judgement:
ivil Appeal No. 316 ot 1987.
From the Judgment and Order dated 31.12.1986 of the Disciplinary Committee of the Bar Council of India in B.C.I. Transfer Case No. 407 of 1985.
S.S. Javali and Raju Ramachandra for the Appellant.
Ravinder Bhat, N. Ganapathy and Promod Swarup for the Respondents .
The Judgment of the Court was delivered by THAKKAR, J.
A hast of questions of seminal significance, not only for the Advocate who has been suspended from practising his profession for 3 years on the charge of having withdrawn a suit (as settled) without the instructions from his client, but also for the members of the legal profession in general have arisen in this appeal: 1.
Appeal under section 38 of the .
(1) Whether a charge apprising him specifically of the precise nature and character of the professional misconduct ascribed to him needs to be framed? (2) Whether in the absence of an allegation or finding of dishonesty or mens rea a finding of guilt and a punishment PG NO 365 of this nature can be inflicted on him? (3) Whether the allegations and the finding of guilt require to be proved beyond reasonable doubt? (4) Whether the doctrine of benefit of doubt applies? (5) Whether an Advocate acting bona fide and in good faith on the basis of oral instructions given by some one purporting to act on behalf of his client, would be guilty of professional misconduct or of an unwise or imprudent act, or negligence simpliciter, or culpable negligence punishable as professional misconduct? The suit was a suit for recovery of Rs.30,098 (Suit No. 65/81 on the file of Additional City Civil Judge, Bangalore).
It appears that the complainant had entrusted the brief to the appellant which he in his turn had entrusted to his junior colleague (respondent No. 2 herein) who was attached to his Office and was practising along with him at his office at the material time.
At the point of time when the suit was withdrawn, respondent No. 2 was practising on his own having set up his separate office.
On the docket of the brief pertaining to the suit, the appellant made an endorsement giving instructions to withdraw the suit as settled.
A sketch was drawn on the back of the cover to enable the person carrying the brief to the junior colleague to locate his office in order to convey the instructions as per the endorsement made by the appellant.
The allegations made by the complainant against the appellant are embodied in paragraphs 1 & 2 of his complaint: 1.
The petitioner submits that he entrusted a matter to the Second Respondent to file a case against Shri section Anantaraju for recovery of a sum of Rs.30,098 with Court costs and current interest in Case No. O.S. 1965/81 on the file of the City Civil Judge at Bangalore.
The Petitioner submits that the said suit was filed by the first respondent who was then a Junior of the Second respondent.
The petitioner submits that the matter in dispute in the suit was not settled at all and the first respon dent without the knowledge and without the instructions of the petitioner has filed a memo stating that the matter is settled out of Court and got the suit dismissed and he has also received half of the institution court fee within l0 days since the PG NO 366 date of the disposal of the suit.
The petitioner submits that he has not received either the suit amount or the refund of court fee and he is not aware of the dismissal of the suit as settled out of court.
The petitioner submits that when the case was posted for filing of written statement itself the first respondent has filed such a memo stating that the suit was settled out of Court.
The petitioner submits that in fact, the respondents did not even inform the petitioner about the dates of hearing and when the petitioner asked the dates of hearing the respondents informed the petitioner stating that his presence is not required in the Court since the case was posted for filing of written statement and therefore .
the petitioner did not attend the Court on that day.
The petitioner submits that when he enquired about the further date of hearing the respondents did not give the date and said that they would verify the next date of hearing since they have not attended the case since the case was posted for filing written statement by the defendant.
The petitioner submits that when he himself went to the Court and verified he found to his great surprise that the suit is dismissed as settled out of court and latter learnt that even the half of the institution court fee is also taken by the first respondent within 10 days.
The version of the appellant may now be unfolded: (i) One Gautam Chand (R.W.3) has been a longstanding Client of the appellant.
Gautam Chand had business dealing with the plaintiff Haradara and the Defendant Anantaraju.
Besides.
Anantaraju executed an agreement dated 9.8.1980 to sell his house property to Gautam Chand.
He received earnest money in the sum of rupees 35,000 from Gautam Chand.
Anantaraju, however, did not execute the sale deed within the stipulated period and during the extended period It was in these circumstances that Gautam Chand (RW 3) approached the appellant for legal advice.
(2) It is the common case of parties that Gautam Chand introduced the complainant Haradara to the appellant and his colleague Advocate respondent No. 2 (3) The appellant caused the issue of notice dated 1.6.1981 (exhibit R/15) on behalf of Gautam Chand addressed to PG NO 367 the seller Anantaraju calling upon him to execute the sale dead.
On the same date, a notice was separately issued on behalf ot the complainant Haradara addressed to Anantaraju demanding certain amounts due on the three `self ' bearer cheques aggregating, Rs.30,098 issued by Anantaraju in course of their mutual transactions.
This notice was issued by the Advocate respondent No.2 acting on behalf of the complainant Haradara.
(4) Gautam Chand (RW 3) and Haradara (PW 1) were friends.
Anantaraju was their common adversary.
There was no conflict of interests as between Gautam Chand and Haradara.
Gautam Chand instructed the appellants and his colleague respondent No. 2.
Ashok, that he was in possession of the said cheques issued by Anantaraju and that no amount was actually due from Anantaraju to the complainant Haradara.
Gautam Chand was desirous of stops to induce Anantaraju to execute the sale deed in his favour.
(5) A suit being O.S. No. 1965 of 1981 was instituted on behalf of the complainant Haradara claiming on amount of Rs. 30,000 and odd, from the defendant Anantaraju on the basis of the aforesaid cheques.
It was instituted on 30.6.1981.
An interlocutary application was moved on behalf of Haradara by respondent No. 2 as his Advocate seeking the attachment before judgment of the immovable property belonging to the defendant Anantaraju.
The property was in fact the subject of an agreement to sell between Anantaraju and Gautam Chand (RW 3) The Court initially declined to grant an order of attachment.
In order to persuade the Court, certain steps were taken through the said Gautam Chand.
He caused the Publication of a notice stating that the property in question was the subject matter of an agreement between Anantaraju and himself and it should not be dealt with by anyone.
The publication of this notice was relied upon subsequently on behalf of the complainant Haradara by his advocate (respondent No. 2).
Ashok in seeking an order of attachment.
The Court accepted his submissions and passed the order of attachment.
(6) Subsequently the defendant Anantaraju executed the sale deed dated 27th Nov., 1981 in favour of Gautam Chand.
The object of the suit was achieved.
The sale deed was in PG NO 368 fact executed during the subsistence of the order of attachment concerning the same property.
The plaintiff Haradara has not objected to it at any time.
Consistently, the appellant had reasons to believe the information of settlement of dispute conveyed by the three parties together on 9.12.1981.
(7) Gautam Chand (RW 3) and the complainant Haradara acted in interest and scoured the attachment of property which was the subject matter of an agreement to sell in favour of Gautam Chand.
The suit instituted in the name of the complainant Haradara was only for the benefit of Gautam Chand by reference to his interest in the property.
(8) The appellant conveyed information of the settlement of dispute by his note made on the docket.
He drew a diagram of the location of residence of the respondent No. 2 Ashok Advocate.
(exhibit R 1A at page 14 Additional Documents).
The papers were delivered to respondent No. 2 Ashok Advocate by Gautam Chand (PW 3).
(9) After satisfying himself, respondent No. 2 Ashok advocate appeared in Court on 10.12.81 and filed a Memo prepared in his handwriting recording the fact of settlement of dispute and seeking withdrawal of the suit.
The Court passed order dated 10.12.1981 dismissing the suit, O.S. No. 1965 of 1981.
(10) Even though the plaintiff Haradara gained knowledge of the disposal of suit, he did not meet the appellant nor did he address him for over 1 1/2 years until May, 1983.
He did not also immediately apply for the restoration of suit.
An application for restoration was filed on the last date of limitation on 11.1.1982.
The application Misc.
16 of 1982 was later allowed to be dismissed for default on 30.7.1982.
It was later sought to be revived by application Misc.
No. 581 of 1982.
Necessary orders were obtained on 16.7.1988.
Thus Misc.
16 of 1982 (Application for restoration of suit) is pending in Civil Court.
On a survey of the legal landscape in the area of disciplinary proceedings this scenario emerges: (1) In exercise of powers under section 35 contained in Chapte V entitled "conduct of Advocates", on receipt of PG NO 369 a complaint against an Advocate (or suo motu) if the State Bar Council has `reason to believe ' that any Advocate on its role has been guilty of "professional or other misconduct".
Disciplinary proceeding may be initiated against him.
(2) Neither section 35 nor any other provision of the Act defines the expression ' legal misconduct ' or the expression `misconduct ' .
