judgement:
Criminal Appeal No. 195 of 1984.
From the Judgment and Order dated 30.11.
1982 of the Punjab & Haryana High Court in Crl.
Appeal No. 425 D.B./1982.
O.P. Soni, Ms. Kamlesh Datta and S.K. Sabharwal for the Appellant.
664 U.R. Lalit and Uma Datta for the Respondents.
Mahabir Singh for the State of Haryana.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
The respondents Puran and Tara Chand along with Ved, Balwan, Dhapan, Jagdish and Lal Chand were tried before the Additional Sessions Judge, Sonepat, for the murder of one Partap Singh and causing injuries to others.
The learned Judge by judgment dated 18.5.
1972 convicted these respondents for offences under section 302, I.P.C., and sections 323,325 read with 149, I.P.C. They were sen tenced to undergo imprisonment for life and ordered to pay a sum of Rs.500 each under section 302, I.P.C., R.I. for one year under section 148, I.P.C., R.I. for one year under section 325 and R.I. for six months under section 323, I.P.C.
The other accused were convicted for the minor of fences and released on probation under sections 360/36.1, Cr.
P.C. The respondents appealed against the conviction and sentence.
The High Court by the impugned judgment dated 30.11.
1982 disposed of the appeal thus: "Admittedly there was no prior enmity between the parties.
The quarrel arose out of a very insignificant matter like the burning of dry sugarcane leaves on the common boundary of the fields of the two parties.
The ensuing altercation would probably have been forgotten had Partap Singh deceased not died.
Even when there is an altercation arising out of a minor incident there is some tendency on the part of the prosecution witness to exaggerate matters.
The three eye witnesses have of course fully supported the prosecution case but the investigating officer recorded statement of one Paras Ram at the time of making the inquest report which gives a somewhat different version.
The learned trial judge has himself found that the object of the unlawful assembly was not to commit the murder of the deceased.
It is precise ly for this reason that five accused persons have been released on probation and only two accused, i.e., Puran and Tara Chand appellants, have been convicted under section 302, I.P.C. We do not propose to go into the details of the controversy and in the peculiar circumstances of this case convert the conviction of Puran and Tara Chand appellants into one under section 304.
Part1, 1.
P.C., on the basis that in view of the statement made by 665 Paras Ram at the time when the investigating officer made the inquest report a somewhat different version was given.
This Paras Ram was not produced as a witness by the prosecu tion.
Since there was no prior enmity between the parties, we order that sentence already undergone by Puran and Tara Chand appellants will meet the ends of justice.
They are, however, ordered to pay a fine of Rs. 12,000 each.
In de fault of payment of this fine, the defaulter is ordered to undergo rigorous imprisonment for five years.
The sentences of imprisonment imposed upon Puran and Tara Chand appellants on other counts are also reduced to that already undergone by them.
The total fine, if realised, shall be paid to the next heirs of Partap Singh deceased as compensation." (emphasis supplied) The High Court has, by this Cryptic order, acquitted re spondents of the major charge under section 302, I.P.C., and recorded their conviction under section 304 Part I reducing the sentence of life imprisonment to a term of imprisonment already undergone while enhancing the sentence of fine.
The State has not preferred any appeal against the order of acquittal or reduction of sentence.
The respondents.
it appears, have accepted the judgment.
Sham Sunder, the de facto complainant, however, being aggrieved approached this Court under Article 136 of the Constitution.
This Court has granted special leave to appeal.
The High Court, exercising power under section 386, Cr. P.C., in an appeal from a conviction may reverse the finding and sentence and acquit the accused or alter the finding maintaining the sentence or with or without altering the finding after the nature or the extent or the nature and extent of the sentence but not so as to enhance the same.
The powers of the High Court in dealing with the evidence are as wide as that of the trial Court.
As the final court of facts, the High Court has also duty to examine the evi dence and arrive at its own conclusion on the entire materi al on record as to the guilt or otherwise of the appellants before it.
It is true that the High Court is entitled to reappraise the evidence in the case.
It is also true that under Article 136.
the Supreme Court does not ordinarily reappraise the evidence for itself for determining whether or not the High Court has come to a correct conclusion on facts but where the High Court has completely missed 666 the real point requiring determination and has also on erroneous grounds discredited the evidence and has further failed to consider the fact that on account of long standing enmity between the parties, there is a tendency to involve innocent persons and to exaggerate and lead pre judged evidence in regard to the occurrence, the Supreme Court would be justified in going into the evidence for the pur pose of satisfying itself that the grave injustice has not resulted in the case.
We have extracted the material portion of the judgment of the High Court to indicate that the line of approach adopted by the High Court is wholly wrong.
There is no discussion of the evidence much less any reasoning.
The respondents herein along with five others had been found guilty by the trial court accepting the testimony of the two eye witnesses and other material evidence on record.
A brief resume of the facts is necessary.
Lal Chand and Tara Chand are brothers.
Ved Singh, Puran, Balwan and Ishwar are the sons of Tara Chand and Dhapan is his wife.
Jagdish is the son of Lal Chand.
Partap and Bhim Singh are brothers.
Sham Sunder is the son of Bhim Singh.
Roshan is the son of Partap.
Tara Chand owns sugarcane field adjoining the wheat field of Partap.
On 10.3.
1981 in the morning, Ved Singh burned sugarcane patties causing damage to the wheat crop.
The protest raised by Roshan was not heeded.
Bhim Singh arrived at the scene and altercation 'ensued.
Partap later raised protest before Tara Chand.
His grievance was not redressed.
At about 6.00 P.M. Partap raised the protest before Puran who also turned down the same.
Shortly thereaf ter Puran and the other members of his family including his wife, brother and their children all numbering about eight reached in front of the house of Partap.
They were armed and attacked Partap.
The allegation is that the respondents Tara Chand and Puran had attacked Partap with jailies, first they gave jailies blows from the prong side in the chest and when Partap fell down, they gave jailies blows like lathi on his head, back and shoulder.
Partap died on his way to the hospital.
It is further alleged that in the course of the incident Lal Chand and Jagdish caused injuries to Roshan; Ishwar caused injuries to Dhapan wife of Partap; Puran, Ved, Balwan caused injuries to Sham Sunder.
It has come out in evidence that Ved, Dhapan, Lal Chand, Puran and Ishwar also received injuries in the course of the incident.
Sham Sunder and Roshan are the two eye witnesses, be sides Smt.
Dhapan the wife of deceased Partap.
There had been no independent witness.
Sham Sunder and Roshan said that they had caused 667 injuries to the members of the opposite party in self de fence.
They do not however state in what circumstances they had to use force.
The evidence does not disclose the genesis of the occurrence; how it developed and culminated in fatal injuries to Partap.
There had been no enmity between the two groups.
The immediate provocation for the quarrel is the damage to the wheat crops.
It is admitted that Partap raised his protest right from the morning till the arrival of Puran who was employee of the Medical College, Rohtak.
The prose cution has, it appears, given a twist when they say that at 6.00 P.M. Partap met Puran who turned down his request and went home and after 15 minutes all the members of his family including the womenfolk reached the house of Partap and started the assault.
It is significant to note that the women and even the minor children of both families were present and received injuries recording their presence at the place.
It would therefore appear that it was a continu ous transaction and when Partap persistently raises the protest and started abusing Puran, other members of his household had come out.
The quarrel had taken a serious turn and in the course of further development fatal injuries had been caused to Partap.
The plea of the respondents was that they did not cause any injury, that there was a Panchayat where a large crowd assembled and there had been brick batting and altercation.
The plea of private defence was not specifically set up.
However, if there are material in evidence to indicate that the incident could not have hap pened in the manner spoken to by the eye witnesses and in all probability the respondents had used the force exercis ing the right of private defence, then accused are entitled to the benefit thereof.
Whether the respondents have in such circumstances exceeded their right and are justified in causing death, has necessarily to be considered.
In the absence of a full discussion of the evidence by the High Court, we have been constrained to consider the materials on record.
We have seen that there is the evidence of only the interested witnesses who have the tendency to exaggerate and involve even innocent persons.
We have seen that most of the accused have sustained injuries and in explaining the same, the prosecution witnesses have not come forward with a truthful account.
We are led to draw the inference that in the melee and ensued on account of the aggressive attitude of Partap, the respondents and other members of the family participated and used the force against Partap and his associates in all probabilities in the exercise of right of private defence.
However, the circumstances did not warrant the causing of death and the respondents must be deemed to have exceeded their right.
The nature of the injuries indi 668 cate that injuries sufficient in the ordinary course of nature to cause death had been inflicted intentionally.
In such circumstances.
, the act of the respondents squarely falls under section 304 Part I, EP.C. While we agree with the conclusion arrived at by the High Court, we record that the High Court has not given any cogent or clear reasons for its conclusion and whatever reason has been stated is erro neous.
It is on the basis of the statement given in the course of investigation by a person who was not examined in the case that the High Court has drawn its conclusion.
We, however, maintain the conviction under section 304 Part I, I.P.C.
The High Court has reduced the sentence to the term of imprisonment already undergone while enhancing the fine.
It is pointed out that the respondents have undergone only imprisonment for a short period of less than six months and, in a grave crime like this, the sentence awarded is rather inadequate.
No particular reason has been given by the High Court for awarding such sentence.
