judgement:
N: Criminal Appeal No. 137 Of 1972.
Appeal by Special Leave from the Judgment and order dated 27 4 72 of the Allahabad High Court in Govt.
Appeal No. 128/69.
Yogeshwar Prasad, section K. Bagga and Miss Meera Bali for the appellant.
O. P. Rana for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
This appeal is by special leave by Sambhu Dayal against the judgment of the High Court of Allahabad allowing an appeal by the Government of U.P. and setting aside the order of acquittal and restoring the conviction under sections 8 and 16 of the Prevention of Food Adulteration Act and the sentence of six months rigorous imprisonment passed by the Sub Divisional Magistrate, Jalaun.
On 1st November, 1966, Shri Raja Ram Bhatt, the Food Inspector, went to the village and found the appellant Shambhu Dayal bringing cow 's milk to Orai for sale.
The Food Inspector served a notice OD the petitioners and took sample of the milk weighing 660 grams against cash payment of 0.60 P.
He divided it in three equal parts and kept each part in a different bottle.
He added 16 drops of formalin in each bottle and then sealed the same.
One of the sealed bottles was 343 given to the petitioner.
Another bottle was sent to the Public Analyst, Lucknow, for analysis.
The Public Analyst submitted his report dated 14th December, 1966 giving his opinion that the sample was deficient in non fatty solid contents by about 15 per cent.
The charge sheet was filed on 5th February, 1967 by the Food Inspector after obtaining the sanction of the District Medical officer of Health, Jalaun at Orai.
The appellant pleaded not guilty and denied that he had sold the milk.
According to him he was taking the milk to one Pandey of village Kharra when the Food Inspector took some of it without making any payment to him.
The trial court accepted the case of the prosecution and on 10th November, 1967 convicted the appellant under section 8 read with section 16 of the Prevention of Food Adulteration Act and sentenced him to six months rigorous imprisonment.
The appellant preferred a Criminal Appeal to the Court of Sessions.
By its judgment dated 12th October, 1968 the Sessions Judge allowed the appeal and set aside the conviction and sentence imposed upon the appellant.
The State of U.P. preferred an appeal to the High Court of Allahabad.
A Division Bench of the High Court allowed the appeal and restored the conviction and sentence imposed upon the appellant by the trial court.
Miss Meera Bali, the learned advocate appearing for the appellant raised three contentions.
She submitted that the Prevention of Food Adulteration Act came into force in 1954 and before the amending Act 49 of 1964 came into force the power to appoint the Public Analyst and Food Inspector rested with the State Government only.
After the amending Act, Act 49 of 1964, sections 8 and 9 were substituted by new sections 8 and 9 which provided that the Central Government or the State Government may by notification in the official Gazette appoint a Public Analyst and a Food Inspector.
The amending Act came into force in 1964.
The State Government by notification dated 15th April, 1968, appointed Food Inspectors with effect from 1st March, 1965 and by notification dated 23rd March, 1968 appointed Dr. R. section Srivastava as the Public Analyst with effect from 1st March, 1965.
The submission of the learned counsel is that when the offence took place on 1st November, 1966 neither the Food Inspector nor the Public Analyst was empowered to function as Food Inspector or Public Analyst as the notification was made very much later on 15th April, 1968 and 23rd March, 1968 respectively.
It was submitted that the notification cannot give retrospective effect to the appointment from 1st March, 1965.
The Plea was accepted by the learned Sessions Judge but the High court held following the decision of the Allahabad High Court in Nagar 344 Mahapalika vs Ram Dhani(1) that the notification relating to the appointment of the Food Inspector and the Public Analyst issued under the unamended Act was valid even after the amendment.
Sections 8 and 9 of the Food Adulteration Act, 1950 before the amending Act 49 of 1964 stood thus: "8.
Public Analysts.
The State Government may, by notification in the official Gazette, appoint such persons as it thinks fit, and, possessing such qualifications.
as may be prescribed to be Public Analyst and define local areas over which they shall exercise jurisdiction.
(1) Subject to the provisions of Section 14, the State Government, may by notification in the official Gazette, appoint persons in such number as it thinks fit, having the prescribed qualifications to be Food Inspectors for the purpose of this Act, and they shall exercise their power within such local areas as that Government may assign to them;" The relevant amendment to sections 8 and 9 is contained in section 5 of the amending Act which reads as follows: "5.
Substitution of new Sections for Sections 8 and 9.
For sections 8 and 9 of the Principal Act, the following sections shall be substituted, namely: 8.
Public Analysts: The Central Government or the State Government may, by notifications in the official Gazette appoint such persons as it thinks fit, having the prescribed qualifications to be Public Analyst for such local areas as may be assigned to them by the Central Government, as the same may be: * * * * 9.
Food Inspectors .(1) The Central Government or the State Government may, by notification in the official Gazette, appoint such persons as it thinks fit, having the & prescribed qualifications to be Food Inspectors for such local areas as may be assigned to them by the Central Government , or the State Government as the case may be: * * * * On the facts it is not disputed that on the date of the offence neither a Public Analyst nor a Food Inspector was appointed after the amending Act 49 of 1964.
The learned counsel would like us to read (1) A.I.R. 1971 All. 53. 345 sections 8 and 9 of the Act as repealing the old sections and empowering the Central Government or the State Government to appoint the Public Analyst or the Food Inspector after the coming into force of the amending Act implying that any prior appointment of a Public Analyst or Food Inspector stood repealed.
We are usable to accept this contention.
lt is not necessary for us to go into the question whether the notifications of the Government in 1968 Appointing the Public Analyst and the Food Inspector with retrospective effect from March, 1968 are valid or not for we can rest our decision on the ground that being an amending Act the appointment of the Public Analyst and the Food Inspector made by the State Government before the amendment continued to be valid.
In Nagar Mahapalika Lucknow vs Ram Dhani, (supra) it was held that when the Food Inspector and the Public analyst were appointed under notifications Dated 27th July, 1959 issued under the provisions of , the effect of the amending Act, Act of 49 of 1964, was only to the extent that the Central Government was given concurrent powers with the State Government in the matter of appointment of Public Analyst through notification and that Act 49 of 1964 did not repeal any part of the Food Adulteration Act which then existed and amendments in the specific provisions of the said Act which were affected by Act 49 of 1964 will not have the effect of repeal of any.
part of the said Act.
We agree with the view taken by the Bench of the Allahabad High Court.
The amended sections 8 and 9 do not in any way repeal Sections 8 and 9 as they originally stood.
As to the effect of the amendment the language of the amending sections will have to be examined to field out whether the original sections were intended to be repealed.
The amending provisions should be held as part of the original statute.
Whenever the amended section has to be applied subsequent to the date of the amendment the unamended provisions of the Act have to be read along with the amended provisions as though they arc part of it.
Reading the amended section we find that there is no provision, express or implied, repealing the existing provisions or the rules made thereunder.
The section will have to be construed as being in addition to what had already existed.
The effect will be that the power of the State Government which already existed under the unamended section and the appointments made thereunder will be preserved and the action taken under the amended sections will be in addition to the powers of the State Government and the appointments which had already been made.
The second point that was raised by the learned counsel was that the sample was sent to the Public Analyst on 5th November, 1966 4 978SCI/78 346 but was analysed only on 14th December, 1966.
As the analysis was after 44 days it was submitted that the milk would not have been in a fit condition for analysis.
This contention was not accepted by the learned Sessions Judge who found that there was no evidence about the sample of milk being pasteurised or its despatch under refrigeration.
But the report of the Public Analyst clearly showed that no change had taken place in the constituents of milk which would have interfered with the analysis.
Though this point was not pressed before the High Court the learned counsel relying on a decision of the Nagpur High Court in Dattappa Mahadappa vs Secretary, Municipal Committee, Baldana, (1) submitted that where milk is analysed by the Analysts a week after the samples were taken no presumption of adulteration can be drawn in the absence of proof of the manner in which the samples were sent and the condition in which the milk was when the samples were received by him.
The learned Judge after referring to the various passages in the text book "Milk: Production and Control" by Harvey and Hill observed that taking into account that the milk was analysed by the Analyst almost a week after the samples were taken, the absence of proof of the manner in which the samples were sent and the condition in which the milk was when the samples.
were received by him detracts from the value of anlyst 's certificate.
In the present case there is evidence of the Food Inspector that he added formalin as a preservative and the report of the Public Analyst that no change had taken place in the constituents of milk which wold have interfered with the analysis.
This statement of the analyst was not challenged in any of the courts below.
Apart from the statement of the Analyst not having been questioned, in this case it is admitted that formalin was added to the milk by the Food Inspector.
The Food Inspector added 16 drops of formalin in each of the bottles and had them sealed properly.
Rule 20 of the Prevention of Food Adulteration Rules requires that in the case of milk, Cream, Dahi, Khoa and Gur a preservative known as 'formalin, that is to say, a liquid containing about 40 per cent of formaldehyde in aqueous solution in the proportion of 0.1 ml (two drops) for 25 ml or 25 grams shall be added The High Court of Allahabad in Babboo vs State(2) held that in the case.
of cow 's milk to which necessary quantity of formalin has been added according to Rules and which has been kept in normal circumstances, it retains its character and is capable of being usefully analysed for a period of about ten months.
It is unnecessary for us to specify the period for which the sample will remain unaffected but so far as this case is concerned there is the clear evidence of Public Analyst that no (1) A.I.R. 1951 Nag.