(3) The Disciplinary Committee of the State Bar Council is authorised to inflict punishment, including removal of his name from the rolls of the Bar Council and suspending him from practise for a period deemed fit by it, after giving the Advocate concerned and the 'Advocate General ' of the State an opportunity of hearing.
(4) While under section 42(1) of the Act the Disciplinary Committee has been conferred powers vested in a Civil Court in respect of certain matters including summoning and enforcing Attendance of any person and examining him on oath, the Act which enjoins the Disciplinary Committee to "afford an opportunity of hearing ' (Vide Sec.
S) to the Advocate does not prescribe the procedure to be followed at the hearing.
(5) The procedure to be followed in an Enquiry under Section 35 is outlined in of the Bar Council of India Rules (1) made under the authority of section 60 of the Act.
(6) Rule 8(1) of the said Rules enjoins the Disciplinary Committee to hear the concerned parties that is to say the complainant and the concerned Advocate as also the Attorney General or the Solicitor General or the Advocate General.
It also enjoins that if it is considered appropriate to take oral evidence the procedure of the trial of civil suits shall as far as possible be followed (2).
At this juncture it is appropriate to articulate some basic principles which must inform the disciplinary proceedings against members of the legal profession in proceedings under Section 35 of the , read with the relevant Rules: 1. Published in Gazette of India on September 6, 1975 in Section (pages 1671 to 1697).
PG NO 370 (i) essentially the proceedings are quasi criminal in character inasmuch as a Member of the profession can be visited with penal consequences which affect his right to practice the profession as also his honour; under Section 35(3)(d) of the Act, the name of the Advocate found guilty of professional or other misconduct can be removed from the State Roll of Advocates.
This extreme penalty is equivalent of death penalty which is in vogue in criminal jurisprudence The Advocate on whom the penalty of his name being removed from the roll of Advocate is imposed would be deprived of practising the profession of his choice, would be robbed of his means of livelihood, would be stripped of the name and honour earned by him in the post and is liable to become a social apartheid.
A disciplinary proceeding by a statutory body of the Members of the profession which is statutorily empowered to impose a punishment including a punishment of such immense proportions in quasi criminal in character; (ii) as a logical corollary it follows that the Disciplinary Committee empowered to conduct the enquiry and to inflict the punishment on behalf of the body, in forming an opinion must be guided by the doctrine of benefit of doubt and is under an obligation to record a finding of guilt only upon being satisfied beyond reasonable doubt.
It would be impermissible to reach a conclusion on the basis preponderence of evidence or on the basis of surmise, conjucture or suspicion.
It will also be essential to con sider the dimension regarding mens rea.
This proposition is hardly open to doubt or debate particularly having regard to the view taken by this Court in L.D. Jaisinghani vs Naraindas N. Punjubi, wherein Ray, CJ., speaking for the Court has observed: `In any case.
we are left in doubt whether the complainant 's version.
with which he had come forward with considerable delay was really truthful.
We think that, in a case of this nature, involving possible disbarring of the advocate concerned, the evidence should be of a character which 2.
Rule 8(1) "The Disciplinary Committee shall hear the Attorney General or the Solicitor General of India or the Advocate General, as the case may be or their Advocate, and parties or their Advocate, if they desire to be heard, and determine the matter on documents and affidavits unless it is of the opinion that it should be in the interest of justice to permit cross examination of the deponents or to take oral evidence, in which case the procedure for the trial of civil suits, shall as far as possible be followed.
" PG NO 371 should leave no reasonable doubt about guilt.
The Disciplinary Committee had not only found the appellant guilty but had disbarred him permanently." (Emphasis added).
(iii) in the event of a charge of negligence being levelled against an Advocate, the question will have to be decided whether negligence simpliciter would constitute misconduct.
It would also have to be considered whether the standard expected from an Advocate would have to answer the test of a reasonably equipped prudent practitioner carrying reasonable workload A line will have to be drawn between tolerable negligence and culpable negligence in the sense of negligence Which can be treated as professional misconduct exposing a Member of the profession to punishment in the course of disciplinary proceedings.
In forming the opinion on this question the standards of professional conduct and etiquette spelt out in Chapter 2 of of the Rules governing Advocates, framed under Section 60 (3) and Section 49(1)(g) of the Act, which form a part of the Bar Council of India Rules may be consulted.
As indicated in the preamble of the Rules, an Advocate shall, at all times compose himself in a manner befitting his status as an Officer of the Court, a privileged member of the community and a gentleman bearing in mind what may be lawful and moral for one who is not a member of the bar may still be improper for an Advocate and that his conduct is required to conform to the rules relating to the duty to the Court, the duty to the client, to the opponent, and the duty to the colleagues, not only in letter but also in spirit.
It is in the light of these principles the Committee would be required to approach the question as regards th guilt or otherwise of an Advocate in the context of professional misconduct levelled against him.
In doing so apart from conforming to such procedure as may have been outlined in the Act or the Rules, the Disciplinary Authority would be expected to exercise the power with full consciousness and awareness of the paramount consideration regarding principles of natural justice and fair play.
The State Bar Council, after calling for the comments of the appellant in the context of the complaint, straightway proceeded to record the evidence of the parties.
No charge was framed specifying the nature and content of the professional misconduct attributed to the appellant.
Nor PG NO 372 were any issues framed or points for determination formulated.
The Disciplinary Committee straightway proceeded to record evidence.
As the case could not be concluded within the prescribed time limit the matter came to be transferred to the Bar Council of India which has heard arguments and rendered the order under appeal.
The questions which have surfaced are: (1) Whether a specific charge should have been framed apprising the appellant of the true nature and content of the professional misconduct ascribed to him? (2) Whether the doctrine of benefit of doubt and the need for establishing the basic allegations were present in the mind of the Disciplinary Authority in recording the finding of guilt or in determining the nature and extent of the punishment inflicted on him? (3) Whether in the absence of the charge and finding of dishonesty against him the appellant could be held guilty of professional misconduct even on the assumption that he had acted on the instructions of a person not authorised to act on behalf of his client if he was acting in good faith and in a bona fide manner.
Would it amount to lack of prudence or nonculpable negligence or would it constitute professional misconduct? Now so far as the procedure followed by the State Bar Council at the Enquiry against the appellant, is concerned it appears that in order to enable the concerned Advocate to defend himself properly, an appropriate specific charge was required to be framed.
No doubt the Act does not outline the procedure and the Rules do not prescribe the framing of a charge.
But then even in a departmental proceeding in an enquiry against an employee, a charge is always framed.
Surely an Advocate whose honour and right to earn his livelihood are at stake can expect from his own professional brethern.
what an employee expects from his employer? Even if the rules are silent, the paramount and overshadowing considerations of fairness would demand the framing of a charge.
In a disciplinary proceeding initiated at the level of this Court even though the Supreme Court Rules did not so prescribe, in re: Shri `M ' an Advocate of the Supreme Court of India [1956] SCR page 811(814) this Court framed a charge after making these observations: PG NO 373 We treated the enquiry in Chambers as a preliminary enquiry and heard arguments on both sides with reference to the matter of that enquiry.
We came to conclusion that this was not a case for discharge at that stage.
We accordingly reframed the charges framed by our learned brother, Bhagwati J., and added a fresh charge.
No objection has been taken to this course.
But it is as well to mention that, in our opinion, the terms of Order IV, rule 30 of the Supreme Court Rules do not preclude us from adopting this course, including the reframing of, or adding to, the charges specified in the original summons, where the material at the preliminary enquiry justifies the same.
The fresh enquiry before us in Court has proceeded with reference to the following charges as reframed and added to by us.
" It would be extremely difficult for an Advocate facing a disciplinary proceeding to effectively defend himself in the absence of a charge framed as a result of application of mind to the allegations and to the question as regards what particular elements constituted a specified head of professional misconduct.
The point arising in the context of the non framing of issues has also significance.
As discussed earlier Rule 8(1) enjoins that "the procedure for the trial of Civil suits, shall as far as possible be followed. ' ' Framing of the issues based on the pleadings as in a Civil suit would be of immense utility.
The controversial matters and substantial questions would be identified and the attention focussed on the real and substantial factual and legal matters in contest.
The parties would then become aware of the real nature and content of the matters in issue and would come to know (l) on whom the burden rests (2) what evidence should be adduced to prove or disprove any matter (3) to what end cross examination and evidence in rebuttal should be directed.
When such a procedure is not adopted there exists inherent danger of miscarriage of justice on account of virtual denial of a fair opportunity to meet the case of the other side.
We wish the State Bar Council had initially framed a charge and later on framed issues arising out of the pleadings for the sake of fairness and for the sake of bringing into forefront the real controversy.
In the light of the foregoing discussion the questions arising in the present appeal may now to be examined.
In substance the charge against the appellant was that he had withdrawn a suit as settled without the instructions from the complainant.