The court in fixing the punishment for any particular crime should take into consid eration the nature of the offence, the circumstances in which it was committed and the degree of deliberation shown by the offender.
The measure of punishment should be propor tionate to the gravity of the offence.
The sentence imposed by the High Court appears to be so grossly and entirely inadequate as to involve a failure of justice.
We are of opinion that to meet the ends of justice, the sentence has to be enhanced.
In the result, we maintain the conviction of the re spondents but enhance the sentence to one of rigorous im prisonment for a period of five years.
The respondents should surrender to the bail to undergo the unexpired por tion of the sentence.
The fine, if paid, shall be refunded to the respondents 1 and 2.
The appeal is disposed of as above.
G.N. Appeal disposed Of.

summary:
Respondent 1 is the son of Respondent No. 2.
Including Respondent No. 1 Respondent No. 2 had 4 sons.
Respondent No. 2 owned a sugarcane field adjoining the wheat field of one P. One of the sons of Respondent 2 had burnt sugarcane patties causing damage to the wheat crop of P, against which P protested before the respondents.
The protest was turned down.
Shortly thereafter the respondent and the family members reached the house of P. They were all armed.
Re spondents attacked P and he fell down.
On the way to hospi tal P died.
Most of the accused as well as the family mem bers of P sustained injuries.
On a complaint, F.I.R. was registered.
After investigation, Prosecution filed a case before the Additional Sessions Judge.
Two eye witnesses were produced by the prosecution.
They were relatives of the deceased and there was no independent witness.
The Additional District Judge convicted the respondent for offences under sections 302 IPC and 323, 325 read with 149 IPC.
Both were sentenced to imprisonment for life and a fine Rs.500 each under section 302 IPC.
They were also sentenced to rigorous imprisonment ranging from six months to one year for the other offences.
The other accused were convicted for minor offences and released on probation.
The respondent appealed against the conviction and sentence.
The High Court acquitted the respondents of the major charge under section 302 IPC and recorded the conviction under section 304 Part I reducing the sentence of life imprison ment to the term already undergone, and enhanced the sen tence of fine.
No appeal was preferred by the State.
Howev er, the complaint filed an appeal by special leave.
663 Disposing the appeal, this Court, HELD 1.
There is the evidence of only the interested witnesses who have the tendency to exaggerate and involve even innocent persons.
Most of the accused have sustained injuries and in explaining the same, the prosecution wit nesses have not come forward with a truthful account.
In the melee that ensued on account of the aggressive attitude of the respondents and other members of the family who partici pated and used force against P and his associates.
in all probabilities in the exercise of right of private defence.
However, the circumstances did not warrant the causing of death and the respondents must be deemed to have exceeded their right.
The nature of the injuries indicate that they were sufficient in the ordinary course of nature to cause death and had been inflicted intentionally.
In such circum stances, the act of the respondents squarely fails under section 304 Part I, IPC.
The High Court has not given any cogent or clear reasons for its conclusion and whatever reason has been stated is erroneous.
It is on the basis of the statement given in the course of investigation by a person who was not examined in the case that the High Court has drawn its conclusion.
However.
the conviction under section 304 Part I, IPC is maintained.
The High CoUrt has reduced the sentence to the term of imprisonment already undergone, and enhanced the fine.
The respondents have undergone imprisonment only for a short period of less than six months and, in a grave crime like this, the sentence awarded is rather inadequate.
No particu lar reason has been given by the High Court for awarding such sentence.
The Court in fixing the punishment for any particular crime should take into consideration the nature of the offence, the circumstances in which it was committed, and the degree of deliberation shown by the offender.
The measure of punishment should be proportionate to the gravity of the offence.
The sentence imposed by the High Court appears to be so grossly and entirely inadequate as to involve a failure of justice.
The sentence is enhanced to one of rigorous imprisonment for a period of five years.


judgement:
ivil Appeal No. 4460 Of 1988.
From the Order dated 15.4.
1988 of the Customs Excise and Gold (Control) Appellate Tribunal New Delhi in Appeal No. E/Appeal No. 2225 of 1986 A. 3 V. Sreedharan, V.J. Francis and N.M. Popli for the Appel lant.
Ashok H. Desai, Solicitor General, Dalip Tandon and P. Parmeshwaran for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
This is an appeal under section 35L of the .
The appeal is di rected against the order dated 15.4.1988 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi.
The appellant is the manufacturer of Hacksaw blades and Bandsaw Blades failing under Tariff Item No. 51 A(iv) of the Central Excise Tariff.
The appellant filed a classification list as per Rule 173B of the Central Excise Rules 1944 on 26.3.1985 in respect of their products furnishing the tariff rate of 15% Ad valorem by mistake instead of furnishing the effec tive rates of duty as per Notification No.85/85 CE dated 17.3.1985.
The aggregate value of the clearance in the preceding year i.e. 1984 85 did not exceed Rs.75 lakhs.
In the case of first clearance upto an aggregate value not exceeding Rs.7.5 lakhs, the effective rates of duty is nil and in the case of next clearance of Rs.7.5 lakhs, the duty is 3.75% Ad valorem.
The Assistant Collector of Central Excise, Hyderabad, approved the Tariff rate 15% Ad valorem on 3.6.1985 instead of the above effective rates as the appellant did not claim the exemption as per Notification No.85/85 CE dated 17.3.1985 due to ignorance.
A revised classification list with the effective rates in respect of the products with retrospective effect from 26.3.1985 was filed on 31.10.1985.
The revised classification list was approved.
The appellant claimed that they had paid excess Rs.2,55,172.55 from 1.4.1985 to 31.8.1985 as excise duty.
They made an application for refund as per rule under sec tion 11B of the on 30.10.1985.
The Assistant Collector of Central Excise by his order dated 13.12.1985 sanctioned the refund claim only partly.
For the period from 1.4.1985 to 27.4.1985, the refund claim was rejected on the ground that the same was time barred.
The Assistant Collector held that the refund claim for the period 1.4.1985 to 27.4.1985 was time barred for the reason that under section 11B, the 'relevant date ' for preferring the claim for a case such as that of the appellant was the date of payment of duty and, according to him, the duty had been paid by adjustment in the personal ledger account as and when goods were removed.
The plea of the appellant is that mere debiting in the personal ledger account should not be taken as the starting point for 4 limitation and the relevant date should be the date on which RT 12 Returns which are filed on a monthly basis are as sessed.
The order of the Assistant Collector was confirmed in the appeal by the Collector of Central Excise (Appeals).
The further appeal to the Tribunal was also unsuccessful.
The question that arises for decision in the appeal is as to the starting point of limitation for filing an appli cation under section 11B of the .
Section 11B so far as it is material reads as under: "11B. Claim for refund of duty (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the relevant date.
Provided that the limitation of six months shall not apply where any duty has been paid under protest.
Explanation For the purposes of this section (B) "relevant date" means, (a) to (d) . . . . . . . . (e) in a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (f) in any other case, the date of payment of duty.
" The appellant 's contention before the authorities was that the date of assessment would be the date of payment of duty within the meaning of clause (f) above.
We agree with the learned Solicitor General that this argument is not tenable.
Where an assessee maintains a personal ledger account, duty is paid by way of debit therein and goes to reduce the amount of deposit paid by the assessee.
It is 5 not a mere adjustment entry; it is effective payment.
Before us, however, learned counsel for the assessee has raised an alternative contention.
According to the appellant it is clause (e) which is applicable in the case whereas the contention of the respondent is that clause (f) is attract ed.
To understand this argument, it is necessary to refer to 'Self removal ' procedure under which the appellant cleared the goods.
Chapter VII A of the Rules relates to removal of excise goods on determination of duty by producers, manufacturers of private warehouse licensees.
Under Rule 173B, every assessee shall file with the Proper Officer for approval a list in prescribed form showing full description of all excisable goods or products manufactured, the rate of duty leviable on such goods and such other particulars as the Collector may direct.
The Proper Officer shall, after such enquiry as he deems fit, approve the list with such modifi cations as are considered necessary and return one copy of the approved list to the assessee who shall unless otherwise directed by the Proper Officer determine the duty payable on the goods intended to be removed in accordance with such list.
All clearance shall be made only after the approval of the list by the Proper Officer.
Sub rule (2 A) of Rule 173B provides as under: "(2 A) All clearances shall, subject to the provisions of rule 173CC, be made only after the approval of the list by the proper officer.
If the proper officer is of the opinion that on account of any inquiry to be made in the matter or for any other reason to be recorded in writing there is likely to be delay in according the approval, he shall, either on a written request made by the assessee or on his own accord, allow such assessee to avail himself of the procedure prescribed under rule 9B for provisional assess ment of the goods.
" Where the assessee disputes rate of duty approved by the Proper Officer in respect of goods, he may have to give an intimation to that effect to such officer and to pay duty under protest at the rate approved by such officer.
When the dispute about the rate of duty has been finalised or for any other reason affecting rates of duty, a modification of the rate or rates of duty is necessitated, the Proper Officer shall make such modification and inform the assessee accord ingly.
Under Rule 173C, the assessee shall file with the Proper Officer a price list in prescribed form.
Prior ap proval of the price list by the 6 Proper Officer is necessary in the specified cases.
Here also, sub rule (5) of rule 173C provides: "(5) Subject to the provisions of rule 173CC, an assessee specified in sub rule (2) shall not clear any goods from a factory, warehouse or other approved place of storage unless the price list has been approved by the proper officer.
