judgement:
Appeal No. 855 of 1968.
Appeal by Special Leave from the Award dated October 26, 1967 of the National Industrial Tribunal, Calcutta in Reference No. NIT 3 of 1967.
D. N. Mukherjee, for the appellant.
P. section Khera and section K. Nandy, for respondents Nos. 1 and 3.
The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, by special leave, is directed against the Award dated October 26, 1967 of the National In dustrial Tribunal, Calcutta in Reference No. NIT 3 of 1967, holding that for the accounting year 1965 66, the quantum of bonus payable by the appellant to its workmen is 20% of the effective salaries or wages with a further direction to set on a sum of Rs. 1,46,252.
The appellant, Indian Cable Company Ltd. (hereinafter to be referred as the Company) occupies a very prominent position in the Cable Industry of India having its Head Office at Calcutta and its factory at Jamshedpur.
It has, branches in Bombay, Madras, New Delhi, Kanpur, Ahmedabad, and Bangalore.
(In addition to insulated cables, the Company manufactures Aluminium Rods, Radio Aerials, Fuse Wires and other products.).
Its paid up capital is Rs. 2,48,65,450.
It employed workmen numberingover 5000.
The gross effective salaries and wages of its employees for the relevant accounting year amounts to Rs. 1,05,32,880.
Its accounting year is from 1st April to 31st March of the succeeding year.
For the accounting year 1964 65, the Company declared and paid bonus at 20% to all employes in accordance with the provisions of the (hereinafter to be referred as the Act).
For the year in question 1965 66, it calculated a sum of Rs. 23,68,785 as available surplus.
This amount was arrived at by the Company after calculating direct tax without deducting the provision for payment of bonus payable to its workmen.
A sum of Rs. 14,21,271 being 60% of the said available surplus was declared as bonus for the year 1965 66.
This amount represented 13 51% of the wage bill.
The workmen were dissatisfied with this offer of bonus at 13.51% and demanded payment of bonus at the maximum rate of 20% as provided in the Act.
In consequence they raised a dispute with the Company.
In view of the agreement dated November 24, 1966 between the parties to refer the claim for additional bonus for adjudication to a Tribunal, the workmen received the bonus at 108 the rate of 13.51% offered by the Company.
The Central Government by order dated June 23 1967 referred for adjudication to the National Industrial Tribunal, Calcutta, the following dispute "What should be the quantum of bonus payable to the Workmen of the Indian Cable Company Limited Calcutta for the accounting year 1965 66" The Unions contended before the Tribunal that the computa tion of allocable surplus by the Company has not been properly made in accordance with the Act and that several items shown in the profit and loss account as expenditure have to be added back to arrive at the actual gross profits.
The Unions further alleged that the Company has spent large amounts for payment of liability for future years with a view to reduce the available and allocable surplus, which in consequence has resulted in, the reduction of percentage of bonus.
The Company on the other hand maintained that it has kept proper accounts which have been audited by a reputed firm of auditors Messrs Lovelock & Lewes and that the computation of allocable surplus has been properly arrived at having due regard to the provisions of the Act.
The Com pany denied the allegations of the Unions that enormous expenditure has been shown with a view to reduce the quantum of bonus.
On the other hand, the Company pleaded that all items of expenditure were justified and those items are deductable in considering, the claim for bonus.
At this stage it may be mentioned that the Unions served interrogatories requiring information on various matters and there is no controversy that the Company furnished all the informations that were 'Called for.
Before the Tribunal the Company required various deductions to be made from the net profits shown in its profit and loss account.
On the other hand, the Unions required various items to be added back.
The Tribunal accepted the contentions of both the parties with regard to certain items.
We will in due course refer to the items which are in dispute before us at the instance of both the Company and the Unions.
The Tribunal computed the, available surplus at Rs. 37,54,713, 60% of this amount being Rs. 22,52,828 was fixed as allocable surplus.
The Tribunal held that a sum of Rs. 21,06,576 being bonus at 20% of the gross effective salaries and wages was payable for the year in question and it directed the surplus amount of Rs. 1,46,252 to be set on.
As the bonus at the rate of 13.51% had already been declared and paid by the Company, the Tribunal directed the payment of the balance 6.49% within the period mentioned 109 in the Award.
One aspect which has to be acted is that (in calculating the available surplus, the Tribunal before calculating the notional direct tax, deducted the bonus payable for the accounting year in question.
The grievance of the Company, as placed before us by its learned counsel Mr. D. N. Mukherjee, relates to three items (1) the method of computation of notional direct tax; (2) disallowance of the deduction from gross profits of the sum of Rs. 2.65 lakhs made as ex gratia payment for the accounting year 1964 65 to employees drawing emoluments exceeding Rs. 750 per mensem; and (3) disallowance of the claim for re 'turn on provision for doubtful debts.
The first contention relates to the principle to be adopted for calculating direct tax when computing the available and allocable surplus for payment of bonus under the Act.
According to the Tribunal, under sections 6 and 7 of the Act, the bonus payable for ,the relevant accounting year has to be deducted from the grossprofits for calculation of direct tax or alternatively rebate for bonus found payable has to be calculated and 60% of the rebate has to be added back as allocable surplus.
The Tribunal took notice of the fact that the Income tax Authorities did not object to deduction of the provision made by the Company for payment of bonus for the accounting year 1965 66.
On this reasoning the Tribunal added back to the gross profits as per the profit and loss account the provision made for payment of bonus.
For coming to this view the Tribunal followed its previous decision in Indian Oxygen Ltd. vs Their Workmen (N.I.T. 1 of 1966).
The Tribunal has also noted that its Award in the Indian Oxygen Ltd. was pending appeal in this Court.
According to Mr. D. N. Mukherjee, this method of calculation of direct tax under the Act, adopted by the Tribunal is contrary to the decisions of this Court.
We are in entire agreement with this contention of Mr. Mukherjee.
In view of the decisions of this Court, to which we will immediately refer, Mr. P. section Khera, learned counsel for the Unions was unable to support the reasoning of the Tribunal on this aspect.
The question of calculation of direct tax under the Act was considered for the first time by this Court in Metal Box Co. of India Ltd. vs Their Workmen.(1) It was held therein that the nationalc tax liability is to be worked out by first working out the gross profits and deducting therefrom the prior charges under section 6, but not the bonus payable to the employees.
Therefore, it is clear from this decision that an employer is entitled to deduct (1) ; 110 his tax liability without deducting first the amount of bonus he would be liable to pay from and out of the amount computed under sections 4 and 6 of the Act.
The same principle, has been reiterated in The Workmen of William Jacks and Company Ltd. Madras vs Management of William Jacks and Co., Madras,(1) Delhi Cloth and General Mills Co. Ltd. vs Workmen(2) and Indian Oxygen Ltd. etc.
vs Their Workmen.
