judgement:
Appeal No. 434 of 1963.
Appeal from the judgment and decree dated July 22, 1960, of the Andhra Pradesh High Court in Appeal Suit No. 709 of 1954.
A. Ranganadham Chetty, A. Vedavalli and A.V. Rangam, for the appellants.
M.S.K. Sastri and M.S. Narasimhan, for the respondents.
The Judgment of the Court was delivered by Bachawat, J.
The first respondent, Seetharamamma, is a Brahmin woman.
She was married to one Ramakrishnayya.
During the life time of her husband she became the concubine of one Lingayya, a Sudra by caste.
From 1938 until the death of Lingayya in February, 1948, she was the permanently kept concubine of Lingayya, and lived with him.
During this period and thereafter, she preserved sexual fidelity to Lingayya.
The second, third and fourth respondents are the sons of the first respondent by Lingayya.
The husband of the first respondent is still alive.
The appellants are the brothers and brothers ' sons of Lingayya.
Lingayya was separate in estate from his brothers and brothers ' sons.
The parties are residents of Choragudi, Bapatla, now in Andhra Pradesh and governed by the Mitakshara school of Hindu law.
In the plaint, as originally filed, the respondents claimed that they were exclusively entitled to the estate left by Lingayya.
The Subordinate Judge and the High Court found that as the first respondent was and continued to be a married woman while she lived with Lingayya and bore him children, she was not the lawfully wedded wife of Lingayya and the children born of the union were not his legitimate sons, nor were they Dasiputras and as such entitled to his properties.
The suit was originally dismissed by the Subordinate Judge, but on appeal, the High Court gave the respondents leave to amend the plaint by making suitable averments for the award of maintenance, and remanded the suit for trial on the question of maintenance.
At the subsequent trial on the amended plaint, the Subordinate Judge decreed the respondents ' claim for maintenance and consequential 124 reliefs and awarded to them maintenance during their lifetime out of the estate of Lingayya.
The Subordinate Judge passed his decree on September 20, 1954.
During the pendency of the appeal preferred by the appellants before the High Court, the Hindu Adoptions and Maintenance Act of 1956 (hereinafter referred to as the Act) came into force.
The main controversies in the appeal before the High Court were (1) whether the provisions of the Act are retrospective; and (2) whether a married woman who left her husband and lived with another as his permanently kept mistress could be regarded as an A varuddha Stree.
In view of the importance of these questions, the appeal was referred to a Full Bench of the High Court.
On the first question the High Court held that the relevant provisions of the Act applied only to the estates of Hindus dying after the commencement of the Act, and that the right of the respondents to maintenance during their lifetime under the Hindu law in force at the time of the death of Lingayya was not affected by the Act.
On the second question, the High Court held that the first respondent was an Avaruddha Stree of Lingayya, and was entitled to maintenance from his estate, though her husband was alive and the connection with Lingayya was adulterous.
The High Court agreed with the Subordinate Judge with regard to the quantum of maintenance.
On behalf of the appellants, it is contended that the respondents are not entitled to claim any maintenance from the estate of Lingayya under the Hindu law as it stood prior to the commencement of the Act, because (a) the first respondent is not a Dasi and the second, third and fourth respondents are not Dasiputras of Lingayya, and this point is concluded by the previous judgment of the High Court, which has now become final between the parties; (b) the husband of the first husband still alive, and the connection of the first respondent with Lingayya.
was adulterous during the period of her intimacy with Lingayya and while she bore him children; (c) the first respondent being a Brahmin adulteress and Lingayya being a Sudra, the connection was Pratiloma and illegal.
Now, under the Hindu law as it stood before the commencement of the Act, the claim of a Dasiputra or the son of a Dasi, that is, a Hindu concubine in the continuous and exclusive keeping of the father rested on the express texts of the Mitakshara, Ch.
I, s.12 V. 1, 2 and 3.
In the case of Sudras, the Dasiputra was entitled to a share of the inheritance, and this share was given to him not merely in lieu of maintenance but in recognition of his status as a son, see Gur Narain Das and another vs Gur Tahal Das and others(1).
But the illegitimate son of a Sudra by his concubine was not entitled to a share of the inheritance if he were the offspring of an incestuous connection, see Datti Parisi Nayudu vs Datti Bangaru Nayudu(2), or if at the time of his conception, the connection was (1)[1952] S.C.R. 869, 875.
(2) [1869] 4 Madras High Court Reports.
204, 125 adulterous, see Rahi and others vs Govind Valad Teja(1), Narayan Bharthi vs Laving Bharthi and others(2), Tukaram vs Dinnkar(3).
Such an illegimate son could not claim the status of a member of his father 's family and could not get a share of the inheritance as a Dasiputra under the express text of the Mitakshara.
For the reason, the previous judgment of the High Court rightly held that the second, third and fourth respondents were not Dasiputras of Lingayya, and could not claim the inheritance.
But the point whether they are entitled to maintenance out of the estate of Lingayya is not concluded by the previous judgment.
It is well recognised that independently of the express texts of the Mitakshara, Ch.
I section 12, V. 3, the illegitimate son of a Sudra was entitled to maintenance out of his father 's estate, though his mother was not a Dasi in the strict sense and though he was the result of a casual or adulterous intercourse.
It was not essential to his title to maintenance that he should have been born in the house of his father or of a concubine possessing the peculiar status therein.
See: Muttusawmy Jagavera Yettappa Naicker vs Vencataswara Yettayya(4).
The illegitimate son of a Sudra was entitled to maintenance out of his father 's estate, though at the time of his conception his mother was a married woman, her husband was alive and her connection with the putative father was adulterous, see Rahi vs Govind(2), Viraramuthi Udayan vs Singaravelu(5), Subramania Mudaly vs Valu(6).
According to the Mitakshara school of law, the illegitimate son a Sudra was entitled to maintenance from his father 's estate during his lifetime.
Under the Hindu law, as it stood prior to the commencement of the Act, the first, second and third respondents were, therefore, entitled to maintenance during their lifetime, out of the estate of Lingayya.
The claim of an Avaruddha Stree or woman kept in concubinage for maintenance for her lifetime against the estate of her paramour rested on the express text of Bai Nagubai vs Bai Monghibai(1), where the man and the woman were Hindus and the paramour was governed by the law of the Mayuka, Lord Darling said: "providing the concubinage be permanent, until the death of the paramour, and sexual fidelity to him be preserved, the right to maintenance is established; although the concubine be not kept in the family house of the deceased.
" The law of the Mitakshara is in agreement with the law of the Mayuka on this point.
In the instant case, the first respondent (1)[1875] I.L.R.1 Bom.97 (2)[1878] I.L.R.2Bom.140.
(3)[1931] 33 B.L.R. 280.
(4)[1868] ,220.
(5)[1877] I.L.R. 1 Mad.306 (6)[1911] I.L.R. 34 Mad.68.
(7)[1926] I.L.R. 50 Bom.604,614,(P.C.).
126 being continuously and exclusively in the keeping of Lingayya until his death for about 10 years, the concubinage has been found to be permanent.
She observed sexual fidelity to Lingayya during his lifetime, and after his death has continued to preserve her qualified chastity.
In Akku Pralhad vs Ganesh Pralhad(1), a Full Bench of the Bombay High Court held that a married woman who left her husband and lived with her paramour as his permanently kept mistress could claim the status of an Avaruddha Stree by remaining faithful to her paramour, though the connection was adulterous, and was entitled to maintenance from the estate of the paramour so long as she preserved her sexual fidelity to him.
This Full Bench decision overruled the decision in Anandilal Bhagchand vs Chandrabai(2)and followed the earlier decisions in Khemkore vs Umiashankar(3), and Bingareddi vs Lakshmawa(1).
The decision in Akku Pralhad vs Ganesh Pralhad(1) has been the subject of strong criticism in Mayne 's Hindu law and Usage, 11th Edn., article 683, p. 816 edited by Sri N. Chandrasekhara Aiyar and in a learned article in (1946) 1 M.L.J., Notes of Indian cases, p. 1, but the Full Bench of the Andhra Pradesh High Court in the instant case found themselves in complete agreement with the Bombay decision.
We are of the opinion that the Bombay decision lays down the correct law.
Avaruddha Stree, as understood by Vijnaneswara, includes a Swairini or adulteress kept in concubinage.
While dealing with the assets of a deceased Hindu not liable to partition, Mitakshara, Ch.
I, section 4, V. 22, he says, "Swairini and others who are Avaruddha by the father, though even in number, should not be divided among the sons".
Colebrooke 's translation of the passage is as follows: "But women (adulteresses and others) kept in concubinage by the father must not be shared by the sons, though equal in number".
In his commentary on Yajnavalkya 's Verse 290 in Vyavahara Adhyaya, Ch. 24 on Stree Sangrahana, Vijnaneswara, citing Manu, explains Swairini as a woman who abandons her own husband and goes to another man of her own Varna out of love for him.
Thus, a Swairini and other adulteress kept in concubinage could claim the status of an Avaruddha Stree.
The connection was no doubt immoral, but concubinage itself is immoral; yet it was recognised by law for the purpose of rounding a claim for maintenance by her and her illegitimate sons.
The paramour may be punishable for the offence of adultery, but the concubine is not punishable as abettor of the offence.