(2) A.I.R. 1970 All. 122.
347 change had taken place in the constituents of milk which would interfere with the analysis.
As this statement has not been challenged we see no reason for accepting the contention of the learned counsel that the analysis of the milk after 44 days cannot be accepted.
This contention has also to be rejected.
Lastly, the learned counsel submitted that the prosecution has not established that the appellant was taking the milk for the purpose of calc.
This plea was rejected by the High Court, accepting the evidence of P.W. 2 that he know the appellant personally and that the appellant carried on the business of selling milk in Orai and possessed a licence in selling milk in the preceding years and also in the current year.
According to the witness the appellant brought milk from the rural areas and sold it in Orai in the current year and the milk was sold by him to hotel keepers.
True evidence of this witness was accepted by the High Court and we see no reason the reject the testimony of P.W. 2.
T he plea of the appellant that he was taking the milk for supplying it to one Triyugi Narain Pandey was rightly rejected by the High Court.
In the result we are unable to accept any of the submissions made by the learned counsel for the appellant.
We confirm the conviction under Section 8(1) read with section 16 of the .
The sentence being the minimum prescribed under the Act it cannot be interfered with.
In the result the appeal is dismissed.
S.R. Appeal dismissed.

summary:
The appellant was convicted under section 8 read with section 16 of the Prevention of Food Adulteration Act by the Sub Divisional Magistrate, Jalaun and sentenced to six months rigorous imprisonment, the minimum sentence awardable under the P.O.F.A. 1950.
In appeal the Session Court reversed it, but in further appeal by the State against his acquittal and reversal of the trial court decision, the High Court of Allahabad set aside the Session 's orders and restored that of the trial court.
Dismissing the appeal by special leave the Court, ^ HELD: 1.
Sections 8 and 9 of the Prevention of Food Adulteration Act, 1950 as amended by section S of the Amending Act 49 of 1964 cannot be read as repealing the old sections and empowering the Central Government or the State Government to appoint the Public Analyst or the Food Inspector after the coming into force of the amending Act, implying that any prior appointment o '.
a Public Analyst or Food Inspector stood repealed.
[345A] 2 Whether the notifications of the Government in 1968 appointing the public Analyst and the Food Inspector with retrospective effect from March 05 are valid or not need not be looked into because being an amendment Act, the appointment of the Public Analyst and the Food Inspector made by the State Government continued to be valid.
[345B C] 3.
The amended sections 8 and 9 do not in any way repeal sections 8 and 9 as they originally stood.
As to the effect of the amendment the language of the amending sections will have to be examined to find out whether the original conditions were intended to be repealed.
The amending provisions should be held as part of the original statute.
[345D E] 4.
Whenever the amended section has to be applied subsequent to the date of the amendment, the unamended provisions of the Act have to be read along with the amended provisions as though they are part of it.
Reading the amended section, it is clear that there is no provision, express or implied, repealing the existing provisions or the rules made thereunder.
The section will have to be construed as being in addition to what had already existed.
The effect will be that the power of the State Government which already existed under the unamended section and the appointments made thereunder preserved and the action taken under the amended sections with be in addition to the powers of the State Government and the appointments which had already been made.
[345F G] 342 Nagar Mahapalika, Lucknow vs Ram Dhani, A.I.R. 1971 All. 53 approved.
The contention that the analysis of the milk after 44 days must yield to an adverse inference against the State as to adulteration cannot be accepted.
[346A] In the present case there is evidence of the Food Inspector that he added formalin as a preservative and the report of the Public Analyst that no change had taken place in the constituents of milk which would have interfered with the analysis.
This statement of the analyst was not challenged in any of the courts below.
Apart from the statement of the Analyst not having been questioned, in this case it is admitted that formalin was added to the milk by the Food Inspector.
The Food Inspector added 16 drops of formalin in each of the bottles and had them sealed properly.
Rule 20 of the Prevention of Food Aduleration Rules requires that in the case of milk, cream Dahi, Khoa and Gur a preservative known as "formalin", that is to say, a liquid containing about 40 per cent of 'formaldehyde ' in aqueous solution in the proportion of 0.1 ml.
(two drops) for 25 ml.
Or 25`grams shall be added.
There is also the clear evidence of Public Analyst that no change had taken place in the constituents of milk which would interfere with the analysis.[346D G, 347A] Babboo vs State, A.I.R. 1970 All 122; approved.
Dattappa Mahadappa vs Secy.
, Municipal Committee, Baldana, A.I.R. 1951 Nag.191 referred to.


judgement:
Civil Appeal No. 1482 of 1972.
Appeal by Special Leave from the Judgment and order dated 20th September 1971 of the Punjab and Haryana High Court in Income Tax Reference No. 12/71.
Hardayal Hardy, K. C. Dua and Miss A. Suhhashini for the Appellant.
G. C. Sharma, P. A. Francis, Anoop Sharma and P. K. Mukherjee for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal by special leave arises out of an assessment to income tax made on M/s Groz Backert Saboo Ltd. (hereinafter referred to as the assessee) for the assessment year 1962 63 the corresponding accounting year being the financial year being 31 st March, 1962.
The assessee set up in collaboration with M/s Theodor Groz & Soehne and Ernst Backert, West Germany (hereinafter referred to as the West German Collaborators) a factory for fabrication and manufacture of hosiery needles and it was not disputed on behalf of the assessee that this factory started business sometime prior to the commencement of the relevant year of account.
It appears that in the early part of the relevant accounting year, the assessee received from the West German Collaborators consignment of machinery costing Rs. 9,45.545/ and along with this consignment, the West German Collaborators also sent to the assessee certain goods free of cost.
These goods consisted partly of raw materials and partly of semi finished needles at various stages of manufacture.
The invoice in respect of this consignment was dated 4th April, 1961 and it showed only the price of the machinery consigned to the assessee and did not make any mention of the raw materials and semi finished needles supplied to the assessee along with this consignment, since these goods were supplied free of cost and no charge was made in respect of the same.
374 The Custom Authorities raised objection in respect of these goods and a separate invoice had, therefore, to be sent by the West German Collaborators showing Rs. 44,448.20 as the value of the raw materials, namely, wire and strip and Rs. 30,000/ as the value of the semi finished needles supplied to the assessee.
These goods were not entered in the books of account of the business immediately on receipt by the assessee but they were brought into the books for the first time on 30th September, 1961 by making the following entries: Rs. 44,448.20 debited to the account of "Wire and Strip" and credited to the "Wire and Strip Gift Account" and Rs. 30,000/ debited to the account of "Semi processed Needles" and credited to the "Semi processed Needles Gift Account".
The assesses utilised these goods in the manufacture of finished products and sold the same in the market and the sale proceeds received by the assessee were credited in the trading account maintained in the books of account of the business, since they represented revenue receipts arising from the sale of the finished products.
On 31st March, 1962, being the last date of the accounting year, the assessee closed the "Wire and Strip Gift Account" and the "Semi Processed Needles Gift Account" by transferring the respective sums of Rs. 14,448.20 and Rs. 30,000/ to the credit of the "Capital Reserve Account" and debited an aggregate sum of Rs. 74,448.20 to the trading account by making corresponding credit entries in the accounts of "Wire and Strip" and 'Semi processed Needles".
The net effect of these entries was that the profit of the assessee was reduced by Rs. 74,448.20.
The Income Tax officer, in course of the assessment of the assessee to income tax for the assessment year 1962 63, took the view that the debit of Rs. 74,448.20 was wrongly made in the trading account as on 31st March, 1962 since no monies were expended by the assessee in acquiring the raw materials and semi finished needles, but they were received by way of gift from the West German Collaborators and hence no amount was deductible in respect of the value of these goods.
The same view was taken by the Appellate Assistant Commissioner in appeal and on further appeal, the Tribunal also affirmed the same view.
This led to a Reference by the Tribunal at the instance of the assessee and the following two questions were referred for the opinion of the High Court: 1.
Whether on the facts and in the circumstances of the case, the sum of Rs. 74,448.20 being the actual value of raw material received from German Collaborators free of cost represented Revenue receipt ? 375 2.
Whether on the facts and in the circumstances of the case, the amount of Rs. 74,448/ being the actual value of raw material received free of cost from German collaborators was rightly debited at that value to the revenue account ? The High Court misapprehended the true nature and scope of the controversy between parties and seemed to proceed on the erroneous impression that what the Tribunal had held was that the raw materials and semi finished needles received by the assessee from the West German Collaborators constituted revenue receipt and its value was, therefore, liable to be taxed as income in the hands of the assessee.
The High Court held that the value of these goods could not be treated as revenue receipt because they had been received by way of gift and in any even, even if they constituted revenue receipt, they could "in no sense be income" since they were take out of the ambit of taxability by sub section (3) of section 10 of the Income Tax Act, 1961.
The High Court accordingly answered the questions referred it by the Tribunal in favour of the assessee and against the Revenue.
The Revenue thereupon brought the present appeal with special leave obtained from this Court.
It was found as a fact by the Tribunal, and indeed there was no dispute about it, that the raw materials and semi finished needles were received by the assessee from the West German Collaborators free of cost by way of gift.
These raw materials and semi finished needles were received some time in April, 1961 and it was only on 30th September, 1961 that they were for the first time introduced in the books of account of the business.