(3) In fact the last decision overruled the decision of the National Industrial Tribunal in Reference No. NIT 1 of 1966, which has been followed by the present Tribunal.
We may also state that after the first decision of this Court, referred to above, the Act was amended in 1969.
The last three decisions of this Court considered the question whether the amendments effected to the Act had made ' any change in the principle laid down by this Court in the first decision.
It was uniformly held in all the three decisions that the amendment has not effected any change in the principle laid down in the earliest decision that the tax liability under the Act is to be worked out first by working out the gross profits and deducting therefrom bonus payable to the employees.
Therefore, it follows that the Tribunal committed an error in law in corrupting, direct tax after deducting bonus.
Therefore, this point will have to be held in favour of the appellant.
The second item relates to the disallowance of Rs. 2.65 lakhs which represented the ex gratia payment made by the Company to certain employees drawing, emoluments exceeding Rs. 750 per mensem for the year 1964 65.
The Company claimed that this amount should be deducted from the gross profits whereas the Unions contended that the same has to be added back to the gross profits shown in the profit and loss account.
The factual position relating to this claim is as follows: From the letter dated February 4, 1966, Ext. 1, written by the Company to one of its officers Mr. section N. Banerjee, it is seen that the Company in appreciation of the officer 's services during the year 1964 65 made an ex gratia payment of Rs. 90.
Mr. Banerjee has given evidence on behalf of the Unions.
He has deposed to the fact that he was drawing about Rs. 1,000 per mensem and that he received the letter Ext.
I as well as the sum of Rs. 90 mentioned therein.
He has further stated that over and above this sum of Rs. 90 he has also, received the bonus payable to him under the Act for the year 1964 65.
He has also deposed to the effect that the ex gratia payment of Rs.( 90 was paid to him in lieu of bonus calculated on the difference in emoluments drawn by him and the ceiling of Rs. 750 per mensem fixed by the Act.
It was (1) ; (2) ; (3) ; 111 the practice of the Company to pay bonus to all the members of its staff without application of any ceiling.
In view of the fact that a ceiling had been fixed under the Act, to make up for the lesser amount that the employees like Mr. Banerjee will get under the Act, this amount of Rs. 2.65 lakhs was paid to all such officers.
The Tribunal accepted the evidence of Mr. Banerjee that the ex gratia amount was paid to keep up the old practice of the Company of paying all the members of the staff without the application of any ceiling.
The Tribunal held that such a payment was not an item which could be deducted from the gross profits under the Act as claimed by the management.
Accordingly, it added back the sum of Rs. 2.65 lakhs to the gross profits shown in the profit and loss account.
Mr. Mukherjee urged that the Company was justified in claiming the above amount by way of deduction.
He referred us to the definition of "employee" in section 2(13) of the Act as also to the employees declared eligible for bonus under section 8.
He also relied on sections 10 and 11 which make it obligatory on an employer to pay the minimum bonus and also the maximum bonus upto 20% respectively.
We are not inclined to agree with the contention of Mr. Mukherjee that the Tribunal committed an error when it added back the sum of Rs. 2.65 lakhs.
From the evidence of Mr. Banerjee, which has been accepted by the Tribunal, read along with the letter Ext.
1, it is clear that Mr. Banerjee received not only bonus due to him under the Act, but also the extra amount of Rs. 90.
Mr. Banerjee was admittedly drawing a salary of Rs. 1000 per mensem.
For a person to be an "employee" under section 2(13), among other things, he is a person drawing a salary or wage not exceeding Rs. 1600 per mensem.
Under section 8, it is provided that every employee is entitled to be paid in an accounting year bonus as per the Act provided he has worked in the establishment for not less than thirty working days in that year.
Section 10, provides for payment of minimum bonus to every employee.
Similarly section 11 provides for payment of bonus to every employee subject to a maximum of 20% of his salary or wage.
According to Mr. Mukherjee there is no prohibition in the Act from paying bonus to officers like Mr. Banerjee, upto a maximum of 20%.
Therefore, when the payment as in Ext.
1, has been made to officers like Mr. Banerjee and others, such amounts have to be computed as an item of expenditure, under the Second Schedule of the Act.
It is no doubt true that an officer drawing a salary not exceeding, Rs. 1600 per mensem is an employee under section 2(13) and he will also be eligible for payment of bonus under section 8 read with sections 10 and 11 of the Act.
But ,the point that is missed by the learned counsel is the limitation 112 contained in section 12.
Though officers drawing salary upto Rs. 1600 per mensem are employees under section 2 (13) and eligible for bonus, still for purposes of calculation of bonus payable under sections 10 and 11, such officers, whose salary exceeds Rs. 750 per mensem, for calculating bonus, the, salary or wages per month will be taken at the maximum of Rs. 750 per mensem.
That is, if an officer is getting, Rs. 1500, per mensem.
he will be eligible for onus; nevertheless for calculating bonus payable to him he will be treated as drawing a salary of only Rs. 750 per mensem.
Therefore, Mr. Banerjee, in the case before.
, us, has admittedly to be paid bonus, which is due to him under the Act for the year 1964 65 on the, basis that his salary is only Rs. 750 per mensem.
What the Company has done was to pay him not only the bonus as calculated under the Act, but also an additional amount.
Such additional amount paid to all such officers totalling Rs. 2.65 lakhs cannot be considered to be an expenditure debited directly to Reserves.
The Tribunal was justified in adding back this amount to the gross profits.
The third item relates to return on provision for doubtful debts.
The Company had calculated return of Share capital and Reserves.
It further claimed a return at 6% on Rs. 2.5 lakhs, which according to it was a revision for doubtful debts.
The amount claimed as return under this head was Rs. 15,000 and the Company claimed to deduct this amount from the gross profits as an item of expenditure.
The Tribunal has rejected this claim of the Company.
It is not necessary for us to dwell on this point at any great length in view of the decision of this Court in Indian Oxygen Ltd. etc.
vs Their Workmen(1), where the decision of the Tribunal directing such an amount to be added back in computing the gross profits has been approved.
The legal position has been dealt with in the said _judgment.
Accordingly, we hold that the Tribunal was justified in adding back the said amount to gross profits.
Mr. P. section Khera, learned counsel for the Unions has contended that the Tribunal was not justified in allowing deduction of certain items from the gross profits for purposes of computing the available and allocable surplus.
The Unions no doubt have not filed any appeal.
In fact in the particular circumstances of this case the could not have filed an appeal because they have been awarded the maximum 20% allowable under the Act.
But, according to Mr. Khera, if the items on which he has relied on had been added back, the Award of the Tribunal can be maintained even on the basis that the principle adopted by the Tribunal in respect of direct tax is found to be erroneous by this Court.
(1) ; 113 The right of parties like the respondents before us even in labour adjudication to support the decision of the Tribunal on grounds which were not accepted by the Tribunal or on other grounds which may not have been taken note of by the Tribunal, has been recognised by this Court in Management of Northern Railway Co operative Society Ltd. vs Industrial Tribunal, Rajasthan etc.
