judgement:
Appeal No. 244 of 1964.
Appeal from the judgment and order dated September 21, 1962 of the Mysore High Court in Civil Revision Petition No. 929 of 1958.
G. section Pathak and R. Gopalakrishnan, for the appellants.
section G. Patwardhan, V. Kumar and Naunit Lal, for the respondent No. 1.
235 May, 8, 1964.
The Judgment of the Court was delivered by SUBBA RAO, J.
This appeal by certificate raies the question whether a minor who was admitted to the benefits of a partnership can be adjudicated insolvent on the basis of debt or debts of the firm after the partnership was dis solved, on the ground that he attained majority subsequent to the said dissolution, but did not exercise his option to become a partner or cease to be one of the said firm.
The facts are not in dispute and may be briefly stated.
Mallappa Mahalingappa Sadalge and Appasaheb Mahalingappa Sadalge, respondents 2 and 3 in the appeal, were carrying on the business of commission agents and manufacturing and selling partnership under the names of two firms "M. B. Sadalge" and "C. N. Sadalge".
The partnership deed between them was executed on October 25, 1946.
At that time Chandrakant Nilakanth Sadalge, respondent 1 herein, was a minor and he was admitted to the benefits of the partnership.
The partnership had dealings with the appellants and it had become indebted to them to the extent of Rs. 1,72,484.
The partnership was dissolved on April 18, 1951.
The first respondent became a major subsequently and he did not exercise the option not to become a partner of the firm under section 30(5) of the .
When the appellants demanded their dues, the respondents 2 and 3 informed them that they were unable to pay their dues and that they had suspended payment of the debts.
On August 2, 1954, the appellants filed an application in the Court of the Civil Judge, Senior Division, Belgam, for adjudicating the three respondents as insolvents on the basis of the said debts.
The 1st respondent opposed the application.
The learned Civil Judge found that respondents 2 and 3 committed acts of insolvency and that the 1st respondent had also become partner as he did not exercise his option under section 30(5) of the Partnership Act and, therefore, he was also liable to be adjudicated along with them.
The first respondent preferred an appeal to the District Judge, but the appeal was dismissed.
On second appeal, the High Court held that the 1st respondent was not a partner of the 236 firm and, therefore, he could not be adjudicated insolvent for the debts of the firm.
The creditors have preferred the present appeal against the said decision of the High Court.
Learned counsel for the appellants, Mr. Pathak, contends that the 1st respondent had become a partner of the firm by reason of the fact that he had not elected not to become a partner of the firm under section 30(5) of the Patnership Act and, therefore, he was liable to be adjudicated insolvent along with his other partners.
The question turns upon the relevant provisions of the, (5 of 1920) and the .
Under the provisions of the , a person can only be adjudicated insolvent if he is a debtor and has committed an act of insolvency as defined in the Act: see sections 6 and 9.
In the instant case respondents 2 and 3 were partners of the firm and they be came indebted to the appellants and they committed an act of insolvency by declaring their inability to pay the debts .and they were, therefore, rightly adjudicated insolvents But the question is whether the first respondent could also be adjudicated insolvent on the basis of thE said acts of insolvency committed by respondents 2 and 3.
He could be, if he had become a partner of the firm.
It is contended that he had become a partner of the firm, because lie did not exercise his option not to become a partner thereof under section 30(5) of the Partnership Act.
Under section 30(1) of the Partnership Act a minor cannot become a partner of a firm but he may be admitted to the benefits of a partnership.
Under sub sections
(2) and (3) thereof he will be entitled only to have a right to such share of the properties and of the profits of the firm as may be agreed upon, but he has no personal liability for any acts of the firm, though his share is liable for the same.
The legal position of a minor who is admitted to a partnership has been succinctly stated by the Privy Council in Sanyasi Charan Mandal vs Krishnadhan Banerji(1) after considering the material provisions of the Contract Act, (1)[1922] I.L.R. , 570. 237 which at that time contained the provisions relevant to the law of partnership, thus : "A person under the age of majority cannot become a partner by contract. . . . and so according to the definition he cannot be one of that group of persons called a firm.
It would seem, therefore, that the share of which section 247 speaks is no more than a right to participate in the property of the firm after its obligations have been satisfied.
" It follows that if during minority of the 1st respondent the partners of the firm committed an act of insolvency, the minor could not have been adjudicated insolvent on the basis of the said act of insolvency for the simple reason that he was not a partner of the firm.
But it is said that sub section
(5) of section 30 of the Partnership Act made all the difference in the case.
Under that sub section the quondam minor at any time within six months of his attaining majority, or of his obtaining knowledge that he had been admitted to the benefits of partnership, whichever date is later, may give public notice that he has elected to become or that he has elected not to become a partner in the firm and such notice shall determine his position as regards the firm.
If he failed to give such a notice, he would become a partner in the said firm after the expiry of the said period of six months.
Under sub section
(7) thereof where such person becomes a partner, his rights and liabilities as a minor continue up to the date on which he becomes a partner, but he also becomes personally liable to third parties for all acts of the firm done since he was admitted to the benefits of partnership and his share in the property and profits of the firm shall be the share to which he was entitled as a minor.
Under the said two sub sections, if during the continuance of the partnership a person, who was admitted at the time when he was a minor to the benefits of the partnership, did not within six months of his attaining majority elect not to become a partner, he would become a partner after the expiry of the said period and thereafter his rights and liabilities would be the same as those of the other partners as from the date he was admitted to the partnership.
238 It would follow from this that the said minor would there after be liable to the debts of the firm and could be adjudicated insolvent for the acts of insolvency committed by the partners.
But in the present case the partnership was dissolved before the first respondent became a major; from the date of the dissolution of the partnership, the firm ceased to exist, though under section 45 of the Act, the partners continued to be liable as such to third parties for the acts done by any of them which would have been the acts of the firm if done before the dissolution until public notice was given of the dissolution.
Section 45 proprio vigore applies only to partners of the firm.
When the partnership itself was dissolved before the first respondent became a major, it is legally impossible to hold that he had become a partner of the dissolved firm by reason of his inaction after he became a major within the time prescribed under section 30(5) of the Partnership Act.
Section 30 of the said Act presupposes the existence of a partnership.
Sub sections (1), (2) and (3) thereof describe the rights and liabilities of a minor admitted to the benefits of partnership in respect of acts committed by the partners; sub section
(4) thereof imposes a disability on the minor to sue the partners for an account or payment of his share of the property or profits of the firm, save when severing his connection with the firm.
This sub section also assumes the existence of a firm from which the minor seeks to sever his connection by filing a suit.
It is implicit in the terms of sub section
(5) of section 30 of the Partnership Act that the partnership is in existence.
A minor after attaining majority cannot elect to become a partner of a firm which ceased to exist.
The notice issued by him also determines his position as regards the firm.
Sub section
(7) which describes the rights and liabilities of a person who exercises his option under sub section
(5) to become a partner also indicates that he is inducted from that date as a partner of an existing firm with co equal rights and liabilities along with other partners.
The entire scheme of section 30 of the Partnership Act posits the existence of a firm and negatives any theory of its application to a stage when the firm ceased to exist.
One cannot become or remain a partner of a firm that does not exist.
It is common case that the first respondent became a major only after the firm was dissolved.
Section 30 of the 239 Partnership Act, therefore, does not apply to him.
He is not a partner of the firm and, therefore, he cannot be adjudicated insolvent for the acts of insolvency committed by respondents 2 and 3, the partners of the firm.
The order of the High Court is correct.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.

summary:
The respondent No. 1 while he was a minor was admitted to the benefits of a partnership constituted of respondents 2 and 3.
The partnership owed a certain amount to the appellants.
The partnership was dissolved and subsequently respondent No. 1 became a major but he did not exercise the option not to become a partner under section 30(5) of the .
Respondents 2 and 3 committed acts of insolvency and the appellants filed an application for adjudicating the three respondents as insolvents.
The first respondent resisted the application without success but on second appeal the High Court held that he was not a partner of the firm and hence he could not be adjudicated an insolvent for the debts of the firm.
The present appeal was filed on a certificate granted by the High Court.
The appellant contended before this Court that the 1st respondent had become a partner of the firm by reason of the fact that he had not elected to become a partner under a. 30(5) of the Partnership Act and therefore he was liable to be adjudicated an insolvent.
Held:(i) A person under the age of majority cannot become a partner by contract and he cannot be one of that group of persons called a firm.
It therefore follows that if during minority of the 1st respondent the partners of the firm committed an act of insolvency, the minor could not have been adjudicated insolvent on the basis of the said act of insolvency for the simple reason that he was not a partner of the firm.
Sanyasi Charan Mandal vs Krishnadhan Banerji, (1922) I.L.R. , relied on.
(ii)It is implicit in the terms of sub section
(5) of section 30 of the Partnership Act that the partnership is in existence,.
A minor, after attaining majority, cannot elect to become a partner of a firm which ceased to exist.
The entire scheme of section 30 of the Partnership Act posits the existence of a firm and negatives any theory of its application to a stage when the firms ceased to exist.
(iii)Since the 1st respondent became a major after the partnersship was dissolved section 30 of the Partnership Act does not apply to him.
He is not a partner of the firm and therefore he cannot be adjudicated insolvent for the acts of insolvency committed by respondents 2 and 3, the partners of the firm.


judgement:
Appeal No. 596 of 1963.
Appeal from the judgment dated March 1, 1960 of the Madras High Court in Case Referred No. 11 of 1955.
K. N. Rajagopal Sastri and R. N. Sachthey, for the appellant.
R. Ganapathy Iyer and R. Gopalakrishnan, for the respondent.
May 7, 1964 The Judgment of the Court was delivered by SUBBA RAO, J.