There can, therefore, be no doubt that these raw materials and semi finished needles were received by the assessee as capital assets and subsequently on 30th September, 1961 they were transferred to the business as part of its stock If that be so, the cost of these raw materials and semi finished needles to the business could not be said to be nil, but, on the principle laid down by this Court in Commissioner of Income Tax vs Sherinbai Kooka(1) and subsequently followed in Commissioner of Income Tax vs Hanrepara Tea Co. Ltd.(2), it would be the market value of there raw mate rials and semi finished needled as on 30th September, 1961.
It is now well settled by these decisions that where an assessee converts his capital assets into stock in trade and starts dealing in them, that able profit on the sale must be determined by deducting from the sale .
(1) (2) 376 proceeds the market value at the date of their conversion into stock in trade (since this would be the cost to the business) and not the original cost to the assessee.
Here, the original cost of these raw materials and semi finished needles to the assessee was undoubtedly nil because these goods were received by the assessee from the West German Collaborators free of cost, but they were introduced in the business and converted into its stock on 30th September, 1961 and, therefore, their market value as on 30th September, 1961 would represent the cost to the business and that would have to be taken into account in determining the profit arising from the sale of the manufactured products.
The entries made by the assessee in the books of account of the business on 30th September, 1961 clearly reflected this opinion.
The assessee debited the sums of Rs. 44,448.20) and Rs. 30,000/ representing respectively the market value of these raw materials and semi finished needles to the stock accounts of "Wire and Strip" and "Semi processed Needles" which would clearly show that these goods were treated by the assessee as having been introduced in the business as part of its stock at their market value represented by the sums of Rs. 44,448.20 and Rs. 30,000/ .
The position was no different than what it would have been if, instead of giving these raw materials and semi finished needles to the assessee free of cost, the West German Collaborators had gifted the sums of Rs. 44,448.20 and Rs. 30,0000/ to the assessee and the assessee had introduced these amounts in the business and an identical quantity of raw materials and semi finished needles had been purchased for the business with these amounts.
The cost of raw materials and semi finished needles thus purchased would have been clearly liable to be deducted from the sale proceeds of the finished products manufactured out of them in determining the profit of the business.
Would the position then be different if instead, the West German Collaborators gave these raw materials and semi finished needles to the assessee free of cost and the assessee introduced them in the business as part of its stock.
We do not sec and distinction in principle between these two types of cases and we are clearly of the view that the cost of these law materials and semi finished needles to the business represented by the sums of Rs. 44,448.00 and Rs. 30,000/ debited in the respective accounts of "Wire and Strip" and "Semi Processed Needles" was liable to be deducted from the sale proceeds of the finished products in arriving at the profit of the business.
It is true that initially on 30th September, 1961 the credit entries for the sums of Rs. 44,448.20 and Rs. 30,000 were made in "Wire and Strip Gift Account" and "Semi processed Needles Gift Account" respectively and it was only on the last date of the ac count year, namely, 31st March, 1962 that these amounts were trans 377 ferred to the credit of the Capital Reserve Account.
But that cannot make any difference to the correct legal inference to be drawn from the proved facts because the nomenclature of the account or accounts in which the credit entries were made is not material but what is really decisive is that these amounts were debited to the respective accounts of "Wire and Strip" and "Semi processed Needles" as representing their real value on 30th September, 1961.
These raw materials and semi finished needles were introduced in the business as part of its stock at their real value represented by the sums of Rs. 44,448.20 and Rs. 30,000/ .
The aggregate amount of Rs. 74,448.20 made up of Rs. 44,448.20 and Rs. 30,000/ was, therefore, liable to be deducted in determining the profit of the business and it was rightly debited to the trading account.
We accordingly dismiss the appeal and answer the questions referred by the Tribunal in favour of the assessee and against the Revenue.
The Revenue will pay the costs of the appeal to the assessee.
S.R. Appeal dismissed.

dataset_name: IN-Abs

summary:
During the assessment year 1962 63, the corresponding accounting year being the financial year ending 31st March, 1962, in respect of goods partly of raw materials and partly of semi finished needles gifted by their collaborators in West Germany, the respondent assessee made entries in their books of account for the first time on 30th September 1961, as follows: Rs. 44.448.20 debited to the account of 'wire and strip ' and credited to the 'wire and strip Gift Account ' and Rs. 30,000 debited to the account of 'Semi processed needles ' and credited to the 'Semi processed Needles Gift Account '.
The assessee utilised these goods in the manufacture of finished products and sold the same in the market and the sale proceeds received by the assessee were credited in the trading account maintained in the books account of the business, since they represented revenue receipts arising from the sale of the finished products.
On 31st March 1962, the assessee closed the above two gift, accounts by transferring the respective sums of Rs. 41,448.20 and Rs. 30,000/ to the credit of the 'Capital Reserve Account ' and debited the aggregate sum of Rs. 74,448.20 to the trading account by making corresponding contra credit entries in the accounts of 'wire and strip ' and 'Semi processed Needles '.
The net effect of these entries was that the profit of the assessee was reduced by Rs. 74,448.20.
The income tax officer, in the course of the assessment of the assessee to income tax for the assessment year 1962 63 took the view that the debit of Rs. 74,448.20 was wrongly made in the trading account as on 31st March, 1962 since no monies were expended by the assessee in acquiring the raw materials and semi finished needles, but they were received by way of gift from the West German Collaborators and hence no amount was deductible in respect of the value of these goods.
The same view was taken by the Appellate Assistant Commissioner in appeal and on further appeal, the Tribunal also affirmed the same view.
But the High Court on a reference at the instance of the assessee, held that the value of these goods could not be treated as revenue receipt because they `had been received by way of gift and in any event, even if they constituted revenue receipt, they could "in no sense be income" since they were taken out of the ambit of taxability by sub section (3) of section 10 of the Income Tax Act, 1961.
The High Court accordingly answered the questions referred by the Tribunal in favour of the assessee and against the Revenue.
The Revenue thereupon brought the present appeal with special leave.
Dismissing the appeal, the Court ^ HELD: 1.
The cost of raw materials and semi finished needles received by the assessee from their West German Collaborators and introduced in the books of the business could not be said to be 'nil", but it would 372 be their market value as on 30th September 1961.
They were received by the assessee as capital assets and subsequently transferred to the business as part of its stock.
[375E G] Commissioner of Income Tax vs Shirinbai Kooka, 46 I.T.R. (S.C.) 61; and Commissioner of Income Tax vs Hantepara Tea Co. Ltd I.T.R. (SC) 258; applied.
Where an assessee converts his capital assets into stock in trade and starts dealing in them, the taxable profit on the sale must be determined by deducting from the sale proceeds the market value at the date of their con version into stock in trade (since this would be the cost to the business) and not the original cost to the assessee.
[375G H. 376A] In the instant case, the original cost of these raw materials and semi finished needles to the assessee was undoubtedly nil because these goods were received by the assessee from the West German Collaborators free of cost, but they were introduced in the business and converted into its stock on 30th September, 1961 and, therefore, their market value as on 30th September 1961 would represent the cost to the business and that would have to be taken into account in determining the profit arising from the sale of the manufactured products.
The entries made by the assessee in the books of account of the business on 30th September, 1961 clearly reflected this position.
The assessee debited the sums of Rs. 44,448.20 and Rs. 30,000/ representing respectively the market value of these raw materials and semi finished needles to the stock accounts of 'Wire and Strip ' and 'Semi processed Needles, which would clearly show that these goods were treated by the assessee as having been introduced in the business as part of its stock at their market value represented by the sums of Rs. 44,448.20 and Rs. 30,000/ [376A D] Commissioner of Income Tax vs Shirinbai Kooka, 46 I.T.R. (SC) 61; and Commissioner of Income Tax vs Hantepara Tea Co. Ltd. 89 I.T.R. (SC) 258; applied 3.
In principle, the position would have been the same if instead of giving raw materials and semi finished articles to the assessee free of cost the West German contractors had gifted sums of money to the assessee and the assessee had introduced these amounts in the business and an identical quantity of raw materials and semi finished products had been purchased for the business with these amounts.
The cost of raw materials and semi finished articles thus purchased would have been clearly liable to be deducted from the sale proceeds of the finished products manufactured out of them in determining the profit of the business.
[3376D F] In the instant case, the cost of the raw materials and semi finished needles.
to the business represented by the sums of Rs. 44,448.20 and Rs. 30,000/ debited in the respective accounts of 'Wire and Strip ' and 'Semi processed Needles ' was liable to be deducted from the sale proceeds of the finished products in arriving at the profit of the business.
It is true that initially on 30th September, 1961 the credit entries for the sums of Rs. 44,448.20 and Rs. 30,000/ were made in 'Wire and Strip Gift Account ' and 'Semi processed Needles Gift Account ' respectively and it this only on the last date of the account year, namely, 31st March, 1962 that these amounts were transferred 373 to the credit of the Capital Reserve Account.
But that cannot make and difference to the correct legal inference to be drawn from the proved facts because the nomenclature of the account or accounts in which the credit entries were made is not material but what is really decisive is that these amounts were debited to the respective accounts of 'Wire and Strip ' and Semi processed Needles ' as representing their real value on 30th September, 1961.
These raw materials and semi finished needles were introduced in the business as part of its stock at their real value represented by the sums of Rs. 44,448.20 and 30,000/ .