In case the proper officer is of the opinion that on account of any enquiry to be made in the matter or for any other rea sons to be recorded in writing, there is likely to be delay in according approval, he shall either on a written request made by the assessee or of his own accord allow such asses see to avail himself of the procedure prescribed under rule 9B for provisional assessment of the goods." Under Rule 173CC, assessee may remove goods in certain cases pending approval by the Proper Officer of the classi fication or price list.
Rule 173F provides that where the assessee has complied with the provisions of Rules 173B, 173D, and where applicable 173C, 173CC, he shall himself determine his liability for the duty due on the excisable goods intended to be removed and shall not, except as other wise expressly provided, remove such goods unless he has paid the duty as determined.
Under Rule 173G, every assessee shall keep an account current with the Collector.
This rule lays down the procedure which is to be followed by the assessee for payment of duty.
According to sub rule (3) of Rule 173G, within five days after the close of each month every assessee shall file with the Proper Officer a monthly return in the prescribed form showing the quantity of the excisable goods manufactured, duty paid on such quantity and other particulars.
The Proper Officer makes an assessment as provided under Rule 1731 on the basis of the information contained in the return and after such further enquiry as he may consider necessary assess the duty due on the goods removed and the assessment is completed.
The duty determined and paid by the assessee under Rule 173F shall be adjusted against the duty assessed and where the duty so assessed is more than the duty determined and paid, the assessee shall pay the deficiency by making a debit in the current account within 10 days of the receipt of copy of the return and where such duty is less, the assessee shall take credit in the account current for the excess.
This is the scheme for the payment of duty for clearance of goods by the manufacturers.
This procedure is known as self removal procedure.
There will be no time bar for refund if the duty is paid under 7 protest.
The period of 6 months is prescribed in other cases.
As we have already seen, section 1 1B says that the period of 6 months "in a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof".
In this case, the classification list filed by the appellant for the period 1.4.1985 to 27.4.1985 was not approved till 3.6.1985.
From the provisions of Rules 173B, 173C and 173CC, which we have set out earlier, it will be seen that clearances can be made only after the approval of the list by the particular officer.
However, if there is likely to be delay in according the approval the officer can allow the assessee to avail himself of the procedure pre scribed under Rule 9B for provisional assessment of the goods.
In the present case between 1st April, 1975 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account.
The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned.
This is the procedure prescribed under Rule 9B except for the circum stance that no bond as provided in Rule 9B is required in a case where the personal ledger account is maintained for the clearance of the goods, since there is always a balance in the account current sufficient to cover the duty that may be demanded on the goods intended to be removed at any time.
In these circumstances, the clearances of goods made by the appellant between 1st April and 3rd of June, 1985 were in accordance with the procedure for provisional assessment.
In such a situation clause (e) of para (B) of the Explanation under section 11B will be attracted.
In this case the RT 12 Returns for the month of April, 1985 was filed on 8.5.1985 and the same was assessed on 29.10.1985.
It is, therefore, only from the date of this assessment that time bar in section 11B will operate.
In the present case the refund application had been filed on the 30th of October, 1985.
It cannot, therefore, said to be time barred.
We, therefore, accept this contention of the appellant.
The appeal has therefore to be allowed holding the appellant is entitled to the full amount and there is no bar of limi tation as found by the Tribunal.
We, therefore, allow the appeal.
In the facts and circumstances of the case there will be no order as to costs.
T.N.A. Appeal allowed.

dataset_name: IN-Abs

summary:
The appellant was manufacturing Hacksaw blades and Bandsaw falling under Tariff Item No. 51 A(iv) of the Cen tral Excise Tariff.
On 26.3.1985 they filed a classification list as per Rule 173 B of the Central Excise Rules, 1944 in respect of their products furnishing the tariff rate of 15% Ad valorem by mistake instead of furnishing the effective rates of duty as per Notification No.85/85 CE dated 17.3.1985.
The Assistant Collector of Central Excise ap proved the classification list on 3.6.1985.
On 31.10.1985 the appellant filed a revised classification list with the effective rates of its products with retrospective effect from 26.3.1985 which was also approved by the Assistant Collector of Central Excise.
On 30.10.1985 the appellant made an application under section 11B of the for refund of excise duty claiming that they had paid excess excise duty from 1.4.1985 to 31.8.1985.
By its order dated 13.12.1985 the Assistant Collector of Central Excise allowed the claim only partly but rejected the claim for the period from 1.4.1985 to 27.4.1985 on the ground that the claim was barred under section 11B of the Act because the 'relevant date ' for preferring the claim for the appellant was the date of payment of duty and the duty had been paid by adjustment in the personal ledger account as and when goods were removed; The order of the Assistant Collector was confirmed in the appeal by the Collector of Central Excise (Appeals).
Appellant 's further appeal to the Customs Excise and Gold (Control) Appellate Tribunal was also unsuccessful.
In appeal to this Court under section 35L of the it was contended on behalf of the appellant (i) that mere debiting in the personal ledger account should not be taken as the 2 starting point for limitation and the, relevant date should be the date on which ART 12 Returns, which were filed on a monthly basis, were assessed: and (ii) that clause (e) of Explanation to Section 11 (B) was applicable to the case.
Allowing the appeal, this Court, HELD: 1.
The scheme for payment of duty of goods under which the appellant was clearing his goods is known as 'self removal ' procedure.
There will be no time bar for refund if the duty is paid under protest.
The period of 6 months is prescribed in other cases.
[6H; 7A] 2.
In the instant case, the classification list filed by the appellant for the period 1.4.1985 to 27.4.1985 was not approved till 3.6.85.
From provisions of Rules 173B, 173C and 173CC of the Central Excise Rules, 1944 it is clear that clearances can be made only after the approval of the list by the particular officer.
However, if there is likely to be delay in accordance with the approval the officer can allow the assessee to avail himself of the procedure prescribed under Rule 9B for provisional assessment of goods.
Between 1st April, 1975 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account.
The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned.
In these circumstances, the clearance of goods made by the appellant between 1st April and 3rd of June, 1985 were in accordance with the procedure for provisional assessment.
In such a situation clause (e) of para (B) of the Explanation under section 11 B will be attracted.
The RT 12 Return for the month of April, 1985 was filed on 8.5.1985 and the same was assessed on 29.10.1985.
It is, therefore, only from the date of this assessment that time bar in section 11 B will operate.
The refund application having been filed on 30th October, 1985 cannot, therefore, said to be time barred.
[7B D; E F]


judgement:
Appeal No. 119 of 1955.
Appeal from the judgment and order dated June 16, 1953, of the Punjab High Court in Civil Reference No. 1 of 1953.
A. V. Viswanatha Sastri and Naunit Lal, for the appellant.
H. N. Sanyal, Additional Solicitor General of India, R. Gopalakrishnan, R. H. Dhebar and D. Gupta, for the respondent.
November 24.
The Judgment of the Court was delivered by SARKAR, J.
The appellant is a company carrying on business as a distiller of country liquor.
It was incorporated in May 1945 and was in fact a previously existing company called the Amritsar Distillery Co. Ltd. reconstructed under the provisions of the Company 's Act.
The appellant carried on the same business as its predecessor, namely, sale of the produce of its distillery to licensed wholesalers.
The wholesalers in their turn sold the liquor to licensed retailers from whom the actual consumers made their purchases.
The entire trade was largely controlled by Government regulations.
After the war started the demand for country liquor increased but difficulty was felt in finding bottles in which the liquor was to be sold.
In order to relieve the scarcity of bottles the Government devised in 1940 a scheme called the buy back scheme.
The scheme in substance was that a distiller on a sale of liquor became entitled to charge a wholesaler a price for the bottles in which the liquor was supplied at rates fixed by the Government which he was bound to repay to the wholesaler on the latter returning the bottles.
The 685 same arrangement, but with prices calculated at different rates was made for the liquor sold in bottles by a wholesaler to a retailer and by a retailer to the consumers.
Apparently it was conceived that the price fixed under the scheme would be found to be higher than the price which the bottles would fetch in the open market and the arrangement for the refund of the price would therefore encourage the return of the bottles from the consumers through the intermediaries ultimately to the distiller.
The price refundable was later increased perhaps because the previous price did not fully achieve the desired result of the bottles finding their way back to the distillers.
Sometime in 1944, the Amritsar Distillery Co. Ltd. which then was in existence, insisted on the wholesalers paying to it in addition to the price of the bottles fixed under the buy back scheme, certain amounts described as security deposits and calculated at varying rates per bottle according to sizes for the bottles in which the liquor was supplied to them promising to pay back for each bottle returned at the rate ' applicable to it and further promising to pay back the entire amount paid on a transaction when 90 per cent.
of the bottles covered by it had been returned.
The company while it was in existence realised these additional sums and so did the appellant after it took over the business.
The object of demanding and taking these additional sums was obviously to provide additional inducement for the return of the bottles to the distiller so that its trade in selling the produce of its distillery might not be hampered for want of bottles.
No time limit had been fixed within which the bottles had to be returned in order to entitle a wholesaler to the refund, nor does it appear that a refund had ever been refused.
The price of the bottles received by the appellant under the buy back scheme was entered by it in its general trading account while the additional sum received for them was entered in the general ledger under the heading " Empty Bottles Return Security Deposit Account ".
