judgement:
iminal Appeal No.122 of 1965.
Appeal from the judgment and order dated December 1, 1964 of the Allahabad High Court in Government Appeal No.785 of 1963.
P. Rana, for the appellant.
J. P. Goyal and Sobhag Mal Jain, for the respondents.
The Judgment of the Court was delivered by Hegde, J.
In this appeal by certificate, the only question that arises for decision is as to the true scope of the expression "time requisite for obtaining a copy of the decree, sentence or order appealed from" found in sub section
2 of section 12 of the Indian Limitation Act 1908 which wilt be hereinafter referred to as the Act.
The said question arose for decision under the following circumstances: The respondents were tried for various offences before the learned assistant sessions judge, Farrukhabad.
The said learned judge acquitted them.
Against the order of acquittal the State went up in appeal to the High Court of Allahabad.
The said appeal was dismissed as being barred by limitation.
The correctness of that decision is in issue in this appeal.
Item 157 of the first schedule to the Act prescribes that the period of limitation for an appeal under the Code of Criminal Procedure 1898, from an order of acuittal is three months from the date of the order appealed from.
But sub section 2 of section 12 provides that in computing the period of limitation prescribed for an appeal the day on which the judgment complained of was pronounced and the time requisite for obtaining a copy of the order appealed from shall be excluded.
The memorandum of appeal was filed into court on March 29, 1963.
The order appealed from bad been delivered on Novem ber 10, 1962.
According to the information contained in the copy of the order produced along with the said memorandum the appeal was within time.
It showed that that copy was, applied for on November 15, 1962 and the same was ready on January 3, 1963.
It was contended on behalf of the respondents that the appeal was out of time in view of the fact that the appellant had applied for and obtained two other copies of the order appealed from and if time is calculated on the basis of those copies the appeal was beyond time.
In addition to the copy referred to earlier, the 844 appellant had applied for another copy of the order appealed from on December 3, 1962 and that copy was ready for delivery on December 20, 1962.
The appellant also applied for yet another copy of the same order on December 21, 1962 and that copy was made ready on the same day.
There is no dispute that if the period of limitation is computed on the basis of those copies the appeal was barred by limitation.
But the point for consideration is whether the obtaining of those copies has any relevance in the matter of computing the period of limitation for the appeal.
The High Court of Allahabad accepted the contention of the respondents that in determining the time requisite for obtaining a copy of the order appealed from, it had to take into consideration the copies made available to, the appellant on the 20th and 21st December, 1962.
It opined that the expression 'requisite ' found in section 12(2) means "properly required", and hence the limitation has to be computed on the basis of the copy made available to the appellant in December, 1962.
It was not disputed on behalf of the respondents that it was not necessary for the appellant to apply for a copy of the order appealed from immediately after the order was pronounced.
The appellant could have, if it chose to take the risk, waited till the ninety days period allowed to it by the statute was almost exhausted.
Even then the time required for obaining a copy of the order would have been deducted in calculating the period of limitation for filing the appeal.
Hence the expression 'time requisite ' cannot be understood as the time absolutely necessary for obtaining the copy of the order.
What is deductible under section 12(2) is not the minimum time within which a copy of the order appealed against could have been obtained.
It must be, remembered that sub section 2 of section 12 enlarges the period of limitation prescribed under entry 157 of Schedule 1.
That section permits the appellant to deduct from the time taken for filing the appeal, the time required for obtaining the copy of the order appealed from and not any lesser period which might have been occupied if the application for copy had been filed at some other date.
That section lays no obligation on the appellant to be prompt in his application for a copy of the order.
A plain reading of section 12(2) shows that in computing the period of limitation prescribed for an appeal, the day on which the judgment or order complained of was pronounced and the time taken by the court to make available the copy applied for, have to be excluded.
There is no justification for restricting the scope of that provision.
If the appellate courts are required to find out in every appeal filed before them the minimum time required for obtaining a copy of the order appealed from, it would be unworkable.
In that event every time an appeal is filed, the court not only will have to see 84 5 whether the appeal is in time on the basis of the information available from the copy of the order filed along with the memorandum of appeal but it must go further and hold an enquiry whether any other copy had been made available to the appellant and if so what was the time taken by the court to make available that copy.
This would lead to a great deal of confusion and enquiries into the alleged laches or dilatoriness in respect not of copies produced with the memorandum of appeal but about other copies which he might have got and used for other purposes with which the court has nothing to do.
The High Court in arriving at the decision that the appeal is barred by time relied on the decision of the Lahore High Court in Mathela and Others vs Sher Mohammad(1).
It also sought support from the decisions of the Judicial Committee in Pramatha Nath Roy vs Lee( ) and J. N. Surty vs T. section Chettyar(3).
The Lahore decision undoubtedly supports the view taken by the High Court.
It lays down that the words "time requisite" mean simply time required by the appellant to obtain a copy of the decree assuming that he acted with the reasonable promptitude and diligence.
It further lays down that the time requisite for obtaining a copy is the shortest time during which the copy would have been obtained by the appellant, and it has nothing to do with the amount of time spent by him in obtaining the copy which he chooses to tile with the memorandum of appeal.
With respect to the learned judges who decided that case we are unable to spell out from the language of section 12(2) the requirement that the appellant should act with reasonable promptitude and diligence and the further condition that the time requisite for obtaining a copy should be the shortest time during which a copy could have been obtained by the appellant.
We are of the opinion that the said decision does not lay down the law correctly.
Now we shall proceed to consider the decisions of the Judicial Committee relied on 'by the High Court.
In Pramatha Nath Roy vs Lee (2) the appellant was found to be guilty of laches.
The Judicial Committee held that he was not entitled to deduct the time lost due to his laches.
It is in that context the Board observed that the time which need not have elapsed if the appellant had taken reasonable and proper steps to obtain a copy of the decree or order could not be regarded as 'requisite ' within sub section 2 of section 12.
That decision does not bear on the question under consideration.
In J. N. Surty vs T. section Chettyar 3 the question that fell for decision by the Judicial Committee was whether in reckoning the time for presenting an appeal, the time required for obtaining (1) A.I.R. 1935 Lah. 682.
L3Sup.
CI/68 10 (3) 55 [.A. 161.
(2) 49 I.A. 3 7. 846 a copy of the decree or judgment must be excluded even though by the rules of the court it was not necessary to produce with the memorandum of appeal the copy of the decree or judgment.
Their Lordships answered that question in the affirmative.
While deciding that question, their Lordships considered some of the observations made by the High Court relating to the dilatoriness of some Indian practitioners.
In that context they observed "There is force no doubt in the observation made in the High Court that the elimination of the requirement to obtain copies of the documents was part of an effort to combat the dilatoriness of some Indian practitioner; and their Lordships would be unwilling to discourage any such effort.
All, however, that can be done, as the law stands, is for the High Courts to be strict in applying the provision of exclusion.
The word 'requisite ' is a strong word; it may be regarded as meaning something more than the word ` required '.
It means 'properly required ' and it throws upon the pleader or counsel for the appellant the necessity of showing that no part of the delay beyond the prescribed period is due to his fault.
" In other words, what their Lordships said was that any delay due to the default of the pleader of the appellant cannot be deducted.
There can be no question of any default if the steps taken by the appellant are in accordance with law.
Hence, the above quoted observations of the Judicial Committee can have no application to the point under consideraion.
Preponderance of judicial opinion is in favour of the con clusion reached by us earlier.
The leading case on the subject is the decision of the full bench of the Madras High Court in Panjamv.
Trimala Reddy(1), wherein the court laid down that in section 12 the words 'time requisite for obtaining a copy of the decree ' mean the time beyond the party 's control occupied in obtaining the copy which is filed with the memorandum of appeal and not an ideal lesser period which might have been occupied if the application for the copy had been filed on some other date.
This decision was followed by the Travancore Cochin High Court in Kunju Kesavan vs M. M. Philip(2), by the Allahabad High Court in B. Govind Rai Sewak Singh and Another vs Behuti Narain Singh(3) and by the Madhya Pradesh High Court in K. U. Singh vs M. R. Kachhi (4) .
From the above discussion it follows that the decision under appeal does not lay down the law correctly.
But yet we are of (1) I.L.R. (3) A.I.R. 1950 All. 486.
(2) A.I.R. 1953 T.C. 552.
(4) A.I.R. 1960 M.P. 140.
847 the opinion that this is not a fit case to interfere with the order of the High Court dismissing the appeal.
The respondents were acquitted by the assistant sessions judge, Farrukhabad on November 10, 1962.
We were informed by learned counsel for the State that this appeal was brought to this court mainly with a view to settle an important question of law, and under instructions from the State government he told us that he does not press the appeal on merits.
Accordingly this appeal is dismissed.
R.K.P.S. Appeal dismissed.

summary:
The appellant State filed an appeal in the High Court on March 29, 1963 against the order made by the trial court on November 10, 1962 acquitting the respondents.
According to the information contained in the copy of the order produced along with the Memorandum of Appeal, the appeal was filed within time.
It Showed that the copy was applied for on November 15, 1962 and it was ready on January 3, 1963.
It was contended on behalf of the respondents that the appeal was out of time in view of the fact that the appellant had applied for and obtained two other copies of the order appealed from and if time was calculated on the basis of those copies the appeal was beyond time.
In addition to the copy referred to earlier, the appellant had applied for another copy of the order appealed from on December 3, 1962, and that copy was ready for delivery on December 20, 1962.
The appellant also applied for yet another copy of the same order on December 21, 1962 and that copy was made ready on the same day.
It was not disputed that if the, period of limitation was computed on the basis of the two later copies, the appeal was barred by limitation.
The High Court accepted the respondent 's contention and dismissed the appeal.
On appeal to this Court.
HELD : That the decision of the High Court under appeal did not lay down the law correctly.
The expression 'time requisite ' in section 12(2) of the Limitation Act cannot be understood as the time absolutely necessary for obtaining the copy of the order.
What is deductible under section 12(2) is not the minimum time within which a copy of the order appealed against could have been obtained.
It must be remembered that section 12(2) enlarges the period of limitation prescribed under entry 157 of Schedule 1.
That section permits the appellant to deduct from the time taken for filing the appeal, the time required for obtaining the copy of the order appealed from and not any lesser period which might have been occupied if the application for copy had been filed at some other date.