A concubine was not disqualified from claiming maintenance by reason of the fact that she was a Brahmin.
The claim of a concubine who was a respectable woman of the Brahmin caste and (1) I.L.R. (2)I.L.R (3) [1873] 10 Biombay High Court Reports.
(4)[1901] I.L. R. 127 her illegitimate sons for maintenance was allowed in Hargovind Kuari vs Dharam Singh(1).
No doubt, a Pratiloma connection is denounced by the Smriti writers and the Commentators, and before the Hindu Marriages Validity Act, 1949 (Act XXI of 1949) Pratiloma marriages between a Sudra male and a Brahmin female were declared invalid in Bai Kashi vs Jamnadas(2) and in Ramchandra Doddappa vs Hanamnaik Dodnaik(3), but even those cases recognise that a Brahmin concubine in the exclusive and continuous keeping of a Sudra until his death was entitled to claim maintenance.
We express no opinion on the question whether a Pratiloma marriage was valid under the old Hindu law, but we are satisfied that the claim of the respondents for maintenance cannot be defeated on the ground that the first respondent was a Brahmin and her paramour was a Sudra.
We are satisfied that the respondents were entitled to maintenance during their lives out of the estate of Lingayya under the Hindu law as it stored in 1948, when Lingayya died, in December 1949, when the suit was instituted and also in 1954, when the suit was decreed by the Subordinate Judge.
The question is whether this right is taken away by the Hindu Adoptions and Maintenance Act, 19 5 6, which came into force during the pendency of the appeal to the High Court.
The Act is intended to amend and codify the law relating to adoptions and maintenance among Hindus.
Section 4 of the Act is as follows: "4.
Save as otherwise expressly provided in this Act, (a) any text, rule or interpretation of Hindu law or any custom or usage as part of that law in force immediately before the commencement of this Act shall cease to have effect with respect to any matter for which provision is made in this Act; (b) any other law in force immediately before the commencement of this Act shall cease to apply to Hindus in so far as it is inconsistent with any of the provisions contained in this Act.
" Section 21 defines "dependants" as meaning certain relatives of the deceased, and under sub cl (viii), includes "his or her minor illegitimate son, so long as he remains a minor".
A concubine is not one of the persons within the definition of "dependants" given in section 21, and an illegitimate son is not a dependant when he ceases to be a minor.
Section 22 reads thus: "22.
(1) Subject to the provisions of sub section (2), the heirs of a deceased Hindu are bound to maintain the dependants of the deceased out of the estate inherited by them from the deceased.
128 (2) Where a dependant has not obtained, by testamentary or intestate succession, any share in the estate of a Hindu dying after the commencement of this Act, the dependant shall be entitled, subject to the provision of this Act, to maintenance from those who take the estate.
(3) The liability of each of the persons who takes the estate shall be in proportion to the value of the share or part of the estate taken by him or her.
(4) Notwithstanding anything contained in sub section (2) or sub section (3), no person who is himself or herself a dependant shall be liable to contribute to the mainten(2) or sub section (3), no person who is himself or herself the value of which is, or would, if the liability to contribute were enforced, become less than what would be awarded to him or her by way of maintenance under this Act.
" Sub section (1) of section 22 imposes upon the heirs of a deceased Hindu the liability to maintain the dependants of the deceased defined in section 21 out of the estate inherited by them from the deceased.
but this liability is subject to the provisions of sub section
(2), under which only a dependant who has not obtained by testamentary or intestate succession, any share in the estate of a Hindu dying after the commencement of the Act is entitled, subject to the provisions of the Act, to maintenance.
Specific provision is thus made in section 22 with regard to maintenance of the dependants defined in section 21 out of the estate of the deceased Hindu, and in view of section 4, the Hindu law in force immediately before the commencement of the Act ceases to have effect after the commencement of the Act with respect to matters for which provision is so made.
In terms, sections 21 and 22 are prospective.
Where the Act is intended to be retrospective, it expressly says so.
Thus, section 18 provides for maintenance of a Hindu wife, whether married before or after the commencement of the Act, by her husband, section 19 provides for the maintenance of a Hindu wife, whether married before or after the commencement of the Act, by her father in law, after the death of her husband, and section 25 provides for alteration of the amount of maintenance whether fixed by a decree of Court or by agreement either before or after the commencement of the Act.
Now, before the Act came into force, rights of maintenance out of the estate of a Hindu dying before the commencement of the Act were acquired, and the corresponding liability to pay the maintenance was incurred under the Hindu law in force at the time of his death.
It is a well recognised rule that a statute should be interpreted, if possible, so as to respect vested rights.
See Craies on Statute Law, 6th Edn.
(1963), p. 397.
We think that sections 21 and 22 read with section 4 do not destroy or affect any right of maintenance out of the estate 129 of a deceased Hindu vested on his death before the commencement of the Act under the Hindu law in force at the time of his death.
On the death of Lingayya, the first respondent as his concubine and the second, third and fourth respondents as her illegitimate sons had a vested right of maintenance during their lives out of the estate of Lingayya.
This right and the corresponding liability of the appellants to pay maintenance are not affected by sections 21 and 22 of the Act.
The continuing claim of the respondents during their lifetime springs (out of the original right vested in them on the death of Lingayya and is not rounded on any right arising after the commencement of the Act.
In section Kameswarammna vs SubramanYam(1), the plaintiff 's husband had died in the year 1916, and the plaintiff had entered into a compromise in 1924 fixing her maintenance at Rs. 240 per year and providing that the rate of maintenance shall not be increased or reduced.
The question arose whether, in spite of this agreement, the plaintiff could claim increased maintenance in view of section 25 of the .
It was held that, in spite of the aforesaid term of the compromise, she was entitled to claim increased maintenance under section 25.
This conclusion follows from the plain words of section 25, under which the amount of maintenance, whether fixed by decree or agreement either before or after the commencement of the Act, may be altered subsequently.
The decision was therefore, plainly right.
No doubt, there are broad observations in that case to the effect that the right to maintenance is a recurring right and the liability to maintenance after the Act came into force is imposed by section 22, and there is no reason to exclude widows of persons who died before the Act from the operation of section 22.
Those observations were not necessary for the purpose of that case, because the widow in that case was clearly entitled to.
maintenance from the estate of her deceased husband dying in 1916 under the Hindu law, as it stood then,independently of sections 21 and 22 of the Act, and in spite of the compromise timing the maintenance before the commencement of the Act, the widow could in view of section 25 claim alteration of the amount of the maintenance.
The decision cannot be regarded as an authority for the proposition that sections 21 and 22 of the Act affect rights already vested before the commencement of the Act.
We therefore, hold that the claim of the respondents to main tenance for their lives is not affected by the Act.
We see no reason to interfere with the concurrent finding of Courts below with regard to the quantum of maintenance.
In the result, the appeal is dismissed with costs.
Appeal dismissed.

summary:
The first respondent S, a Brahmin woman married to R, during the lifetime of her husband became the permanently kept concubine of L, a sudra by caste.
The other three respondents were the sons of S & L.
After L 's death, in a suit filed by the respondent against L 's brother and their sons (the appellants here), the sub judge, by a decree dated September 20, 1954, awarded maintenance to the respondents during their life time out of the estate of L and this award was upheld on appeal by the High Court.
During the pendency of the appeal before the High Court, the Hindu Adoptions and Maintenance Act of 1956 came into force and upon a contention being raised before it, the High Court held that the relevant provisions of the new Act did not have retrospective effect so as to adversely affect the rights of maintenance available to the respondents under the Hindu Law before the Act came into force.
In appeal before the Supreme Court, it was contended on behalf the appellants (1), that the respondents were not entitled to claim any maintenance from the estate of L under the Hindu Law in force before the 1956 Act because (a) the first respondent was not a Dasi and the other three respondents were not Dasiputras of L; (b) the husband of the first respondent having been alive, her connection with L was adulterous and she could not therefore be entitled to maintenance as an Avaruddha Stree and (c) the first responden being a Brahmin adulteress and L being a Sudra.
the connection was Pratiloma and illegal.
(2) That in any event, by virtue of section 4 of the 1956 Act, the Hindu Law prior to that Act ceased.
to have effect with respect to matters for which provision was made in the Act and that provision for maintenance, etc.
had in fact been made in sections 21 and 22 of the Act.
HELD ': (1) The respondents were entitled to maintenance during their lives out of the estate of L under the Hindu Law as it stood before the 1956 Act came into force.
[127 D] (a) It was well recognised that independently of the express texts of the Mitakshara, whereby, in the case of Sudras the Dasiputra was entitled to a share of the inheritance, the illegitimate son of a Sudra was entitled to maintenance out of his father 's estate though his mother was not a Dasi in the strict sense and though he was the result of a casual or adulterous relationship.
[125 C] Mitakshara Ch.
I, section 12 V. 1, 2 and 3 referred to; Case law reviewed.
(b) Under Mitakshara law.
a married woman who left her husband and lived with her paramour as his permanently kept mistress could claim the status of an Avaruddha Stree by remaining faithful 123 to her paramour, even though the connection was adulterous, and she was entitled to maintenance from the estate of the paramour so long as she preserved sexual fidelity to him.