This appeal by special leave is preferred against the order of the Madras High Court in a reference made to it by the Income tax Appellate Tribunal under section 66(1) of the Income tax Act, 1922, hereinafter called the Act.
The facts leading up to the reference and relevant to the present enquiry are as follows.
The Free Press of India (Madras) Ltd., hereinafter called the Free Press Company, was a private limited company carrying on business as printers and publishers of certain newspapers, namely, "Indian Express", "Dhinamani" and "Andhra Prabha" at 191 Madras, "Eastern Express" and "Bharat" at Calcutta and "Sunday Standard" and "Morning Standard" at Bombay.
,On August 31, 1946, the Free Press Company passed a resolution transferring to the Express Newspapers Limited, a new company formed on or about April 22, 1946, hereinafter called the assessee company, the right to print and publish the said newspapers from September 1. 1946.
letting out its machinery and assets and authorizing the assessee company to collect the book debts and pay off the liabilities of the Free Press Company.
The assessee company accordingly started publishing newspapers from September 1, 1946.
On October 31, 1946, the Free Press Company resolved at a General Body Meeting to wind up the company voluntarily.
The liquidator appointed thereunder was directed not to carry on the business of the company.
On November 1, 1946, the liquidator ascertained the value of the assets over the liabilities taken over by the assessee company as per the balance sheet at Rs. 19,36.000/and this amount was credited to the account of the two directors of the Free Press Company in the assessee 's books.
The profit of the Free Press Company was worked out to be Rs. 6,08,666, being the difference between the written down value and the sale price of the machinery.
That sum was made up of, (i) the difference between the original cost price and the written down price of the machinery. ' Rs. 2,14,090/ , (ii) the amount in excess over the original cost price .
Rs. 3,94,576/ .
The Income tax Officer included the said two items in the total income of the assessee company under the following heads, (i) profit under proviso to section 10(2) (vii) .
Rs. 2,14,090/ , and (ii) capital gains under section 12B .
Rs. 3,94,576/ , and assessed each to tax.
The Income tax Appellate Tribunal upheld the validity of the inclusion of the item under capital gains in the total income of the assessee but decided against the inclusion of the first item.
The Appellate Tribunal referred the following two questions, among others, for the decision of the High Court of Madras under section 66(1) of the Incometax Act: "4.
Whether Free Press Company made a business profit of Rs. 2,14,090/ under proviso to section 10(2);(vii) of the Act?" 192 "6.
Whether the capital gain made by the Free Press Company is liable to be assessed in the hands of the Express Company, under section 26(2) of the Act?" The reference was heard by a Division Bench of the High Court, consisting of Rajagopalan and Ramachandra Iyer, JJ., who by their judgment answered the two questions in the negative and against the department.
The present appeal is preferred against the said judgment of the High Court.
The argument in the appeal proceeded on the basis of the following facts.
During the accounting year 1946 47 the Free Press Company did not do the business of printing and publishing newspapers from September 1, 1946, and thereafter the assessee company alone was carrying on the said business.
The Free Press Company went into voluntary liquidation on October 31, 1946, and the liquidator, on November 1, 1946, confirmed the transfer of the assets made by the Free Press Company to the assessee company.
Therefore, on November 1, 1946, the aforesaid machinery was sold yielding a profit of Rs. 6,08,666/ to the Free Press Company being the difference between the written down value and the sale price of the machinery.
Broadly stated, the machinery was sold by the Free Press Company during the accounting year after it closed down its business and after it went into voluntary liquidation.
On those facts learned counsel for the Revenue raised before us the following two contentions: (1) The first item of Rs. 2,14,090/ , representing the surplus over the written down value of the machinery was assessable in accordance with the proviso to section 10 (2) (vii) of the Act; and (2) the second item of Rs. 3,94,576/ , representing the capital gains made by the Free Press Company is assessable in the hands of the assessee company, who succeeded to the said business, under section 26(2) of the Act.
Learned counsel for the respondent contended that neither the conditions laid down in section 10(2)(vii) of the Act nor those laid down in section 26(2) thereof attracted the said two items of income and, therefore, they were not assessable in the hands of the assessee company.
193 The first question turns upon the relevant provisions of section 10 of the Act.
To have a clear view of the scope of the relevant provisions it will be convenient to read them at one place.
Section 10. (1) The tax shall be payable by an assessee under the head "Profits and gains of business, profession or vocation" in respect of the profit or gains of any business, profession or vocation carried on by him.
(2) Such profits or gains shall be computed after making the following allowances, namely: (iv) in respect of insurance against risk of damage or destruction of buildings, machinery, plant, furniture, stocks or stores, used for the purposes of the business, profession or vocation.
the amount of any premium paid: (v) in respect of current repairs to such buildings, machinery, plant or furniture, the amount paid on account thereof; (vii) in respect of any such building, machinery or plant which has been sold or discarded or demolished or destroyed, the amount by which the written down value thereof exceeds the amount for which the building, machinery or plant, as the case may be, is actually sold or its scrap value: Provided further that where the amount for which any such building, machinery or plant is sold, whether during the continuance of the business or after the cessation thereof, exceeds the written down value, so much of the excess as does not exceed the difference between the original cost and the written 51 S.C. 13 194 down value shall be deemed to be profits of the previous year in which the sale took place: We are concerned with the second proviso to section 10(2) (vii) of the Act.
The substantive clause grants a balancing allowance in respect of building, machinery or plant which has been sold or discarded or demolished or destroyed.
The allowance represents the excess of the written down value over the sale price.
Under the proviso, if the sale price exceeds the written down value, but does not exceed the original cost price, the difference between the original cost and the written down value shall be deemed to be profits of the year previous to that in which the sale takes place; that is to say, the difference between the price fetched at the sale and the written down value is deemed to be the escaped profits for which the assessee is made liable to tax.
As the sale price is higher than the written down value, the difference represents the excess depreciation mistakenly granted to the assessee.
To illustrate: assume that the original cost of a machinery or plant is Rs. 100/ and depreciation allowed is Rs. 25/ ; the written down value is Rs. 75.
If the machinery is sold for Rs. 100/ , it is obvious that depreciation of Rs. 25/ was wrongly allowed.
If it had not been allowed that amount would have swelled the profits to that extent.
When it is found that it was wrongly allowed that profit is brought to charge.
The second proviso, therefore, in substance, brings to charge an escaped profit or gain of the business carried on by the assessee.
The scope of this proviso cannot be ascertained in vacuum.
The conditions for its applicability can be ascertained only in its relation to the other related provi sions.
Under section 3 of the Act income tax shall be charged for any year in accordance with and subject to the provi sions of the Act in respect of the total income of the previous year of every assessee; under section 6, one of the heads of taxable income is "profits and gains of business, profession or vocationl,; under section 10(1), the tax under that head is payable in respect of profit or gains of any business carried on by the assessee during the accounting year.
The 195 main condition which attracts all the other sub sections and clauses of the section is that the tax shall be payable by an assessee in respect of the profit or gains of any business etc.
carried on by him.
The crucial words are ."business carried on by him".
If the profit or gains were not earned when the business was being carried on by the assessee during the accounting year, they would fall outside the provision of section 10(1).
For instance, if the machinery sold after the business was closed or when the business was under liquidation, it would not be appropriate to hold that the profit or gains earned by the sale were in respect of the business that was being carried on by the assessee.
The second condition that attracts the second proviso is implicit in the adjective "such" preceding "building, machinery or plant" sold.
The adjective "such" refers back to cls.
(iv), (v), (vi) and (vii) of section 10(2).
Under cl.
(iv) an allowance is allowed in regard to any premium paid in respect of insurance against risk of damage or destruction of buildings, machinery, plant etc.
used for the purpose of the business, profession or vocation.
Under this clause allowance is allowed only in respect of the machinery used for the purpose of the business.
Clauses (v), (vi) and (vii) refer to such buildings, machinery, plant etc.; that is to say, such buildings, _machinery, plant etc.
used for the purpose of the business.
The result is that the second proviso will only apply to the sale of such machinery which was used for the purpose of the business during the accounting year.
It brings in to charge the escaped profits under the guise of superfluous allowances if the machinery sold was used for the business during the accounting year when the business was being carried on.
Therefore, to bring the sale proceeds to charge the following condition.
,, shall be fulfilled: (1) During the entire previous year or a part of it the business shall have been carried on by the assessee; (2) the machinery shall have been used in the business; and (3) the machinery shall have been sold when the business was being carried on and not for the purpose of closing it down or winding it up.
If these were the conditions for the applicability of the said proviso, the sale of the machinery in the instant case having taken place after the business was closed and during the winding up 196 proceedings, it would fall outside the scope of the said proviso and therefore the first item is not assessable to tax This point directly arose for consideration in The Liquidators of Pursa Limited vs Commissioner of Incometax, Bihar(1).
There, the assessee company carried on the business of growing sugarcane and manufacturing and selling sugar.
In the year 1943 it negotiated for the sale of the factory and other assets with the object of winding up the company.
It received a firm offer on August 9, 1943, and concluded the agreement of sale on December 7, 1943.
Between August 9, 1943, and December 7, 1943, it never used the machinery and plant for the purpose of manufacturing sugar or for any other purpose except that of keeping them in trim and running order.
In the assessment of the company to income tax for the accounting period from October 1, 1943, to September 30, 1944, the income tax authorities treated the surplus made by the company on the sale of the buildings, plant and machinery as profits under proviso (2) to section 10(2)(vii) of the Act.
This Court held that the said amount was not taxable.