That section lays no obligation on the appellant to be prompt in his application for a copy of the order.
A plain reading of section 12(2) shows that in computing the period of limitation prescribed for an appeal, the day on which the judgment or order complained of was pronounced and the time taken by the court to make available the copy applied for.
have to be excluded.
There is no justification for restricting the scope of that provision.
[844 E H] Mathela.
and others vs Sher Mohammad, A.I.R. 1935, Lah. 682; disapproved.
Pramatha Nath Roy V. Lee, 49 I.A. 307 and J. N. Surty vs T. section Chettyar, 55 I.A. 161; distinguished.
84 3 Panjam vs Trimala Reddy, I.L.R. ; Kunju Kesavan vs M.M. Philip, A.I.R. 1953 T.C. 552; B. Govind Rai Sewak Singh and Anr.
vs Behuti Narain Singh.
A.I.R. 1950, All. 486 and K. U. Singh vs M. R.Kachhi, A.I.R. 1960 M.P. 140; referred to.


judgement:
Appeal No. 124 of 1951.
Appeal by Special Leave granted by His Majesty in Council, dated the 30th October, 1945, from the Judgment and Decree, dated the 12th July, 1944, of the High Court of Judicature at Lahore in Civil Regular Second Appeal No. 450 of 1942, against the Judgment and Decree, dated the 14th January, 1942, of the Court of the District Judge, Gurdaspur, in Appeal No. 91 of 1941, arising from the Judgment and Decree, dated 31st July, 1941, of the Court of Senior Subordinate Judge, Gurdaspur, in Suit No. 80 of 1940.
G. section Vohra and Harbans Singh for the appellants.
Achhru Ram (J. B. Dadachanji and R. N. Sachthey, with him) for respondents.
45 1954.
April 1.
The Judgment of the Court was delivered by GHULAM HASAN J.
This is an appeal by special leave granted by the Privy Council against the judgment and decree dated July 12, 1944, of a Division Bench of the High Court at Lahore passed in second appeal confirming the dismissal of the appellants ' suit cone currently by the trial Court and the Court of the District Judge, Gurdaspur.
The two appellants are admittedly the first cousins of the respondent, Harnam Singh, and belong to village Gillanwali, Tahsil Batala, District Gurdaspur.
Gurmej Singh, respondent No. 2, is a collateral of Harnam Singh in the 8th degree.
The appellants sued for a declaration that the deed of adoption executed by Harnam Singh on July 30, 1940, adopting Gurmej Singh was invalid and could not affect the reversionary rights of the appellants after the death of Harnam Singh.
The appellant 's case was that under the Customary Law of Gurdaspur District applicable to the Gill Jats ,of village Gillanwali, Harnam Singh could only adopt a is near collateral" and Gurmej Singh being a distant collateral his adoption was invalid.
The defence was a denial of the plaintiffs ' claim.
Both the trial Judge and the District Judge on appeal held that the factum and the validity of the adoption were fully established.
In second appeal Trevor Harries C. J. and Mahajan J. (as he then was) held that there was sufficient evidence of the factum of adoption as furnished by the deed and the subsequent conduct of Harnam Singh.
They held that all that was necessary under the custom to constitute an adoption was the expression of a clear intention on the part of the adoptive father to adopt the boy concerned as his son and this intention was clearly manifested here by the execution and registration of the deed of adoption coupled with the public declarations and treatment as adopted son.
Upon the legal validity of the adoption the High Court found that the answer to Question 9 of the Riwaj i am of Gurdaspur District of the year 1913 laying down that the adoption of "near collaterals only " was recognised was not mandatory.
The High Court relied in support of their 46 conclusion on a decision of Tek Chand J. in Jowala vs Diwan Singh (1) and the Privy Council decision in Basant Singh vs Brij Raj Saran Singh (2).
The first question regarding the factum of adoption need not detain us long.
The deed of adoption, Exhibit D. 1, recites that Harnam Singh had no male issue who could perform his kiry a karam ceremony after his death, that Gurmej Singh had been brought up while he was an infant by his wife and that he had adopted him according to the prevailing custom.
The recital continues that since the adoption he had been treating and calling Gurmej Singh as his adopted son.
This fact was well, known in the village and the adoptee was en joying all rights of a son.
He had executed a formal document in his favour in order to put an end to any dispute which might be raised about his adoption.
As adopted son he made him the owner of all of his property.
We are satisfied that there is ample evidence to sustain the finding on the factum of adoption.
The main question which falls to be considered is whether under the terms of the Riwaj i am applicable to the parties, Gurmej Singh being a collateral of Harnam Singh in the 8th degree could be validly adopted.
The custom in question is founded on Question 9 and its answer the Customary Law of the Gurdaspur District.
They are as follows: " Question 9.
Is there any rule by which it is required that the person adopted should be related to the person adopting ? If so, what relatives may be adopted ? Is any preference required to be shown to particular relatives ? If so, enumerate them in order of preference.
Is it necessary that the adopted son and his adoptive father should be (1) of the same caste or tribe; (2) of the same got? Answer : The only tribes that recognised the adoption of a daughter 's son are the Sayyads of the Shakargarh and the Arains of the Gurdaspur Tahsil.
The Brahmans of the Batals Tahasil state that only such of them as are not agriculturists by occupation recognize such adoption.
The Muhamadan Jats of the (1) (2) I.L.R. 57 All 494.
47 Gurdaspur.
Tahsil could not come to an agreement on this point.
The remaining tribes recognise the adoption of War collaterals only.
The right of selection rests with the person adopting.
The Khatris, Brahmans and Bedis and Sodis of the Gurdaspur Tahsil, however, state that the nearest collaterals cannot be sperseded and selection should always be made from among them" It is contended for the appellants that the expression " near collaterals only " must be construed to mean a collateral up to the third degree and does not cover the case of a remote collateral in the 8th degree.
The restriction as regards the degree of relationship of the adoptee, it is urged, is mandatory and cannot be ignored.
The expression " near collaterals " is not defined by the custom.
The relevant answer which we have underlined above gives no indication as to the precise import of the words " near collaterals.
" The custom recorded in the Riwaj i am is in derogation of the general custom and those who set up such a custom must prove it by clear and unequivocal language.
The language is on the face of it ambiguous and we can see no warrant for limiting the expression to signify collateral relationship only up to a certain degree and no further.
We are also of opinion that the language used amounts to no more than an expression of a wish on the part of the narrators of the custom and is not mandator.
If the intention was to give it a mandatory force, the Riwaj i am would have avoided the use of ambiguous words which are susceptible of a conflicting interpretation.
The provision that the right of selection rests with the person adopting also detracts from the mandatory nature of the limitation imposed upon the degree of relationship.
Though the adoption of what the custom describes as "near collaterals only" was recognized by the community of Jats, the right of selection was left to the discretion of the adopter.
There is no meaning in conferring a discretion upon the adopter if he is not allowed to exercise the right of selection as between collaterals inter se.
We are unable to read into the answer a restriction upon the choice of the adopter of any particular collateral however near in degree he may be, 48 In his valuable work entitled "Digest of Customary Law in the Punjab" Sir W.H. Rattigan states in paragraph 35 that "a sonless proprietor of land in the central and eastern parts of the Punjab may appoint one of his kinsmen to succeed him as his heir" and in paragraph 36 that "there is no restriction as regards the age or the degree of relationship of the person to be appointed".
It appears to us that the basic idea underlying a customary adoption prevalent in the Punjab is the appointment of an heir to the adopter with a view to associate him in his agricultural pursuits and family affairs.
The object is to confer a personal benefit upon a kinsman from the secular point of view 'unlike the adoption under the Hindu Law where the primary consideration in the mind of the adopter if a male is to derive spiritual benefit and if a female, to confer such benefit upon her husband.
That is why no emphasis is laid on any ceremonies and great latitude is allowed to the adopter in the matter of selection.
Mulla in his well known work on Hindu Law says: "It has similarly been held that the texts which prohibit the adoption of an only son, and those which enjoin the adoption of a relation in preference to a stranger, are only directory; therefore, the adoption of an only son, or a stranger in preference to a relation, if completed, is not invalid.
In cases such as the above, where the texts are merely directory, the principle of factum valet applies, and the act done is valid and binding." (Page 541).
We see no reason why a declaration in a Riwaj i am should be treated differently and the text of the answer should not be taken to be directory.
However peremptory may be the language used in the answers given by the narrators of the custom, the dominant intention underlying their declarations which is to confer a temporal benefit upon one 's kinsmen should not be lost sight of.
A number of cases have been cited before us to show that in recording the custom the language used was of peremptory nature and yet the Courts have held that 49 the declarations were merely directory and non compliance with those declarations did not invalidate the custom.
In Jiwan Singh and Another vs Pal Singh and Another(1) Shah Din and Beadon JJ.
held "that by custom among Randhawa Jats of Mauza Bhangali, Tahsil Amritsar, the adoption, by a registered deed, of a collateral in the 9th degree who is of 16 years of age is valid in the presence of nearer collaterals.
" The adoption was objected to on the ground that the adoptee was a remote collateral and that he was not under the age of twelve at the time of the adoption as required by the Riwaj i am.
The learned Judges held that the provision as regards the age was recommendatory and not of a mandatory character.
In Sant Singh vs Mula and Others ) Robertson and Beadon Jj.
held "that among Jats and kindred tribes in the Punjab, the general, though not 'the universal, custom is that a man may appoint an heir from amongst the descendants of his ancestor and that he need not necessarily appoint the nearest collateral.
" This was a case where a distant collateral was preferred to a nearer collateral.
The learned Judges expressed the opinion that the clause which points to the advisability of adopting from amongst near collaterals was nothing more than advisory.
In Chanan ' Singh vs Buta Singh and Others(3), a case from Jullundur District, the question and answer were as follows : "Q. No. 71: Are any formalities necessary to constitute a valid adoption, if so, describe them.
State expressly whether the omission of any customary ceremonies will vitiate the adoption ? A. .
The essence of adoption is that the fact of adoption be declared before the brotherhood or other residents of the village.
The usual practice is that the Baradari gathers together and the adopter declares in their presence the fact of the adoption.
Sweets are distributed and a deed of adoption is also drawn up.