It was not the case of the complainant that PG NO 374 the appellant had any dishonest motive or that he had acted in the matter by reason of lack of probity or by reason of having been won over by the other side for monetary considerations or otherwise.
The version of the appellant was that the suit which had been withdrawn had been instituted in a particular set of circumstances and that the complainant had been introduced to the appellant for purposes of the institution of the suit by an old client of his viz. RW 3 Gautam Chand.
The appellant was already handling, a case on behalf of RW 3 Gautam Chand against RW 4 Anantharaju.
The decision to file a suit on behalf of the complainant against RW 4 Anantharaju was taken in the presence of RW 3 Gautam Chand.
It was at the instance and inspiration of RW 3 Gautam Chand that the suit had been instituted by the complainant, but really he was the nominee of Gautam Chand and that the complainant himself had no real claim on his own.
It transpires from the records that it was admitted by the complainant that he was not maintaining any account books in regard to the business and he was not an Income tax assessee.
In addition,the complainant (PW 1) Haradara himself has admitted in his evidence that it was Gautam Chand who had introduce him to the appellant, and that he was in fact taken to the office of the appellant for filling the said suit, by Gautam Chand.
It was this suit which was withdrawn by the appellant.
Of course it was withdrawn without any written instruction from the defendant against whom he had filed the suit for recovery of Rs. 30,000 and odd through Gautam Chand and that he did not know the defendant intimately or closely.
He also admitted that the cheques used to be passed in favour of the party and that he was not entitled to the entire amount.
He used to get only commission.
Since even on the admission of the complainant himself he was taken to the office of the appellant for instituting the suit, by RW 3 Gautam Chand, and old client of th appellant whose dispute with the defendant against whom the complainant had filed the suit existed at the material time and was being handled by the appellant.
The defence of the appellant that he had withdrawn the suit in the circumstances mentioned by him required to be considered in the light of his admissions.
The defence of the appellant being that the suit was withdrawn under the oral instructions of the complainant in the presence of RW 3 Gautam Chand and RW 4 Anantharaju and inasmuch as RWs 3 and 4 supported the version of the appellant on oath, the matter was required to be examined in this background.
Assuming that the evidence of the appellant corroborated by RWs 3 and 4 in regard to the presence of the complainant was not considered acceptable, the question would yet arise as to PG NO 375 whether the withdrawal on the part of the appellant as per the oral instructions of RW 3 Gautam Chand who had taken the complainant to the appellant for instituting the suit, would amount to professional misconduct.
Whether the appellant had acted in a bona fide manner under the honest belief that RW 3 Gautam Chand was giving the instructions on behalf of the complainant required to be considered.
If he had done so in a bona fide and honest belief would it constitute professional misconduct, particularly having regard to the fact that nO allegation regarding corrupt motive was attributed or established? Here it has to be mentioned that the appellant had acted in an open manner in the sense that he had in his own hand made endorsement for withdrawing the suit as settled and sent the brief to his junior colleague.
If the appellant had any oblique motive or dishonest intention.
he would not have made the endorsement in his own hand.
No doubt Rule 19 contained in Section 2 captioned `Duty to the clients ' provides that an Advocate shall not act on the instructions of any person other than his client or his authorised agent.
If, therefore, the appellant had acted under the instructions of RW 3 Gautam Chand bona fide believing that he was the authorised agent to give instructions on behalf of the client, would it constitute professional misconduct? Even if RW 3 was not in fact an authorised agent of the complainant, but if the appellant bona fide believed him to be the authorised agent having regard to the circumstances in which the suit came to be instituted, would it constitute professional misconduct? Or would it amount to only an imprudent and unwise act or even a negligent act on the part of the appellant? These were questions which directly arose to which the Committee never addressed itself.
There is also nothing to show that the Disciplinary Committee has recorded a finding on the facts and the conclusion as regards the guilt in full awareness of the doctrine of benefit of doubt and the need to establish the facts and the guilt beyond reasonable doubt.
As has been mentioned earlier, no charge has been formulated and framed, no issues have been framed.
The attention of the parties was not focussed on what were the real issues.
The appellant was not specifically told as to what constituted professional misconduct and what was the real content of the charge regarding the professional misconduct against him.
In the order under appeal the Disciplinary Committee has addressed itself to three questions viz. PG NO 376 (i) Whether the complainant was the person who entrusted the brief to the appellant and whether the brief was entrusted by the complainant to the appellant? (ii) Whether report of settlement was made without instruction or knowledge of the complainant? (iii) Who was responsible for reporting settlement and instructions of the complainant? In taking the view that the appellant had done so probably with a view to clear the cloud of title of RW 3 as reflected in paragraph 22 quoted herein, the Disciplinary Committee was not only making recourse to conjucture.
surmise and presumption on the basis of suspicion but also attributing to the appellant a motive which was not even attributed by the complainant and of which the appellant was not given any notice to enable him to meet the charge: "It is not possible to find out as to what made PW 2 to have done like that.
As already pointed out the house property which was under attachment had been purchased by RW 3 during the subsistence of the attachment.
Probably with a view to clear the cloud of title of RW 3, PW 2 might have done it.
This is only our suspicion.
Whatever it might be, it is clear that RW 2 had acted illegally in directing RW l to report settlement.
" In our opinion the appellant has not been afforded reasonable and fair opportunity of showing cause inasmuch as the appellant was not apprised of the exact content of the professional misconduct attributed to him and was not made aware of the precise charge he was required to rebut.
The conclusion reached by the Disciplinary Committee in the impugned order further shows that in recording the finding of facts on the three questions, the applicability of the doctrine of benefit of doubt and need for establishing the facts beyond reasonable doubt were not realised.
Nor did the Disciplinary Committee consider the question as to whether the facts established that the appellant was acting with bona fides or with mala fides, whether the appellant was acting with any oblique or dishonest motive, whether there was any mens rea, whether the facts constituted negligence and if so whether it constituted culpable negligence.
Nor has the Disciplinary Committee considered the question as regards the quantum of punishment in the light of the aforesaid considerations and the exact nature of the professional misconduct established against the appellant.
PG NO 377 The impugned order passed by the Disciplinary Committee, therefore cannot be sustained.
Since we do not consider it appropriate to examine the matter on merits on our own without the benefit of the finding recorded by the Disciplinary Committee of the apex judicial body of the legal profession, we consider it appropriate to remit the matter back to the Disciplinary Committee.
As observed by this Court in O.N. Mohindroo vs The District Judge, Delhi and Anr., Supreme Court Bar Association, in paragraph 23 quoted hereinbelow, we have no doubt that the Disciplinary Committee will approach the matter with an open mind: "From this it follows that questions of professional conduct are as open as charges of cowardice against Generals for reconsideration of the conviction of persons convicted of crimes.
Otherwise how could the Hebron brothers get their conviction set aside after Charles Peace confessed to the crime for which they were charged and held guilty? ' ' We must explain why we consider it appropriate to remit the matter back to the Bar Council of India.
This matter is one pertaining to the ethics of the profession which the law has entrusted to the Bar Council of India.
It is their opinion of a case which must receive due weight because in the words of Hidayatullah, CJ, in Mohindroo 's case: "This matter is one of the ethics of the profession which the law has entrusted to the Bar Council of India.
It is their opinion of a case which must receive due weight. ' ' It appears to us that the Bar Council of India must have an opportunity to examine the very vcxed and sensitive question which has arisen in the present matter with utmost care and consideration.
the question being of great importance for the entire profession.
We are not aware of any other matter where the apex body of the profession was required to consider whether the bona fide act of an Advocate who in good faith acted under the instructions of someone closely connected with his client and entertained a bona fide belief that the instructions were being given under the authority of his client, would be guilty of misconduct.
It will be for the Bar Council of India to consider whether it would constitute an imprudent act, an unwise act.
a negligent act or whether it constituted negligence and if so a culpable negligence, or whether it constituted a professional misconduct deserving severe punishment, even when it was not established or atleast not PG NO 378 established beyond reasonable doubt that the concerned Advocate was acting with any oblique or dishonest motive or with mala fides.
This question will have to be determined in the light of the evidence and the surrounding circumstances taking into account the doctrine of benefit of doubt and the need to record a finding only upon being satisfied beyond reasonable doubt.
In the facts and circumstances of the present case, it will also be necessary to re examine the version of the complainant in the light of the foregoing discussion keeping in mind the admission made by the complainant that he was not maintaining any books of accounts and he was not an Income tax assessee and yet he was the real plaintiff in the suit for Rs.30,000 and odd instituted by him, and in the light of the admission that it was RW 3 Gautam Chand who had introduced him to the appellant and that he was in fact taken to the office of the appellant, for filing the suit, by RW 3 Gautam Chand.