It is not disputed that for the accounting periods with which this case is concerned, the additional amounts had been taken 686 without Government 's sanction and entirely as a condition imposed by the appellant itself for the sale of its liquor.
The appellant was assessed to income tax on the balance of the amounts of these additional sums left after the refunds made there out.
It had also been assessed to business profits tax and excess profits tax on the same balance.
Its appeals against the orders of assessment to these taxes to the Appellate Assistant Commissioner and thereafter to the Tribunal failed.
It then obtained an order referring a certain question arising out of the assessments for decision by the High Court of Punjab.
The question originally suggested was reframed and in its final form reads thus: Whether on the facts and circumstances of the case the collections by the assessee company described in its accounts as " empty bottle return security deposits" were income assessable under section 10 of the Income tax Act? The High Court answered the question in the affirmative.
The present appeal is against that decision which related to all the three varieties of taxes for which the appellant had been made liable.
We are concerned in this appeal only with the additional sums demanded and received by the appellant and described as security deposit and not with the price of bottles which also it took under government sanction.
The question is whether these amounts called security deposits were.
trading receipts.
Now, as already stated, the appellant 's trade consisted in selling in bottles liquor produced in its distillery to wholesalers.
The sale was made on these terms: In each transaction of sale the appellant took from the wholesaler the price of the liquor, a certain sum fixed by the government, as price of the bottles in which the liquor was supplied and a further sum described as security deposit for the return of the bottles.
The moneys taken as price of the bottles were returned as and when the bottles were returned.
The moneys described as security deposit were also returned as and when the bottles were returned with only this difference that in this case the entire sum taken in one 687 transaction was refunded when 90 per cent.
of the bottles covered by it had been returned, though the remaining 10 per cent.
had not been returned.
Such being the nature of the appellant 's trade and the manner in which it was conducted, these additional sums appear to us to be its trading receipts.
Mr. Vishwanatha Sastri appearing on behalf of the appellant first contended that on these facts the amounts could not be regarded as price and that therefore they were not trading receipts.
He said that the price of the bottles was separately fixed and the amount taken as deposit was different from and exclusive of, it.
This contention is founded on the use of the word price in the buy back scheme in connection with the rates which the distiller was entitled to charge a wholesaler for the bottles.
It seems to us that this contention lays undue emphasis on that word.
We think that the High Court took substantially a correct view of the matter when it said that in realising these amounts " the company was really charging an extra price for the bottles ".
It is clear to us that the trade consisted of sale of bottled liquor and the consideration for the sale was constituted by several amounts respectively called, the price of the liquor, the price of the bottles and the security deposit.
Unless all these sums were paid the appellant would not have sold the liquor.
So the amount which was called security deposit was actually a part of the consideration for the sale and therefore part of the price of what was sold.
Nor does it make any difference that the price of the bottles was entered in the general trading account while the so called deposit was entered in a separate ledger termed " empty bottles return deposit account ", for, what was a consideration for the sale cannot cease to be so by being written up in the books in a particular manner.
Again the fact that the money paid as price of the bottles was repaid as and when the bottles were returned while the other moneys were repaid in full when 90 per cent.
of the bottles were returned does not affect the question for ,none of these sums ceased to be parts of the consideration because it had been agreed that they would be 688 refunded in different manners.
It is not contended that the fact that the additional sums might have to be refunded showed that they were not part of the price.
It could not be so contended because what was expressly said to be the price of bottles and admitted to be price was also refundable.
If so, then a slightly different method providing for their refund cannot by itself prevent these additional sums from being Price.
Now, if these additional sums were not part of the price, what were they ? Mr. Sastri said that they were deposits securing the return of the bottles.
According to him if they were such security deposits, they were not trading receipts.
Again we are unable to agree.
There could be no security given for the return of the bottles unless there was a right to their return for if there was no such right, there would be nothing to secure.
Now we find no trace of such a right in the statement of the care.
The wholesalers were clearly under no obligation to return the bottles.
The only thing that Mr. Sastri could point out for establishing such an obligation was the use of the words " security de posit ".
We are unable to hold that these words alone are sufficient to create an obligation in the wholesalers to return the bottles which they had bought.
If it had been intended to impose an obligation on the wholesalers to return the bottles, these would not have been sold to them at all and a bargain would have been expressly made for the return of the bottles and the security deposit would then have been sensible and secured their return.
The fact that there was no time limit fixed for the return of the bottles to obtain the refund also indicates that there was no obligation to return the bottles.
The substance of the bargain clearly was that the appellant having sold the bottles agreed to take them back and repay all the amounts paid in respect of them.
For this part of the case Mr. Sastri relied on Davies vs The Shell Company of China Ltd. (1), but we do not think that case assists at all.
What had happened there was that the Shell Company had appointed a large number of agents in China to sell its products (1) 689 and had taken from each agent a deposit to secure itself against the risk of default by the agent duly to PI account for the sale proceeds.
The deposits were made in Chinese dollars and later converted into sterling.
When the Company closed its business in China it reconverted the deposits into Chinese dollars and refunded to the agents the deposits made by them.
Owing to a favourable exchange for the conversion of sterling into dollars, the Company made a profit and it was sought to assess this profit to income tax.
It was held that the profit could not be taxed, for the deposits out of which it was made were really not trading receipts at all.
Jenkins, L. J., observed at p. 157: " Mr. Grant described the agents ' deposits as part of the Company 's trading structure, not trade receipts but anterior to the stage of trade receipts, and I think that is a fair description of them.
It seems to me that it would be an abuse of language to describe one of these agents, after he had made a deposit, as a trade creditor of the Company; he is a creditor of the Company in respect of the deposit, not on account of any goods supplied or services rendered by him in the course of its trade, but simply by virtue of the fact that he has been appointed an agent of the Company with a view to him trading on its behalf, and as a condition of his appointment has deposited with or, in other words, lent to the company the amount of his stipulated deposit.
" lie also said at p. 156: it If the agent 's deposit had in truth been a payment in advance to be applied by the Company in discharging the sums from time to time due from the agent in respect of petroleum products transferred to the agent and sold by him the case might well be different and might well fall within the ratio deciding of Landes Bros. vs Simpson (1) and Imperial Tobacco Co. vs Kelly (2).
But that is not the character of the deposits here in question.
The intention manifested by the terms of the agreement is that the deposit should be (1) (2) 87 690 retained by the Company, carrying interest for the benefit of the depositor throughout the terms of the agency.
It is to be available during the period of the agency for making good the agent 's defaults in the event of any default by him ; but otherwise it remains, as I see it, simply as a loan owing by the Company to the agent and repayable on the termination of the agency ".
It would therefore appear that the deposits in that case were held not to be trading receipts because they had not been made as part of a trading transaction.
It was held that they had been received anterior to the commencement of the trading transactions and really formed the trading structure of the Company.
The character of the amounts with which we are Concerned is entirely different.
They were parts of the trading transactions themselves and very essential parts: the appellant would not sell liquor unless these amounts were paid and the trade of the appellant was to make profit out of these sales.
The fact that in certain circumstances these amounts had to be repaid did not alter their nature as trading receipts.
We have already said that it is not disputed that what was expressly termed as price of bottles was a trading receipt though these had to be repaid in almost similar circumstances.
We may point out that it had not been said in Shell Company case(1) that the deposits were not trading receipts for the reason that they might have to be refunded; the reason for the decision was otherwise as we have earlier pointed out, namely, that they were no part of the trading transactions.
We therefore think that the deposits dealt with in the Shell Company case were entirely of a different nature and that case does not help.
Mr. Sanyal was prepared to argue that even if the amounts were securities deposited for the return of the bottles, they would still be trading receipts, for they were part of the trading transactions and the return of the bottles was necessary to enable the appellant to carry on its trade, namely, to sell liquor in them.
As we have held that the amounts had not been paid as security for the return of the bottles, we do not (1) 691 consider it necessary to pronounce upon thiscontention.
We might also refer to the observationsmade in Imperial Tobacco Co. vs Kelly(1) mentioned in the Shell Company case (2) and set out below.
There the Company in the course of its trading activity used to purchase tobacco in America and for that purpose had to acquire American dollars.
It so happened that after it had acquired a certain amount of dollars for making the purchases, it was prevented from buying tobacco in America by Government orders passed due to outbreak of war.
While the dollars lay with the Company, they appreciated in value and later the Treasury acquired the dollars and paid the Company for them in sterling at the then current rate of exchange, as a result of which payment the Company made a profit.
It was hold that the profit was a trading receipt of the Company.
Lord Greene said at p. 300: " The purchase of the dollars was the first step in carrying out an intended commercial transaction, namely, the purchase of tobacco leaf.
The dollars were bought in contemplation of that and nothing else ".
He also observed that the dollars " were an essential part of a contemplated commercial operation ".
It seems to us that the amounts with which this case is concerned, were paid and were refundable as an integral part of a commercial transaction, namely, the sale of liquor in bottles by the appellant to a wholesaler.
The case nearest to the present one is, in our view, that decided by this Court in K. M. section Lakshmanier & Sons vs Commissioner of Income tax and Excess Profits Tax, Madras (3).
There the appellants, who were the assessees, were merchants carrying on business as the sole selling agents for yarn manufactured by the Madura Mills Co. Ltd. They sold the yarn to their constituents and in the relevant accounting period the sales were made under three successive arrangements each of which covered a part of it.
