judgement:
Appeal No. 171 of 1967.
Appeal from the judgment and decree dated April 12, 1966 of the Patna High Court in Appeal from Original Decree No.445 of 1963.
1006 D. V. Patel and U. P. Singh, for the appellant.
C. B. Agarwala, Umesh Chandra singha , R. Goburdhun and D. Gob urdhun, for respondent No. 1.
The Judgment of the Court was delivered by Mitter, J.
This is an appeal from a judgment of the Patna High Court reversing the decree in favour of the plaintiff appellant declared to be the duly installed Mahant of Turki Math and of all its subsidiary maths and as such entitled to possession of the properties covered by the decree.
The, undisputed facts are as follows.
In the village of Turki in North Bihar there is a Math or as that of the Kabirpanthi Bhagatatha Vairagi sect established over a century back.
There are asthals subordinate to the principal one at Turki located in different districts of Bihar.
Devolution of the Mahantship has always been from a Guru to his Chela.
Defendant No. 2 executed a deed dated December 17, 1951 nominating the first defendant as Ms successor to the Mahantship and a second deed on September 15, 1952 surrendering his right to the Mahantship in favour of the first defendant with, immediate effect.
The suit of the appellant was launched in 1959 for a declaration that he himself was the duly installed Mahant of saddar asthal Turki in the circumstances mentioned in the plaint, that the second defendant had ceased to be the Mahant by his, voluntary of retirement and the first defendant being a junior Chela could have no right or Claim to the Mahants.
As a corollary to the above declaration, he also asked for a decree for recovery of possession of all the properties of the asthal including those which had been purported to be transferred by the first two defendants.
The appellant made a two fold claim in his plaint.
It was his case that under the tenets and the customs of the asthal and Bhagataha sect of Kabirpanthies, the devolution of the office of Mahantship is always from a Guru to the senior celebate Chela ,either, on the death of.
the Mahant for the time being or by the said Mahant nominating.
his successor by deed and himself retiring from the Mahantship In either case, after the death or retirement of the Mahant for the time being, the senior chela succeeds to the Mahantship and is ' duly installed on the Gaddi after the perfomance of Bhandara in an assemblage of Mahants and sadhus of the sect and respectable persons of the locality at which The Chaddar of Mahanthi is bestowed on the new Mahant by the Mahant of Acharya Math Dhanauti in the District of Saran.
The deeds of 1951.
and 1952 being in violation of the ancient custom of the asthal, the first defendant was never of the as or became the Mahant of Turki nor was any Chaddar ceremony 1007 performed at any requisite ceremony in recognition of such succession. 'The appellant had filed a suit in the court of the Subordinate Judge at Muzaffarpur in the year 1953 for declaration of his riots and for setting aside the deeds of 1951 and 1952.
After the suit was pending for some time,, a compromise was arrived at whereby it was agreed that the appellant should assume the office of Mahantship and take possession of all the properties of the Math.
The appellant put his signature on a sheet of blank paper for recording the terms of settlement.
He had actually assumed the office of the Mahant of Turki in April 1954, and an elaborate ceremony was performed on the 16th February 1956.
whereat he was installed.
as the Mahant of Turki and given the Chaddar of Mahanti by the Acharya of Dhanauti before a big gathering.
A document known as the Surat Hall was prepared regarding the plaintiff 's installation.
This bore the signature, of innumerable persons.
This was followed by his taking, charge of all the properties of the saddar and subordinate asthals.
The first two defendants thereafter dispossessed him and being unsuccessful in proceedings under the Code of Criminal Procedure for securing possession of the math and its properties, he was compelled to file the suit.
Respondents 1 And 2 filed a joint written statement.
They pleaded that the custom and usages of the Turki Math relating to devolution of Mahantship was for the Mahant for the time being nominating a fit and proper person as his successor from amongst his Chelas irrespective of his seniority and the person so nominated invariably became the Mahant on the demise or retirement of the; incumbent Mahant.
A ceremony of installation of the new Mahant on the Gaddi and the bestowing of a Chaddar on him were not essential for establishing his title to this office in place of the retiring or the deceasing Mahant.
The defendants denied the factum of the installation of the appellant relied on in the plaint.
According to them the appellant had at all times knowledge of the nomination of the first defendant by the deed of December 17, 1951 and his appointment with immediate effect by the, deed of September 15, 1952.
It was on realisation of the weakness of his case that he had approached the defendants for a compromise agreeing, to given up his claim in the suit of 1953.
He had appended his signature to the petition of compromise in that suit being fully conversant with the terms thereof.
The two main issues framed by the trial court and relevant for the disposal of this appeal bear on the custom governing the succession to the Mahantship of the Turki Math and the right of the incumbent mahant to nominate a junior Chela in preference to a senior Chela.
Issues were also framed by the trial court as to whether an installation ceremony was an essential pre requisite 1008 to a Mahant 's lawfully functioning as such and whether the plaintiff had factually been installed as a Mahant of the Turki Math.
The findings of the trial court were as follows : 1.From 1899 onwards only senior Chelas had succeeded their Gurus.
2.According to the custom of the Muth the Mahant had the right to nominate his successor and the choice rested upon the senior Chela unless he suffered from any disqualification or was found to be unfit for the office.
The right of nomination was not absolute but was subject to the approval of others.
3.An installation ceremony was not essential to complete the title of the Mahant.
Such a ceremony had been performed in the ease of the plaintiff in 1956 and he became the Mahant of Turki although not in possession of the properties thereof at the ,time of the suit.
The High Court rejected the custom as to succession set up by the plaintiff.
It found 1.Since the time of the founder, Chaturbhuj Gosala, six Mahants had occupied the office of whom three were described as junior Chelas by some of the witnesses on the defendant 's side.
The evidence did not establish that there was an invariable custom of the senior Chela being nominated by the outgoing Mahant.
2.The Mahant in office had an undoubted right to nominate his successor and ordinarily the right of appointment was exercised in favour of the senior Chela but the choice was exercised in favour of a celebrate chela taking into account his all round ability and character.
The second defendant had as a matter of fact nominated one Ganesh Bhagat as his successor even before the deed of nomination of 1951 in favour of the first defendant.
This nomination of Ganesh Bhagat was cancelled as he was found to be unfit.
Compared to the plaintiff, the first defendant was decidedly superior in learning, ability and conduct : as the main function of the Mahant was to propagate the Kabirpanthi cult and the maintenance of a peaceful and harmonious atmosphere in the mutt where people were expected to congregate for religious discussion and discourses and other benevolent functions the choiceof the, first defendant by the second defendant in preference to the plaintiff was not undeserved and must be taken as final.
The High Court did not examine the question as to whether an installation ceremony was necessary to perfect the title of Mahantship in view of the concession by counsel for the plaintiff Differing from the finding of the trial court, the High Court held that no ceremony of installation of the plaintiff had been performed in 1956 as alleged in the plaint.
1009 4.The deeds of nomination and surrender in 1951 and 1952 by the first defendant were valid and binding.
The general law as to succession to Mahantship is now well settled by innumerable decisions of the Judicial Committee of the Privy Council and some decisions of this Court.
It will be enough to quote some passages from Mukharji 's book on the Hindu Law of Religious and Charitable Trusts.
The learned author states (third edition, p. 257): "Once a Mutt is established, succession to headship takes place within the spiritual family according to the usages that grow up in a particular institution.
" "The, primary purpose of a Mutt. is to encourage and foster spiritual learning by maintenance of a competent line of teachers who impart religious instructions to the disciples and followers of the Mutt and try to strengthen the doctrines of the particular school or order of which they profess to be adherents.
" At page 269 : "In a Mutt. it is the custom or practice of a particular institution which determines as to how a successor is to be appointed.
" Three aspects have to be borne in mind in connection with the question of succession to the office of a Mahant (p. 269): "The first is that if the grantor has laid down any particular rule of succession, that is to be given effect to.
Secondly, in the absence of any grant the usage of the particular institution is to be followed; and in the third place, the party who lays claim to the office of a Mohunt on the strength of any such usage must establish it affirmatively by proper legal evidence.
The fact that the defendant is a trespasser would not entitle the plaintiff to succeed even though he be a disciple of the last Mohunt, unless he succeeds in proving, particular usage under which succession takes place in the particular institution.
" At p. 270 : "Generally speaking, the Mutts are divided into three classes according to the different ways in which the heads or superiors are appointed.
These, three descriptions of Mutts are Mourasi, Panchayati and Hakimi.
In the first, the office of the Mohunt is hereditary and devolves upon the chief disciple of the existing Mohunt 1010 who moreover usually nominates him as his successor; in the second, the office is elective, the presiding Mohunt being selected by an assembly of Mohunts.
In the third, the appointment of the presiding Mohunt is vested in the ruling power or in the party who has endowed the temple In a Mourasi Mutt the chela or disciple of the last Mohunt succeeds to the office when there are more, chelas than one the eldest generally succeeds, but a junior chela may succeed if he is found more capable and if he is selected by the last Mohunt is his successor In various institutions the custom is that in order to entitle a chela to succeed, be must be appointed or nominated by the reigning Mohunt during his life time or shortly before his death and this may be done either by a written declaration or some sort of testamentary document.