[125 H, 126 B] Akku Prahlad vs Ganesh Prahlad I.L.R. affirmed Case law reviewed.
(c) A Brahmin concubine in the exclusive and continuous keeping of a Sudra until his death was entitled to claim maintenance.[127 B] Case law referred to.
Sections 21 and 22 are in terms prospective and these sections read with section 4 did not destroy or affect the right of maintenance of the respondents which vested in them on the death of L and before the commencement of the 1956 Act.
A] section Kameshwaramma vs Subramanyam A.I.R. 1959 Andhra Pradesh 269; distinguished.


judgement:
ivil Appeal No. 424 of 1963.
Appeal by special leave from the judgment and order dated April 8, 1960 of the Allahabad High Court in Civil Misc.
Writ No. 2650 of 1956.
C.B. Agarwala and O.P. Rana, for the appellant.
Yogeshwar Prasad, Harder Singh and M.V. Goswami, for the respondents.
The Judgment of the Court was delivered by Raghubar Dayal, J.
This appeal, by special leave, raises the question whether Zamindari Abolition Compensation Bonds (shortly termed Bonds) issued by the U.P. Government to intermediaries in payment of compensation payable on the basis of their rights under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (U.P. Act I of 1951), hereinafter referred to as the Act, have to be accepted by the appropriate authorities in payment of the agricultural income tax due from them.
131 The facts leading to the appeal, in brief, are that the respondent, an ex Zamindar, was assessed to agricultural income tax in the assessment year 1360 F corresponding to 1952 53, on the basis of the agricultural income accruing in the previous year 1359 F corresponding to 1951 52.
He did not pay the assessed tax and was further assessed to a penalty.
In the result, Rs. 868/ were to be paid by him for tax plus penalty.
The respondent 's writ petition contending that he was not liable to pay tax was dismissed by the High Court.
Thereafter, the agricultural income tax authorities took out proceedings for the realisation of the amount due from him.
On July 24, 1956, the respondent presented an application to the Agricultural Income tax Assessing Officer, Allahabad, stating that he had no ready cash to pay the dues and that he was therefore depositing Bonds of the value of Rs. 850/ and Rs. 18/ in cash and praying that the Bonds be accepted in payment of tax dues.
This application was rejected by an order stating that there was no rule for the acceptance of those bonds and that they be returned to the applicant.
On August 1, 1956, the respondent made a similar application to the Collector complaining that the Assessing Officer had no valid reason to refuse to take the Bonds when the Bonds were negotiable instruments.
This application was also rejected on a report of the Assessing Officer that the Bonds were not accepted in the settlement of agricultural income tax dues, that they were not negotiable and that there was no provision in the Act for their acceptance.
Thereafter, the respondent presented a writ petition to the High Court of Allahabad praying for the issue of a writ of certiorari quashing the orders of the Assessing Officer and the Collector, Allahabad, for the issue of a writ of mandamus directing them to accept the Bonds in lieu of the tax dues and, in any case, to deduct the amount from the rehabilitation grant due to the petitioner and for the issue of a writ of prohibition directing the opposite parties from adopting coercive measures for the realisation of the tax due from the petitioner.
The grounds mentioned in support of the prayers were that the Bonds were negotiable instruments and therefore refusal to accept them in payment of agricultural income tax was illegal, that they, having been issued by Government, could not be subsequently refused they being perfectly valid legal tender and that in view or r. 8A of the Rules made under the Act the amount due for tax should have been deducted from the interim compensation.
The counter affidavit filed by the Naib Tehsildar Agriculture Income tax Officer, Allahabad, on behalf of the State, stated that the respondent was assessed to agricultural income tax in the assessment year commencing from July 1, 1952 on the income derived in the previous year commencing from July 1, 1951, that the tax 132 had to be paid in four instalments and in default of payment a penality of Rs. 43/ was imposed for each default in payment of the four instalments and that the Bonds could not be accepted towards the tax due under section 6(d) of the Act read with r. 48 of the Rules as the tax had fallen due in 1360 F, corresponding to July 1, 1952 to June 30, 1953.
The High Court held that the orders of the Agricultural Income tax Assessing Officer and the Collector were wrong as the ground for refusing to accept the Bonds in payment of the tax on the ground that there was no rule or statutory provision for their acceptance was incorrect and appeared to have been given in complete ignorance of the provision of law.
Reference was made to the provisions of section 6(d) of the Act and r. 8A.
The High Court was of the opinion that these have been completely ignored by the two officers.
It, therefore thought that the orders were liable to be quashed and that adequate relief would be available to the respondent if a direction was given to the Collector to decide his application dated August I, 1956, in accordance with law.
The High Court therefore quashed the order of the Collector dated August 24, 1956 and directed him to decide the respondent 's application afresh in accordance with law as indicated above.
The appellant thereafter obtained special leave from this Court and appealed against the order of the High Court dated April 8, 1960.
The main contention for the appellant before us is that neither section 6(d) of the Act nor r. 8A provides that Bonds can be accepted in payment of agricultural income:tax and that therefore the order of the Collector dated August 24, 1956 was correct.
For the respondent it is urged that r. 8A makes it mandatory for the Agricultural Income tax Officer to realise the agricultural income tax due from the compensation payable and that compensation continues to be payable till the Bonds are actually encashed, Section 6(d) of the Act, as originally enacted, did not provide, among the consequences of the vesting of the estate in the State, that arrears on account of agricultural income tax might be realised by deducting the amount from the compensation money payable to the intermediary under Chapter III.
An amendment was made in this clause (d) by section 3 of U.P. Act XVI of 1953, with retrospective effect from July 1, 1952.
and the relevant portion of the provision after amendment reads thus: "All arrears of revenue, . or an arrear on account of tax on agricultural income assessed under the U.P. Agricultural Income tax, Act, 1948 for any period prior to the date of vesting shall continue to be recoverable from such intermediary and may, without prejudice to any other mode of recovery be realised by deducting the amount from the compensation money payable to such intermediary under Chapter III;" 133 Rule 8A was added to the rules by Notification No. 3266/I A 1056 1954 dated August 17, 1954 and its relevant portions read: "8 A. Without prejudice to the right of the State Government to recover the dues mentioned below by such other means, as may be open to it under law: (1) all arrears of land revenue in respect of the estates which have vested in the State Government as a result of the notification under Section 4 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (Act 1 of 1951), and of tax on agricultural income assessed under the U.P. Agricultural Income tax Act, 1948 (U.P. Act III of 1949) due from an intermediary for any period prior to the date of vesting shall be realised: (a) in the case of an intermediary who was assessed to land revenue of Rs. 10,000 or more from the amount of interim compensation due to him, and (b) in the case of an intermediary who was assessed to a land revenue of less than Rs. 10,000 per annum by deduction from the amount of compensation payable to It is clear from the above provisions that neither section 6(d) nor r. 8A provide that Bonds must or can be accepted in payment of tax on agricultural income.
It has been held by this Court in Collector of Sultanpur v Raja Jagdish Prasad Sahi(1) that the provisions of section 6(d) of the Act would apply to arrears on account of agricultural income tax assessed in 1360F on the basis of agricultural income during the year 1359F and that the provisions of r. 8A are mandatory.
It is not urged for the appellant that r. 8A is inconsistent with the provisions of section 6(d) which provides that arrears of tax may be realised from the compensation payable and therefore appears to give a discretion to.
the authorities to realise the arrears of tax from the compensation payable.
We do not agree with the contention for the respondent that the compensation payable to the intermediary continues to remain payable even after the compensation Bond 's had been delivered to him.
Section 68 of the Act provides that the compensation under the Act shall be payable in cash or in bonds or partly in cash and partly in bonds as may be prescribed.
It is clear therefore that the delivery of Bonds to the intermediary is in payment of the compensation.
The claim for compensation is thus satisfied when the compensation has been paid in accordance with the provisions of section 68.
This is also clear from the relevant rules for the payment of compensation.
(1) 134 Rule 62 as it stood prior to November 29, 1956, provided that the compensation would be paid in negotiable bonds which would be described as Zamindari Abolition Compensation Bonds.
Rule 63 as it then stood provided that the Bonds would be issued in specified denominations and would bear interest at the specified rate on the principal that had become payable calculated from the date of vesting.
Rule 64 provided that interest together with the principal of a Bond would be paid in equated annual installments except for the last, as described in Appendix IV during the period of 40 years beginning from the date of vesting, provided that any Bond might be redeemed at an earlier date at the option of the Government.
Rule 65 provided that the instalments due on a Bond from the date of its effacement would be payable on presentation from and after July 1st next after the delivery of the Bond to the intermediary.
These rules show that the compensation does not remain payable alter the delivery of the Bonds and that the Bonds could not be cashed before the due date for their encashment.
The fact that the Bonds are negotiable does not make them legal tender and does not make it obligatory on anyone, including Government, to accept them in payment of any dues.
The only result of their being treated as negotiable instruments is that the owner of the Bends can transfer them to any person who is agreeable to purchase them.
When the compensation payable to an intermediary has been paid in the form of cash or Bonds, that compensation ceases to be payable.
Section 6(d) of the Act and r. 8A of the rules do not.
as already stated, provide for the receipt of agricultural income tax in the form of Bonds.
