judgement:
il Appeal No. 431 of 1976.
(Appeal by Special Leave from the judgment and order dated 31 3 1975 of the Gujarat High Court in Special Civil Application No. 2355 of 1974).
G.L. Sanghi, K.J. John, S.R. Kureshi and D. N, Mishra, for the appellants.
I. N. Shroff and H.S. Parihar, for Respondent No. 1.
M.N. Shroff, for Respondent No. 2.
The Judgment of the Court was delivered by GOSWAMI, J.
The only question that arises in this appeal by special leave is whether the order of acquisition passed by the Municipal Commissioner under section 284J of the Bombay Provincial Municipal Corporations Act, 1949, as applicable to Gujarat, is invalid and void for non compli ance with section 5A of the Land Acquisition Act, 1894.
The Municipal Corporation of the city of Ahmedabad (briefly the Corporation) by its resolution of December 15, 1966, authorised its Commissioner under section 2841 of the Bombay Provincial Municipal Corporations Act 1949 (briefly the Bombay Act) to provide housing accommodation for the poorer classes.
In pursuance of this authority of the Corporation the Commissioner passed the impugned order of compulsory acquisition on October 9, 1967, under section 284J of the Bombay Act in respect of 33,357 sq.
of land final plots Nos. 11 to 25 of Town Planning Scheme No. V of Dariapur, Kazipur Ward.
Out of this area the land belonging to the appellants measures about 1694 sq.
It is averred by the appel lants that this area is "predominantly a commercial area and is almost fully built upon".
The aforesaid order of compulsory acquisition was pub lished in the official gazette of January 25, 1968 and in the local newspapers of February 10/11, 1968.
Individual notices were also served on the concerned parties in ac cordance with law inviting objections from the owners in cluding the appellants which were lodged in due course.
These objections were submitted to the Standing Committee by the Commissioner with his suggestions and the Committee by its resolution No. 1942 of January 21, 1969, approved the said order of compulsory acquisition.
The State Government thereafter confirmed the said order on January 6, 1972.
The appellants had requested for a personal hearing with regard to their objections and their grievance is that the same was denied to them.
It is common ground that no personal hearing was given to the appellants with regard to their objections by the Commissioner.
Even so a period of nearly five years was taken in the process of finalising the order.
After confirmation of the order of acquisition by the Government there is a provision for appeal under Schedule B to the Bombay Act.
7 1003 Sc1176 74 The appellants preferred an appeal to the City Civil Court at Ahmedabad and amongst several other grounds raised the question of the denial of personal hearing to them.
The learned Judge of the City Civil Court did not accede to the contention and by his order of April 10, 1974, held that the principles of natural justice were satisfied in this case inasmuch as they had been given an opportunity to submit their objections to the acquisition.
The appellants then took the matter to the High Court of Gujarat under article 227 of the Constitution where the same grievance as to the denial of personal hearing was reiterat ed.
The High Court by its order of March 31, 1975 refused to interfere with the order holding that section 5A of the Land Acquisition Act was duly complied with.
The High Court also held that the City Civil Court Judge was right in rejecting the submission since "no oral hearing was ever claimed in the objection".
Hence this appeal, by special leaye, which was ordered by this Court to be expedited.
From a perusal of the judgment of the City Civil Court as well as that of the High Court we are of opinion that there was no proper appraisal of the real issue in the matter.
It appears that both the City Civil Judge and the High Court were only concerned with whether the rules of natural justice were complied with in the matter of acquisi tion of the land in question.
We think, as will be shown below, that the City Civil Court and the High Court are not right in their approach.
We find that there is reference to section 5A of the Land Acquisition Act in the order of the High Court and it is apparently assumed by the High Court that the said sec tion is applicable.
All the same the High Court erroneously thinks that no personal hearing was necessary and the sec tion is fully completed with by mere submission.
of the written objection particularly because "no oral bearing was ever claimed".
Mr. Sanghi submits that so far as the appellants are concerned they did request for a personal hearing and that there is no denial by the respondents of their averment to that effect in their special leave petition.
The City Civil Judge also noted in his judgment that "some of the appel lants had in terms demanded a personal hearing in their objections memorandum".
Be that as it may section 5A of the Land Acquisition Act does not rest on a person 's demand for personal hearing.
The matter may be different if a person whose property is acquired abandons the right to a personal hearing with which aspect we are not concerned in this appeal.
Although the judgment of the High Court, as stated earlier apparently rests on the asumption that section 5A of the Land Acquisition Act is applicable Mr. Shroff appearing on behalf of the respondents submits that that section is unavailable in the case of acquisition under the Bombay Act, Mr. Sanghi also, fairly enough, has not taken advantage of the assumption in the judgment and has submitted by drawing our attention to the various provisions of the Act that section 5A is clearly attracted in a matter of acquisition under the Bombay Act.
75 We will, now, examine the rival contentions with regard to the applicability of section 5A of the Land Acquisition Act.
The title of Chapter XVI of the Act is "Improvement Schemes" and opens with section 270.
There are various sub headings in this Chapter and we are concerned in this appeal with only a few sections under the sub title "Provi sion of housing accommodation for the poorer classes", This sub title in the Chapter opens with section 2841: 2841 (1) "If the Corporation, upon considera tion of a representation from the Commissioner or other information in its possession, is satisfied that within any area in any part of the City it is expedient to provide housing accommodation for the poorer classes and that such accommodation can be conveniently provided without making an im provement scheme, it shall cause such area to be defined on a plan and pass a resolution authorising the Commission and the Commissioner shall there upon be empowered to provide such accommodation " * * * * * * Section 284J provides that "the Commissioner may for the purposes of the foregoing section on behalf of the Corporation (a) acquire any land including any buildings thereon as a site for the erection of buildings for the poorer classes".
* * * * Section 284K provides as follows : 284K. (1) "Land for the purposes of the foregoing section may be acquired by the Commis sioner by agreement upon obtaining the requisite sanction under section 77, or he may, with the sanction of the Standing Committee, be authorised to acquire land for those purposes by means of a compulsory acquisition order made and submtited to the State Government and confirmed by it in accord ance with the provisions of Schedule C to this Act.
* * * * * * (3) The provisions of Schedule B to this Act shall have effect with respect to the validity and date of operation of a compulsory acquisition order made under this section".
* * * * * * The next important section is section 284N which reads as under : 284N. "The Land Acquisition Act, 1894 (in this and the next succeeding sections referred to as 'the Land Acquisition Act ') shall to the extent set forth in Appendix I regulate and apply to the acquisition of land under this Chapter, otherwise than by agreement, and shall for that purpose be deemed to form part of this Chapter in the same manner as if enacted 76 in the body thereof, subject to the provisions of this Chapter and to the provisions following namely : " * * * * Thus, section 284N referentially incorporates in the Bombay Act certain provisions of the Land Acquisition Act as detailed in Appendix I to the Bombay Act.
Out of those provisions we are only concerned with Part 1I (Acquisition) of the Land Acquisition Act containing sections 4 to 17 including section 5A.
According to Appendix I all the sections in Part Il of the Land Acquisition Act except subsection (1) of section 4, section 6 and sub section (2) of section 17 are bodily incorporated in the Bombay Act.
Those provisions are deemed to be part and parcel of the Bombay Act.
Hence section 5A is clearly a part of the Bombay Act in terms of Appendix I.
It is true section 284 N provides that the incorporated provisions of the Land Acquisition Act are subject to the provisions of Chapter XVI and to those contained in section 284N itself.
That is to say, if there is any inconsistency between a provision in Chapter XVI of the Bombay Act or in section 284N itself and that in the Land Acquisition Act, the former will prevail over the grafted provisions of the.
Land Acquisition Act.
This is, however, not to say that where section 5A is deemed to be part of the Bombay Act, there is a further requirement to show in the Bombay Act an express provision for affording an opportunity of personal hearing.
This is the error into which, earlier, the City Civil Judge fell.
The heart of section 5A of the Land Acquisition Act is the hearing of objections and under sub section (2) of that section a personal hearing is mandato rily provided for.
When, therefore, section 5A of the Land Acquisition Act is applicable under Appendix I of the Bombay Act and there is nothing to show expressly or by necessary implication that the said section or any part of it is excluded under section 284N or under any other provi sion in Chapter XVI as a whole the right to personal hearing under the Bombay Act cannot vanish or be defeated.