In other cases again, the nominee is formally installed in the office and some sort of recognition is accorded to him by the members of the particular sect either during the life time of the last Mohunt or when the funeral ceremonies of the latter are performed." At p. 273.
"When the Mohunt has the right to appoint his successor, he may exercise the right by an act inter vivos or by will." At p. 274 : "In a Mourashi Mutt it is possible for the Mohunt to make over the endowment during his life time to his chela whom he appoints as a successor." At p. 275: "In many cases when a successor is appointed by Mohunt, he is installed in office with certain ceremonies,This cannot be deemed to be essential.
" Admittedly Turki was a Mourasi Mutt The evidence as to custom adduced in the case Is both documentary and oral.
The oral evidence which will be noted hereafter is discrepant and mostly of persons who were not disinterested.
The documentary evidence undoubtedly furnishes more reliable testimony being ante item motam and brought into existance at a time when the plaintiff was not on the scene and when no dispute as to succession to ship was raging.
1011 The earliest document exhibited in this case is that of 1899 executed by Mahant Lal Bahadur Bhagat in favour of Ram Bhagat describing him as the senior chela, able, clever, literate and by all means tit for the Mahantship.
Mahant Ram Bhagat in his turn nominated Mahadeo Bhagat as his successor by a deed of November 1910.
Like the document of 1899 this deed also describes the nominee as able, clever and fit to discharge the duties of the Mahant Mahadeo Bhaaat however is not described as the senior Chela but only as a disciple of the executant.
By a deed of August 1937 Mahant Mahadeo Bhagat nominated Narsingh Bhagat, defendant No. 2 as his successor describing the latter as his only disciple worthy, clever and fit in all respects for the Gaddi.
By a document of June 1947 Narsingh Bhagat nominated one Ganesh Bhagat as his successor to the Gaddi.
This nomination was cancelled by Narsingh Bhagat on the ground of unfitness of the nominee for the office but mention is made in this docu ment of 1947 of the practice and custom relating to the succession to the office of the Mahant.
This document goes against the contention of the plaintiff that by custom the senior Chela was eligible to the office in preference to all others.
It recites : "It has been the practice in the Asthal from the time of my predecessors that the Gadinashin leads a life of Brahmacharya and he does not marry.
One Mahanth Gadinashin appoints and nominates his able Brahmachari disciple as Gadinashin and future successor during his lifetime.
After the death of his Guru, the rightful disciple becomes heir and Gadinashin of the Asthal of the Sadar Nath at Turki.
I the executant thought it proper to make over the management of the property under a will, according to previous custom and appoint Ganesh Bhagat as my successor.
" This was followed by a description of the nominee as literate, able and efficient.
The document of December 1951 by Narsingh Bhagat in favour of Girija Nandan Bhagat.
the first defendant.
describes the nominee as fit and qualified in all respects to be the Mahant and recites the custom as in the case of Ganesh Bhagat.
The trial Judge 's view that the nominations if 1899, 1910 and 1937 'being invariably in favour of the senior disciple went a long way to establish the custom relied on by the plaintiff was not accepted by the High Court.
Apparently the trial Judge was of the view that Mahadeo Bliagat who became the Mahant in 1910 was the only disciple of Ram Bhagat and it was therefore not felt necessary to mention him is the senior chela Quite a number of defendants ' witnesses made statements to the effect that Ran .
Bhagat had a number of Chelas.
The trial Judge obviously over locked the statement of the plaintiff in his cross examination that 1012 Ram Gossai had 5 or 6 Chelas and he himself had seen all of them.
A fairly large number of witnesses stated that the qualifications for a person 's nomination to the Mahantship did not depend only on seniority but on ability to manage, celibacy, adherence to religious principles and a habit of serving sadhus, fakirs and visitors besides a good moral character.
Some even suggested that it was the ablest Chela who was made the Mahant.
Making due allowance for the witnesses who came to support the case of the party examining them, the oral testimony unquestionably leads us to hold that in the matter of nomination of a successor to the Mahantship seniority was not the decisive factor but that ability and efficiency in management coupled with a good moral character and adherence to the religious rites practised at the mutt and a spirit of service to sadhus etc.
all entered into consideration in the selection of a successor by a Mahant.
This conclusion is fortified by the documents exhibited.
As already noted they do not support the plaintiff 's version that invariably the senior Chela was selected.
In our view the document executed by Narsingh Bhagat in favour of Ganesh Bhagat sets out the custom as to succession fairly accurately.
The argument advanced on behalf of the appellant that the plaintiff was installed as the Mahant of Turki in 1956 before a wide gathering of sadhus and respectable persons at which the Chaddar ceremony was performed does not merit any elaborate or serious consideration.
As noted already, the trial, court did not take the view that the performance of the Chaddar ceremony was an essential pre requisite to a person becoming a Mahant and before the High Court counsel for the plaintiff expressly gave up that point.
Although the trial court found in favour of the plaintiff that such a ceremony had actually been performed, the High Court came to a different conclusion.
One of the reasons which prompted the High Court to take this view was that the document evidencing the installation ceremony styled the Surat Hall had not been produced in any court of law before the institution of the suit of 1959 although litigation in respect of the properties of the mutt and the plaintiff 's right to possession were being canvassed before ,courts of law.
The High Court also relied on the fact that a res pectable and reliable witness like the Mahant of the Acharya Mutt denied having signed this document exhibit 1 and no attempt was made on behalf of the plaintiff to controvert the said denial by examination of a hand writing expert.
Reliance was also placed by the High Court on the fact that the plaintiff who filed a petition under sections 107 and 145 Cr. P.C. against the first defendant and 12 others on 8th December, 1956 described himself as the Mahant of Chanwa Math and made no reference in the petition itself to the installation ceremony at Turki.
The High Court also ,did not believe the plaintiff 's version that he had signed a blank 1013 sheet of paper to be used as a compromise petition in the earlier suit filed by him and nothing has been shown to us as to why we should take a different view.
In the result we hold that the plaintiff was unable to discharge the onus which lay on him to substantiate the custom as to succession pleaded in his plaint.
He also failed to establish that he had in fact been installed as the Mahant of the said Math.
The appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.

summary:
Three aspects have to be borne in mind in connection with the question of succession to the office of a mohunt : (i) if the rounder or endower has laid down any particular rule of succession, that is to be given effect to; (ii) in the absence of the above the usage of the particular institution, is to be followed; and (iii) the party who lays claim to the, office on the strength of any such usage must establish it affirmatively.
The fact that the defendant is a trespasser would not entitle the plaintiff to succeed, un less he succeeds in proving the particular usage under which he claims.
[1 009 E G] In a Mourasi mutt the office of the mohunt is hereditary and devolves upon a disciple of the existing mohunt who usually nominates him as the successor.
Though generally the senior disciple succeeds, a junior disciple may succeed if he is found more capable and if he is selected by the last mohunt as his successor.
The appointment or nomination is done by the reigning mohunt during his life time or shortly before his death and it is possible for the mohunt to make over the endowment during his lifer time to the successor.
[1010 B D, F] In the present case, the mutt was a Mouriasi mutt and the second respondent was its mohunt.
He nominated the first respondent as his successor by a deed.
and by a second deed, surrendered to him his right to, the office of mohunt.
The appellant claimed the office as the senior disciple on the contention that the devolution to the office was to the senior disciple according to the tenets and customs of the sect which established the mutt.
The trial court decreed the suit but the High Court set aside the decree Dismissing the appeal to this Court, HELD : The appellant had not discharged the onus which lay on him to substantiate the custom pleaded by him.
The documentary evidence, which was ante litern motam did not support the appellant 's case that invariably only the senior disciple was selected.
On the contrary, the entire evidence in the case led to the conclusion that in the matter of nomination of a successor to the office of mohunt seniority was not the decisive factor, but that ability and efficiency in management coupled with a good moral character, adherence to the religious rites practised at the.
mutt and a spirit of service to the sadhus etc.
entered into consideration in the selection of a successor.
[1012 A D]


judgement:
Appeal No. 213 of 1967.
Appeal from the Judgment and order dated February, 17th 1965 of the Patna High Court in First Appeal No. 113 of 1960.
M. C. Chagla, D. P. Singh, section C. Agarwal, V. J. Francis, R. Goburdhun and D. Goburdhun, for the appellant.
M. C. Setalvad, Sarjoo Prasad, A. G. Ratnaparkhi and Rajiv Shah, for respondent No. 1.
The Judgment of the Court was decided by Hegde, J.
In this appeal by certificate we are to consider the effect of the will executed by one Raghunath Prasad Singh, on August 31, 1938.
The said testator died very soon after the execution of the will leaving behind him his widow Jageshwar Kuer, 72 his daughter Satrupa Kuer and his two grand daughters Talkeshwari Devi (the appellant herein) and Sheorani.
The appellant and Sheorani are the daughters of Sukhdeo Prasad Singh, the son of the testator who had predeceased the testator.