This Court rejected the contention of the Revenue that the said excess was taxable on two grounds, namely, (1) "the sale of the machinery and plant was not an operation in furtherance of the business carried on by the company but was a realisation of its assets in the process of gradual winding up of its business which eventually.
culminated in the voluntary liquidation of the company; (2) "even if the sale of the stock of sugar be regarded as carrying on of business by the company_and not a realisation of its assets with a view to winding up, the machinery or plant not being used in the accounting year at all and in any event not having had connection with the carrying on of that limited business during the accounting year, section 10(2)(vii) could have no application to the sale of any such machinery or plant".
Learned counsel for the Revenue contends that the main reason for the decision was that the machinery or the plant was not used in the accounting year for the business and that the second reason, namely, that the assets were sold in the process of gradual winding up of the com 197 pany was only an observation and that the decision was not based upon the said observation.
But a careful perusal of the judgment discloses beyond any reasonable doubt that the decision was based upon both the grounds.
As in the present case the machinery was sold not for the business but only for closing it up during the liquidation proceedings, this decision directly covers the present case.
This question again fell to be considered by this Court in The Commissioner of Income tax, Bombay Circle II vs The National Syndicate, Bombay(1).
There, the National Syndicate, a Bombay firm, acquired on January 11, 1945, a tailoring business as a going concern for Rs. 89,321/ which includedthe consideration paid for sewing machines and a motor lorry.
Soon after the purchase the respondent found it difficult to continue the business, and therefore it closed its business in August, 1945.
Between August 16, 1945, and February 14, 1946, sewing machines and the motor lorry were sold at a loss.
The respondent closed its account books on February 28, 1946, showing the two losses and writing them off.
For the assessment year 1946 47, the respondent claimed a deduction under section 10 (2) (vii) of the Indian Income tax Act.
The question fell to be considered on a construction of the provisions of section 10(2) (vii) of the Act.
This Court, speaking through Hidayatullah, J., held that the loss was a business loss, though the machines and the motor lorry were sold after the business was closed down, as the said machines and lorry were used for the purpose of the business during a part of the accounting year and were sold during the accounting year.
This Court, after noticing the decision under appeal and that of this Court in The Liquidators of Pursa Limited vs Commissioner of Income tax, Bihar (2), and the amendment introduced in the second proviso to section 10 (2) (vii) of the Act, observed: "But it is to be noticed that no such amendment was made in el.
(vii) to exclude loss over buildings, machinery or plant after the closure of the business.
It is thus clear that the principles which govern the proviso cannot be (1) ; (2) ; 199 used to govern the main clause, because profit or loss arise in different ways in business.
The two rulings do not, therefore, apply to the facts here.
" It is contended that the principle accepted by this decision is in conflict with that laid down in the case of The Liquidators of Pursa Limited(1).
It is said that the con dition that the sale of the machinery at a loss should have been before the closing of the business is impliedly laid down by section 10(1) of the Act which applies equally to cl.
(vii )as well as to the second proviso thereto, and that if the condition need not be fulfilled in the case falling under the substantive part of cl.
(vii) of section 10(2) of the Act, it will be incongruous to apply it to a case falling under the second proviso before it was amended.
So stated there is some plausibility in the argument.
But this Court in express terms made a distinction between the scope of the substantive part of cl.
(vii) and that of the second proviso thereto and expressly distinguished those rulings on the ground that they would not apply to the construction of the substantive part of cl.
(vii).
When this Court expressly confined the scope of the decision to the substantive part of cl.
(vii) without disturbing the validity of the decisions governing the second proviso, it is not proper that we should rely upon it in preference to a direct decision on the second proviso to cl.
(vii) of section 10(2) of the Act before it was amended.
This Court in K. M. section Reddy, Commissioner of Income tax, Kerala vs The West Coast Chemicals and Industries Ltd. (in liquidation), Alleppy(2) held that a winding up sale was not trading or doing business.
There.
chemicals and other raw materials were sold not in the course of ordinary trading but only in realisation sale after the company had been wound up.
This Court, speaking through Hidayatullah, J., posed the following question, "The question, therefore, is whether there can be said to be a sale in the carrying on of the business in respect of the chemicals and other raw materials." (1) ; (2) [1962] Supp.
3 S.C.R. 960, 965. 199 After referring to the passages in Halsbury 's Laws of Eng land, 3rd Edn., Vol. 20, pp. 115 117, wherein it was stated that "mere realisation of assets is not trading" and that there was distinction between sales forming part of the trading activities and those where the realisation was not an act of trading, the learned Judge observed that the said distinction was a sound one.
The learned Judge, on a consideration of other decisions, also accepted as correct the distinction made between a sale of the entire stock as part of trading and the sale of a part of the stock as a winding up sale.
Then the learned Judge applied the principles to the facts of the case and held that it was im possible to infer that the chemicals and raw materials were sold in the ordinary way of business or that the assessee company was carrying on a trading business.
This decision again accepts the distinction between a sale held in the ordinary way of business and that held for the purpose of winding up the business and that in the latter case the profits accrued are not trading profits.
This case no doubt did not turn upon the provisions of the second proviso to cl.
(vii) of section 10(2) of the Act, but the principle accepted therein is the basis for the application of section 10 of the Act and that will apply to all provisions of section 10, unless an exception is made in a particular provision.
For the fore going reasons we hold that the first item is not liable to tax and the High Court has given the correct answer to the first question submitted to it.
The second item relates to capital gains.
That represents the excess of the price obtained on the sale of the machinery over its original cost price.
It is conceded that it does not represent profits and gains of business, but it falls under the heading "capital gains".
But it is argued that, as the Free Press Company wag wound up and, therefore, could not be found.
, the assessee, who had succeeded to it, would be liable to be assessed for the said capital gains under the proviso to section 26(2) of the Act.
To appreciate the contention some of the relevant provisions of the Act may be read: Section 6.
Save as otherwise provided by this Act, the following heads of income, profits and 200 gains, shall be chargeable to income tax in the manner hereinafter appearing, namely: (v) Profits and gains of business, profession or vocation.
(vi) Capital gains.
Section 10. (1) The tax shall be payable by an assessee under the head "Profits and gains of business, profession or vocation" in respect of the profit or gains of any business, profession or vocation carried on by him.
(2) Such profits or gains shall be computed after making the following allowances, namely: Section 12B. (1) The tax shall be payable by an assessee under the head "Capital gains" in respect of any profits or gains arising from the sale, exchange, relinquishment or transfer of a capital asset effected after the 31st day of March, 1956, and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange, relinquishment or transfer took place: Section 24. (2A) Notwithstanding anything con tained in sub section (1), ",here the loss sustained is a loss falling under the head "Capital gains," such loss shall not be set off except against any profits and gains falling under that head.
(2B) Where an assessee sustains a loss such as is referred to in sub section (2A) and the loss cannot be wholly set off in accordance with the provisions of that sub section, the portion not so set off shall be carried forward to the 201 following year and set off against capital gains for that year, and if it cannot be so set off, the amount thereof not so set off shall be carried forward to the following year and so on, so however that no such loss shall be carried forward for more than eight years: Provided that where the loss sustained by an assessee, not being a company, in any previous year does not exceed five thousand rupees, it shall not be carried forward.
Section 26. (2) Where a person carrying on any business, profession or vocation has been succeeded in such capacity by another person, such person and such other person shall, sub ject to the provisions of sub section (4) of section 25, each be assessed in respect of his actual share, if any, of the income, profits and gains of the previous year: Provided that, when the person succeeded in the business, profession or vocation cannot be found, the assessment of the profits of the year, in which the succession took place up to the date of succession, and for the year preceding that year shall be made on the person succeeding him in like manner and to the same amount as it would have been made on the person succeeded or when the tax in respect of the assessment made for either of such years assessed on the person succeeded cannot be recovered from him, it shall be payable by and recoverable from the person succeeding, and such person shall be entitled to recover from the person succeeded the amount of any tax so paid.
A conspectus of the said sections discloses a clearcut scheme.
Though income tax is only one tax levied on the total income, section 6 enumerates six heads whereunder the income of an assessee falls to be charged.
This Court in United Commercial Bank Ltd. vs Commissioner of Income 202 tax, West Bengal(1) laid down that sections 7 to 12 are mutually exclusive and where an item of income falls specifically under one head it is to be charged under that head and no other.
The expression "Income, profits and gains" in section 6 is a composite concept which takes in all the six heads of income mentioned therein.
The 4th head is "profits and gains of business, profession or vocation" and the 6th head is "capital gains".
Section 10 taxes the profits and gains of a business, profession or vocation carried on by an assessee; it also enumerates the different kinds of allowances that can be made in computing the profits.
Under section 10(1), as we have already pointed out, the necessary condition for the application of the section is that the assessee should have carried on the business for some part of the accounting year.
Section 26(2) indicates the manner of assessment of the income, profits and gains of any business, profession or vocation.
This section does not provide for the assessment of income under any other head.
It only says that if there is a succession to a person carrying on business during an accounting year, the person succeeded and the person succeeding can each of them be assessed in respect of his actual share.
The proviso deals with a case where the person succeeded cannot be found; in that event, the assessment of the profits of the year in which the succession took place upto the date of the succession and for the year preceding that year shall be made on the person succeeding him.
If an assessment has already been made in respect of the said years on the person succeeded, it can be recovered from the person succeeding.
But both sub section
(2) and the proviso deal only with income, profits and gains of 'the business, that is to say, for the assessment made in respect of profit and gains under the 4th head of section 6.
Now turning to section 12B, it provides for capital gains.
Under that section the tax shall be payable by the assessee under the head capital gains in respect of any profits or gains arising from, the sale of a capital asset effected during the Prescribed period.
It says further that such profits or gain shall be deemed to be income of the previous year in which the sale etc.
took place.
This deeming clause does not lift the, capital gains from the 6th head in section 6 and place it (1) ; (4) 203 under the 4th head.