Mr. Shroff fairly and, in our opinion, rightly concedes that there is no express ouster of section 5A of the Land Acquisition Act under the provisions of Chapter XVI of the Bombay Act.
He, however, submits that there is a special machinery under section 284K of the Act disclosed in Sched ule C and in Schedule B attached to the Bombay Act and since section 284N is subject to the provisions of Chapter XVI these Schedules form part of the Chapter.
Assuming that Schedule C and Schedule B are part of Chapter XVI we are unable to read in the provisions contained in these two Schedules any exemption from the right to personal hearing mandatorily required under section 5A of the Land Acquisi tion Act.
It is true that the mode of acquisition of land for housing accommodation is provided for under section 284K and that the order of compulsory acquisition made by the Commis sioner has to be confirmed by the State Government in ac cordance with the provisions of Schedule C to the Bombay Act.
Broadly, clause 2 of Schedule C provides that before submitting the order to the State Government the Commissioner, 77 inter alia, has to publish the order in the official gazette and in three or more newspapers.
The Commissioner has also to serve on persons specified in clause 2(b) notices calling for objections, etc.
Clause 3 provides that upon compliance with the provisions of clauses 1 and 2 the Commissioner shall submit to the Standing Committee any objections re ceived under clause 2 and any suggestions he may wish to make in that respect.
Under clause 4 the Standing Committee shall after consideration of any such objections and sugges tions make suCh modification in respect of such order as it may think fit and the Commissioner shall thereafter submit the order as modified by the Standing Committee to the State Government for confirmation.
It is manifest that the proce dure under the scheme of Schedule C will be breached if the Commissioner does not afford a personal hearing to the objectors even in order to be able to fortify his sugges tions which he has to submit to the Standing Committee along with the objections.
Since the Standing Committee is enti tled to have his properly considered suggestions which may enable it even to modify the order of acquisition it is necessary that the Commissioner gives a personal hearing to the objectors before he is able to make his suggestions worthy in the context of the objections lodged.
Otherwise it will be only an empty formality and the suggestions will be devoid of much of practical utility to the Committee.
Schedule C, therefore, does not even by necessary implica tion rule out a right to personal hearing.
Clause 2 of Schedule B provides for an appeal to a Judge of the City Civil Court .in
Ahmedabad and elsewhere to a Judge of the District Court whose decision shall be final.
Mr. Shroff submits that provision for an appeal against the acquisition order after confirmation by ' the State Govern ment provides for appropriate remedy before a judicial Tribunal.
This also, says Mr. Shroff, goes to indicate, by necessary implication, that personal hearing required under section 5A of the Land Acquisition Act is dispensed with and the remedy provided for under the provisions of the Bombay Act read with the two Schedules is exhaustive and necessari ly excludes the application of section 5A of the Land Acqui sition Act and with it the right of personal hearing provid ed thereunder.
We should make it clear that provision for appeal is not a complete substitute for a personal hearing which is pro vided for under section 5A of the Land Acquisition Act.
This will be evident from a perusal of clause 3 of Schedule B itself.
The character of the appeal contemplated under clause 3(ii) of Schedule B is only with regard to the examination of the following aspects : (1 ) whether the order or approval of the plan .is within the powers of the Bombay Act, and (2) whether the interests of the appellant have been substantially prejudiced by any requirement of this Act not having been complied with.
The appeal is confined under clause 3 of Schedule B to the examination of only the twin aspects referred to above.
There is no provision for entertainment of any other rele vant objection to the acquisition of 78 land.
For example a person whose land is acquired may object to the suitability of the land for the particular purpose acquired.
He may again show that he will be at an equal disadvantage if his land and house have to be acquired in order to provide accommodation for the poorer people as he himself belongs to the same class of the indigent.
He may further show that tbere is a good alternative land available and can be acquired without causing inconvenience to the occupants of the houses whose lands and houses are sought to be acquired.
There may be other relevant objections which a person may be entitled to take before the Commis sioner when the whole matter is at large.
The Commissioner will be in a better position to examine those objections and consider their.weight from all aspects and may even visit the locality before submitting his report to the Standing Committee with his suggestions.
For this purpose also a personal hearing is necessary.
The appeal court under the Schedule B to the Bombay Act, on the other hand, is not required under clause 3 to entertain all kinds of objections and it may even refuse to consider the objections mentioned earlier in view of the truncated scope of the hearing under clause 3(ii) as noted above.
We are, therefore, unable to accept the submission that the appeal provided for under Schedule B is a complete substitute for a right to personal hearing and as such by necessary implication ousts the applicability of Section 5A of the Land Acquisition Act.
Mr. Shroff further submits that under the Appendix I, inter alia, section 17(4) of the Land Acquisition Act is made applicale in an acquisition proceeding under the Bombay Act.
It is, therefore, submitted that under section 284N, sub section (4) any acquisition under the Bombay Act is treated as an acquisition under section 17 ( 1 ) of the Land Acquisition Act and since section 17(4) of the Land Acquisi tion Act is also brought in under the said Appendix, section 5A of the Land Acquisition Act, by necessary implication, should be held as excluded from the purview of the Bombay Act.
We are unable to accept this submission.
Even under section 17(4) of the Land Acquisition Act the appropriate Government has to direct, in a case of urgency, that the provisions of section 5A shall not apply.
There is no automatic exclusion of section 5A even under the Land Acqui sition Act.
That being the position there is no substance in the contention that because of subsection (4) of section 284N, section 5A should be held inapplicable in the case of an acquisition proceeding under the Bombay Act.
We are clearly.
of opinion that section 5A of the Land Acquisition Act is applicable in the matter of acquisition of land in this case and since no personal hearing had been given to the appellants by the Commissioner with regard to their written objections the order of acquisition and the resultant confirmation order of the State Government with respect to the land of the appellants are invalid under the law and the same are quashed.
It should be pointed out, it is not a case of failure of the rules of natural justice as such as appeared to be the only concern of the High Court and also of the City Civil Court.
It is a case of absolute non compliance with a mandatory provision under section 5A of the Land Acquisition Act which is clearly applicable in the matter of acquisition under the Bombay Act.
79 We should also point out that the acquisition order must be an order valid under the law and the question of appeal arises only after confirmation of the order by the State Government.
If the order is, at inception, invalid, its invalidity cannot be cured by its approval of the Standing Committee or by its confirmation of the State Government.
Besides, hearing of objections under section 5A of the Land Acquisition Act to be given by the Commissioner under the Bombay Act cannot be replaced by a kind of appeal hear ing by the City Civil Judge.
The Bombay Act having assigned the duty of hearing objections to the Commissioner, he alone can hear them and not the City Civil Judge even assuming that all objections could be entertained by him in appeal.
(See Shri Mandir Sita Ramji vs Lt. Governor of Delhi & Ors.(1)].
Beneficial schemes under welfare legislation have to be executed in accordance with law which creates the schemes.
The end does not always justify the means and it is no answer that the object of the scheme is such that it justi fies the implementer of the law to be absolutely oblivious of the manner of enforcement even though the manner is an integral part of the scheme, imposing under the law, re strictions on the rights of individuals.
Beneficial laws have to be simple and self contained.
To introduce provi sions of another Act referentially in vital matters creates avoidable difficulties and litigation highlighted by the case in hand.
It is refreshing that this Court disposed of this matter within about four months of granting of special leave.
In the result the appeal is allowed and the judgment of the High Court is set aside and with it the appellate order of the City Civil Judge also falls.
The Commissioner shall give a personal hearing to the appellants as required under sub section (2) of section 5A of the Land Acquisition Act and, thereafter, dispose of the matter in accordance with law.
In the circumstances of the case we will, however, make no order as to costs in this appeal.
V.P.S. Appeal al lowed.
S.C.R. 597.

summary:
Section 284 (1) of Chapter VI of the Bombay Provincial Municipal Corporations Act, 1949, as applied in Gujarat, provides that if the Corporation is satisfied that within any area in any part of a city under the Act it is expedient to provide housing accommodation for the poorer classes, it shall cause such area to be defined on a plan and pass a resolution authorising the Commissioner and the Commissioner shall thereupon be empowered to provide such accommodation.