If (1) 22 P.R. (2) 44 P.R. (3) A.I.R. 1935 Lah.
7 50 these formalities are not observed the adoption is not considered valid.
" The adoption was challenged on the ground that there was no gathering of the brotherhood.
The learned Judges (Addison and Beckett JJ.) held that it was immaterial whether there was or was not a gathering of the brotherhood at the time.
It appears that the adopter had made a statement in Court acknowledging the appointment or adoption in question.
The next day he celebrated the marriage of the boy as his son, and thereafter he looked after his education and allowed him to describe himself as his adopted son or appointed heir, and the boy lived with him as his son.
The learned Judges held that the details given in the answers to questions in various Customary Laws were not necessarily mandatory but might be merely indicatory.
In Jowala vs Dewan Singh(1) Tek Chand J. held "that an adoption of a collateral in the fourth degree, among Jats of Mauza Hussanpur, Tahsil Nakodar, District Jullundur, is valid although nearer collaterals are alive." He also held "that an entry in the Riwaj i am as to the persons who can be adopted is merely indicatory".
In a case from Delhi reported in Basant Singh and Others vs Brij Raj Saran Singh(2)the Privy Council held "that the restriction in the Riwaj i am of adoption to persons of the same gotra is recommendatory and a person of a different gotra may be adopted.
" Counsel for the appellants frankly conceded that he could cite no case where the declarations governing customary adoptions were held to be mandatory.
Whether a particular rule recorded in the Riwaj i am is mandatory or directory must depend on what is the essential characteristic of the custom.
Under the Hindu Law adoption is primarily a religious act intended to confer spiritual benefit on the adopter and some of the rules have, therefore, been held to be mandatory and compliance with them regarded as a condition of the validity of the adoption.
On the other hand, under the (1) (2) 57 All, 494. 51 Customary Law in the Punjab, adoption is secular in character, the object being to appoint an heir and the rules relating to ceremonies and to preferences in selection have to be held to be directory and adoptions made in disregard of them are not invalid.
There is no substance in the appeal and we dismiss it with costs.
Appeal dismissed.

dataset_name: IN-Abs

summary:
Held, that under the Customary Law of Gurdaspur District (Punjab) applicable to the Gill Jats of village Gillanwali, the adoption of a collateral of the 8th decree is not invalid.
The answer to question 9 in Customary Law of the Gurdaspur District that "the adoption of near collateral only" should be recognised is not mandatory but directory.
Under the Customary Law in the Punjab, adoption is secular in character, the object being to appoint an heir and the rules relating to ceremonies and to preferences in selection have to be held to be directory and adoptions made in disregard of them are not invalid.
Jiwan Singh and Another vs Pal Singh and Another (22 P.R. 1913 at p. 84); Sant Singh vs Mula and Others (44 P.R. 1913 at p. 173); Charan Singh vs Butta Singh and Others (A.I.R. ; Jowala vs Dewan Singh ; and Basant Singh and Others vs Brij Raj Saran Singh (I.L.R. 57 All. 494) referred to:


judgement:
Appeal No. 47 of 1965.
Appeal from the judgment and decree dated December 12, 1962 of the Patna High Court in Appeal from Original Decree No. 433 of 1959.
H. R. Gokhale, section N. Prasad and B. P. Singh, for the appellant.
883 emption and not of renewal was granted to the appellant Com pany.
The High Court of Patna confirmed the decree passed by the Trial Court but on different grounds.
The High Court held that the right granted by cl. 29 gave rise to an "encumbrance" which was extinguished when the interest of the owners in the land vested in the State.
With certificate granted by the High Court, this appeal has been preferred by the Company.
A notification under section 3(1) of the Bihar Land Reforms Act, 1950, on June 27, 1953 was issued in respect of the land of the owners.
Section 4 of the Act prescribes the consequences of the publication of the notification under section 3(1) : it provides, insofar as it is relevant : "Notwithstanding anything contained in any other law for the time being in force or in any contract, on the publication of the notification under sub section (1) of section 3, or sub section (1) or (2) of section 3A the following consequences shall ensue, namely : (a) Such estate or tenure including the interests of the proprietor or tenure holder in any building or part of a building comprised in such estate or tenure and used primarily as office or cutchery for the collection of rent of such estate or tenure, and his interests in trees, forests, fish eries, jalkars, hats, bazar, mela and ferries and all other sairati interests as also his interest in all sub soil including any rights in mines and minerals, whether discovered or undiscovered, or whether being worked or not, inclusive of such rights of a lessee of mines and minerals comprised in such estate or tenure (other than the interests of raiyats and under raiyats) shall, with effect from the date of vesting, vest absolutely in the State free from all encumbrances and such proprietor or tenure holder shall cease to have any interests in such estate or tenure, other than the interests expressly saved by or under the provisions of this Act.
" The opening words of this clause "Subject to the subsequent provisions of this Chapter" were omitted by Bihar Act 16 of I 959, but that omission has no practical significance in this case.
Section 10 of the Act provides : "(1) Notwithstanding anything contained in this ,Act, where immediately before the date of vesting of the estate or tenure there is a subsisting lease of mines or minerals comprised in the estate or tenure or any part thereof, the whole or that part of the estate or tenure 884 comprised in such lease shall, with effect from the date of vesting, be deemed to have been leased by the State Government to the holder of the said subsisting lease for the remainder of the term of that lease, and such holder shall be entitled to retain possession of the leasehold property.
(2) The terms and conditions of the said lease by, the State Government shall mutatis mutandis be the same as the terms and conditions of the subsisting lease referred to in sub section (1), but with the additional condition that, if in the opinion of the State Government the holder of the lease had not, before the date of the commencement of this Act, done any prospecting or developing work, the State Government shall be entitled at any time before the expiry of one year from the said date to determine the lease by giving three month 's notice in writing Provided (3) Counsel for the appellant Company contended that cl. 29 created an interest in the demised land in favour of the Company and the State of Bihar as successor in title of the original owners took the land subject to that interest.
In the alternative, counsel contended, the Company acquired immediately on execution of the indentures of lease an indefeasible right to obtain renewal and that right was enforceable against the owners and their successors in interest alike.
We are unable to agree with those contentions.
The covenant granting an option of renewal of the lease on the expiry of the period of the lease outstanding is a covenant running with the land : it creates no interest in land.
In The, State of Bihar vs Indian Copper Corporation Ltd.(1) the High Court of Patna held that a clause for renewal of a lease on the expiry of it% period has not the effect of a present demise nor does it operate to create an interest in land on the date on which the original lease was executed : a covenant for renewal is not tantamount to an actual demise and therefore "no leasehold interest is created for the renewed term when the original lease is granted.
" Under the terms of the lease dated September 30, 1940, the appellant Company became entitled to a lease for a period of fifteen years.
On the expiry of that period the Company could have entorced their right to get a renewal of the lease for a period of fifteen years against the owners if their interest had not been extinguished.
If the owners declined to carry out their obligation, the Company could sue for specific performance and claim a right to remain I ) I.L.R. 38 Pat.
1160, 885 in possession for a period of fifteen years stipulated in cl. 29.
But the provisions of the Bihar Land Reforms Act intervened.
By the express terms of section 4 (a) of the Act all the interests of the owners in all sub soil including any rights in mines and minerals, whether discovered or undiscovered or whether being worked or not, inclusive of such rights of the lessee of mines and minerals comprised in such estate or tenure became vested in the State with effect from the date of vesting absolutely and free from all encum branches.
Even the interest of the lessees of the mines and minerals comprised in the estate therefore ceased, and all encumbrances on the interest of the owners ' estate were extinguished and the State took the estate free from all the rights of the lessees.
The original contractual lease came to an end by the operation of section 4 (1 )(a,) of the Act, and a fresh statutory lease for the remainder of the term of that lease in favour of the lessee came into being under s.1 0 ( 1 ) of the Act.
The appellant Company therefore acquired the rights of a statutory lessee for the period between June 27, 1953 and September 30, 1955, with terms and conditions mutatis mutandis the same as the conditions of the original lease granted by the owners on September 30, 1940.
But by virtue of section 4 that covenant by which ,he owners had agreed to renew the lease at the option of the lessee being merely of the nature of an encumbrance and not an interest in the land was extinguished, the land vested in the State free from the obligation created by the renewal clause.
We agree with the High Court that "a clause for renewal of the lease at a future date was a limitation imposed upon the lessor.
His freedom as an absolute owner was sought to be curtailed by such agreement.
It was thus an encumbrance and all encumbrances were wiped out by section 4. . . .
Taking all these provisions into consideration, an agreement for renewal of a lease in future cannot be binding upon the State Government after the vesting of the estate".
Counsel for the appellant relied upon r. 40 of the Mineral Concession Rules, 1949, and contended that under the scheme of the Rules a lessee of a mining lease is entitled to at least one renewal.
Rule 40, insofar as it is material, provides : "(1) The period for which a mining lease may be granted shall be 30 years in the case of coal, iron ore and bauxite for manufacture of aluminium, and 20 years in the case of any other minerals, unless the applicant himself asks for a shorter period.
The lease shall be renewable at the option of the lessee, for one or two periods, each not exceeding the duration of the original lease, in the case of iron ore and bauxite for manufacture of aluminium, and one period not exceeding the 8 8 6 duration of the original lease in the case of other minerals.
" But r. 40 has no application.
Manifestly, the rule applies to grants made by the Government : it has no application to statutory leases arising by virtue of section 10 of the Bihar Land Reforms Act.
Even assuming that r. 40 applies to such a statutory lease, the duration of the "original lease" may be deemed to be no longer than the period between the date of vesting and September 30, 1955.
That period for which renewal may have been claimed has expired many years ago, and recognition of the rights of the appellant Company will be of no practical significance in this appeal.
The appeal fails and is dismissed with costs.
Appeal dismissed.

summary:
The appellant company obtained a lease of certain mica bearing land from the owners for a period of fifteen years.
The lease deed provided for a renewal of the lease on the expiry of the period at the option of the lessee.
The land was within an estate and by virtue of a notification under the Bihar Land Reforms Act, 1950, the estate vested in the State Government under section 4, free from all encumbrances and free from all rights of the lessees.
But the appellant continued in occupation for the remaining period of the contractual lease, under a statutory lease deemed to have been granted by the State under section 10 of the Act.