Jageshwar Kuer died in November 1948 and Sheorani Devi on November 1, 1949 without leaving any issue.
The dispute in this case is as to who is entitled to the properties devolved on Sheorani under the provisions of the will left by the testator.
For deciding that question we have to refer to the relevant provisions of the will.
the genuineness or validity of which is not in dispute.
The will in question provides that after the death of the testator a portion of his properties (detailed in the will) was to devolve on Jageshwar Kuer absolutely and the remaining properties are also to devolve on her but therein she was to have only a life interest.
The will further provides that after her death "the entire property will be treated as 16 annas property out of which 5 annas 4 pies(five annas four pies) share constituting proprietary interest will pass to Shrimati Satrupa Kuer alias Nan daughter of me, the executant and her heirs as absolute owners and the remaining 10 annas 8 pies (annas ten and eight pies) share will pass to both the minor grand daughters, (1) Shrimati Talkeshwari Kuer alias Babu and (2) Shrimati Sheorani Kuer alias Bachan in equal shares as absolute proprietary interest" (cf. 4 of the will).
Clause 5 of the will says : "That if one of the two grand daughters named above, dies issueless, then under such circumstances the other living grand daughter will enter into possession and occupation of the entire 10 annas 8 pies and become the absolute owner thereof.
" At the time of the death of the testator, the appellant as well as Sheorani Kuer were minors.
After the death of Jageshwar Kuer, the appellant and her sister Sheorani Kuer divided the ten annas eight pies share of the properties which devolved on them in equal shares and each one came into possession of her share of the properties.
Immediately after the death of Sheorani Kuer, the appellant instituted a suit for possession of the properties that fell to the share of Sheorani Kuer purporting to base her claim on clause 5 of the will to which we have earlier made reference.
That suit was resisted by the first defendant, the husband of Sheorani.
He claimed that he was entitled to those properties as the heir of his wife.
The trial court dismissed the plaintiff 's suit and the decision of the trial court was upheld by the High Court.
It was contended on behalf of the appellant that in view of clause 5 of the will, the appellant is entitled to the suit properties 73 as Sheorani Kuer had died issueless.
This contention, as mentioned earlier, did not find favour either with the trial court or with the appellate court.
They have held that on a proper leading of the will as a whole, it is clear that clause 5 ceased to be operative on the death of Jageshwar Kuer, thereafter caluse 4 of the will was the only operative clause so far as the rights of the appellant and Sheorani ware concerned.
It is undisputed that the duty of the court is to find out the intention of the testator but that intention has to be gathered from the language of the will read as a whole.
I+ is clear from clause 4 of the will that the testator wanted to give to his grant daughters an absolute right in the properties that were to devolve on them after the death of his wife, Jageshwar Kuer.
The estate bequeathed under clause 4 of the will is not a conditional estate.
Clause 5 of the will relates to devolution and it does not provide for any divestment of an estate which had vested.
The estate that vested on Sheorani was an absolute one.
The will does not provide for the divestment of that estate.
It is plain from the language of clause 5 of the will that it refers to the devolution, which means when the properties devolved on the two sisters on the death of Jageshwar Kuer.
We are, unable to accept the contention of Mr. M. C. Chagla, learned Counsel for the appellant that there is an , conflict between clause 4 and clause 5 of the will.
Clause 5 in our judgment would have come into force if the contingency mentioned therein had happened before the properties absolutely devoted on the two sisters.
Clause 5 cannot be considered as a defeasance clause.
If the testator wanted that the bequest made to any of his grand daughters should stand divested on the happening of any contingency, then he would have said so in the will, assuming that he could have made such a provision.
But the will nowhere says that the properties bequeathed to the appellant and her sister should cease to be their properties on their dying issueless.
Obviously what the testator intended was that if any of his grand daughters dies issueless before the devolution took place then the entire property should go to the other granddaughter.
To our mind the intention of the testator is plain from the language of the will.
To find out the effect of the will before us we have to look to sections 1 4 and 131 of the .
Section 124 says : "Where a legacy is given if a specified uncertain event shall happen and no time is mentioned in the will for be occurrence of that event, the legacy cannot take effect, unless such event happens before the period when the fund bequeathed is payable or distributable." L864 Sup.
CI/72 74 Illustration (ii) to that section says "A legacy is bequeathed to A, and in the case of his death without children, to B.
If A survives the testator or dies in his lifetime leaving a child, the legacy to B does not take effect.
" If section 124 applies to the facts of the case, as we think it does, then it is clear that the legacy claimed by the appellant is unavailable as the contemplated contingency did not occur before the fund bequeathed was payable or distributable.
Section 124 deals with devolution.
But as we shall presently see section 131 deals with divestment of an estate that had vested.
Mr. Chagla contends that the governing provision is section 131.
That section says: "A bequest may be made to any person with the condition super added that, in case a specified uncertain event shall happen, the thing bequeathed shall go to another person, or that in case a specified uncertain event shall not happen, the thing bequeathed shall go over to another person." had already vested.
It speaks of an estate going over to another person.
As seen earlier clause 5 of the will is not a defeasance clause.
A case somewhat similar to the one before us came up for consideration before the Judicial Committee of the Privy Council in Norendra Nath Sircar and anr.
vs Kamal Basini Dasi(1) Therein a Hindu at his death left three sons, the eldest of full age and the other two minors.
In his will were the directions "My three sons shall be entitled to enjoy all the movable and immoveable properties left by me equally.
Any one of the sons dying sonless, the surviving son shall be entitled to all the properties equally".
Interpreting this clause the Judicial Committee held that those words gave a legacy to the survivors contingently on the happening of a specified uncertain event, which had not happened before the period when the property bequeathed was distributable, that period of distribution being the time of the testator 's death.
In arriving at this conclusion, the Judicial Committee relied on section 111 of the Indian Succession Act, 1865.
That provision is similar to section 124 of the .
For the reasons mentioned above we are in agreement with the courts below that the suit brought by the appellant is un sustainable.
This appeal is accordingly dismissed with costs.
Appeal dismissed.
K.B.N. Appeal dismissed.

dataset_name: IN-Abs

summary:
By clause 4 of a will the testator bequeathed to his grand daughters T and S an absolute right in the properties that were to devolve on them after the death of his wife.
, Clause 5 further provided that if one of the two grand daughters were to die issueless the other living grand daughter was to enter into possession of the entire property as absolute owner.
After the death of the testator 's wife T and S divided the properties which devolved on them in equal shares.
On S dying issueless T instituted a suit for possession of the properties that fell to the share of S basing her claim on clause 5 of the will.
The suit was dismissed.
Dismissing the appeal, HELD : Clause 5 of the will relates to devolution, it does not provide for any divestment of an estate which had vested.
The estate that vested in S under clause 4 of the will was not a conditional estate, it was an absolute one.
The will does not provide for the divestment of that estate.
Clause 5 would have come into operation if the contingency mentioned therein had happened before the properties absolutely devolved on T and section What the testator intended was that if any of his grand daughters died issueless before the devolution took place then the entire property should go to another grand daughter.
The intention of the testator is plain from the language of the will.
[73 E] Section 124 of the applies to the facts of the case and not section 131.
The legacy claimed by the appellant is unavailable as the contemplated contingency did not occur before the fund bequeathed was payable or distributable.
Section 131 provides for the divestment of an estate which had already vested; it speaks of an estate going over to another person.
[74B] Norendra Nath Sircar and anr.
vs Kamal Basini Dasi, I.L.R. , referred to.


judgement:
Appeal No. 357 of 1967.
Appeal from the judgment and order dated December 9, 1963 of the Calcutta High Court in Appeal from Original Order No. 110 of 1960.
B. Sen, Sadhu Singh, Jagmohan Khanna, R. N. Kapoor and section K. Dholakia, for the appellants.
G. L. Sanghi, B. Dutta and section P. Nayar, for the respondents.
87 The Judgment of the Court was delivered by P. Jaganmoban Reddy, J.
This is an appeal by certificate under Article 1 3 3 ( 1 ) (b) of the Constitution against the judgment of the Calcutta High Court which dismissed an appeal from an order of the single Judge of that Court discharging a rule granted by it to the appellants calling on the respondents the Collector of Customs and others to show cause why certain orders under various sections of the Sea Customs Act and the Foreign Exchange Regulation Act should not be quashed and why a written complaint made by the respondents under the Foreign Exchange Regulation Act and the case pending in the Court of the Presidency Magis trate, Calcutta, should not be stayed.
The appellant is a registered partnership firm carrying on business of importers, exporters, commission agents, brokers and general merchants.
It consists of two partners, Girdhari Lal Gupta and Pooran Mal Jain.
On the 25th October 1958.
the Cashier of the appellant Bhagwandeo Tiwari handed over a consignment of wooden case to the Swiss Airways at Dum Dum Airport for being sent by air freight to Hongkong.
According to ,the consignment note, the consignment was being sent by one Ramghawan Singh of Karnani Mansions, Park Street, Calcutta, who in fact was a fictitious person.
The Shipping Bill showed that the consignment purported to contain Rassoglla, Achar, Papar and dried vegetables and it was being sent to one Ishwar Lal, 41, Wyndham St., Hongkong who is also alleged to be, a fictitious person.
