rules in operation at the time of the passing of that Act, whether made by the Secretary of State in Council or by any other authority, relating to 31 the Civil Service of the Crown in India, were duly made in accordance with the powers in that behalf and it confirmed the same.
But it is urged that as there is nothing to show that article 465 A of the Civil Service Regulations was in operation at the time of the passing of the Government of India Act, 1919, and that as all that has been shown is only that the article in question was amended and brought.
up to its present form in 1922 it cannot be said to have been validated by subsection (4) of section 96B.
Reference is then made to sub section (2) of that section which empowered the Secretary of State in Council to make rules for regula ting the classification of the Civil Services in India, the methods of their recruitment, their conditions, of service, pay and allowances, and discipline and conduct and, by such rules, to delegate the power of making rules to the Governor General in Council or to local Governments or to authorise the Indian Legislature or local Legislatures to make laws regulating the public services.
It is pointed out that sub section (2) did not empower the Secretary of State in Council to delegate the power to make rules concerning pensions to any authority in India.
Our attention is next drawn to sub section (3) of section 96B which specially safeguarded the interests of the civil servants employed by the Secretary of State in Council by providing that their right to pensions and the scale and conditions ,of pensions should be regulated in accordance with the rules in force at the time of the passing of that Act and that, although such rules might be varied or added to by the Secretary of State in Council, such variations or additions should not adversely affect the pension of any member of the service appointed before the date thereof It is urged that not only has article 465 A not been shown to have been in force at the time of the passing of the Government of India Act, 1919, it has also not been shown to have been made by the Secretary of State in Council.
In the premises, it is contended that article 465 A which is set out in section V of Chapter XVIII of the Civil Service Regulations and deals with retiring pensions and has presumably been made by the Governor General in Council cannot be 32 supported as a valid rule under sub sections (2), (3) or (4) of section 96B and can have no application to the appellant who was appointed by the Secretary of State in Council and consequently the order of the President made in accordance with Note I to that article is illegal and void.
The above line of reasoning found favour with the High Court but nevertheless the High Court repelled the conclusions sought to be established by it on the ground that rule 7 of the Civil Services (Classification, Control and Appeal) Rules read with rule 26 of those Rules impressed the stamp of validity upon article 465 A of the Civil Service Regulations and made it applicable to the All India Services.
Learned counsel for the appellant challenges the correctness of the decision of the High Court in so far.
as it is founded on a construction of rules 7 and 26 of the Civil Services (Classification, Control and Appeal) Rules which were first made in December, 1920, and were again pub lished in 1930 with subsequent amendments.
While agreeing with learned counsel that there is some force in his contention that the construction put upon rule 7 may not be quite cogent or convincing we do not consider it necessary to express any final opinion on that matter, for, in our judgment, the major, premise assumed by the High Court that Note 1 to article 465 A has no application to the appellant cannot be supported or sustained.
it appears that by Resolution No. 1085 E.A. passed on the 15th November, 1919, and published in the gazette of India on the same date the Government: of India, Finanance Department with the approval of the Secretary of State for India, announced certain new rules relating to retiring pensions of the officers (other than military officers or members of the Indian Civil Service) and the 'services specified therein.
The services so specified included the Public Works Department.
The new rules were,, by rule 1, made to apply only to officers joining the above services after the 29th August, 1919, And to those existing officers who elected in writing to come under their provisions,.
The appellant was, employed in October, 1923, and 33 consequently these new rules applied to him.
The material I part of rule 4 of these new rules was as follows : "Government will have an absolute right to retire any officer after he has completed twenty five years ' service, without necessity to give reasons and without any claim for compensation in addition to pension, and in that event. . . " These rules which came into force on their publication in the Official Gazette of the 15th November, 1919, were, therefore, in operation on the 23rd December, 1919, when the Government of India Act, 1919, was passed and were accordingly validated and confirmed by sub section (4) of section 96B of that Act to which reference has already been made.
The rules thus confirmed by section 96B(4) became applicable to the appellant on his employment by the Secretary of State in October, 1923.
In Resolution No. 714 C.S.R. dated the 10th May, 1920, it was announced that with a view to the exact scope of the new pension rules published in Resolution No. 1085 E.A. dated the 15th November, 1919, being made clear the Government of India intended to publish those rules in the form of amendments to the Civil Service Regulations.
Accordingly Resolution No. 1003 C.S.R. dated the 18th June, 1920, along with certain amendments to the Civil Service Regulations were published in the Gazette of India of the 19th June, 1920, for general information.
The amendments so published provided for the insertion in the Civil Service Regulations of a new article 349 A stating that the rules in certain articles including article 465 A would apply to officers in the services specified therein.