We are therefore of opinion that the Collector cannot be said be in error in not accepting the Bonds which had been delivered and which were not even cashable at the time, in payment of the arrears of agricultural income tax payable under the Agricultural Income tax Act.
We accordingly allow the appeal, set aside the order of the High Court and restore that of the Collector dated August 24, 1956 The respondent will pay the costs of the appeal to the appellants Appeal allowed.

dataset_name: IN-Abs

summary:
The respondent who was assessed to agricultural income tax made an application to the Assessing Officer depositing compensation Bonds and prayed that the Bonds be accepted in payment of tax dues.
This was rejected stating that there was no rule for acceptance of these bonds.
Another attempt by the respondent was also turned down by the Collector.
Thereafter the respondent presented a writ petition in the High Court for directing them to accept the Bonds in lieu off the tax dues.
The High Court was of the opinion that the two officers completely ignored the provisions of section 6(d) of the Act and r. 8A, and directed the Collector to decide the respondent 's application in accordance with law.
In appeal by special leave: HELD: (i) Neither section 6(d) nor r. 8A provide that the Bonds must or can be accepted in payment of tax on agriculture income.
[133 E] Collector of Sultanpur vs Raja Jagdish Prasad Sahi. , referred to.
(ii) When the compensation payable to an intermediary has been paid in the form of cash or Bonds.
that compensation ceased to be payable.
The fact that the Bonds are negotiable does not make them legal tender and does not make it obligatory on anyone including Government to accept them in payment of any dues.
The only result of their being treated as negotiable instruments is that the owner of the Bonds can transfer them to any person who is agreeable to purchase them.
[134 D F]


judgement:
vil Appeal No. 281 of 1962.
Appeal by special leave from the judgment and order dated January 14, 1959 of the Bombay High Court in Special Civil Application No. 2145 of 1958.
S.G. Patwardhan and R.H. Dhebar, for the appellants.
S.T. Desai, J.B. Dadachanji, O.C. Mathur and Ravinder Narain, for respondents No. 1, 2, 4, 6, 10 and 12.
The Judgment of the Court was delivered by Ramaswami, J.
Respondents nos.
1 to I 1 were the Jagirdars of Waghach State in former Sankeda Mewar in Reva Kantha Agency which now forms part of the State of Gujarat.
They claimed that they were the full owners of all the land including forest areas in the said State and exercised full revenue power during their regime.
There were 39 villages in Waghach State in all of which there were forests.
Except for the lands which were cultivated, all the lands in the said villages were forest lands.
Respondents nos.
1 to l1 further claimed that they had full proprietary rights over the forest lands and enjoyed the produce as full owners thereof.
By the agreement of merger dated June 1, 1948 the State of Waghach was merged with the State of Bombay with effect from June 10, 1948.
On August 19, 1953, respondents 1 to 11 entered into an agreement with respondent No. 12 whereby respondent No. 12 became entitled to cut and remove all species of trees from the forest lands in the 39 villages for a period of ten years.
On August 1, 1954, the Bombay Merged Territories and Areas (Jagirs Abolition) Act, 1953 (Act XXXIX of 1954) came into force.
This Act was passed with the object of abolishing jagirs in the merged territories and merged areas in the State of Bombay and providing for matters consequential and incidental thereto.
The jagirs were classified, under the Act, into two categories, namely, (1) Proprietary jagirs and (2) Non proprietary jagirs.
It is the undisputed position in the present case that the jagirs fell in the category of proprietary jagirs.
Under section 5 of the Jagirs Abolition Act the Jagirdars became occupants in the lands including forest areas which were in their possession before coming into force of the Act.
On July 6, 1956 the State Government issued a notification under section 34(A) of the Indian Forest Act.
declaring all uncultivated lands in the said 39 villages to be forests for 179 the purposes of Ch.
5 of the Act.
On March 19, 1953 the Divisional Forest Officer wrote a letter to the respondents wherein he stated that all the rights of the jagirdars had been abolished by the Jagirs Abolition Act and that the reserved species of trees standing on the lands belonged to the State Government.
He, therefore, asked the respondents to refrain from cutting teak and Pancharao trees standing in the forest lands.
On July 11, 1958.
the Divisional Forest Officer wrote another letter to the respondents in which he stated that the reserved species of trees teak, blackwood and sandalwood vested in the State Government and, therefore, prohibited the respondents from cutting and removing the material from those trees.
He also warned the respondents that if they cut and removed the material of such trees they will be liable to prosecution.
On the same date he wrote another letter to the respondents and informed them that the material obtained by cutting teak and blackwood trees which was tying in the forest lands, had been advertised for sale.
The respondents thereafter filed a Special Civil Application No. 2146 of 1958 in the High Court of Judicature at Bombay against the applicants for the grant of a writ in the nature of mandamus under article 226 of the Constitution directing them to cancel the orders contained in the fetters of the Divisional Forest Officer dated March 19, 1958 and July 11, 1958 and to restrain the appellants from enforcing the said orders.
The High Court, by its judgment dated January 14, 1959, allowed the application of the respondents holding that after coming into force of the Jagirs Abolition Act the rights of the jagirdars in the forest lands and the trees were extinguished but at the same time jagirdars became occupants of the forest lands under section 5(1)(b) of the said Act and they accordingly became entitled to the trees standing on the forest lands.
The High Court held that all the trees standing on the forest lands belonged to the respondents 1 to 11 and the same did not belong to the State Government and consequently the State Government was not entitled to sell the material obtained by cutting the trees.
Accordingly the High Court issued an injunction restraining the appellants from preventing the respondents from cutting any species of trees standing in the forest lands in the villages in question and from removing and disposing of the produce thereof.
The High Court further held that this order would be without prejudice to the right of the State Government, if they had any, to reserve any class of trees under section 40 of the Land Revenue Code or under any other law for the time being in force, or to impose such restrictions as it may be lawful for them to do, under the provisions of the Indian Forest Act and the Rules made thereunder.
The present appeal is brought by special leave on behalf of the State of Gujarat and the other appellants against the order of the High Court of Judicature at Bombay in the Special Civil Application No. 2146 of 1958.
180 The question presented for determination in this case is whether the trees standing in the forest lands of the 39 villages in question belong to the jagirdars respondents 1 to 11 or to the State Government and whether the respondents have a right to cut and remove the trees including the reserved species of trees from the forest lands of these villages.
Section 3 of the Bombay Merged Territories and Areas (Jagirs Abolition) Act, 1953 (hereinafter to be called the Jagirs Abolition Act) states: "3.
Notwithstanding anything contained in any usage, grant, sand, order, agreement or any law for the time being in force, on and from the appointed date, all jagirs shall be deemed to have been abolished; (ii) save as expressly provided by or under the provisions of this Act, the right of a jagirdar to recover rent or assessment of land or to levy or recover any kind of tax, cess, fee, charge or any has, and the right of reversion lapse, if any, vested in a jagirdar, and all other rights of a jagirdar or of any person legally subsisting on the said date, in respect of a village as incidents of jagir shall be deemed to have been extinguished.
" Under section 4 all jagir villages are made liable to the payment of land revenue in accordance with the provisions of the Code and the rules made thereunder, and the provisions of the Code and the rules relating to unalienated lands are made applicable to such villages.
Section 5 (1) (b) provides as follows: "5.
(i) In a proprietary jagir village, (b) in the case of land other than Gharkhed land.
which is in the actual possession of the jagirdar or in the possession of person other than a permanent holder holding through or from the jagir dar, such jagirdar.
shall be primarily liable to the State Government for the payment of land revenue due in respect of such land and shall be entitled to all the rights and shall be liable to all the obligations in respect of such land as an occupant under the Code or any other law for the time being in force: 181 Section 8 of the Jagirs Abolition Act states: "8.
All public roads.
lanes and paths.
the bridges.
ditches.
dikes and fences.
on or beside the same.
the bed of the sea and of harbouts.
creeks below high water mark.
and of rivers.
streams, nalas.
lakes.
wells and tanks and all canals and water courses.
and all standing and flowing water.
all unbuilt village site lands.
all waste lands and all uncultivated lands (excluding lands used for building or other non agricultural purposes) which are situate within the limits of any jagir village, shall.
except in so far as any rights of any person other than the jagirdar may be established in or over the same and except as may otherwise be provided by any law for the time being in force.
vest in and shall be deemed to be.
with all rights in or over the same or appertaining thereto.
the property of the State Government and all rights held by a jagirdar in such property shall be deemed to have been extinguished and it shall be lawful for the Collector.
subject to the general or special orders of the State Government.
to dispose them of as he deems lit.
subject always to the rights of way and other rights of the public or of individuals legaliy subsisting.
Section 9 reads: "9.
The rights to trees specially reserved under the .
or any other law for the time being in force.
except those the ownership of which has been transferred by the State Government under any contract.
grant or law for the time being in force.
shall vest in the State Government and nothing in this Act shall in any way affect the right of the State Government to apply the provisions of the .
as in force in the pre Reorganisation State of Bombay.
excluding the transferred territories to forests in a Jagir Village.
" Section 10 provides as follows: "10.
Nothing in this Act or any other law for the time being in force.
shall be deemed to affect the rights of any jagirdar subsisting on the appointed date to mines or mineral products in a jagir village granted or recognised under any contract.
grant or law for the time being in force or by custom or usage.