Under each arrangement, the assessees were paid a certain initial (1) (2) (3) ; 692 sum by their customers.
The question was as to the nature of these initial payments.
Under the first arrangement " the appellants had two accounts for each constituent, namely, ' a contract deposit account ' and ' a current yarn account ', crediting the moneys received from the customers in the former account and transferring them to the yarn account in adjustment of the price of the bales supplied then and there, that is, as and when deliveries were made under a contract either in instalment or in full ".
It was held that the amounts received from the customers under this arrangement were taxable as they were merely advance payments of the price and could riot therefore be regarded as borrowed money.
This was clearly so because under this arrangement cash was deposited by a purchaser in respect of a contract of purchase at the time it was made and was to be applied when the goods had been delivered by the appellant under that contract towards the price payable in respect of them, such price not being payable in any other manner.
The arrangement for the second part of the accounting period was that the payment made by a constituent at the time of the making of a contract was taken as " Contracts advance fixed deposit " and it was refunded when the goods under the contract had been supplied and the price in respect thereof paid in full irrespective of the earlier payment.
With respect to the payment initially made under this arrangement Patanjali Sastri, C. J., said at p. 1067 : ". we are of opinion that, having regard to the terms of the arrangement then in force, they partake more of the nature of trading receipts than of security deposits.
It will be seen that the amounts received were treated as advance payments in relation to each " contract number " and though the agreement provided for the payment of the price in full by the customer and for the deposit being returned to him on the completion of delivery under the contract, the transaction is one providing in substance and effect for the adjustment of the mutual obligations on the completion of the contract.
We hold accordingly that 693 the sums received during this period cannot be regarded as borrowed money. .
It seems to us that the amounts involved in the present case were exactly of the nature of the deposits made in the second period in Lakshmanier & Sons ' case (1).
There, as here, as soon as a transaction of sale was made the seller received certain moneys in respect of it.
It is true that in Lakshmanier & Sons ' case the transaction was a contract to sell goods in future whereas in the present case the transaction was a sale completed by delivery of the goods and receipt of the consideration.
But that cannot change the nature of the payment.
In Lakshmanier & Sons ' case, the payment initially made was refundable after the price had been paid; in the present case the contract is to refund the amount on the return of the bottles already sold.
In each case therefore the payment was made as part of a trading transaction and in each case it was refundable on certain events happening.
In each case again the payment was described as a deposit.
As in that case, so in the present case, the payment cannot be taken to have been made by way of a security deposit.
We must therefore on the authority of Laskhmanier & Sons ' case, hold the amounts in the present case to have been trading receipts.
It was Mr. Sastri 's effort to bring the case within the arrangement that prevailed in the third part of the accounting period in Laskhmanier & Sons ' case, the initial payments made during which were held to be loans.
But we think that he has not succeeded in this.
The payments during the third period were made under the following arrangements: " Instead of calling for amounts from you towards 'Security Deposit ' due to bales for which we are entering into forward contracts with you and returning the same to you from the said deposit then and there, as we are doing now, and in order to make it feasible, we have decided to demand from you a certain sum towards Security Deposit and keep the same with us so long as our business connections under forward contracts will continue with you." Under this arrangement a certain (1)[1953] S.C.R. 1057.
694 sum was kept in deposit once and for all and there.
after Lakshmanier & Sons commenced to enter into the trading transactions, namely, forward contracts for sale of yarn with the constituents who deposited the money.
The sum so deposited was to be refunded with interest at three per cent.
per annum at the end of the business connection between the parties, if necessary, after retaining there out any amount due on the contracts made with the constituent which, the latter was at the termination of the business found not to have paid.
Patanjali Sastri, C. J., observed at p. 1063 in regard to the deposits made under this arrangement: "The amount deposited by a customer was no longer to have any relation to the price fixed for the goods to be delivered under a forward contract either in instalments or otherwise.
Such price was to be paid by the customer in full against delivery in respect of each contract without, any adjustment out of the deposit, which was to be held by the appellants as security for the due performance of his contracts by the customer so long as his dealings with the appellants by way of forward contract continued, the appel lants paying interest at 3 per cent.
in the meanwhile, and having, as appears from the course of dealings between the parties ' the use of the money for their own business.
It was only at the end of the " business connection " with the appellants that an adjustment was to be made towards any possible liability arising out of the customer 's default.
Apart from such a contingency arising, the appellants undertook to repay an equivalent amount at the termination of the dealings.
The transaction had thus all the essential elements of a contract of loan, and we accordingly hold that the deposits received under the final arrangement constitute borrowed money ".
Having observed that the description of the payment made by the customer as a deposit made no difference for a deposit included as a loan, the learned Chief Justice further said at p. 1064: " The fact that one of the conditions is that it is to be adjusted against a claim arising out of a possible 695 default of the depositor cannot alter the character of the transaction.
Nor can the fact that the purpose for which the deposit is made is to provide a security for the due performance of a collateral contract invest the deposit with a different character.
It remains a loan of which the repayment in full is conditioned by the due fulfilment of.
the obligations under, the collateral contract ".
In coming to the view that he did with regard to the arrangement prevailing in the third period, the learned Chief Justice referred ' with approval to the case of Davies vs Shell Company of China(1) which we have earlier mentioned.
Now it seems to us that the reasons on which the learned Chief Justice based his conclusion that the deposits during the third period were loans do not apply to the present case.
In the present case, unlike in Lakshmanier & Sons ' case, the amount paid has a relation to the price of the goods sold ; it is part of that price as we have earlier said.
It was a condition of each transaction of sale by the appellant.
It was refundable to the wholesaler as soon as he returned the bottles in which the liquor had been supplied to him in the transaction in respect of which the deposit had been made.
The deposit in the present case was really not a security at all ; it did not secure to the appellant anything.
Unlike Lakshmanier & Sons ' case, in the present case a deposit was made every time a transaction took place and it was refundable under the terms of that transaction independently of other deposits under other transactions.
In Lakshmanier & Sons ' case, the deposit was in the nature of the assee 's trading structure and anterior to the trading operations, as were the deposits considered in Shell Company case(1).
In the case in hand the deposit was part of each trading transaction.
It was re.
fundable under the terms of the contract relating to a trading transaction under which it had been made; it was not made under an independent contract nor was its refund conditioned by a collateral contract, as happened in Lakshmanier & Sons ' case.
(1) 696 We therefore think that the present case is governed by the arrangement covering the second period and: not the third period mentioned in Lakshmanier & Sons case (1), and, come to the conclusion that the amounts with which we are concerned were trading receipts.
Mr. Sastri also referred us to Morley vs Pattersall and contended that the amounts with which we are concerned, were of the same kind as those consideredin that case and were not income.
It seems to us that there is no similarity between the two cases at all.
Tattersall was a firm who sold horses of its constituents on their behalf and received the price which it was liable to pay them.
It so happened that in the course of years various customers did not come and demand the amounts due to them.
Initially Tattersall showed those amounts in its accounts as liabilities which they really were.
Later it thought that it would never have to pay back these amounts and thereupon transferred them to the credit of its partners.
The Revenue sought to tax the amounts so transferred as Tattersall 's income.
The question was whether the amounts upon transfer became Tattersall 's income.
It was never contended that the amounts when received as price of the constituent 's horses sold were Tattersall 's income and the only contention was that they became income upon being transferred to the credit of the partners.
It was held that the amounts had not by being entered on the credit side, become income of the firm.
Sir Wilfrid Greene said at p. 65 : " Mr. Hill 's argument was to the effect that, although they were not trading receipts at the moment of receipt, they had at that moment the potentiality of becoming trading receipts.
That proposition involves a view of Income Tax Law in which I can discover no merit except that of novelty.
" Then again he said: " It seems to me that the quality and nature of a receipt for Income Tax purposes is fixed once and for all when it is received.
What the partners did in (1) ; (2) 697 this case, as I have said, was to decide among themselves that what they had previously regarded as a liability of the firm they would not, for practical reasons, regard as a liability; but that does not mean that at that moment they received something, nor does it mean that at that moment they imprinted upon some existing asset a quality different from what it had possessed before.
There was no existing asset at all at that time.
" All that this case decided was that moneys which were not when received, income and as to this there was no question could never later become income.
With such a case we are not concerned.
The case turned on the fact that the moneys received by Tattersall were never its moneys; they had been received on behalf of others and that receipt only created a liability towards them.
Now it seems to us quite impossible to say that the amounts with which we are concerned were not the appellant 's moneys in the sense that the constituent 's moneys in the hands of Tattersall were not its.
The amounts in this case were not received on account of any one but the appellant.
No doubt these moneys might have to be refunded if certain things happened which however might never happen, but that did not make them the moneys of those who might become entitled to the refund.
Mr. Sastri referred us to the observations of Sir Wilfrid Greene, M. R., in Morley vs Tattersall (1) at p. 65 to the effect that, " The money which was received was money which had not got any profit making quality about it; it was money which, in a business sense, was a client 's money and nobody else 's" and contended that the amounts involved in the presentcase were of the same nature.
We are unable to agree.
If we are right in our view that the amounts were trading receipts, it follows that they must have a profit making quality about them.
Their payment was insisted upon as a condition upon which alone the liquor would be supplied with an agreement that they would.
be repaid oil the return of the bottles.
They (1)(1938) 88 698 were part of the transactions of sale of liquor which produced the profit and therefore they had a profit making quality.