After the consignment was accepted and when The Customs examined it for clearance on 25th October 1958 before its onward despatch to Hongkong, there was found concealed in a specially made secret cavity on the battens nailed to the inner sides of the case, Indian currency notes of Rs. 51,000/ .
An investigation was set on foot and on 22nd January 1959 a search warrant was issued by the Presidency Magistrate, pursuant to which the Customs Officers caused a search to be made of the office of the firm and the residences of the appellant 's partners.
In the course of search account books and other documents were seized.
This investigation revealed that the Cashier, Bhagwandeo Tiwari had signed the consignment note as Ramchandra which, as the subsequent writings showed, were in his hand.
Even the consignment note appears to have been typed on the typewriter of the appellant firm.
It was further alleged that from a comparison of the consignment note with a letter admittedly sent out by the appellant firm and signed by one of its partners, Girdhari Lal Gupta, it became evident that the slip seized from the office of the appellant firm had contained entries, to show that Bhagwandeo Tiwari was the person who actually transported and booked the offending consignment in question and that he made an entry 88 of Rs. 123.73 being the Air freight paid for its transport to Hongkong which was the exact amount shown on the consignmer the account slip was in his handwriting, and that the expense note.
Bhagwandeo Tiwari, it was said, had in fact admitted the and charges shown therein were also found in the books of account of the appellant firm.
In view of this evidence, the customer authorities served a notice on the appellant firm on April 2, 1959 by which after setting out in detail the aforesaid facts and after pointing out that the exportation of Indian currency out of India was in contravention of section 8 (2) of the Foreign Exchange Regulations Act 1947 read with the Reserve Bank of India Notification dated 27 2 1951 as specified therein, it was asked to show cause and to produce within four days of the receipts of the notice, the permit, if any, of the Reserve Bank of India, for export of the Indian currency and if it did not do so, it would be liable for prosecution under section 23(1) read with section 8(2) of the Foreign Exchange Regulations Act.
On 13 4 1959, the appellant firm replied to the notice denying that the firm had anything to do with the despatch of the box containing currency notes; that it was not aware of any person by the name of Ramghawan Singh or Ishwar Lal, or that Bhagwandeo Tiwari had ever despatched the consignment in question or visited any Air office in connection therewith.
It may be mentioned en passant that in the High Court, in the reply affidavit affirmed on 11 1 1960 to the affidavit in opposition, Girdhari Lal Gupta, one of the partners of the firm went even to extent of denying that Bhagwandeo Tiwari was the Cashier of the firm, notwith standing the fact that in the earlier reply to the show cause notice as also in the Writ Petition, it was tacitly assumed that he was the Cashier.
Apart from the criminal prosecutions that were launched against the partners, in the penalty proceedings which were initiated by the aforesaid show cause notice, the firm was held to be knowingly concerned in the offence and accordingly, a fine of Rs. 1,000/ was imposed on it under section 167(3) of the Sea Customs Act with a further personal liability of Rs. 1,000/under section 167(37) of the said Act.
It was further fined Rs. 51,0001 under section 167(8) of the Act read with section 23 (1) of the Foreign Exchange Regulations Act.
Apart from these fines, the currency notes of Rs. 51,000/ which were seized were confiscated.
This order was challenged before the single Judge of the Calcutta High Court who, as already stated, had issued a rule but later discharged it.
Against that order an appeal was filed 89 Reddy, J.) but that also was dismissed.
Of the four points that were urged in that appeal, the first three have been reiterated before us on behalf of the appellant, viz. : (1) Currency notes are not 'goods ' and there fore the provisions of section 167(3), (8) and (37) of the Sea Customs Act are not attracted; (2) A 'firm ' is not a legal entity and therefore it cannot be a 'person within the meaning of any of the above provisions of law; (3) Even if a firm be a person within the meaning of the said provisions no penalty can be imposed on the firm or any of its members unless it appears from the evidence that the members of the firm had consciously taken any steps to violate the provisions of law; even so only the particular member against whom there is evidence of guilt can be held liable.
Before dealing with the above contentions it will be necessary to consider the relevant provisions of the Foreign Exchange Regulations Act as also those under the Sea Customs Act, Sections 8(1), 23(a), (b), (1A), 23A, 23B and 23C of the Foreign Exchange Regulations Act and section 19, 167(3).
(8) and (37) of the Sea Customs Act are relevant for the purpose of this appeal.
These are given below : 8 (1).
The Central Government may, by notification in the Official Gazette, order that, subject o such exemptions, if any, as may be contained in the notification, no person shall, except with the general or special permission of the Reserve Bank and on payment of the fee, if any, prescribed bring or send into India any gold or silver or any currency notes or bank notes or coin whether Indian or foreign.
Explanation The bringing or sending into any port or place, in India of any such article is aforesaid intended to be taken out of India without being removed from the ship or conveyance in which it is being carried shall nonetheless be deemed to be a bringing L864SupCI/72 90 or as the case may be sending, into India of that article for the purposes of this section.
(2) 23(1) If any person contravenes the provisions of section 4, section 5, section 9 or sub section (2) of section 12 or of any rule, direction or order made thereunder, he shall (a) be liable to such penalty not exceeding three time, , the value of the foreign ex change in respect of which the contravention has taken place, or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement in the manner hereinafter provided, or (b) upon conviction by a Court, be punish able with imprisonment for a term which may extend to two years, or with fine, or with both.
23(1A) Whoever contravenes (a) any of the provisions of this Act or of any rule, direction or order made thereunder, other than those referred to in subsection (1) of this section and section 19 shall, upon conviction by a court, be punishable with imprisonment for a term which may extend to two years, or with fine or with both; (b) any direction or order made under sec tion 19 shall, upon conviction by a court, be punishable with fine which may extend to two thousand rupees.
23A. Without prejudice to the provisions of section 23 or to any other provision contained in this Act, the restrictions imposed by sub sections (1) and (2) of section 8, sub section (1) of section 12 and clause (a) of subsection (1) of section 13 shall be deemed to have been imposed under section 19 of the (8 of 1878), and all the provisions of that Act shall have effect accordingly except that section 183 thereof shall have effect as if for the word 'shall ', therein the word 'may ' were substituted.
23B. Whoever attempts to contravene any of the provisions of this Act or of any rule, direction or order made thereunder shall be deemed to have contravened that provision, rule, direction or order, as the case may be.
23C(1) If the person committing a contravention is a company, every person who, at the time the contravention was committed, was incharge of, and was responsible, to the company for the conduct of the business of the Company as well as the company, shall be deemed to be guilty of the contravention and Shall be liable to be proceeded against and punished accordingly Provided that nothing contained in this sub section shall render any such person liable to punishment, it ' he proves that the contraven tion took place without his knowledge or that he exercised ill due diligence to prevent such contravention.
(2) Notwithstanding anything contained in subsection (1), where a contravention tinder this Act has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly".
: "19.
The Central Government may from time to time, by notification in the official Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified descrip tion into or out of India across any customs frontier as defined by the Central Government.
The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the 9 2 same with reference to such offences respectively Offences Section of Penalties.
this Act to which offence has reference.
1 2 3 3.
If any person ship or General such person shall be aid on the shipment or lan liable to a penalty ding of goods, or knowing not exceeding one keep or conceal, or knowingly thousand rupees.
permit or procure to be kept or concealed to be shipped or landed or intended to be shipped or landed, contrary to provision of this Act; or if any person be found to have 11 been on board of any vessel liable to confiscation on account of the commission of an offence under (No. 4) of this section, while such vessel is within any bay, river, creek or arm of the sea which is not a port for the shipment and landing of goods.
If any goods, the importation 18 & 19 such good shall or exportation of which is for be liable to the time being prohibited or rest to confiscation; restricted by or under Chapter IV of this and Act, be imported into or exported from India contrary to such prohibition any person conc or restriction or erned in any such offence shall be liable to a pena lty not exceedig three times the value of the goods, or not exceeding one thousand rupees.
if any attempt be made so to import or export any such goods; or if any such goods be found in any package produced to any officer of Customs as containing no such goods; or if any such goods, or any dutiable goods, be found either before or after landing or shipment to have been concealed in any manner on board of any vessel within the limits of any port in India; or if any goods, the exportation of which is prohibited or restricted as aforesaid, be brought to any wharf in order to be put on board of any vessel for exportation contrary to such prohibition or restriction.
93 37.
If it be found, when any 86 & 137 such package, tog goods are entered at, or brought ether with the to be passed through, a whole of the good custom house, either for contained therein importation or exportation, that shall be liable to confiscation, and every person concerned in any such offence shall liable to a pen lty not exceeding one thousand rupees.
(a)the packages in which they are contained differ widely from the description given in the bill of entry or application for passing them; or (b) the contents thereof have been wrongly described in such bill or application as regards the denominations, characters, or conditions according to which such goods are chargeable with duty or are being imported or exported; or (c) the contents of such packages have been misstated in regard to sort, quality, quantity or value; or (d)goods not stated in the bill of entry or application have been concealed in, or mixed with, the articles specified therein, or have apparently been packed so as to deceive the officers of Customs.
and such circumstance is not accounted for to the satisfaction of the Customs Collector.