On the question whether the appellant was entitled to specific performance of the covenant of renewal, HELD : The agreement of renewal of the lease infuture was not binding upon the State Government after the vesting ofthe estate.
(1) The Original contractual lease came to an endby the operationof section 4 and under section 10 a fresh statutory lease for theremainder of the term of that lease, in favour of the lessee, came into being with terms and conditions mutatis mutandis the 'same as the conditions of the original lease.
But the covenant granting an option of renewal of the lease on the expiry of the period of the lease is merely a covenant running with the land, and does not create any interest in land.
It being in the nature of an encumbrance and by virtue of section 4 it was extinguished and the land vested in the State free from the obligation created by the renewal clause.
[885 C E] The State of Bihar vs Indian Copper Corporation Ltd. I.L.R. 38 Pat.
1160, approved.
(2) Rule 40 of the Mineral Concession Rules, 1949, under which a lessee of a mining lease is entitled to at least one renewal for a period not exceeding the duration of the original lease, applies to grants made by Government and not to statutory leases.
Therefore, the rule has no application.
Even assuming the rule was applicable, the duration of the original lease in the case of such a statutory lease must be deemed to be no longer than the period between the date of vesting and the date of expiry of the original lease and that period, for which renewal may have been claimed, expired many years ago.
[885 G; 886 A B]


judgement:
Appeal No. 1627 of 1967.
Appeal by special leave from the Award dated March 31, 1967 of the Industrial Tribunal, Andhra Pradesh in Industrial Dispute No. 55 of 1965.
H. R. Gokhale and D. N. Gupta, for the appellant.
M. K. Ramamurthi, Shyamala Pappu and Vineet Kumar, for the respondents.
The Judgment of the Court was delivered by Hegde, J.
This appeal has been brought to this Court by special leave.
It arises from the decision ' of the Industrial Tribunal, 9 Andhra Pradesh, Hyderabad.
The only question that arises for decision is whether on the basis of the material on the record there was any justification for framing a gratuity scheme for appellant 's staff.
The admitted facts are these : The appellant concern is hav ing about 500 looms. ' It has a subscribed capital of a little over 3 5 lakhs.
Its built up reserve is over thirty lakhs.
In three out of the six years during the period 1960 65 it has suffered substantial losses.
Out of the remaining three years, in one year it made a profit of about Rs. 45,000 in another year about Rs. 13,000 and in 1962 over rupees twelve lakhs.
The annual expenses of the appellant 's concern under the head 'salaries, wages and bonus ' are nearly 47 lakhs.
It was found by the tribunal that the appellant concern and the Nellimarla Jute Mills are sister concerns.
Both of them are under a single management, viz., M/s. Mcleod and Company, Calcutta.
They are located in the same region, the distance between the two being about 25 miles.
In Nellimarla Jute Mills a gratuity scheme for the staff is in existence and that in addition to provident fund benefits.
Our attention was not invited to any material on record to show that these findings are not correct.
In the appellant concern also there is a provident fund scheme for the staff.
The appellant in its counter affidavit filed before the tribunal admitted that it had always been the policy of the management to introduce identical terms of employment for the workmen at Nellimarla and Chitavalsah.
From the material before us it is not possible to find out the financial position of the Nellimarla mills.
We ascertained from the learned counsel for the appellant that the appellant concern had made a profit of over a lakh of rupees in 1966.
The tribunal has found and that finding was not challenged before us that the additional burden to be borne by the appellant as a result of the gratuity scheme framed by it is about Rs. 3,000 per year.
On behalf of the appellant two contentions were advanced in opposition to the proposed gratuity scheme.
They are (1) the wage board was unable to recommend a gratuity scheme for the jute industry and hence there was no justification to frame the impugned scheme, and (2) in view of the losses incurred by the appellant during the years 1960 65., no additional burden should have been cast on it by introducing a gratuity scheme.
So far as the Wage Board recommendations is concerned, it pertains to the jute industry as a whole.
After taking into consideration the 'importance of the jute industry for.
the national L4Sup.
Cl/68 2. 11 Burhanpur Tapti Mills Ltd. vs B. T. Mills Mazdoor Sangh [(1965) ". . there are two general methods of fixing the terms of a gratuity scheme.
It may be fixed on the basis of industry cum region or on the basis of units.
Both, systems are admissible but regard must, be had to the surrounding circumstances to select the right basis.
Emphasis must always be laid upon the financial position ,of the employer and his profit making capacity whichever method is selected, and it must be further seen "whether the industrial court was right in appraising the financial condition and the profit making capacity of the company A scheme for gratuity no doubt imposes a burden on the finances of the concern but the pressure is ex facie distributed over the years for it is limited to the number of retirements each year.
The employer is not required to provide the whole amount at once.
He may create a fund, if he likes and pay from the interest which accrues on a capitalised sum determined actuarially.
This is one of providing the money.
Ordinarily the payment is made each year to those who retire.
To judge whether the financial position would bear the strain the average number of retirements per year must be found out.
This is one part of the inquiry.
The next part of the inquiry is to see whether the employer can be expected to bear the burden from year to year.
The present condition of his finances, the past history and the future prospects all enter into the appraisal of.
his ability." In Calcutta Insurance Co. Ltd. vs Their Workmen(1), this Court observed "On the financial aspect 'of a gratuity scheme, we were referred to the case of Wenger & Co. vs Their workment [(1963) II LIJ 403].
There it was observed by this Court that the problem of the burden imposed by the gratuity scheme could be looked at in two ways.
one was to capitalise the burden on actuarial basis.
which would show theoretically that the burden would be very heavy; and the other was to look at the scheme in its practical aspect and find out how many employees retire every year on the average.
According to this Court, it was this practical approach which ought to be 'taken into account." (1) ; 12 In the light of the principles noted above and on the material placed before the tribunal it is not possible to hold that the tribunal 's conclusion was without any just basis.
For the reasons mentioned above this appeal fails and the same is dismissed with costs.
G.C. Appeal dismissed.

summary:
The appellant was a jute mill.
The Industrial Tribunal framed a gratuity scheme for its workers.
It was challenged by the appellant before this Court in an appeal under article 136 of the Constitution.
Two contentions were urged, namely : (i) that the wage board was unable to recommend a gratuity scheme for the jute industry and hence there was no justi fication to frame the impugned scheme; (ii) in view of the losses incurred by the appellant during the years 1960 65, no additional burden should have been cast on it by introducing a gratuity scheme.
HELD : (i) The Wage Board 's recommendation pertained to the jute industry as a whole and not to any individual industrial unit.
It cannot be understood as recommending that there should be no gratuity scheme for the employees in any particular unit in that industry.
What was relevant to find out was whether the appellant could bear the additional burden.
[10 B] (ii) The Tribunal recommended the gratuity scheme after taking into consideration the financial position of the appellant as well as the fact that in a sister concern such a scheme was in existence.
The losses suffered by the appellant were considered by the Tribunal to be a passing phase.
What is of essence is the profit making capacity of the concern.
In determining that question one has to take into consideration the paid up capital of the company, its reserves, its earnings in the past and its future prospects.
A practical view of the question has to be taken.
[10 D, G] In the light of these principles and on the material placed before the Tribunal it was not possible to hold that the Tribunal 's conclusion was without any just basis.
[12 A] National Iron & Steel Co. Led. & Ors.
vs State of West Bengal & Anr.
; and Calcutta Insurance Co. Ltd. vs Their Workmen, ; , relied on.


judgement:
Appeal No. 1862 of 1967.
Appeal under section 116 A of the Representation of the People Act 1951 from the judgment and order dated November 16, 1967 of the Punjab and Haryana High Court in Election Petition No. 19 of 1967.
112 A. K. Sen, B. Dutta, P. C. Bhartari, M. L. Aggarwal and J. B. Dadachanji, for the appellant.
section K. Mehta and K. L. Mehta, for respondent No. 1 The Judgment of the Court was delivered by Hidayatullah, J.
This appeal is directed against the judgment of the High Court of Punjab and Haryana at Chandigarh, November 16, 1967 by which the election of the appellant to the Vidhan Sabha of Haryana State from the Kaithal constituency has been declared to be void.
The election was held on February 19, 1967 and the result of the pool was declared on February 22, 1967.
The appellant had a margin of nearly 2000 votes.
over the first respondent who was the closest rival.
One other candidate had also stood but we are not concerned with him in the present appeal since he has not shown any interest in it.
He secured less than 1000 votes and forfeited his security.
The election petition was based upon allegations of corrupt practice against the successful candidate.
The gravamen of the charge was that she as a minister in the Government of Mr. Bhagwat Dayal Sharma used certain discretionary grants to bribe the voters of her constituency and in particular by paying two sums, of Rs. 2,000 for the construction of two dharamsalas ,for the Kumhar and the Sweeper Colonies at Kaithal.
There were other allegations also against her but as they have been found against the election petitioner and have not been brought to our notice we need not say anything about them.
The learned Judge who tried the election petition did not accept the evidence tendered by the election petitioner to prove the corrupt practice outlined above but held on a general appraisal of the circumstances of the case that these sums were in fact paid to bargain for votes and to influence the voters in favour of the appellant.
We shall now give a few facts of the case before stating our conclusion.
The election petition was filed on April 7, 1967.
It was later amended and better particulars were supplied on July 29, 1967.
In the original election petition as filed by the election petitioner it was stated that a sum of Rs. 2,000 from the discretionary giant of the appellant was paid to the Harijans of Keorak Gate, Kaithal for the construction of a dharamsala.
The allegation then was that in the beginning of January 1967 the Harijans were approached by the appellant and were asked to vote for her.
They flatly refused to vote for her.
Thereupon she promised to provide funds for the construction of a dharamsala in their basti and tempted by this offer they agreed to vote for her.
In regard to the other discretionary grant it 'was ' stated in the original petition that the Kumhar voters who reside in Dogran Gate.
Kaithal, were also 113 approached,by the appellant in the beginning of January 1967 and were asked to vote for her.
When they refused to vote she promised them a sum of Rs. 2,000 for building the dharamsala in their locality.
It was further pointed out that the first sum of Rs. 2,000 was paid through the Deputy Commissioner, Kamal, vide his Memo No. 78 BP III/67/335 of January 12, 1967.
