judgement:
Criminal Appeal No. 195 of 1977.
Appeal by Special Leave from the Judgment and Order dated the 25 10 1976 of the Andhra Pradesh High Court in Crl.
R., Case No. 660 of 1970 and Crl.
R.P. No. 646 of 1976.
155 G. Yenkatrama Sastry and G. Narasinhulu for the Appellant.
P. Parwneswara Rao and G. Narayana Rao for Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
Some basic issues bearing on prescription of punishments arise for judicial investigation in this criminal appeal where leave has been limited to tailoring the sentence by appellate review to fit the gravity of the delinquency and the redemption of the deviant.
The facts leading up to the conviction may need brief narration.
The appellant, along with another accused, deceived several desperate unemployed young men, received various sums of Rs. 1200/ by false pretences that they would secure jobs for them through politically influential friends and other make believe representations.
The offence of cheating under section 420 IPC was made out and convic tion of both the accused followed.
The 1st accused (appellant before us) is a young man around 28 years old and works as a Junior Assistant in the Planning and Financial Department of the Andhra Pradesh Secretariat and the other accused is his friend who personated as a State Port Officer.
Before the trial court, there was a formal, almost pharisaic, fulfilment 'of the pre sentencing provision in section The opportunity contemplated in the sub section has a penological significance of far reaching import, which has been lost on the trial Magistrate.
For he disposed of this benignant obligation by a brief ritual : "I made of the accused that they were found guilty under section 420 IPC and the punishment contemplated thereof.
" Reform of the black letter law is a time lagging process.
But judicial metabolism is sometimes slower to assimilate the spiritual substance of creative ideas finding their way into the statute book.
This may explain why the appellate courts fell in line with the Magistrate 's mechanical approach and confirmed the condign punishment of 3 years ' rigorous imprisonment.
At all the three tiers the focus was on the serious nature of the crime (cheating of young men by a government servant and his blackguardly companion) and no ray of light on the 'criminal ' or on the pertinent variety of social facts, surrounding him penetrated the forensic mentation.
The humane art of sentencing remains a retarded child of the Indian criminal system.
Now we enter the area of punitive treatment of criminals, assuming that the guilt has been brought home.
Certain elemental factors are 'significant strands of criminological thought.
Since the whole territory of punishment in its modem setting is virtually Virgin so far as our country is concerned, we may as well go into the subject in some incisive depth for the guidance of the subordinate judi ciary.
The subject of study takes us to our cultural heritage that there is divinity in every man which has been translated into the 11 722SCI/77, 156 constitutional essence of the dignity and worth of the human person.
We take the liberty of making an Indian approach and then strike a cosmic note.
Progressive criminologists across the world will agree that the Gandhian diagnosis of offenders at patients and his conception of prisons as hospitals mental and moral is the key to the pathology of delinquency and the therapeutic role of 'punishment ' The whole man is a healthy man and every man is born good.
Criminality is a curable deviance.
The morality of the law may vary, but is real.
The basic goodness of all human beings is a spiritual axiom, a fall out of the advaita of cosmic creation and the spring of correctional thought in criminology.
If every saint has a past, every sinner has a future, and it is the role of law to remind both of this.
The Indian legal genius of old has made a healthy contribution to the world treasury of criminology.
The drawback of our criminal process is that often they are built on the bricks of impressionist opinions and dated values, ignoring empirical studies and deeper researches.
India, like every other country, has its own crime complex and dilemma of punishment.
Solutions to tangled social issues do not come like the crack of down but are the product of research and study, oriented on the founding faiths of society and driving towards that transformation which is the goal of free India.
Man is subject to more stresses and strains in this age than ever before, and a new class of crimes arising from restlessness of the spirit and frustration of ambitions has erupted.
White collar crime, with which we are concerned here, belongs to this disease of man 's inside.
If the psychic perspective and the spiritual insight we have tried to project is valid, the police billy and the prison drill cannot 'minister to a mind diseased nor tone down the tension, release the repression, unbend the perversion, each of which shows up as debased deviance, violent vice and behavioral turpitude.
It is a truism, often forgotten in the hidden vendetta in human bosoms, that barbarity breeds barbarity, and injury recoils as injury, so that if hearing the mentally or morally maimed or malformed man (found guilty) is the goal, awakening the inner being, more than torturing through exterior compulsions, holds out better curative hopes.
An aside.
A holistic view of sentencing and a finer perception of the effect of imprisonment give, short shrift to draconian severity as self defeating and fillips meditational relaxation, psychic medication and like exercises as apt to be more rewarding.
Therefore, the emphasis has to be as much on man as on the system, on the inner imbalance as on the outer tensions.
Perhaps the time has come for Indian criminologists to rely more on Patanjali sutra as a scientific curative for crimogenic factors than on the blind jail term set out in the Penal Code and that may be why western researchers are now seeking Indian yogic ways of normalising the individual and the group.
157 Western jurisdiction and 'sociologists, from their own angle have struck a like note.
Sir Samual Romilly, critical of the brutal penalties in the then Britain, said in 1817 : "The laws of England are written in blood".
Alfieri has suggested : 'society prepares the crime, the criminal commits it.
George Micodotis, Director of Criminological Research Centre, Athens, Greece, maintains that 'Crime is the result of the lack of the right kind of education. ' It is thus plain that crime is a pathological aberration, that the criminal can ordinarily be redeemed, that the State has to rehabilitate rather than avenge.
The sub culture that leads to anti social behaviour has to be countered not by undue cruelty but by re culturisation.
Therefore, the focus of interest in penology is the individual, and goal is salvaging him for society.
The infliction of harsh and savage punishment is thus a relic of past and regressive times.
The human today views sentencing as a process of reshaping a person who has deteriorated into criminality and the modern community has a primary stake in the rehabilitation of the offender as a means of social defense.
We, therefore consider a therapeutic, rather than an in 'terrorem ' outlook, should prevail in our criminal courts, since brutal incarceration of the person merely produces laceration of his mind.
In the words of George Bernard Shaw : 'If you are to punish a man retributively, you must injure him.
If you are to reform him, you must improve him and, men are not improved by injuries '.
We may permit ourselves the liberty to quote from Judge Sir Jeoffrey Streatfield : 'If you are going to have anything to do with the criminal courts, you should see for yourself the conditions under which prisoners serve their sentences. ' In the same strain a British Buddhist Christian Judge, speaking to a BBC reporter underscored the role of compassion : "Circuit Judge Christmas Humphreys told the BBC reporter recently that a judge looks 'at the man in the dock in a different way : not just a criminal to be punished, but a fellow human being, another form of life who is also a form of the same one life as oneself. ' In the context of karuna and punishment for karma the same Judge said : 'The two things are not incompatible.
You do punish him for what he did, but you bring in a quality of what is sometimes called mercy, rather than an emotional hate against the man for doing something harmful.
You feel with him; that is what compassion means.
" The Listener, November 25, 1976, p. (692) Incidentally, we may glance at the prison system which leaves much to be desired in the sense of humanizing and reforming the man we call criminal.
Jimmy Carter, currently President of the United States and not a law man, made certain observations in his Law Day Speech to the University of Georgia while he was Governor of that State, which bear quotation : "In our prisons, which in the past have been a disgrace to Georgia, we 've tried to make substantive changes in the 158 quality of those who administer them and to put a new realm of understanding and hope and compassion into the administration of that portion of the system of justice.