The services so specified included the Public Works Department.
The amendments also provided for the insertion in the Civil Service Regulations, amongst others, of a new rule as article 465 A with two notes appended thereto.
Omitting clause (1) and note (2) which are not relevant for our present purpose that article read as follows: "465 A. For officers mentioned in article 349 A the rule for the grant of retiring pension is as follows: 5 34 (1) . . . . . . . . . . . (2) A retiring pension is also granted to an officer who is required by Government to retire after completing twenty five years ' service or more.
Note I. Government retains an absolute right to retire any officer after he has completed twenty five years ' service without giving any reasons and no claim to special compensation on this account will be entertained.
It will be noticed that clause (2) and Note I quoted above are word for word the same as clause (2) and Note 1 of article 465 A as we find it now except that the last sentence in Note 1 in the present rule was not in article 465 A Note I when it was published in 1920.
It seems that this addition was subsequently made by amendment in 1922 as referred to in the High Court judgment under appeal.
It is contended by learned counsel for the appellant that article 465 A and Note I thereto came into force only in June, 1920, that is to say, after the Government of India Act, 1919, had been passed and therefore cannot be said to have been confirmed by section 96B (4) and being a pension rule made after the date of that Act but not being a rule made by the Secretary of State in Council it cannot under section 96B (3) apply to the appellant who was employed by the Secretary of State.
We are unable to accept this argument as sound.
As already stated, the new rules were announced by Resolution No. 1085 E. A. passed and published on the 15th November, 1919, and were in force on the 23rd December, 1919, when the Government of India Act, 1919, was passed and consequently acquired statutory force by virtue of section 96B (4) of,that Act.
The subsequent Resolution No. 714 C.S.R. dated the 10th May, 1920, and Resolution No. 1003 C.S.R. referred to above did not and could not affect the validity or force of the new rules announced on the 15th November, 1919.
The purpose of publishing the new rules in the form of amendments to the Civil Service Regulations, as Resolution No. 714 C.S.R. itself stated expressly, was only to clarify the exact scope of those new rules and not, 35 As suggested by learned counsel for the appellant, to bring them into force for the first time.
The new rules came into operation ex proprio vigore on their publication in the Official Gazette on the 15th November, 1919, and their subsequent publication for general information in the form if amendment to the Civil Service Regulations only served to make their exact scope clear.
The real purpose of the incorporation of these rules in the ' Civil Service Regulations was not to make any now rule at the date of such incorporation but to distribute and post up the rules announced in November, 1919, at appropriate places in the Civil Service Regulations for ready reference.
A comparison of the language used, in Note 1 to article 465 A with that employed in new rule 4 announced by Resolution No. 1085 E.A. dated the 15th November, 1919, will also make it clear beyond doubt that the purpose of Note I is not to confer on the Government any new right to compulsorily retire an officer on completion by him of twenty five years", service but that it is intended to serve as a reminder that the Government already has such right which it, means to "retain".
One "retains" only what one already possesses and the word "retain" is wholly inappropriate for the purpose of conferring a fresh right.
The last sentence of Note I is only an administrative direction, as to when the existing right of the Government is to; be exercised.
Indeed, article I in.
Chapter I of the: Civil Service Regulations clearly provides that the regulations therein are intended only to regulate salaries, leave, pension and other allowances and that they do not deal otherwise than indirectly with matters relating to recruitment, promotion, official duties, discipline or the like.
In short, the language of ' Note I to article 465 A makes it abundantly clear that the Government 's right to compulsorily retire an officer is not derived from Note 1.
Note I only assumes its existence aliunde and indicates when that existing right is to be, exercised and what consequences are to follow if that right is exercised.
That right is obviously derived from new rule 4 which was announced by Resolution No. 1085 E.A. on the 15th November, 1919.
Being in operation at the date of the passing of the Government of 36 India Act, 1919, that rule, by virtue of sub section (4) of section 96B of that Act, became binding on the appellant although he was employed by the Secretary of State for India.
We, therefore, agree with the High Court, though on different grounds, that the first question raised by the appellant must be answered against him.
It is unfortunate that the Gazette of India notifications of the several earlier resolutions referred to above were not made available to the High Court.
(ii) and (iii).
It will be convenient to deal with these two questions together.
Learned counsel for the appellant urges that even assuming that rule 4 announced by Resolution No. 1085 E.A. and on which Note I to article 465 A of the Civil Service Regulations was based had, on the passing of the Government of India Act, 1919, become binding on the appellants it nevertheless became void on the coming into operation of the Constitution of India by reason of its being repugnant to the provisions of article 31 1 of the Constitution.