The aggregate amount of Rs. 74,448.20 made up of Rs. 44,448.20 and Rs. 30,000/ was, therefore, liable to be deducted in determining the profit of the business and it was rightly debited to the trading account.
[376F H, 377A C]


judgement:
ivil Appeal Nos.
204 226 of 1978.
Appeals by Special Leave from the order dated 29 11 1977 of the Commissioner, Pune Division, Pune in Passenger Tax Appeals Nos.
POI 1/56 AR 12, 24, 27, 32, 42, SO and 17 other appeals.
F. section Nariman Ravinder Narain and K. J. John for the Appellant.
V. section Desai M. C. Bhandare (In CA 209/78) and M. N. Shroff for the Respondents.
Ravinder Narain and K. J.
John for the Interveners Sandvik Asia Ltd. section K. F. Cooper Engineering Ltd. Bharat Forge Ltd. and Bajaj Auto Ltd. The Judgment of the Court was delivered by FAZAL ALI, J.
These appeals by special leave arc directed against an order of the Commissioner of Pune dated 29 11 1977 dismissing the appeals and holding that the challenge to the tax sought to be realised by the Revenue was not tenable and the appellants were liable to pay the tax as also the penalty.
The appellants are a company registered under the Companies Act, 1913 and have their factories at Pimpri and Chinchvad in the District of Pune (Maharashtra).
The appellants employ as many as 7.000 workmen in those factories.
In order to provide transport 359 facilities to their employees to come to the factories from their respective villages the appellants provided transport which would pick up passengers from Pune or Khed or Vadgaon or Alandi or places enroute to TELCO Factory at Pimpri or Chinchvad and back.
For this journey a nominal charge of Rs. 10 per month was realised by the appellants from the employees.
Similarly, for the transport facilities provided to the employees from Pimpri Railway Crossing and onwards to TELCO factory, they were charged at the rate of Rs. 5 per month.
A charge of Rs. 2 per month was levied for the transport of employees from Chinchvad Village to TELCo factory at Pimpri and back.
the appellants further averred that these amounts were realised by the appellants only from a particular category of employees and no charges were levied in respect of those employees who were in the supervisory grades.
In the course of the arguments, it was pointed out that when the company was prepared to grant free transport facilities to the supervisory staff there was no reason why the same amenities should not be extended to the other employees and Mr. Nariman, learned counsel for the appellants frankly conceded that in future no charges would be realised from the employees and they would he provided free transport as in the case of supervisory staff.
It is manifest that if the appellants had not levied any charge at all for the transport facilities granted to the employees they would not be exigible to passenger tax.
Mr. Nariman, however, argued that even if a nominal charge is realised from the employees that would not make the transport a public service vehicle carrying passenger;, so as to attract the provisions of section 3 which is the charging section of the Act.
In our opinion, the contention of the learned counsel is well founded and must prevail.
The Bombay Motor Vehicles (Taxation on Passengers) Act, 1958 hereinafter called the Act is a statute which authorises the levy of passenger tax.
This Act has been amended several times right from the year 1960 to 1975.
Before analysing the relevant provisions of the Act, it may be necessary to extract the Preamble to the Act which runs thus: .
Whereas it is expedient lo provide for the levy of a tax on passengers, carried in certain classes of public service.
vehicles in the State of Bombay.
It is hereby enacted in the Ninth Year of the Republic of India as follows.
" A perusal of the Preamble clearly reveals that the dominant object of the Act was to impose tax on certain classes of public service vehicles.
In other words, the Preamble indicates that vehicles which could not be termed as public service vehicles fell beyond the ambit of the taxing provisions of the Act.
360 Section 2(7) of the Act defines 'stage carriage ' thus: " 'stage carriage ' means a motor vehicle carrying or adapted to carry more than six persons excluding the driver, which carries passengers for hire or reward, at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey, and includes such a carriage or other omnibus when used as a contract carriage within the meaning of the ".
Section 3 which is the charging section runs thus: "3.
(1) There shall be levied and paid to the State Government a tax on all passengers carried by road in stage carriages at such rate to be filed by the State Government from time to time by order in the official Gazette as would yield an amount not exceeding twenty per cent of the inclusive amount of fares payable to the operator of a stage carriage.
(2) After calculating the total amount of tax payable under sub section (1) out of the total amount received by an operator during each month on account of inclusive fares in respect of the stage carriage or stage carriages held by him the total amount of the tax shall wherever necessary be rounded off to the nearest naya paisa, fractions of half a naya paisa and over being counted as one and less than half being disregarded".
Thus section 3 authorises the levy of tax on all passengers carriages by road in stage carriages.
This section contains two essential ingredients: (1) that the transport concerned must carry passengers by road, and (2) that such passengers must be carried in stage carriages.
that is to say, as defined in section 2(7) of the Act, passengers must be carried for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey.
Rule 2(i) of the Bombay Motor Vehicle Rules, 1940 framed under the Bombay defines 'passenger ' thus: " 'passenger ' for the purposes of the rules in Chapter IV means any person travelling in a public service vehicle other than the driver or the conductor or an employee of the permit holder while on duty".
361 A combined reading, therefore, of rule 2(i) and section 2(7) of the Act clearly indicates that the tax would be leviable only if the passengers are carried on a public service vehicle.
It is true that the term 'public service vehicle ' has not been defined either by the Act or by the Rules, but that however does not create any difficulty, because having regard to the Preamble of the Act we are of the opinion that the tax can be levied only on passengers who are carried by a stage carriage which is of the nature of a public service vehicle.
The word 'public ' has got a well known connotation and means a carriage to which any member of the public can have free access on payment of the usual charges.
It cannot by any process of reasoning or stretch of imagination be deemed to include employees of a private company who are given facilities not as members of the public but as holding a special status, namely, the employees of that company.
Thus, qua public the employees form a separate class and cannot be said to be public as contemplated by rule 2(i).
On the other hand, the Bombay Motor Vehicles Rules 1959 define 'private service vehicles ' as follows: "Private Service Vehicle ' means any omnibus constructed or adapted to carry more than nine persons excluding the driver and ordinarily used by or on behalf of the owner of such vehicle for the purpose of carrying persons for or in connection with his trade or business, or otherwise than for hire or reward; but does not include a motor vehicle used solely for Police purposes".
The transport service in the present case which was registered as private service vehicle falls squarely within the ambit of the aforesaid definition Moreover, in the instant case, it is not disputed that the transport provided to the employees of the company was reserved for them only and no other member of the public even if he wanted to pay full charges could be carried on the said vehicle.
In these circumstances, therefore, it cannot be said that the transport vehicle provided to the employees by the appellants could be a public service vehicle in any sense of the term.
Mr. Nariman drew our attention to a number of rules and forms in order to illustrate his point that private service vehicle was beyond the ambit of the charging section.
In view of what we have already said, it is not necessary for us to go into such meticulous details, because the legal position appears to be clear enough.
As counsel for the appellants has already undertaken not to charge any amount from the employees for providing transport facilities, the point has now become more or less academic.
The Commissioner appears to have dismissed the appeals of the appellants 5 978 SCI/78 362 as he felt bound by the judgment of the Bombay High Court which had held that the transport vehicle provided to the employees by the company would be a public service vehicle.
In view of our finding that such a transport vehicle is not a public service vehicle within the meaning of the provisions of the Bombay , the view taken by the Bombay High Court is clearly erroneous and must be overruled.
For these reasons, therefore, the appeals are allowed and the order of the Commissioner imposing the tax is set aside.
The appellants would he entitled to one set of costs.
S.R. Appeals allowed.

summary:
The appellants are a Company registered under the Companies Act, 1913 and provide transport facilities to their employees at a nominal rate from certain pick up places to their factories at Pimpri and Chinchvad in district Pune (Maharashtra) in their transport vehicle registered as "private service vehicle" within the meaning of the Bombay Motor Vehicles Rules 1959.
The Bombay High Court held that the transport vehicle provided to the employees by the company would be a public service vehicle and therefore, the respondents sought to levy a tax on passengers under the charging section 3 of the Bombay Motor Vehicles Taxation on Passengers) Act, 1958.
A challenge to the said levy having been rejected by the Commissioner of Pune the appellant obtained special leave of this Court.
Allowing the appeals, the Court ^ HELD: 1.
The preamble to the Bombay Motor Vehicles (Taxation on Passengers) Act, 1958 clearly reveals that the dominant object of the Act was to impose tax on certain classes of public service vehicles.
In other words, the Preamble indicates that vehicles which could not be termed as public service vehicles fell beyond the ambit of the taxing provisions of the Act.
[359 G H] 2.
Though the Act and Rules made thereunder do not define the term "public service vehicle", it is clear that, from the Preamble of the Act that the tax can be levied only on passengers who are carried by a stage carriage which is of` the nature of Public Service Vehicle.
[361A B] 3.
Section 3 of the Act which authorises the levy of tax on all passengers carried by road in state carriages contains two essential ingredients (1) that the transport concerned must carry passengers by road, and (2) that each passengers must be carried in stage carriages, that is to say, as defined in Section 2(7) of the Act, passengers must be carried for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey.
[360F G] 4.
A combined reading of section 7 (1) which defines 'passenger ' and section 2(7) which defines 'stage carriage.
Of the Act clearly indicates that the tax would be leviable only if the passengers are carried on a public service vehicle.
[361A] 358 5.