Ninety five percent of those who are presently incarcerated in prisons will be returned to be our neighbors.
And now the thrust of the entire program, as initiated under Ellis Mac Dougall and now continued under Dr. Ault, is to try to discern in the soul of each convicted and sentenced person, redeeming features that can be enhanced.
We plan a career for that person to be pursued while he is in prison.
I believe that the early data that we have on recidivism rates indicates the efficacy of what we 've done." In the light of what we propose to do, in disposing of this appeal, another observation of Jimmy Carter in the course of the same speech is relevant: "Well, I don 't know the theory of law, but there is one other point I want to make, just for your own consideration.
I think we 've made great progress in the Pardons and Paroles Board since I 've been in Office and since we 've reorganized the Government.
We have five very enlightened people there now.
And on occasion they go out to the prison system to interview the inmates, to decide whether or not they are worthy to be released after they serve one third of their sentence.
I think most jurors and most judges feel that when they give the sentence, they know that after a third of the sentence has gone by, they will be eligible for careful consideration.
Just think for a moment about your own son or your own father or your own daughter being in prison, having served seven years of a lifetime term and being considered for a release.
Don 't 'you think that they ought to be examined and that the pardons and Paroles Board ought to look them in the eye an d ask them a question and if they are turned down, ought to give them some substantive reason why they 'are not released and what they can do to correct their defects We have dealt 'with the subject sufficienty to set the humanitarian tone that must inform the sentencing judge, the Karuna that must line his verdict.
The same compassionate outlook is reflected in some of the decision of this Court and of the High Courts indicating the distance between current penal strategy and Hammurabi 's Code, which, in about 1975 B.C., insited 'on an eye for an eye, a tooth for a tooth '.
Referring to the earlier Criminal Procedure Code and its deficiency in regard to sentencing, this Court observed in Telani (AIR 1974 SC 228, 236) "Finally comes the post conviction stage where the current criminal system is weakest.
The Court 's approach has at once to be socially informed and personalised.
Unfortunately, the meaningful collection and presentation of 159 the penological facts bearing on the background of the individual, the dimension of damage, the social milieu and what not these are not provided in the Code and we have to make intelligent hunches on the basis of materials adduced to prove guilt.
In this unsatisfactory situation which needs legislative remedying we go by certain broad features." Similarly, in Jagmohan Singh. ; :1973 SCR 541,560 this Court observed : "The sentence follows the conviction, and it is true that no formal procedure for producing evidence with reference to the sentence is specifically provided.
The reason is that relevant facts and circumstances impinging on the nature and circumstances of the crime are already before the Court Where counsel addresses the court with regard to the charac ter and standing of the accused, they are duly considered by the Court unless there is something in the evidence itself which belies him or the Public Prosecutor for the State challenges the facts.
If the matter is relevant and is essential to be considered, there is nothing in the Or.
P. C. which prevents additional evidence being taken.
It must however be stated that it is not the experience of criminal courts in India that the accused with a view to obtaining a reduced sentence ever offers to call additional evidence.
However, it is necessary to emphasize that the Court is broadly concerned with the facts and circumstances whether aggravating or mitigating, which are connected with the particular crime under enquiry.
All such facts and circumstances are capable of being proved in accordance with the provisions of the Indian Evidence Act in a trial regulated by the Cr.
P.C. The trial thus does not come to an end until all the relevant facts are proved and the counsel on both sides have an opportunity to address the court. .
The Kerala High Court, in Shiva Prasad had also something useful to say in this regard : "Criminal trial in our country is largely devoted only to finding out whether the man in the dock is guilty.
It is a major deficiency in the Indian system of criminal trials that the complex but important sentencing factors are not given sufficient emphasis and materials are not presented before the court to help it for a correct judgment in the proper personalised, punitive treatment suited to the offender and the crime. .
Likewise, Shri Justice Dua (as lie then was) of the Punjab High Court had indicated the guidelines on the application of the rehabilitative theory in Lekharaj & Ors vs State (AIR 1960 Punjab 482) where the learned Judge had pointed out the relevance of the offender 's circumstances and social milieu, apart 160 from the daring and reprehensible nature of the offence.
The Law Commission of India (in 47th Report) has summed up the components of a proper sentence : "A proper sentence is a composite of many factors, including the nature of the offence, the circumstances extenuating or aggravating of the offence, the prior criminal record, if any, of the offender, the age of the offender, the professional and social record of the offender, the background of the offender with reference to education.
home life, sobriety and social adjustment, the emotional and mental condition of the offender, the prospect for the rehabilitation of the offender, the possibility of a return of the offender to normal life in the community, the possibility of treatment or of training of the, offender, tie possibility that the sentence may serve as a deterrent to crime by this offender, or by others, and the present community need, if any for such a deterrent in respect to the particular type of offence involved." (para 7.44) All that we have said upto now emphasizes the need on the part of the judges to see that sentencing ceases to be downgraded to Cinderella status.
The new Criminal Procedure Code, 1973 incorporates some of these ideas and gives an opportunity in section 248(2) to both parties to bring to the notice of the court facts and circumstances which win help personalize the sentence from a reformative angle.
This Court, in Santa Singh , has emphasized how fundamental it is to put such provision to dynamic judicial use, while dealing with the analogous provisions in section 235(2) "This new provision in section 235(2) is in consonance with the modern trends in penology and sentencing procedures.
There was no such provision in the old Code,.
It 'was realised that sentencing is an important stage in the process of administration of criminal justice as important as the adjudication of guilt and it should not be con signed to a Subsidiary position as if it were a matter of not much consequence.
It should be a matter of some anxiety to the court to impose an appropriate punishment on the criminal and sentencing should, therefore, receive serious attention of the Court.
(p. 194.).
Modern penology regards crime and criminal as equally material when the right sentence has to be picked out.
It turns the focus not only on the crime, but also on the criminal and seeks to personalise the punishment so that the reformist component is as much operative as the deterrent element.
It is necessary for this purpose that facts of a social and personal nature, sometimes altogether irrelevant if not injurious, at the stage of fixing the guilt, may have to be brought to the notice of the court when the actual sen tence is determined.
(p. 195).
161 A proper sentence is the amalgam of many factors such as the nature of the offence, the circumstances extenuating or aggravating of the offence, the prior criminal record, if any, of the offender, the age of the offender, the record of the offender as to employment, the background of the offender with reference to education, home life, sobriety and social adjustment, the emotional and mental condition of the offender, the prospects for the rehabilitation of the offender, the possibility of return of the offender to normal life in the community, the possibility of treatment or training of the offender, the possibility that the sentence may serve as a deterrent to crime by the offender or by others and the current community need, if any, for such a deterrent in respect to the particular type of offence.
These factors have to be taken into account by the Court in deciding upon the appropriate sentence.
(p. 195).
The hearing contemplated by section 235(2) is not confined merely to hearing oral submissions, but it is also intended to give an opportunity to the prosecution and the ac cused to place before the court facts and material relating to various factors ' bearing on the question of sentence and if they are contested by other side, then to produce evidence for the purpose of establishing the same.
Of course, care would have to be taken by the court to see that this hearing on the question of sentence is not abused and turned into an instrument for unduly protracting the proceedings.