It only introduces a limited fiction, named that capital gains accrued will be deemed to be income of the previous year in which the sale was effected.
The fiction does not make them the profit or gains of the business.
It is well settled that a legal fiction is limited to the purpose for which it is created and should not be extended beyond its legitimate field.
Sub sections (2A) and (2B) of section 24 provide for the setting off of the loss falling under the head "capital gains" against any capital gains falling under the same head.
Such loss cannot be set off against an income falling under any different head.
These three sections indicate beyond any doubt that the capital gains are separately computed in accordance with the said provisions and they are not treated as the profits from the business.
The profits and gains of business and capital gains are two distinct concepts in the Income tax Act: the former arises from the activity which is called business and the latter accrues because capital assets are disposed of at a value higher than what they cost the assessee.
They are placed under different heads; they are derived from different sources; and the income is computed under different methods.
The fact that the capital gains are connected with the capital assets of the business cannot make them the profit of the business.
They are only deemed to be income of the previous year and not the profit or gains arising from, the business during that year.
If that be the scheme of the Act, the contention of the learned counsel for the Revenue can easily be answered.
He asks that if section 26(2) deals with only profits and gains of the business, why should the Legislature use the word "income" therein? As we have indicated, the expression "income, profits and gains" is a compendious term to connote the income from the various sources mentioned in section 6; therefore, the use of such an expression does not efface the distinction between the different heads, but only describes the income from the business.
The expression ;,profits" in the proviso makes it clear that the income, profits and gains in sub section
(2) of section 26 only refer to the profits under the 4th head in section 6.
On the other hand, if the interpretation 204 sought to be put upon the expression "income" in sub section
(2) of section 26 by the Revenue is accepted, then the absence of that word in the proviso destroys the argument.
But the more reasonable view is that both the sub section and the proviso deal only with the profits under the 4th head men tioned in section 6 and, so construed, it excludes capital gains.
The argument that sub section
(2) of section 26 read with the proviso thereto indicates that the total income of the person succeeded is the criterion for separate assessment under sub section
(2) and for assessment and realisation under the proviso is on the assumption that sub section
(2) and the proviso deal with all the heads mentioned in section 6 of the Act.
But if, as we have held, the scope of sub section
(2) of section 26 is only limited to the income from, the business, the share under sub section
(2) and the assessment and realisation under the proviso can only relate to the income from the business.
The argument is really begging the question itself.
In the result we agree with the High Court in regard to the answer it has given in respect of the second question.
In this view no other question arises for our consideration.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.

dataset_name: IN-Abs

summary:
The Free Press Company was a private limited company Carrying On business as printers and publishers of certain newspapers.
On August 31, 1946, the Free Press Company transferred the right to print and publish the newspapers to the assessee company and let out its machinery and assets to the latter with effect from September 1, 1946.
The assessee company accordingly started publishing newspapers from September 1, 1946.
The Free Press Company went into voluntary liquidation on October 31, 1946, and the Liquidator, on November 1, 1946, confirmed the transfer of the assets made by the Free Press Company to the assessee company.
On November 1, 1946 the aforesaid machinery was sold yielding a profit of Rs. 6,08,666.
That sum was made up of, of price machinery Rs. 2,14,090, (ii) the amount in excess over the original cost priceRs.
3,94,576.
In assessing the assessee to income tax for the accounting year 1946 47 the Income tax Officer included the said two items in the total income of the assessee company.
The first item was assessed as profit under proviso to section 10(2)(vii) of the Incometax Act and the second item was assessed as capital gains.
The matter went up to the High Court.
On a reference the High Court held that the assessee was not liable to tax in respect of the said two items.
Held: (i) The second proviso to section 10(2)(vii) of the Act would only apply to the sale of such machinery which was used for the purpose of business during the accounting year.
In order to bring the sale proceeds to charge under the second proviso the following conditions shall be fulfilled: (1) During the entire previous year or a part of it the business shall have been carried on by the assessee; (2) the machinery shall have been used in the business; and (3) the machinery shall have been sold when the business was being carried on and not for the purpose of closing it down or winding it up.
On the facts of this case it was held that the sale of the machinery in the instant case having taken place after the business was closed and during the winding up proceedings therefore it would fall outside the scope of the said proviso and thus the first item i.e. the sum of Rs. 2,14,090 could not be assessed to income tax.
190 The Liquidators of Pursa Limited vs Commissioner of Income tax, Bihar; , and K. M. section Reddy, Commissioner of Income tax, Kerala vs West Coast Chemicals and Industries Ltd. (in liquidation), Alleppy, [1962] Supp.
3 S.C.R. 960, relied on.
Commissioner of Income tax, Bombay Circle II vs The National Syndicate, Bombay, ; , explained.
(ii) Both the sub section
(2) of section 26 and the proviso deal only with profits under the 4th head mentioned in section 6 and, so construed, it excludes capital gains.
The profits and gains of business and capital gains are two distinct concepts in the Income tax Act: the former arises from the activity which is called business and the latter accrues because capital assets are disposed of at a value higher than what they cost the assessee.
Therefore under section 26(2) of the Act the assessee being the successor could not be liable to income tax in respect of Rs. 3,94,576 (the second item) which represented the capital gains because capital gains are excluded from the purview of section 26(2) of the Act.
United Commercial Bank Ltd. vs Commissioner of Income tax, West Bengal; , , referred to.


judgement:
ls Nos. 140 to 143 and 156 and 157 of 1953.
Appeals by special leave granted by the Supreme Court by its Order dated the 23rd April, 1953, from the decision dated the 19th December, 1952, of the Labour Appellate Tribunal of India, Third Bench, Madras, in Appeals Nos.
245/52, 246/52, 247/52 and 248/52.
466 C.K. Daphtary, Solicitor General for India, (I. B. Dadachanji, with him) for the appellants in all the appeals.
S.Mohan Kumaramangalam for the respondents in Civil Appeals Nos.
140 to 143.
H. J. Umrigar for the respondents in Civil Appeals Nos.
156 and 157.
October 8.
The Judgment of the Court was delivered by MAHAJAN J.
The Government of Mysore by a notification dated 15th June, 1951, under powers conferred by section 7 of the Industrial *Disputes Act, 1947, constituted an Industrial Tribunal for a period of one year consisting of a chairman and two members for the adjudication of industrial disputes in accordance with the provisions of the Act.
It appointed the following persons as chairman and members thereof: Chairman : Rajadharmaprasakta T. Singaravelu Mudaliar.
Members : Janab Mohamed Sheriff.
Sri section Rangaramiah.
Two disputes between the management and the workers of the Minerva Mills Ltd., Bangalore, and two other disputes between the management and workers of the Mysore Spinning and Manufacturing Co. Ltd., Bangalore, were referred to the said Industrial Tribunal under section 10 (1) )c) of the Act for adjudication.
Several other disputes were also referred for adjudication to the same tribunal.
Till the 15th June, 1952, when the period of one year expired, the tribunal had only disposed of 5 out of the 22 disputes referred to it.
In the four disputes with which we are concerned ,the tribunal had only framed issues and had not proceeded to record any evidence.
On 27th June, 1952, the Government by another notification constituted another tribunal for adjudication of these disputes and acting under section 10(1) (c) of the Act referred all the disputes left undisposed of by the first tribunal to the newly constituted 467 tribunal.
This notification was not very happily worded and has been the subject matter of a good deal of comment in the courts below and also before us.
It runs thus : "Whereas under Notification No. L.S. 1075 L.W. 68 51 2, dated 15th June, 1951 an Industrial Tribunal for the adjudication of industrial disputes in accordance with the provisions of the , was constituted for a period of one year, And whereas the said period of one year has expired creating a vacancy in the office of both the chairman and the two members, namely, Chairman: Sri B. R. Ramalingiah.
Members : Janab Mohamad Sheriff.
Sri section Rangaramiah.
Now therefore in exercise of the power conferred under sections 7 and 8 of the , H.H. the Maharaja of Mysore is hereby pleased to constitute an Industrial Tribunal for adjudication of industrial disputes in the Mysore State in accordance with the provisions of the Act and further to appoint the following persons as chairman and members thereof Chairman Sri B. R. Ramalingiah.
Members Janab Mohamad Sheriff.
Sri K. Shamaraja Iyengar.
Under section 10 (1) (c) of the , H. H. the Maharaja is pleased to direct that the tribunal now constituted under this notification shall hear and dispose of all the references made to the previous tribunal constituted under the notification of 15th June, 1951, and which have remained undisposed of on 15th June, 1952.
" When the second tribunal proceeded to hear the four disputes which are the subject matter of these appeals, the employers raised a number of preliminary objections regarding the jurisdiction of the tribunal to hear and dispose of the disputes, the principal contentions being, (1) that the time limit of one year fixed 468 for die life of the first tribunal was unauthorized illegal and therefore the first tribunal continued to exist in spite of the expiry of that period; (2) that the Government could not withdraw the disputes referred to the first tribunal,from it, so long as the members of the first tribunal were available for discharging their duties and.
that section 8 had no application to the facts of this case ; and (3) that the trial of these disputes by the newly constituted tribunal, even if,it had jurisdiction to entertain them, could not be started from the stage at which they were left by the first tribunal and should begin de novo.
The employees contested these propositions and contended that it was competent for the Government to constitute one or more Industrial Tribunals under section 7 and it was open to it to prescribe that these tribunals should function for a limited period; that the notification dated the 27th June, 1952, was valid both under sections 7 and 8 of the Act and the second tribunal was properly constituted and had jurisdiction over the disputes referred to it under section 10 (1) (c) of the Act and that there was no need for a de novo trial in law.