The second payment was also made on the same date through the Deputy Commissioner, Karnal, vide Development Department Memo No. 47 BAP III 67/326.
The affidavit in support of the election petition was sworn by the election petitioner on information supplied by others and believed to be true.
It was stated in the verification clause that.this information was received "from my workers and believed to be true".
On an objection being raised that the particulars of the corrupt practice were not adequate and on the other hand vague and that the affidavit did not disclose the persons from whom the information was derived the Court ordered that better particulars be supplied and a fresh affidavit filed.
The amended election petition was then filed in July, 1967.
In this election petition a change was introduced.
It was stated that on December 22, 1966 the Harijans were called to a Canal Rest House through one Om Prakash Shorewala.
President of the Municipal Committee, Kaithal.
Other members of the Municipal Staff including the Executive Officer Bhalla were also present.
Among those who came were one Khaki Ram, Banwari Lal and one Harijan Lamberdar whose name was not given.
In the presence of these persons request Was made to the Harijans to vote for the appellant, and when they refused to do a sum of Rs. 2,000 was promised from the discretionary grant, and on this offer the Harijan voters consented to .vote for the appellant.
It was further alleged that this.
amount was ultimately paid to Khaki Rain and Banwari Lal through Shri Om Parkash Shorewala (R.W. 4).
As regards the second charge it was stated that on December 29. 1966 the Kumhar voters were summoned to the Canal Rest House and three persons, Thakru, Attra and Lilloo came as the representatives of the Kumhar community.
The same procedure, viz., asking them to vote for her candidature was followed by the appellant and on their refusal to do so a sum of Rs. 2,000 was promised to them for the construction of a dharamsala in their basti at Dogran Gate.
Kaithal.
This induced them to change their views.
The affidavit was also corrected.
It was stated that the allegation was based upon information received from Pandit Kailash Chander, s/o Pandit Hari Ram of Kaithal and Ch.
Inder Rai, ex Municipal Commissioner, Chandena Gate Gamri, Kaithal.
114 In answer to the amended election petition the written statement added that the allegation was a pure concoction.
The appellant pointed out that the grant for the construction of the dharamsalas was made by the appellant as far back as December 19, 1966 and that the allegation that it was the result of a bargain either on December 22 or December 29, was a pure fiction.
The election petitioner examined fourteen witnesses.
We are, however, not concerned with all of them because they are connected with the other allegations in the election petition.
Witnesses bearing upon this case were only four.
They were Gurbax Singh (P.W. 1), who only proved certain documents, P. N. Bhalla (P.W. 3), the Executive Officer of the Municipality, Thakru (P.W. 8), whose name has already been mentioned by us and Abnash Chander, the election petitioner.
In the evidence a change was again introduced.
It was attempted to be proved that the bargain which had been referred to in the election petitions actually took place on December 3, 1966.
This time it was affirmed that the Kumhars and the Sweepers were called together.
An objection was taken before the learned Judge that this evidence could not be considered because the plea was quite different.
The learned Judge ruled that the objection would be decided later.
It appears that the learned Judge did not put too much emphasis on the change of pleading presumably because he found the evidence to be unsatisfactory and unreliable.
On the side of the appellant were examined one R. N. Kapur (R.W. 1), the personal Secretary of the appellant who proved her tour programme to give a lie to some of the allegations in the election petition.
Attroo (R.W. 3), who was said to have been present at the conferences, Om Parkash Shorewala (R.W. 4), the Municipal President, Mr. Bhagwat Dayal Sharma (R.W. 5), the Chief Minister in whose Ministry the appellant was working as the Finance Minister and the appellant herself.
It is not necessary to go largely into what the witnesses said because the learned Judge himself observed as follows "Whereas according to the respondent the fact of the grant is not disputed, but it is denied that the grant was made in consideration of these communities voting for her.
If the matter had remained at this stage and the executing agency (the Sub Divisional Magistrate) had disbursed these grants I would not have been prepared to accept the oral evidence regarding the bargain which led to the grants.
But the manner, how the money was realised and disbursed, lends ample support to the evidence that the bargain was struck.
" It is clear that the learned Judge was of the opinion that the evidence led to prove the conference and the bargain at the con 115 ference was unacceptable.
He, however, accepted it because it was supported by circumstantial details of the withdrawing of the money which was sanctioned; but for this the learned Judge would not have accepted the election petition.
We shall glance at this evidence which has been led in the case.
As pointed out above the only witnesses from 'the conference are Thakru (P.W. 8) and Bhalla (P.W. 3).
With regard to Thakru it is sufficient to point out what the learned Judge himself said at the end of the deposition of Thakru : "The testimony of, this witness has not at all impressed me.
I will place no reliance whatsoever on his testimony.
" In view of this observation of the learned ' Judge we think we are entitled to ignore his testimony altogether.
As regards Bhalla (P.W. 3), he seems to have deposed not only in.
respect of these two grants but every allegation made in the election petition.
Mr. A. K. Sen, for the appellant, very pertinently described him as an omnibus witness.
His evidence is not convincing.
It appears on the record of this .case (and it was in fact admitted by Bhalla) that the appellant had taken action against him in respect of a house which fell down owing to the negligence of the Municipal Authorities.
It appears to us that Bhalla was hostile to the appellant.
There is enough material to show that he was trying to get even with the appellant for her action in putting the blame upon him for the falling down of a house from seepage of water from the municipal mains.
The learned Judge did not place any direct reliance upon Bhalla 's testimony.
As we have shown above, if it had not been for the circumstances attending the grant the learned Judge himself would have discarded his testimony.
We must, therefore, proceed with extreme caution in dealing with Bhalla 's evidence in the case.
It may be pointed out here that in the election petition as well as in the evidence it was stated that the Harijans and Kumhars were summoned through Bhalla and the peon was ordered by Om Prakash Shorewala to call the leaders of these two communities to the Canal Rest House: Sat Prakash, the peon was not examined in the case.
Of the persons present on the first occasion, viz., Banwari Lal, Khaki Ram, Lilloo and Attra and the Harijan Lamberdar who was not even named, none was examined except Attroo and Thakru.
Attroo was examined by the appellant.
We have shown above that the learned Judge placed no reliance upon Thakru 's word.
He made a similar remark about Attroo also so that the case really comes to this that there is only the evidence of the parties and such other evidence as was furnished by Shore wala and Bhalla.
The persons from whom information was derived as stated in the verification of the affidavit were not called as witnesses.
We have shown that Bhalla 's testimony must not be taken on its face value.
, Om Prakash Shorewala was support 116 ing the election petitioner but even so his evidence goes in favour Of the appellant.
The fact, 'however.
remains that the .
election petitioner himself was fumbling with the facts and was not able to state quite categorically when the conferences took place and on what date and at which place.
He changed the dates as more information came to hand.
This was not information about the conferences but the date on which the grant was sanctioned and the dates on which the appellant could be expected to have held the conferences.
In these circumstances, we are satisfied that in this case the oral evidence is practically non existing.
Mr. Mehta, who argued the case on behalf of the answering respondent, stated that it was not necessary at all to give the facts about the conferences and that the charge of bribery could be proved even without the details of how the bribe came to be given.
He relied upon the judgment of the Madras High Court in Kandaswami vs section B. Adityan for the proposition that a bribe is a bribe although the date on which it is given may not be capable of being specified if it could be established otherwise that the.
money was in: fact paid; and he further relied on a judgment of this Court in Bhagwan Datta Shasri vs Ram Ratanji Gupta & Ors.
that even if the full particulars be not given evidence might still be led to determine whether a corrupt practice had in fact taken place or not.
We need not decide in this case what the pleadings and the proof should be.
The ordinary rule of law is that evidence is to be given only on a plea properly raised and not in contradiction.
of: the plea.
Here the pleas were made on two different occasions and contradicted each other.
The evidence which was tendered contradicted both the pleas.
The source of the information was not attempted to 'be proved and the witnesses who were brought were found to be thoroughly unreliable.
In these circumstances we do not propose to refer to the evidence in this judgment any more.
This brings us to the question whether the circumstances of this case clearly demonstrated that there must have been some kind of bargain before the grant was made and that this bargain was with a view to inducing the voters to support the candidature of the appellant.
In Ghasi Ram vs Dal Singh & Ors.
(3) in which the judgment of this Court was pronounced today, the law relating to corrupt practice specially in the matter of giving of discretionary grants has been considered and stated.
It has been pointed out that a Minister in the discharge of his duties may be required to do.
some acts of administration including the granting of money for the uplift of certain communities and this action of the Minister is not to be construed against him unless it can be established (1) (3) ; 2.
(2) A.I.R. 1960 S.C. 200.
117 that there 'was a bargain with the voters for getting their assistance at the election.
Since the oral evidence in this case is non existing we must now look at the circumstances whether this conclusion which has been drawn by the High Court can be irresistibly reached.
The State of Haryana came into existence on November 1,1966.
Immediately afterwards the Cabinet placed certain sums of money at the disposal of, the Chief Minister, the Cabinet Ministers, Ministers for State and Deputy Ministers, to be used at their, discretion for the uplift of the communities.
A sum of Rs. 50,000 was placed in the discretionary grant of a Minister and the appellant as the Finance Minister in the Ministry of Shri Bhagwat Dayal Sharma was required to spend this money.
The money had to be disbursed before the end of the Financial Year, that is to say, before March 31, 1967.
It is reasonable to think that there must have been several demands in this State from the various community centres for their own uplift and they must have been clamouring even before for money for the establishment of schools, hospitals, supply of water, and so on.
The policy statement attached to the sanction of the discretionary grant stated the purposes for which the money could be utilised.
It was stated quite clearly that the money should not be given to any private person 'but should be given through the Development Commissioner for purposes of public utility and for benefit of the general public and that the execution of the works should be through certain named agencies such as Zilla Parishad, Panchayat Samities, the Panchayats concerned, the Public Works Department or any other Government Agencies or Municipality as the Minister may indicate.
In the present case money was to be disbursed through the Municipal Committee.
It is argued that the money was withdrawn and made available a day before the poll suggesting thereby that this was done to assure the voters that the money had come in as a result of the, bargain.
The hurry in reaching the money to these two wards in the Kaithal Municipality is the main reason behind the learned Judge 's conclusion that it must have been a part of a bargain.