Section 284J(a) provides that the Commissioner may, for such purposes, acquire any land including any buildings thereon.
Section 284K( 1 ) provides that the Commissioner may, with the sanction of the Standing Committee, be authorised to acquire the land by means of a compulsory acquisition order made and submitted to the State Government and confirmed by it in accordance with the provisions of Schedule C to the Act; and section 284K(3) provides that the provisions of Schedule B to the Act shall have effect with respect to the validity and date of operation of the compulsory acquisition order.
Clause 2, Schedule C, provides that before submitting the order to the State Government the Commissioner has to pub lish the order in the Official Gazette and in three or more newspapers.
The Commissioner has also to serve on persons specified in el.
2(b) notices calling for objections etc.
Clause 3 provides that upon compliance with the provisions of cls.
1 and 2 the Commissioner shall submit to the Stand ing Committee any objections received under el. 2 and any suggestions he may wish to make in that respect.
Under cl. 4, the Standing Committee shall, after consideration of any such objections and suggestions, make such modification in respect of such order as it may think fit and the Commis sioner shall thereafter submit the order, as modified by the Standing Committee, to the State Government for confirma tion.
Clause 2 of Schedule B provides for an appeal to a Judge of the City Civil Court in Ahmedabad and elsewhere to a Judge of the District Court against the order of acquisi tion confirmed by the State Government.
Section 284N refer entially incorporates in the Bombay Act certain provisions of the Land Acquisition Act, 1894, as detailed in Appendix I to the Bombay Act.
Accordingly all the sections in Part H of the Land Acquisition Act, except section 4(1), section 6 and section 17(2) are bodily incorporated in the Bombay Act.
Hence, section 5A of the Land Acquisition Act, which provides for personal hearing of the objectors to an acquisition, forms part of the Bombay Act.
In pursuance of the authority of the Corporation of the City of Ahmedabad the Commissioner passed an order of com pulsory acquisition under s.284J. published it in the Offi cial Gazette and in local newspapers, and served individual notices on the concerned parties.
The appellants, who objected to the acquisition were however, not given any personal hearing by the Commissioner inspite of a request by them.
The Commissioner submitted the objections with his suggestions, to the Standing Committee, and the Committee approved the order of compulsory acquisition.
The State Government thereafter confirmed the order.
The appellants preferred an appeal to the City Civil Court on the basis, inter alia, of the denial of personal hearing to them; but the Court held that the principles of natural justice were satisfied, and the High Court confirmed the order of the City Civil Court.
Allowing the appeal to this Court, 72 HELD: Section 5A, Land Acquisition Act, is applicable in the present case.
It is not a case of failure of the rules of natural justice but one of noncompliance with the manda tory provision in section 5A; and since no personal hearing had been given to the appellants by the Commisisoner, the order of acquisition, and the confirmation by the State Government are invalid.
[78 G H] (1) The incorporated provisions of the Land Acquisition Act are subject to the provisions of Chap.
XVI of the Bombay Act; that is, if there is any inconsistency between a provi sion in Chap.
XVI of the Bombay Act, and that of the Land Acquisition Act, the former will prevail.
But there is no express provision of the Chapter ousting the application of section 5A of the Land Acquisition Act.
[76 D E] (2) Schedule C does not, even by necessary implication, rule out the right to personal hearing.
On the other hand, since the Standing Committee is entitled to have the Commis sioner 's properly considered suggestions which may enable it even to modify the order of acquisition, it is necessary that the Commissioner gives a personal hearing to the objec tors before he makes his suggestions worthy in the context of the objections lodged, for otherwise, his.
suggestions will be devoid of much practical utility to Committee.
[77 C D] (3) The appeal provided for under Schedule B is not a substitute for the right to personal hearing.
The applica bility of section 5A is therefore not impliedly ousted by the provision for appeal.
[78 D] The appeal contemplated under Schedule B is only with regard to the, examination of two aspects, namely, whether the order or approval of the plan is within the powers of the Bombay Act; and whether the interests of the appellant have been substantially prejudiced by any requirement of the Bombay Act not having been complied with.
But there may be other relevant objections which a person may be entitled to take before the Commissioner when the whole matter is at large, such as, that the land is not suitable for the par ticular purpose, that he himself belongs to a poor class and would suffer disadvantage by the acquisition, or that there is a good alternative land available which can be acquired without causing inconvenience to the occupants of land sought to be acquired.
Hence, a personal hearing is neces sary.
The appellate court is not required to entertain such objections in view of its truncated scope and,, even assum ing that all such objections could be entertained by it, the duty of hearing objections under the Bombay Act is of the Commissioner and he alone can hear them and not a Judge of the Civil Court.
The acquisition order must be a valid order and the question of appeal arises only after, confir mation of such an order by the State Government.
[77 G H; 78 A D] Shri Mandir Sita Ramji vs Lt. Governor of Delhi, ; referred to.
(4) Merely because under section 284N(4) of the Bombay Act, the acquisition is treated to be under section 17(1), Land Acqui sition Act, and since section 17(4) is also applicable it could not be said that section 5A is excluded by necessary implication; because, even under section 17(4) of the Land Acquisition Act the appropriate Government has to direct, in a case of urgency, that the provisions of section 5A shall not apply.
There is no automatic exclusion of the section even under the Land Acquisition Act.
[78 E F] (5) If the order of acquisition is, at inception in valid, its invalidity cannot be cured by its approval by the Standing Committee or by its confirmation by the State Government.
[79 A] (6) The end does not always justify the means, and even beneficial schemes under welfare legislation have to be executed in accordance with the appropriate law.
It is no answer that the object of the scheme is such that it justi fies the implementer of the law to be absolutely oblivious of the manner of enforcement even though the manner is an integral part of the scheme, imposing under law, restric tions on the rights of individuals.
[79 C] [Beneficial laws have to be simple and self contained.
The introduction of provisions of another Act referentially in vital matters creates avoidable difficulties and Irrigation.
[79 D]


judgement:
Civil Appeal No. 1207 of 1975.
(Appeal by special leave from the judgment and order dated 5 8 1975 of the Punjab & Haryana High Court in Letters Patent Appeal No. 459/75).
J.S. Wasu, Adv.
General, Punjab and O.P. Sharma, for the appellants.
V.C. Mahajan and S.S. Khanduja, for respondent No. 1.
P.K. Pillai, for respondent No. 1.
The Judgment of the Court was delivered by KHANNA, J.
This is an appeal by special leave by the State of Punjab against the order of the Punjab & Haryana High Court, whereby at was directed that the Minister in charge of Irrigation Department be impleaded as a party in the writ petition filed by V.P. Duggal respondent.
The Minister was also directed to file his affidavit.
In the writ petition filed by him, Duggal respondent challenged notification dated January 29, 1974 fixing the seniority of the engineers n the Irrigation Department of the Punjab Government.
During the course of the heating of the writ petition, an order was made by the High Court on November 18, 1974 that the Minister concerned might give a personal hearing to the parties and thereafter pass the necessary order in the matter.
The Minister concerned thereafter heard the parties and made a speaking order on February 18, 1975 affirming the earlier seniority list.
The writ petition was thereafter amended, and 97 in the amended petition, Duggal respondent also challenged the validity of .the later order of February 18, 1975.
At the resumed hearing of the writ petition, the learned Judge hearing the petition directed that the Minister con cerned be impleaded as a party in the petition, as in the view of the learned Judge, allegation had been made against the Minister that he had deviated from the normal procedure while passing the impugned order dated February 18, 1975 inasmuch as he had dealt with the matter directly and by passed the Secretary of the Department.
Direction was also issued that the Minister should file an affidavit in regard to the allegations made in the petition.
At the hearing of the appeal before us, the learned Advo cate General for the State of Punjab has contended that the allegations made in the amended petition do not disclose any personal animus on the part of the Minister concerned and as such the High Court was in error in directing that the Minister be impleaded as a party.
The learned Advocate General has also assailed the direction of the High Court in sofar as the Minister has been called upon to file his personal affidavit.
As against that, Mr. Mahajan on behalf of Duggal respondent has urged that looking to the facts of the case if the High Court came to the conclusion that the Minister was a necessary or proper party, this Court should not interfere in the matter.