The aforesaid question would arise even if the conclusion was reached that the complainant himself was not present and had not given instructions and that the appellant had acted on the instructions of RW 3 Gautam Chand who had brought the complainant to the appellant 's office for instituting the suit and who was a close associate of the complainant.
Since all these aspects have not been examined at the level of the Bar Council, and since the matter raises a question of principle of considerable importance relating to the ethics of the profession which the law has entrusted to the Bar Council of India, it would not be proper for this Court to render an opinion on this matter without the benefit of the opinion of the Bar Council of India which will accord close consideration to this matter in the light of the perspective unfolded in this judgment both on law and on facts.
We are reminded of the high degree of fairness with which the Bar Council of India had acted in Mohindroo 's case.
The Advocate concerned was suspended from practice for four years.
The Bar Council had dismissed the appeal.
Supreme Court had dismissed the Special Leave Petition summarily.
And yet the whole matter was reviewed at the instance of the Bar Council and this Court was persuaded to grant the review.
A passage extracted from Mohindroo 's case deserves to be quoted in this connection: "37.
We find some unusual circumstances facing us.
The entire Bar of India are of the opinion that the case was not as satisfactorily proved as one should be and we are also of the same opinion.
All processes of the Court are intended to secure justice and one such process is the power of review.
No doubt frivolous reviews are to be discouraged and technical rules have been devised to prevent persons from PG NO 379 reopening decided cases.
But as the disciplinary committee themselves observed there should not be too much technicality where professional honour is involved and if there is a manifest wrong done, it is never too late to undo the wrong.
This Court possesses under the Constitution a special power of review and further may pass any order to do full and effective justice.
This Court is moved to take action and the Bar Council of India and the Bar Association of the Supreme Court are unanimous that the appellant deserves to have the order disbarring him from practice set aside.
We have therefore no doubt that upon the matter being remitted to the Bar Council of India it will be dealt with appropriately in the light of the aforesaid perspective.
We accordingly allow this appeal, set aside the order of the Bar Council in so far as the appellant is concerned and remit the matter to the Bar Council of India.
however, wish to make it clear that it will not be open to the complainant to amend the complaint or to add any further allegation.
We also clarify that the evidence already recorded will continue to form part of the record and it will be open to the Bar Council of India to hear the matter afresh on the same evidence.
It is understood that an application for restoration of the suit which has been dismissed for default in the City Civil Court at Bangalore has been made by the complainant and is still pending before the Court.
It will be open to the Bar Council of lndia to consider whether the hearing of the matter has to be deferred till the application for restoration is disposed of.
The Bar Council of India may give appropriate consideration to all these questions.
We further direct that in case the judgment rendered by this Court or any part thereof is reported in Law Journals or published elsewhere, the name of the appellant shall not be mentioned because the matter is still subjudice and fairness demands that the name should not be specified.
The matter can be referred to as an Advocate vs The Bar Council or in re.
an Advocate without naming the appellant.
The appeal is disposed of accordingly.
No order regarding costs.
Y. Lal Appeal disposed of.

summary:
The appellant is an Advocate.
Gautam Chand was one of his old clients.
The complainant Respondent No. l engaged the appellant on being introduced by Gautam Chand to file a Suit against Shri section Anantaraju for recovery of a sum of Rs.30,098 with Court costs and interest in the Court of City Civil Judge at Bangalore.
The appellant passed on the papers to his junior advocate to file the Suit which he did.
The complainant 's allegation is that the matter in dispute in the suit had not been settled at all and the appellant without the knowledge and without his instructions filed a memo in the Court to the effect that the matter has been settled out of Court and accordingly got the suit dismis sed and also received half of the institution court fee; about which the complainant was not aware, nor was he informed by the appellant.
The complainant 's allegation is that he was not informed about the dates of hearing of the suit; when inquired he was simply told that the case is posted for filing written statement where his presence was not neces sary.
When nothing was heard by the complainant from the appellant about the progress of his suit, he personally made inquiries and came to learn to his great surprise that the suit in question had in fact been withdrawn as settled out of Court.
The version of the appellant Advocate is that Gautam Chand, his old client, had business dealings with the plaintiffs, Haradara (Complainant) and the defendant Anantaraju.
Anantaraju had also executed an agreement on 9.8.80 to sell his house property to Gautam Chand.
He received earnest money amounting to Rs.35,000 from Gautam Chand.
Anantaraju however did not execute the sale deed within the specified time.
Gautam Chand approached the appellant for legal advice.
The appellant caused the issue of notice to Anantaraju calling upon him to execute the sale deed.
A notice was also issued on behalf of the complainant calling upon the defendant Anantaraju demanding certain amounts due on 3 self bearer cheques amounting to PG NO 362 Rs. 30,098 issued by him in course of their mutual transactions.
Gautam Chand and the complainant were friends having no conflict of interests Gautam Chand instructed the appellant and his junior Ashok that he was in possession of the said cheques issued by Anantaraju and that no amount was actually due from Anantaraju to Haradara Complainant.
Gautam Chand desired Anantaraju to execute the sale deed.
Anantaraju executed the sale deed on 27.11.81 in favour of Gautam Chand, even though an order of attachment before judg ment in respect of the said property was in existence.
Consequent on the execution of the sale deed, the object of the suit was achieved.
The complainant did not at any time object.
In this back ground, the appellant had reasons to believe the information re: settlement of dispute conveyed by the three together on 9.12.81.
Acting on the said informa tion, the appellant asked Ashok his erstwhile junior to take steps to withdraw the suit, which he did on 10.12.8l as per instructions received from the appellant noted on the docket of the brief.
The state Bar Council, called for the comments of the appellant relating to the complaint.
No charge was framed specifying the nature and content of the professional misconduct attributed to the appellant.
Nor were any issues framed or prints for determination formulated.
Instead thereof the Bar Council proceeded to record evidence.
As the case could not be concluded within the time limit, the matter came to be transferred to the Bar Council of India.
The Bar Council off India addressed itself to the three questions, viz. (i) Whether the complainant was the person who entrusted the brief to the appellant and whether the brief was entrusted by the complainant to the appellant.
(ii) Whether report of settlement was made without instructions or knowledge of the complainant? (iii) Who was responsible for reporting settlement and instructions of the complainant ? The Disciplinary Committee of the Bar Council of India after considering the matter found appellant guilty of professional misconduct and suspended him for practising his profession for 3 years on the charge of having withdrawn a suit (not settled) without the instruction of the clients.
PG NO 363 The appellant has filed the appeal u,s 38 of the Advocates Act.
The following questions arose for consideration by this Court.
(i) Whether a specific charge should have been framed apprising the appellant of the true nature and content of the professional misconduct ascribed to him: (ii) Whether the doctrine of benefit of doubt and the need of establishing the basic allegations were present in the mind of the Disciplinary Authority in recording the finding of guilt or in determining the nature and extent of the punishment inflicted on him; (iii) Whether in the absence of the charge and finding of dishonesty against him the appellant could be held guilty of professional misconduct even on the assumption that he had acted on the instructions of a person not authorised to act on behalf of his client if he was acting in good faith and in a bona fide manner.
Would it amount to lack of prudence or non culpable negligence or would it constitute professional misconduct.
Disposing of the appeal, the Court, HELD: That the appellant was not afforded reasonable and fair Opportunity of showing cause inasmuch as he was not apprised of the exact content of the professional misconduct attributed to him and was not made aware of the precise charge he was required to rebut.
[376E F] That in recording the finding of facts on the three questions.
referred to above.
the applicability of the doctrine of benefit of doubt and the need for established the facts beyond reasonable doubt were not realized.
Nor did the Disciplinary Committee consider the question as to whether the facts established that the appellant was acting with bona fides or mala fides whether the appellant was acting with any oblique and dishonest motive.
whether there was any mens rea; whether the facts constituted negligence and if so whether it constituted culpable negligence.
Nor has the Disciplinary Committee considered the question as regards the quantum of punishment in the light of the aforesaid considerations and the exact nature of the professional misconduct established against the appellant.
[376F H; 377A] The Court, in view of the fact that "the matter is one of the ethics of the profession which the law has entrusted to the Bar Council of India" and it is in their opinion, "a case which must receive due weight" did not consider it PG NO 364 appropriate to examine the matter on merits without first having the opinion of the Bar Council of India.
[377D] Remanding the matter to the Bar Council of India the Court directed it to consider whether it would constitute an imprudent act, an unwise act, a negligent act or whether it constituted negligence and if so a culpable negligence, or whether it constituted a professional misconduct deserving severe punishment, even when it was not established or at least not established beyond reasonable doubt that the concerned Advocate was acting with any oblique or dishonest motive or with mala fides.
[377H; 378A] L.D. Jaisinghani vs Naraindas N. Punjabi, and Re: M. vs Distt.
Judge Delhi, [1956] S.C.R. P. 811(814), referred to.