The second tribunal rejected the preliminary objections raised by the employers and came to the conclusion that the Government was competent to constitute the first tribunal for a limited period, that the second tribunal was properly constituted and that the references made were proper and could be proceeded with from the stage at which the first tribunal had left them.
Against this order the employers preferred appeals ' to the Labour Appellate Tribunal, Nos. 245 to 248 of 1952.
They also filed writ applications under article, 226 of the Constitution of India before the Court, C.P. Nos. 79 and 80 of 1952 53, for the issue of writs of prohibition prohibiting the second tribunal from proceeding with the adjudication of the four disputes, the subject matter of the appeals.
The points that arose for decision in the appeals as well as in the writ applications were substantially the same.
In these circumstances the High Court postponed hearing the 469 writ applications till the appeals had been heard by the Labour Appellate Tribunal.
The Labour Appellate Tribunal by its order dated 19th December, 1952, dismissed all the 'appeals and subsequently the High Court of Mysore by its order dated 25th March, 1953, also dismissed the writ applications.
It, however, granted the employers a certificate of leave to appeal to this court.
The employers filed applications for special leave to appeal against the order of the Labour Appellate Tribunal passed in the appeals before it, and this court granted special leave to appeal by an order dated 23rd April, 1953.
The result is that we have four appeals now before us against the order of the Labour Appellate Tribunal, C.A. Nos. 140 to 143 of 1953 and two appeals before us from the order of the High Court refusing the application of the employers under article 226 of Constitu tion, C.A. Nos. 156 and 157 of 1953.
As all these appeals raise a common question of law they can conveniently be disposed of by one judgment.
Mr. Daphtary, who appeared for the employers, contended that the four disputes between the ,employers and employees that were referred to the Industrial Tribunal constituted by the notification of 15th June, 1951, were still in law pending before that tribunal and it was that tribunal and that tribunal alone that could adjudicate on them and give its award on them and that the second tribunal constituted by the notification of 27th June, 1952, had no jurisdiction to entertain the references or to give any awards concerning them.
It was contended that under the there is no power in the Government for appointing a tribunal for a limited duration, and that its power is only to constitute a tribunal and to refer certain disputes to it.
It is said that in the provisions of the Act it is implicit that a tribunal once appointed can cease to function only after the references made to, it have been exhausted, i.e., after it has given its award.
It 6 83 S.C. India/59. 470 was further urged that there is no power in the Government once it has made a reference under section 10 of the Act to withdraw it from the tribunal and to hand it over to another tribunal.
It was suggested that the members of the first tribunal should be directed to hear those references and to give their award.
In our opinion, none of these contentions can be sustained on the provisions of the Act Section 7 of the Act provides as follows : "The appropriate Government may constitute one or more Industrial Tribunals for the adjudication of industrial disputes in accordance with the provisions of this Act.
(2)A tribunal shall consist of such number of independent members as the appropriate Government may think fit to appoint, and where the tribunal consists of two or more members, one of them shall be appointed as the chairman thereof . . ".
Section 8 provides that if for any reason a vacancy occurs in the office of the chairman or any other member of a court or tribunal, the appropriate Government shall, in the case of a chairman, and may, in the case of any other member, appoint another independent person, in accordance with the ' provisions of section 6 or section 7, as the case may be, to fill the vacancy, and the proceedings may be continued before the court or the tribunal so reconstituted.
Section 7 does not restrict or limit the powers of the Government in any manner and does not provide that a tribunal cannot be constituted for a limited period or for deciding a limited number of disputes.
From the very nature and purpose for which Industrial Tribunals are constituted it is quite clear that such tribunals are not to be constituted permanently.
It is only when some industrial disputes arise that such tribunals are constituted and normally such tribunals function so long as the disputes referred to them are not disposed of.
But from this circumstance it cannot be inferred that it is not open to the Government to fix a time limit for the life of these tribunals in order 471 to see that they function expeditiously and do not prolong their own existence by acting in a dilatory manner.
Mr. Daphtary, however, contended that though the language of section 7 was wide enough to include within its phraseology a power in the Government to constitute tribunals for any period of time it thought fit, this wide construction of its language had been limited by the other provisions of the Act.
He made reference to the provisions of section 4 which deals with conciliation officers.
Sub section (2) of section 4 provides that a conciliation officer may be appointed for a specified area or for specified industries in a specified area or for one or more specified industries and either permanently or for a limited period.
It is obvious that the nature of duties of conciliation officers being of a different character, provision has been made that they may be either appointed permanently or for a limited period.
From these provisions it is difficult to infer the same or a different intention regarding Industrial Tribunals.
They may well be appointed ad hoc for a particular dispute.
It was for this reason that no restriction was placed on the powers of Government regarding the constitution of tribunals, and Government was given very wide discretion and it could appoint them for any limited time or for a particular case or cases as it thought fit and as the situation in a particular area or a particular case demanded.
Reference was then made to the provisions of sections 15 to 20 of the Act for the proposition that once a reference is made to a tribunal, the adjudication must be ,concluded by that tribunal and that tribunal alone must give the award, and that the life of the tribunal cannot be cut short between the date of the reference of the dispute for adjudication and the date of the award.
Section 15 provides that where an industrial dispute has been referred to a Tribunal for adjudication, it shall hold its proceedings expeditiously and shall, as soon as practicable, on the conclusion thereof, submit its award to the appropriate Government.
We are unable to see that any inference 472 can be raised from the provisions of the section supporting the contention of Mr. Daphtary.
This is a provision directing the tribunal to function expeditiously and give its award as soon as possible.
Section 20(3) is in these terms "Proceedings before a tribunal shall be deemed to have commenced on the date of the reference of dispute for adjudication and such proceedings shall be deemed to have concluded on the date on which the award becomes enforceable under section 17 A." This section lays down the date or the terminus a quo for the termination and commencement of the proceedings.
It is difficult to see that it in any way cuts the power of the Government to appoint a tribunal for a limited duration.
Reference was also made to the provisions of section 33 which relate to the conditions of service during the pendency of the proceedings in adjudication.
It is provided therein that there shall be no change in the conditions of service of the workmen pending adjudication.
In our opinion, the Labour Appellate Tribunal and the High Court were right in holding that from these provisions it could not be held that it was implicit in section 7 that the Government could not withdraw a dispute referred to a tribunal or make the appointment of a tribunal for a limited period of time.
In our opinion, under the provisions of section 7, the appropriate Government has ample power of constituting a tribunal for a limited time, intending thereby that its life would automatically come to an end on the expiry of that time.
The contention therefore of Mr. Daphtary that the notification appointing the first tribunal for a period I of one year was illegal and that the first tribunal continues to exist is without force.
His further contention that the Government could not withdraw the dispute referred to the first tribunal so long as the members of the first tribunal were available and could not hand it over to the 'second tribunal cannot also be sustained.

summary:
Under Section 7 of the , the appropriate Government has ample power to constitute an industrial tribunal for a fixed period of time and to constitute a new tribunal on the expiry of that period, to hear and dispose of all references made to the previous.
tribunal which had not been disposed of by that tribunal.


judgement:
Appeal No. 80 of 1962.
Appeal from the judgment and decree dated December 19, 1957, of the Madras High Court in C.M. Appeal No. 303 of 1956.
A. V. Viswanatha Sastri, V. Ratnam and R. Ganapathy Iyer, for the appellant.
G.S. Pathak and R. Thiagarajan, for the respondent.
July 24, 1964.
The Judgment of the Court was delivered by SUBBA RAO, J.
This appeal by certificate raises the question whether a decree obtained in a suit to enforce a debt incurred after the Madras Agriculturists Relief Act, 1938 (Act 4 of 1938), hereinafter called the Parent Act.
came into force could be scaled down under section 13 of the Parent Act.
The facts are as follows: On February 15, 1964, the appellant and 4 others executed a mortgage deed in favour of Kaverlal Chordia for a sum of Rs. 2,00,000 payable after three years with interest at 9 per cent.
per annum.
On January 24, 1946, the mortgagee assigned the said mortgage 308 in favour of the respondent.
Certain payments towards principal and interest were made thereunder.
On February 28, 1950, the assignee mortgagee i.e., the respondent, filed a suit, O.S. No. 55 of 1950, in the Court of the Subordinate Judge, Nilgiris, Ootacamund, for the recovery of Rs. 1,98,487 8 0, made up of Rs. 1,50,000 for the balance of the principal and Rs. 48,487 8 0 for interest due on tile mortgage.
The suit ended in a compromise dated December 21, 1950, under which a decree was passed for Rs. 1,50,000 on account of principal, with interest and further interest at 9 per cent.
per annum and costs, subject to some concessions being shown in the event of payments, being made in certain specified instalments.
Thereafter, certain payments were made towards the decree.
In due course the respondent filed I.A. No. 382 of 1953 for the passing of a final decree.
On June 24, 1955, the appellant filed O.P. No. 24 of 1955 for scaling down the debt.
The respondent, inter alia, contended in his objections filed against the said application that as the debt sought to be scaled down was incurred subsequent to March 22, 1938, which is the date of the commencement of the Parent Act.
the decree could not be scaled down under section 19(2) of the Parent Act.
The learned Subordinate Judge overruled the objection and held by his order dated August 10, 1956.
that the decree was liable to be scaled down in terms of section 13 of the Parent Act.
He accordingly scaled down the decree debt.
On appeal, a Division Bench of the Madras High Court held that as the statutory right to have the interest scaled down was not put forward before the consent decree was passed, the decree could not be scaled down at the stage of the final decree proceedings.
It further held that section 19(2) of the Parent Act only applied to debts payable at the commencement of the &aid Act and therefore, the application for scaling down the decree was not maintainable.