We have given the matter our consideration, and it seems to us that the direction for the impleading of the Minister as a party was given by the High Court with a view to apprise the Minister of the allegations made in the petition and thus to afford him an opportunity of controverting those allegations, if he so deemed proper.
Taking the totality of the facts and circumstances of the case, we do not feel persuaded to interfere with the order of the High Court adding the Minister as a party to the writ petition.
The High Court was, however, in our opinion in error in direct ing that the Minister concerned should file his affidavit.
It is essentially for the Minister concerned to decide in the light of the allegations made in the petition as to whether he should or should not file an affidavit.
We, therefore, decline to interfere with the order made by the High Court insofar as it has directed that the Minister be impleaded as a party.
The other part of the order whereby the Minister concerned was directed to file his personal affidavit is set aside.
The appeal shall stand disposed of accordingly.
The parties in the circumstances shall bear their own costs.
M.R. Appeal partly allowed.

dataset_name: IN-Abs

summary:
The respondent challenged the validity of a Government Notification, and also the Minister 's order upholding the same.
At the hearing, the High Court directed that the concerned Minister be impleaded as a party, and file his personal affidavit.
Challenging the directions, the appel lant contended before this Court, that the allegations against the Minister did not disclose any personal ammus on his part, and he was not liable to be added as a party or to file his affidavit.
Partly allowing the appeal, the Court, HELD: The direction for the impleading of the Minister as a party was given by the High Court with a view to ap praise the Minister of the allegations made in the petition and thus to afford him an opportunity of controverting those .allegations, if .he so deemed proper.
We decline to interfere.
It is essentially for the Minister concerned to decide in the light of the allegations made in the petition as to whether he should or should not file an affidavit.
[97 E F]


judgement:
Civil Appeal No. 1095 of 1970.
and 1677 of 1973.
From the Judgment and Order dated 26/27 9 1968 of the Gujarat High Court in Estate Duty Reference No. 3/67.
S.C. Manchanda and R.N. Sachthey, for the Appellant (In CA 1095/70).
K.B. Kazi and 1.
N. Shroff, for the Respondents in CA 1095/70.
S.T. Desai and J. Ramamurthi, for the Intervener.
S.T. Desai and J. Ramamurthi, for the Appellants in CA 1677/73.
S.P. Nayar, for the Respondent in CA 1677/73.
73 KRISHNA IYER, J. Is it permissible for judges to specu late on the philosophical edge of a human problem hidden by the litigative screen before settling down to examine its forensic facet ? If it is, we may make an observation about the question posed in this case without pejorative impli cations.
For many men in advancing age arrives a stage in life when to be or not to be stampedes them into doing things 11 dubious before God and evasive before Caesar and we have a hunch both the appeals before us smack of such a disposition as will be evident when the narration of facts and discus sion of law unfold the story.
A brief statement of the circumstances leading to the single critical legal issue, proliferating into a plurality of points, may now be made.
We begin with the facts in the Gujarat Appeal [Kantilal Trikamlal(1)] since the Madras Appeal [Ranganayaki Ammal(2)] raises virtually the same question, is plainer on the facts and may conveniently be narrated immediately after.
To appreciate the complex of facts we choose to enunciate the principal proposition of law canvassed before us by the Revenue in the two appeals.
Does a relinquishment by a decedent of a slice of a share or a partition of joint property in such manner that he takes less than his due effected within two years of his death with a view to relieve himself of a part of his wealth and pro tanto to benefit the accountable person, a near relation have to suffer estate duty under the (for brevity, the Act) ? One Trikamlal Vadilal (hereinafter referred to as the deceased) and his son Kantilal (referred to later as the accountable person) constituted a Hindu undivided family.
They continued as members of a joint and undivided Hindu family until November 16, 1953 when an instrument styled 'release deed ' was executed by and between the deceased and Kantilal.
Considerable controversy between the parties turns on the interpretation of this instrument and it will therefore be necessary for us to refer to its terms briefly later.
Suffice it to state for the present that, under this instrument, a sum of rupees one lakh out of the joint family properties was taken by the deceased in lieu of his share in the joint family properties and he relinquished his interest in the remaining properties of the joint family which were declared to belong to Kantilal as his sole and absolute properties and Kantilal also, in his turn, relinquished his interest in the amount of rupees one lakh given to the deceased and declared that the deceased was the sole and absolute owner of the said amount.
Within two years from 7 3 died and on his death the question arose as to what was the estate duty chargeable on his estate.
Kantilal, who is the accountable person before us, filed a return showing the status of the deceased as individual and the principal value of the estate as Rs. 1,0.6,724.
The Assistant Con troller was, however, of the view that the instrument dated November 16, 1953 operated as relinquishment by the deceased of his interest in the joint properties in favour of Kanti lal and that the consideration of rupees one lakh for which the one half share of the deceased in the joint family properties at the date of the said instrument was Rs. 3,44,058 and there was, therefore, a disposition by the deceased in favour of a relative for partial consideration and it was, accordingly by reason of section 27, sub section
(1 ), liable to be treated as a gift for the purpose of section 9, sub section
(1), and its value, viz., Rs. 3,44,058 after deducting Rs. 1,06,724 (being the amount received by the deceased together with interest) was includable in the principal value of the estate of the (1) (2) 12 deceased.
The Assistant Controller, accordingly, included a sum of Rs. 2,37,334/ being the difference between Rs. 3,44,058/ and Rs. 1,06,724/ in the principal value of the estate of the deceased.
On appeal by the accountable person, the assessment made by the Assistant Controller was confirmed by the Central Board of Revenue.
Though the main ground on which the Cen tral Board based its decision was the same as that which found favour with the Assistant Controller, viz., that under the instrument there was a disposition by the deceased of his interest in the joint family properties in favour of Kantilal for partial consideration and it was therefore by reason of section 27, sub section
(1 ), liable to be treated as a gift for the purpose of section 9, sub section
Another argument also appealed to the Central Board and that was one based on section 2(15), Explanation 2.
The 'Board held that, in any event, under the instrument there was extinguishment at the ex pense of the deceased of his interest in the joint family properties and there was therefore a deemed disposition by the deceased of the benefit which accrued to Kantilal as a result of such extinguishment and the charge to estate duty was accordingly attracted under section 9, sub section
(1), read with section 27, sub section
On reference, the High Court held in favour of the assessee and the Revenue has appealed hopefully, relying on a ruling of the Madras High Court which itself is the sub ject matter of the sister appeal.
Here the tables were 7 3 High Court as contrary to the ratio of this Court 's pro nouncements.
Were it so, it were bad; but judgments, even of the summit court, are not scriptural absolutes but rela tive reasonings and there is in them, read as a human whole, more than meets the legal eye which looks at helpful lines here and there.
We will examine them closely, especially because several High Courts are split on the construction of 'disposition ' in the Act, and seek to resolve the conflict of views and values.
Behind everyone 's attitude to tax is an unspoken value judgment! Before we move into the arena of argument we may silhou ette the facts of the Madras case.
The deceased, Bheema Naidu, and his predeceased son 's widow and children consti tuted a Hindu undivided family.
A little within the two year pre mortem line drawn by the Act he effected a partition and turnnig abnegator took a smaller share instead of his legal half, benefiting the others to the extent of the difference.
This difference was taxed as disposition of property under the Act and fiscal hierarchy was upheld by the High Court.
The assessees assail that decision before us.
The forensic focus has been rightly turned on the inter pretation of the critical provisions in the Act bearing on this controversy.
The social design, the legislative intent and the grammar of statutory construction visa vis the Act may have to be briefly surveyed while studying the language of the text and the impact of the context.
The scheme and spirit of the Act need to be understood first, for every social legislation has a personality and taxing statute a fiscal 13 philosophy without a feel of which a correct perspective to gather the intent and effect of the separate clauses cannot be gained.
Over four centuries ago Plowden said: "Each law consists of two parts viz., of body and soul; the letter of the law is the body of the law and the sense and reason of the law is the soul of the law.
" It is well known that death duties imposed on richer estates have a socialistic savour being motivated by the State 's policy of paring of unearned accumulation of inheritances and of diminishing glaring disparities of wealth.
This comprehensive but slow egalitar ian purpose fulfils itself fully only when it operates on property at death and near death; nor is there any rational ground to save some types of disposition or subtle transfer ence of wealth from exigibility, having due regard to the plain language of estate duty measures.