The claim of due and proper hearing would have to be harmonised with the requirement of expeditious disposal of proceedings." (p. 196).
It will thus be seen that there is a great discretion vested in the Judge, especially when pluralistic factors , enter his calculations Even so, the judge must exercise this discretionary power, drawing his inspiration from the humanitarian spirit of the law, and living down the traditional precedents which have winked at the personality of the crime doer and been swept away by the features of the crime.
What is dated has to be discarded.
What is current has to, be incorporated.
Therefore innovation, in all conscience, is in the field of judicial discretion.
Unfortunately, the Indian Penal Code still lingers in the somewhat compartmentalised system of punishment viz. imprisonment simple or rigorous, fine and, of course, capital sentence.
There is a wide range of choice and flexible treatment which must be available with the judge if he is to fulfil his tryst with cruing the criminal in a hospital setting.
Maybe in an appropriate case actual hospital treatment may have to be prescribed as part of the sentence.
In another case, liberal parole may have to be suggested and, yet in a third category, engaging in certain types of occupation or even going through meditational drills or other courses may be part of the sentencing prescription.
The perspective having changed, the legal strategies and judicial resources, in their variety, also have to change.
Rule 162 of thumb sentences of rigorous imprisonment or other are too insensitive to the highly delicate and subtle operation expected of a sentencing judge.
Release on probation, conditional sentences, visits to healing centres, are all on the cards.
We do not wish to be exhaustive.
Indeed, we cannot be.
Sentencing justice is a facet of social justice, even as redemption of a crime doer is an aspect of restoration of a whole personality.
Till the new Code recognised statutorily that punishment required considerations beyond the nature of the crime and circumstances surrounding the crime and provided a second stage for bringing in such additional materials, the Indian courts had, by and large, assigned an obsolescent backseat to the sophisticated judgment on sentencing.
Now this judicial skill has to come of age.
The sentencing stance of the court has been outlined by us and the next question is what 'hospitalization ' techniques will best serve and sentencee, having due regard to his just deserts, blending a feeling for a man behind the crime, defence of society by a deterrent component and a scientific therapeutic attitude at once correctional and realistic.
The available resources for achieving these ends within the prison campus also has to be considered in this context.
Noticing the scant regard paid by the courts below to the soul of section 248 (2) of the Code and compelled to gather information having sentencing relevancy, we permitted counsel on both sides in the present appeal to file affidavits and other materials to help the Court make a judicious choice of the appropriate 'penal ' treatment.
Both sides have filed affidavits which disclose some facts pertinent to the project.
We have earlier mentioned that the social abhorrence of the crime is an input, since the emphatic denunciation of a crime by the community must be reflected in the punishment.
From this angle we agree with the trial court that unconscionable exploitation of unfortunately unemployed 'young men by heartless deception, compounded by pretension to political influence, calls for punitive severity to serve as deterrent.
The crime here is doubly bad and throws light on how gullible young men part with hard money in the hope that political influence, indirectly purchased through money, can secure jobs obliquely.
But then the victims of the crime must be commiserated with and in such white collar offences it is proper to insist upon reparation of the victims, apart from any other sentence.
In the present case, four young men have been wheedled out of their little for tunes by two convicts and so, to drive home a sense of moral responsibility to repair the injury inflicted, we think it right to direct the appellant to pay a fine of Rs. 1200/ which will be made over by the trial court to P.W. 1 (whose case alone is the subject of the prosecution) under section 357 of the Code.
That is to say, a fine of Rs. 1200/is imposed will be ,paid over to the aforesaid P.W.1.
What are the other circumstances which we may look into ? The appellant is a young man of 28 years.
He has a degree in Bachelor of Oriental Languages and another in Commerce, which suggests that he may respond to new cultural impact.
He was working as a Junior 163 Assistant in the Government Secretariat and has now lost the post consequent on the conviction.
This is a hard lesson in life.
The socioeconomic circumstances of the man deserve to be noticed.
His parents are old and financially weak, since they and the appellant '& sisters and younger brother are his dependents.
The younger brother also is unemployed.
These factors suggest that the economic blow, if the appellant is imprisoned for long, will be upon his brothe r at College and the other members of his family.
Extenuation is implicit in this fact.
He prays for release on probation or under section 360 of the Code because he has no blemish by way of previous crime or bad official record.
Having regard to his age (not immature) and the deliberate plan behind the crime operated in partnership upon four perhaps more persons, we reject his request as over ambitious.
At the same time, a contrite convict, yet in his twenties, may deserve clement treatment.
A just reduction of the sentence is justified and we think that incarceration for 18 months may be adequate.
But this long period has to be converted into a spell of healing spent in an intensive care ward of the penitentiary, if we may say so figuratively.
How can this be achieved ? First, by congenial work which gives job satisfaction not jail frustration, nor further criminalisation.
We therefore direct the State Government to see that within the framework of the Jail Rules, the appellant is assigned work not of a monotonous, mechanical, degrading type, but of a mental, intellectual, or like type mixed with a little manual labour(1).
This will ensure that the prisoner does work more or less of the kind he is used to.
The jail, certainly, must be able to find this kind of work for him, even on its own administrative side under proper safeguards though.
Shri PP Rao, appearing for the State,, assures us, that in keeping with this constructive suggestion of the Court the jail authorities will assign to the appellant congenial work of a mental cum manual type and promote him to an officer warder 's position if his conduct is good.
We have also made the suggestion that the appellant must be paid a reasonable faction of remuneration by way of wages for the work done, since unpaid work is bonded labour and humiliating.
This amount may be remitted to his father once in three months Shri Rao, on behalf of the State Government, has assured the Court that immediate consideration will be given to this idea by the State Government and the jail authorities.
We also think that the appellant has slipped into crime for want of moral fibre.
If competent Jail Visitors could organise for him processes whichwill instill into him a sense of ethics it may help him become a better man.
Self expression and self realisation have a curative effect.
Therefore, any sports and games, artistic activity (1) Says Gandhiji in Harijan : Feb. 6, 1947 "Intellectual work is important and has an undoubted place in the scheme of life.
But what I insist on is the necessity of physical labour.
No man, I claim, ought to be free from that obligation; it will serve to improve even the quality of his intellectual output,,.
164 and/or meditational course, may also reform.
We strongly recommend that the appellant be given such opportunities by the jail authorities as will stimulate his creativity and sensitivity.
In this connection we may even refer to proven advantages of kindling creative intelligence and normalising inner imbalance reportedly accomplished by Transcendental Meditation (TM) propagated by Maharshi Mahesh Yogi in many countries in the west.
Research projects conducted in various countries bring out that people practising such or like courses change their social behaviour and, reduce their crime proneness.
We do not prescribe anything definite but indicate what the prison doctors may hopefully consider.
While it is beyond us to say whether the present facilities inside the Central Prison, Hyderabad, make it feasible for the appellant to enjoy these benefits and thereby improve his inner being, we strongly feel that the humanitarian winds must blow into the prison barricades.
More than this is expected in this decade, when jail reforms, from abolition of convict 's costume and conscript labour to restoration of basic companionship and atmosphere of self respect and fraternal touch, are on the urgent agenda of the nation.
Our prisons should be correctional houses, not cruel iron aching the soul We have given thought to another humanising strategy, viz., a guarded parole release every three months for at least a week, punctuating the total prison term.