" Section 11 provides for compensation to Jagirdars in the manner provided therein.
Section 2(2) of the Jagirs Abolition Act states that any word or expression which is defined in the Code and not defined in the Act shall be deemed to have the meaning given to it in the Code.
182 Section 2(1)(ii) of the Jagirs Abolition Act defines the 'Code ' to mean 'the Bombay Land Revenue Code, 1879 '.
Section 3(16) of the Bombay Land Revenue Code defines "Occupant" as a holder in actual possession of unalienated land, other than a tenant: provided that where the holder in actual possession is a tenant, the landlord or superior landlord, as the case may be, shall be deemed to be occupant.
Section 3(17) defines "Occupancy" to mean a portion of land held by an occupant.
Under section 3(19) of the Code "Occupation" means possession.
Section 40 of the Bombay Land Revenue Code provides as follows: "40.
In villages, or portions of villages, of which the original survey settlement has been completed before the passing of this Act, the right of the Government to all trees in unalienated land, except trees reserved by the Government or by any survey officer, whether by express order made at, or about the time of such settlement, or under any rule, or general order in force at the time of such settlement, or by notification made and published at, or at any time after, such settlement, shall be deemed to have been conceded to the occupant.
But in the case of settlement completed before the passing of Bombay Act 1 of 1865 this provision shall not apply to teak, black wood or sandal wood trees.
The right of the Government to such trees shall not be deemed to have been conceded, except by clear and express words to that effect.
"In the ease of villages or portions of villages of which the original survey settlement shall be completed after the passing of this Act, the right of the Government to all trees in unalienated land shall be deemed to be conceded to the occupant of such land except in so far as any such rights may be reserved by the Government, or by any survey officer on behalf of the Government, either expressly at or about the time of such settlement, or generally by notification made and published at any time previous to the completion of the survey settlement of the district in which such village or portion of a village is situate.
"When permission to occupy land has been, or shall hereafter be granted after the completion of the survey settlement of the village or portion of a village in which such land is situate, the said permission shall be deemed to include the concession of the right of the Government to all trees growing on that land which may not have been, or which shall not hereafter be, expressly reserved at the time of granting such permission, or which may not have been reserved, under any of the foregoing provisions of this section, at or about the time of the original survey settlement of the said village or portion of a village.
"Explanation.
In the second paragraph of this section, the expression "In the case of villages or portions of villages of which 183 the original survey settlement shall be completed after the passing of this Act" shall include cases where the work of the original survey settlement referred to therein was undertaken before the passing of this Act as well as cases where the work of an original survey settlement may be undertaken at any time after the passing of this Act.
" Section 41 states: "41.
The right to all trees specially reserved under the provision of the last preceding section, and to all trees.
brushwood, jungle, or other natural product growing on land set apart for forest reserves under section 32 of Bombay Act I of 1865 or section 38 of this Act.
and to all trees, brushwood, jungle or other natural product, wherever growing, except in so far as the same may be the property of individuals or of aggregates of individuals capable of holding property, vests in the State Government and such trees, brushwood, jungle or other natural product shall be preserved or disposed of in such manner as the State Government may from time to time direct.
" Section 65 states: "65.
An occupant of land assessed or held for the purpose of agriculture is entitled by himself, his servants, tenant, agents, or other legal representatives, to erect farm buildings, construct wells of tanks, or make any other improvements thereon for the better cultivation of the land, or its more convenient use for the purpose aforesaid.
But, if any occupant wishes to use his holding or any part thereof for any other purpose the Collector 's permission shall in the first place be applied for by the occupant.
The Collector, on receipt of such application, (a) shall send to the applicant a written acknowledgment of its receipt, and (b) may, after due inquiry, either grant or refuse permission applied for; When any such land is thus permitted to be used for purpose unconnected with agriculture it shall be lawful for Collector, subject to the general order of the State Government to require the payment of a fine in addition to any new assessment which may be leviable under the provisions of section 48.
" 184 Section 68 states that the occupant 's rights are conditional, and is to the following effect: "68.
An occupant is entitled to the use and occupation of his land for the period, if any, to which his tenure is limited, or if the period is unlimited, or a survey settlement has been extended to the land, in perpetuity conditionally on the payment of the amounts due on account of the land revenue for the same, according to the provisions of this Act, or of any rules made under this Act, or of any other law, for the time being in force, and on the fulfilment of any other terms or conditions lawfully annexed to his tenure; The High Court expressed the view that under section 3 of the Jagirs Abolition Act the rights of the jagirdars in the forest lands and the trees which grew upon them were extinguished.
The High Court further held that with the coming into force of the Jagirs Abolition Act jagirdars became the occupants in the forest lands under section 5(1)(b) of that Act and the respondents 1 to 11 become.
therefore, entitled to the trees standing on the forest lands.
In our opinion, the view expressed by the High Court is erroneous and must be reversed.
It is manifest that under section 3 of the Jagirs Abolition Act all jagirs were abolished and all the rights of the jagirdars were extinguished, save those rights which are expressly provided by other provisions of the Act itself.
It is also manifest that under section 5(1)(b) of the Act the only rights conferred on the jagirdars are the rights of occupancy of the forest lands.
In our opinion, the rights of the occupants under the Bombay Land Revenue Code do not include the right to cut and remove the trees from the forest lands.
The reason is that the 36 villages in dispute have not been surveyed or settled and until there is completion of the survey and settlement there is no question of concession on the part of the State Government of the right to the trees in favour of the occupants.
Section 40 of the Bombay Land Revenue Code provides that in the case of villages of which the original survey settlement has been completed before the passing of the Act, the right of the Government to all trees in unalienated land.
except trees reserved by the Government or by any survey officer, whether by express order made at, or about the time of such settlement, or under any rule, or general order in force at the time of such settlement, or by notification made and published at, or at any time after, such settlement, shall be deemed to have been conceded to the occupant.
The second para of section 40 deals with concession of Government rights to trees in case of settlements completed after the passing of the Act.
The second para states that in the case of villages or portions of villages of which the original survey settlement shall be completed after the passing of the Act, the right of the Government to all trees in unalienated land shall 185 be deemed to be conceded to the occupant of such land except in so far as any such rights may be reserved by the Government, or by any survey officer on behalf of the Government, either expressly at or about the time of such settlement, or generally by notification made and published at any time previous to the completion of the survey settlement.
The third paragraph of section 40 relates to the concession of Government rights to trees in case of land taken up after completion of settlement.
The section states that when permission to occupy land has been granted after the completion of the survey settlement of the village, the said permission shall be deemed to include the concession of the right of the Government to all trees growing 'on that land which may not have been, or which shall not hereafter be, expressly reserved at the time of granting such permission.
In 'the present case, the 36 villages in question have admittedly not been surveyed and settled and the necessary conclusion to be drawn is that the rights of the State Government to trees cannot be deemed to be conceded to the occupants of the land.
The assumption is implicit in section 40 of the Bombay Land Revenue Code that all the trees standing and growing on the lands with the occupants belong to the State Government and not to the occupants and until there is a survey and settlement of the village the question of concession on the part of the State Government of rights to the trees does not arise.
In other words, until there is survey and settlement of the land there is no implication in favour of respondents 1 to 11 that they had concession of the rights of the Government to the trees standing on the forest lands.
On behalf of the respondents Mr. S.T. Desai referred to section 9 of the Jagirs Abolition Act and stressed the argument that the right of trees mentioned in that section alone vested in the State Government and there was no other reservation in the Act or any other law, in favour of the State Government.
It was contended that by implication it must be held that the jagirdars had rights to the trees in the forest areas apart from those mentioned in section 9 of the Act.
We do not accept this argument as correct.
Section 3 of the Act provides for abolition of jagirs and under that section all jagirs shall be deemed to have been abolished on and from the appointed date i.e., August 1, 1954 and all rights of a Jagirdar, in respect of a jagir village as incidents of jagir, shall be deemed to have been extinguished by virtue of the section unless there is express provision in the Act saving such right.
In our opinion, section 9 of the jagirs Abolition Act is not an express provision saving the right of the jagirdars with regard to the trees and the argument of Mr. Desai must be rejected on this point.
Our view is supported by the language of section 10 of the Jagirs Abolition Act which expressly saves the right of the jagirdar to mines or mineral products in a jagir village subsisting on the appointed day.
There is no provision in the Jagirs Abolition Act corresponding to section 10 with regard to the saving of the right to the trees in favour of the jagirdars.
We are accordingly of the opinion that after coming into 186 force of the Jagirs Abolition Act respondents 1 to 11 became occupants in respect of the forest lands in the 36 villages and the only rights which they have are those of occupants under the provisions of the Bombay Land Revenue Code and such rights do not include the right to cut and remove the trees from the forest lands of the villages in question.
In our opinion, the High Court was in error in holding that the respondents were entitled to cut and remove all species of trees standing in the forest lands of the 36 villages in question.
We accordingly allow this appeal, set aside the order of the High Court dated January 14, 1959 in Special Civil Application No. 2146 of 1958 and order that the Special Civil Application should be dismissed.
The appellants are entitled to costs both in this Court and in the High Court.
Appeal allowed.