The broad object also includes inhibition of dispositions, unsupported by reasonable consideration, made on the eve of death or within 7 3 or manoeuvres, though sincere, being manifestly likely to defeat death duties posthumously flowing from properties covered thereby.
The fiscal policy is dual: (i) the collec tion of revenue; and (ii) reduction of the quantum of inher itance on a progressive basis directed towards a gentle process of equalisation.
The draftsman 's efforts have been exerted to use words of the widest import and, where the traditional use of words iS likely to limit, to use legal fictions, by deeming devices, to expand the semantics there of and to rope in all kinds of dealings with property for inadequate or no consideration within the statutory prox imity of death.
The sweep of the sections which will be presently set out must therefore be informed by the lan guage actually used by the legislature.
Of course, if the words cannot apply to any recondite species of property, courts cannot supply new logos or invent unnatural sense to words to fulfil the unexpressed and unsatiated wishes of the legislature.
Law, to a large extent, lives in the language even if it expands with the spirit of the statute.
It is good to remember that the Indian Act has some English genetic touch, being largely based on the English Finance Acts of 1854 Onwards.
This historical factor has current relevance for one reason. 'We may usefully refer to, although we may not be blindly bound by, English authorities under the corresponding statute and both sides have sought trans Atlantic light on this footing.
A skletal projection of the Act to the extent that concerns us here may now be made.
This Act exacts estate duty.
The charging section (section 5) authorizes the levy of a duty upon all property which passes on the death of a person dying after the commencement of the Act.
Two questions immediately arise.
What is property as envisaged in the charging section ? When does property pass on the death of a person ? The answer to the first question is furnished in an inclusive definition of 'property ' in section 2(15).
It is a wide ranging definition supplemented by two expansive definitions.
Of immediate moment is Explanation 2 which reads: "Explanation 2.
The extinguishment at the expense of the deceased of a debt or other rights shall be deemed to have been a disposition made by the deceased in favour of the 14 person for whose benefit the debt or fight was extinguished, and in relation to such a disposition the expression 'property ' shall include the benefit conferred by the extinguishment of a debt or 7 3 What property passes on the death of a person is indicated in an inclusive definition set out in section 2(15).
It covers property passing either immedi ately on the death or after any interval and 'on the death ' includes 'at a period ascertainable only by reference to the death '.
A glance at sections 9 and 27 gives more comprehension.
Section 9, among other provisions, introduces a legal fiction and since the meaning and implication of this section has been the subject of some disputation we had better allow the provision, in the first instance, to speak for itself: "9. Gifts within a certain period before death : (1 ) Property taken under a disposition made by the deceased purporting to operate as an immediate gift inter vivos whether by way of transfer, delivery, declaration of trust, settle ment upon persons in succession, or otherwise, which shall not have been bona fide made two years or more before the death of the deceased shall be deemed to pass on the death.
" Both the appeals deal with deceased persons who are mem bers of joint Hindu families and the subject matter of the dispositon was linked up with their share in the HUF (acro nymically speaking).
For this reason our attention has to be rivetted to sections 7 and 39 which resolve a likely difficul ty in ascertaining the interest in property which ' passes on the death of a deceassed coparcener in the joint family property the pristine rule of Hindu law being his share lapses in favour of the survivors and is not a descendible estate or a predictable fraction.
Sections 7 and 39, by a deeming process, circumvent this contretemps and crystallize a clear share in the coparcener at the point immediately before death.
Had the properties of the coparcener been partitioned immediately before the death what share in the joint family property would have been allowed to the de ceased represents the principal value of such share for the purposes of computation of death duty.
Section 27 is a strategic provision which deems as a gift all dispositions made by the deceased person in favour of his relations unless such disposition was made for full consideration or the deceased was concerned in a fiduciary capacity with the property. 'Relative ' means, in this context, near rela tions set out in section 27(2) and it is sufficient, for our pur pose, to know that in both the appeals the accounting persons are relatives failing within the statutory compass.
One more provision is pertinent to our enquiry and that deals with gifts within a certain period before death.
While there are other provisions dealing with gifts before 7 3 already been read and will later be explained.
Now to the boxing ring.
The bout has been fought over the import and amplitude of 'property ' as widened by section 2(15), especially Explanation 2 thereto.
Sri section T. Desai, appearing for the accountable per 15 son in the Madras case, and Shri Manchanda, arguing for the Exchequer in the Gujarat case, have levelled multi pointed attacks, but the crucial issue which is decisive of both cases is the same.
What is 'property ' for the purpose of this fiscal law ? Is it a misfortune for any legal system that a battle of semantics, where able judges and erudite advocates fundamen tally disagree on meanings of words pivotal to the very levy, should be a bonanza of the draftsman ? Simplicity and certainty is basic to the rule of law but is a consummation devoutly to be wished in our corpus juris.
Here we find ranged on both sides more than one High Court taking con trary but scholarly views.
A radically new legislative art is the urgent contemporary need if comprehensibility to the laity is to be a democratic virtue of law.
We will first unlock Explanation 2 to section 2(15), discover the signification of 'property ' expanded by the deeming clause and then read it in that wider sense along with the comprehensive provisions of sections 9, 27 and 5.
The key con cept that underlies this fasciculus of sections is property, the tax being charged on property passing on death.
Consid erable controversy has raged not only on the boundaries of the notion of 'disposition ' as specially defined, by import ing a legal fiction, but on the slightly ticklish and tricky placement in section 9 of the expression 'bona fide made two years or more before the death of.
the deceased '.
If we surmount these constructional difficulties, the answer to the core question arising in these appeals fol lows without much ado.
In fairness to counsel we must, at the threshold, set out the seven propositions formulated by Shri Desai for pin pointing the discussion.
They are: "1.
Partition is merely a process in and by which joint enjoyment is transferred into an enjoyment in severalty.
Since in such a case each one of the coparceners had an antecedent title which extended to the whole of the joint family properties and had therefore full interest 7 3 his share, no creation of right or interest in such specific property takes place in his favour nor does any extinguishment of any right or interest in the other property take place to his detriment.
Sections 9(1) and 27(1) form part of a single scheme.
The word 'disposition ' in section 27 (1 ) cannot be treated in isolation and must take its colour and meaning from the sense in which the word has been used in sec.
9 (1).
3. 'Disposition ' means 'giving away or giving up by a person of something which was his own , 606 SC).
No meaning howsoever wide and comprehensive of the expression 'disposition ' can possibly take in its ambit or coverage, parti tion , SC).
The mere fact that on a partition a copar cener takes a lesser share than he could have demanded does not mean 16 that there is 'disposition ' as contemplated in Explanation 2 to section 2(15) which defines 'proper ty '.
In such a partition, there is no extinguish ment, at the expense of such coparcener of any 'debt ' or 'other right '.
In a partition whether equal or unequal, there is no disposition by a coparcener in favour of any relative nor can it be said that there is any purported gift nor can it be treated as a gift.
Of course, the partition must be bona fide and not to evade duty.
The scope and ambit of Explanation 2 to section 2(15) becomes more clear when it is read in juxtaposi tion with Explanation 1.
The 'extinguishment ' contemplated in Expla nation 2 can be only in respect of any debt or other right which could have been created by the deceased and could have been enforced against him.
In a partition, no such thing takes place.
A definition is not a substantive rule of law operative by itself.
The definition of 'property ' in section 2(15) has to be read along with sections 9 and 27 and not in isolation.
Disposition, in section 9, even if read along with Explanation 2 to section 2(15), can only be of something the disponer had as his own at the time of the alleged extinguishment.
If it is of any interest in property it must be of an interest which was already vested in the disponer at the time of the disposition.
If of any other right, it must be of a right which had vested in him even when he gives it up.
" This 7 point programme of submission really brings out all the issues and sub issues, legal and factual, and the last two, over lapping in some respects, deserve first attention.
Before that, we must state, in precis form, the facts with reference to which the statute must speak.
The life of the law is not idle abstraction or transcendental meditation but fitment to concrete facts to yield jural results a synergetic action, not isolated operation.
Our discussion will therefore be conditioned by the material facts found in the two cases.