We direct the State Government to extend this parole facility to the appellant, Jail Rules permitting, and the appellant submitting to conditions of discipline and initiation into an uplifting exercise during the parole interval.
We further direct the Advisory Board of the, Person periodically to check whether the appellant is making progress and the Jail authorities are helping in the process and implementing the prescription hereinabove given.
Indeed, the direction of prison reform is not towards dehumanization but dehumanization, not maim and mayhem and vulgar callousness but man making experiments designed to restore the, dignity of the individual and the worth of the human person.
This majuscule strategy involves orientation courses for the prison personnel.
The State will not hesitate, we expect, to respect the personality in each convict, in the spirit of the Preamble to the Constitution and will not permit the colonial hangover of putting people 'behind the bars ' and then forget about them.
This nation cannot and, if it remembers its incarcerated leaders and freedom fighters will not but revolutionize the conditions inside that grim little world.
We make these persistent observations only to drive home the imperative of Freedom that its deprivation, by the State, is validated only by a plan to make the sentencee more worthy of that birthright.
There is a spiritual dimension to the first page of our Constitution which. projects into penology.
Indian courts may draw inspiration from Patanjali sutra even as they derive punitive patterns from the Penal Code (most of Indian meditational therapy is based on the sutras of Patanjali).
Before we close this judgment we wish to dispel a possible misapprehension about the fine we are imposing upon the cheat although we have proceeded on the footing of his family being relatively indigent.
The further direction for making over the fine to the deceivees also needs a small explanation.
165 There is nothing in principle, as Lord Parker pointed out in R. V. King (1970 2 AR.
E. R. 248) to prevent a court from imposing a fine even when imposing a suspended sentence of imprisonment. 'Indeed, in many cases it is quite a good thing to impose a fine which adds a sting of course, the fine should not be altogether beyond the sentences means.
As to whether it is wrong to make a sort of compensation order in a case of a convicted person without much means, again, Lord Parker in R. V. Ironfield (1971 1 All.
E. R. 202) has observed "If a man takes someone else 's property or goods, he is liable in Law to make restitution, or pay compensation.
A victim. need not be put to the additional trouble and expense of independent proceedings, and certainly cannot be required to forego his rights in order to facilitate the rehabilitation of the man who has despoiled him.
" Counsel for the appellant has repeated that his client is taking examination in Accountancy an indication of this anxiety to improve himself.
We have no doubt that the jail authorities will afford facilities to the appellant to do his last minutes studies and take the examination and, for that purpose, allow him to go to any library and the examination hall under proper conditions of security.
The affidavit on behalf of the State indicates that a tendency to, turn a new page is discernible in the appellant and this has to be strengthened imaginatively by the Jail Superintendent, if need be, by affording him opportunity for initiation into Transcendental Meditation courses or like exercises provided the appellant shows an appetite in that direction and facilities are available in Hyderabad City.
Shri P. P. Rao, for the State, has represented that the Andhra Pradesh Government is processing rules for payment of wages to prisoners who work but that it may take a few months more for finalisation.
It is a little surprising that at least two decades or more have been spent in this country after Freedom discussing active programmes of correction although in some States, for long years the wage system has been in vogue.
Andhra Pradesh State will rise to this civilized norm and, when it finalises rules, will take care to see that the wages rates are reasonable and not trivial and that retrospective effect will be given to see that at least from October 2, 1976 (the birthday of the Father of the Nation) effect is given to the wage policy.
Shri Sastry, for the appellant, assured the Court that he had been instructed to state that Rs. 1200/ would be paid right away out of the fine, imposed.
We allow the appeal in humanist part, as outlined above, while affirming the conviction.
More concretely, we direct that (a) the sentence shall be reduced to 18 (eighteen) months, less the period already undergone; (b) our directions, above mentioned, regarding parole and assignment of suitable work and payment of wages in jail shall be complied with; and (c) the appellant shall pay a fine of 166 Rs. 1200/ .
We appreciate the services of counsel Shri P. P. Rao in disposing of this appeal justly.
We may also mention that Shri G. V. R.Sastry appearing for the appellant has also helped the court towards the same en P.H.P. Appeal allowed.

summary:
The appellant along with another accused deceived several desperate unemployed youngmen, received various sums of Rs. 1200 by false pretences that they would secure jobs for them through politically influential friends and other make believe representations.
The offence of cheating under a. 420 was made out and all the 3 courts concurrently convicted both the accused.
The appellant was sentenced to 3 years rigorous imprisonment.
The appellant is an unemployed youngman around 28 years old and used to work as a Junior Assistant in the Andhra Pradesh Secretariat.
This Court granted special leave limited to the question of sentence.
Allowing the appeal partly, HELD : (1) The pre sentencing provision in section 248(2) Cr. P. C. has a penological significance of far reaching import which has been lost on the trial magistrate.
Reform of the black letter law is a time lagging process.
At an the three tiers the focus was on the serious nature of the crime and no ray of light on the criminal or on the pertinent variety of social facts surrounding him penetrated the forensic mentation.
[153 D, E] (2)Since the whole territory of punishment in its modern setting is virtually virgin so far as our country is concerned, the court went into the subject in some incisive depth for the guidance of the subordinate judiciary.
[155 G] (3)Progressive criminologists in the world agree that the Gandhian diagnosis of offenders as patients and his conception of prisons as hospitals mental and moral is the key to the pathology of delinquency and the therapeutic role of punishment.
The whole man is a healthy man and every man is born good.
Criminality is a curable deviance.
If every saint has a past every sinner has a future and it is the role of law to remind both of this.
[155 B C] (4)Man is subject to more stresses and strains in this age than ever before and a new class of crimes arising from restlessness of the spirit and frustration of ambitions has erupted.
White collar crime, as in the present case, belong% to this disease of man 's inside.
Barbarity and injury recoils as injury so that if healing the mentally or morally maimed or malformed man is the goal, awakening the inner being more than torturing through exterior compulsions, holds out better curative hopes.
The infliction of harsh and savage punishment is thus a relic of past and regressive times.
Today sentencing should be a process of re shaping a person who has deteriorated into criminality and the modern community has a primary stake in the rehabilitation of the offender as a means of social defence.
Therefore, a therapeutic, rather than a terrors outlook should prevail in our criminal courts.
[156 E, H, 157 C D] Tejani AIR 1974 S C 228, 236; Jagmohan Singh ; and Santa Singh , referred to.
(5)There is a great discretion vested in the judge while imposing sentence.
The Judge must exercise this discretionary power, draw his inspiration from the humanitarian spirit of the law living down the traditional precedents which have winked at the personality of the crime doer and been swept away by the features of the crime.
Unfortunately, the Indian Penal Code still lingers in the somewhat compartmentalised system of punishment viz., imprisonment, 154 simple or rigorous, fine and, of course, capital sentence.
There is a wide range of choice and flexible treatment which must be available with the Judge if he is to fulfil his tryst with curing the criminal in a hospital setting.
Rule of thumb sentences of rigorous imprisonment or other are too insensitive to the highly delicate and subtle operation expected of a sentencing judge.
Release on probation, conditional sentences, visits to healing centres, are all on the cards.
[161 E H 162 A] (6)In the present case the crime is doubly bad and throws light on how gullible youngmen part with hard earned money in the hope that political influence indirectly purchased through money can secure jobs obliquely.