" A perusal of these provisions would show that no gold or silver or any currency notes or Bank notes or coin, whether Indian or foreign, can be sent to or brought into India, nor can any gold, precious stones or Indian currency or foreign exchange other than foreign exchange obtained from an authorised dealer can be sent out of India without the general or special permission of the Reserve Bank of India.
These restrictions by virtue of section 23A of the Foreign Exchange Regulation Act are deemed to have been imposed under section 19 of the and all the provisions of the latter Act shall have effect accordingly except section 183 thereof shall have the effect as if for the word 'shall ' therein the word 'may ' were substituted.
What section 23A does is to incorporate by reference the provisions of the by deeming the restrictions under section 8 of the Foreign Exchange Regulation Act to be prohibitions and restrictions under section 19 of the .
The contention is 'that since section 19 restricts the bringing or taking by sea or by land goods of ,my specified description into or out of India, these restrictions are not applicable to the bringing in or taking out the currency notes which are not goods 94 within the meaning of that section, and, therefore, the appellant is not guilty of any contravention of section 19 of the and cannot be subjected to the penal provisions of the said Act.
This argument, in our view, is misconceived, because firstly, it is a well accepted Legislative practice to incorporate by reference, if the Legislature so chooses, the provisions of some other Act in so far as they are relevant for the purposes of and in furtherance of the scheme and objects of that Act and secondly, that merely because the restrictions specified in section 8 of the Foreign Exchange Regulation Act are deemed to be prohibitions and restrictions under section 19 of the , those prohibitions and restrictions are not necessarily confined to goods alone but must be deemed for the purposes of the Foreign Exchange, Regulation Act to include therein restrictions in respect of the articles specified in section 8 thereof, including currency notes as well.
The High Court thought that there is no definition of goods in the and that contained in the Sale of Goods Act which excludes money is inapplicable inasmuch as that Act was a much later statute than the .
It is, however, unnecessary to consider this aspect because even if the currency notes are not goods, the restrictions prescribed in section 8 of the Foreign Exchange Act cannot be nullified by section 23A thereof which incorporates section 19 of the .
We cannot attribute to the Legislature the intention to obliterate one provision by another provision of the same Act.
On the other hand, we construe it as furthering die object of the Act which is to restrict the import into or export out of India of currency notes and to punish contravention of such restrictions.
The second contention that because the firm is not a legal entity, it cannot be a person within the meaning of Section 8 of the Foreign Exchange Regulation Act or of section 167 (3), (8) and (37) of the , is equally untenable.
There is of course, no definition of 'person ' in either of these Acts but the definition in section 2 (42) of the . or section 2(3) of the Act of 1868 would be applicable to the said Acts in both of which 'person ' has been defined as including any company or association or body of individual,, whether incorporated or not.
It is of course contended that this definition does not apply to a firm which is not a natural person and has no legal existence, as such clauses (3), (8) and (37) of section 167 of the are inapplicable to the appellant firm.
In our view, the explanation to section 23C clearly negatives this contention, in that a company for the purposes of that section is defined to mean any body corporate and includes a firm or other association of individuals and a Director in relation to a firm 9 5 means a partner in the firm.
The High Court was clearly right in holding that once it is found that there has been a contravention of any of thee provisions of the Foreign Exchange Regulation Act read with by a firm, the partners of it who are in charge of its business or are responsible for the conduct of the same, cannot escape liability, unless it is proved by them that .he contravention took place without their knowledge or the exercised all due diligence to prevent such contravention.
There is, also no warrant for the third submission that unless it appears from the evidence that members of the firm had consciously taken any steps to violate the provisions of law and even then only the particular members against whom there is evidence of guilt, can alone be held liable.
This contention was said to be based on a decision of this Court in Radha Krishan Bhatia vs Union of India and others,(1) that as the 'person concerned ' specified in section 167(8) of the is the person actually involved or engaged or mixed up in contravening the restrictions imposed under the Foreign Exchange Act or the , he must be the person who must be, shown to be actually concerned.
That was also a case under section 167(8) of the where, in fact, a number of gold bars held to be smuggled were recovered from the person of the ,appellant.
The single Bench of the Punjab High Court ha( allowed the Writ Petition of the appellant on ',he ground that the Collector had not recorded a finding that the appellant was connected with the act of smuggling gold into the country.
This finding was set aside on a Letters Patent Appeal and the writ petition was dismissed.
This Court held that the concern of the appellant in the commission of the offence must be at a stage prior to the completion of the offence of illegal importation of gold into the country.
The mere finding of fact recorded by the Collector of Customs about the smuggled old being recovered from the person of .he appellant was not sufficient to conclude that the appellant was concerned in the illegal importation of gold into the country and, therefore, liable for penalty under section 167(8) of the Act.
What the order of the Collector of Customs must show is that be had considered the question of the person being concerned in the commission of the offence of illegal importation of the goods.
It should further indicate that the matters he had considered had a bearing on the question and the reasons for his arriving at that conclusion.
This has really no bearing on the question before us because under section 23B, even an attempt to contravene any of the provisions of the Act or of any rule, direction or order made thereunder shall be deemed to have contravened that provision, rule, direction or order as the (1) 96 case may be.
in respect of this very incident where the petitioners were prosecuted it was held by this Court in Girdhari Lal Gupta and another vs D. N. Mehta, Assistant Collector of Customs and another,(1) that Girdhari Lal Gupta, one of the two partners and Bhagwandeo Tiwari, Cashier, have been rightly convicted under the provisions of the Foreign Exchange Regulation Act for contravention of the restrictions imposed under section 8(2) read with section 23(1A) of the Foreign Exchange Regulation Act.
In that case it was contended that there is no evidence to show that the contravention took place with the knowledge of Girdhari Lai Gupta or that he did not exercise due diligence to prevent such contravention.
That contention was negatived because he had 'not only stated under section 342, that he alone looks after the affairs of the firm but it had been found that there were entries in his account books.
It is true, that the relevant provisions of the are penal in character and the burden of proof is on the Customs authorities to bring home the guilt to the person alleged to have committed a particular offence under the said Act by adducing satisfactory evidence.
But that is not to say that the absence of direct evidence to connect a person with the offence will not attract the penal provisions to establish the guilt in a criminal proceeding of the type which the customs authorities have to take.
The evidence of the kind which has been adduced in this case would be sufficient to lead to the conclusion that the partner of the firm was interested in or involved in attempting to export Indian currency notes out of India.
As observed by this Court in Thomas Dana vs The State of Punjab(2), while dealing with section 167 of the , that "All criminal offences 'are offences but all offences in the sense of infringement of law are not criminal offences.
Likewise, the other expressions have bean used in their generic sense and not as they are understood in the Indian Penal Code or other laws relating to criminal offences .
Out of more than 82 entries in the schedule to section 167, it is only about a dozen entries which contemplate prosecution in the criminal sense, the remaining entries contemplate penalties other than punishments for a criminal offence".
In the Additional Collector of Customs vs Sita Ran? Agarwal(3), to which the High Court has referred, while dis missing the appeal from the judgment of the Calcutta High Court, this Court had stated that "the High Court was right when it observed that if any one is interested or consciously takes any step whatever to promote the, object of illegally bringing bullion into the country, then even if no physical connection is established between him and the thing brought, he will be guilty.
" In that case, the respondent, Sita Ram Agarwal who was seen moving (1) ; (3) Civil Appeal No. 492/162 decided on 14 9 62.
(2) [1959] Suppl.
(1) S.C.R. 274, 97 in the company of one Bhola Nath Gupta on the western Pavement of Jatindra Mohan Avenue, Calcutta, had proceeded in the direction of a taxi which had come to the place where they were, and on a signal being flashed, a Chinese national alighted therefrom, shook hands, with the respondent after which all the three boarded the taxi.
A police constable who was on the spot raised an alarm and secured the respondent and his companion with the help of the members of the public.
All of them were taken to the police station for the purpose of interrogation but the Chinese national tried to get away and started to run.
He was chased and eventually secured.
Before his apprehension.
however, he was seen to drop three packets which were found to contain 23 bars of illicit gold.
The respondent was charged as a person concerned in the offence of attempting to import contraband gold under section 167(8) of the .
The High Court while holding that there was no evidence to establish that he was in conscious relation with the gold, observed, "in order that a person may be said to be so concerned, some facts have to be proved which will establish that he was in conscious relation with the gold in one or other of the several successive steps preceding its actual receipt into the country".
In order that he was concerned in the offence, the High Court further pointed out that there need be no physical connection between the gold and the person charged and "if the offence did not relate to his being concerned in the importation of the gold.
but related to his having something to do with smuggled gold, the position might have been different".
The facts of the instant case clearly disclosed, as was observed by the High Court, " a well laid plain".
We have earlier stated that the currency notes were secreted in a cavity and were sought to be despatched out of the country in a package which ostensibly looked inocuous.
containing eatables.