The word 'Public ' has got a well known connotation and means a carriage to which any member of the public can have free access of payment of the usual charges.
It cannot by any process of reasoning or stretch of imagination be deemed to include employees of a private company who are given facilities not as members of the public but as holding a status namely, the employees of that company.
Thus, qua public the employees from a separate class and cannot be said to be public as contemplated by rule 2(i).
[361 C] 6.
In the present case: (a) The transport service which was registered as a private service vehicle falls squarely within the ambit of the definition of 'private vehicle service in the Bombay Motor Vehicles Rules, 1959.
[361E] (b) The transport provided to the employees of the company was reserved for them only and no other member of the public even if he wanted to pay full charges could be carried on the said vehicle.
In these circumstances, therefore, it cannot be said that the transport vehicle provided to the employees by the appellants could be a public service vehicle in any sense of the term.
Such a transport vehicle, being not a public service vehicle within the meaning of the provisions of the Bombay Motor Vehicles Act, the view taken by the Bombay High Court is clearly erroneous.
[361F G, 362B]


judgement:
Transfer Petition No. 96 of 1978.
Madan Bhatia and D. Gobardhan for the Petitioner.
V. M. Tarkunde and Mrs. K. Hingorani for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
Mrs. Maneka Gandhi figures as an accused a prosecution launched against her and others by Miss. Rani Jethmalani for an offence of defamation in the Court of the Metropolitan Magistrate, Bombay.
The former is the editor of a monthly called "Surya" and is the wife of Shri Sanjay Gandhi and daughter in law of Smt.
Indira Gandhi, former Prime Minister.
The latter is a young advocate and is the daughter of a leading advocate and currently an important Member of Parliament.
The present petition has been made for a transfer of the criminal case from Bombay to Delhi, and a string of grounds has been set out to validate the prayer.
We decline the transfer and proceed to give our reasons without making the least reflection on the merits of the case.
Assurance of a fair trial is the first imperative of the dispensation of justice and the central criterion for the court to consider when a motion for transfer is made is not the hypersensitivity or relative convenience of a party or easy availability of legal services or like minigrievances.
Something more substantial, more compelling, more imperilling, from the point of view of public justice and its attendant environment, is necessitous if the Court is to exercise its power of transfer.
This is the cardinal principle although the circumstances may.
be myriad and vary from case to case.
We have to test the petitioner 's grounds on this touch stone bearing in mind the rule that normally the complainant has the right to choose any court having jurisdiction and the accused cannot dictate where the case against him should be tried.
Even so, the process of justice should not harass the parties and from that angle the court may weigh the circumstances.
381 One of the common circumstances alleged in applications for transfer is the avoidance of substantial prejudice to a party or witnesses on account of logistics or like factors, especially when an alternative venue will not seriously handicap the complaint and will mitigate the serious difficulties of the accused.
In the present case the petitioner claims that both the parties reside in Delhi and some formal witnesses belong to Delhi; but the meat of the matter, in a case of defamation, is something different.
The main witnesses are those who speak to having read the offending matter and other relevant circumstances flowing therefrom.
They belong to Bombay in this case and the suggestion of the petitioner 's counsel that Delhi readers may be substitute witness and the complainant may content herself with examining such persons is too presumptuous for serious consideration.
Now to the next ground.
The sophisticated processes of a criminal trial certainly require competent legal service to present a party 's case.
If an accused person, for any particular reason, is virtually deprived of this facility, an essential aid to fair trial fails.
If in a certain court the whole Bar, for reasons of hostility or otherwise, refuses to defend an accused person an extra ordinary situation difficult to imagine, having regard to the ethics of the profession it may well be put forward as a ground which merits this Court 's attention.
Popular frenzy or official wrath shall not deter a member of the Bar from offering his services to those who wear unpopular names or unpalatable causes and the Indian advocate may not fail this standard.
Counsel has narrated some equivocal episodes which seem to suggest that the services of an efficient advocate may not be easy to procure to defend Mrs. Maneka Gandhi.
Such glib allegations which involve a reflection on the members of the Bar in Bombay may not be easily accepted without incontestible testimony in that behalf, apart from the ipse dixit of the party.
That is absent here.
It is difficult to believe that a person of` the position of the petitioner who is the daughter in law of the former Prime.
Minister, wife of a consequential person and, in her own right, an editor of a popular magazine, is unable to engage a lawyer to defend her, while, as a fact, she is apparently represented in many legal proceedings quite competently.
A more serious ground which disturbs us in more ways than one is the alleged absence of congenial atmosphere for a fair and impartial trial.
It is becoming a frequent phenomenon in our country that court proceedings are being disturbed by rude hoodlums and unruly crowds, jostling, jeering or cheering and disrupting the judicial hearing with menaces, noises and worse.
This tendency of toughs and street roughs to violate the serenity of court is obstructive of the course of justice 382 and must surely be stamped out.
Likewise, the safety of the person of an accused or complainant is an essential condition for participation in a trial and where that is put in peril by commotion, tumult or threat on account of pathological conditions prevalent in a particular venue, the request for a transfer may not be dismissed summarily.
It causes disquiet and concern to a court of justice if a person seeking justice is unable to appear, present one 's case, bring one 's witnesses or adduce evidence.
Indeed, it is the duty of the court to assure propitious conditions which conduce to comparative tranquillity at the trial. 'Turbulent conditions putting the accused 's life in danger or creating chaos inside the court hall may jettison public justice.
If this vice is peculiar to a particular place and is persistent the transfer of the case from that place may become necessary.
Likewise, if there is general consternation or atmosphere of tension or raging masses of people in the entire region taking sides and polluting the climate, vitiating the necessary neutrality to hold a detached judicial trial, the situation may be said to have deteriorated to such an extent as to warrant transfer.
In a decision cited by the counsel for the petitioner, Bose, J. Observed: ".
But we do feel that good grounds for transfer from Jashpurnagar are made out because of the bitterness of local communal feeling and the tenseness of the atmosphere there.
Public confidence in the fairness of a trial held in such an atmosphere would be seriously undermined, particularly among reasonable Christians all over India not because the Judge was unfair or biassed but because the machinery of justice is not geared to work in the midst of such conditions.
The calm detached atmosphere of a fair and impartial judicial trial would be wanting, and even if justice were done it would not be "seen to be done".(1) Accepting this perspective we must approach the facts of the pre sent case without excitement, exaggeration or eclipse of a sense of pro portion.
It may be true that the petitioner attracts a crowd in Bombay.
Indeed, it is true of many controversial figures in public life that their presence in a public place gathers partisans for and against, leading to cries and catcalls or 'Jais ' or 'zindabads '.
Nor is it unnatural that some persons may have acquired, for a time a certain quality of reputation, sometimes notoriety, sometimes glory, which may make them the cynosure of popular attention when they appear in cities even in a court.
And when unkempt crowds press into a court hall it is possible that some pushing, some nudging, some brash ogling or angry starting may occur in the rough and rumble resulting in ruffled feelings (1) G.X. Francis vs Banke Bihari Singh, A.I.R. 1958 S.C. 809 at 810.
383 for the victim.
This is a far cry from saying that the peace inside the court has broken down, that calm inside the court is beyond restoration, that a tranquil atmosphere for holding the trial is beyond accomplishment or that operational freedom for the Judge parties, advocates and witnesses has ceased to exist.
None of the allegations made by the petitioner, read in the pragmatic light of the counter averments of the respondent and understood realistically, makes the contention of the counsel credible that a fair trial is impossible.
Perhaps, there was some rough weather but it subsided, and it was a storm in the tea cup or transcient tension to exaggerate which is unwarranted.
The petitioner 's case of great insecurity or molestation to the point of threat to life is, so far as the record bears out, difficult to accept.
The mere word of an interested party is insufficient to convince us that she is in jeopardy or the court may not be able to conduct the case under conditions of detachment, neutrality or uninterrupted progress.
We are disinclined to stampede ourselves into conceding a transfer of the case on this score, as things stand now.
Nevertheless, we cannot view with unconcern the potentiality of a flare up and the challenge to a fair trial, in the sense of a satisfactory participation by the accused in the proceedings against her.
Mob action may throw out of gear the wheels of the judicial process.
Engineered fury may paralyse a party 's ability to present his case or participate in the trial.
If the justice system grinds to a halt through physical manoeuvres or sound and fury of the senseless populace the rule of E law runs aground.
Even the most hated human anathema has a right to be heard without the rage of ruffians or huff or toughs being turned against him to unnerve him as party or witness or advocate.
Physical violence to a party, actual or imminent, is reprehensible when he seeks justice before a tribual.
Manageable solutions must not sweep this Court off its feet into granting an easy transfer but uncontrollable or perilous deterioration will surely persuade us to shift the venue.
It depends.
The frequency of mobbing manouvres in court precincts is a bad omen for social justice in its wider connotation.
We, therefore, think it necessary to make a few cautionary observations which will be sufficient, as we see at present, to protect the petitioner and ensure for her a fair trial.
The trial court should readily consider the liberal exercise of its power to grant for the accused exemption from personal appearance save on crucial occasions.
Shri Tarkunde, for the respondent fairly agreed that it was the right thing to do and explained the special reason for its first rejection.
If the application is again made, the magistrate will deal with it as we have indicated.
This will remove much of the unsavoury sensationalism which the hearing may suffer from 384 The magistrate is the master of the orderly conduct of court proceedings and his authority shall not hang limp if his business is stalled by brow beating.