They are, tersely, though simplistically put, that the deceased person, being a member of a joint Hindu family, within two years before his death, entered into a partition of family properties bona fide, not as colourable or sham transaction, whereby he received towards his share an allotment substantially lower in value than would be his legal entitlement thus gladly suffering a diminution which would to that extent benefit the account able person by giving him a larger slice of the joint cake than was his due.
We assume, for the purpose of argument, that the divi sion in status and the partition made by metes and bounds have taken place simultaneously on the execution of the deed in question.
We also take it that the release, relinquish ment or division in the cases on hand has been bona rule made in the sense that one sharer has not over reached the other or played fraud or together the sharers have not gone through a mere simulacrum of a partition or exercise in colourable division.
We proceed on the further footing and that is law well established 16 now that 'partition is really a process in and by which a joint enjoyment is transformed into an enjoyment in several ty.
Each one of the sharers had an antecedent title and, therefore, no conveyance is involved in the process, as a conferment of a new title is not necessary '.
Now to the 7 points of Shri Desai.
The 6th point is a shade platitudinous and the other side does not dispute its soundness.
Certainly the ' definition of 'property ' in section 2(15) has to inform and must be read along with section 9 and section 27 and cannot be functional in isolation.
It is not a substantive rule of law operative by itself.
Similarly, point No. 7, stated the way it has been, may not be and has not been disputed before us, for the expression 'disposi tion ' in section 9 must be read with the definition in Explana tion 2 to section 2(15) since that is the whole purpose of a"deeming provision ' in the shape of a definition.
Granting that, the disponer cannot extinguish or part with what is not his rather a trite statement though since A can give or give up only what he has at the time of alienation or abnegation.
Shri Desai contends, and rightly, that the deceased could not dispose of any interest in property which did not earlier vest in him or at least at the time of the disposition.
No right can be given up without its being vested in him when he gives up.
This hypothesis in law turns the searchlight on the existence, at the time of the release or partition, of what has been disposed of under that deed.
What then was disposed of ? And did the deceased own at the time of disposition what he thus made over or extinguished ? An answer to these twin questions may be readily given, once we clear the confusion that has crept in at certain stages of the argument, by a process of inept importation and imperfect understanding of the rule of Hindu law regarding coparcenary.
The proposition is trite that in an undivided Hindu family coparceners have no predictable or defined shares but each has an antecedent title in every parcel of property and is jointly the owner and in enjoyment with the others.
But surely it is well established that at the very moment mem bers decide upon a partition eo instanti, a division in status takes place whereupon the share of the demanding members gets crystallised into a definite fraction and if there is division by metes and bounds the allotment of properties vivifies and specifies such shares in separate ownership.
These two processes or stages may often get telescoped when by consensus the coparceners jointly divide the properties.
Unequal divisions of properties knowingly made may not spell invalidity and mathematical equality may not be maintained always in a partition while, ordi narily, substantial fairness in division is shown.
Granting these legal positions, the more serious question which has been agitated before us is as to whether a willing, al beit ' bona fide, arrangement whereby a substantially reduced share is taken by the decedent consequentially vesting a proportionately larger estate in the recipient is a dispo sition falling within Explanation 2 to section 2(15) and there fore 'property ' within the substantive definition.
In this context we may have to read sections 9 and 27 for property taken under a disposition made.
by the deceased may be deemed to be a gift in favour of the accounting person in the circum stances mentioned in section 9.
Similarly, section 27 also tracks down certain dispositions made by deceased 18 persons in favour of relatives by treating them as 'gifts '.
The basic concept of disposition looms important in such circumstances.
This introductory statement of the law takes us to the other points of Shri Desai which we will tackle together, guided by the text of the sections aforesaid read in the light of the citations, aplenty, of cases Indian and Eng lish.
We may compendiously state, forgetting for a moment the complication in the Gujarat Case of the release deed executed by the decedent being either a relinquishmere or a partition that in both the appeals, the decedents and the recipients were members of an undivided Hindu family and within the two years proximity of death the partition ar rangement was effected where under a lesser share than due was allotted to the latter.
And indeed, it is this differ ence between what was due to the right of the deceased and what was actually taken that was treated as a 'gift ' by the Revenue based on the definition in section 2 (15 ), Explanation 2, plus sections 9 and 27.
The cornerstone of the whole case of the Revenue is thus the concept of 'disposition ' which we may point out, right at the outset, is not a term of art not legalese but plain English with wide import.
What is more, this word has acquired, beyond its normal ambit, an abnormal semantic expansion on account of a special definition with an Explanation super added.
In short, 'disposition ' in the Estate Duty law of India enjoys an extended meaning.
Even so, does it go so far as to cover a mere taking of a less than equal share by the deceased, the benefit on account of which has gone to the accountable person ? Before we enter the thicket of judicial conflict regard ing the meaning of 'property ' as extended by Explanation 2 to section 2(15), we may remind ourselves as courts that in a taxing statute one has to look merely at what is clearly said.
There is no room for any intendment.
There is no equity about a tax.
While the rulings on the point in the Act and in the allied Gift Tax Act will be adverted to presently, we may begin an incisive understanding of the Explanation 2 aforesaid.
The spirit thereof is obvious.
The framers of the Act desired by a deeming provision regarding 'disposition ' to cover extinguishments of debts and all other rights at the expense of and made by the deceased in favour of the beneficiary.
The substantive definition of 'property ' in section 2(15) is not exhaustive but only inclusive and the supplementary operation of Explana tion 2 takes in what is not conventionally regarded as 'disposition '.
Indeed, 'disposition ', even according to law dictionaries, embraces 'the parting with, alienation of, or giving up property. a destruction of property ' (Black 's Legal Dictionary).
The short question before us is whether the dispositive fact of giving up by a coparcener of a good part of what is due to him at the time of division to his own detriment and to benefit of another coparcener, can be called 'disposition ' in law.
Undoubtedly this operation, to use a neutral expression, is made up of simple jural facts that modify and extinguish jural relations and create in their place new rights whereby one gives or gives up and another gains.
This legal result, produced by voluntary 'action, is 'disposition ' within the scope of Explanation 2 to section 2(15).
The assessee 's contention, effectively presented by counsel, takes a legalistic course, ignoring the purpose, language and amplitude of 19 Explanation 2.
Argues Shri Desai, in a partition, equal or unequal, there is no element whatsoever of consideration, partial or full, since in a partition there is only an adjustment of rights and substitution of joint enjoyment by enjoyment in severalty.
In his view it is a confusion to mix up unequal partition with inadequate consideration and it is a worse confusion to talk in terms of bona fide and main fide partition where the shares are merely unequal by choice.
What is forgotten in this chain of reasoning is the office of Explanation 2 which is deliberately designed to take into its embrace what otherwise may not be 'disposi tion '.
Once we reconcile ourselves to the enlargement of sense imported by the Explanation, we part company with the traditional concept.
We have also to stress the expression 'other right ' in the Explanation which is of the widest import and cannot be constricted by reading it ejusdem generis and 'debt '. 'Other right ', in the context, is expressly meant considerably to widen the concept and there fore suggests a somewhat contrary intention to the applica tion of the ejusdem generis rule.
We may derive instruction from Green 's construction of the identical expression in the English Act Is.
45(2).
The learned author writes: "A disclaimer is an extinguishment of a right for this purpose.
Although in the event the person disclaiming never has any right in the property, he has the right to obtain it, this inchoate right is a 'right ' for the purposes of section 45(2), The ejusdem generis rule does not apply to the words 'a debt or other right ' and the word 'right ' is a word of the widest import.
Moreover, the expression 'at the expense of the deceased ' is used in an ordinary and natural manner; and is apt to cover not only cases where the extinguishment involves a loss to the deceased of a benefit he already enjoyed, but also those where it prevents him from acquiring the benefit.
The words 'the person for whose benefit the debt or other right was extinguished ' do not neces sitate a conscious intention to benefit some per son; it is sufficient that some person was in fact benefited. 'The motive or purpose of the deceased appears to me to be immaterial ', provided the transaction was gratuitous and did in fact benefit the other person concerned.
The extinguishment of a right may also cover the release of his interest by one joint tenant in favour of another." (Green 's Death Duties, 7th Ed., Butterworths, p. 149) Shri Desai and also Shri Kazi, appearing for the 'ac counting persons ' in the respective cases, urged that this expansive interpretation taking liberties with traditional jural concepts is contrary to this Court 's pronouncement in Getti Chettiar(1).