The manner in which the attempt was made was to hood wink the Customs officials and escape their detection.
Further, the consignor and the consignee were not shown as real persons but were fictitious so that even if the attempt to smuggle out of the country the currency notes was detected, the real persons could not be traced.
The charges and expenses incurred in connection with the despatch found in the entries in the books of account of the firm were the same a those relating to the offending package which was being despatched to Hongkong.
The freight mentioned in the account slip the exact amount which appears on the consignment note in respect of that offending package.
The amount sought to be sent is half a lakh of rupees which can hardly be within the means of the Cashier.
leading to the inescapable inference that the firm through its partners was concerned in the attempt to transgress the restrictions under section 8 of the Foreign Exchange Regulation Act and liable to penal action by virtue of section 23A 98 under the provisions of the .
On these facts as established, the High Court came to the conclusion and in our view rightly, that it was not unreasonable to infer that it was the firm which was interested in sending the currency notes out of India in a clandestine manner.
In this view, the appeal has no merits and it is dismissed with costs.
S.N. Appeal dismissed.

summary:
The appellant, a partnership firm having 2 partners, carried, on business of importers and exporters, etc.
The Cashier of the firm handed over a wooden case, to the Swiss Airways at Dum Dum for being sent to Hong Kong by air.
According to the consignment note, the consignment was being sent by one R. of Karnani mansions, Calcutta, who was a fictitious person.
The shipping bill showed that the consignment purported to contain food and dried vegetables and was sent to 1, of Hong Kong, also a fictitious person.
After the consignment was accepted and when customs examined it for clearance, it was found that it contained Rs. 51,000 in Indian currency.
On investigation, a search warrant was issued by the Presidency Magistrate and the office of the firm and the residence of partners were searched.
In the course of search, accounts books and other documents were seized.
Investigation revealed that the Cashier, had signed the consignment note as Rs, which, as the subsequent writings showed, were in his hand.
Even the consignment note appears to have been typed on the type writer of the appellant firm.
Thereafter, Customs authorities served a notice, on the appellant pointing out that exportation of Indian currency out of India was in contravention of section 8 (2) of the Foreign Exchange Regulations Act, 1947 read with Reserve Bank Notification dated 27 2 1951 as specified therein and it was asked to show cause and to produce within 4 days the permit, if any, of the Reserve Bank of India, failing which, it would be liable for prosecution under Section 23(1) read with section 8(2) of the Foreign Exchange Regulations Act.
The appellant denied that the firm bad anything to do with the case.
Apart from criminal prosecutions against the partners, a fine of Rs. 1,000 under section 167(3) of the Sea Customs Act with a further personal liability of Rs. 1,000 section 167(37) of the Act was imposed against the firm.
It was further fined Rs. 51,000 section 167(8) of the Act read with section 23(1) of the Foreign Exchange Regulations Act.
Apart from these, the currency notes of Rs. 51,000 which were seized, were also confiscated.
This order was challenged before the single judge of the Calcutta High Court who issued a rule but later discharged it.
An appeal against that order was also dismissed.
In appeal to this Court, three points, raised before the Appellate Court were also reiterated : (1) Currency Notes are not 'goods ' and therefore, the provisions of section 167(3), (8) and (37) of the Sea Customs Act are not attracted.
(2) A firm is not a legal entity and therefore, it cannot be a 'person ' within the meaning of any of the above provisions of law.
(3) Even if a 'firm ' be a 'person, no penalty can be imposed on the firm or any of its members unless the members have consciously taken any step to violate the provisions of law; 8 6 even so, only the partner member against whom there is evidence of guilt can be held liable.
Dismissing the appeal, HELD :P (i) section 23A of the Foreign Exchange Regulations Act, incorporates, by reference, the provisions of the Sea Customs Act by deeming the restrictions under section 8 of the Foreign Exchange Regulations Act, to be prohibiting and restricting under section 19 of the Sea Customs Act.
The legislature can always incorporate by reference, the provisions of some other Act, if they are relevant for the purposes of the scheme and object of that Act.
Restrictions specified in section 8 of the Foreign Exchange Regulations Act are deemed to be prohibitions and restrictions mentioned under section 19 of the Sea Customs Act.
The prohibitions mentioned under section 8 are not necessarily confined to goods alone but must be deemed, for the purposes of Foreign Exchange Regulations Act, to include therein restrictions in respect of the articles specified in section 8 thereof, including currency notes as well.
[94 B] (ii) Although there is no definition of the word 'person ' in either of.
the Acts, the definition in section 2(42) of the or Section 2(3) of the Act of 1863 would be applicable to the present Acts.
in both of which, person has been defined as including any Company or association, or body of individuals whether incorporated or not.
Further, the explanation to section 23C clearly envisages that a company for the purposes of that Section is defined to mean any body corporate and includes a firm or other association of individuals and a Director in relation to a firm also means a partner of the firm.
Therefore, for "he purposes of Foreign Exchange Regulations Act and Sea Customs Act.
a registered partnership firm L is a 'legal entity '.
[94G] (iii) From the evidence, it was clear that the appellant attempted to hoodwink the customs officials (currency notes secreted in a cavity), that the consigner and consignee were not shown as real persons, the charges and expenses incurred.
in connection with the despatch were found in the entry in the books of account of the firm that the amount, sought to be sent was half a lakh of rupees which could hardly be within the mean ', of the Cashier and the High Court was right in holding that it was the firm which was interested in sending the currency notes out of India .,II a clandestine manner.[198 A] Radha Krishna Bliatia vs Union of India & Ors., Thomas Dana vs The State of Punjab, [1959] Supp. 1 S.C.R. 274 and Additional Collector of Custo is vs Sita Ram Agarwal, C.A. No. 492 of 1962 decided on 14 9 1962 referred to and distinguished.


judgement:
AppealS Nos. 101 , 102 and 103 of 1951.
Civil Appeal No. 101 of 1951 was an appeal from the Judgment and decree dated the 13th March, 1946, of the Chief Court of Avadh at Lucknow in First Civil Appeal No. 132 of 1943 arising out of the Judgment dated the 25th September, 1943, of the Court of Special Judge, 1st Grade, Sitapur in E. E. Act Suit No. 27/1 of 1938.
Civil Appeals Nos. 102 and 103 of 1951 were appeals from the Judgment and Decree dated the 13th March, 1946, of the Chief Court of Avadh at Lucknow in Execution of Decree Appeals Nos. 103 of 1944 and 23 of 1945 arising out of the Judgment dated the 16th November, 1944, of the Court of Additional Civil Judge, Lucknow, in Miscellaneous Case No. 70 of 1944.
B. I. Bishan Singh for the appellant.
M. C. Setalvad (Nazimuddin Siddique, with him) for the respondent.
January 21.
The Judgment of the Court was delivered by MAHAJAN J, 561 MAHAJAN J.
Shortly stated, the factS giving rise to these three appeals are these On the 4th July, 1933, Rai Bahadtir Lala Hari Kishen Das obtained from the court of The civil judge, Sitapur, a final compromise decree in the sum Of Rs. 3,88,300 2 6 with pendente lite and future interests ' and costs, on the foot of two simple mortgages executed in his favour in 1928 and 1931 by Thakur Raghuraj Singh.
The Judgment of the Court was delivered by MAHAJAN J.
561 MAHAJAN J. Shortly stated, the factS giving rise to these three appeals are these On the 4th July, 1933, Rai Bahadtir Lala Hari Kishen Das obtained from the court of The civil judge, Sitapur, a final compromise decree in the sum Of Rs. 3,88,300 2 6 with pendente lite and future interests ' and costs, on the foot of two simple mortgages executed in his favour in 1928 and 1931 by Thakur Raghuraj Singh.
It was provided in the compromise that Raghtiraj Singh mould within a week sell to Hari Kishen Das at agreed prices some villages out of the mortgaged property selected by him and sufficient to satisfy the decree.
He reserved to himself the right to get back the sold villages after five years and before the expiry of fifteen years on payment of the stipulated prices.
The computation of the price of the sold lands was to be made in the manner laid down in clause (6).
Hari Kishen Das made a selection of eight villages, and deeds of sale and relinquishment in respect of them were duly prepared and executed on 4th July, 1933 Before they could be presented for registration, the parties received information that a notification for assumption by the Court of Wards of the management of the talukdar 's estate had been issued and that it was likely to render the conveyances ineffectual.
In view of the impending notification the sale transaction felt through and a refund was obtained of the amount spent on the stamp papers, On the 20th January, 1934, the Court of Wards decided that it would not take the estate under its supervision.
Hari Kishen Das then revived his demand against the judgment debtor for the completion of the sale deeds but the judgment debtor did not pay any heed to his request with the result that on 26th May, 1934, he made an application for execution of the compromise decree.
To the execution of this decree a number of objections were raised by Raghuraj Singh.
Before the disposal of these objections the U.P. Agriculturists ' Relief Act (XXVII of 1934) and the U.P.
Encumbered Estates Act (XXV 562 of 1934) came into operation.
Under the provisions of Act XXVII of 1934, the judgment debtor became entitled to the amendment, of the decree by reduction of interest, and for payment of the decretal sum in instalments.