In the result it set aside the order of the Subordinate Judge and dismissed the petition for scaling down the debt.
Hence the present appeal.
Mr. A. V. Viswanatha Sastri, learned counsel for the appellant, did not press the appellant 's claim under section 19(2) of the Parent Act, but put it under section 13 of the said Act.
309 He took us through the relevant provisions of the Parent Act, which according to him disclose the legislative policy undermining the sacrosanctity of decrees and pressed on us to hold, on a scrutiny of the provisions of section 13 of the Parent Act in the light of the said policy, that the decree made in respect of a debt incurred after the Parent Act came into force was liable to be scaled down thereunder.
Mr. Pathak, learned counsel for the respondent, makes a distinction between the substantive and procedural pro visions and contends that the Parent Act does not make any provision for scaling down decrees made in respect of debts incurred after the said Act came into force.
The general scheme of the Parent Act gathered therefrom may be briefly stated thus.
The main object of the Parent Act was to give relief to agriculturists.
"Debt" has been defined in section 3 (iii) of the Parent Act as any liability in cash or kind, whether secured or unsecured, due from an agriculturist, whether payable under a decree or order of a civil or revenue court or otherwise.
This definition is rather com prehensive; it takes in secured, unsecured and decree debts due from an agriculturist.
Section 7 of the Parent Act declares that a debt so defined has to be scaled down in the manner prescribed by the said Act.
Section 8 provides the mode of scaling down debts incurred before, 1932 and section 9, the debts incurred after 1932 but before March 22, 1938; and section 13 deals with the scaling down of debts incurred after the commencement of the Parent Act.
The relief granted under the said Act varies with the date of the debt depending upon whether it falls under one or other of the said three periods.
While sections 7, 8, 9 and 13 give the principles for scaling down a debt, section 19 provides the machinery for scaling down.
Section 19 of the Parent Act.
as amended in 1948, reads: "(1) Where before the commencement of this Act a court has passed a decree for the repayment of a debt, it shall, on the application of any judgment debtor who is an agriculturist. apply the provisions of this Act to such decree 310 and shall, notwithstanding anything contained in the Code of Civil Procedure, 1908, amena the decree accordingly or enter satisfaction.
as the case may be: (2) The provisions of subsection (1).
shall also apply to cases where, after the commencement of this Act, a Court has passed a decree for the repayment of a debt payable at such commencement.
It may be mentioned that the second clause was inserted by the Amending Act of 1948.
Before the amendment there was a conflict of view on the question whether section 19(1) could be invoked in amending a decree passed after the commencement of the Parent Act in respect of a debt incurred before the said Act.
Sub section (2) made the position clear and declared that it could be done.
The position, therefore, is that in the case of debts other than decree debts, the scaling down process will have to be resorted to in an appropriate proceeding taken in respect of the debt and in the case of decrees in respect of debts incurred before the Parent Act whether made before or after the said Act, by filing an application under section 19(1) or (2) of the Board Act, as the case may be But section 19 on its express terms does not permit the filing of an application for amending a decree by scaling down a debt incurred after the Parent Act came into force.
Doubtless, as Mr. Viswanatha Sastri contents, the Parent Act, to some extent, undermines the sanctity of decrees, but that is to implement the policy of the Legislature to give relief to agriculturists over burdened with debts.
But a Court, particularly in the case of an expropriatory measure like the Act, cannot rely upon the supposed policy of the Legislature and extend the scope of the relief given to agiculturists by analogy.
The scope of the relief shall necessarily be confined to that given by the Act expressly or by necessary implication.
A fair reading of sub sections (1) and (2) of section 19 of the Parent Act disclose beyond any reasonable doubt that the Legislature does not provide thereunder any machinery for reopening a decree made in respect of a debt incurred after the Act came into force.
311 Realizing this difficulty ' Mr. Viswanatha Sastri relied upon the provisions of section 13 itself and contends that the said section provides, in the case of debts incurred after the Parent Act came into force, both for the substantive relief as well as for the machinery to give the said relief.
The said section reads: "In any proceeding for recovery of a debt, the Court shall scale down all interest due on any debt incurred by an agriculturist after the commencement of this Act, so as not to exceed a sum calculated at 6 1/4 per cent.
per annum, simple interest. . . " The Government by notification reduced the rates of interest to 5 1/2 per cent per annum with effect from July 29, 1947.
Let us scrutinize the provisions of the section in the light of the arguments advanced.
Learned counsel asks us to read the words "decree debt" instead of "debt" in section 13 of the Parent Act, for "debt" is defined to take in a decree debt, and by so reading, he contends, in any proceeding, which, according to him, includes, a final decree application, the court shall scale down all interest in the manner prescribed thereunder.
It is further argued that final decree proceedings are only proceedings in a suit and, therefore, the word "recovery" in the sub section is appropriate in the context of a decree debt.
This argument, if accepted, disturbs the entire scheme of the Parent Act.
Section 13 is one of the group of sections viz., sections 8, 9 and 13, dealing with the principles of scaling down in a proceeding for the recovery of a debt.
But where a decree is to be amended, the Act has taken care to provide expressly for the amendment of the decree.
If the Legislature intended to provide for the amendment of decrees even in cases falling 'under section 13, it would have added another appropriate clause in section 19.
The absence of any such clause indicates an intention that in cases of debts comprehended by section 13, the Legislature gives only a limited relief expressly thereunder.
It is said, so far as the reopening of decrees after the Parent Act came into force is concerned, whether in respect of 312 debts incurred before or after the said Act, there cannot possibly be a justification for a difference in the manner of their treatment.
A plausible reason can be discerned for this legislative distinction between debts incurred before the Act and those incurred after the Act; for, in the former when the debts were incurred the Act was not in existence and, as the debtors could not have anticipated the provisions of the Act, they were given the summary remedy, but the agriculturists who incurred debts after the Parent Act with open eyes were denied the same; while in the former, they were allowed to reopen decrees made in respect of the said debts before or after the Act, in the latter they could claim relief only in an appropriate proceeding before the decree was made and that too was confined to the limited relief in regard to the rate of interest provided thereunder.
The difference in the treatment of the two categories of decrees was brought about by sub section (2) of section 19 added by a later amendment.
Whatever may be the reason for the difference, we cannot extend the scope of section 13 by analogy or by stretching the meaning of the words "proceeding" and "recovery".
Reliance is placed upon section 13 A of the Parent Act which reads: "Where a debt is incurred by a reason who would be an agriculturist as defined in section 3(ii) but for the operation of proviso (B) or proviso (C) to that section the rate of interest applicable to the debt shall be the rate applicable to it under the law custom, contract or decree of Court under which the debt arises or the rate applicable to an agriculturist under section 13, whichever rate 'is less." On the basis of this section a contention is raised that sections 13 and 13A relate to the same subject matter with the difference that while section 13 applies to agriculturists who incurred debts after the Parent Act came into force, section 13A applies to persons who would be agriculturists but for the provisos (B) and (C) of section 1 (ii) in respect of debts in curred after the Act, and as a fair reading of section 13 A indi cates that it applies to decrees made in regard to debts in 313 curred after the Act, it must be interpreted reasonably that section 13 also applies to such decrees.
Mr. Pathak, learned ,counsel for the respondent, on the other hand, contends that section 13 A only applies to pre Act debts, as section 7 which declares the scheme of scaling down of debts applies only to pre Act debts and the only exception to it is section 13 A. Be that as it may, we cannot construe section 13 with the aid of section 13 A which was introduced by the Amending Act 23 of 1948.
This appeal does not call for an interpretation of section 13 A of the Act and we shall not express any opinion thereon.
The legal position may be briefly stated thus.
Section 7, 8, 9 and 13 form a group of sections providing the principles of scaling down of debts incurred by agricul turists under different situations.
A debt can be scaled down in an appropriate proceeding taken in respect of the same.
But in the case of debts that have ripened into decrees, section 19(1) and (2) prescribe a special procedure for reopening the decree only in respect of debts incurred before the Parent Act.
The Parent Act does not provide for the reopening of decrees made in respect of debts incurred after it came into force, and for understandable reasons the relief in respect of such decrees is specifically confined only to a concession in the rate of interest.
For the foregoing reasons, we hold that the order of the High Court is correct .
In the result, the appeal fails and is dismissed with costs.

summary:
The respondent, who was the assignee mortgagee of a mortgage deed executed on February 15, 1945 by the appellant for a certain sum payable with interest, filed a suit for the recovery of the sum with Interest.
The suit ended in a compromise under which a decree was passed and certain payments were made towards the decree.
In due course the respondent moved for the passing of a final decree.
The appellant applied for scaling down of the debt under the Madras Agriculturists Relief Act.
The respondent, inter alia, contended in his objections filed against this application that as the debt sought to be scaled down was incurred subsequent to the date of commencement of the Act, the decree could not be scaled down under section 19(2) of the 307 Act.
The Subordinate Judge overruled the objection and held that the debt was liable to be scaled down in terms of section 13 of the Act.
On appeal, the High Court held that as the statutory right to have the interest scaled down was not put forward before the consent decree was passed, the decree could not be scaled down at the stage of the final decree R proceedings.
It further held that section 19(2) of the Act only applied to debts payable at the commencement of the Act and, therefore, the application for scaling down the decree was not maintainable.
On appeal by certificate, Held: Sections 7, 8, 9 and 13 form a group of sections providing the principles of scaling down of debts incurred by agriculturists under different situations.
A debt can be scaled down in an appropriate proceeding taken in respect of the same.
But in case of debts that have ripened into decrees, section 19(1) and (2) prescribe a special procedure for reopening the decree only in respect of debts incurred before the Act.