It is his duty to clear the court of confusion, yelling and nerve racking gestures which mar the serious tone of judicial hearing.
The officials whose duty is to keep the public peace shall, on requisition, be at the command of the court to help it run its process smoothly.
When the situation gets out of hand the remedy of transfer surgery may be prescribed.
Every fleeting rumpus should not lead.
to a removal of the case as it may prove to be a frequent surrender of justice to commotion.
The magistrate shall take measures to enforce conditions where the court function free and fair and agitational or muscle tactics yield no dividends.
If that fails, the parties have freedom to renew their motion under section 406 of the Criminal Procedure Code.
For, where tranquil court justice is a casualty the collapse of our constitutional order is an inevitability.
We dismiss, for the nonce, this transfer petition.
S.R. Petition dismissed.

summary:
^ HELD: 1. Assurance of a fair trial is the first imperative of the dispensation of justice and the central criterion for the Court to consider when motion four transfer is made is not the hypersensitivity or relative convenience of a party or easy availability of legal services or the like mini grievances.
Something more substantial, more compelling, more imperilling, from the point of view of public justice and its attendant environment is necessitous, if the Court is to exercise its power of transfer.
This is the cardinal principle although the circumstances may be myriad and vary from case to case.
courts must test the petitioner 's grounds on this touch stone bearing in mind the rule that normally the complainant has the right to choose any Court having jurisdiction and the accused cannot dictate where the case against him should be tried.
Even so, the process of justice should not harass the parties and from that angle the Court may weigh the circumstances.
[380F H] 2.
The meat of the matter, in a case of defamation is something different than the common ground usually urged like the avoidance of substantial prejudice to a party or witnesses on account of logistics or like factors, especially when an alternative venue will not seriously handicap the complainant and will mitigate the serious difficulties of the accused.
The main witnesses are those who speak to having read the offending matter and other relevant circumstances flowing therefrom.
[381A B] In this case, the witnesses belong to Bombay and the suggestion that Delhi readers may be substitute witnesses and the complainant may consent herself with examining such persons is too presumptuous for serious consideration.
[381 C] 3.
The sophisticated processes of a criminal trial certainly require competent legal service to present a party 's case.
If an accused person, for any particular reason, is virtually deprived of this facility, an essential aid to fair trial fails.
If in a certain Court the whole Bar, for reasons of hostility or otherwise refuses to defend an accused person an extraordinary situation difficult to imagine, having regard to the ethics of the profession it may well be put forward as a ground which merits the attention of the Supreme Court.
Glib allegation like the services of an efficient advocate may not be easy to procure involves a reflection on the members of the Bar in Bombay and, therefore, is cannot be easily accepted without incontestible testimony in that behalf which is absent in this case.
apart from the ipse dixit of the party; Popular frenzy or official wrath shall not deter a member of the Bar from 379 offering his services to those who wear unpopular names or unpalatable causes and the Indian advocate may not fail this standard.
[381C E] 4.
It is true that a detached atmosphere of a fair and impartial judicial trial is a must.
The tendency of toughs and street roughs to violate the serenity of Court is obstructive of the course of justice and must surely be stamped out.
Likewise, the safety of the person of an accused or complainant is an essential condition for participation in a trial and where that is put in peril by commotion, tumult or threat on account of pathological conditions prevalent in a particular venue, the request for a transfer may not be dismissed summarily.
It causes disquiet and concern to a Court of justice if a person seeking justice is unable to appear present one 's case, bring one 's witnesses or adduce evidence.
Indeed, it is the duty of the Court to assure propitious conditions which conduce to comparative tranquility at the trial.
Turbulent conditions putting the accused 's life in danger or creating chaos inside the Court hall may jettison public justice.
If this vice is peculiar to a particular place and is persistent the transfer of the case from that place may become necessary.
Likewise, if there is general consternation or atmosphere of tension or raging masses of people in the entire region taking sides land polluting the climate, vitiating the necessary neutrality to hold a detached judicial trial, the situation may be said to have deteriorated to such an extent as to warrant transfer.
[381 H, 382A C] In the instant case, none of the allegations made by the Petitioner.
read in the pragmatic light of the counter averments of the respondent and understood realistically makes the contention credible that a fair trial is impossible.
[383A B] G. X. Francis vs Banke Bihari Singh, A.I.R. 1958 SC 809 and 810; referred to.
Observation : The frequency of mobbing manouvres in Court precincts is a bad omen for social justice in its wider connotation.
Mob action may throw out of the gear the wheels of the judicial process.
Engineered fury may paralyse a party 's ability to present his case or participate in the trial.
If the justice system grinds to a halt through physical manouvres or sound and fury of the senseless populace, the rule of law runs aground.
Even the most hated human anethema has a right to be heard without the rage of ruffians or huff of toughs being turned against him to unnerve him as party or witness or advocate.
Physical violence to a party, actual or imminent, is reprehensible when he seeks justice before a tribunal.
Manageable solutions must not sweep the Supreme Court off its feet into granting an easy transfer but uncontrollable or perilous deterioration will surely persuade this Court to shift the venue.
It depends.
[383D F] Therefore (a) the trial Court should readily consider the liberal exercise of its power to grant for the accused exemption from personal appearance save on crucial occasions.
[383G] (b) Where tranquil Court justice is a casualty, the collapse of an constitutional order is an inevitability.
The Magistrate is the master 380 of the orderly conduct of court proceedings and his authority shall not hang limp if his business is stalled by brow beating.
It is his duty to clear the Court of confusion, yelling and nerve racking gestures which mar the serious tone of judicial heaving.
The officials whose duty is to keep the public peace shall, on requisition, be at the command of the Court to help it run its process smoothly.
When the situation gets out of hand the remedy of transfer surgery may be prescribed Every fleeting rumpus should not lead to a removal of the ease as it may prove to be a frequent surrender of justice to commotion.
The Magistrate shall take measures to enforce conditions where the Court functions free and fair and agitational our muscle tactics yield no dividends.
[384A C]


judgement:
Civil Appeal No. 484 of 1969.
From the Judgment and order dated 28 7 1967 of the Allahabad High Court in Special Appeal No. 352/67.
M. section Gupta for the Appellant.
G. N. Dikshit and O. P. Rana.
for the Respondents.
The Judgment of the Court was delivered by SARKARIA, J.
This is an appeal by certificate against a judgment, dated July 28, 1967, passed by the High Court of Allahabad in Special Appeal 352 of 1967.
It arises our of these fact.
Jai Dutt, appellant, was in possession of public land bearing Survey Nos 230, 131A and 131B, with an aggregate area of 80 Bighas and 19 Biswas in the area of village Guljarpur PurraamSingh, Tehsil Kala chungi, Distt.
Nainital.
The Public Authority, Nainital; served a show cause notice, dated August 26, 1963, under Section 3(1) of the U.P. Land (Eviction and Recovery of Rent and Damages) Act, 1959 (here inafter called the Eviction Act) on the appellant for his eviction from this land on the ground that he was in its unauthorised occupation.
The appellant contested the notice on the ground that he was in its possession for more than 12 years and had acquired the rights of a hereditary tenant in the land under Section 180(2) of the U.P. Tenancy Act, 1939 (for short, called the Tenancy Act).
On these premises, the appellant contended that the land was not 'public land ', and as such, the Eviction Act has no application and the notice was illegal.
By its order dated October 31, 1963, the Public Authority dismissed the objections, holding that the appellant "has not filed any documentary evidence to show that the land in dispute was allotted to him by a competent authority, while the documents filed on behalf of the State show that it is a public land and "the O.P. (appellant herein) is a trespasser thereon", and he is, therefore, liable to be evicted therefrom 177 under Section 4(1) of the Eviction Act.
The Public Authority further assessed Rs. 12/ as damages payable by the appellant.
Against this order of the Public Authority, Jai Dutt carried an appeal under Section S of the Eviction Act to the District Judge.
The appeal was heard by the Additional District Judge, Kummaon Nainital, before whom the appellant reiterated the contention that he had been in possession of the land in question for the preceding 12 years, and as such, had acquired the rights of a hereditary tenant thereon.
There, the appellant seems to have further contended that he had been paying "rent" for his occupation of the land He appears to have shown some receipts also to the Additional District Judge.
The Additional District Judge negatived all the contentions and dismissed the appeal.
The appellant then filed a writ petition under Article 226 of the Constitution before the High Court to impugn the orders of the Public Authority and of the Add.
District Judge, inter alia, on the ground that since he had been paying rent for the land which has been in his cultivating possession for a number of years preceding the eviction proceedings, he could not be said to be all 'unauthorised occupant ', but a hereditary tenant under Section 180(2) of the Tenancy Act The learned Single Judge of the High Court, who heard the writ petition, rejected this contention with the observation that 'the Khatauni of 1368 Fasli entered the petitioner 's possession over the disputed plots as ranging from 1 to 6 years.
The oral evidence led by the petitioner does not outweigh the force of the entries in the Khatauni.
The petitioner, therefore, did not acquire any title under Section 180 of the U.P. Tenancy Act before 1953.
" The learned Single Judge further observed that the decision of the Division Bench of that High Court in Shri Chandra vs State of U.P. & Ors.
(W.P. No. 3277 of 1966 decided on 13 2 67) was applicable to the case and the land in dispute will be public land and the possession of the appellant unauthorised.