That was a case under the Gift Tax Act, 1958 and the construction of section 2(xxiv) fell for decision.
Certainly, many of the observations there, read de hors the particular statute, might reinforce the assessee 's stand.
This Court interpreted the expression 'transfer of property ' in section 2(xxiv) and held that the expression 'disposition ' used in that provision should be read in the (1) 20 context and setting of the given statute.
The very fact that 'disposition ' is treated as a mode of transfer takes the legal concept along a different street, if one may use such a phrase, from the one along which that word in the is travelling.
Mr. Justice Hegde rightly observed, if we may say so with respect, that 'Words in the section of a statute are not to be interpreted by having those words in one hand and the dictionary in the other.
In spelling out the meaning of the words in a section, one must take into consideration the setting in which those terms are used and the purpose that they are in tended to serve." (p. 605 606) The word 'transaction ' in section 2(xxiv) of the Gift Tax Act takes its The word that is it must be a 'transfer ' of property colour from the main clause that is , it must be a 'transfer ' of property in some way.
Since a partition is not a 'transfer ' in the ordinary sence of law, the Court reached the conclusion that a mere partition with unequal allotments not being a transfer, cannot be covered by section 2(xxiv).
A close reading of that provision and the judgment will dissolve the mist of misunderstanding and discloses the danger of reading observations from that case for application in the instant case.
The language of section 2 (15 ), Explanation 2, is different and wider and the reasoning of Getti Chettiar (supra) cannot there fore control its amplitude.
It is perfectly true that in ordinary Hindu law a partition involves no conveyance and no question of transfer arises when all that happens is a severance in status and the common holding of property by the coparcener is converted into separate title of each coparcener_as tenant in common.
Nor does subsequent partition by metes and bounds amount to a transfer.
The controlling distinction consists in 'the difference in definition between the Gift Tax Act [section 2(xxvi)] and the is.
2(15).
The Madras High Court in Valliammai Achi(1) took the correct view when it said on similar facts: "The facts of this case, in our opinion, seem to square with the second Explanation to section 2(15).
That, no doubt, is an Explanation to the inclusive definition of property.
But the language of it seems to go further and coins a deemed disposition in the nature of a transfer.
The mechanics of the transfer for the purposes of Explanation 2 consist in the extinguishment at the expense of the deceased of a right and the accrual of a benefit in the form of the right so given up in favour of the person benefited.
Transfer in a normal sense and as understood with reference to the Transfer of Property Act connotes a movement of property or interest or right therein or thereto from one person to another in praesenti.
But in the kind of disposition contemplated by the second Explanation, one can hardly trace such a transfer because of the mere fact of extinction of a certain right of the deceased which does not involve a movement, a benefit is , 808.
21 created in favour of the person benefited thereby.
In the present case the son who was a quondam coparcener had a pre existing right to every part of the coparcenary property, and if by a partition or a relinquishment on the part of one or more of the coparceners, the joint ownership is severed in favour of severalty, the process, having regard to the peculiar conception of a coparcenary, in volves no transfer .
But Explanation 2 is concerned not with that kind of situation, but an extinguishment of a right and creation of a bene fit thereby and this process is statutorily deemed to be a disposition which is in the nature of a transfer.
" This line of reasoning has our general approval.
From what we have said, the bold lines of opposing views emerge and they hinge on the conno tation of 'disposition '.
The High Courts, in their divergent stands, have lined up before both strands of reasoning.
Madras, a Full Bench of the Punjab High Court, and the classic observations in In re Stratton 's Disclaimer(1) support the point of view championed in Ranganayaki Ammal.
The contrary thinking finds support in Andhra Pradesh and Punjab as welt as in Gujarat (Kantilal).
The sense of our statutes modelled as they are on a series of English Acts, is best expressed so far as the concept of 'disposition ' is concerned, by Jenkins L.J., in In re: Stratton 's Disclaimer(1) relating to section 45 of the Finance Act, 1940 [which runs similar in strain to s.2(15).
Noting the strength of the sweeping and unparticularized reference to 'a debt or other right ', Jenkins L.J., repelled the application of the ejusdem generis rule and impart ed to the word 'right ' the widest import: "Mr. Russel did not seek to limit the effect of the words 'debt or other right 'by an applica tion of the ejusdem generis rule, and, in my view, it would not be possible to do so.
In the absence of any such restriction on its meaning the word 'right ' is a word of the widest import, and if, in accordance with my view, Mrs. Stratton can properly be held to have had a right in respect of the specific bequest and devise pending disclaimer, I see no ground for holding that it was not a right within the meaning of section 45 (2).
" * * * * "I confess that I am disposed to deprecate recourse in revenue legislation to sweeping gener alities of this kind, but the mere fact that an enactment is couched in general and comprehensive terms affords no ground for excluding from its operation transactions falling fairly within its provisions, general though they may be.
Roxburgh J., emphasized the impact of the legal fiction and observed: "A certain state of facts is to be deemed to be a different state of facts, and the line between fact and hypothesis seems to me to be drawn by the word 'deemed '.
If this be (1) [1958] 34 I.T .R. (Estate Duty) 47. 22 so, only three actual facts are expressed to be necessary in order to involve the hypothetical situation, (1) the existence of a right, (2) its extinguishment, (3) its extinguishment at the expense of the deceased.
When those three facts concur, the hypothesis goes into action, and the hypothesis is that these facts are equivalent to a disposition made by the deceased in favour of the person for whose benefit the right was extin guished.
These words, ill my opinion, all form part of the hypothesis and the concluding words are necessary to define the hypothetical disponee.
" The conventional construction of 'disposition ' has to submit to the larger sweep of the hypothetical extension by defini tion.
The Gujarat High Court has gravitated towards the nar rower construction of 'disposition ' and 'or right '.
It makes no specific reference to Stratton 's Disclaimer (supra) and the learned judges have insisted on transfer of inter est as a necessary indicium of every disposition.
Partition does not involve a transfer and therefore, cannot be a disposition, runs the logic of the Gujarat judgment.
Like wise, 'other right ', in Explanation (2), it is argued, cannot cover the case of partition as in the learned Judges ' view a transfer is a sine qua non.
We cannot agree, for reasons already stated, with this approach which defeats the intendment of the Act and the express object of Explana tion 2 to section 2(15).
The peculiar definition of 'disposi tion ' injecting a triple hypothesis and fictional expan sion covers the diminution in the share taken by the copar cener and augmentation of the share taken by the other and impresses the stamp of property on this process by the "deeming ' provision.
Sections 9 and 27 strengthen this conclusion.
We were confronted by Shri Desai with Kancharla Kesava Rao(1) for contending that giving away or giving up could not in all cases be disposition where the transaction is a partition.
This Court, in the above ruling, held that a partition in a coparcenary was just an adjustment of rights, not a transfer in the strict sense.
Shri Justice Hegde, speaking for the Court, placed on section 24 of the Act more or less the same intepretation as was put in Getti Chettiar (supra) by this Court.
Whatever might be the interpretation 'disposition ' in section 24 of the Act, we are satisfied that the only straight forward construction of that expression in section 27 is as we have explained at length above.
Section 9, dealing with gifts takes in property under a disposition made by a deceased, throwing up the question 'What is a gift? '.
Section 27 supplies the answer: 'an dispsition made by the deceased in favour of a relative of his shll be treated for the purposes of this Act as a gift '.
Unless: of course, it is made for full considera tion.
There is no limitation, environmental or by the society of words, warranting the whittling down of the unusually wide range of explanation 2 to section 2(15).
Kesava Rao (supra) cannot cut back on the liberality of section 27.
In the realm of legal fiction, law cannot be confined within traditional (1) 23 concepts.
It is pertinent that as between the Gift Tax Act and the there is basic difference in that the tax effect in the first is on transaction inter vivos and in the second on the generating source of transmission by death.
Comparisons in construction cannot therefore be pushed too far.
Before winding up tihis part of the discussion, we may refer to Grimwade vs Federal Commissioner of Taxation (1) where Williams J., dealing with the expression 'disposition of property ' defined somewhat in similar lines as in our Act, observed: "The whole emphasis of paragraph (f) is upon ' a transaction entered into by one person, which seems to me to mean that where there is an act done by one person with the requisite intent, and as a result there is a transfer of value from any property of that person to the property of another person, the conditions of liability are satisfied.