summary:
The first eleven respondents were Jagirdars in a former state which was merged with the State of Bombay in June 1948.
In August 1953, these respondents entered into an agreement with respondent No. 12, whereby, the latter could cut and remove all species of trees from forest lands in 39 villages over which the first eleven respondents claimed full proprietary rights.
On August, 1, 1954, the Bombay Merged Territories and Areas (Jagirs Abolition) Act, 1953 came into force whereby all Jagirs in the merged territories in Bombay State were abolished.
Under section 5 of the Act, the Jagirdars became 'occupants ' in the lands including forest areas which were then in their possession.
On July 6, 1956 the State Government issued a notification under section 34(A) of the Indian Forest Act, declaring all uncultivated lands in the 39 villages to be forests for the purposes of Ch.
5 of the Act.
Thereafter, in March and July 1958, the Divisional Forest Officer wrote to the respondents stating, inter alia, that all the rights of the Jagirdars having been abolished, the reserved species of trees on the lands belonged to the State Government and prohibiting them from cutting and removing the trees.
The respondents thereupon filed a writ petition, seeking a direction to the appellants to cancel, and to restrain from enforcing the orders contained in the letters of the Divisional Forest Officer.
The High Court allowed the petition, mainly on the ground that as the Jagirdars became occupants within the meaning of the Bombay Land Revenue Code of the forest lands under section 5(1)(b) of the Abolition Act, they, and not the State Government, were entitled to the trees standing on them.
In the appeal to the Supreme Court it was further contended on behalf of the respondents that as section 9 of the Act vested some of the rights to trees in forest areas in the State Government, by implication, all the remaining rights belonged to the Jagirdars.
HELD: Under section 5(1)(b) of the Abolition Act, the only rights conferred on the Jagirdars were the occupancy rights of the Forest lands; under section 40 of the Bombay Revenue Code the rights of occupants did not include the right to cut and remove trees from the forest lands except in the case of villages as which the original survey and settlement has been completed, whereupon the Government 's rights to the trees, unless expressly or otherwise reserved, are deemed to have been conceded to the occupant.
In the present case the villages in question had admittedly not been surveyed and 178 settled and therefore the rights of the State Government to the trees could not be deemed to have.
been conceded to the respondents as occupants.
[184 E 185 E] By section 3 of the Abolition Act all Jagirs and all the rights of a Jagirdar were extinguished unless there was any express provision in the Act saving any right.
It could not be said that because section 9 of the Act reserved certain rights to trees of the State Government and by implication the Jagirdars had all the other rights, there was an express provision saving the rights of the Jagirdars within the meaning of section 3.
[185 F H]


judgement:
Appeal No. 216 of 1952.
Appeal from the judgment and decree dated September 15, 1959 of the Bombay High Court in First Appeal No. 600 of 1955 from Original Decree.
A.V. Viswanatha Sastri, Rameshwar Nath, S.N. Andley and P.k.
Vohra, for the appellant.
S.N. Pershad, M.H. Chhatrapati, 1.
B. Dadachanji, O.C. Mathur and Ravinder Narain, for respondents Nos. 1 and 2.
K.L. Hathi and R.H. Dhebar, for respondent No. 3.
The Judgment of the Court was delivered by Raghubar Dayal, J.
There is a temple known as Shri Chandraprabhu Khandelwal Jain Temple at Dhulia.
Gulabchand Hiralal, father of appellant Hukumchand Gulabchand Jain, a leading member of the Khandelwal Jain Community at Dhulia, looked after the temple for over 40 years till his death sometime in 1950.The appellant looked after it after his father 's death.
Two members of the community interested in the temple, held to be a public temple, instituted the suit against the appellant and the Charity Commissioner, Bombay, praying for the removal of the appellant from possession of the trust properties, for the rendering of true and faithful accounts of all the assets and income of the trust property and for the framing of the scheme for the administration of the trust.
It was alleged in the plaint that the appellant 's father was maintaining all accounts of income and expenditure concerning the temple and that the funds of the temple were many times advanced at interest and that the temple had come to hold large properties, movable and immovable.
It was further alleged that the temple had a large income from offerings, house rent etc., but the appellant and his deceased father had not been maintaining the accounts properly and that the.
funds of the temple were being advanced at interest, though no such income was shown as received recently by the appellant.
The appellant, in his written statement, denied that the amount was so advanced at interest as alleged by the plaintiffs and stated that his father had been keeping a ledger in the name of the temple in the accounts in which its income and expenditure had been duly entered since over 40 years and that the appellant himself had kept separate account books for the temple since October 30, 1951.
He denied that any income recently received had not been shown in the accounts.
The trial Court held that the appellant had committed minor irregularities in the maintenance of the accounts, that he was liable to render accounts and that the Commissioner was to ascertain the 93 amount due from the appellant on taking the accounts.
It definitely held it not established that income, if any, derived by way of interest on loans advanced out of the funds of the temple had not been credited to the account of the temple and that no instance of fraudulent or dishonest misappropriation of temple funds on the part of defendant No. 1 or his father had been established.
It found that the meeting of the community had passed a resolution on August 22, 1958, by an overwhelming majority, sanctioning the accounts submitted by the appellant and that only two persons who opposed against the resolution were the two plaintiffs of the suit.
The Commissioner found that on the date of the institution of the suit, i.e. on February 17, 1954, Rs. 10.088 10 3 were due for principal and Rs. 16,853 6 0 were due for interest, from the appellant.
The plaintiffs admitted the report to be correct but the appellant contended that under the rule of damdupat interest exceeding the amount of principal could not be allowed.
The appellants contention was accepted and the trial Court passed a decree on April 23, 1955, for Rs. 20,177 4 6 against the appellant, with future interest at 6 per cent per annum.
We are not now concerned with the other items of the decree and therefore we make no reference to them.
The appellant deposited the amount due under the decree on July 18, 1955.
The plaintiffs appealed and claimed a larger amount on various grounds, including the one that the principle of damdupat should not have been applied and that interest on the balance of the trust fund should have been calculated and compound interest allowed in place of simple interest on the amount of the trust fund in the hands of the defendant or his father.
The appellant filed a cross objection against the allowing of interest on the balance of the trust funds with his father and himself.
The High Court agreed with the plaintiffs that the principle of damdupat could not be applied in the circumstances of the case and that compound interest should have been charged against the appellant.
It therefore set aside the decree passed by the trial Court in so far as it determined the amount due to the temple and referred the case back to the trial Court for reassessment of the amount due to the temple having due regard to the observations made in its judgment.
On an application by the appellant, certificate under article 133(1) of the Constitution was granted.
The appellant has then filed this appeal and questioned the correctness of the order of the High Court holding him liable to pay compound interest and holding that the principle of damdupat was not applicable in this case.
The High Court said in its judgment that it was the contention of the plaintiffs that the appellant 's father and the appellant 3(D)2SCI 8 94 used the funds of the temple in their business and that they were therefore liable to account on that footing.
There was no such allegation in the plaint or in the memorandum of appeal to the High Court.
The High Court referred to the khulasa submitted to the Commissioner by the plaintiffs and stated that it was specifically alleged therein that the amount was being used by the defendant and his father in business.
Support for such an allegation was found in the statement Exhibit 24 of the appellant 's father in 1931.
Reference was also made to the fact that the appellant had nowhere denied the fact of the moneys of the temple being used for the purpose of the business and to the non production of certain books of account by the appellant.
His statement that they were not available was not accepted.
The High Court recorded the finding in this form (at p. 43 of the appeal record): "Under these circumstances it would not be an unreasonable inference to draw that the amounts belonging to the temple were being utilised by Defendant No. 1 (the appellant) and before him by his father in their business." Having come to this conclusion and to the view that the position of the appellant 's father and the appellant vis a vis the temple funds was that of a trustee, the High Court considered whether the plaintiffs could claim interest on equitable grounds and held that they could claim compound interest with yearly rests, as the money had been used in the business or had been so mixed up with their own funds that it was impossible to say that they had not so used it.
The High Court did not apply the rule of damdupat as the liability of the appellant was not rounded on loans or on any contract.
It is contended for the appellant that there was neither an allegation nor evidence to the effect that the trust funds had been used in his business by the appellant 's father or the appellant and that therefore the appellant was not liable to pay compound interest on the trust funds in his hands or in the hands of his father.
It was further urged that if interest was payable by the appellant 's father or the appellant on the balance of trust funds, it should be simple interest and the amount of interest could not be more than the amount of principal due on the date of the institution of the suit on the principle of damdupat.
It has not been established in this case that the trust funds with the appellant or his father were used in their trade or business.
We have already referred to the finding Of the High Court in this respect.
It is a very halting finding.
The High Court has not definitely held it proved that the funds were used in the business.
We say so, as the High Court has said (at p. 46 of the appeal record): "Since we are of the view that the defendant No. 1 and his father have used the monies of the temple in their business or have so mixed it up with their own funds that it is impossible to say that they have not so used it . " 95 This is not a clear cut definite finding that the funds had been used in business or trade.
The earlier finding noted at p. 43 of the appeal record and quoted by us earlier, loses its force in view of what has been said later.
There is no evidence about such use of the money.
There was no such allegation in the plaint.