Under the other Act, a landlord debtor whose property was encumbered could apply to the court for the administration of his estate for liquidation of his debts.
Raghuraj Singh was not slow in seeking the aid of these laws to reduce the amount of his indebtedess and to save his property.
He made applications under both the Acts.
In the application under the Relief Act he prayed for the scaring down of the amount of the decree and for instalments.
In the application under section 4 of the Encumbered Estates Act he asked for liquidation ,of his debts by the civil judge.
On the 11th January, 1936, the civil judge of Sitapur altered the decretal amount of Rs. 3,88,300 2 6 to Rs. 3,76,790 4 3 exclusive of costs and future interest and directed Raghuraj Singh to pay the money in twelve equal annual instalments payable in the month of December of each year, the first instalment being payable in December, 1936, and also provided that in the case of default in payment of three instalments, the whole amount then due would become immediately payable.
Against this order, Hari Kishen Das filed an application in revision to the Chief Court and was successful in having the amended decree set aside on 15th February, 1938.
In the proceedings commenced under the Encumbered Estates Act on 29th October, 1936, Raghuraj Singh obtained an order under section 6 of the Act but this order was eventually quashed by the Board of Revenue on 13th August, 1938, and the debtor 's application under section 4 was dismissed.
Having succeeded in his application in revision in the Chief Court, Hari Kishen Das revived the proceedings in execution of the compromise decree and called upon Raghuraj Singh to execute a sale deed in respect of the selected villages in his favour.
On his failure to comply with this demand, the court 563 executed a deed of sale in his favour on 24th February, 1939, and in due course delivered to him possession of the property covered by the deed.
Thakur Raghuraj Singh died in the year 1941, leaving him surviving the present appellant as his successor in interest.
An appeal had been taken by him against the decision of the Chief Court dated 15th February, 1938, setting aside the amended decree to His Majesty in Council.
By an order of His Majesty in Council passed on 20th January, 1944, the decision of the Chief Court dated 15th February, 1938, was reversed and the amended decree passed by the Civil Judge of Sitapur on 11th January, 1936, was restored.
Liberty was given to the appellant to apply to the court of the civil judge, Sitapur, for such relief as he might be entitled to with reference to the recovery of possession of the property.
In view of the decision of the Privy Council, Bhagwant Singh (appellant) made an application for restoration of possession and for recovery of profit:,, wrongfully realized by Hari Kishen Das and after his death by his adopted son Sri Kishen Das.
This application was strenuously resisted by the creditor and it was pleaded by him that even under the amended decree a sum of Rs. 4,31,148 9 9 including interest and costs had become due to the decreeholder on the date of the sale since three instalments which had till then fallen due had remained unpaid and the default clause had come into operation and the sale in execution could not be set aside, as it has not caused any injury to the judgment debtor and had not in any way caused loss to him in the absence of proof that he had the money to pay the instalments.
The subordinate judge allowed the application for restitution conditional on Bhagwant Singh paying within two months the accumulated sum that had fallen due to the decreeholder under the unpaid instalments up to the date of the order.
He held that the arrears up to December, 1943, came to Rs. 3,58,914 8 9, and deducting from this amount the net profits 73 564 realized during the period of his possession amounting to Rs. 73,294 8 5 and the costs of appeal allowed by the Privy Council, a. sum of Rs. 2,85,620 074 was due and directed that if this amount was not deposited in court within two months, the application would stand dismissed.
Bhagwant Singh applied for extension of time but this application was summarily dismissed.
Rai Sabib Sri Kishen Das and Bhagwant Singh both appealed to the Chief Court against this decision.
The appeal of Sri Kishen Das was numbered as 103 of 1944.
His contention was that the judgment debtor was not entitled to restitution at all.
The appeal of Bhagwant Singh was numbered as 23 of 1945.
His grievance was that he wag entitled to restitution without any condition.
The Chief Court allowed the decreeholder 's appeal (103 of 1944) with costs and dismissed the judgment debtor 's appeal (23 of 1945) but without costs, and dismissed the application of the judgment debtor for restitution on the 13th March, 1946.
Appeals 102 and 103 of 1951 arise out of this decision.
Appeal No. 101 of 1951 arises out of another decision of the Chief Court dated 13 th March, 1946, which confirmed the decree dated 26th September, 1943, of the special judge of Sitapur under the Encumbered Estates Act.
The facts about this matter are these : As already stated, on 28th October, 1936, Thakur Ragburaj Singh applied under section 4 of the U.P.
Encumbered Estates Act (XXV of 1934) for administration of his estate so as to liquidate his debts amounting to about 14 lakhs.
on 13th August, 1938, the Board of Revenue quashed the proceedings under the Encumbered Estates Act initiated by Thakur Raghuraj Singh.
As no order for stay of execution proceedings was obtained by Raghuraj Singh from the Chief Court or the Privy Council, the civil judge to whom the exe cution proceedings had been transferred, on 13th 565 February, 1939, ordered the judgment debtor to execute a sale deed and on his making a default the civil judge on 24th February, 1939, executed a sale deed on behalf of the judgment debtor in, favour of Rai Bahadur Hari Kishen Das.
The U.P.
Encumbered Estates Amendment Act (XI of 1939) came into operation after this sale.
It allowed the applicants to amend their applications, proceedings in respect of which had been quashed previously.
On the 10th October, 1939, Raghuraj Singh applied for amendment of his application.
This application was allowed by the sub divisional officer who passed an order under section 6 of the U.P.
Encumbered Estates Act on 18th October, 1939, and forwarded the amended application to the special judge, first grade, Sitapur.
On 31st July, 1940, the special judge passed an order to the effect that the proceedings would start afresh.
Raghuraj Singh went up in revision to the Chief Court against this order contending that the proceedings should not be deemed as fresh proceedings.
The Chief Court dismissed the revision on 9th December, 1940.
On a notification issued under section 11 of the Encumbered Estates Act, Hari Kishen Das filed objection on 14th August, 1942, under section 11 claiming that the villages sold to him were his property and were not liable to be attached and sold for the debts of Raghuraj Singh.
This objection was contested by the debtor.
The special judge by his decree dated 25th September, 1943, declared Rai Bahadur Hari Kishen Das to be the proprietor of all the eight villages included in the sale deed of 24th February, 1939.
Against the decree of the special judge an appeal was filed in the Chief Court which confirmed that decree on 13th March, 1946.
Appeal No. 101 of 1951 now before us is directed against that decree.
This appeal can be shortly disposed of.
The proceedings under the Encumbered Estates Act having been quashed by the Board of Revenue in August, 1938, the sale held in February, 1939, was unaffected by the bar imposed by section 7 of the Act.
In 566 view of the decision of the Chief Court dated 9th December, 1940, the appellant could not be allowed to agitate the point that the proceedings should have been deemed to be pending in February,.1939, because of the provisions of the amending Act.
This point was stressed before us by the learned counsel for the appellant and he contended that the provisions of the amending Act XI of 1939 should have been given retrospective operation and the date of his original application should have been treated as the date of the start of the proceedings under the Encumbered Estates Act.
This contention, in our opinion, was rightly negatived in the courts below, and it was rightly held that the order made under section 6 on 18th October, 1939, was made on a fresh application under section 4.
of the U.P.
Encumbered Estates Act preferred on 10th October, 1939, and this could not affect the validity of the sale deed executed at a time when no application under section 4 was pending.
It was argued in the courts below that the sale deed was a nullity because it was executed while execution proceedings were pending before the collector under schedule III of the Code of Civil Procedure.
The point was not argued before us in this appeal.
This appeal therefore fails and is dismissed with costs.
As regards appeals Nos. 102 and 103, the main point for decision is whether in the circumstances of this case the appellant was entitled to restitution by way of restoration of possession and grant of mesne profits after the reversal of the compromise decree by the Privy Council and the restoration of the amended decree as passed by the civil judge under the Relief Act.
Having regard to the provisions of section 144 of the Code of Civil Procedure, the Chief Court was of the opinion that the sale in 1939 was inevitable and could not have been avoided if the amended decree had been then in force and that if it was set aside it would confer on the appellant an advantage to which his predecessor was not entitled, he having defaulted 567 in the payment of three instalments before the sale took place.
The following passage from the judgment of the Chief Court expresses the view that it took on this point : "For purposes of section 144 we have in the words of the section 'to place, the parties in the position which they would have occupied but for such decree or such part thereof as has been varied or reversed. ' So placing them the issue which falls for determination is whether the judgment debtor would have paid the accumulated amount of three instalments namely Rs. 1,37,839 1 11 in December, 1939.
On the evidence the lower court has come to the conclusion with which we agree that Thakur Raghuraj Singh owed no less than rupees fourteen lakhs to other creditors, and computing the value of the entire landed property at the rate specified in the compromise of 1133, it was only rupees nine lakhs.
Lal Bhagwant Singh produced no evidence to establish that his father was otherwise in a position to pay the amount of three instalments in December, 1938.
We may mention that no objection has been taken at the bar to the estimate of indebtedness or to the evaluation of the estate.