judgement:
ecial Leave Petition (C) No. 8566 of 1988.
From the Judgment and Order dated 9.10.1987 of the Andhra Pradesh High Court in W.P. No. 306 of 1983.
R. Mohan for the Petitioner.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This petition is for leave to appeal under Article 136 of the Constitution from the judgment and order of the High Court of Andhra Pradesh dated 9th October, 1987.
The question that was urged before the High Court and the question which is sought to be raised in this petition is whether the respondent Pradesh Rayons Ltd. which is manufacturing Rayon Grade Pulp, a base material for manufacturing of synthetics or manmade fabrics is an industry as mentioned in Schedule I of the Water (Prevention and Control of Pollution) cess Act, 1977 for the purposes of levy of Water Cess under the Act.
The water (Prevention and Control Of Pollution) Act, 1974 was passed by the Parliament to "provide for the prevention and control of water pollution and the maintaining or restoring of wholesomeness of water, for the establishment, with a view to carrying out the purposes aforesaid, of Boards for the prevention and control of water pollution, for conferring on and assigning to such Boards powers and functions relating thereto and for matters connected therewith".
For the aforesaid purposes, the Act contemplated creation of State Boards at State level and the Central Board at the national level.
Thereafter, the being Act 36 of 1977 was passed (hereinafter called 'the Act ').
The preamble to the said Act states that the said Act was "to provide for the levy and collection of a cess on water consumed by persons carrying on certain industries and by local authorities, with a view to augment the resources of the Central Board and the State PG NO 383 Boards for the prevention and control of water pollution constituted under the ".
Therefore, the said Act was passed only for the purpose of providing for levy and collection of cess on water consumed by persons carrying on certain industries with a view to augment the resources of the Central Board and the State Boards.
Section 2(c) stipulates A `specified industry ' means any industry specified in Schedule T. Section 3 provides as follows: "3.
Levy and collection of cess. (1) There shall be levied and collected a cess for the purposes of the and utilisation thereunder.
(2) The cess under sub section ( I) shall be payable by (a) every person carrying on any specified industry; and (b) every local authority, and shall be calculated on the basis of the water consumed by such person or local authority, as the case may be, for any of the purposes specified in column (1) of Schedule II, at such rate, not exceeding the rate specified in the corresponding entry in column (2) thereof, as the Central Government may, by notification in the Official Gazette, from time to time, specify.
" Therefore, this section provides for levy and collection of cess from the specified industries.
Specified industry is one which is mentioned in Schedule I which is as follows: "1.
Ferrous metallurgical industry.
Non ferrous metallurgical industry.
Mining industry.
Ore processing industry.
Petroleum industry.
Petro chemical industry.
Chemical industry.
Ceramic industry.
PG NO 384 9.
Cement industry.
Textile industry 11.
Paper industry.
Fertilizer industry.
Coal (including coke) industry.
Power (thermal and diesel) generating industry.
Processing of animal or vegetable products industry.
" Therefore, the short question, is, whether the industry run by the respondent herein for manufacturing Rayon Grade Pulp, a base material for manufacture of synthetics or man made fabrics is one of the industries mentioned in Schedule I hereinbefore.
In this case, the respondent company was registered as company in 1975.
The supply of energy to the company commenced on August 22, 1981 and the production began from September 1, 1981.
The company manufactures rayon grade pulp of 26250 tonnes per annum.
The Company was served with a notice on 12th August, 1981 to furnish the quantum of water consumed for assessment under the Act.
Based on the returns filed by the respondent as required under section S of the Act, assessment of water cess was made by an order dated 31st December 1981.
Aggrieved by the said order the respondent filed an appeal before the Appellate Committee constituted under the Act.
The Appellate committee by its order dated 30th November, 1982 conformed the orders of the assessment passed by the petitioner.
Before the Appellate Committee various contentions were urged and only one of such contention survives now and is agitated before us, namely, that the Rayon Industry is nOt included in Schedule I of the said Act.
The Appellate Committee by its order said as follows: "We are unable to agree with the arguments advanced by the learned counsel.
The appellant industry is manufacturing Rayon Grade Pulp which comes under the category of textile industry as it involves the production of Rayon Grade Pulp.
a base material for manufacture of synthetic of man made fibres. ' ' PG NO 385 From the aforesaid, it appears that the Appellate Committee was of the view that the respondent herein was manufacturing Rayon Grade Pulp which comes under the category of Textile mentioned in Schedule I of the Act.
Textile industry is item No. 10 in the aforesaid Schedule.
Aggrieved by the decision of the Appellate Committee, the respondent herein filed writ petition challenging the constitutional validity of the Act as well as the levy of cess on water on the ground that it was not one of the industries mentioned in the Schedule.
The High Court by its order dated 9th October, 1987 rejected the contention relating to the constitutional validity but upheld the contention that the respondent 's industry was not an industry which is mentioned in Schedule I and as such was not liable to pay cess.
It is the propriety or the correctness of that decision which is sought to be canvassed before us by this petition.
It must, therefore, be made clear that we are not concerned with the correctness or otherwise of the decision of the High Court about the constitutional validity of the Act in question.
That is not at issue before us since the petitioner, Andhra Pradesh State Board for Prevention and Control of Water Pollution has not challenged that finding.
The only question is whether the respondent is an industry as mentioned in the aforesaid schedule.
The High Court in the impugned judgment has held that Rayon Grade Pulp is not covered by any of the items specified in the said Schedule.
We are of the opinion that the High Court was right.
Before us it was sought to be canvassed that Rayon Grade Pulp is covered either by Item No. 7 which is chemical industry or 13y item No. 10 which is textile industry or item No. I1 which is paper industry.
We are unable to accept the contention.
It has to be borne in mind that this Act with which we are concerned is an Act imposing liability for cess.
The Act is fiscal in nature.
The Act must, therefore, be strictly construed in order to find out whether a liability is fastened on a particular industry.
The subject is not to be taxed without clear words for that purpose; and also that every Act of Parliament must be read according to its natural construction of words.
See the observations in Re Micklethwait, ; , 456.
Also see the observations in Tenant vs Smith, ; and Lord Halsbury 's observations at page 154.
See also the observations of Lord Simonds in St. Aubyn vs AG, ; at 485.
Justice Rowlatt of England said a long time ago, that in a taxing ACt one has to look merely at what is clearly said.
There is no room for any intendment.
There is no equity about a tax.
There is no presumption at to tax.
Nothing is to be read in, nothing is to be implied.
One has to look fairly at the language used.
See the observations in Cape Brandy Syndicate vs IRC, [1921]J 1 KB PG NO 386 64 at 71.
This Court has also reiterated the same view in Gursahai Saigal vs C.I.T. Punjab, ; ; S.L. T. Madras vs V. MR.
P. Firm, Muar, [1965] I SCR 815.
and Controller of Estate Duty Gujarat vs Kantilal Trikamlal, ; The question as to what is covered must be found out from the language according to its natural meaning fairly and squarely read.
See the observations in IRC vs Duke of Westminster, [1936] AC I at 24, and of this Court in A V Fernandez vs The State of Kerala, ; Justice Krishna Iyer of this Court in Martand Dairy & Farm vs Union of India, has observed that taxing consideration may stem from administrative experience and other factors of life and not artistic visualisation or neat logic and so the literal, though pedestrian, interpretation must prevail.
In this case where the question is whether a particular industry is an industry as covered in Schedule I of the Act, it has to be judged normally by what that industry produces mainly.
Every industry carries out multifarious activities to reach its goal through various multifarious methods.
Whether a particular industry falls within the realm of taxation, must be judged by the predominant purpose and process and not by any ancillary or incidental process carried on by a particular industry in running its business.
Chemical process would be involved to a certain extent, more or less in all industries, but an industry would be known as a chemical industry if it carries out predominantly chemical activities and is involved in chemical endeavours.
We fail to see that Rayon Grade Pulp could be considered even remotely connected as such with chemical industry or textile industry or paper industry.
In all preparations, there is certain chemical process but that does not make all industries chemical industries.
The expression "chemical" means, according to Collins English Dictionary.
any substance used in or resulting from a reaction involving changes to atoms or molecules or used in chemistry.
The Concise Oxford Dictionary, 8th Edition page 170 defines "chemical ' ' as made by or relating to, chemistry.
Broadly and literally, in our opinion, it can be said that the Rayon Grade Pulp is neither chemical industry nor textile industry nor paper industry.
We find it difficult on a broad and literal construction to bring the industry of the respondent into any of these categories.
In other words, to find out the intention of the legislation, if possible it should be PG NO 387 found out from the language used in case of doubt.
The purpose of legislation should be sought for to clarify the ambiguity only, if any.
The fairest and most rational method, says Blackstone, to interpret the will of the legislator is by exploring his intentions at the time when the law was made, by signs the most natural and probable.