It was said in the khulasa dated December 22, 4954 and included in the Additional Report of the Commissioner of even date: "Because the amount that was received by the defendant in respect of the temple could be utilised by the defendant in his business he used to pay interest thereon at the rate of annas 8.
" This too, is not, as stated by the High Court, a specific allegation that the amount was being used in business.
The plaint did not even say that the amount had been always advanced on loan.
What it said in para l is that the funds of the temple were many times advanced at interest and that no income from interest recently received had been shown in the accounts.
No evidence has been led about the regular advance of the trust funds as loans.
On the other hand, the accounts show only a few entries about the receipt of interest on the trust funds.
The statement, Exhibit 24, made by the appellant 's father on October 26, 1931, in Regular Suit No. 377 of 1931, was in a suit instituted by the appellant 's father for the recovery of money advanced on a mortgage at compound rate of interest.
Gulabchand, father of the appellant, stated in examination in chief, that the funds lent were of the temple, the transactions of the temple were in his name and that interest at compound rate had been agreed upon.
In cross examination he stated that he had with him funds of the temple and that he paid for them compound interest at 8 annas.
This statement does not necessarily mean that the appellant 's father had been crediting the temple accounts with compound interest, at the rate of 8 annas, on the temple funds in his hands.
Gulabchand made another statement on January 12, 1950.
It is exhibit 23.
This statement was made in proceedings on Miscellaneous Application No. 110 of 1949.
He stated: "Suit No. 377 of 1931 had been filed.
In the same my deposition has been recorded.
I have made a statement that the amount was of the temple.
But I gave a statement to that effect as that amount has been set apart for the temple.
I have given a statement that after the mortgage deed was executed and before the suit was filed, I set apart this amount for the temple and that the transaction of the temple was in my name.
That statement is correct, 96 If it is the amount of the Mandir, I credit it to the Khata of the Mandir.
I do not pay interest for the amount of the Mandir.
As there was interest in the mortgage deed, I have taken interest at eight annas from Mangilal.
I have made a statement that I have with me the amount of the temple and that I pay interest for it at eight annas.
" These statements, taken together, lead to the inference that Gulabchand was not crediting interest on the temple funds in the accounts except when he received interest on the amounts lent and that this statement made in 1931 was in connection with the amount lent on a mortgage deed.
He charged compound interest from the mortgagor and therefore credited that interest in the accounts.
It is significant to note that the four entries about interest were for the years 1927 to 1931 when Suit No. 377 of 1931 was filed.
The fact that no interest appears to have been credited after 1931 bears out the inference we derive from the statements of Gulabchand.
There is another matter which throws light on this question and tends to support our conclusion.
The report submitted ' by the Commissioner on November 29, 1954 shows that the balance at the beginning of samvat year 1996, corresponding to 1939 40, was Rs. 7,649 14 3.
The amount credited during the year was Rs. 573 12 0 and the amount debited was Rs. 769 3 6.
If the opening balance be ignored, there would be a deficit of Rs. 195 7 0 and the accounts for the samvat year 1997 opened with a debit balance of Rs. 195 7 0.
This shows that the opening balance of samvat year 1996, i.e. Rs. 7,649 14 3, had been taken out of the accounts.
It appears that this amount was taken over to some Bhandara account and was credited again in the temple accounts for samvat year 2009, i.e., 1952 53, after being brought out from Bhandara account.
Such dealing with this amount does not appear to be consistent with its being used in business.
In view of the shaky finding of the High Court about the funds being used in business by the appellant 's father or the appellant and in view of what we have said above, we hold that it has not been proved that these funds had been used in business and that therefore the appellant is not liable to pay compound interest on the balance of the trust funds with his father or himself.
We may now consider whether the appellant is liable to pay simple interest on the balance of trust money with his father or himself.
Two questions arise for consideration and they are whether the trustee is liable to pay simple interest on the trust capital in his hands and if he is so liable what rate of interest be charged from him in the present case.
Interest can be allowed on equitable grounds only as no statutes in force during the period in suit and dealing with public charitable trusts made the trustee liable to pay 97 interest.
The Indian Trusts Act does not apply to public or private religious or charitable endowments and therefore the provisions of section 23 thereof cannot be used for charging interest from the appellant trustee.
The Charitable and Religious Trusts Act has no provision which provides for charging the trustee with interest.
Reference may therefore be made in this connection to what is stated in para 1691 of Halsbury 's Laws of England, III Edition.
38: "Subject to this, or unless a trustee is expressly otherwise authorised or required under the terms of his trust.
he must duly and promptly invest all capital trust money coming to his hands, and all income which cannot be immediately applied for the purposes of the trust; and he is liable for any loss which may result from its being improperly invested or being left uninvested for an unreasonable length of time, and for interest during the period of its being so left.
" This is so because the trustee has to conduct the affairs of the trust in the same manner as an ordinary prudent man of business would conduct his own affairs.
In para 1812 are set out the circumstances in which a trustee, besides being required to account for the principal trust money, can also be charged with interest on it and one of the circumstances is when the Court considers that the trustee ought to have received interest.
Such could be the case when the trustee, in breach of his duty, retains the trust money in his own hands uninvested or mixes it with his own money or property.
It appears from the Commissioner 's report that the trustee in this case had over Rs. 10,000 in his hands from samvat year 1988 commencing from November 10, 1931, upto February 17, 1954, when this suit was instituted.
The trustee kept such a large sum uninvested for a long time extending over 22 years.
The accounts show that reasonably he could not have expected to require this amount for any current purpose of the trust during these years.
He should have invested the amount.
His failure to do so makes him liable to pay interest.
It appears from what is said in para 1814 of Halsbury 's Volume 38 that where a trustee simply fails to invest trust money which he ought to have invested or there are no other special circumstances in the case, he is in general charged simple interest at the rate of 4 per cent per annum.
We consider it reasonable to charge interest at 4 per cent per annum in this case.
We have now therefore to decide what had been the amount of trust funds in the hands of the appellant 's father at different times and what would be the amount due from the appellant on the date of the institution of the suit, both for principal amount of trust money and for accumulated interest with him.
We do not 98 consider it desirable that the case be sent back to the trial Court for these calculations, in the light of our finding, as this litigation has been pending for over 10 years and as the accounting is to be done for a period commencing from November 10, 1931, from which date the accounts are available to the Court.
The Additional Report of the Commissioner, dated December 22, 1954, shows that the amount of principal on February 17, 1954, the date on which the suit was filed, was Rs. 10,088 10 3 and that the accumulated amount of interest due on that date was Rs. 16,853 6 0 at the rate of 6 per cent per annum.
The plaintiffs respondents admitted this report to be correct.
The defendant also admitted the correctness of the principal amount found due by the Commissioner.
He, in fact, did not even dispute that the amount of interest at 6 per cent per annum would be what has been found by the Commissioner.
What he contended was that he was not liable to pay interest in excess of the amount of principal found due, in view of the rule of damdupat.
In these circumstances, these figures can be accepted as correct.
When the Commissioner had submitted his first report on November 29, 1954.
both the parties objected to the accounts prepared by him.
The defendant had objected to the Commissioner 's including a sum of Rs. 7,648 14 3 twice over in his accounts.
This sum represents the balance at the close of samvat year 1995 corresponding to 1938 39.
It was not taken over in the accounts for the samvat year 1996.
The Commissioner, in preparing the account, took this amount into consideration without making up the accounts for the samvat year 1996.
He found and noted in his accounts that the amount credited to the temple during the samvat year 2009 corresponding to 1952 53 was Rs. 9,978 5 3 and that this amount included a sum of Rs. 7,648 14 3 which had been brought from the Bhandara account.
He however did not consider this sum to be the sum which had been not included in the accounts of the temple from the samvat year 1996.
The learned District Judge agreed with the objection of the defendant and held that this amount had been included twice in the Commissioner 's accounts.
The respondents did not dispute the correctness of this finding in the High Court and therefore we do not consider it a sound contention that this sum of Rs. 7,648 14 3 be further added to the balance found due by the Commissioner.
The appellant stated that the statement of the balance in hand submitted by him to the meeting on August 22, 1953 was arrived at by adding an amount of Rs. 7,000 to the balance shown in the accounts as he had found a sum of Rs. 7,000 in a bag marked 'Dharmadya ' inside a safe.
The High Court has not considered the statement of the defendant about so finding a sum of Rs. 7,000 reliable.
It was not urged before the High Court, as has been urged 99 before us, that this sum of Rs. 7,000 be included in the amount of trust money in the hands of the appellant on the date of the institution of the suit.
The High Court merely dealt with the complaint for the respondents that the Commissioner had not taken this sum into account for the purpose of computation of interest on funds in possession of the defendant.
The High Court considered this complaint to be justified.
We therefore do not accept the respondent 's contention that Rs. 7,000 be added to the balance found due by the Commissioner and hold that the High Court was in error in ordering interest to be calculated on this amount as well.
According to the report of the Commissioner, the amount of interest on the principal amount of trust money in the hands of the trustee worked out to Rs. 16,853 6 0 up to February 17, 1954 at 6 per cent annum.
We have held that the interest be calculated at 4 per cent per annum.
If follows that at this rate the amount of interest found due by the Commissioner would be reduced to Rs. 1 I,235 9 4.