Evidence, however shows that Bhalla (who was not favourable to the appellant) himself wrote saying that the money should be made available at once; and this money came to the hands of Om Prakash Shorewala, who, as we have already pointed out, was helping the answering respondent in his election.
It appears to us that all this hurry which did not emanate from the appellant was the result of and anxiety on the part of the recipients that the money should be made available as soon as possible.

summary:
The State of Haryana came into existence On 1st November 1966.
The Cabinet placed certain sums of money at the disposal of the ministers, one of whom was the appellant to be used at their discretion for purposes of public utility, for the benefit of the general public and for the uplift of backward communities.
The money had to be disbursed before 31st March 1967 through Panchayat, Municipal or Government agencies.
The appellant sanctioned certain payments for building two dharmashalas in two wards of a Municipality.
Long after the sanction, her candidature for election to the Vidhan Sabha of the State was recognised by her party and she stood for election from a constituency which included these two wards.
She was elected, and some time later, the money was made available to the wards though the recipients were writing that the money should be made available at once.
The first respondent challenged the election alleging corrupt practices and later amended the petition giving better particulars.
The pleas in the petition contradicted each other, the evidence tendered at the trial of the petition contradicted the pleas, and the witnesses were found to be thoroughly unreliable.
In spite of this the petition was allowed on the ground that the circumstances showed that the were in fact paid to bargain for votes and to influence the voters in favour of the appellant.
In appeal to this Court, HELD : The action of the appellant could not be construed against her.
It was done in the ordinary course of her duties as Minister and there was no evidence that it was, directly or indirectly, part of a bargain with the voters.
No hurry to make the money available to the recipients emanated from the appellant.
It was only the persons who were to benefit by the discretionary grant that were anxious to lay hands on the money, as soon as possible, so that the grant might not be cancelled later by a change of attitude caused by the election going against the particular party.
[117 H; 118 A C] Ghasi Ram vs Dal Singh & Ors. ; followed.
Bhagwan Dutta Shastri vs Ram Ratanji Gupta, A.I.R. 1960 S.C. 200 and Kandaswami vs Adityan, , referred to.


judgement:
ON: Civil Appeals Nos. 289 to 311 of 1965 and 999 to 1001 of 1967.
Appeals from the judgments, and orders dated July 13, 1964 Of Panjab High Court in Civil Writs Nos.
587 D, 590 D, 592 595 D, 643 D, 851 D, 852 D, 1163, 1164, 1167 and 1196 of 1963, 45 D of 1964, and 994, 588 D, 589 D, 591 D,593 D,594 D, 1165, 1166, 1168, 1169, 1197, 1240, 1216 and 1155 of 1963 respectively and writ Petition No. 212 of 1966.
Petition under article 32 of the Constitution of India for the enforcement of fundamental rights.
S.V. Gupte, Rameshwar Nath and Mahinder Narain, for the appellants (in C.As.
289 to 311 of 1965).
Rameshwar Nath and Mahinder Narain, for the appellants (in C.A. No. 999 of 1967).
S.Sorabji, 'D. section Dang and Ravinder Narain, for the appellants (in C. A. No. 1000 of 1967).
S.V Gupte and K. K. Jain, for the appellants (in C.A. No. 1001 of, 1967);.
23 N, A.Palkhivala, F. N. Kaka, O. P. Malhotra O. C. Mathur and Ravinder Narain, for the 'petitioner (in W.P. No, 212 Of 1966).
C.K. Daphtary, Attorney General, B. Sen, R. H.Dhebar and S.P. Nayar, for the respondents (in W. P. No. 212 of 1966) and the respondents (in, C.A. Nos,. 289 to 311 of 1965).
C. K. Daphtary, Attorney General, and R. H. Dhebar for the respondents (in C.As.
999, 1000 and 1001 of 1967).
N. A. Palkhivala, 0.
C. Mathur and Ravinder, Narain, for the intervener (in C.As.
289 to 311 of '1965).
The Judgment of the Court *as delivered by Shelat, J. These appeals, by certificate, are against the common judgment of the High Court of Punjab which dismissed, the writ petitions filed by the appellant companies challenging the legality of excise duty levied against them, under Item 14 H in ' Sch. 1 to the Central Excise and Salt Act, 1 of 1944.
Writ Petition 212 of 1966 by Tata Chemicals Ltd. also raises die same.
question.
As both the appeals and the writ petition raise a common question of law they were heard together and are disposed of by this common judgment.
The appellant companies manufacture sugar by carbonation process as against sulphitation process employed by some other manufacturers of sugar and pay excise duty on the sugar manufactured by them under Item 1 of Sch. 1 to the Apt.
According to the affidavit of V. J. Bakre, Deputy Chief Chemist of the Central, Revenue Control Laboratory, these manufacturers bum limestone with coke in a lime kiln with a regulated amount of air and generate a mixture of gases consisting of carbon dioxide, nitrogen, oxygen and a small quantity of carbon monoxide.
Most of the oxygen from the air is used up by the coke in the process of burning itself.
The coke so burnt supplies the heat which decomposes the limestone so as to generate carbon dioxide.
The gas thus produced is sucked,by a pump through a pipe which connects the kiln with the inlet side of the pump.
The gas enters the chamber of the pump and is then immediately compressed by means of the compression stroke of the pump.
At this stage the gas is forced into a narrower space and as a result of the compression stroke it acquires pressure exceeding the atmospheric pressure.
The gas so compressed is let into the delivery pipe, which connects the outlet side of the pump with the tank containing the sugarcane juice and enters.
the sugarcane juice with the acquired pressure behind it.
But for the compression resulting in pressure the gas would not bubble in the sugarcane juice.
In the 24 tank there, is besides the sugarcane juice milk of lime which is mixed so as to remove the impurity in and refine the juice.
Thus, it is carbon dioxide which reacts on the lime and what is produced is an insoluble content known as calcium carbonate.
The other gases viz., nitrogen, 'oxygen, carbon monoxide do not contribute in the process of clarification of the sugarcane juice.
These are innocuous so far as the process of clarification of sugarcane juice is concerned and escape into the atmosphere by a vent provided in ' the sugarcane juice tank.
Along with these gases a certain amount of carbon dioxide which remains unabsorbed also escapes.
The carbon dioxide content in the mixture of gases ranges from 27 to 36.5%.
Thus, the process involves the forcing of impure carbon dioxide into a narrower space within the chamber of the pump where it is compressed and pushed first into the delivery pipe and then into the, tank containing the juice.
The respondents ' case therefore was that the process employed by the appellant companies involves compressing carbon dioxide with the pressure achieved pushing it through sugarcane juice.
The 'appellant companies therefore produced carbon dioxide through the lime kiln which was taken first to the Co2 pump and there compressed and then pushed into the tank.
The Tata Chemicals Ltd. manufactures among other products soda ash by solvay ammonia soda process.
The solvay process as described by the said V. J. Bakre is as follows First common salt is dissolved in water and ammonia gas is passed through such dissolved salt called brine.
The ammonia gas gets absorbed in the brine.
The solution so formed is called AB solution, that is, ammoniated brine.
The AB solution is introduced at the top of a carbonating tower and passed from section to section.
from the top to the bottom of the tower.
At the bottom of the tower compressed carbon dioxide is forced through at a pressure of 40 to 50 pounds per square inch and is bubbled through the liquid in all the sections of the tower.
The chemical reactions involved in the tower are: (i) Ammonia Gas plus, (ii) Carbon dioxide plus, (iii) water of the brine solution.
These react together to form ammonium bicarbonate which reacts with salt in brine to produce sodium bicarbonate and ammonium chloride.
The sodium bicarbonate thus formed being much less soluble in the liquid is precipitated and is then taken out from the bottom of the tower.
It is then filtered and the sodium bicarbonate in moist condition is left on the bed of the filter and the solution which is mostly of ammonium chloride is pumped to ammonia reaction tower where ammonia is produced.
Moist sodium bicarbonate is then washed and is heated in a calciner at 200 ' centigrade.
, The sodium bicarbonate, gets decomposed to give soda ash, water and carbon dioxide.
Carbon 25 dioxide thus produced is reutilised in the cycle of manufacture of soda ash.
It contains 85% pure carbon dioxide (according to the Company 's expert 50 to 60%) and is mixed with carbon dioxide sucked by the compressor from the lime kiln.
The whole mixture, which contains about 60% of pure carbon dioxide is compressed in the compressor to a pressure of 40 to 45 lbs.
per inch Thus carbon dioxide is essential in the production of soda ash and is produced by burning limestone with coke in a kiln in the same manner as by the, sugar manufacturing concerns which employ carbonation process.
The carbon dioxide so produced in the kiln is first compressed in the compressor during the compression stroke, and thereafter the piston compresses the. gas in the said cylinder at pressure of more than 40 to 50 pounds per square inch.
The gas so compressed is compressed carbon dioxide which comes out of another valve in the cylinder and comes into the delivery side of the compressor admixed with carbon dioxide from the calciner.
This gas is throughout at a pressure of 40 to 45 lbs.
per sq. inch.
This gas so manufactured is independent of soda ash.
The compressed carbon dioxide so produced does not lose its identity of being compressed carbon dioxide.
Pure compressed carbon dioxide is isolated from the admixture of gases in the carbonating tower where chemical reaction takes place and is used in the manufacture of soda ash.
According to the Revenue the processes employed by the appellant companies and by Tata.
Chemicals Ltd. thus involve produc tion of compressed carbon dioxide which is amenable to excise duty.
Item 14 H of Sch.
I reads as follows "14 H. Compressed, liquefied or solidified gases, the following (iv) Carbon acid Fifty per cent Fifty per cent (carbon dioxide) ad valorem By a notification dated March 2, 1963 issued under r. 8 (1 ) of the Central Excises Rules, 1944 the Central Government exempted as from April 24, 1962 carbonic acid utilised in manufacture of sugar within the factory of production for clarifying and bleachin sugarcane juice or syrup from so much of the excess of Rs. 25/ per metric tonne.
The contentions raised on behalf of the appellant companies and Tata Chemicals Ltd. may be summarised as follows : (1) that the lime kiln is maintained to generate a mixture of gases and not carbon dioxide; 4Sup.