And these signs are either the words, the context, the subject matter, the effects and consequence, or the spirit and reason of the law.
See Commentaries on the Laws of England by Blackstone (facsimile of 1st edition of 1765, University of Chicago Press, 1979 Vol. 1 p. 59.).
The words are generally to be understood `in their usual and most known signification ', although terms of art `must be taken according to the acceptation of the learning in each art, trade and science.
If words happen still to be dubious, we may establish their meaning from the context, which includes the preamble to the statute and laws made by the same legislator on the same subject.
Words are always to be understood as having regard to the subject matter of the legislation.
See Cross Statutory Interpretation, 2nd Edition page 21.
This Court in Lt Col. Prithi Pal Singh Bedi etc.
vs Union of India & Ors., [1983] I S.C.R. 393 at page 404 of the report reiterated that the dominant purpose in construing a statute is to ascertain the intention of the Parliament.
One of the well recognised canons of construction is that the legislature speaks its mind by use of correct expression and unless there is any ambiguity in the language of the provision the Court should adopt literal construction if it does not lead to an absurdity.
Therefore, the first question to be posed is whether there is any ambiguity in the language used.
If there is none, it would mean the language used, speaks the mind of Parliament and there is no need to look somewhere else to discover the intention or meaning.
If the literal construction leads to an absurdity, external aids to construction can be resorted to.
To ascertain the literal meaning it is equally necessary first to ascertain the juxtaposition in which the rule is placed, the purpose for which it is enacted and the object which it is required to subserve and the authority by which the rule is framed.
Bearing the aforesaid principle in mind, we find that there is no absurdity in the literal meaning.
The purpose of the Act is to realise money from those whose activities lead to pollution and who must bear the expenses of the maintenance and running of the State Board.
It is a fiscal provision and must, therefore, not only be literally construed but also be strictly construed.
Having regard to the literal expression used and bearing in mind the purpose for the legislation, we arrive at a result that certain PG NO 388 industries have to pay the expenses of the maintenance and functioning of the State Boards.
Considering the principle broadly and from commonsense point of view, we find nothing to warrant the conclusion that Rayon Grade Pulp is included in either of the industries as canvassed on behalf of the petitioner here and as held by the High Court in the judgment under appeal.
In this case, we must also note that neither the water Pollution Board nor any authorities under the Act nor the High Court proceeded on any evidence how these expressions are used in the particular industry or understood in the trade generally.
In other words, no principle of understanding in "common parlance" is involved in the instance case.
In that view of the matter, we are of the opinion that the contention sought for by the petitioner is of no substance.
Our attention, however, was drawn to the decision of a learned single Judge of the High Court of Kerala in M/s. Gwalior Rayon Silk Mfg.
(Wvg.) Co. Ltd., Mavoor vs The Appellate Committee for Water Cess, Trivandrum and others, A.I.R. 1983 Kerala 110.
There, the learned single Judge of the Kerala High Court held that industry manufacturing rayon grade pulp is chemical industry.
The High Court has observed that the product of the Pulp Division of a rayon silk manufacturing company is rayon grade pulp, extracted from bamboo or wood.
The High Court noted that the pulp produced in the Pulp Division of the company is the raw material for the Staple Fibre Division.
The High Court further observed that the pulp in question is a chemical used as chemical raw material, in the form known as chemical cellulose, for preparation of fibres.
The High Court noted that for the scientist cellulose is a carbohydrate an organic compound, a saccharide and for the layman also it is a chemical like salt and sugar.
Manufacture of pulp from wood or bamboo involves consumption of large quantities of water which get polluted in the process; and "chemical industry ' ' in the context in which it is used in Schedule I of the Act, can therefore, include an industry manufacturing rayon grade pulp.
We are unable, with respect, to accept the circuitous process of reasoning of the Kerala High Court.
As mentioned hereinbefore, looked at from this circuitous method every industry would be chemical industry.
It could not have been the intention to include all industries because every industry has to go to certain chemical process more or less and, therefore, it could not be so construed.
Such expression should, therefore, be construed reasonably, strictly and from a commonsense point of view.
The High PG NO 389 Court of Kerala has set out in the said judgment the company 's case in that case which also produced Rayon Grade Pulp and the manufacturing process consisted only of isolating cellulose present in bamboo and wood by removal of "lignin" and other contents, and that the resultant product is not chemical cellulose.
It explained the process as under: "The actual process of manufacture of Rayon grade pulp is by feeding the raw materials on the conveyors leading to the chippers, where they are chipped into small pieces in uniform sizes.
The raw materials are washed by a continuous stream of water before they are fed into chippers for removal of their adhering mud and dirt.
The chips are then conveyed into Digesters, where they are subjected to acid pre hydrolysis, using dilute sulphuric acid solution.
The spent liquor is then drained out, and the chips washed to remove the acid.
The chips are again cooked using a solution containing cooking chemicals at high temperature of above 160C. After the chips are thus cooked the pressure is released, and the material is collected in a blow tank, from where the chipped pulp is sent to "Knotter Screen" for removal of uncooked particles.
The pulp is washed in a series of washers in a counter current manner.
The washed pulp is bleached in a multi staged Bleaching Plant, and converted into sheets in a continuous machine.
The pulp sheets so obtained are sent to other factories for their conversion into Staple Fibre.
" The said High Court also relied on a passage from the "Book of Popular Science" Grolier, 1969, Vol. 7, p. 55 which reads as follows: "Just what is a chemical, after all? Presumably it is a pure chemical substance (an element or compound) and not a mixture.
Thus sulphuric acid is a chemical .
But common salt and sugar, with which all of us are familiar, are also pure chemical substances .
The truly chemical industries, which manufacture chemicals, are seldom well known to the public.
This is because we, as consumers, do not ordinarily make use of chemicals in their pure form.
Instead they are converted into products that reach the consumer only after a number of operations . " (Emphasis supplied) PG NO 390 As mentioned hereinbefore, the expression should be understood not in technical sense but from broad commonsense point of view to find out what it truly means by those who deal with them.
Bearing the aforesaid perspective in mind, we are unable to agree with the view of the Kerala High Court expressed in the aforesaid judgment.
In that conspectus of the Kerala High Court everything would be included in the process of chemical.
In the aforesaid view of the matter we are of the opinion that the High Court of Andhra Pradesh in the impugned judgment was right and the High Court of Kerala in the judgment referred to hereinbefore was not right.
In the aforesaid view of the matter this petition fails and is accordingly dismissed.

dataset_name: IN-Abs

summary:
The respondent, Andhra Pradesh Rayons Ltd., manufacturing Rayon Grade Pulp, a base material for the manufacture of synthetics or man made fabrics, was assessed by the petitioner under the provisions of which provided for levy and collection of Water cess from the specified industries enumerated in Schedule I of the Act.
On appeal, the Appellate late Committee confirmed the order of assessment on the ground that the respondent was manufacturing Rayon Grade Pulp which came under the category of Textile industry.
The respondent filed a writ in the High Court challenging the levy Inter alia on the ground that it was not one of the industries mentioned in the Schedule.
The High Court upheld this contention.
Before this Court, it was sought to be canvessed by the petitioner that Rayon Grade Pulp was covered either by Item No. 7 of the Schedule, which was chemical industry, or item No. 10 which was textile industry, or item No.11 which was paper industry.
Dismissing the petition, it was, PG NO 380 PG NO 381 HELD: (I) The Act being fiscal in nature must be strictly construed.
The question as to what is covered must be found out from the language according to its natural meaning, fairly and squarely read.
[385F; 386B] (2) In a taxing Act one has to look merely at what is clearly said.
There is no room for any intendment.
There is no equity about a tax, there is no presumption as to tax.
Nothing is to be read in, nothing is to be implied.
[385H] (3) Whether a particular industry is an industry covered in Schedule I has to be judged normally by what that industry produces mainly, its predominant purpose and process, and not by any ancillary or incidental process carried on by it.
[386D] (4) Chemical process would be involved to a certain extent, more or less in all industries, but an industry would be known as a chemical industry if it carries out predominantly chemical activities and is involved in chemical endeavours.
[386E] (5) Taxing consideration may stem from administrative experience and other factors of life and not artistic visualisation or neat logic and so the literal, though pedestrian, interpretation must prevail.
[386C] (6) One of the well recognised canons of construction is that the legislature speaks its mind by use of correct expression and unless there is any ambiguity in the language of the provision the Court should accept literal construction if it does not lead to an absurdity.
[387E] (7) There is no absurdity in the literal meaning.
Broadly and literally it can be said that the Rayon Grade Pulp is neither chemical industry nor textile industry nor paper industry.
[387G;386H] In Re Micklethwait., [1885] II EX 452. 456; Tenant vs Smith; , ; St. Aubyan vs AG., [1951] 2 All E.R. 473; Cape Brandy Syndicate vs IRC.