The argument is that a compulsory retirement of an officer was nothing but his removal from service within the meaning of article 311 and as rule 4 as well as Note I to article 465 A of the Civil Service Regulations sanctioned compulsory retirement without assigning any reason which, in substance, meant without giving him any opportunity to show cause against such action being taken in regard to him, it became repugnant to article 311 of the Constitution and, therefore, became void.
The argument, although plausible and attractive, was nevertheless rejected by the High Court and we think it rightly did so.
A brief study of the history and development of the rule now embodied in article 311 and a consideration of the language of that article and the relevant rules will amply confirm the correctness of this conclusion.
In England the rule was well established from very early times that public offices were held at the pleasure of the Crown.
The English constitutional theory was that the King could do no wrong and accordingly the services of a civil servant could be terminated without assigning any reason and no action could be maintained in the King 's Courts for damages for wrongful 37 dismissal.
This principle appears to have been applied even to the servants of the East India Company and certainly to the civil servants after the British Crown took over the territories and the administration thereof from the East India Company.
This state of affairs continued until 1919 when section 96B of the Government of India Act, 1910, while maintaining that the tenure was during His Majesty 's pleasure, introduced a minor restriction on this power of dismissal.
The relevant portion of sub section (1) of that section was in the terms following : " 96B. (1) Subject to the provisions of this Act and of rules made thereunder, every person in the civil service of the Crown in India holds office during His Majesty 's pleasure, and may be employed in any manner required by a proper authority within the scope of his duty, but no person in that service may be dismissed by any, authority subordinate to that by which he was appointed, and the Secretary of State in Council may (except so far as he may provide by rules to the contrary) reinstate any person in that service who has, been dismissed.
The rest of the sub section need not be quoted.
As already stated, sub section (4) of this section validated and confirmed the then existing rules and sub section (2) gave power to the Secretary of State for India in Council to make rules for regulating the classification of the civil services in India, the methods of their recruitment, their conditions of service, pay and allowances,, and discipline and conduct.
In exercise of this power the Secretary of State for India in Council framed certain rules in December, 1920, which with subsequent modifications were published on the 27th May, 1930, as "The Civil Services (Classification, Control arid Appeal) Rules.
" Rule 49 provides: " 49.
The following penalties may, for good and sufficient reason and as hereinafter provided, be imposed upon members of the services, comprised in any of the classes (1) to (5) specified in rule 14, namely: (i) Censure.
38 (ii)Withholding of increments or promotion, including stoppage at an efficiency bar.
(iii)Reduction to a lower post or time scale, or to a lower stage in a time scale.
(iv) Recovery from pay of the whole or part of any pecuniary loss caused to Government by negligence or breach of orders.
(v) Suspension.
(vi) Removal from the civil service of the Crown, which does not disqualify from future employment.
(vii) Dismissal from the civil service of the Crown, which ordinarily disqualifies from future employment.
Explanation.
The termination of employment(a) of a person appointed on probation during or at the end of the period of probation, in accordance with the terms of the appointment and the rules governing the probationary service; or (b) of a temporary Government servant appointed otherwise than under contract, in accordance with rule 5 of the Central Civil Services (Temporary Service) Rules, 1949; or (c) of a person engaged under a contract, in accordance with the terms his contract does not amount to removal or dismissal within the meaning of this rule or of rule 55].
The, relevant portion of rule 55 runs thus " 55.
Without prejudice to the provisions of the Public Servants Inquiries Act, 1850, no order of dismissal, removal or reduction shall be passed on a member of a service (other than an order based on facts which had led to his conviction in a criminal Court or by a Court martial) unless he has been informed in writing of the grounds on which it is proposed to take action, and has been afforded an adequate opportunity of defending himself . . . . . . .
The rest of this rule which lays down the details of procedure to be followed need not be quoted for our present purpose.
Under article 353 of the Civil Service Regulations, no pension may be granted to an officer dismissed or removed for misconduct, insolvency or 39 inefficiency, but to officers so dismissed or removed compassionate allowances may be granted when they are deserving of special consideration, provided that such allowance shall not exceed two thirds of the pension which would have been admissible to him if he had retired on medical certificate.
It will be noticed that the rules just referred to con template and provide for both dismissal and removal from service.
As regards pension both dismissal and removal stand on the same footing, namely, that both of them entail loss of pension and even when a compassionate allowance is granted in either case such ' allowance is much less than the pension that had been earned.
The only difference between dismissal and removal is that while dismissal ordinarily disqualifies the officer from future employment, removal does not.