(" ') In fact this decision had to deal with an appeal filed a Co operative Society against the Award of the Tribunal setting aside the order passed by the Society removing from its service an employee.
This Court permitted the Union concerned, which was respondent in the appeal, to support the Award of the Tribunal, directing reinstatement of the employee on grounds which had not been accepted by the Tribunal and also on ground which had not been taken notice of by the Tribunal.
Similarly, in J. K. Synthetics Limited vs J. K. Synthetics Mazdoor Union(1), this Court permitted the Union, which was the respondent in the appeal, to support the decision of the Industrial Tribunal on a method of computation regarding bonus which was not adopted by the Tribunal.
Though 'the management appellant therein challenged the right of the Union to support the award on other grounds without filing an appeal, that contention was rejected by this Court as follows : "On behalf of the management the right of the union to challenge the multiplier and divisor, in the absence of an appeal by it, is strenuously contested but in our view there is little force in this objection.
The appeal by the employer is against the grant of bonus to, the employees which implies that the method of computation of the gross profits, as well as of the available surplus and the rate at which the bonus is granted can subjected to scrutiny.
It is needless to recount the several priorities that have to be deducted and the items in respect of which amounts have to be added, before arriving at the available surplus.
In an appeal, the sevetat steps which have to be taken for computation of the available surplus, either in respect of the actual amounts or the method adopted, can be challenged.
If so, the union, even where it has not appealed against ,the award, can support it on a method of computation, which may not have been adopted by the Tribunal but nonetheless is recognised by the Full Bench formula of this Court so longing in the final result the amount awarded is not exceeded.
We are supported in this view by a decision of this Court in Management of Northern Railway Cooperative Society Ltd. vs Industrial Tribunal, Rajasthan, (1) ; (2) 114 Jaipur and another(1), where it was held that the respondents were entitled to support the decision of the Tribunal even on grounds which were not accepted by the Tribunal or on other grounds which may not have been taken notice of by the Tribunal while they were patent on the face of the record.
" In the said decision this Court also found support for the above view in the decision of Ramanbhai Ashabhai Patel vs Dabhi Ajitkumar Fulsinji and others(1), though the latter decision related to an election appeal.
We will now deal with the items, which, according to ( 'the Unions should not have been allowed to be deducted from the gross profits.
The first item relates to a sum of Rs. 18,24,047 paid by the Company to retired workmen at Jamshedpur Workshop under a Voluntary Retirement Scheme.
This Scheme is exhibit G. and it was framed on August 9, 1965.
The Scheme states that the Company has been suffering, from an acute shortage of imported raw materials in view of the difficulty in getting foreign exchange and as such production could not be maintained for some, considerable time.
In view of these difficulties it is stated that the Company has found it necessary substantially to reduce the number of workers in the Workshop.
The Scheme offered substantial benefits to workmen who choose to retire voluntarily, namely, ex gratia payment equal to retrenchment compensation under section 25 of the Industrial Disputes Act, and gratuity admissible to the workmen.
There is evidence on the side of the Company that about 450 workmen availed themselves of the Voluntary Retirement Scheme and a sum of Rs. 18,24,047 was paid.
This item has been included in the profit and loss account under the heading "Salary, Wages, Bonus and Retirement gratuities.
" The Company gave a break ,up of these items in answer to the interrogatories furnished to it by the workmen.
The contention on behalf of the Unions is that under the Re tirement Gratuity Scheme, which is in force, a workman retires at the age of 60 and normally during the year 1965 66, the payment of gratuity to persons so retired would have come to Rs. 1.21 lakhs.
Therefore, it was argued that the payment of Rs. 18.24 lakhs and odd paid as lumpsum under the Voluntary Retirement Scheme during the year 1965 66 was not proper as that amount would have in the ordinary course been spread over eight or ten years.
The Tribunal has rejected this claim of the Unions, and in ,,our opinion, quite rightly.
If there had been a retrenchment and compensation had been paid to all these workmen, ;the Unions cannot raise any objection in law to the payment of such amount.
(1) ; (2) [1965]1 S.C.R. 712.
115 If retrenchment had been restored, the junior most men under the principle "last come first go" would have been sent out of service.
On the other hand, the Voluntary Retirement Scheme enabled the younger workmen to continue in service while it offered a temptation for the older employees to retire from service.
The Voluntary Retirement Scheme has not been challenged, as mala fides by the Unions.
We are in agreement with the view of the Tribunal that the payment of compensation to induce the workmen to retire prematurely was an item of expenditure incurred by the Company on the ground of commercial expense in order to facilitate carrying on of the business and it was an expenditure allowable under section 37(1) of the Income tax Act.
It was not an expenditure of a capital nature.
The Tribunal was justified in declining to add back this item of expenditure to the gross profits.
The second item, which according to the Unions should have been added back is the sum of Rs. 65,764 which was claimed as extra shift allowance of plants and machinery added during the year.
The consideration of this claim was postponed by the Income tax Officer on the ground that the Company had not furnished the requisite particulars.
The Company claimed a sum of Rs. 36,10,594 as depreciation allowable under section 32(1) of the Income tax Act.
According to the Unions, as the sum of Rs. 65,764 has not been accepted by the Income tax Officer, the Company can claim depreciation only in the sum of Rs. 35,44,830.
The Tribunal did not accept this contention of the Unions on the ground that the amount of Rs. 65,764 has not been disallowed by the Income tax Officer.
It is now stated in an affidavit filed in this Court on March 23, 1972 by the Chief Financial Accountant of the Company that the Company has filed an appeal against the order of the Income tax Officer refusing to allow Rs. 65,764 as extra shift allowance for the year 1965 66.
In our opinion, the rejection of the Unions ' contention in this regard by the Tribunal is justified.
It is seen that the Company has produced figures for depreciation and that has not been subjected to any serious challenge by the Unions.
Hence the objection regarding extra shift allowance has also to be rejected in view of the decision of this Court, in Jabalpur Bijlighar Karamchari Panchayat vs The Jabalpur Electric Supply Co. Ltd. and another.
(1) The third item objected to by the Unions related to the ex penditure shown by the Company for repairs and renewals.
According to the Unions the expenses shown are very heavy and large and that the Company was not justified in incurring 'the same.
In our opinion, this contention also has been properly rejected by the Tribunal.
Apart from the fact that the Unions (1) A.I.R. 1972 S.C.70 116 are not technically entitled to raise this objection, as they have not pleaded the same in their statement of case filed before this Court, this contention can be rejected even on merits.
The Unions had furnished interrogatories requiring the Company to furnish certain particulars.
Mr. R. N. Gupta, the Chief Financial Accountant of the Company filed an affidavit before the Tribunal giving answers to the interrogatories.
He had categorically given details as to how the amount of Rs. 12.94 lakhs has been incurred as expenses for repairs and renewal.