, at 71; Gursahai Saigal vs C.I.T. Punjab, ; ; C.I.T. Madras vs MR.
P. Firm, Muar, ; ; Controller of Estate Duty, Gujarat vs Kantilal Trikamlal, ; ; IRC vs Duke of Westminster, at 24; AV Fernandez vs The State of Kerala, ; ; Martand Dairy & Farm vs Union of India, [1975] Supp.
SCR 265; Lt Col. Prithi Pal Singh Bedi vs Union of India, , referred to.
PG NO 382 M/s. Gwalior Rayon Silk Mfg.
(Wvg.) Co. Ltd. Mavoor vs The Appellate Committee for Water Cess, Trivandrum, A.I.R. 1983 Kerala 110.
overruled.


judgement:
tion No. 1219 of 1987.
(Under Article 32 of the Constitution of India. ) T.S. Krishnamoorthy Iyer, P.N. Puri and R.K. Talwar for the Petitioner.
PG NO 400 Kuldip Singh and B. Dutta, Additional Solicitor Generals, Mahabir Singh, C.M. Nayar, A.K. Srivastava, Ms. A. Subhashini, A.S. Bhasme and A.V. Rangam for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
This application is under Article 32 of the Constitution.
The All India Sainik Schools Employees Association through its President is the petitioner.
The Sainik School Society (hereinafter referred to as "the Society") is a society registered under the Societies Registration Act, 21 of 1860.
The main object of the Society, as available from clause 3(a) of the Memorandum of Association is: `to establish Sainik Schools in various parts of India, providing special school education of a high standard with the aim of preparing boys academically and physically for entry into National Defence Academy and other walks of life. " With a view to implementing this object 18 schools located in different States of the country have been established.
The petitioner has impleaded the Chairman and Members of the Board of Governors of the Society as respondents 1 to 6; Ministers of Education of the seventeen States as respondents 7 to 23 and Principals of the 18 schools as respondents 24 to 41 The petitioner has asked for a writ of mandamus to the Union of India as also respondent No. l: (1) to implement the recommendations of the Fourth Pay Commission in the Sainik Schools and to extend all the benefits already given to employees of the Kendriya Vidyalayas by way of implementing the recommendations of the Chattopadhya Commission; (2) to give to the employees of the Sainik Schools the differential wages in terms of the Third Pay Commission between 1973 (when it applied to Government institutions) and 1978 (when the benefits were extended to the employees of the Sainik Schools); (3) to direct that the employees of the Sainik Schools shall have the benefits of leave travel concession house rent, pension, group insurance, contributory provident fund, pensionary benefits and gratuity in the same pattern as PG NO 401 obtaining in Kendriya Vidyalaya Sangthan or given to Defence Services Officers working in the Sainik Schools, and; (4) enhance the age of superanuation to 60 years as in the case of Kendriya Vidyalaya employees.
When notice was issued to the respondents, respondent No. I alone entered appearance and made a return.
Apart from raising certain technical pleas against the maintainability of the petition, it has pleaded that the Society was not an instrumentality of the State.
According to the respondent No. 1, the entire capital expenditure on land, buildings, furniture and educational equipment and the major portion of the recurring expenditure is borne by the concerned State Government/Union Territory Administration of the places where the school is located.
Maintenance, additions and replacement are also the obligation of the respective State Governments.
The Principal, the Head Master, the Registrar and an Army Physical Training Corps/ National Cadet Corp Instructor posted in every school are paid out of the Defence budget All other expenses are met out of the fees payable by the parents or taken out of the scholarships paid by the State/Central Governments to the students.
The quantum of the fees,scholarships is fixed by the Board of Governors from time to time taking into consideration the financial position The counter affidavit accepted the petitioner 's plea that several Committees had been established for bringing about improvement in the functioning of the Sainik Schools and improvement of conditions of service such as the High Power Committee Sahare Committee, Balaram Committee and the Academic Study Group Though it essence the Kendriya Vidyalayas and the other establishments of the Central Government differ from the Sainik Schools, many of the benefits admissible to Government servants and Vidyalaya teachers have already been extended to employees of the Sainik Schools The counter affidavit traversed the petitioner 's averment that the guideline of Kendriya Vidyalayas has to be adopted and the benefits admissible to the employees of such Vidyalayas should be extended to the employees of Sainik Schools According to the respondent, the Sainik Schools are of a different pattern; the historical background of their creation, the purpose for which they are founded and the other benefits which are admissible to the employees should also be borne in mind when considering the claim raised by the petitioner According to the respondents the claim based on the concept of equal pay for equal work PG NO 402 contained in Article 39(d) of the Constitution is misconceived inasmuch as unless the nature and the status of the service is the same there can be no equality.
On behalf of the petitioner a rejoinder has been filed reiterating some of the averments in the main petition and meeting some of the pleadings in the counter affidavit of respondent No 1.
During the pendency of this application, the Board of Governors decided to extend certain advantages and benefits to the employees of the Sainik Schools.
Some of these benefits had been claimed in the writ petition.
An affidavit has been filed on behalf of the petitioner indicating what are the claims still in issue on the basis of the respondents ' affidavit dated July 29, 1988.
It is not necessary to recount the concessions extended by the Society and in our view what is claimed as subsisting items may now be dealt with These are: 1.
The age of retirement should be 60 years applicable to all categories of employees being the same as obtaining in the case of employees of the kendriya Vidyalaya Sangathan (K.V.S.).
Bonus and gratuity should be effective from 1.1.1986 and employees who have either retired or resigned after that date should be given benefit of the Contributory Provident Fund and gratuity at Central Government rates.
3 Medical reimbursement should he provided on the same basis as admissible to K.V.S. and Central Government employees.
Leave Travel Concession including once in a block of four years to travel anywhere in lndia as available to employees of K.V.S. and Central Government employees should be available.
Leave rules to all categories of employees should be placed at par with employees of K.V.S. 6.
House Rent Allowance should be granted with effect from 1.10.1986, at par with Central Government employees.
The pay scale recommended by the Chattopadhyay Commission to Teachers should be effective from 1.1.1986.
PG NO 403 8.
The Librarians should be given the benefit of pay revision as per the Chattopadhyay Commission pay scale with effect from 1.1.1986.
Office Superintendent, Accountants and Personal Assistant to the Principals should be given the same pay as their counterpart receive from the Central Government with effect from 1.1.1986.
Nursing Sisters/Assistants/Compouders should be granted pay scales at par with Pharmacists in Central Government under Para Medical Staff as per recommendations of the 4th Pay Commission with effect from 1.1.1986.
House Construction Loan, Scooter and Car Purchase Loan should be granted at par with K.V S./Central Government Scheme.
15% extra pay over and above scales admissible to K.V.S. teachers should be admissible to the Sainik School teachers .
The difference in wages between 1.1.1973 and 30th June, 1978 on account of delayed implementation of the 3rd Pay Commission 's recommendations should be paid.
Bonus for 1984 85 and 1985 86 should also be paid at par with K.V.S 15.
All employees who have retired by now before completing 60 years of age and have not yet attained the age of 60 years should be called back to duty and given postings.
As we have already indicated, it is the contention of the petitioner that the Sainik School Society is `State ' within the meaning of Article 12 and is accordingly amenable to claim and enforcement of fundamental rights.
It is also to be guided by what is provided in Part 4of the Constitution by way of Directive Principles of State Policy.
A Constitution Bench of this Court in Ajay Hasia & Ors.
vs Khalid Mujib Sehravardi & Ors., ; was considering whether a Society registered under the PG NO 404 Societies Registration Act of 1861 could be "State" within the meaning of Article 12.
Bhagwati, J., as he then was, speaking for the unanimous Bench called out six tests from the judgment of this Court in International Airport Authority case (1979) 3 SCC489.
Those tests are: "(1) One thing is clear that if the entire share capital of the Corporation is held by Government, it would go a long way towards indicating that the Corporation is an instrumentality or agency of Government.
(2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the Corporation, it would afford some indication of the Corporation being impregnated with Governmental character.
(3) It may also be a relevant factor . whether the Corporation enjoys monopoly status which is a State conferred or State protected.
(4) Existence of deep and pervasive State control may afford an indication that the Corporation is agency or instrumentality.
(5) If the functions of the Corporation are of public importance and closely related to governmental functions it would be a relevant factor in classifying the Corporation as an instrumentality or agency of Government.
(6) "Specifically, if a department of Government is transferred to a Corporation, it would be ;l strong factor supportive of this inference" of the Corporation being an instrumentality or agency of Government.
" Applying those tests the Constitution Bench found that the Society which managed the Regional Engineering College at Srinagar and several others elsewhere was `State '.