It may also be mentioned here that although the power of dismissal at pleasure was " subject to the provisions of this Act and of the rules made thereunder " the Judicial Committee held in Rangachari vs Secretary of State(1) and in Venkatarao vs Secretary of State(2) that those opening words of section 96B(1) did not qualify the unfettered discretion of the Crown to dismiss a servant at pleasure and that the remedy of the servant for the violation of the rules was not by a law suit but by 'an appeal of an official or political kind.
Then came the Government of India Act, 1935.
Section 240 is important for our purpose.
The relevant portions of that section were as follows: " 240.
(1) Except as expressly provided by this Act, every person who is a member of a civil service of the Crown in India, or holds any civil post under the Crown in India, holds office during His Majesty 's pleasure.
(2) No such person as aforesaid shall be dismissed from the service of His Majesty by any authority subordinate to that by which he was appointed.
(3) No such person as aforesaid shall be dismissed or reduced in rank until he has been given a reasonable (1) L.R. 64 I.A. 40; A.I.R. 1937 P.C. 27.
(2) L.R. 64 I.A. 55; A.1,R. , 40 opportunity of showing cause against the action proposed to be taken in regard to him.
" The rest of the section is not material for the present discussion.
In short, sub section (1) reiterated the English constitutional theory, sub section (2) reproduced the restriction introduced by section 96B (1) of the 1919 Act and sub section (3) gave statutory protection to the rights conferred by rule 55 of the Civil Service,% (Classification, Control and Appeal) Rules but which, prior to this Act of 1935, had been held by the Privy Council in the two last cited cases to be ineffective against the Crown 's plenary power of dismissal.
It will, however, be noticed that in sub section (3) the word " removed " was not used, although that word occurred in rule 55 and the other rules quoted above.
It was, however, held in I. M. Lal 's case(1) that removal was within section 240(3), which conclusion implies that removal is comprised within dismissals The position, therefore, is that both under the rules and according to the last mentioned decision of the Judicial Committee there is no distinction between a dismissal and a removal except that the former disqualifies from future employment while the latter does not.
Finally, we have our new Constitution.
Article 3 10(1) reiterates the constitutional theory of the tenure of office being during the pleasure of the President, the Governor or Rajpramukh as the case may be.
Article 311(1) reproduces the provisions of section 240(2) of the Government of India Act, 1935.
Clause (2) of article 311, leaving out the proviso, runs thus: "(2).
No such person aforesaid shall be dismissed, removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him.
" The word " removal " which is used in the rules is also used in this clause and it may safely be taken, for reasons stated above, that under the Constitution removal and dismissal stand on the same footing except as to future employment.
In this sense removal is but a species of dismissal.
Indeed, in our recent decision (1) L.R 75 I,A. 225; A.I.R. 1948 P.C. 121. 41 in Satischandra Anand vs The Union of India(1) it has been ' said that these terms have been used in the same sense in article 31 1.
Removal, like dismissal, no doubt brings about.
a termination of service but every termination of service does not amount to dismissal or removal. ' A reference to the Explanation to rule 49 quoted above will show that several kinds of termination of service do not amount to removal or dismissal.
Our recent decision in Satishchandra Anand vs The Union of India (supra) fully supports the conclusion that article 311 does not apply to all cases of.
termination of service.
That was a case of a contract for temporary service being terminated by notice under one of the clauses of the contract itself and fell within clause (c) of the Explanation to rule 49 and article 311 was held by this Court not to have any application to the case.
The question then is whether a termination of service brought about by compulsory retirement is tantamount to a dismissal or removal from service so as to attract the provisions of article 311 of the Constitution.
The answer to the question will depend on whether the nature and incidents of the action resulting in dismissal or removal are to be found in the action of compulsory retirement.
There can be no doubt that,removal I am using the term synonymously with dismissal generally implies that the officer is regarded as in some manner blameworthy or deficient, that is to say, that he has been guilty of some misconduct or is lacking in ability or capacity or the will to discharge his duties as he should do.
The action of removal taken against him in such circumstances is thus founded and justified on some ground personal to the officer.
Such grounds, therefore, involve the levelling of some imputation or charge against the officer which may conceivably be controverted or explained by the officer.
There is no such element of charge or imputation in the case of compulsory retirement.
The two requirements for compulsory retirement are that the officer has completed twenty five years ' service and that it is in the public interest to dispense with his further services It is true that (1) ; at p. 659.
42 this power of compulsory retirement may be used when the authority exercising this power cannot substantiate the misconduct which may be the real cause for taking the action but what is important to note is that the directions in the last sentence in Note 1 to article 465 A make it abundantly clear that an imputation or charge is not in terms made a condition for the exercise of the power.