Mr. Gupta had also given evidence about this matter.
In cross examination he had stated that all the vouchers for repairs and renewal were scrutinised by the auditors and this evidence has been accepted by the Tribunal.
Therefore, the Tribunal was justified in rejecting this claim of the Unions.
The last item relates to the claim made by the Unions that after distribution of bonus at 20% for the year 1964 65, there must have been a surplus and it.
should have been set on for the next year, namely, 1965 66.
This amount so set on should be taken into account for computing bonus for the year 1965 66.
This assertion made on behalf of the Unions was controverted by the Company on the ground that there was no surplus left after paying, the maximum 20% bonus for the accounting year 1964 65.
In fact the evidence of Mr. Gupta shows that apart from there not having been any surplus, the Company Raid 20% bonus merely because they had already announced that they will pay the same.
It is clear from his evidence that bon us at 20% could not have been declared for the year 1964 65 and in order to honour the declaration made by the Company, bonus was paid at that percentage.
This evidence of Mr. Gupta has been, in our opinion, rightly accepted by the Tribunal.
No evidence contra has been adduced by the Unions.
Once the evidence of Mr. Gupta is accepted, it is: clear that there was no surplus after paying bonus for 1964 65.
Therefore, the question of set on does not arise.
This plea of the Unions also has to be rejected.
From what is stated above, it is seen that the only aspect in respect of which the Award of the Tribunal requires modification is in respect of the principle to, be adopted for calculating direct tax.
As we have accepted the contention of the Company in that regard, it follows that recomputation of the available and allocable surplus will have to be made after making a calculation of direct tax without deducting bonus payable for the year 1965 66.
In the original calculation filed by the Company, it calculated tax only in the sum of Rs. 98,10,893.
It has later on corrected this figure by adding a sum of Rs. 1,34, 921 being surtax.
Therefore, the total direct tax will be Rs. 99,45,814.
Here again Mr. 117 Gupta in his affidavit dated March 23, 1972 has given the correct figures.
Therefore the recomputation of the available surplus, allocable surplus and the percentage of bonus for The accounting year 1965 66 on the basis of our judgment will be as follows Rs. Rs. Gross Profit as pier Award 216,16,195 of National Tribunal Less (1) Depreciation admissible under section 32 (1) of I.T. Act. 36,10,594 (2) Development Rebate admissible 6,76,22442,86,818 1,73,29,377 Less: Direct Tax as Per cl. 6 (c) including Di vidend Tax 99,45,814 73,83,563 Less Statutory Deductions Share Capital Rs. 248,65,45021,13,56349,22,387 @ 8 .5%.
Reserves Rs. 46,81,37,73928,08,824 @ 6% (without tak ing into account 6 % of Rs. 250,000/ be ing provision for Doubtful debts) Available Surplus. 24,61,176 Allocable Surplus60% of above 14,76,706 Effective Gross salary 105,32,880 Bonus paid @ 13.51% 14,22,992 Balance .51% 53,714 14.02% 14,76,706 From the above, it will be seen that the workmen will be entitled to bonus at 14.02% of their total salary or wages and the amount will be Rs. 14,76,706 and not Rs. 20% as awarded by the Tribunal.
From this it follows that the further direction in the Award of the Tribunal regarding set on cannot be accepted.
Admittedly, the Company has already declared and paid Rs. 14,22,922 representing 13.51% of the total wages or salary.
Therefore, the balance additional amount that the Company will have to pay by way of bonus to make up the 14.02%, as stated above, is Rs. 53,714.
This amount will be paid by the Company within a period not exceeding two months from today.
The Award of the Industrial Tribunal is accordingly modified and the appeal allowed in part.
Parties will bear their own costs.
G.C Appeal allowed in part.

summary:
The appellant company declared bonus for the year 1955 56 at 13.51% The workmen demanded bonus at the rate of 20%, the maximum provided in the Payment.of Bonus Act, 1965.
The dispute about the rate of bonus and calculation of the available surplus was referred to the Industrial Tribunal.
The Tribunal held that a sum of Rs. 21,06,576 being bonus at 20% of the gross effective salaries and wages was payable for the year in question and it directed the surplus amount of Rs. 1,46,252/ to be set on As the bonus at the rate of 13.51 % had already been declared and paid by the Company, the Tribunal directed the payment of the balance 6.49% within a prescribed period.
In appeal to this Court against the Tribunal 's award the appellant company contended : (i) that the Tribunal erred in holding that under sections 6 and 7 of the the bonus payable for the relevant accounting year has to be deducted from the gross profits for the calculation of direct tax, (ii) that the Tribunal erred in refusing to deduct from the gross profits the ex gratia payment made to employees in respect of salary above the ceiling of Rs. 750 fixed by the Act.
(iii) that the Tribunal wrongly refused to deduct the reserve for doubtful debts from the gross profits.
On behalf of the respondent workmen it was urged that the Tribunal was not justified in allowing deduction of certain items from the gross profits for purposes of computing the available and allocable surplus.
HELD : (i) In the case of Metal Box Co., it was held by this Court that the notional tax liability is to be worked out by first working out the gross profits and deducting therefrom the prior charges under section 6, but not the bonus payable to the employees.
It is clear from the above decision that an employer is entitled to deduct his tax liability without deducting first the amount of bonus he would be liable to pay from and out of the amount computed under sections 4 & 6 of the Act.
This principle has been upheld by the Court in later cases.
This Court has also held that the amendment of the Act in 1969 has not effected any change in the earlier decision that the tax liability under the Act is to be workedout firstby working out the gross profits and deducting therefrom bonuspayableto the employees.
It followed that the Tribunal committed anerror inlaw in computing direct tax after deducting bonus.
[109H 110D] Metal Box Co. of India Ltd. vs Their Workmen, [1969]1 S.C.R. 750, The Workmen of William Jacks, and Company Ltd. Madras vs Management of William Jacks and Co. Ltd., Madras, A.I.R. 1971 S.C. 08SupCI/72 106 1821, Delhi Cloth and General Mills Co. Ltd. vs Workmen ; and Indian Oxygen Ltd. etc.
vs Their Workmen; , applied.
(ii) Though officers drawing salary upto Rs. 1600 per mensem are employees under section 2(13) of the Act and eligible for bonus, the salary or wages per month will be taken at the maximum of Rs. 750/ permensem.
What the company had done was to pay such men not only the bonus as calculated under the Act, but also in additional amount representing bonus on the emoluments above the ceiling of Rs. 750/ .
Such additional amount paid to all such officers totalling Rs. 2.5 lakhs could not be considered to be an expenditure debited directly to Reserves.
The Tribunal was justified in adding back this amount to the gross profits.
[12A C] (iii) In view of the decision of this Court in Indian Oxygen Ltd. the Tribunal 's decision adding back the deduction claimed by the appellant on account of return on the provision for doubtful debts must be upheld.