In the result, the writ petition was dismissed with costs.
The appellant 's special Appeal was dismissed by a Division Bench of the High Court on July 28, 1967.
In the meantime, the Eviction Act was successfully challenged before the High Court in Writ Petitions 3755 and 3756 of 1962 which were decided on May 24, 1968.
Keeping in view the value of the subject matter which exceeded Rs. 20,000/ and the question of the Constitutional validity of the Eviction Act, the High Court granted a certificate under Article 133 (l)(a) and (c) of the Constitution, that the case was fit for appeal to this Court.
Hence, this appeal.
178 Mr M. section Gupta, appearing for the appeal, has now given up the challenge to the Constitutional validity of the Eviction Act on the ground of its being violative of Article 14 of the Constitution, because this ground of attack no longer survives in view of this Court 's judgement in Maganlal Chhagganlal vs Municipal Corporation of Greater Bombay & ors.(1) He, however, sought to make out these points: (i) The appellant had been in cultivatory possession of the land for a number of years and no action for his eviction was taken for a long time and since no steps were taken by the Government to evict him evict two years of his entry into possession, he became a here ditary tenant under Section 180(2) of the Tenancy Act.
(ii) Even if the appellant did not acquire the rights of a hereditary tenant in the disputed land, he had by long possession acquired the rights of a tenant or tenure holder of any other kind under the Government.
He has been paying rent in respect of the land to the Government, and, as such, was not in unauthorised occupation of the land.
Since the land was held by the appellant as a tenant, it did not fall within the definition of 'public land ' given in Section 2(a) of the Eviction Act.
(iii) Since the objections raised by the appellant in response to the show cause notice issued under Section 3(1) of the Eviction Act were substantial, the Public Authority was bound to refer the dispute to the Civil Judge under Sec. 7 of the Eviction Act.
Its failure to do so, vitiates the code of eviction passed by it.
(iv) one of the prerequisites of taking action under Section 3(1) of the Eviction Act is that title Public land is required "for one or more public purposed of this Act".
Sub section (2) (a) of Section 3 requires that the notice shall "specify the grounds on which the order of eviction is proposed to be made".
The impugned notice issued by the Public Authority did not comply with these, requirements of Section 3 and was therefore, illegal.
Points (i) and (ii): Mr. Gupta did not seriously press the first point, obviously because it was without substance.
It may be noted that Section 180 of the Tenancy Act is subject to the, restrictions contained in Section 30 of that Act, which provides: "Notwithstanding anything in Section 29, hereditary rights shall not accrue on. (1) [1975] I S.C.R. 1. 179 (3) land acquired or held for a public purpose or work of public A utility.
" Even if it is assumed that the appellant was at the material time in occupation of this land for more than two years, he would not acquire rightmost of a hereditary tenant under Section 180(2).
Omission of the State Government, therefore, to institute a suit under Section 180(l) within the prescribed period of limitation would not bring into existence relationship of landlord and tenant between the Government and the appellant, and the letter 's possession would remain, as it was at its inception, that of a trespasser or unauthorised occupant.
This point is further highlighted by the definition of "unauthorised occupation" given in clause (h) of Section 2 of the Eviction Act, which states: "Unauthorised occupation means occupation of a public land by any person without the authority of the owner for such occupation and includes its continued occupation after the expiry of the period of allotment, lease or grant. anything contained in.
O.P. Tenancy Act, 1939. to the contrary notwithstanding." n In the context, the definition of "Public Land" given in Section 2(e) of the Eviction Act may also be seen.
This definition, so far as material for our purpose, states: "Public land means land belonging to or owned by the State Government but does not include land (i) for the time being held by a tenure holder for the State Government under the U.P. Tenancy Act, 1939.
(ii) . .
" Section 2 (b) of this Act defines "Lease" to mean "a lease as defined in Section 105 of the ".
There is neither any factual nor legal basis for the appellant 's contention that he had acquired some kind of tenure as a tenant by remaining in twelve years ' continuous possession of the land in dispute.
As noticed by Additional District Judge and the learned Single Judge of the High Court, the Khasra tendered in evidence before the Public Authority, shows that in the years 1362, 1363, 1365 and 1367 Fasli (which we are told roughly corresponds to 16655 56, 1956 57, 1958 59 and 1960 61 A.D.) the land in dispute was lying Banjar (barren).
That is to say, in the years 1955 to 1961, the appellant was not in occupation of this land.
During these years, when the land was lying Banjar, its possession would be presumed to be of the lawful owner, viz., the State Government.
The appellant 's possession over the land is shown for the first time in Khasra of the year 1368 Fasli (roughly 180 corresponding to 1961 62) as "bila tasfia, Ziman 10 Ka".
Same is the position shown in the Khatauni 1368 Fasli "Bil Tasfia" obviously means "without settlement or allotment or grant".
The documentary evidence from the revenue records, accepted by the courts below, had thus discounted the appellant 's claim that he had been in cultivator possession of the disputed land for 12 years preceding the issue of the impugned notice under Section 3(1).
It was never the case of the appellant that he had lawfully entered into possession of the land.
On the contrary, his case was that he took possession of the land without any grant, settlement or lease from the land owner.
Indeed, by clanging acquisition of a hereditary tenancy under Section 180(2), he admitted that he had taken possession without any title and without the consent of the land owner.
Mr. Gupta has been unable to show that the appellant 's occupation of the land even for one or two years preceding the notice under Section 3(1) was that of a "tenure holder" within the contemplation of the saving sub clause (i) in the definition of "public land` ' in Section 2(e) of the Eviction Act.
The appellant 's contention that he has been paying rent for this land does not appear to be well founded.
No such plea appears to have been raised before the Public Authority, much less was any evidence, such as a rent receipt produced there.
The Public Authority has nob d in its order dated October 3, 1963, that the O.P. (appellant herein) did not produce any documentary evidence to show that he was holding the land with title permission of or under allotment from any competent authority.
Nor was this plea agitated or pressed before the learned Single Judge or the Division Bench of the High Court.
Even now, before us, counsel has not referred to any rent receipt or like document on record showing that the appellant had paid rent in respect of this land to the Government for the period of his possession preceding the notice under Section 3 (1) of the Eviction Act.
Even the Additional District Judge, to whom for the first time in appeal, some "rent receipts" appear to have been shown by the appellant, has not recorded any clear cut finding that those documents evidence the receipt of rent by the Government in respect of the disputed land for the relevant period preceding the issue of notice under Section 3(1).
This being the situation, in this appeal arising out of writ proceedings under Article 226, we decline to embark upon a speculative examination of this argument for which there is no firm factual foundation and was never raised before the Public Authority, nor pressed before the High Court.
181 Be that as it may, the provisions of Sections 2(18), 30, 180(2) of the Tenancy Act on the one hand and Sections 2(b), 2(e)(i) and 2(h) of the Eviction Act on the other, are to be construed in harmony with each other.
So construed, a person occupying land belonging to the State Government, as a trespasser or without title or a person holding over after the revocation or cancellation of the lease, allotment or grant in accordance with the conditions thereof, cannot be considered "a tenure holder from the State Government under .
the U.P. Tenancy Act, 1939" within the meaning of Section 2(e)(i) of the Tenancy Act.
There was thus no doubt that the disputed land was "public land" and the appellant was in its "unauthorised occupation" within the meaning of the Eviction Act.
Point (iii) : Section 7, (so far as material) reads thus: "7(1) Where an objection is taken on the ground that the disputed land is not public land and the Public Authority is of the opinion that the objection is not prima facie base less or frivolous, he shall refer the question to the Civil Judge, having jurisdiction, stating the facts of the case and the, point in issue.
" From a plain reading of Section 7(1), extracted above, it is clear that the obligation to refer the question whether or not the land is public land, is not absolute, but contingent.
It arises only if the Public Authority is of the opinion that objection is not prima facie baseless or frivolous.
In the instant case, a perusal of the impugned order would show that although the Public Authority did not say in the phraseology of the Statute that the objection raised by the appellant was prima facie "baseless", yet in substance, .
_ unhesitatingly came well nigh to the same conclusion when he observed: "The O.P. has not filed any documentary evidence to show that the land in dispute was allotted to him by a competent authority.
The documents filed on behalf of the State show that the land in dispute is a public land and the C.P. is a trespasser thereon.
" We are therefore of opinion that there was no infraction of Section 7.
Point (iv): This point was not raised before the Public Authority, nor in any of the Courts below.
It is sought to be raised for the first time in this Court, now.
We decline to entertain it at this state.
It is not 182 a pure question of law which could be decided on the basis of material already on record.
The appellant has not produced even the copy of the notice under Section 3 (1) which was served upon him and is supposed to be in his possession.
In the circumstances of the case, the maxim omnia praesumuntur rite essa acta will be attracted.
It will be presumed that the public purpose of the Act for which the appellant was sought to be evicted from the public land, was only specified in the notice in compliance with the requirement of sub section (2) of Section 3 of the Act.
Thus, all the contentions advanced by the appellant are devoid of merit.
In the result, the appeal fails and is dismissed with costs.
P.B.R. Appeal dismissed.