In other words, a compulsory retirement has no stigma or implication of misbebaviour or incapacity.
in the present case there was no doubt some imputation against the appellant which he was called upon to explain but it was made perfectly clear by the letter of the 4th January, 1950, that the Government was not holding any formal enquiry under rule 55 of the Civil Services (Classification, Control and Appeal) Rules and that before taking action for his compulsory retirement the Government desired to give him an opportunity to show cause why that action should not be taken.
In other words, the enquiry was to help the Government to make up its mind as to whether it was in the public interest to dispense with his services.
It follows, therefore, that one of the principal tests for determining whether a termination of service amounts to dismissal or removal is absent in the case of compulsory retirement.
Finally, rule 49 of the Civil Services (Classification, Control and Appeal) Rules clearly indicates that dismissal or removal is a punishment.
This is imposed on an officer as a Penalty.
It involves loss of benefit already earned.
the officer dismissed or removed does not get pension which he has earned.
He may be granted a compassionate allowance but that, under article 353 of the Civil Service Regulations, is always less than the pension actually earned and is even less than the pension which he would have got had he retired medical certificate.
But an officer who is compulsorily retired does not lose any part of the benefit that he has earned.
On compulsory retirement he will be entitled to the pension etc.
that he has actually earned.
There is no diminution of the accrued benefit It is said that compulsory retirement, like dismissal or removal, deprives the officer of the chance of serving 43 and getting his pay till he attains the age of superan nuation and thereafter to get an enhanced pension and that is certainly a punishment.
It is true that in that wide sense the officer may consider himself punished but there is a clear distinction between the loss of benefit already earned and the loss of prospect of earning something more.
In the first case it is a present and certain loss and is certainly a punishment but the loss of future prospect is too uncertain, for the officer may die or be otherwise incapacitated from serving a day longer and cannot, therefore,, be regarded in the eye of the law as a punishment.
The more important thing is to see whether b y compulsory retirement the officer loses the benefit he has earned as he does by dismissal or removal.
The answer is clearly in the negative.
The second element for determining whether a termination of service amounts to dismissal or removal is, therefore, also absent in the case of termination of service brought about by compulsory retirement.
The foregoing discussion necessarily leads us.
to the conclusion that a compulsory retirement does not amount to dismissal or removal and, therefore, does not attract the provisions of article 311 of the Constitution or of rule 55 and that, therefore, the order of the President cannot be challenged on the ground that the appellant had not been afforded full opportunity of 'showing cause against the action sought to be taken in regard to him ' Both the questions under consideration must also be answered against the appellant.
The result, therefore.
, is that this appeal fails and must stand dismissed.
In the circumstances of this case we make no order as to costs.
Appeal dismissed.

summary:
Held, that Article 465 A and Note I thereto of the Civil Service Regulations relating to the retiring pensions of officers was applicable to the appellant who was employed in 1923 as a member of the Indian Service of Engineers because Rule 4 of the new Rules published by the Government of India on 15th November, 1919, providing for compulsory retirement of any officer after the completion of 26 years ' service was validated and confirmed by section 96 B of the Government of India Act , 1919, which came into force on 23rd December, 1919, and the language of Note 1 to Article 466 A published in 1920 clearly indicates that the Government 's right to compulsorily retire an officer was not derived from Note 1 as Note 1 assumed its existence aliunde and the Government 's right was derived from new Rule 4 published on 15th November, 1919.
Held also, that a compulsory retirement under the Civil Services (Classification, Control and Appeal) Rules, does not amount to dismissal or removal within the meaning of Article 311 of the Constitution and therefore does not fall within the provisions of the said Article.
The word "removal" used synonymously with the term "dis missal" generally implies that the Officer is regarded as in some manner blameworthy or deficient.
The action of removal is founded on some ground personal to the officer and there is a levelling of some imputation or charge against him.
But there is no such element of charge or imputation in the case of compulsory retirement.
In other words a compulsory retirement does not involve any stigma or implication of misbehaviour or incapacity.
Dismissal or removal is a punishment and involves loss of benefit already earned.
The Officer, dismissed or removed, does not got pension which he has earned.
On compulsory retirement the Officer will be entitled to the pension that he has actually earned and there is no diminution of the accrued benefit.
Rangachari vs Secretary of State (L.R. 64 I.A. 40; A.I.R. ; Vankata Rao vs Secretary of State L.R. 64 I.A. 55; A.I.R, 1937 P.O. 37); I.M, Lal 's case (L.R. 76 I.A. 225 A.I.R. 1948 27 P.C. 121); Satischandra Anand vs The Union of India at p. 659) referred to.