[112E F] (iv) The respondents were entitled to support the decision of the Tribunal even on grounds which were not accepted by the Tribunal or on other grounds which may not have taken notice of by the Tribunal while they were patent on the face of the record.
[113A, 114A B] Management, of Northern Railway Co operative Society Ltd. vs Industrial Tribunal, Rajasthan et. ; ; J. K. Synthetics Limited vs J.K. Synthetics Mazdoor Union, and Ramanbhai Ashabhai Patel vs Dabhi Ajitkumar Fulsinji and others; , , followed.
(v) The Voluntary Retirement Scheme had not been challenged as mala fide by the Unions.
The payment of Compensation.
to induce the workmen to retire prematurely was an item of expenditure incurred by the company on the ground of commercial expense in order to facilitate carying on of the business and it was an expenditure allowable under section 37(i) of the Income tax Act.
It was not an expenditure of a capital nature.
The Tribunal was justified in declining to add back this item of expenditure to the gross profits.
[115B C] (vi) The Company had filed an appeal against the order of the Income tax officer postponing consideration of the company 's claim for extra shift allowance.
The Company had produced figures of depreciation and that had not been subjected to any serious challenge by the Unions.
In the circumstances the Tribunal rightly refused to add back the amount claimed by the Company as extra shift allowance.
[1 15F G] Jabalpur Bijlighar Karamchari Panchayat vs
The Jabalpur Electric Supply Co. Ltd. and another, A.I.R. 1972 S.C.70 applied.
(vii) The amount claimed by the Companyin respect of repairs and renewals was supported by evidence and had been accepted by the auditors.
The contention of the Unions that the Company was not justified in incurring the said expenditure had been rightly rejected by the Tribunal.
[1 15A] (viii) Since from the evidence produced on behalf of the company it was clear that there was no surplus after paying bonus for 1964 65 the question of set on for the next year did not arise.
The plea of the Unions in this regard had to be rejected.
[116F] [After working out the available and allocable surplus on the basis of the above findings the Court fixed the bonus payable at 14.02%].


judgement:
o. 189 of 1971.
Appeal under Section 116 A of the Representation of the People Act, 1951 from the judgment and order dated January 8, 1971 of the Madras High Court in Election Petition No. 1 of 1970.
V. P. Raman and Vineet Kumar, for the appellant.
Jagdish Swarup, Socilitor General of India, B. D. Sharma and section P. Nayar, for the Election Commission of India.
B. Sen and Sobhag Mal Jain, for the Supreme Court Bar Association.
The Judgment of the Court was delivered by Beg, J.
This is an appeal under Section 116 A of the Repre sentation of People Act, 1951.
The appellant 's election, held on 11 4 1970, to the Madras Legislative Council from the Madras District Graduates ' Constituency was set aside by a learned Judge of the Madras High Court who decided all the issues except one in favour of the appellant.
The only issue decided against the appellant, which is now before us, was framed as follows : "Whether the first Respondent was not qualified to stand for election to the Graduates Constituency on all or any of the grounds set out by the petitioner in paragraph 7 to 9 of the election Petition" ? Paragraphs 7 to 9 of the election petition against the appellant are lengthy, prolix, and argumentative.
The case and the contentions of the Respondent G. Panneerselvam, the petitioner before the High Court, which were accepted by the High Court, may be summarised as follows Firstly, the whole purpose of Article 171 of the Constitution was to confer a right of "functional representation" upon persons possessing certain educational or other qualifications so that the Appellant Narayanaswami, who had only passed the High School Leaving Examination and was not a Graduate, could not be elected 175 at all to the Legislative Council from the Graduates ' Constituency; secondly, it would be absurd and destructive of the very concept of representation of especially qualified persons that an individual who does not possess the essential or basic qualification of the electors should be a representative of those who are to be represented because of this special qualification of theirs; and, thirdly, the Constitution, being an organic instrument for the governance of the land, must be interpreted in a particularly broad and liberal manner so as to give effect to the underlying principles and purposes of the system of representation sought to be set up by it and not in such a way as to defeat them.
Hence, the educational qualification of the electors should be read into the system of represen tation set up by the Constitution for Legislative, Councils as a necessary qualification of candidates in such constituencies.
Authorities are certainly not wanting which indicate that Courts should interpret in a broad and generous spirit the document which contains the fundamental law of the land or the basic principles of its Government.
Nevertheless, the rule of "plain meaning or "literal" interpretation, described in Maxwell 's Interpretation of Statutes as "the primary rule", could not be altogether abandoned today in interpreting any document.
Indeed, we find Lord Evershed, M.R., saying: "The length and detail of modern legislation, has undoubtedly reinforced the claim of literal construction as the only safe rule".
(See : Maxwell on "Interpretation of Statutes" 12th Edition p. 28).
It may be that the great mass of modem legislation, a large part of which consists of statutory rules, makes some departure from the literal rule of interpretation more easily justifiable today than it was in the past, But, the object of interpretation and of "construction" (which may be broader than "interpretation") is to discover the intention of the law makers in every case (See: Crawford on "Statutory Construction" 1940 Ed. para 157, p. 240 242).
This object can, obviously, be best achieved by first looking at the language used in the relevant provisions.
Other methods of extracting the meaning can be resorted to only if the language used is contradictory, ambiguous, or leads really to absurd results.
This is an elementary and basic rule of interpretation as well as of construction processes which, from the point of view of principles applied, coalesce and converge towards the common purpose of both which is to get at the real sense and meaning, so far as it may be reasonably possible to do this, of what is found laid down.
The provisions whose meaning is under consideration have, therefore, to he examined before applying any method of construction at all.
To these provisions we may now turn.
Article 168 of our Constitution shows that the State Legis latures in nine States in India, including Madras, were to consist of two Houses : the Legislative Assembly and the Legislative, Coun 176 cil.
Article 170 lays down that the Legislative Assembly of each State "shall consist of members chosen by direct election from territorial constituencies in the State, in such a manner as the Parliament may by law determine".
After that, comes Article 171 which may be reproduced in toto here: "1.71(1) The total number of members in the Legislative Council of a State having such a Council shall not exceed one third of the total number of members in the Legislative Assembly of that State,: Provided that the total number of members in the Legislative Council of a State shall in no case be less than forty.
(2) Until Parliament by law otherwise provides, the composition of the Legislative Council of a State shall be as provided in clause (3).
(3) of the total number of members of the Legislative Council of a State (a) as nearly as may be, one third shall be elected by electorates consisting of members of municipalities, district boards and such other local authorities in the State as Parliament may by law specify; (b) as nearly as may be, one twelfth shalt be elected by electorates consisting of persons residing in the State who have been for at least three years graduates of any university in the territory of India or have been for at least three years in possession of qualifications prescribed by or under any law made by Parliament as equivalent to that of a graduate of any such university; (c) as nearly as may be.
one twelfth shall be, elected by electorates consisting of persons who have been for at least three years engaged in teaching in such educational institutions within the State, not lower in standard than that of a secondary school, as may be prescribed by or under any law made by Parliament; (d) as nearly as may be, one third shall be elected by the members of the Legislative Assembly of the State from amongst persons who are not members of the Assembly.