Again, a wholesaler was quite free to return the bottles or not as he liked and if he did not return them, the appellant had no liability to refund.
It would then keep the moneys as its own and they would then certainly be profit.
The moneys when paid were the moneys of the appellant and were thereafter in no sense the moneys of the persons who paid them.
Having given the matter our anxious consideration which the difficulties involved in it require, we think that the correct view to take is that the amounts paid to the appellant and described as " Empty Bottles Return Security Deposit " were trading receipts and therefore income of the appellant assessable to tax.
We agree with the High Court that the question framed for decision in this case, should be answered in the affirmative.
In the result the appeal fails and is dismissed.
The appellant will pay the costs in this Court.
Appeal dismissed.

summary:
The appellant, a distiller of country liquor, carried on the business of selling liquor to licensed wholesalers.
Due to shortage of bottles during the war a scheme was evolved, where under the distiller could charge a wholesaler a price for the bottles in which liquor was supplied at rates fixed by the Government, which lie was bound to repay to the wholesaler on his returning the bottles.
In addition to this the appellant took a further sum from the wholesalers described as 'security deposit ' for the return of the bottles.
Like the price of the bottles these moneys were also repaid as and when the bottles were returned with this difference that the entire sum was refunded only when go% of the bottles covered by it had been returned.
The appellant was assessed to income tax on the balance of the amounts of these additional sums left after the refunds made there out.
Held, that the amounts paid to the appellant and described as 'security deposit ' were trading receipts and therefore income of the appellant assessable to tax.
These amounts were paid as an integral part of the commercial transaction of the sale of liquor in bottles and represented an extra price charged for the bottles.
They were not security deposits as there was nothing to secure, there being no right to the return of the bottles.
684 K. M. section Lakshmanier & Sons vs Commissioner of Income tax and Excess Profits Tax, Madras, ; , followed.
Davies vs The Shell Company of China Ltd., (1951) Tax Cas. 133; and Morley vs Tattersall, , distinguished.
Imperial Tobacco Co. vs Kelly, , referred to.


judgement:
ivil Appeal No.4718 of 1990.
From the Judgment and Order dated 24.8.1988 of the Punjab and Haryana High Court in C.W.P. No. 7136 of 1985.
Dr. Rajeev Dhawan and Arun K. Sinha for the Appellant.
K.G. Bhagat, B.S. Malik and Ms. Galshan for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
Special leave granted.
This appeal is from the Judgment and Order dated August 24, 1988 of the Punjab and Haryana High Court dismissing the appellant 's writ petition for quashing the order of the Financial Commissioner Punjab dated 9.2.1988 declaring the second respondent to be eligible for allotment of the lands in dispute under Rule 34C of the Displaced Persons Compensa tion and Rehabilitation Rules 1955 (hereinafter referred to as the rules ') framed under the Displaced Person Compensa tion and Rehabilitation Act, 1954 (hereinafter referred to as 'the Act ').
The land in dispute (hereinafter referred to as the land ') bearing Khasra Nos.
17/8/1, 8/2, and 8/4 admeasuring 7 Kanals 4 Marlas in the Revenue Estate of Shanzada Nangal, Gurdaspur, was owned by one Vinod Kumar.
The second respond ent claimed to have been in its cultivating possession in the years 1953 54, 1956 57.
In 1957 58 and 1958 59 he was recorded as a sub lessee under one Budha Singh lessee on annual rent of Rs.100.
In 1958 the lease in favour of Budha Singh was cancelled with information to him by the Rehabili tation Department whereupon the second respondent 's right as sub lessee came to an end.
Consequently the second respond ent was no longer recorded as lessee or sub lessee after 1958 59.
In 1961 the second respondent applied to the Settlement Authority for allotment of the land under Rule 34C of the rules claiming as a sublessee.
His application was rejected by the Managing Officer vide his Order dated 25.11.1962 and the second respondent having not filed any appeal or revi sion therefrom the order became final and binding on him.
The Rehabilitation Authorities having decided to dispose of the land an open auction was conducted on 11.8.1967 and the appellant, a retired army Subedar and also a displaced person from West Pakistan offered the highest bid of Rs.9,500 (Rupee nine thousand five hundred) which was ac cepted.
The sale certificate was duly issued by 18 the Rehabilitation Department 'to the appellant with effect from September 15, 1969.
Without resorting to any appeal against the aforesaid Order dated 25.11.1962 refusing allot ment of the land, the respondent made a second attempt for allotment under Rule 34C of the rules by making another application which too was rejected by the Settlement Officer by order dated July 24, 1969 wherefrom the second respondent moved a revision application before the Chief Settlement Commissioner who remanded the case by Order dated July 29, 1970 to the Managing Officer for fresh decision but the latter rejected that application also on 22.3.1973.
The second respondent 's appeal therefrom to the Settlement Commissioner was also rejected by Order dated 13.5.1973 as the second respondent could not prove his continuous culti vating possession as a sub lessee under Budha Singh, from 1.1.1956 till termination of the latter 's lease.
The second respondent thereafter instituted a suit on August 22, 1973 in the Court of Subordinate Judge, Gurdaspur against Budha Singh for declaration of his continuous pos session of the land.
However, neither the appellant who purchased the land in auction nor the Rehabilitation Depart ment which cancelled Budha Singh 's lease was impleaded.
Budha Singh having supported the case, a decree declaring the second respondent to have been in continuous possession was passed.
The second respondent this time filed a revision from the appellate order of the Settlement Commissioner dated 13.5.1973 before the Chief Settlement Commissioner who by his Order dated 5.11.1976 remanded the case to the Managing Officer for fresh decision.
The Managing Officer vide his order dated 6.1.1978 this time allotted the land to the second respondent under Rule 34C of the rules.
The appel lant 's appeal therefrom to the Settlement Commissioner was dismissed vide order dated 6.6.1978 but his revision there from was allowed and the allotment order in favour of second respondent was quashed by the Chief Settlement Commissioner vide his Order dated 11.1.1979.
The Chief Settlement Commis sioner declared the appellant to be the auction purchaser and therefore the true owner of the land.
The second , respondent 's revision therefrom was also rejected by the Financial Commissioner on 23.10.1979.
Thus all the authori ties in the successive rounds found the facts against the second respondent.
The second respondent then filed a writ petition challeng ing the Financial Commissioner 's order dated 23.10.1979 and the High Court, contrary to all the aforesaid findings of fact, remanded the case, by 19 its order dated 7.1.83 to the Financial Commissioner for fresh decision in the light of the decree of the civil court dated 17.11.1973, which the High Court at the same time declared to have been a collusive one, obtained by second respondent in collusion with Budha Singh.
The Financial Commissioner on remand by the High Court has now held vide Order dated 9.2.1988 that the second respondent is eligible for allotment of the land under Rule 34C of the rules and accordingly allotted the land in his favour quashing the auction sale made in favour of the appellant on 11.8.1967 holding that being a sub lessee in continuous possession since 1.1.1956, the second respondent had a superior claim to allotment of the land and, therefore, the auction sale to the appellant was null and void.
The appellant 's writ peti tion challenging that Order having been dismissed in limine by the High Court vide impugned Judgment dated 24.8.1988, he appeals.
Rule 34C included in Chapter V of the rules provides: Allotment of agricultural lands of the value of Rs.10,000 or less.
Where any land to which this Chapter applies has been leased to a displaced person and such land consists of one or more khasras and is valued at Rs.10,000 or less, the land shall be allotted to the lessee: Provided that where any such land or any part thereof has been sub leased to a displaced person and the sublessee has been in occupation of such land or part there of continuously from the first January 1956 such land or part thereof as the case may be, shall be allotted to such sublessee." Mr. Rajeev Dhawan, the learned counsel for the appel lant, submits, inter alia, that after Budha Singh 's lease was cancelled in 1958.
the second respondent 's status as sub lessee ceased and thereafter he was neither a sub lessee nor bid he pay any rent for the land and, in fact, he was a trespasser and not entitled to allotment under Rule 34C of the rules; that his first application was rightly rejected and he having never preferred any appeal or revision there from, the order became final and binding on him, and he was, therefore, not entitled to make the second application.
After the land was already sold in auction to the appellant on 1.8.67, counsel submits, the land ceased to be evacuee property and the second respondent 's second application was not maintainable, and the appellant was declared as auction purchaser on 15.8.1969 and the sale certificate issued to him was with effect from 15.9.1969.
20 Mr. K.G. Bhagat, the learned counsel for the respondent, submits that the decision on his first application for allotment was not communicated to him till he made his second application for allotment and that as a sub lessee he had the right to apply for allotment and that his right has now been rightly recognised and the land allotted to him though his second application was also rejected on 24.7.
It appears that though the land was sold in auction to the appellant under Rule 34H on 11.8.1967, perhaps because of the pendency of the second application of the second respondent, the appellant was not declared as auction pur chaser during the pendency of that application and only after it was rejected on 24.7.1969, the appellant was de clared purchaser on 15.8.1969.
It also appears that after the second respondent 's revision petition against the order rejecting his second application for allotment was remanded by the Chief Settlement Commissioner to the Managing Officer for fresh decision and the latter rejected that application also holding that the second respondent failed to prove his continuous possession of the disputed land as sublessee as required under Rule 34C; and the appeal therefrom was also rejected on 13.5.1973, the Certificate of sale was issued to the appellant on 23.6.1973 with effect from 15.9.1969.