But the victims of the crime must be commiserated with and in such white Collar offences it is proper to insist upon reparation of the victims apart from any other sentence.
The Court, therefore, directed the appellant to pay a fine of Rs. 1200/ which was directed to be made over by the Trial Court to P.W. 1 who was victim in the present case.
[162 E FG] (7)The appellant is a youngman of 28 years.
He has a degree in Oriental Languages and another in Commerce.
He was working as a Junior Assistant in the Government Secretariat and has now lost the post consequent on the conviction.
This is a hard lesson in life.
The socioeconomic circumstances of the man deserve notice.
His parents are old and financially weak.
His parents, sisters and younger brothers are his dependents.
The younger brother is also unemployed.
These factors suggest that the economic blow, if the appellant is imprisoned for long, will be upon his brother at College and other members of his family.
He had not committed any previous crime.
The court rejected the prayer of the appellant for release on probation on the ground that the appellant had a deliberate plan behind the crime operated in partnership upon 4 or more persons and that his age is such that he cannot be called immature, The court, however, reduced the sentence to 18 months.
The court also recommended that (a) he should not be given work of a monotonous, mechanical, degrading type, but of a mental, intellectual or like type mixed with a little manual labour.
This would ensure that the person does work more or less of the kind he used to; (b) the appellant must be paid a reasonable fraction of remuneration by way of wages for the work done, as unpaid work is bonded labour and humiliating; (c) the appellant should be allowed to participate in sports and games, and take to artistic activity and/or meditational course.
He should be given such opportunities by the Jail authorities as would stimulate his creativity and sensitivity.
(d) a guarded parole release every 3 months for at least a week.
[162 H, 163 A E] Humanitarian winds must blow into the prison barricades.
Jail reforms from abolition of convict 's costume and conscript labour to restoration and fraternal touch, are on the urgent agenda of the nation.
Our prisons should be correctional houses, and not cruel iron aching the soul.
[164 C] The court observed that the State should not hesitate to respect the personality in each convict in the spirit of the preamble to the Constitution and not to permit the colonial hangover of putting people behind the bars and then forget about them.
[164 F] R. vs King and R. vs Ironfield , referred to.


judgement:
Appeal No. 49 of 1972.
Appeal from the Judgment and Order dated 24th December, 1970 of the Madhya Pradesh High Court in Mic.
Petition No. 474/68.
Panjwani, H.S. Parihar and 1.
N. Shroff for the Appel lants.
B. Sen, (Mrs.) Leila Seth, T.M. Sen, Praveen Kumar and O.P Khanan for Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The State of Madhya Pradesh, blessed with abundant forest wealth, whose exploitation, for reasons best known to that government, was left in part to the private sector, viz., the respondent, Orient Paper Mills, which is the appellant in this appeal by certificate.
The subject matter of this litigation, however, is the competen cy to collect sales tax from the respondent for the bamboo and salai wood extracted by it, under a transaction relating to some government forests in Vindhya Pradesh which, on 'states reorganisation ' in 1956, became part of Madhya Pradesh.
The transaction itself was dressed up as a lease deed executed by the then State of Vindhya Pradesh on August 4, 1956 in favour of Orient Paper Mills, the respondent herein.
At that time no sales tax could be levied under the law from the forest department of the appellant State or the respondent mills.
However, on April 1, 1959 the M.P. Gener al Sales Tax Act, 1958, (hereinafter referred to acronymi cally as M.P.G.S.T. Act) came into force.
On the footing that the Forest Department was a dealer it got itself regis tered as such, under the sales tax law, on November 3, 1962.
The respondent, of course, is a registered dealer under the same law.
Subsequently, the Chief Conservator of For ests, representing the appellant, demanded of the respondent that it pay sales tax on the timber extracted under the 'lease deed ', whereupon the claim was repudiated by the respondent.
In consequence, 151 the appellant proceeded to.
levy the sum representing the sales tax on the value of the timber cut and removed as per the terms of the contract, resorting to revenue recovery proceedings authorised by Sec. 82 of the Indian Forest Act.
Thereupon the respondent moved the High Court for the issu ance of a writ under article 226 of the Constitution of India against the State.
to forbear from collecting sales tax illegally.
Holding that the State Government and its Forest Department were not dealers w;thin the sense of the sales tax law, the writ petition was allowed, notwithstand ing the adverse findings against the petition respondent on some other vital points.
The State has challenged this finding in the appeal before us.
The validity of the attempted exaction is the gut issue in these proceedings, although the centre of gravity on this forensic stage has shifted from the question of the forest department being a dealer to whether the transaction styled 'lease ' does at all involve sale of goods.
From 'no dealer, no sales tax ' to 'no sale no sales tax ' is the shift in the epicentre of the argument caused by an amendment to the sales tax statute legislated after and on account of the very judgment under appeal.
Suffice it to say for the present, no sale, no sales tax is a legal tru ism.
It may be mentioned right here that the respondent before us is not directly liable to pay sales tax, even assuming that the 'lease deed ' involves sale of goods.
The forest department of government is admittedly a registered dealer for the relevant period, and it is claimed by the appellant State that it was liable qua dealer to pay tax on sales of timber, and by virtue of section 64 A of the Sale of Goods Act such sums, which became leviable only after the agreement was entered into in 1956, could be recovered from the purchaser respondent.
It is virtually admitted in this appeal, as stated earlier, that both parties are registered dealers under the relevant sales tax Act.
Nor is it in dispute that if the appellant forest department were liable to pay sales tax for the sales of timber which were alleged to have taken place, the respondent, in turn, would be liable to make good that sum in view of the plain provision in section 64A of the Sale of Goods Act.
But to attract that provision there has to be sale of goods.
Was there any sale of wood under the lease deed ? That is the core of the legal quarrel agitated before us.
We may straight proceed to consider the questions canvassed before the High Court since both sides have had to challenge one or other of the findings.
We may borrow the formulation of the four points set out in the judgment of the High Court.
"(i) The transaction is not a sale of goods and no sales tax is payable in respect of bamboos and salai wood extracted thereunder by the petitioner.
(ii) No sales tax is payable under the terms of the lease deed dated August 4, 1956 and, therefore, such tax cannot be recovered.
(iii) Neither the State Government nor the Forest Department of that Government is or could be a dealer and for this reason also no sales tax is payable or recoverable.
152 (iv) The sales tax, even if payable, is not recoverable as arrears of land revenue, particularly when the revenue recovery certificate was issued by the Divisional Forest Officer.
" The time is set true for stating the decisive statutory changes which occurred after the High Court ruled against the State, calculated to undo the disability discovered by that pronouncement.
This development deserves attention as the sole point on which the State lost in the High Court, viz. that the Forest Department is not doing business, ceases to have relevance today on account of the amendment to the Madhya Pradesh.
General Sales Tax Act by the MPGST (Amendment and Validation) Act 13 of 1971.
The definition of 'dealer ' and other related provisions were touched up and redefined in such manner that the finding on point No. 3 formulated by the High Court was effectively nullified.
Indeed, the legislation is a sequel to the decision and has squarely undone the impediment in the way of the State collecting sales tax from the respondent.
So long as that law holds good the State 's claim cannot be bowled out.