C.I./168 3 26 (2) that at no stage in the process of generating this mixture and sucking it into the sugarcane juice for refining, carbon dioxide which forms one of the contents of the said mixture is either compressed, liquidified or solidified; (3) that the mixture of gases so generated is not carbon dioxide as known to the market; (4) that according to the specifications laid down by the Indian Standards Institution carbon dioxide content has to be at least 99%; (5) that the mixture of gases so generated has no other use except for processing sugarcane juice; (6) that the said mixture is neither sold nor is marketable nor known to the trade; (7) that the excise duty sought to be recovered on the con tent of carbon dioxide in the said mixture of gases cannot fall under Item 14 H; (8) that these concerns are not manufacturers of carbon dioxide as carbon dioxide is not separated from the said mixture of gases by any process nor is the carbon dioxide content in the said mixture compressed, liquefied or solidified; (9) that the mere fact that the said mixture of gases is passed through a conduit pipe by a process of suction cannot mean that carbon dioxide becomes compressed carbon dioxide at that or any other stage; (10) that the term "compressed" in Item 14 H contemplates the form in which the article sought to be levied is manufactured.
There is no separation of carbon dioxide from the said mixture at any stage nor is it compressed or stored as carbon dioxide in cylinders; and lastly (11) that the duty being, on goods it can be charged only on goods known as carbon dioxide in the trade and marketable as such.
The contentions of the Revenue, on the other hand, were (1) that the mixture of gases generated as aforesaid is nothing but impure carbon dioxide in the sense that during the process of burning limestone with coke a small quantity of carbon monoxide is released by the burning of coke, the other gases in the mixture being nitrogen and oxygen derived from the ' air which is let into the kiln to aid combustion; 27 (2) that these concerns require carbon dioxide for refining sugarcane juice and manufacture it out of limestone and coke.
The other gases which get mixed up are unavoidable on account of the process employed by them; (3) that these extraneous gases can be separated and the manufacturers would separate them if what they require is pure carbon dioxide.
They do not do so because carbon dioxide mixed with other gases produces the same effect in the process of refining as without them; (4) that the fact that in the process Of its manufacture carbon dioxide gets mixed up with other gases does not mean that carbon dioxide which is intended to be and is in fact produced loses its characteristics as such.
The gas thus produced contains 30 to 35% carbon dioxide; (5) that the specifications laid down by the Indian Standards Institution are not relevant as they are for cylindered carbon dioxide bought and sold in the market as pure carbon dioxide; (6) that carbon dioxide produced by these concerns can be sold in the condition in which it is produced and used by other sugar mills and by factories manufacturing soda ash by solvay process.
In support of their contentions the appellant companies as also the Tata Chemicals Ltd. relied on the specifications laid down by the Indian Standards Institution and the several affidavits made by concerns using carbon dioxide for the manufacture of their respective goods.
As most of them are identical, it is sufficient to take the affidavit of one Shantilal Patel as typical.
The deponent there asserts that the company of which he is the senior chemist uses carbon dioxide in considerable quantity in manufacturing aerated waters, that carbon dioxide so used contains 99.5% of pure carbon dioxide, that compressed liquidified or solidified carbon dioxide as known to the trade or sold in the market contains a minimum of 99% carbon dioxide conforming to the specifications of the Indian Standards Institution, that such carbon dioxide is contained in steel cylinders under a pressure of minimum of 1000 lbs.
per sq. inch and that kiln or calciner gas is not known to the trade as carbon dioxide nor is it marketed as such.
Dr. Homi Ruttonji whose affidavit was produced by Tata Chemicals Ltd. states that for the purpose of manufacturing carbon dioxide an elaborate plant shown in the annexure to his affidavit would have to be set up separate from the plant and equipment used in the manufacture of soda ash and refutes the statement of the said Bakre that compressed carbon dioxide is forced through at a pressure of 40 to 45 lbs.
per sq. inch or that 28 at the bottom of the said carbonating tower pure compressed carbon dioxide is or can be isolated from the mixture of gases in that tower where chemical reaction takes place.
He also refutes the statement that the process of generating kiln gas is independent of the manufacture of soda ash and states that the process of manufacture of soda ash is a continuous and integrated process wherein a certain quantity of kiln gas is released which is directly utilised without removal or storage in the manufacture of soda ash.
According to him, kiln gas released during the manufacture of soda ash is never known as carbon dioxide in the market.
To, obtain marketable carbon dioxide from kiln gas an elaborate plant would be required for separation and purification and it is such carbon dioxide which becomes marketable after it is compressed at a pressure of 1000 to 1800 lbs.
per sq. inch in cylinders of the specifications laid down by the Government of India under Rule II of the Gas Cylinder Rules, 1940.
Notwithstanding the divergence of opinion between the two experts one thing is clear and that is that in the case of both sugar and soda ash the manufacturer does require carbon dioxide for the purpose of producing the two articles and sets up lime kiln for that purpose.
The question is whether what he actually produces by combusting limestone with coke is carbon dioxide and if so whetheris compressed carbon dioxide as contemplated by Item 14 H.
In the Courseof their arguments counsel referred to certain works on Chemistry in general and sugarcane industry in particular.
There are observations in some of them which.
might throw some light on the question before us.
The Handbook of Cane Sugar Engineering by E. Hugot (1960 ed.) at pp. 286 to 289 states that carbon dioxide necessary for the carbonation process is produced at the same time as lime in a lime kiln adjacent to the sugar factory.
The combustion of limestone with coke produces kiln gases consisting of carbon dioxide, carbon monoxide, oxygen, nitrogen and a certain amount of moisture.
The proportion of carbon dioxide in these kiln gases varies from 25 to 33% averaging about 30%.
The carbon dioxide leaving the washer is at a temperature of 60 'C.
Its pressure at the suction of the pump varies from 1.6 to 5 in of mercury and the delivery pressure varies from 4 to 10 lbs.
per sq. inch.
It is also stated that the,pumps known as Co2 pumps are fully analogous to air pumps.
(see also Cane Sugar ' Handbook by Guildord L. Spencer and G. P. Meade, p. 138).
The carbonation process according to Hugot is one of the cheapest, cleanest *id most reliable process in the sugarcane industry ensuring standard quality of sugar.
Roger 's Industrial Chemistry, (6th ed.) p. 415 29 in the chapter dealing with "Alkali and Chlorine production" states thus "The kilns used in the process are built and operated with special precautions to produce as high a concentration of Co., as possible.
In practice 41 to 43 per cent of Co2 is.
obtained in kiln gases with very little Co or 02, the rest of the gas being N15/2.
" At pp. 415 to 417 of the said work, the Solvay process is described in the same terms as in the affidavit in support of the, petition of Tata Chemicals Ltd. J.A. Timm in his General Chemistry (4th ed.), p. 470 states that commercial carbon dioxide can be obtained as a bye product of certain industries, e.g., flue gases R. Norris Shreve in his Chemical Process Industries, (3rd ed.) states that there are three important processes for commercial production of carbon dioxide, viz., flue gases by burning carbonacious material, bye product from fermentation industries through dextrose breakdown into, alcohol and carbon dioxide and bye product of lime kiln operation.
He also states that an absorption system is used for concentrating C02 gas obtained from sources 1 and 3 to over 99%, and that in all cases the almost pure carbon dioxide must be given various chemical treatments for the removal of minor impurities which contaminate the gas.
Similarly, KirkOthmer in the Encyclopedia of Chemical Technology, (2nd ed.) Vol. 1, p. 722 observe as follows : "The carbon dioxide evolved consists of both that generated by the decomposing limestone and ' that resulting from combustion of the carbon in the coke.
The kiln gases are considerably diluted with nitrogen from the air used to burn the coke; they usually con tain 37% to 42% carbon dioxide together with stone dust, coke ash, particles and gaseous impurities.
The gas is cooled to some extent in the kiln itself by the upper layers of stone; it is further cooled and purified in water scrubbers until it is absolutely free from dust and tarry matters, and then, in the more modern plants which make a very pure soda ash, the gas is finally purified electrostatically." Arthur and Elizabeth Rose, in their Condensed Chemical Dic tionary, (7th ed.) p. 178 divide commercial carbon dioxide into two grades, both of them having at least 99% carbon dioxide.
Such carbon dioxide when solidified is packed in 50 lbs.
blocks 'in insulated boxes and is at a temperature of 109 ' below zero.
When liquified it is packed in steel cylinders.
The uses of solidified or liquefied carbon dioxide are refrigeration of foods, carbonated beverages, industrial refrigeration, fire extinguishers, welding etc.
30 These extracts show that commercial carbon dioxide as brought to the market for being bought or sold and used for the purposes enumerated above has content of at least 99% of carbon dioxide and is either compressed and packed in steel cylinders or liquefied or solidified.
As the Revenue argued these concerns undoubtedly require carbon dioxide in the processes employed by them while manu facturing sugar and soda ash and to meet, their requirement they have set up lime kilns by which they produce kiln gas which includes carbon dioxide to the extent of about 30 to 35%, which they in fact use after compressing it through a pump or otherwise, at one stage or the other in their manufacturing processes.
Nonetheless, is it possible to say that the lime kilns set up for the aforesaid purpose produce carbon dioxide and even if it be so, that at one stage or the other, through the pump or otherwise, the carbon dioxide so produced becomes compressed carbon dioxide as envisaged by the legislature when it decided to introduce Item 14 H in the First Schedule ? It cannot be gain said that by burning limestone with coke in the kiln the manufacturer actually produces kiln gas of which one of the constituents undoubtedly is carbon dioxide and which he utilises while producing his ultimate excisable goods.
But if it is possible to say that what he produces is carbon dioxide during the process which Mr. Palkhiwala termed as an integrated and continuous manufacturing process or separately as the Revenue insisted, it is equally possible to say that the combustion of limestone with coke results in the manufacture of nitrogen, whose content in the kiln gas is about 53%.
As the text books produced before us and the affidavits show, the correct picture is that what is produced is kiln gas which consists of several gases, viz., carbon dioxide, carbon monoxide, oxygen and nitrogen, the last one being in a larger quantity than carbon dioxide.
The mixture of gases so generated is known as kiln gas in the trade, i.e. to those who manufacture sugar and soda ash.