(e) the remainder shall be nominated by the Governor in accordance with the provisions of clause (5).
(4) The members to be elected under sub clauses(a), (b) and (c) of clause (3) shall be chosen in such territorial constituencies as may be prescribed by or under any law made by Parliament,, and the elections under 177 the said sub clauses and under sub clause (d) of the said clause shall be held in accordance with the system of pro portional representation by means of the single transferable vote.
(5) The members to be nominated by the Governor under sub clause (2) of clause (3) shall consist of persons having special knowledge or practical experience in respect of such matters as the following namely: Literature, Science, article cooperative movement and social service.
" The term "electorate", used in Article 171(3) (a)(b) & (c) has neither been defined by the Constitution nor in any enactment by Parliament.
2(1)(e) of the Representation of People Act 43 of 1951, however, says : " 'elector, ' in relation to a constituency means a person whose name is entered in the electoral roll of that constituency for the time being in force and who is not subject to any of the disqualifications mentioned in Sec.
16 of the Representation of the People Act, 1950".
The plain and ordinary meaning of the term " electorate" is confined to the body of persons who elect.
It does not contain, within its ambit, the extended notion of a body of persons electing representatives "from amongst themselves".
Thus, the use of the term "electorale" in Article 171(3) of our Constitution, could not, by itself, impose a limit upon the field of choice of members of the electorate by requiring that the person to be chosen must also be a member of the electorate.
The qualifications of the electors constituting the "electorate" and of those who can represent each " electorate", contemplated by the constitution and then supplemented by Parliament, are separately set out for each house.
We may glance at the provisions relating to Legislative Assemblies first.
Section 16 of the Representation of People Act 43 of 1950 lays down the qualifications of an elector negatively by prescribing who shall be disqualified for registration in an electoral roll.
A disqualified person is one who : (a) is not a citizen of India; or (b) is of unsound mind and stands so declared by a competent court; _or (c) is for the time being disqualified from voting under the provisions of any law relating to corrupt practices and other offences in connection with elections".
Section 19 lays down the two conditions for registration on the electoral roll of a constituency.
The person to be registered must not be less than 21 years of age on the qualifying date and must 178 be ordinarily resident in the constituency.
The persons so registered, whose names appear on the electoral roll, constitute the electorato for the legislative Assembly of each State.
Section 5 of the Representation of People Act, 43 of 1.951 enacts : "5.
Qualifications for membership of a Legislative Assembly: A person shall not be qualified to be chosen to fill a seat in the Legislative Assembly of a State unless (a) in the case of a seat reserved for the Scheduled Castes or for the Scheduled Tribes of that State, he is a member of any of those castes or of those tribes, as the case may be, and is an elector for any Assembly consti tuency in that State; (b) in the case of a seat reserved for an autonomous district of Assam, other than a seat the constituency for which comprises the cantonment and municipality of Shillong, he is a member of a Scheduled Tribe of any autonomous district and is an elector for the Assembly constituency in which such seat or any other seat is reserved for that district; and (c) in the case of any other seat, he is an elector for any Assembly constituency in that State"; Coming to the Legislative Council, we find that the qualifications for the four "electorates" are indicated by article 171(3)(a)(b)(c) & (d).
And, the qualifications of candidates for seats in a Legislative Council are given in Section 6 of the Representation of People Act 43 of 1951 which lays down: "6.
Qualifications for membership of a Legislative Council. (1) A person shall not be qualified to be chosen to fill a seat in the Legislative Council of a State to be filled by election unless he is an elector for any Assembly con stituency in that State.
(2) A person shall not be qualified to be chosen to fill a seat in the Legislative Council of a State to be filled by nomination by the Governor unless he is ordinarily resident in the State".
A look at Article 171(2), set out above, indicates that the composition of the Legislative Council of a State was a matter to be also provided for by law made by Parliament.
It is evident that the constitution makers had directed their attention specifically towards the methods of election and composition of the legislature 179 of each State.
They themselves prescribed same qualifications to be possessed by members of each House of the Legislature.
Article 173 lays down : "173.
A person shall not be qualified to be chosen to fill a seat in the Legislature of a State unless he (a) is a citizen of India, and makes and subscribes before some person authorised in that behalf by the Election Commission an oath or affirmation according to the form set out for the purpose in the Third Schedule; (b) is, in the case of a seat in the Legislative Assembly, not less than twenty five years of age and, in the case of a seat in the Legislative Council, not less than thirty years of age; and (c) possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament".
An important and very noticeable difference between, quali fications prescribed by Parliament for the membership of a Legislative Assembly by Section 5 of the Representation of People Act of 1951 and those for the membership of a Legislative Council by Section 6 of that Act is that, so far as a member of the Legislative Assembly is concerned, he or she has to be an Elector in the Constituency from which he or she stands, but a member of a Legislative Council in a State is not, similarly, required to be a member of the electorate.
All that Parliament says, in Section 6 of the Representation of People Act, 1951, is that the, person to be chosen as a member of the Legislative Council has to be "an elector for any Assembly constituency" in the State to whose legislative Council he was to be chosen.
He has to be "ordinarily resident" in the State to qualify for nomination.
No other qualifications, apart from those found in Article 173 of the Constitution and Section 6 of the Representation of People Act of 1951, are to be found laid down anywhere.
But, an additional qualification was found, by the judgment under appeal before us, to exist by resort ' ing to a presumed legislative intent and then.
practically adding it to those expressly laid down.
It may be possible to look for legislative intention in materials outside the four corners of a statute where its language is really ambiguous or conflicting.
But, where no such difficulty arises, the mere fact that the intentions of the law makers, sought to be demonstrated by what was said by some of them or by those advising them when the Constitution was on the anvil, were really different from the result which clearly follows from language used in the Legislative provisions under consideration, could not authorise the use of such an exceptional mode of construction.
"It is well accepted", said Lord Morris (See: Davies Jankins & 180 Co. vs Davies) ', "that the beliefs and assumptions of those who frame Acts of Parliament cannot make the law".
The judgment under appeal, after discussing the manner in which Article 171 of the Constitution was framed and the different views expressed about the nature of the Second Chambers to be set up by it in our States, says : "The system of functional, which is also called occupational representation, as distinguished from territorial representation, was borrowed from the Irish Constitution and that is the underlying principle in Article 171.
The opinion of political thinkers and statement on the wisdom of such representation may not be unanimous.
Whatever be the divergent views, the accomplished fact in the Constitution is that such a representation has been given recognition and it has to be implemented.
In making the Legislative Council as a representative body, the framers of the Constitution have not made it exclusively one of elected representatives according to their occupations.