Of course, Sri B. Sen, for the respondent, desired to challenge the vires of the Amending Act but the Presidential Proclama tion during the Emergency, suspending the operation of article 14, handcuffs the respondent from seeking to strike down this legislation.
When the Presidential Proclamation, sterilising article 14, lapses then it may be time enough to assail ' this law.
So far as this appeal is concerned, article 14 is under eclipse and the ground of challenge unavailable.
The amendatory provisions must therefore be held impregna ble, on this score, and we proceed on that footing.
Its post Emergency validity will be decided, if attacked, at that time, since we leave that aspect untouched.
To abbre viate the discussion, thanks to Act 13 of 1971, the Forest Department of the State shall be deemed to be dealer.
If it is a dealer, the levy of sales tax from it is legal and the controversy on this score is silenced.
The meat of the matter is the judicial determination of the true character of the transaction of 'lease ' from the angle of the MPGST Act and the Sale of Goods Act whose combined operation is pressed into service for making the tax exigible from the Forest Department and, in turn, from the respondent mills.
It is the part of judicial prudence to decide an issue arising under a specific statute by confining the focus to that ' statutory compass as far as possible.
Diffusion into wider jurisprudential areas is fraught with unwitting conflict or confusion.
We, there fore, warn ourselves against venturing into the general law of real property except for minimal illumination thrown by rulings cited.
In a large sense, there are no absolutes in legal propositions and human problems and so, in the jural cosmos of relativity, our observations here may not be good currency beyond the factual legal boundaries of sales tax situations under a specific statute.
The major plea to bomb the tax demand having been shot down by retroactive legislative missiles, the respondent has sought a manouvre to victory by reliance on the contention covered by formulation No. 1 set out at the beginning.
Point 2 hinges on the result of point No. 1 and deserves no separate discussion.
153 The High Court 's holding on these twin points is in favour of the respondent on the basic submission of non exigibility of tax on the score that the transactions in question are not sales at all and the payments not price of goods at all but mere royalty under a lease.
A short legal survey will take us to an easy solution of this issue.
Section 64A of the Sale of Goods Act enables the seller, under certain circumstances, to recover, as sale price, any sales tax which the vendor has had to pay.
So, if in the present case, the Forest Department of the State is liable to pay sales tax on the bamboo.
and salai wood cut and removed by the respondent, the claim to recover it from the buyer is good under the said s.64A.
The next logical series of questions are whether the Forest Department is liable to sales tax on the timber covered by demise ? Can the timber s0 extracted and the royalty paid at the rates stipulated be called goods and sale price respectively under Sec.
2(0) of the MPGST Act ? Can the levies made by the Forest Department become its turnover of sales under Sec. 2(t) ? Does removal of timber by the lessee constitute sale of goods under section 2(n) of the MPGST Act or section 64A of the Sale of Goods Act ? The ignition point which sets in motion the chain reac tion is the character of the transaction whereby bamboo etc.
are cut and removed and money paid, measured by the weight of the timber extracted.
If it is a sale the tax is leviable from the Forest Department and the amount, in turn, recoverable from the lessee and vice versa.
We must set out parts of the 'lease deed ' so that its basic structure and essential nature may be decoded.
Is it really a lease of forest or is it a sale of certain timber with ancilliary licences ? No. doubt, the deed styles itself a lease.
But it is argued that a soi disant lease may well be a mere contract of sale of goods.
Theoretical ly, this is perfectly possible in law, as in literature: 'What 's in a name ? that which we call a rose/By any other name would smell as sweet '! But what is there in the document to detract from the prima facie validity of the label ? Here the clarity of the reasoning lies in the correct approach t0 the question which is not so much whether the contract is one of lease but whether it works out a sale of goods under the two concerned statutes.
Sales tax is payable by a dealer.
The Forest Department, by force of the statutory amendment, is admittedly a dealer.
Such tax is computed on the turnover as defined in section 2(t) of the MPGST Act, which reads: "2.
In this Act, unless there is anything repugnant in the subject or context, X X X X (t) 'turnover ' used in relation to any period means the aggregate of the amount of sale prices received and receivable by a dealer in respect of any sale or supply or distribu 154 tion of goods made during that period, whether or not the whole or any portion of such turnover is liable to tax but after deducting the amount, if any refunded by the dealer to a purchaser, in respect of any goods purchased and returned by the purchaser within the prescribed period.
" The essential ingredients of turnover are thus 'sale of goods ' and 'sale prices '.
The latter concept has received definitional expression in s.2(0) and the former in s.2(n).
They may be read here: "(o) 'sale price ' means the amount payable to a dealer as valuable consideration for the sale of any goods, less any sum allowed as cash discount according to ' ordinary trade practice but including any sum charged for anything done by the dealer in respect of the goods at the time or before delivery thereof other than the cost of freight or delivery or the cost of installation when such cost is Separately charged and the expression 'purchase price ' shall be construed accordingly.
(n) 'Sale ' with all its grammatical variations and cognate expressions means any transfer of property in goods for cash or deferred payment or for other valuable consideration and includes a transfer of property in goods involved in the supply or distribution of goods by a society or club or any association to its members, but does not include a mortgage, hypothecation charge or pledge, and the word 'purchase ' shall be construed accordingly;" For all these words to apply, the pivotal factor is 'goods ' which is defined in substantially similar manner in both the Sale of Goods Act and in section 2(g) of the MPGST Act which latter reads: "2 (g) "goods" means all kinds of movable property other than actionable claims, newspapers, stocks, shares, securities or Government stamps and includes all materials, articles and commodities whether or not to be used in the construction, fitting out, improvement or repair of movable or immovable property; and also includes all growing crops, grass, trees, plants and things attached to, or forming part of the land which are agreed to be severed before sale or under the ' contract or sale;" The key expressions which unlock the mystique of turn over curesale of goods are the last inclusive limb of the clause 'also includes . trees which are agreed to be severed under the contract of sale '.
The crunch issue thus is whether the self styled lease deed is in substance a contract of sale of timber.
The true import of the document may be gathered from its terms, not from rulings on other documents.
There is a serious limitation on the service of case law in this area.
It depends firstly on the actual issue in each case and the angle of vision adopted and secondly on the clauses, pur poses and surrounding circumstances of each tran 155 saction.
While, therefore, we may cite some rulings later we bear in mind the limits of their use.
Shri Sen rightly stressed the importance of the deliber ate description of the deed as a lease.
He drew our atten tion, with emphasis, to annual payments of royalty, not price.
Royalty has a slight fedual flavour with a tell tale demise relish, if we may say so, while price is a mercantile concept smacking of commercial relations.
By the deed, the forest lands of the lessor are 'hereby demised '.
There are frequent references to the 'leased area '.
The period of the lease is stated to be a long 20 years, later substituted by 30 years.
There is also refer ence to discharge of lease, royalties, compensation and other monies, suggestive of a demise rather than of a sale.
The provision for payment of a minimum royalty runs in these terms: lm15 "Provided that the minimum royalty payable by the lessees to the State Government during the first year of this lease shall not be less than 1.5 lakhs of rupees and for the next and subsequent years, shall, during the term of this demise, be not less than two lakhs of rupees per annum.
" Whether there is cutting of timber or not, Shri Sen argues, the minimum royalty has to be paid, thus showing that the provision for payment is sometimes de linked from the ex ploitation of the forest or the value of the timber cut.