Thus, the matter should have finally ended at that stage.
The second respondent 's suit against Budha Singh leading to the decree declaring that the second respondent was in continuous possession of the disputed land was, argues Mr. Dhawan, not maintainable and the decree was rightly held to have been collusive, but Mr. Bhagat submits that the High Court was wrong in holding so.
Mr. Dhawan 's submission that the sale in favour of the appellant culminating in issue of the sale certificate in his favour had the effect of taking away the land from the pool of evacuee properties and thereafter so long that was not cancelled according to law, it was not open for the Rehabilitation authorities to deal with the same appears to be sound.
Rule 34H of the rules reads: "34H. Manner of disposal of land not allotted.
Any land to which this Chapter applies which is not allotted under this Chapter, shall be disposed of in the manner provided in Chapter XIV." 21 Chapter XIV of the rules prescribes the procedure for sale of property in the compensation pool.
Rule 90 pre scribes the procedure for sale of property by public auc tion.
Sub rule 15 of Rule 90 provides for issue of sale certificate and for sending a certified copy of the sale certificate by the Managing Officer to the Registering Officer within the local limits of whose jurisdiction the whole or any part of the property to which the certificate relates is situated.
Rule 92 prescribes the procedure for setting aside the sale.
In Bishan Paul vs Mothu Ram, reported in AIR 1965 SC 1994, it has been held that Rules 90 and 92 show that there are distinct stages in the auction sale of property in the compensation pool, namely, (1) the fail of the hammer and the declaration of the highest bid, (2) the approval of the highest bid by the Settlement Commissioner or Officer ap pointed by him, (3) payment of the full price after this approval, (4) grant of certificate, and (5) Registration of the certificate.
That is the intention behind the rules.
The new form of the sale certificate requires a mention that the purchaser had been declared the purchaser of the said property with effect from the certificate date.
The title, however, would not be abeyance till the certificate was issued but would be based on the confirmation of the sale.
The intention behind the rules appears to be that title shall pass when the full price is realised and this is now clear from the new form of the certificate, and title must be deemed to have passed and the certificate must relate back to the date when the sale became absolute.
The appel lant, therefore, must be held to have obtained title to the land on the date of confirmation of the sale.
That is why the Sale Certificate in the instant case was expressly stated to be with effect from 25.9.1969.
Rule 92 provides: "92.
Procedure for setting aside a sale. (1) Where a person desires that the sale of any property made under rule 90 or 91 should be set aside because of any alleged irregularity or fraud in the conduct of the sale (including in the case of a sale by public auction in the notice of the sale) he may make an application to that effect to the Settlement Commissioner or any officer, authorised by him in this behalf to approve the acceptance of the bid or tender, as the case may be.
(2) Every application for setting aside a sale under this rule shall be made 22 (a) where the sale is made by public auction within seven days from the date of the acceptance of the bid; (b) where the sale is made by inviting tenders, within seven days from the date when the tenders were opened.
XX XX XX XX XX XX XX XX XX XX Under Sub rule (4), notwithstanding anything contained in Rule 92, the Settlement Commissioner may, of his own motion, set aside any sale under this Chapter if he is satisfied that any material irregularity or fraud which was resulted in a substantial injury to any person has been committed in the conduct of the sale.
In the instant case we have not been shown any application for setting aside of the auction sale and the sale certificate in favour of the appellant made according to rules.
Nor have we been shown that the Settlement Commissioner of his own motion had set aside the sale being satisfied that any material irregularity or fraud which had resulted in a substantial injury to any person had been committed in the conduct of the sale.
Section 14 of the Act provides for constitution of the compensation pool.
Section 15 of the Act exempts the proper ty in compensation pool from processes of courts.
Section 20 of the Act empowers the Managing Officer or managing corpo ration to transfer any property within the compensation pool (a) by sale of such property to a displaced person or any association of displaced person whether incorporated or not, or to any other person, whether the property sold by public auction or otherwise.
Under sub section (2) of that section every Managing Officer or managing corporation selling any immovable property by public auction under sub section (1) shall be deemed to be a Revenue Officer within the meaning of sub section (4) of section 89 of the Indian .
Under section 27 of the Act save as otherwise expressly provided in the Act every order made by any officer or authority under the Act, including a managing corporation, shall be final and shall not be called in question in any court by way of appeal or revision or in any original suit, application or execution proceeding.
The jurisdiction of the Civil Court was therefore barred in the matter of the sale.
It is true that where the special tribu nal or authority acts ultra vires or illegally, the Civil Court has by virtue of section 9 of the Civil Procedure Code power to interfere and set matters right.
As was laid down by the Judicial Committee of the Privy 23 Council in Secretary of State vs Mask and Co., AIR 1940 PC 105, if the provisions of the Statute have not been complied with or the Statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure, the Civil Courts have jurisdiction to examine those cases.
This rule was reiterated by the Supreme Court in State of Kerala vs M/s. N. Ramaswami Iyer and Sons, AIR 1966 SC 1938.
In the instant case the second respondent 's civil suit against Budha Singh for declaration of possession was not against any order passed by any officer under the Act.
That decree, even if it was not declared collusive could not have collat erally affected the auction sale order.
Mr. Dhawan is, therefore, right in his submission that the appellant, a displaced person, having bona fide pur chased the land in public auction for Rs.9,500 and having paid that amount with the sincere hope of his rehabilita tion, has been subjected to expensive protracted litigation for the last 22 years during which he has earned nothing out of the land while the second respondent had until the im pugned orders, been enjoying the usufruct of the land and this is because of the State not honouring its own final commitment made in the sale certificate in favour of the appellant.
Mr. Bhagat answers that the second respondent was in possession, in 1956, and till the cancellation of Budha Singh 's lease in 1958, and thereafter.
He was admittedly a sub lessee of Budha Singh till 1958 and then was a sub tenant holding over on the date he applied for allotment in 196 1.
The decision rejecting his first application having not been communicated to him he made his second application which was also wrongly rejected by the Chief Settlement Officer; and the Financial Commissioner ultimately on remand from the High Court, on the basis of the second respondent 's possession of the land, rightly set aside the order of the Chief Settlement Commissioner dated 11.1.1979 and allotted the land to the second respondent declaring him to be sub lessee for the period after 1958 setting aside the sale made by the Rehabilitation Department made in favour of the appellant and that the High Court by the impugned Order dated 24.8.88 rightly dismissed the appellant 's writ appli cation in limine.
Mr. Bhagat also persuades us to consider that the second respondent, also a displaced person, had been demanding justice for the last 22 years and has finally succeeded in obtaining the allotment and he ought not to be deprived of the same.
Sri Dhawan attacks the order of the Financial Commissioner on the ground that he had no material before him other than what was there before his predecessor on 23.10.1979, except the judgment in the civil suit, which for obvious reasons, cannot be taken 24 into account Mr. Dhawan emphasises that, it having been repeatedly held earlier that continuous cultivating posses sion of the second respondent was not proved, there was no basis for the Financial Commissioner in his order dated 9.2.
1988 to have observed that "a favourable presumption regard ing continuity of his possession during the intervening period that is from kharif 1961 to rabi 1964 ought to have been drawn and benefit of doubt given" to the second re spondent, in spite of the absence of Girdawari for the year 1961 62 and 1962 63 and mutilations in the entries of Girda wari for 1963 64.
In a sense.
, he is no doubt correct but the previous order of 23.10.1979 having been set aside by the High Court, it was open to the Financial Commissioner consider the matter afresh.
Doing so, he has found that since the possession of the second respondent from 1953 to 1961 and again in 1964 65 and 1965 66 was borne out from the records, the absence of the records for 1961 62 ad 1962 63 and their illegibility due to mutilation for 1963 64 and 1964 65 should not be held against him and that his continu ous possession since 1962 can be presumed entitling him to an allotment under section 34C.
This was a conclusion on facts, which the High Court has declined to interfere with.
Thus, we have a peculiar position in this case.
While Mr. Dhawan is right in saying that the appellant, as a bona fide purchaser of the land for value at public auction, should be put in the same position in which he would have been had his auction purchase as evidenced by the Sale Certificate been effective from the date of purchase, Mr. Bhagat appears to be justified in saying that it would not be just and proper to deprive the second respondent who was inducted by Budha Singh as a sub lessee and who has contin ued in possession of the land till date, of the fruits of his protracted litigation culminating in allotment of the land to him.
The difficulty in the present case has arisen because the State confirmed the sale in favour of the appel lant in 1969 and issued a sale certificate to him in 1973 without waiting for the final outcome of the second respond ent 's revision application to the Chief Settlement Commis sioner and further proceedings consequent thereon.
The odd situation, creating equities in favour of both the parties, that has thus resulted in the present case is due to the fault of the appellant or the second respondent.
It could have been avoided if the State had held over the auction until the second respondent 's application had been finally disposed of or had held the auction subject to the result of the application.
It is true that the second respondent could have taken steps to challenge the auction in favour of the appellant but, perhaps misguidedly, he was concentrating on getting an allotment under section 34C for which he cannot be 25 wholly blamed.
Whatever that may be, the final position is that both parties have had to suffer and indulge in lengthy litigation .
Under the above circumstances we feel that while this Court is to administer justice according to law there may be scope for doing justice and equity between the parties.