The Madras Agriculturists Relief Act does not provide for the reopening of decrees made in respect of debts incurred after it came into force, and for understandable reasons the relief in respect of such decrees is specifically confined only to a concession in the rate of interest.


judgement:
minal Appeal Nos.
87 91 of 1964.
Appeal by special leave from the judgment and order dated January 18, 1964, of the Judicial Commissioner 's Court for Tripura in Criminal Misc.
(Habeas Corpus) Petitions Nos. 15, 20, 25, 26 and 28 of 1963, and Habeas Corpus Petitions Nos. 24 and 27 of 1963.
AND Writ Petitions Nos. 43, 42, 40, 41, 65 and 80 of 1964.
Petition Under article 32 of the Constitution of India for the enforcement of the fundamental rights.
R. K. Garg, section C. Agarwala, D. P. Singh and M. K. Ramamurthi, for the appellants and petitioners in all.
H. N. Sanyal, Solicitor General, D. R. Prem and R. H. Dhebar, for the respondents (Except Respondent No. 2 in W.P. 43 of 1964).
D. Goburdhun, for respondent No. 2 (in W.P. 43 of 1 964).
July 23, 1964, The Judgment of the Court was delivered by GAJENDRAGADKAR C. J.
These Criminal Appeals and Writ Petitions have been placed for hearing together in a group because they raise common questions of law.
As is well known, after the Chinese attacked the northern border of India on the 8th September, 1962, the President issued a Proclamation under article 352 of the Constitution on the 26th October, 1962.
This proclamation declared that a grave emergency existed which posed a threat to the security of India.
On the same day, an Ordi 297 nance was promulgated by the President.
This Ordinance was subsequently modified by Ordinance No. 6 of 1962 on the 3rd of November, 1962.
The President also issued an Order tinder article 359(1) suspending the rights of citizens to move any court for the enforcement of the rights conferred by Articles 21 and 22 during the pendency of the emergency proclamation.
On the 26th October, 1962, the Rules framed by the Central Government under the Defence of India Act (hereinafter called 'the Rules ') were published.
Rule 30 of the Rules as originally framed was subsequently modified on the 6th December, 1962 and Rule 30 A was added.
Later, an Act was passed on the 12th December, 1962, and section 48(1) of this Act provided for the repeal of the earlier Ordinances.
Even so, section 48(2) provided for the continuance of the Rules framed under the Ordinances, so that the relevant Rules framed under the Ordinances have to be taken as Rules framed under the latter Act.
It appears that Mr. Mukerjee who was the Administrator of the Union Territory of Tripura at the relevant time, considered the material placed before him as such Administrator and was satisfied that a group of Communists had been agitating amongst the tribals residing in the area and inciting them against the Government, and he came to the conclusion that their activities were likely to endanger the security of the State.
Acting on this view, he directed that 68 persons should be detained under Rule 30(1)(b) and passed appropriate orders in that behalf.
Later, lie was satisfied that 45 out of these 68 persons need not be detained any longer; and so, he ordered their release from time to time.
That left 23 persons under detention and it is with the cases of these 23 persons that we are concerned in the present group if criminal appeals and writ petitions.
12 out of these 23 persons moved the Judicial Commissioner of Tripura under article 226 of the Constitution and prayed that the orders of detention under which they continued to be detained at the time of their petitions were illegal and should be set aside and they should be ordered to be released forthwith.
These applications were heard 298 together by the learned Judicial Commisioner and were ultimately dismissed.
Against his decision, Criminal Appeals Nos. 87 91 of 1964, and 106 and 107 of 1964 have been filed by the detenues, with special leave granted to them by this Court on petitions made by them in that behalf.
It appears that the detenues Mohan Chaudhury and Jagabrata Sen Gupta who have joined in Cr.
Nos. 87 91/1964, have also preferred separate criminal appeals Nos. 106 and 107/1964 individually.
That is how this group of appeals is concerned with the cases of 12 detenues who had moved the Judicial Commissioner under article 226; and their grievance is that the view taken by the Judicial Commissioner in regard to the points of law raised by them before him, is not correct.
The Writ Petitions deal with cases of 11 remaining detenues and they joined the detenues who have preferred appeals before us by special leave in contending that the continuance of their detention is invalid and that a similar plea raised by the appellants before the Judicial Commis sioner should have been upheld by him.
That is how the criminal appeals and the writ petitions between them raise common questions of law.
Mr. Garg who appeared for the appellants and the petitioners, as well as the learned Solicitor General who appeared for the respondent, the Chief Commissioner of Tripura, agreed that it would not be necessary to consider the facts in each individual case for the purpose of decid ing the common questions of law raised by them.
It would be enough if we refer to the facts in one case, because facts in other cases are exactly similar and there would be no point of distinction on facts as such.
We would, therefore, refer to the facts relevant to the case of the detenu Biren Dutta.
Biren Dutta was detained on the 25th December, 1962, and an order issued in that behalf was duly served on him.
On the 26th December, 1962, he was transferred to the Hazaribagh Jail.
The respondent 's case is that on the 15th February, 1963, the case of Biren Dutta was reviewed under R. 30A(8) and it was decided to continue his deten 299 tion.
Subsequently, his case was reviewed on the 3rd July, 1963, 5th September, 1963, and 11th March, 1964, and on each occasion, it was decided to continue his detention.
On the other hand, Biren Dutta 's contention before the Judicial Commissioner was that an order of review had not been passed as required by R. 30A(8) and had not been communicated to him.
It was urged on his behalf that Rule 30A(8) requires that the decision to continue the detention of a detenu must be reduced to writing and must be communicated to the detenu, and the argument was that since these two conditions prescribed by the relevant Rule had not been complied with, the continuance of the detenu 's detention was invalid in law.
The Judicial Commissioner has negatived the contentions thus raised by the detenu.
He has found that the decision to continue the detenu 's detention reached by the respondent under R. 30A(8) had in fact been reduced to writing, and in support of this contention, he has referred to the fact that the original file containing a record of the decision had been produced on behalf of the respondent before the Judicial Commissioner, but since the respondent 's learned Advocate was apparently not prepared to allow the lawyer of the detenu inspection of the said record, the court did not consider the evidence supplied by it.
The argument urged by the detenu that the said record may have been subsequently manufactured was rejected by the Judicial Commissioner.
The Judicial Commissioner also considered the fact that the affidavit made on behalf of the respondent showed that when the cases of the detenues were considered by him from time to time, he actually ordered the release of some of them.
This fact, according to the Judicial Commissioner, showed that the respondent had applied his mind to the cases of all the detenues and since he released some of them, it followed that in regard to the rest he was satisfied that their detention should be continued.
The Judicial Commissioner was apparently inclined to take the view that the relevant Rule did not seem clearly to require that the decision reached by the appropriate authority under R. 30A(8) should be reduced to writing, but he thought it unnecessary to make a definite finding 300 on this issue, because he was satisfied that in the case of Biren Dutta, the decision in question had been reduced to writing.
The argument that R. 30A(8) requires that the said decision should be communicated to the detenu was rejected by the learned Judicial Commissioner.
It is on these findings that he rejected the petition filed by Biren Dutta and 11 other detenues and held that the continuance of their detention was justified in law.
When these matters were argued before this Court on the 6th May, 1964, an interim order was passed directing that the Chief Secretary to the Tripura Administration should forthwith transmit to this Court the original files in respect of the detenues concerned and that the Minister, or the Secretary or the Administrator who reviewed the cases of the detenues and had arrived at a decision that their detention should be continued, should file an affidavit in this Court on or before the 8th June, 1964, and that the affidavit should state all material facts and should indicate whether the decision arrived at was duly communicated to the detenues or not.
Accordingly, the original files have been produced before us and additional affidavits have been filed.
The learned Solicitor General fairly conceded that he would allow Mr. Garg for the appellants an opportunity to inspect the files inasmuch as he was not going to raise any question of privilege in respect of theme.
It is in the light of the minutes made on these files that the principal points raised before us now fall to be considered.
Mr. Garg contends that the scheme of the Rules clearly shows that the original order of detention passed under R. 30(1)(b), as well as the decision to continue the detention of the detenues reached by the appropriate authority under R. 30A(8) must be recorded in writing and must comply with the provisions of article 166 of the Constitution.
He also urges that R. 30A(8) further requires that the relevant decision reached by the appropriate authority must be communicated to the detenu.
In support of his argument that the relevant decision under R 30A(8) must comply with article 166 and must be communicated to the detenu, Mr. Garg has relied on the ,decision of this Court in Dattatreya Moreshwar Pangarkar 301 vs The State of Bombay(1), and Bachhittar Singh vs State of Punjab(1).
He has also invited our attention to the observations made by Raghubar Dayal J. in section Partap vs State of Punjab(1).
The learned Solicitor General has conceded that the order directing the detention of a citizen under R. 30(1) (b), as well as the order incorporating the decision to continue the detention under R. 30A(8) must be in writing.
He, however, challenges the correctness of Mr. Garg 's contention that these orders must comply with article 166, and he disputes his case that the decision reached under R. 30A (8) must be communicated to the detenu.
In support of his case he has referred us to the decision of this Court in Mohammad Afzal Khan vs State of Jammu and Kashmir(4), as well as the decision of the Bombay High Court in Pralhad Krishna Kurne vs The State of Bombay(1) and that of the Allahabad High Court in Nandan Singh Bhist vs State of U.P.(6).
We do not think it necessary to consider the question as to whether the orders passed under R. 30(1) (b) and the record of the decision reached under R.30A(8) should comply with article 166 of the Constitution or not.
It also appears to us to be unnecessary to decide in the present group of cases whether the decision recorded under R. 30A(8) should be communicated to the detenu.