Considerable reliance was placed for taking the document out of the category of mere sale of goods, on clause 5 of the Deed, which reads: "The lessees shall with the previous permission in writing of the State Government be at liberty to make dams, cross streams, cut canals, make water course irrigation works, construct roads, railways and tramways and do any other works useful or necessary for the purposes of the business connected with these presents in or upon the leased area provided that they are in accordance with the plan approved by the State Government and also with the like approval to widen or deepen any existing creeks or channels of waterways for the purposes of the said business and all timbers required for the above purposes shall be allowed half royalty rates in the case of timbers of reserved species and free in case of timbers of unreserved species by the State Government.
" There is also provision for renewal of the lease deed which savours, again, of a transaction of real property since renewals cannot obtain for sales.
The face value of these features tends to fix the trans action as a lease but, lift the veil and feel the reality behind, Shri Shroff urged us, only to discover that the lease is no more than a simple sale of goods, viz., of bamboo and salai wood.
He dismissed tags and labels as of the least consequence when the heart of the matter turned on the crucial terms of the document which were, in his submis sion, loudly 156 obtrusive of the 'sale of goods ' character of the transac tion.
Of course, if in essence there is a sale of goods covered by the deed, we have to locate the taxing event which occurs when the title to the goods is transferred.
The description of the document as a lease 'deed ', the reference to royalty, the right to construction of buildings etc., cannot hamper a contrary conclusion if there are luminous characterstics of a 'sale of goods ', in what is but a lease deed in name.
From this angle Shri Shroff has high lighted certain principal provisions in the deed.
There is no doubt, he says, that if one scans the document closely, one finds that possession of the land is not given; which means that parties have slurred over the demise part of it notwithstanding the dubious expressions used.
What is authorised under the deed is the 'exclusive liberty ' to enter upon the leased area to fell, cut or extract bamboos and salai wood and to remove, store and utilise the same for meeting the full requirements of the Paper Mill.
This reads more like a sale of standing timber coupled with a licence to enter and do certain things on another 's land.
Counsel also emphasised that an insightful understanding of cl.
2(g) of the deed would bring out the price fixed for the goods sold viz., 'a fiat rate of Rs. 6/ per ton on air dry bamboo and Rs. 2/ per ton on air dry salai wood . actually extracted and removed from the leased area on the weighment at the weighbridge of the said Paper Mill and in case of export at the weighbridge or weighbridges to be installed at suitable places by the lessees, in which case the royalty shall be Rs. 7/8/0 (rupees seven and eight annas) and Rs. 2/8/0 (rupees two and annas eight) per ton of air dry bamboo and salai wood respectively.
In this context supportive strength was sought to be drawn from cl. 2(h) which reads: "(h) The lessees shall keep an account of all bamboos and salai wood cut and removed in the manner as may mutually be settled and such account shah be open to inspection by the Forest Officer authorised in this behalf by the Divisional Officer concerned.
" Shri Shroff went to the extent of saying that the real nature of the transaction was disclosed in the deed itself in clause 2(k): "(k) The lessees in conducting their operation on the leased area shall not in any way interfere with the surface of land save and in so far as may be necessary in connection with and for the purposes of this licence." Clause 4 bears on its bosom, in his submission, the imprint of a contract for sale of goods and it may be read: "4. "Without prejudice to the provisions of this lease, the rights, liberties and privileges of the lessees hereinbefore mentioned shall extend only to bamboos and salai wood within the leased area and nothing herein shall in any way be deemed to authorise the lessees to interfere with the working of the forest areas within the leased area or the rights, liberties, privileges of other contractors of the said forest lands.
" 157 We are considerably impressed with this analysis.
The upshot of the whole transaction is that, for a price fixed, bamboos and salai wood are permitted to be removed from the forest of the appellant by the respondent.
For the exercise of the right under this contract, certain necessary licences are conceded.
It is made perfectly plain that the posses sion of the land qua land is not given, and there is a fool proof provision that the rights of the 'lessees ' shall extend only to bamboos and salai woods within the leased area and nothing herein shall in any way be deemed to autho rise the lessees to interfere with the working of the forest area . of other contractors of the said forest lands.
Can there be a lease without exclusive, possession of the lands ? Can there be a lease to A of lands when the only right is to cut certain species of timber above a certain height and according to.
stipulated conditions ? Can there be a lease of lands where similar right to cut timber from the same land co exist in other contractors ? There are mere circumstances than these, but we need not be exhaus tive, especially when we agree with the conclusion reached by the High Court.
We are satisfied that despite its description, the deed confers in truth and substance a right to cut and carry timber of specified species.
Till the trees are cut, they remain the property of the owner, namely the appellant.
Once the trees are severed, the property passes.
The 'Royalty ' is a feudalistic euphemism for the 'price ' of the timber.
We may also observe that the question before us is not so much as to what nomenclature would aptly describe the deed but as to whether the deed results in sale of trees after they are cut.
The answer to that question, as would .appear from the above, has to be in the affirmative.
Now to a brief reference to two out of several cases cited at the Bar.
Sri Sen relied heavily upon Raja Bahadur Kamakshya Narain Singh(1).
That was a case under the Income Tax law.
The assessee there received large payments by way of royal ty under various mining leases.
The leases purported to be for 999 years and related to the coal mining rights set Out in the Schedule to the lease.
The lessees were to pay a sum by way of salami or premium and an annual sum as royalty computed at a certain rate per ton on the amount of coal raised and coke manufactured.
It was contended on behalf of the assessee that the sums received as salami and royalty did not constitute 'income ' but were capital receipts, representing the price of the minerals removed.
There was also a provision for minimum royalty which was pressed into service by the party.
The Judicial Committee held that the royalty payable under the lease was not the price of the actual coal extracted but represented compensation which the lessees paid to the lessor for that species of occupa tion which the contract allowed and it was therefore 'in come ' from other sources ' within the meaning of the relevant Income tax Act.
We must point that the legal setting in which a question is considered colours the ratio of the case.
The Judicial Committee was considering an issue arising under the Income Tax Act and, interpreting the clauses of a deed with particular terms, to ascertain wheth er the payments made thereunder fell within the meaning of 'income ' understood in its broadest connotation [1943] 11 .T.R. 513. 158 in England and in India.
Construing, as we do, a special statute and a differently worded deed and the signification of the words used therein we are unable to draw any legiti mate instructional inferences from a decision contextually different, concerned with a different branch of law; and dealing with different issues although with seeming resem blances in superficial respects.
Another decision which, perhaps, has some helpful reasoning, is by this Court in Badri Prasad(1).
We need not discuss the details of that case except to point out that it has been recognised, in that ruling, that trees which are to be severed before sale or under the contract of sale are 'goods ' for the purposes of the Sales of Goods Act.
On the facts of that case, property in the cut timber could pass to the plaintiff under the contract at the earliest when the trees were felled but before that happened the trees had vested in the state under an agrarian reform measure.
The crutches of case law are not always necessary in Court.
While direct light on the legal situation present before us is not available from Badri Prasad, or 'Kamakshya Narain Singh, (supra) there is not the slightest doubt that going by the definition of 'sale of goods ' under 8.
2(7) of the Sale of Goods Act and of s.2(g) of the MPGST Act, stand ing timber is 'movable property ' if under the contract of sale they are to be severed.