Taking them, therefore, to be correct it is impossible to believe that the judgment debtor could have prevented the sale on 24th February, 1939, if the parties were then governed by the decree of 1936.
The result which followed was inevitable and cannot be attributed solely to the erroneous order passed by this court in February, 1938.
" In our opinion, no exception can be taken to the judgment of the Chief Court in the facts and circumstances of this case and both these appeals would therefore have to be dismissed.
On account of the order of His Majesty in Council the amended decree passed by the civil judge, Sitapur, on 11th January, 1936, must be deemed to have been subsisting all along.
All the terms of the compromise were embodied in the amended decree and there was no difference in the two decrees except for the reduction of 568 the sum due from Rs. 3,88,300 2 6 to Rs. 3,76,790 4 3 and the reduction of pendente lite and future interest and for provision for instalments.
The compromise decree with the necessary adaptations and amendments became the amended decree and was enforceable as such.
It gave the judgment debtor, an opportunity to satisfy the decree by instalments if he committed no default and to save the property from being sold in satisfaction of it but in case the whole amount of the decree became due according to its terms or if any portion of it remained unpaid, it yet had to be satisfied in the same manner as the original compromise decree.
During the pendency of the decreeholder 's, appeal before the Chief Court the judgment debtor did not obtain any order staying the operation of the amended decree.
He was thus bound to carry out the terms of that decree but he failed to pay any of the instalments that fell due in 1936 or 1937.
The third instalment, it is true, fell due in December, 1938, after the amended decree had been set aside by the Chief Court but the judgment debtor had appealed for its restoration to the Privy Council.
He should therefore have taken steps to protect himself against being in default with payment of three instalments.
In order therefore to avoid the default which he would otherwise commit by nonpayment of the third instalment it was obligatory on him to pay or offer to pay to the decree holder an amount equal to the amount of one instalment so that three instalments will not be in arrears, or to obtain an order from the Privy Council absolving him from complying with the terms of the amended decree set aside by the Chief Court, even if it was eventually restored.
Failing that, he should have obtained a fresh order from the Privy Council fixing the instalments and time for the payment.
He, however, did nothing and adopted the attitude that he need make no payment and considered himself absolved from satisfying either the original decree or the amended decree.
The result of this attitude was that the whole of the decretal amount became due on his 569 failure to pay the third instalment provided for under the amended decree in December, 1938, and he thus lost the benefit of paying the decretal amount by instalments.
The amount due from him in February, 1939 under the decree was the same sum for which the property was sold in execution of the original decree.
In this situation it cannot be said that there was any alteration in the position of the parties by thePrivy Council setting aside the compromise decree and restoring the decree passed by the civil judge, Sitapur, in 1936.
The position would have been the same if that decree was a subsisting one and was in execution.
If the judgment debtor could have shown that he was in a position to pay the aggregate amount of the instalments in December, 1938, or at least one instalment so that he could not be said to have defaulted in the payment of three instalments, then the sale made in February, 1939, could not possibly be regarded as one under the amended decree but could only have been made in consequence of the original compromise decree, and that compromise decree having been superseded and the amended decree having been restored, the sale held under the reversed decree would surely have to be set a side.
On the other hand, if the sale could not have been avoided even if the amended decree which was eventually restored had been in operation at the time of the sale by reason of default of payment of three instalments and the sale was also a necessary consequence under the decree of the civil judge and was inevitable, then it cannot be said that the sale held in February, 1939, was the result and consequence of the reversed decree.
It is true that it is one of the first and the highest duty of a court to take care that its acts do not injure any of the suitors and if any injury was caused to the judgmentdebtor by the sale held in February, 1931, it was our duty to undo the wrong caused to him.
It, however, cannot be said that in this case any wrong has been done to the judgment debtor which we are called upon to redress.
It is not possible to hold that he 570 was under no obligation to satisfy either one or the other of the two decrees, and that he was absolved from satisfying the instalment decree because it had been set aside by the Chief Court and he was also absolved from satisfying the original decree because it was later on set aside by the Privy Council.
Having himself appealed to the Privy Council for the restoration of the instalment decree, it was obligatory on him to carry out the terms of that decree if he wanted to take advantage of its provisions.
Having defaulted in this, he must take its consequences, which are now different from the consequences of the original decree.
Indeed, if in this case the prayer of the judgment debtor for restitution was granted, it would result in doing not only an injustice but a wrong to the decreeholder and the court would not be acting fairly and rightly towards him.
As already said, in February 1939 both under the original decree and the amended decree a sum of over rupees four lakhs became due to him and he was entitled to got a sale of the villages selected by him in his favour towards satisfaction of this decretal debt.
If this sale is set aside and possession of eight villages is restored to the judgment debtor and mesne profits are decreed in his favour, the decreeholder would be deprived of the fruits of his decree which is certainly not the purpose of restitution in law or equity; it would place the judgment debtor in a position of advantage to which he is not entitled.
The executing court decreed restoration of possession of the eight villages in favour of the appellant conditional on his paying the amount due to the decreeholder under the amended decree till the date of that order.
This obviously favourable order passed in his favour by the trial judge was not availed of by the judgment debtor as he has no means whatsoever to make any payment.
An order of restitution in the manner asked for in the circumstances of this case would be contrary to the principles of the doctrine of restitution which is that on the reversal of a judgment the law raises an obligation on the party to the record who received the 571 benefit of the erroneous judgment to make restitution to the other party for what he had lost and that it is the duty of the court to enforce that obligation unless it is shown that restitution would be clearly contrary to the real justice of the case.
The decreeholder in the present case has derived no advantage* to which he was not entitled and the judgment debtor has lost nothing.
In either event he had to discharge and satisfy the decretal debt due from him whether under the first decree or under the second and that debt could only be discharged by sale of the villages selected by the decreeholder.
In the words of Rankin C. J. in Dayal.
Sardar vs Tari Deshi(1), the judgmentdebtor is not entitled to recover the properties except upon showing that the sale was in substance and truth a consequence of the error in the reversed decree.
The sale being inevitable under the amended decree the 'judgment debtor was clearly not entitled to restitution.
It was held in, Gansu Ram vs Parvati Kuer (2), that where a judgment debtor could not have paid even the reduced decretal amount and the sum realized at the sale was less than the decretal amount the situation could not have been altered in any way had the decree been modified before, instead of after the sale, and the judgment debtor could not invoke the provisions of section 144, except by showing that the sale was in substance and truth a consequence of the error in the original decree.
, The observations made in this case have apposite application to the facts and circumstances of this case.
For the reasons given above we are of the opinion that there is no merit in either of these appeals and we dismiss both of them with costs.
Appeals dismissed.
(1)(1932) I.L.R. , (2) A.I.R. 1941 Pat.

summary:
Under a compromise decree the amount due to the plaintiff was fixed by mutual consent and it was further agreed that the defendant should within one week of the date of the decree convey to the plaintiff immoveable properties sufficient to satisfy the decree.
The U. P. Agriculturists Relief Act of 1934 having come into force, the decree was subsequently amended by the Civil Judge by reducing the amount and directing that the amount may be paid in 12 annual instalments with the condition that if three instalments were in default the whole amount was to become immediately payable.
The amended decree was set aside by the Chief Court in 1938.
The decree holder applied for execution, and a sale deed was executed by the Civil Judge in 1939 for the entire decree amount.
The Privy Council reversed the decree of the Chief Court and restored the amended decree of the Civil Judge in 1944.
The judgment debtor applied for restoration of the properties with mesne profits by way of restitution: Held, confirming the decree of the Chief Court, that, as the judgment debtor bad not obtained any order staying the operation of the amended decree pending the dereeholder 's appeal to the Chief Court he was bound to carry out the terms of the amended decree, and, as the Privy Council had merely restored the amended decree without altering the provisions as to payment by instalments or extending the time for payment by instalments and its decree did not in any way alter the position of the parties as it stood under the amended decree, and, the sale was not in consequence of any error in a decree which was reversed on appeal by the Privy Council, the judgment debtor was not entitled to restitution.
Dayal Sardar vs Tari Deshi (I.L.R. and Gansu Ram vs Parvati Kuer (A.I.R. 1941 Pat. 130) approved.
560 The judgment debtor in the above mentioned case applied tinder section 4 of the U. P.
Encumbered Estates 'Act, 1934, for administration of his estate in 1936 but the proceedings were quashed by the Board of Revenue in 1938.
As no order for stay of execution was obtained, a sale was effected in execution of the decree in February, 1939.
The U. P. Encumbered Estates (Amendment) Act, 1939, came into force after the date of the sale and the judgment debtor applied on the 10th October, 1939, foe amending his former application, but it was ultimately decided by the Chief Court that the amendment application of 1939 must be treated as fresh proceedings: Held, confirming the decision of the Chief Court, that as the proceedings which were started in 1936 were quashed by the Board of Revenue in 1938, the sale held in February, 1939, was unaffected by the bar imposed by section 11 of the Act.
The order made on the application of the 10th October was an order on a fresh application under section 4 and it had no retrospective effect and could not affect the validity of the sale effected when no application under section 4 was pending.