The principal due on that date was Rs. 10,088 10 3.
The question now arises whether the amount of interest be limited 10 the amount of principal, on the basis of the principle of Damdupat, or not.
The High Court has held that the principle of Damdupat will not apply in this case.
We agree with that opinion.
The rule of Damdupat applies to cases where a loan is advanced.
This is clear from Colebrooke 's Digest on Hindu Law.
Part I, Vol.
I, of the Digest deals with Contracts.
Book I of this Part deals with Loans and Payment.
Section I of Chapter I of Book I deals with Loans in General and describes what may or may not be loaned by whom, to whom and in what form, with the rules for delivery and receipt.
These matters are comprised under the title 'loans delivered (rinadana) ', which means the complete delivery of a loan or debt by whom, where and to whom made.
Chapter II deals with Interest and states at the commencement of Section I: "Such interest, as may be taken without a breach of duty on the part of the creditor, is a rule (dherma) for delivery by the creditor.
Or . for it is the nature of a loan, that it should produce to the lender the principal sum advanced, and interest in addition thereto.
" The various Articles in this Section use the expressions 'creditor '. 'render '. 'Joan ', 'principal ', 'lent ', 'borrowers ' and thus make it amply clear that it deals with interest on the amounts advanced by a creditor to a debtor.
Section I deals with the rates of interest to be charged.
Section 1I deals with Special Forms of Interest.
Paragraph 53 thereof states: "Interest on money, received at once, not year by year, month by month, or day by day, as it ought, must never be more than enough to double the debt, that is, more than the amount of the principal paid at the same time.
" 100 This is what is known by the rule of Damdupat and has been rightly construed, as long ago as 1863, by the Bombay High Court in Dhondu Jagannath vs Narayan Ramchandra(1).
Section III deals with Interest Specially Authorized and Specially Prohibited.
Article II of this Section deals with Limits of Interest.
Paragraph 59 thereof states: "The principal can only be doubled by length of time, after which interest ceases.
" The limit of interest is different under other paragraphs for loans advanced in different circumstances.
Paragraph 61 repeats what has been stated in paragraph 53 of Section II and adds a special rule to the effect: "On grain, on fruit, on wool or hair, on beasts of burden, lent to be paid in the same kind of equal value, it must not be more than enough to make the debt quintuple.
" It is therefore clear, as stated earlier, that the rule of Damdupat applies in respect of interest due on amounts lent by a creditor to the borrower, the debtor.
The question then is whether the funds in the hands of a trustee can be said to be such loans nationally advanced by the trustee to himself as an individual.
If their character can be deemed to be such, there may be a case for applying the rule of Damdupat to the interest on such funds and that if it is not so, this rule of Damdupat will not apply to the interest ordered to be paid on such funds.
It has been urged for the appellant that the trustee is a debtor with respect to the trust money in his hands.
Reference has been made to Halsbury 's Laws of England, III Edition, Vol.
38, 1044 where it is stated at para 1801: "A breach of trust is, in equity, regarded as giving rise to a simple contract debt.
" In the foot note is stated: "Strictly speaking, the relation of debtor and creditor does not subsist between a trustee and his cestui que trust (per Lindley, L.J. in Lewin on 'Trusts ', 15th Edition, states at p. 745: "The debt constituted by a breach of trust is, even after it has been established by a decree, an equitable debt only, and until the Bankruptcy Act, 1869, would not have supported a petition in bankruptcy.
" It was said by the Earl of Halsbury, L.C., in Sharp vs Jackson(2): "It has been suggested that there was a proposition which could be maintained, as to which I confess I entertain grave doubts whether any decision goes to that extent, namely, that the relation between a cestui que trust 101 and a trustee who has misappropriated the trust fund is not that of debtor and creditor.
That it may be something more than that is true, but that it is that of debtor and creditor.
1 can entertain no doubt.
As that question has been mooted and brought before your Lordships ' House as one question for decision here, I certainly have no hesitation in saying that in my opinion no such proposition can properly be maintained, and that although there are other and peculiar elements in the relation between a cestui que trust and a trustee, undoubtedly the relation of debtor and creditor can and does exist." No other Lord expressed an opinion on this point.
The correctness of this expression of the Earl of Halsbury has been doubted in Lake, in re.
Dyer, Ex Parte( ') by Rigby L.J., who remarked at the hearing: "How is a trustee a debtor '? Can he be sued at common law '? I do not see how he can be a 'debtor ', for the money he is fraudulently dealing with is, at law, his own money.
No doubt he can be called upon to replace the money, but that must be by a suit in equity, not at law.
Notwithstanding the high authority of the statement that has been referred to, I confess I do not understand it.
" We are of opinion that though a trustee., who has custody of trust funds, has a pecuniary liability to make good those funds if he has used them and may, on the basis of such a liability, be said to be a debtor of the trust, yet he, as an individual, is not a borrower of the funds from the trust and cannot be said to have taken a loan from himself as a trustee in charge of the trust funds.
His liability to pay interest, when ordered by the Court on equitable grounds, does not come within the provisions dealing with interest in Hindu Law, as mentioned in Colebrooke 's Digest.
There is no fixed rate of interest which a trustee be liable to pay as there is no contract between him as a trustee and as an individual to pay interest.
He simply uses the money in his custody.
It is only when the Court determines his liability to pay interest that interest is to be calculated on the principal amount due from him.
It is not the case of a creditor letting interest accumulate and thus make the debtor pay interest much more than what he had borrowed as principal.
The principle of Damdupat was evolved both as an inducement to the debtor to pay the entire principal and interest thereon at one and the same time in order to save interest in excess of the principal and as a warning to the creditor to take effective steps for realising the debt from the borrower within reasonable time so that there be not such accumulation of interest as would be in excess of the principal amount due, as in that case he would have to forego the excess amount.
There may be justification for the (1) ,715.
102 principle of Damdupat applying in the case of an ordinary creditor and a debtor, but there seems no justification for extending that principle to the case of a trustee who has to pay interest on the funds in his hand with respect to which on certain grounds he is held liable to pay interest.
We therefore hold that the rule of Damdupat will not apply with respect to the interest adjudged payable by a trustee on his committing breach of trust with respect to the trust funds in his hands .
The result then is that the appellant is liable to pay Rs. 10,088 10 3 for principal and Rs. 11,235 9 4 as interest, upto the date of the institution of the suit, i.e. upto February 17, 1954.
We therefore allow the appeal, set aside the decree of the High Court and modify the decree of the trial Court accordingly.
The result will be that the suit temple will be entitled to get from defendant No. 1 a sum of Rs. 21,324 3 7 upto the date of the suit, together with future interest at 4 per cent per annum on Rs. 10,088 10 3 from the date of the suit till the date of payment.
The appellant will bear his costs throughout.
The costs of the respondents will come out of the estate.
Appeal allowed.

summary:
The respondents who were interested in a public temple filed a suit against the appellant who was looking after the affairs of the temple.
They prayed for his removal from possession of the trust properties, for the rendering by him of true and faithful accounts and for the framing of a scheme.
The trial court held that the appellant was liable to render accounts.
Having ascertained the amount of principal, it determined the interest payable at an amount equal to that of the principal on the basis of the rule of damdupat.
The respondents appealed to the High Court and urged that the rule of damdupat should not have been applied and that compound interest should have been charged against the appellant.
The High Court held that the appellant had used the trust moneys in his business and therefore agreed with the contention of the respondents and remanded the case to the trial court for ascertaining the amount due to the temple.
In the appeal to the Supreme Court, it was contended that, (i) there were no grounds for making the appellant liable to pay compound interest, and (ii) even if there was liability to pay any interest, it was only for paying simple interest and that the rule of damdupat should be applied.
HELD: (i) It had not been proved that the trust funds had been used in the appellant 's business and therefore the appellant was not liable to pay compound interest on the balance of the trust funds with him.
[96 G] (ii) In the absence of statutes during the period of suit dealing with public charitable trusts making a trustee liable to pay interest, interest could be charged only on equitable grounds.
One such circumstance is, when the Court considers that the trustee ought to have received interest, as when he retains trust money in his hands uninvested.
Since the accounts, in the instant case, show that the appellant had retained the principal amount uninvested for over twenty years he would be liable to pay simple interest at the rate of 4 per cent per annum.
Even though the interest calculated at that rate exceeded the principal, that entire interest would have to be paid, because, the rule of damdupat would not apply.
The principle of damdupat was evolved both as an inducement to the debtors to pay the entire principal and interest at one and the same time in order to save interest in excess of the principal, and as a warning to the creditor to take effective steps for realising the debt from the borrower within a reasonable time, so that, there may not be accumulation of interest in excess of the principal amount.
But that rule applies only to cases where a loan is advanced.
Though a trustee who had custody of trust funds, has a pecuniary liability to make good those funds if he has used them and may, on the basis of such a liability, be said to be a debtor of the trust, yet he, as an individual, is not a borrower of the funds from the trust and cannot be said to have taken a loan from himself as a trustee in charge of the trust funds.
[96 H; 97 E H; 99 D; E; 101 E F, H] 92 Sharp vs Jackson, (1899) A.C.419 and Lake, in re Dyer Ex Parte, (1901)1 K.B. 710, referred to.