But the severance must take place when the timber still vests in the contracting party.
Ultimately, the case before us has to.
be decided on the facts and the law which form the backdrop to the deci sion.
We have already held that the crucial fact to be found before we can designate the transaction as 'sale of goods ' is to scan and see whether the 'lease deed ' really deals with sale of timber.
We are clear that there is sale of bamboo and salai wood under the contract and, in the contemplation of the parties they are to be cut and severed, pursuant to the contract itself.
It follows that the find ing of the High Court on this point is correct.
The appeal deserves to be allowed on account of the statutory amendment.
The Madhya Pradesh Legislature had taken great care and responded with prompt attention to deal with a situation where considerable revenue would be lost to it on account of inadequate expression of its intendment in the MPGST Act.
A diligent and considered amendment has fulfilled the legislative purpose.
Had the State lost the appeal before Us on another point, that is as to whether royalty was 'price for sale of goods ', the whole amendatory effort would have been an exercise in futility or a legisla tive brutum fulmen.
In view of our finding that there is a 'sale of goods ' under the contract, the State is entitled to succeed.
Counsel for the respondent, when we briefly indicated our mind, and even otherwise by way of abundant caution,.
rightly urged that his client had a good case for reduction of the quantum of tax even if sales tax was payable by the Forest Department which could be shift (1) ; 159 ed to the respondent by virtue of s.64A of the Sale of Goods Act.
He prayed for an opportunity to establish that he was being called upon to foot a larger bill than was legally tenable.
We regard this a reasonable request and, indeed, Shri Shroff, for the State, has very rightly agreed with this prayer of the respondent.
For one thing, the amending Bill whereby the liability was being de novo fastened was enacted into law after the judgment of the High Court.
Read with s.82 of the Indian Forests Act, the amount was being recovered as if it were land revenue.
This process deprived the respondent of his right to challenge the quantification of the tax.
It is fair and the State agrees to be fair that the respondent should be enabled to prove his case that the sum claimed was much higher than could be legitimately recovered.
Shri B. Sen brought to our notice that the rate of tax on sales to a registered dealer, if the commodity was to be consumed within the State, in view of Section 8 of Madhya Pradesh General Sales Tax Act for manu facturing purposes was less than the general rates.
The appellant, on the other hand was seeking to recover at the higher rate.
Moreover, even the lesser rate varied over the years from 1% to 2% and on to 3 %.
Thus the arithmetics of the case had also to be gone into before the actual sum due from the Forest Department to the Sales Tax Department was fixed.
More could not be exacted from the respondent.
These reasons persuade us to allow the appeal and remand the case for consideration of the quantum of tax that the State, in the Forest Department, was legally liable to pay as a dealer, to the Sales Tax Department.
Shri Shroff took up a point that when the Forest Depart ment made a demand on the respondent and required him to furnish a declaration necessary to reduce the rate of tax, the latter ignored the request.
This, according to him, had an impact on the eventual liability.
We do not propose to investigate this aspect at the present stage but leave it to be raised by the State before the High Court.
In this view, we allow the appeal and remand the case for disposal after recording a finding on the limited issue/issues above indicated.
We may mention that although the High Court has not properly adjudicated upon the recov erability of the Sales Tax as and by way of arrears of land revenue, it is not necessary to go into the matter afresh especially because once the tax amount is settled, the payment by the respondent will follow.
However, we are not upsetting the finding of the High Court in this behalf in the present case.
The appeal is allowed and remanded, to be disposed of in the light of the directions given above.
Parties will bear their costs throughout.
P.B.R. Appeal allowed.

dataset_name: IN-Abs

summary:
Under section 2(g) of the Madhya Pradesh General Sales Tax Act the term 'goods ' means all kinds of movable property and includes all growing crops, trees, plants and things at tached to.
or forming part of the land which are agreed to be severed before sale or under the contract of sale.
Under el.
(n) 'Sale ' means any transfer of property in goods for cash or deferred payment.
Clause (0) defines 'sale price ' as the amount payable by a dealer as valuable consideration for the sale of goods and under cl.
(t) 'turnover ' means the aggregate of the amount of sale price received and receiva ble by a dealer.
The respondent Mills entered into a lease with the Forest Department of the State for the cutting of bamboo and salai wood from the leased forest area in the State.
The lease deed provided that the lessee shall pay a minimum royalty every year whether there was cutting of timber or not, the lessee could construct roads, railways etc.
for the purposes of business; should pay the price fixed for the wood removed from the leased area; should keep a,n account of all wood cut and removed and that the rights and privi leges of the lessees shall extend only to bamboos and salai wood within the leased area.
The appellant (Forest Department) which was a registered dealer under Sates Tax Act demanded front the respondent, (also a registered dealer) sales tax in respect Of timber extracted from the leased area.
When the respondent repudi ated the Department 's claim it paid the tax and proceeded to recover the tax under the revenue recovery proceedings under section 82 of the Indian Forests Act.
Allowing the respondent 's writ petition under article 226 of the Constitution the High Court held that the State Govern ment and its Forest Departments were not a 'dealer ' within the meaning of the sales tax law and as such were not enti tled to recover the amount from the respondent.
Thereupon the definition of the dealer under the Act was altered to undo the effect of the High Court 's decision.
In appeal to this Court the appellant contended that though apparently the transaction was a lease, in reality the lease was no more than a simple sale of standing timber, coupled with a licence to enter and do certain things on another 's land and the transaction in essence was a sale of goods within the meaning of the Act.
Allowing the appeal to this Court.
HELD: Going by the definition of 'sale of goods ' under s.2(7) of the Sale of Goods Act and section 2(g) of the Sales Tax Act standing timber is 'movable property ' if under the contract it is to be severed.
But the severence must take place when the timber still vests in the contracting party.
[158D] In the instant case there was sale of bamboo and salai wood under the contract and, in the contemplation of the parties they were to be cut and severed pursuant to the contract itself.
Raja Bahadur Kamakshya Narain Singh (1943) 11 I.T.R. 513; Badri Prasad [1969] 2 S C R. 380 held inapplicable.
150 1.
(a) Despite its description, the deed conferred in truth and substance a right to cut and carry timber of specified species.
Till the tress were cut, they remained the property of the appellant.
Once the trees were severed, the property passed.
Royalty is a euphemism for the price of the timber.
[157D] (b) From the terms of the lease it was clear that for a price fixed, bamboo and salai wood were permitted to be removed by the respondent from the forest of the appellant.
Possession of the land qua land was not given and there was a provision that the rights of the lessess shall extend only to bamboos and wood within the leased area and nothing therein shall in any way be deemed to authorise the lessees to interfere with the working of the forest area of other contractors of the forest lands.
[157A B] (2) The amending bill, whereby the liability was being de novo fastened, was enacted into law ' after the judgment of the High Court.
Read with section 82 of the Indian Forests Act, the amount was being recovered as if it were land revenue.
This process deprived the respondent of his right to chal lenge the qualification of the tax.
The respondent should be enabled to prove his case that the sum claimed was much higher than could be legitimately recovered.
[159B] [The case was remanded for consideration of the quantum of tax that the Forest Department was legally liable to pay as a dealer, to the Sales Tax Department.
Once the tax is settled the payment by the respondent will follow.]