In such a situation we remember what the Institute of Justin ian, De Justitia Et Jure, in 'Liber Primus ' Tit.
I said: "Justice est constans et perpetua voluntas jus suum cuique tribuendi.
" Justice is the constant and perpetual wish to render every one his due. "Jurisprudentia est divinarum atgue humanarum rerum notitia, justi atgue injusti scientia." Jurisprudence is the knowledge of the things divine and human; the science of the just and the unjust.
The divine is that which right reason commends.
The human is a|so in the contents of the law.
As Max Rumelin said, in the Struggle to govern Law, "Justice is rivaled by equity.
" The dilemma that equity is to be better than justice and yet not quite opposed to justice, but rather a kind of justice has troubled us.
Gustav Radbruch clarifies the mutual relation between two kinds of justice, namely, commutative and dis tributive.
We may call "just" either the application or observance of law, or that law itself. "The former kind of justice, especially the justice of the Judge true to the law," according to him, "might better be called righteous ness.
" Here "we are concerned not with justice which is measured by positive law, but rather with that by which positive law is measured.
" Justice in this sense means equality.
Aristotle 's doctrine of justice or equality is called by him commutative justice which requires at least two persons while distribute justice requires at least three.
Relative equality in treating different persons while granting relief according to need, or reward and punishment according to merit and guilt is the essence of distributive justice.
While in commutative justice the two persons con front each other as co equals.
three or more persons are necessary in distributive justice in which one, who imposes burdens upon or grants advantages to the others, is superior to them.
"Therefore, it presupposes an act of distributive justice which has granted to those concerned, equality of rights, equal capacity to act, equal status." (The Legal Philosophies of Lask, Radbruch and Dabin P. 74) According to Radbruch, "distributive justice is the prototype of justice.
In it we have found the idea of justice, toward which the concept of law must be oriented.
" Law offers and protects and conditions necessary for the life of man and his perfection.
In the words of Cardozo, "What we are seek ing is not merely the justice that one receives when his rights and status are determined by the law as it is, what we are seeking is 1 justice to which law in its making should 26 conform.
" The sense of justice will be stable when it is firmly guided by the 'pragma ' of objective and subjective interests.
In the instant case the Financial Commissioner is a party.
What we find in the instant case is that the Rehabil itation authorities acting under the Act and the Rules decided the competing claims of the appellant as well as the second respondent as to the land.
If the Rehabilitation authorities can provide an equal extent of land with equal benefits to both the parties justice, may appear to be done but that being uncertain, the availability of land being limited, this Court can only look towards equity for solu tion.
Considering the facts of the instant case including the extent of the land and the purposes of the Act and the Rules, and the reality that the land must have become scarce and much more valuable now than in 1967, we feel that the ends of justice on the facts of the present case require that the impugned Orders be set aside and the land be caused to be divided by the Financial Commissioner into two equal halves and one half be given possession of to the appellant by dint of his auction purchase and the other half be allot ted and given possession of to the second respondent under Rule 34C of the rules.
We order accordingly.
We direct the Financial Commissioner or the Chief Settlement Commissioner, after notice to the appellant and the second respondent, to divide the land forthwith into two qual halves and deliver possession of the appellant 's moiety to him.
They should carry out the above directions within three months from the date of receipt of this order.
The parties shall cooperate in carrying out of the directions and we hope that they will be able to live in peace thereafter.
The appeal is disposed of accordingly.
Under the facts and the circumstances of the case, we make no order as to costs.
A copy of the Judgment may be forwarded forthwith to the Financial Commissioner.
S.B. Appeal allowed.

summary:
The appellant, a retired army subedar and also a dis placed person from west Pakistan purchased the Land in public auction conducted by The Rehabilitation Department, by offering the highest bid of Rs.9,500.
The laud in dispute measured 7 Kanals & 4 Marlas and was owned by one Vinod Kumar.
Having paid the purchase money with the sincere hope of his rehabilitation, he had to be in protracted litigation for 22 years during which he earned nothing out of the land because the State did not honour its final commitment made in the sale certificate in favour of the appellant.
The State confirmed the sale in favour of the appellant in 1969 but issued sale certificate on 23 June, 1973 being effective from September 15, 1969 without waiting for the final out come of the second respondent 's revision application to the Chief Settlement Commissioner, and further consequent pro ceedings thereon.
It was submitted by the second respondent that the said land was in his cultivatory possession since 1956 and as per public records he was sub lessee under Budha Singh Lessee, and the Lease in favour of Budha Singh was cancelled in 1958 by the Rehabilitation Department and thereafter he became a sub tenant holding over on the date he applied for allotment in 1961, under Rule 34C of the Rules.
The decision rejecting his first application was not communicated to him.
So he made his second application which was rejected by The Chief Settlement Officer vide his order dated July 24th, 1969.
Then he moved a revision application before the Chief Set tlement Commissioner who remanded the case to the Managing Officer for fresh decision by his order dated July 29, 1970.
The second respondent 's second application was rejected on March 22, 1973.
The second appeal to the Settlement Commis sioner was also rejected on May 13, 1973 as he could not prove his continuous cultivator) possession as a sub lessee under Budha Singh from January 1956 till the termination of the latter 's lease.
Thereafter second 15 respondent instituted a suit against Budha Singh for decla ration of his continuous possession of the land and got a decree in his favour as being in continuous possession of the land.
The second respondent again filed a revision against the appellate order of the Settlement Commissioner, which was remanded to the Managing officer and he got land allotted under Rule 34C of the Rules vide order dated January 6th, 1978.
The appellant 's appeal therefrom was dismissed by the Settlement Commissioner, but in his revision application therefrom, the allotment order in favour of the second respondent was quashed by the Chief Settlement Commissioner vide his order dated January 1, 1979 declaring the appellant to be the auction purchaser and therefore the true owner of the Land.
The second respondent 's revision was rejected by the Financial Commissioner on Oct. 23, 1979.
Thus all au thorities in the successive rounds found the facts against the second respondent.
Therefore, the second respondent filed a writ petition challenging the Financial Commissioner 's order in the High Court.
High Court remanded the case to the Financial Commis sioner for fresh decision on January 7, 1983.
The Financial Commissioner vide his order February 2, 1988 held that the second respondent was eligible for allotment of land under rule 34C of the rules, holding that being a sub lessee in continuous possession since January 1, 1956, and thereafter he had a superior claim to the allotment of the land and quashed the auction sale made in favour of the appellant on August 11, 1967.
The Financial Commissioner found that since 1953 to 1961 the second respondent was in possession of the land and again in 1964 65, 65 66 the records also bore out this fact.
The absence of records for 1961 62, 62 63 due to their illegibility due to mutilation should not be held against him and his continuous possession since 1962 can be presumed entitling him to an allotment under Rule 34 C of the Rules.
This was a conclusion on facts which the High Court declined to interfere with and dismissed the appellant 's writ peti tion in limine on August 24, 1988.
Allowing the Appeal, the Court, HELD: In the instant case, the appellant as a bone fide purchaser of the disputed land for value at public auction under Rule 34H of the rules on August 11, 1967 should have been put in the same position which he would have been, had his auction purchase as evidenced by the 16 Sale Certificate been effective from the date of purchase.
Rule 90 of the Rules prescribes the procedure for sale of property by public auction.
Sub rule 15 of Rule 90 provides for issue of sale certificate and Rule 92 prescribes the procedure for setting aside the sale.
but once the sale certificate was issued in favour of the appellant, he became the true owner and it had the effect of taking away the land from pool of evacuee properties and thereafter so long that was not cancelled according to law, it was not open to the Rehabilitation Department to deal with the sale.
The diffi culty in the present case has arisen because the State confirmed the sale in favour of the appellant in 1969, whereas it issued sale certificate to him on June 23,1973 with effect from September 15, 1969 without waiting for the final outcome of the second respondent 's revision applica tion to the Chief Settlement Commissioner & further proceed ings thereafter.
Thus the odd situation resulted in creating equities favour of both the parties with no fault of the appellant or the second respondent.
If the State had held over the auction until the second respondent 's application had been finally disposed of or had held the auction subject to the result of the application, the second respondent could have challenged the auction in favour of the appellant but perhaps misguidedly he was concentrating on getting an allotment under section 34C.
So both the parties had to suffer and indulge in lengthy protracted litigation for 22 years.
Had the Rehabilitation authorities acting under the Act and the Rules decided the competing claims of the appel lant as well as the second respondent as to the disputed land and provided an equal extent of land with equal bene fits to both the parties justice may appear to be done but that being uncertain the availability of land being limited.
the court can only look towards equity for solution.
The dilemma that equity is to be better than justice and yet not quite opposed to justice but rather a kind of justice and the distinction between commutative justice and distributive justice discussed.
[24E; F I I; 23G H; 26B; 25C] Passages from justinian, gustav Radbrach, Aristotle and Cardozo referred to.
Considering the facts, the extent of land and the pur poses of the Act and the Rules and the reality that land must have become scarce and much more expensive than in 1967 to meet the ends of justice on the basis of facts, the Court directed that the disputed land be divided by the Financial Commissioner into two equal halves and one half and one half be given possession of to the appellant by dint of his being auction purchaser and the other half be allotted and given possession of to the second respondent under Rule 34C of the Rules.
This order be carried out accordingly within three months.
[26C D] 17