We are satisfied that the decision to continue the detention of the detenues which, it is urged on behalf of the respondent, was reached by him under R. 30A(8), has not been recorded in writing as required by the said Rule; and there is no other evidence on record to show that such a decision had then been reached and reduced to writing.
It will be recalled that in the present proceedings, it is common ground between the parties that there has to be an order in writing indicating the decision of the appropriate authority reached by him after reviewing the case of the detenu that the continuance of his detention should be ordered.
Rule 30A(8) provides that every detention order made by an (1) ; ,(2) [1962] SUPP.
3 S.C.R. 713 (3) ; (5) I.L.R. 1952 Bom.
134(6) A.I.R. 1964 All. 327 302 officer empowered by the Administrator and confirmed by him under clause (b) of the sub rule (6) and every detention order made by the Administrator himself shall be reviewed at intervals of not more than six months by the Administrator who shall decide upon such review whether the order should be continued or cancelled.
The question which we have to decide is whether it is shown by the minutes made on the file produced before us by the respondent that he did decide that it was necessary to continue the detention of the detenues before us.
The minutes made on the file are no doubt a written record of his decision, and so, the requirement that whatever is decided under R. 30A(8) should be reduced to writing is satisfied; but the question is do these minutes show that the cases of the detenues before us were considered and a decision to continue their detention was reached by the respondent on the relevant occasion, and that presents a very narrow problem for our decision in relation to the construction of the said minutes.
The first occasion on which the respondent claims to have reviewed the cases of the detenues before us was on the 15th February, 1963.
On that date, he made the following order: "On review of the detention order in respect of all detenus CC decided to cancel detention orders in respect of detenues at section No. 1, 3, 4, 5, 6, 7, 8, 9, 12 and 13.
" It is urged by the learned Solicitor General that this order shows that the appropriate authority considered the cases of all the detenues and decided to cancel the detention of some of them, and that, he suggests, should be construed to mean that he decided to continue the detention of detenues other than those whose release he ordered.
There is no doubt that this order makes a reference to the review of all detenues and, prima facie, it would be open to the Solicitor General to contend that this part of the order shows that the cases of all the 68 detenues must have been considered by the appropriate authority.
In this connection.
we would like to emphasise the fact that in exercising its power under 303 R. 30A(8), the appropriate ' authority should record its decision clearly and unambiguously.
After all, the liberty of the citizen is in question and if the detention of the detenue is intended to be continued as a result of the decision reached by the appropriate authority, it should say so in clear and unambiguous terms.
But assuming that an ,order passed by the appropriate authority under R. 30A(8) can in a proper case be construed to mean his implied decision to continue the detention of some detenues, while releasing some others, we find it difficult to hold that such an implied decision can be inferred from the present order.
It is relevant to remember that this order was passed on the 15th February, 1963, and the six months ' period within which review had to be made under R. 30A(8) would have expired on the 25th June, 1963.
It is quite likely that even before the six months period expired, the authority considered the matter and came to the conclusion that any further detention of the detenues specified in the order was not justified, and so, even before the, six months ' period expired, he directed that they should be released.
That undoubtedly shows that the authority was considering the question very carefully and as soon as he felt satisfied that further detention of the said detenues would be unnecessary, he ordered their release forthwith; but this very consideration suggests that he may have considered the cases of only such detenues as should be released forthwith.
Besides, there is nothing to show that after the 15th February, 1963, and before the 25th June, 1963, he considered the matter in respect of the detenues before us and held that the continuance of their detention was justified after the expiration of six months.
It is necessary to emphasise that the decision recorded under R. 30A(8) is in the nature of an independent decision which authorises the further detention of the detenu for a period of six months.
In other words, the initial order of detention is valid for six months and the detention of the detenu thereafter can be justified only if a decision is recorded under R. 30A(8).
That being the nature of the decision which is required to be recorded under R. 30A(8), we are unable to hold that the memorandum in question can be reasonably said to include a decision that the continuance of the detention of the 304 detenues before us was thought to be necessary by the appro priate authority after the expiry of the period of six months.
It is true that in the additional affidavit filed by the respondent it has been stated as a submission by him that as a result of the said review (15/2/63) the detention of Biren Dutta as well as others whose detention orders were not cancelled, continued.
" This undoubtedly is a matter of argument; it being the respondent 's contention that since the order detaining some detenues was cancelled, logically it follows that the detention of the others was ordered to continue.
But even assuming that the respondent had stated in his additional affidavit clearly and unambiguously that he had decided on the 15th February, 1963, that the detention of the detenues before us should be continued, we would not have attached much significance to such a state ment, because what we have to consider is the order passed on the 15th February, 1963, and not what the authority making the order thought it meant or intended it to mean; and so, it comes back to the question of the construction of the order itself.
We have carefully considered the argu ments urged before us by the Solicitor General, but we are unable to hold that this order can be said to satisfy the requirements of R. 30A(8) at all.
We are satisfied that this order cannot be construed to contain a written record of the decision of the respondent that the detention of the detenues before us should be continued after the expiry of six months from the date of the original order of detention.
Then as to the next order passed on the 3rd July, 1963, the position is still worse.
It appears that on the 15th May, 1963, the Superintendent of Police, Tripura recommended that some of the detenues should be released, because he thought there was no longer any justification for their continued detention.
This matter was discussed between the Superintendent of Police and the Chief Secretary on the 6th June, 1963, and eventually as a result of the conference held between the Chief Minister and the Chief Commissioner an order was passed on the 3rd July, 1963.
This order shows that the cases of the persons whose release had been recommended by the Superintendent of Police were considered.
These detenues were 25 in 305 number.
During the course of the discussion between the Chief Minister and the Chief Commissioner, the Chief Minister appears to have suggested that instead of releasing all the aforesaid 25 detenues together it would be better if they were released in batches, but ultimately, the order passed by the Chief Minister which was assented to by the Chief Commissioner was that all of them may be released at the same time on the 6th July, 1963.
In other words, reading the letter written by the Superintendent of Police to the Chief Commissioner on the 15th May, 1963, and the record of the discussion that took place between the Chief Secretary, the Chief Minister and the Chief Commissioner on the 3rd July, 1963, it is clear that the only cases which the authorities considered were the cases of 25 detenues whose release had been recommended by the Superintendent of Police.
It is common ground that the detenues before us were not included in the said list of 25 detenues, and so, there is no scope for suggesting that at this time the cases of the detenues other than those who were released were concerned.
That being so, we must hold that like the earlier order passed on the 15th February, 1963, the order passed on the 3rd July, 1963, is also of no assistance to the respondent, because neither order can be reasonably construed as containing a decision of the appropriate authority reached under R. 30A(8) to continue the detention of the detenues before us.
This conclusion necessarily means that the requirement of R. 30A(8) has not been complied with and that inevitably makes the continuance of the detention of the detenues before invalid in law.
The fact that those cases were reviewed subsequently on the 25th September, 1963 and 11th March.
1964, and the decision of the authority was in fact communicated to them would not validate the illegal continuance of the detention of the detenues after six months had expired from the date of their original detention.
We have already indicated that we do not propose to consider in these proceedings the two other points of law urged by Mr. Garg but before we part with these matters, we would like to emphasise that even assuming that the decision recorded by the appropriate authority under 51 S.C.20.
306 R. 30A(8) is not, as a matter of law, required to be com municated to the detenu, it is desirable and it would be fair and just that such a decision should in every case be communicated to the detenu.
If the appropriate authority considers the question about the continuance of the deten tion of a particular detenu and decides that such continu ance is justified, we see no justification for failing to communicate the said decision to the detenu concerned.
If the requirement as to such communication were held to be necessary as a matter of law, non communication would render the continuance of the detention invalid; but that is a matter which we are not deciding in these cases.
We are only emphasising the fact that it would be fair that such a decision should be communicated to the detenu.
In the result, the appeals and writ petitions are allowed and the detenues concerned ordered to be set at liberty at once.
Appeals and Writ Petitions allowed.

summary:
The Administrator of the Union Territory of Tripura passed orders detaining 68 persons, including the appellants and the petitioners, under R. 30(1)(b) of the Defence of India Rules, 1962.
While gradually releasing 45 of them he purported to detain the appellants and the petitioners under R. 30A(8) of the said Rules.
The appellants moved the Judicial Commissioner under article 226 of the Constitution and their case was that the decision to continue them in detention was not recorded in writing nor was it communicated to them and was, therefore, invalid in law.
The Judicial Commissioner dismissed the said applications.
The petitioners moved this Court under article 32 of the Constitution and their case was also the same.
The first review held on February 15, 1963, in respect of all the 68 detenus was recorded as follows, "On review of the detention order in respect of all the detenus CC.
decided to cancel orders in respect of detenus at section Nos. 1, 3, 4, 5, 6, 7, 8, 9, 12 and 13.
" It was urged on behalf of the respondent that the order by implication continued the detention of the appellants and the petitioners and such detention was confirmed by subsequent orders.
Held: (i) The order did not comply with the provisions of R. 30A(8) of the Defence of India Rules and the detenus before this Court must be set at liberty.
Decision to continue a detenu in detention must not only be recorded in writing but such writing must clearly and unambiguously indicate that decision.
Subsequent reviews under the Rule could not validate the illegal continuance of the detention after the expiry of six months from the date of the original order of detention.
Decision recorded under R. 30A(8) is in the nature of an independent decision and further detention can be justified only if the decision is recorded as required by it.
296 Even assuming that an order passed under R. 30A(8) could in a proper case imply the decision to continue the detention of some of the detenus, the present case could not be said to be one such.
(ii) Assuming, though not deciding, that a decision recorded under R. 30A(8) of the Rules was not in law required to be communicated to the detenue, it was just and proper that the decision should in every case be communicated to the detenu.