summary:
In appeal to this Court it was contended that the appellant had become a hereditary tenant under section 180(2) of the Tenancy Act by reason of the fact that he had been in cultivator possession of the land for a number of years and no steps had been taken to evict him within two years of his entry into possession of the land, (2) that since he had been paying rent to the Government he was not in unauthorised occupation of the land and (3) failure of the Public Authority to refer the dispute to a Civil Judge under Section 7 of the Act vitiated the order of eviction Dismissing the appeal, ^ HELD: l(a) The appellant 's claim was not that he lawfully entered into possession of the land but that he took possession without any grunt, settlement or leases from the owner.
By claiming acquisition of a hereditary tenancy) under section 180(2) he admitted that he had taken possession without any title anal without the consent of the land owner.
1180 C] (b) The provisions of Section 2(18), 30, 180(2) of the Tenancy Act are to be construed in harmony with each other.
So construed, a person occupying land belonging to the State Government, as a trespasser or without title or a person holding over after the revocation or cancellation of the lease, allotment or a grant in accordance with the condition thereof, cannot be "a tenureholder.
from the State Government under the U.P. Act, 1939.
" within the meaning of Sec.
2(e)(i) of the Tenancy Act.
There was thus no doubt that the land was "public land" within the meaning of the Eviction Act.
[181 A B] (2) The obligation to refer the question whether or not the land is public land, under Section 7, is not basic but contingent.
Although the Public Authority did not say in the phraseology of the statute that the objection raised by the 176 appellant was prima facie baseless, yet, in substance, it well nigh came to the same conclusion.
It was, therefore, not obligatory for the authority to refer the question to the Civil Court.
[181 F] (3) The plea that the notice did not comply with the requirements of section 3 of the Eviction Act and for that reason illegal had not been raised in the Courts below.
It is not a pure question of law.
The appellant has not produced a copy of the notice served on him.
Tn the circumstances, the maxim omnia prae sumuntur vite essa acta will be attracted.
It will be presumed that the purpose for which the appellant was sought to be evicted was duly specified in the notices compliance with the requirements of section 3(2).
[182 A B]


judgement:
Civil Appeal Nos. 1286, 1287 and 2511 of 1969 From the Judgment and Order dated 20 8 1968 and 3 4 1969 of the Punjab and Haryana High Court in Civil Writ Nos.800/66, 2625/65 and LPA No 141 of 1969.
Harbans Singh and R. N. Sachthey for the Appellant in all the appeals.
E. C. Agarwala and M. L. Srivastava for the Respondent in C.A. 1286/69.
406 H.K. Puri for the Respondent in C. A. 1287/69 N. N. Keswani for the Respondent in C.A. 2511/69 The Judgment of the Court was delivered by SHINGHAL, J.
These three appeals by certificates granted by the High Court of Punjab and Haryana are directed against two judgments of that court dated August 20? 1966, and another judgment of that court dated November 22, 1968.
The High Court first decided the writ petition of constable Dwarka Das, which is the subject matter of appeal No.1286 of 1969, and disposed of the other two writ petitions, which are the subject matter of appeals Nos. 1287 and 2511 of 1969, on the basis of that judgment.
These three appeals therefore Raise common questions of law and have been heard together at the request of learned counsel for the parties and will be disposed of by a common judgment The writ petitioners in all the three cases were recruited as constables in the police force of the Punjab State.
It is not in dispute before us that (i) they were police officers of the State, (ii) they were enrolled as police officers, (iii) they had put in more than three years service after their recruitment and enrolment as police officers, and (iv) they were discharged under the provisions of rule 12.21 of the Punjab Police Rules, 1934, (hereinafter referred to as the Rules and not by way of punishment under the provisions of Chapter XVI of the Rules.
No attempt has been made to distinguish one case from the others on facts.
On the other hand learned counsel for the parties are in agreement that the facts of the three cases are quite similar and they raise the common question of law whether the orders of discharge were valid.
The respondents challenged the validity of those orders by writ petitions which were allowed by the impugned judgments of the High Court and the three appeals are before us for that reason.
It has been argued by Mr Harbans Singh, on behalf of the appellant State, that even though the respondents had put in more than three years service as police officers of the State Government, their appointments were temporary and could be terminated for that reason even if the termination could not strictly be said to fall within the purview of rule 12.21 of the Rules.
that in fact is the only question II for consideration in these appeals and can easily be answered with reference to the provisions of the , hereinafter refer red to as the Act, and the Rules.
407 Section 1 of the Act defines "Police" to include all persons who A shall be enrolled under it.
Section 2 provides that the entire police establishment under the State Government shall be deemed to be one police force, and shall be formally enrolled.
It further provides that the conditions of service of the members of the subordinate ranks of the police force shall be such as may be determined by the State Government.
Section 8 is also relevant, for it expressly provides that every police officer appointed to the police force of the State (other than an officer mentioned in section 4), shall receive on his appointment a certificate in the form annexed to the Act, by virtue of which he shall be vested with the powers, functions and privileges of a police officer.
The certificate states that the police officer concerned has been appointed a member of the police force under the Act, and vested with the powers.
functions and privileges of a police officer.
The certificate is not therefore the order of appointment or enrolment, but is subsequent to the appointment and the enrolment, even though it is a part of the process of appointment and enrolment, in as much as it certifies that the police officer has been vested with the necessary powers, functions and privileges of a police officer.
The certificate does not however have any bearing on the question whether its holder is a permanent or a temporary police officer, for that is a matter which has to be governed by the other conditions of his service.
It is not in dispute before us that such certificates were issued to all the three respondents and that they functioned as police officers for more than three years.
Chapter XII of the Rules deals with the appointment and enrolment of police officers.
Clause (3) of rule 12.2.
provides, inter alia, as follows, "(3) All appointments of enrolled police officers are on probation according to the rules in this chapter applicable to each rank.
" It is therefore obvious that as the respondents were enrolled police officers, they were on probation.
The period of probation has not been specified in the Rules, but rule 12.21 provides for the discharge of an inefficient police officer as follows "12.21.
A constable who is found unlikely to prove an efficient police officer may be discharged by the Superintendent at any time within three years of enrolment.
There shall be no appeal against an order of discharge under this rule.
" 408 So if rules 12.2(3) and 12.21 are read together, it will appear that the maximum period of probation in the case of 3 police officer of the rank of constable is three, years, for the Superintendent OF Police concerned has the power to discharge him within that period.
It follows that the power of discharge cannot be exercised under rule 12.21 after the expiry of the period of three years.
If therefore it is proposed to deal with an inefficient police officer after the expiry of that period, it is necessary to do so in accordance with the rules of Chapter XVI of the Rules which makes provision for the imposition of various punishments including dismissal from the police force.
It is not permissible to ignore those rules and make a simple order of discharge under rule 12.21 after the expiry of the period of three years for that will attract article 311 of the Constitution.
The Superintendent of Police concerned could not have ignored that requirement of the law and terminated the services of the three respondents after the expiry of the period of three years from their enrolment in the police force of the State.
The High Court therefore rightly set aside the orders of termination of the services of the three respondents and to that extent the impugned judgments are correct.
But we are constrained to say that it was not justified in holding that "a constable who has obtained a certificate under rule 12.22 cannot be dealt with under rule 12.21", and that "if he is to be removed from service, procedure prescribed in Chapter XVI has to be followed.
" The reason is that, as has been shown, the certificate prescribed under rule 12.22 is meant to serve the purpose of section 8 of the Act by vesting a police officer with the powers, functions and privileges of a police officer, and has to be issued on his appointment as such.
The certificate is thus a letter of authority, and enables the police officer concerned to enter upon his duties as a police officer.
It has to be granted almost from the inception, when a person is appointed and enrolled as police officer, and it is not correct to say that the mere issue of the certificate puts its holder beyond the reach of rule 12.21 even if it is found that he is unlikely to prove an efficient police officer and has not completed the period of three years after his enrolment.
Except for this slight clarification, we find no merit in these appeals and they are dismissed with costs.
M.R. Appeals dismissed.

summary:
The respondent writ petitioners were constables of the Punjab State Government, and had put in more than 3 years service, when they were discharged for inefficiency, under Rule 12.21 of the Punjab Police Rules, 1934.
the High Court allowed their writ petitions challenging the validity of their discharge orders.
It was contended by the State that although the respondents had put in more than three years service, their appointments were temporary and could be terminated for that reason, even if the termination could not strictly b said to fall within the purview of rule 12.21.
Dismissing the appeal.
the Court ^ HELD: If rules 12.2(3) and 12.21 are read together, it will appear that the maximum period of probation in the case of a police officer of the rank of constable is three years and the power of discharge cannot be exercised under rule 12.21 after expiry of that period.
If it is proposed to deal with an inefficient police officer after the expiry of three years, it is necessary to do so in accordance with the rules of Chapter XVI of the Rules which makes provision for the imposition of various punishments including dismissal from the police force.
[408A B] The High Court was not justified in holding that a constable who had obtained a certificate under rule 12.32 cannot be dealt with under rule 12.21 "I`hat certificate is meant to serve the purpose of section 8 of the Police Act.
1861, by vesting a public officer with the powers, functions and privileges of a police officer and has to be issued on his appointment as such.
The certificate is a letter of authority and enables the police officer to enter upon his duties as a police officer.
It has to be granted almost From the inception and it is not correct to say what the mere issue of the certificate puts its holder beyond the reach of rule 12.21 even if it is found that he is unlikely to prove an efficient police officer and has not completed the period of three years of his enrolment.
[408D G]