Having said so, this Court pointed out: "It is also necessary to add that merely because a juristic entity may be an authority and therefore State within the meaning of Article 12, it may not be elevated to the position of State for the purpose of Articles 309, 310 PG NO 405 and 311 which find a place in Part XIV.
The definition of State in Article 12 which includes an authority within the territory of India or under the control of the Government of India is limited in its application only Part III and by virtue of Article 30, to Part IV; it does not extent to the other provisions of the Constitution and hence a juristic entity which may be State for the purpose of Part III and IV would not be so for the purpose of Part XIV or any other provision of the Constitution.
" Applying the tests indicated at page 737 of the Reporter it cannot be doubted that the Sainik School Society is also `State '.
The entire funding is by the State Government and the Central Government.
The main object of the Society is to run schools and prepare students for the purpose of feeding the National Defence Academy.
Defence of the country is one of the regal functions of the State.
Once it is held that the Sainik School Society is `State ' within the meaning of Article 12 of the Constitution, application of Article 14 is attracted.
Similarly under the Directive Principles the claim for equal pay for equal work becomes tenable.
The main plank for substantiating the petitioner 's claim for relief is the allegation of discrimination founded upon the basis that the employees of the Sainik School Society though in every respect comparable to employees of K V.S. and the Central Government are not being given the same treatment K V.S. is a creation of the Government of lndia and is wholly financed out of the Central Exchequer Sainik School Society, as already pointed out, is not wholly funded by the Central Government.
In fact substantial contribution for running the Sainik School comes from the funds of the State where the school is located.
The Central Government 's contribution is minimal The mode of funding is mainly through scholarship by the State payable to the students.
It follows out of this fact that the employees of the Sainik School cannot be treated as Central Government employees nor can they be treated as at par with the employees of K V.S.
They are a class by themselves and, therefore, the stand on the basis of Article 14 by pleading discrimination against the guarantee of equality is not available.
To put unequals as equals is against the objective of Article 14; in the same way is to discriminate between equals The later, however, is on the hypothesis that the two are equals.
In view of the position that the employees of the Society are a distinct class by themselves, we do not think that there is any merit in the claim that there has been discrimination.
PG NO 406 Similarly the claim of equal pay for equal work is indeed not tenable.
No acceptable material has been placed before us to support the stand that the work in the two institutions is equal.
A bare statement that both the Kendriya Vidyalayas and the Sainik Schools impart education to the students cannot sustain the claim of equal work.
To maintain a claim for equal pay on the allegation of equal work requires clear material to support the basis that the work in both the institutions is the same.
Kendriya Vidyalayas popularly known as Central Schools, are more or less schools as understood in common parlance.
A Sainik School intended essentially to draw young men for being recruited into the National Defence Academy is not an ordinary school.
Its curriculum, the pattern of teaching, the life style, the discipline and attention differ.
The Sainik Schools are totally residential and the teacher is provided accommodation within the complex with a view to exposure of students to the teacher throughout the period and allow the teacher to exercise regulation over the students at all material times.
The teacher is also expected to interact with the students beyond the class room.
The Principal of the Sainik School is a defence service officer; so is the Headmaster for the lower classes; the Physical Instructor is also drawn from the Army.
We are not in a position to accept the claim of the petitioner that the work in the two institutions is equal, and therefore, the claim for equality of pay cannot be accepted.
Even though that claim is not accepted, the Sainik Schools being `state ' is amenable to the jurisdiction of the Court and it is open to the court to examine whether the conditions of service are of an acceptable pattern.
The age of retirement of teachers in the Sainik Schools is till 60 years but continuance beyond 58 years is subject to physical fitness and continued satisfactory performance of duties.
For non academic staff the age is 58 years which is same for most government employees.
There is nothing unreasonable in this condition of service.
There has been a switch over to pension and gratuity scheme with effect from 29.7.1988.
The claim of the petitioner is that it should be with effect from.
1.1.1986.
Keeping the mode of funding in view, we do not think the liability that would arise by ante dating the benefit from 1.1.1986 can be conveniently met.
We, however, see no reason why the benefit should be extended only from 29.7.1988, which is said to be the date of the decision.
It should be made operative from 1st April, ]988, which is the commencement of the current financial year.
We would accordingly direct that the pension and revised gratuity scheme should be made operative from 1.4.1988.
PG NO 407 We see no reason to interfere in the matter of claim for medical reimbursement.
The Society has extended the benefit of medical allowance which is a known form in respect of even government servants not covered under the C.G.H. Scheme.
But here again the benefit should be operative from 1st April, 1988.
Coming to the Leave Travel Concession advantage, the same should be available from 1st April, 1988, while permitting the visit to the home town once in a block of two years.
In terms of the recommendation of the Academic Study Group, we are inclined to extend the benefit of Leave Travel Concession for visiting any place in India once in a block of four years.
When such scheme is being accepted even by non government employers on the basis that these visits improve the quality of service, we extend it to the Sainik School employees effective from 1.4.1988.
Most of the employees have accommodation provided by the Sainik Schools and according to the Respondent No. 1 free furnished accommodation is provided.
There may be cases where in the absence of such accommodation the employees may be living in rented accommodation, but we do not think that we should interfere in respect of this claim.
The other claims raised do not appear to be reasonable except the prayer for providing house construction loan, scooter, car purchase loan.
This is really nOt a heavy burden and out of the fund to be created loans are to be provided and the loan amounts are recoverable with concessional interest.
According to modern thinking these advantages are normal service benefits.
A residential accommodation adds to the security of the employee and a conveyance adds to his mobility.
We are of the view that this benefit should be admissible to the employees.
The Society shall, therefore, create an appropriate fund either to be operated through every college or through such method as may be found convenient for entertaining claims for house construction loan and loans for purchase of scooter, car etc.
as may be admissible in terms of the scheme to be framed.
We direct that the further benefits which we have granted by our present order should be made available to the employees by the end of 31st March, 1989.
The writ petition is accordingly disposed of.
There shall be no order as to costs.
Before we part, we would like to place on record that learned Additional Solicitor General appearing for respondent No. 1 had candidly stated in Court that if over PG NO 408 and above what the Board of Governors had decided to sanction, if this Court was of the view that some more benefits should be given, the same may be ordered.
R.S.S. Petition disposed of.

summary:
The All India Sainik Schools Employees Association in a petition filed in this Court under Article 32 of the Constitution has asked for a writ of mandamus directing the respondents, primarily, to extend to the employees working in the Sainik Schools all.
the service benefits and advantages in the same pattern as obtaining in Kendriya Vidyalaya Sangthan.
The petitioner 's contentions are that the Sainik School Society is `State ' within the meaning of Article 12 and is accordingly amenable to claim and enforcement of fundamental rights, and further that the society has to be guided by what is provided in Part 4 of the Constitution by way of Directive Principles of State Policy.
Disposing of the petition, this Court, HELD: (1) The entire funding of the Sainik Schools is by the State Governments and the Central Government.
The overall control vests in the governmental authority.
It cannot therefore be doubted that the Sainik School Society is `State ' within the meaning of Article 12. 1405C] (2) Once it is held that the Sainik School Society is `State ', application of Article 14 is attracted.
Similarly under the Directive Principles, the claim for equal pay for equal work becomes tenable.
[405D] PG NO 398 PG NO 399 (3) Substantial contribution for running the Sainik School comes from the funds of the State where the school is located.
The Central Government 's contribution is minimal.
The mode of funding is mainly through scholarship by the State payable to the students.
It follows out of this fact that the employees of the Sainik School cannot be treated as Central Government employees nor can they betreated as at par with the employees of Kendriya Vidyalayas.
They are a class by themselves.14.
[405F G] (4) In view of the position that the employees of the Sainik Society are a distinct class by themselves, there is no merit in the claim that there has been discrimination.
To put unequals as equals is against the objective of Article 14.
[405G] (5) The claim of equal pay for equal work is indeed not tenable.
A Sainik School intended essentially to draw young men for being recruited into the National Defence Academy is not an ordinary school.
Its curriculum, the pattern of teaching, the life style, the discipline and attention differ.
A claim for equal pay on the allegation of equal work reguires clear material to support the basis that the work is both the institutions is the same.
The claim of the petitioner that the work in the two institution is equal, and, therefore, the claim for equality of pay cannot be accepted.[406A,C E] (6) The Sainik School Society being, `State ' is amenable to the jurisdiction of the Court and it is open to the court to examine whether the conditions of service are of an acceptable pattern.
[406E] (7) The Court accordingly examined the petitioner 's demands and passed appropriate orders directing specific reliefs in terms of medical, leave travel concession benefits and house building and other advances.
The Court however found nothing unreasonable in the condition of service pertaining to age of retirement.
[407G] Ajay Hasia & Ors.
vs Khalid Mujib Sehravardi & Ors., ; and International Airport Authority case., [1979]3 SCC 489.