It is intended to be a hetergenous and more broad based body consisting of persons of different walks of life, some elected and some nominated, each with the experience in his own field of activity".
The learned Judge concluded; "It is with these objects that clauses (a),, (b), and (c) of Article 171(3) have been conceived so that persons in those walks of life could make their contribution to the Legislative functions of the State.
Article 1.71 in fixing the composition of the Legislative Council as a functional chamber.
has also indirectly laid down certain qualifications and also disqualifications of members to be elected thereunder".
Whatever may have been the opinions of Constitution makers or of their advisers, whose views are cited in the judgment under appeal, it is not possible to.
say, on a perusal of Article 171 of the Constitution, that the Second Chambers set up in nine States in India were meant to incorporate the principle of what is known as "functional" or "vocational" representation which has been advocated by Guild Socialist and Syndicalist Schools of political thought.
, Some of the observations quoted above, in the judgment under appeal itself, militate with the conclusions reached there.
All that we can infer from our Constitutional provisions is that additional representation or weightage was given to persons possessing special type of knowledge and experience by enabling them to elect their special representatives also for Legislative Councils.
The concept of such representation does not carry with it, as a necessary consequence, the further notion that the representative must also possess the very qualifications of those he represents.
In the case of the Graduates ' constituency, it is provided in Article 171(3)(b) that the electors must have held their degrees (1) 1967 2 W.L.R. p. 11 39 @ 11 56.
181 for at least three years before they become qualified an electors.
Thus,. in laying down the test of competence of voters of such a constituency, more possession of degrees by them was not considered sufficient.
Moreover, graduates are not an occupational or vocational group but merely a body of persons with an educational qualification.
It would, therefore, not be correct to describe the additional representation sought to be given to them as an attempt to introduce the "functional" or "vocational" principle.
On the face of it, Article 171 appears to be designed only to give a right to choose their representatives to those who have certain types of presumably valuable knowledge and education.
If the presumption of their better competence to elect a suitable representative in there, as we think that there must be, it would be for the members of such a constituency themselves to decide whether a person who stands for election from their constituency possesses the right type of knowledge, experience, and wisdom which satisfy certain standards.
It may well be that the constitution makers, acting upon such a presumption, had intentionally left the educational qualifications of a candidate for election from the graduates constituency unspecified.
A test laid down by Blackburn J. in R. vs Cleworth(1), to determine what the correct presumption, arising from an omission in a statute should be, was whether what was omitted but sought to be brought within the legislative intention was "known" to the law makers, and could, therefore, be "supposed to have been omitted intentionally".
"It makes no difference", says Craies 'in "Statute Law"(2) "that the omission on the part of the legislature was a mere oversight, and that without doubt the Act would have been drawn otherwise had the attention of the legislature been directed to the oversight at the time the Act was under discussion".
In the case before us, it could not possibly be said that the question to be dealt with was not "known" to the, legislators.
It could not even be said that qualifications of the electors/ as well as of those to be elected were not matters to which the attention of the law makers, both in the Constituent Assembly and in Parliament, was not specially directed at all or that the omission must be by mere oversight.
The provisions discussed above demonstrate amply how legislative attention was paid to the qualifications, of the electors 'as well as of the elected in every case.
Hence, the correct presumption, in such a case, would be that the omission was deliberate.
A glance at the legislative history lying behind Article 171 also enables us to reach the conclusion that the omission by the Constitution makers or by Parliament to prescribe graduation as (1) [1864] 4 BSS 927, 934 (2) Crains on Statute Law 5th En.
182 must be deliberate.
Sections 60 and 61 of the Government of India Act, 1935, deal with composition of Provincial legislatures and of the two Chambers of such legislatures.
The Upper Chambers in the Provincial Legislatures were to be composed of members retiring every third year in accordance with provisions of the Fifth Schedule to the Act.
Rule 10 of this Schedule lays down: "In a Province in which any seats are to be filled by representatives of backward areas or backward tribes, representatives of commerce, industry, mining and planting, representatives of landholders, representatives of universities or representatives of labour, persons to fill those seats. . . shall be chosen in such manner as may be prescribed".
On 30th April, 1936, the Government of India (Provincial Legislative Assemblies) Order of 1936 was issued by His Majesty in Council.
It prescribed the qualifications of persons to be chosen from the "special constituencies" set up for representation in the Legislative Councils, A glance at the provisions relating to these qualifications, including those for the University seats, indicates that it was invariably expressly provided, where it was so intended, that a necessary qualification of a candidate for a seat was that he or she should be "entitled to vote for the choice of a member to fill it".
Hence, legislative history on the subject would also indicate.
that, whenever any qualification of the candidate was intended to be imposed, this was expressly done and not left to mere implications.
We think that the view contained in the Judgment under appeal, necessarily results in writing some words into or adding them to the relevant statutory provisions to the effect that the candidates from graduates ' constituencies of Legislative Councils must also possess the qualification of having graduated.
This contravenes the rule of "Plain meaning" or "literal" construction which must ordinarily prevail.
A logical corollary of that rule is that "a statute may not be extended to meet a case for which provision has clearly and undoubtedly not been made" (See: Craies on Statute Law 6th Edn.
p. 70).
An application of the rule necessarily involves that addition to or modification of words used in statutory provisions is not generally permissible (see e.g. Sri Ram Narain Medhi & Ors.
vs The State of Bombay(1), British India General Insurance Co. Ltd. vs Captain Itbar Singh & Ors.
(2), R. G. Jacob vs Union of India(3).
Courts may deppart from this rule only to avoid a patent absurdity (see e.g. State 'of Madhya Pradesh vs M/s. Azad Bharat Finance Co. & Anr.(4).
In Hira Devi vs District Board, Shahiahanpur(5), this Court observed (1) ; (2) (3) ; (4) A.T.R. (5) A.T.R. 365.
183 "No doubt it is the duty of the Court to try and harmonise the various provisions of an Act passed by the Legislature.
But it is certainly not the duty of the Court to stretch the words used by the Legislature to fill in gaps or omissions in the provisions of an Act".
Cases in, which defects in statutory provisions may or may not be supplied by Courts have been indicated in well known works such as Sutherland 's "Statutory Construction" (3rd Edn.(Vol. 2) (Paragraph 4924 at pages 455 558) and in Crawford 's "Construction of statutes" (1940 Edn.).
Only one passage from the last mentioned work need be cited here: (p. 269) : "Where the statutes meaning is clear and explicit, words cannot be interpolated.
In the first place, in such a case, they are not needed.
If they should be interpolated, the statute would more than likely fail to express the legislative intent, as the thought intended to be conveyed might be altered by the addition of new words.
They should not be interpolated even though the remedy of the statute would thereby be advanced, or a more desirable or just result would occur.
Even where the meaning of the statute is clear and sensible, either with or without the omitted word, interpolation is improper, since the primary source of the legislative intent is in the language of the statute".