The affidavits of concerns which use carbon dioxide definitely assert that kiln gas is never known in the market as carbon dioxide nor is it a marketable article in the sense that it is loose and is not transportable nor is it brought to the market for being bought and sold unless carbon dioxide is extracted out of it.
Such extraction requires an elaborate plant.
After extraction it would have to be compressed in cylinders of certain specifications or liquefied or solidified before it can become a marketable article.
It is true as the Revenue contended that the gas produce through the kiln can be made marketable in the sense that it car be sold in the very same condition in which it is produced to concerns interested in the carbonation process through" for example, pipes.
But, apart from such a method of disposal being 31 uneconomic and hardly likely to be employed by the trade, though it is possible in theory, what would be transported is that which is produced through the kiln, viz., the kiln gas containing among other things a certain quantity of carbon dioxide.
As one of the text books points out carbonation process is employed by manufacturers of sugar because it is one of the cheapest methods to ensure production of sugar of standard quality.
The fact is that in employing carbonation process the manufacturer who requires carbon dioxide produces kiln gas and as that mixture of gases contains carbon dioxide he pumps through a pipe that mixture of gases and not carbon dioxide alone ex tracted from it.
Therefore, in truth and in fact what he uses is the kiln gas produced by him in the lime kiln.
Even assuming that this gas is compressed either through a narrow pipe what is compressed is the kiln gas and it is that kiln gas containing no doubt a certain percentage of carbon dioxide which is inducted in the sugarcane juice for refining.
The same must also be said of the solvay process used in the production of soda ash though in that case the percentage of carbon dioxide is larger than in the case of refining sugarcane juice.
The Act charges duty on manufacture of goods.
The word "manufacture" implies a change but every change in the raw material is not manufacture.
There must be such a transformation that a new and different article must emerge having a distinctive name, character or use.
The duty is levied on goods.
As the Act does not define goods, the legislature must be taken ,to have used that word in its ordinary, dictionary meaning.
The dictionary meaning is that to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market.
That it would be such an article which would attract the Act was brought out in Union of India vs Delhi Cloth & General Mills Ltd.(1) The contention there was that in the course of manufacture of vanaspati, a vegetable product from groundnut and til oil, the respondents brought into existence at an intermediate stage of manufacturing refined oil which fell within the description of "vegetable nonessential oil, all sorts," in Item 23 of the First Schedule.
The contention would seem to assume that the goods subjected to duty must be goods known as such in the market.
The contention was that the respondents, after they bought raw oil with all its impurities, manufactured, by application of certain processes of refinement, refined oil which was the same as refined Oil available in the market and that it was "refined oil" which became after further processes the ultimate, vegetable product.
It was argued that the fact that the vegetable product was the ultimate (1) [1963] Supp. 1 S.C.R. 586.
32 product and was chargeable to duty did not alter the position that at an earlier stage, the respondents manufactured "refined oil" as known to the market and that the fact that they did not put this "refined oil" in the market but used it to produce the finished product did not affect their liability.
This Court held that if a new substance was brought into existence from raw materials and that substance was the same as "refined oil" as known to the market it would be subject to duty.
The question, therefore, was, was the substance sought to be charged "refined oil" known to the market ? The affidavits showed that deodorization was necessary before the product could be called "refined oil".
It was not in dispute that that process was employed after hydrogenation and not at the stage when what was called "refined oil" came into existence at an intermediate stage.
No evidence was produced by the Union of refined oil being brought to the market without deodorization.
It was held that raw oil purchased by the respondents for the purpose of manufacturing vanaspati did not become at any stage "refined oil" as known to the consumers and the commercial community.
The affidavits filed in the instant cases and the scientific works referred to above show that the mixture of gases produced from the kiln is known both in trade and in science as kiln gas and not as carbon dioxide. 'The Revenue has not produced any affidavit of persons dealing in carbon dioxide to show that kiln .gas is known to the market as carbon dioxide.
The aforesaid affidavits show that carbon dioxide known to and brought in the market for being bought and sold for its diverse uses is carbon dioxide compressed, liquefied or solidified as Item 14 H describes it.
The analogy given by the learned Attorney General of a manufacturer of cotton cloth also producing at an intermediate stage cotton yarn and such cotton yarn being liable to excise duty would not help the Revenue as cotton yarn obtained by such a manufac turer is known as such in the commercial community and brought to the market for being bought and sold.
That cannot be said of kiln gas.
If kiln gas were to be offered in discharge of a contract to supply carbon dioxide it would certainly be rejected on the ground that it is no+, carbon dioxide but is kiln gas.
It is also not correct to say that because the sugar manufacturer wants carbon dioxide for carbonation purpose and sets up a kiln for it that he produces carbon dioxide and not kiln gas.
In fact what he produces is a mixture known both to trade and,, science as kiln gas, one of the constituents of which is, no doubt, carbon dioxide.
The kiln gas which is generated in these cases is admittedly never liquefied nor solidified and is therefore neither liquefied nor solidified carbon dioxide, assuming that it can be termed carbon dioxide.
It cannot be called compressed carbon dioxide as 33 understood in the market among those who deal in compressed carbon dioxide.
Compressed carbon dioxide is understood generally as carbon dioxide compressed in cylinders with pressure ranging from 1000 to 1800 lbs.
per sq. inch.
The mere fact that at one stage or the other kiln gas is pressed at 40 to 45 lbs.
per sq.
inch by a pump or otherwise cannot mean that it is compressed carbon dioxide.
At the same time the duty being on manufacture and not on sale the mere fact that kiln gas generated by these concerns is not actually sold would not make any difference if what they generate and use in their manufacturing processes is carbon dioxide.
The fact that the gas so generated has carbon dioxide below 99% and does not conform to the specifications of the Indian Standards Institution also would not matter for the gas may be sub standard, provided what is produced is carbon dioxide.
In our view, the gas generated by these concerns is kiln gas and not carbon dioxide as known to the trade i.e., to those who deal in 'it or who use it.
The kiln gas in question therefore is neither carbon dioxide nor compressed carbon dioxide known as such to the commercial community and therefore cannot attract Item 14 H in the First Schedule.
In this view it is not necessary for us to consider certain other contentions raised by the appellants and the petitioners in the writ petition.
In the result, the appeals and the writ petition must allowed and the orders passed by the High Court in the appeals must be set aside.
We hold that the demand notices served on these concerns are illegal and must be quashed.
The respondents in these appeals as also in the writ petition will pay costs to the appellants and the petitioner in the writ petition.
The costs will be one hearing fee for the appeals and a separate set of costs in respect of the writ petition.
R.K.P.S. Appeals and Petition allowed.

summary:
The appellant companies manufactured sugar by carbonation process.
land paid excise duty on sugar manufactured by them under item 1 of Sch. 1 to the Central Excise and Salt Act, 1944.
According to an affidavit filed on behalf of the respondents, these manufacturers employed a process of burning lime stone with coke in a lime kiln with a regulated amount of air whereby a mixture of gases was generated consisting of carbon dioxide, nitrogen, oxygen and a small quantity of carbon monoxide.
The gas thus produced was thereafter compressed so as to achieve pressure exceeding atmospheric pressure and then passed through a tank containing sugarcane juice so as to remove impurities from it and to refine the juice.
For this process of refining it was only the carbon dioxide in the gas which was used and the other gases i.e. nitrogen, oxygen and carbon monoxide escaped into the atmosphere by a vent provided for the purpose.
The carbon dioxide content in this mixture of gases ranged from 27 to 36.5%.
Similarly, another company manufactured soda ash by solvay ammonia soda process for which also carbon dioxide is required and this was produced by the petitioner by burning lime stone with coke in a kiln in the same manner as the appellant 'sugar manufacturing companies employing the carbonation process.
The respondents regarded all the companies as manufacturers of compressed carbon dioxide and levied excise duty on them under Item 14 H in Sch. 1 to the Act.
The appellants filed writ petitions in the High Court challenging the validity of this excise duty but these petitions were dismissed.
It was contended, inter alia, on behalf of the appellants that the lime kiln was maintained to generate a mixture of gases and not carbon dioxide and at no stage in the process of generating this mixture and passing it through the sugarcane juice was carbon dioxide which formed one of the contents of the mixture either compressed, liquidified or solidified.
The mixture of gases so generated was not carbon dioxide as known to the market nor was it according to the specifications laid down by the Indian Standards Institution which required the carbon dioxide content to be at least 99%.
Therefore the excise duty sought to be recovered on the content of carbon dioxide in the mixture of gases could not fall under Item 14 H. Furthermore the duty being on goods it could be charged only on goods known as carbon dioxide in the trade and marketable as such.
22 HELD : The gas generated by the appellant companies was kiln gas and not carbon dioxide as known to the trade, i.e., to those who deal in it or who use ' it.
The kiln gas in question.
therefore is neither carbon.
dioxide nor compressed carbon dioxide known as such to the commercial community and therefore cannot attract Item 14 H in the First Schedule.
It was not correct to say that because the sugar manufacturer wants carbon dioxide for carbonation purposes and sets up a kiln for it that he produces carbon dioxide and not kiln gas.
In fact what he produces is a mixture known both to trade and science as kiln gas one of the constituents of which is, no doubt, carbon dioxide.
The kiln gas which is generated in these is admittedly never liquified nor solidified and is therefore neither liquified nor solidified carbon dioxide, assuming that it can be termed carbon dioxide.
It cannot be called compressed carbon dioxide as understood in the market among those who deal in compressed carbon dioxide.
Compressed carbon dioxide is understood generally as carbon dioxide compressed in cylinders with pressure ranging from 1,000 to 1,800 lbs.
per sq. inch.
The mere fact that at one stage or the other kiln gas is pressed at 40 to 45 lbs.
per sq.
inch by a pump or otherwise cannot mean that it is compressed carbon dioxide.
At the same time the duty being on manufacture and not on sale the mere fact that kiln gas generated by these is not actually sold would not make any difference if what they generate and use in their manufacturing processes is carbon dioxide.
The fact that the gas so generated has carbon dioxide below 99% and does, not conform to the specifications of the Indian Standards Institution also would not matter for the gas may be sub standard, provided what is produced is carbon dioxide.
[32 D H] Union of India v, Delhi Cloth & General Mills Ltd. [1963] Supp.
I S.C.R. 586, referred to.