Each statute has its own mint and the coinage of words bears a special stamp.
That is our only comment when we depart semantically from other judicial ' annotations of the expres sion 'disposition '.
If A is entitled to a moiety in property worth rupees five lakhs (or let us assume that much of cash in the till belongs jointly to A and B) and by a partition relinquishment, disclaimer or otherwise A accepts something substantially less than his due, say rupees one lakh as against rupees two and a half lakhs and the remainder goes to.
the benefit of B who gets four lakhs as against two and a half lakhs, commonsense, concurrently with Explanation 2, draws the inference that A has made over at his expense and to the benefit of B a sum of rupees one and ahalf lakhs which may be designated a 'disposition ' by him in favour of B. Shri Desai rightly stressed in construing section 9 we should not confess between a mala fide transaction and unequal partition.
He is right.
But the simpIe scheme of section 9 may be stated to erase misapprehension.
What the provision declares is that if the disposition made by the deceased is more than two years before death.
,, the property covered thereby shall not pass on the death unless it shall not have been bona fide.
That is to say, even if the transaction were more than two years before the death, if it were entered into in bad faith, estate duty may still attach to that property.
So far as dispositions made within two years of the death of the deceased are concerned, there is no question of mala fides or bona fides.
All such transactions are caught within the coils of section 5 read with sections 9 and 27.
The re quirement of 'bona fides ' has nothing to do.
with disposi tions within 2 years and has much to do with those beyond 2 years.
The marginal obscurity in section 9 is due perhaps to compressed draftsmanship.
Now to costs.
We have already indicated how serious arguments have appealed in contrary ways to several fudges of the High Courts and certain observations of this Court have themselves been capable of different shade of sense from what we have read into them.
Indeed the point involved in the case is of general public importance which (1) ; 24 on account of the conflict in the High Courts, needs to be decided by the Supreme Court.
One of the major functions of this Court is to declare the law for the country under article 141 of the Constitution, although under our adversary system it is only when litigation spirals up the Court acts and declares the law.
While dealing with a similar situation, this Court in Trustees Port, Bombay(1) observed: "Is it fair in these circumstances that one party, albeit the vanquished one, should bear the burden of costs throughout for providing the occa sion not provocation for laying down the correct law in a controversial situation ? Faced with a similar moral legal issue, Lord Reid observed: "I think we must consider separately costs in this House and costs in the Court of Appeal.
Cases can only come before this House with leave, and leave is generally given because some general question of law is involved.
In this case it enabled the whole vexed matter of non est factum to be reexamined.
This seems to be a typical case where the costs of the successful respondent should come out of public funds.
The Evershed Committee on Supreme Court Practice and Procedure had suggested in England that the Attorney General should be empowered to issue a certificate for the use of public funds in appeals to the House of Lords where issues of outstanding public importance are involved.
" Maybe, a scheme for a suitors ' fund to indem nify for costs as recommended by a Sub Committee of Justice is the answer, but these are matters for the consideration of the Legislature and the Executive.
We mention them to show that the law in this branch cannot be rigid.
We have to make a compromise between pragmatism and equity and modify the loser pays all doctrine by exercise of a flexi ble discretion.
The respondent in this case need not be a martyr for the cause of the certainty of law under section 87 of the Act, particularly when the appellant wins on a point of limitation.
(The trial Court had even held the.
appellant guilty of negligence).
In these circumstances we direct that the parties do bear their costs throughout.
" We adopt the same course and while.
allowing Civil Appeal No. 1095 of 1970, and dismissing Civil Appeal No. 1677 of 1973 the parties in both the appeals are directed to bear their respective costs throughout.
V.P.S. C,4.
1095 of 1970 allowed.
CA 1677 of 1973 dismissed.
(1) ; , 738.

summary:
Section 5 of the , authorises the levy of duty upon all property which passes on the death of a person.
Section 9 provides that property taken under a disposition made by the deceased purporting to operate as an immediate gift whether by way of transfer, delivery etc., which shall not have been bona fide made two years or more before the death of the deceased shall be deemed to pass on the death.
Explanation 2 to section 2(15), which defines 'prope rty ', provides that the extinguishment at the expense of the deceased of a debt or other rights shall be deemed to have been a disposition made by the deceased in favour of the person for whose benefit the debt or right was extinguished and in relation to such a disposition the expression 'property ' shall include the benefit conferred by the extin guishment of a debt or right.
Section 27 deems all disposi tions made by the deceased person in favour of his relations as gifts, for the purposes of the Act, unless such disposi tion was made for full consideration or the deceased was concerned in a fiduciary capacity with the property.
A member of a joint Hindu family, within two years before his death entered into a partition of family proper ties bona fide, not as a colourable or sham transaction, whereby, he received towards his share an allotment substan tially lower in value than would be his legal entitlement, with a view to relieve himself of a part of his wealth and 7 3 who is a relative within the meaning of the Act.
HELD: The relative, as the accountable person under the Act, is liable to pay estate duty, on the difference between the share that the deceased was legally entitled to and the share that the deceased actually took, that is, to the extent of the benefit received by the accountable per son.
[14 G, 12 .A.] (1) Death duties are imposed on richer estates, the fiscal policy being, (a) collection of revenue, and (b) reduction of the quantum of inheritance on a progressive basis towards equalisation by diminishing glaring dispari ties of wealth.
Therefore, the Act uses words of the widest import, legal fictions and deeming devices to.
rope in all kinds of dealings with property for inadequate or no consid eration within the statutory proximity of death.
If the words, however cannot apply to a particular species of property, courts.
cannot supply words to fulfil the unex pressed wishes of the legislature.
In a taxing statute one has to look merely at what is clearly said.
There is no room for any intendment.
There is no equity about a tax.
[13 D] (2) The definition of 'property ' in section 2(15) has to inform and must be read along with sections 9 and 27.
It is not a substantive rule of law operative by itself.
Similarly, the expression 'disposition ' in section 9 must be read with the definition in Explanation 2 to section 2(15) since that is the whole purpose of a 'deeming provision ' is the shape of a definition.
[17 B C] 3 1003 SC1/76 10 (3) The definition of 'property ' in section 2(15) is not exhaustive but only inclusive and the supplementary opera tion of Explanation 2 takes in what is not conventionally regarded as 'disposition '.
The expression "other right" in the Explanation is of the widest import and cannot be read ejusdem generis with 'debt '.
The process of extinguishment of a right and the creation of a benefit thereby is statuto rily deemed to be a disposition in the nature of a transfer.
Therefore, the definition of 'disposition ' covers the diminution in the share taken by one coparcener and augmentation of the share taken by the other and impresses the stamp of property on this process by the deeming provi sion.
[18 F G; 19 C] (4) The case of Getti Chettiar [(1971) dealt with the expression 'transfer of property ' in section 2(xxiv) of the Gift Tax Act, 1958.
This Court held that 'transaction ' 7 3 and it must be a 'transfer ' of property; and that since a partition is not a transfer in the ordinary sense of law, a mere partition with unequal allotments cannot be covered by section 2(xxiv).
But the language of Explanation 2 to section 2(15) of the is different and wider and so the reasoning of this case cannot control its amplitude.
[20 C] (5) This Court in Kancharla Kesava Rao [(1973) placed on 'disposition ' in section 24 of the the same interpretation as was put in the case of Getti Chettiar.
But, whatever might be the interpretation of 'disposition ' in section 24, under section 27, a disposition in favour of a relative not for full consideration, shall be treated as a gift and under section 9 if the disposition made by the deceased is more than 2 years before death, the property covered thereby shall not pass on the death unless it shaH: not have been bona fide to say, even if the transaction were more than 2 years before the death, if it were entered into in bad faith, estate duty may Still attach to that property.
But so far as dispositions made within two years of the death of the deceased are concerned there is no question of mala fides or, bona fides, and all such transactions would be liable to estate duty.
[22 G; 23 F G] Valliammi Achi , approved.
In re.
Stration 's Disclaimer applied.
Grimwade vs Federal Commissioner of Taxation ; referred to.
[Principles for awarding costs in matters of general public importance where there is conflict in the High Courts on a question of Law, reiterated.]