We think that the language as well as the legislative history of Articles 171 and 173 of the Constitution and Section 6 of the Representation of People Act, 1951, enable us to presume a deliberate omission of the qualification that the representative of the Graduates should also be a graduate.
In our opinion, no absurdity results if we presume such an intention.
We cannot infer, as the learned Judge of the Madras High Court had done, from the mere fact of such an omission and opinions about a supposed scheme "functional representation" underlying Article 171 of our Constitution, that the omission was either unintentional or that it led to absurd results.
We think that, by adding a deemed to be necessary or implied qualification of a representative of the Graduates which the Constitution makers, or, in any event, the Parliament, could have easily imposed, the learned Judge had really invaded the Legislative sphere.
The defect, if.
any, in the law could be removed only by law made by Parliament.
We conclude, after considering all the relevant constitutional and statutory provisions relating to the qualifications of a candidate for election from the Graduates ' constituency of the Legislative Council of the Madras State, that the appellant possesses all the qualifications laid down for such a candidate.
184 Therefore, we allow this appeal, set aside the Judgment and order of the Madras High Court, and dismiss the, Respondent 's election petition.
The appellant is entitled to his costs throughout.
V.P.S. Appeal allowed.

dataset_name: IN-Abs

summary:
The respondent challenged the appellant selection to the Madras Legislative, Council from the Madras District Graduates ' Constituency on the grounds, (1) that, the purpose of article 171 of the Constitution was to confer a right of functional representation upon persons possessing certain educational or other qualifications so that the appellant who was not a graduate could not be elected to the Legislative Council from the Graduates ' Constituency; (2) that, it would be absurd and destructive of the concept of representation that an individual, who did not possess the essential or basic qualification of the electors, should be their representative, and (3), that, the Constitution, being an organic instrument, must be interpreted in a broad and liberal manner so as to give effect to the underlying principles and purposes of the system of representation sought to be embodied in it.
The High Court set aside the election.
Allowing the appeal to this Court, HELD: (1) (a) Graduates are not an occupational or vocational group, but merely a body of persons with particular educational qualifications.
It would, therefore, not be correct to describe the additional representation sought to be given to them in the Legislative Council as an attempt to introduce functional or vocational representation.
[181B] (b) The qualifications of the elector constituting the electorate, and of those who can represent each electorate, contemplated by the Constitution and supplemented by Parliament, are separately set out for each House.
As regards the Legislative Council, the qualifications for the four electorates are indicated in article 171 (3) (a), (b), (c) and (d).
The plain and ordinary meaning of the term "electorate is that it is the body of persons who elect.
It does not take in the extended notion of a body of persons electing representatives from amongst themselves.
It does not impose a requirement that the person to be chosen must also be a member of the electorate.
[177D F] (c) The qualifications of candidates for seats in the Council are given in section 6 of the Representation of the People Act, 1951.
While a member of the Legislative Assembly should also be an elector in the constituency from which he stands, the member of the Legislative Council is not so required to be a member of the electorate.
All that is required is that the person to be chosen as a member of the Legislative Council should be an elector for an Assembly constituency in the State to whose Legislative Council he is chosen.
[179E] (d) Whatever may have been the opinions of the Constitution makes or their advisors it is not possible to say, on a perusal of article 171, that the Second Chamber found here were meant to provide for functional 173 or vocational representation.
AR that can be inferred is that additional representation or weightage was given to persons possessing special types of knowledge and experience by enabling them to elect their special representatives.
The concept of such representation does not carry with it the further notion that, the representative must also possess the very qualifications of those he represents.
The High Court erroneously travelled outside the four corners of the statutory provisions when there was no ambiguity at all in the language, and by resorting to a presumed legislative intent, it added a qualification to those expressly laid down in the Constitution and other statutory provisions.
[1 80F] Davies Jankins & Co. vs Davies, 1967 (2) W.L.R. p. 1139 (a_) 1156, inferred to.
2(a) Article 171 is designed only to give a right to choose their representatives to those who have certain types of presumably valuable knowledge and education.
If the presumption of their better competence to elect a suitable representative is there, it would be for the members of such a constituency themselves to decide whether a person who stands for election from their constituency possesses the right type of knowledge , experience and wisdom.
The Constitution makers, acting on such a presumption, may have intentionally left the educational qualifications of candidate for election from the Graduates Constituency unspecified.
[181C] (b) It could not possibly be said that the question to be dealt with was not known to the legislators.
The provisions of law show that the qualifications of the electors as well as of those to be elected were matters to which the attention of the law makers, both in the Constituent Assem bly and in Parliament, was specifically directed.
Hence, the omission must have been deliberate.
[181G] R. vs Cleworth, (1864) 4 BSS 927 and Craies on Statute Law6th Edn.
1963 72, referred to.
(c) The legislative history of the Article also shows that the omission by the Constitution makers or by Parliament, to prescribe graduation as a qualification of the candidate from the Graduates ' constituency, was deliberate.
The provisions of the Government of India (Provincial Legislative Assemblies) Order, 1936, prescribing the qualifications of persons to be chosen from special constituencies set up for representation in the Legislative Councils under the Government of India Act, 1935, indicate that it was invariably expressly provided where it was so intended, that a necessary qualification of a candidate for a seat was that he should be entitled to vote for the choice of a member to fill it.
Such a qualification was not left to mere implication.
[181H 182E] (3) It is true that a constitution should be interpreted in a broad and generous spirit, but the rule of "plain meaning" or "literal" interpretation could not altogether be abandoned.
The object of interpretation is to discover the intention of the law makers, and this object can obviously be best achieved by first looking at the language used in the relevant provisions.
A logical corollary of the rule of literal interpretation is that a statute may not be extended to meet a case for which provision has clearly and undoubtedly not been made; and an application of this rule necessarily involves that addition to, or modification of, words used in statutory provisions is not generally permissible.
Courts may depart from this rule only to avoid a patent absurdity.
[175D] Sri Ram Narain Medhi & Ors.
vs The State of Bombay, A.I.R. ; British India General Insurance Co. Ltd. vs
Captain 174 itbar Singh & Ors., ; R. C. Jacob vs Union of India; , ; State of Madhya Pradesh vs M/s. Azad Bharat Finance Co. & Anr.
A.I.R. 1967 S.C. 276; Hira Devi vs District Board, Shabiahanpur, ; & 365, referred to.
From the language as well as the legislative history of articles 171 and 173 of the Constitution and section 6 of the Representation of the People Act, 1951, it could be presumed that the omission of the qualification that the representative of graduate should also be a graduate was deliberate.
By presuming such an intention of the law makers, no absurdity results.
By adding 'deemed to be necessary ' or 'implied ' qualification of a representative of the graduates, which the Constitution makers or Parliament could easily have imposed, the Court would be invading the legislative sphere.
[183F]