judgement:
ivil Appeal No. 13 of 1958.
Appeal by special leave from the judgment and order dated June 29, 1954, of the former Nagpur High Court in Misc.
Civil Case No. 219 of 1952.
R. Ganapathy Iyer and D. Gupta, for the appellant.
M. C. Setalvad, Attorney General for India, K. G. Chondke, J. B. Dadachanji and K. K. Raizada, for the respondents.
I. N. Shroff, for the Intervener (State of Madhya Pradesh).
April 21.
The Judgment of the Court was delivered by DAS, C. J.
This is an appeal by special leave, against the order of the High Court of Judicature at Nagpur dated June 29, 1954, answering against the 704 appellant certain questions referred to it by the Board of Revenue under section 23(1) of the Central Provinces & Berar Sales Tax Act, 1947 (hereinafter referred to as "the Act").
The reference arose out of an order of assessment made on the respondent for ' payment of sales tax for the period June 1, 1947, to November 12, 1947, on a taxable turnover of Rs. 30,067 9 0.
The facts leading up to the present appeal may shortly be stated as follows.
The respondent deals in matchwood called " sawar " (Bombay Malabaricum).
His place of business is situate at Chanda in the erstwhile Central Provinces.
In January 1948 the respondent entered into an agreement with the Western India Match Co. Ltd., which is popularly known and will hereinafter be referred to as " WIMCO " for the supply of a minimum quantity of 2,500 tons of sawar logs during the season 1947 48.
This agreement is evidenced by WIMCO 's letter dated January 7, 1948, accepting and confirming it.
Unfortunately that letter, although a part of the record, has not been printed in the Paper Book.
It is common ground, however, that the agreement of sale was subject to the conditions appearing in a formal contract in writing dated March 2, 1945, which is said to have been renewed from year to year.
It appears that prior to the execution of the last mentioned contract there was another contract between the respondent and WIMCO which was dated October 18, 1940.
Evidently that contract was superseded by the later one of March 2, 1945, the terms and conditions whereof were renewed year after year.
It is, therefore, not easily intelligible why both the contracts were filed before the Sales Tax authorities and actually mentioned in the first question that was referred to the Hight Court.
Both the contracts have been printed in the Paper Book and reference has been made to some of the terms of both of them in the course of the arguments before us.
The reason for referring to the terms of the ,earlier contract is presumably to emphasise the variation in the language used in the corresponding provisions of the later contract as indicative of a definite change in the intention of the parties.
It is, therefore, 705 as well that the relevant clauses of both the contracts should be set out here for properly following the arguments advanced on both sides.
Reference may first be made to the earlier contract dated October 18, 1940.
Clause I sets out the specifications, that is to say, the dimensions and quality of the logs to be delivered under the contract which need not be reproduced here.
The other material clauses, omitting the unnecessary portions thereof, may now be set out: " 2.
The Contractor agrees that any logs supplied by him which do not conform with the specification herein shall not be accepted or paid for by the company and he the contractor undertakes to remove all logs so rejected at his own expense from the Company 's premises within fifteen days after date of notice to him or his representative from the Company so to remove such logs.
Should the Contractor fail to i.e. move such logs from the Company 's premises within the period stipulated it is hereby mutually agreed that such failure shall be construed as being the Contractor 's consent to relinquish all claims whatsoever to such rejected logs, and the Contractor agrees to such logs thereupon becoming the property of the company and that the contractor shall have no claim whatsoever upon the company for payment either in respect of the supply by him of such rejected logs or arising out of the disposal by the Company of such logs." " 3.
The said goods shall be delivered at Ambernath in the quantities and at the times hereinafter mentioned, i.e., " 4.
The goods to be supplied under this Contract shall be despatched by the Contractor from Railway Stations on the B.N.R. and G.I.P.R. Sections between the following Stations : " 5.
Measurements: The goods under this contract shall be measured under the supervision of the 89 706 Company 's Factory Manager at Ambernath on arrival of the goods at the Factory in accordance with the following stipulations: The Contractor agrees to. accept the decision of the Company 's Factory Manager at Ambernath as final and binding.
" The prices of the logs to be supplied are set out in cl. 6 of the contract as "F.O.R. Ambernath ".
We now pass on to the later contract of March 2, 1945.
Clause 1 sets out the specifications of the logs to be supplied under the contract in exactly the same language as in el.
I of the earlier contract.
The other material clauses, again omitting the unnecessary portions, are as follows: " 2.
The contractor agrees that any logs supplied by him which, on arrival at Ambernath, are found in the opinion of the Company 's Factory Manager not to conform with the specifications herein shall not be accepted or paid for by the Company, notwithstanding the fact that such logs may have been accepted by the Company 's representatives before being railed to Ambernath.
" It may be mentioned here that Ambernath is a place situate in the erstwhile province of Bombay and outside the Central Provinces.
The goods to be supplied under this contract shall be despatched by the Contractor from railway stations on the B. N. Railway, N. section Railway and G. 1.
P. Railway sections between the following stations.
It is unnecessary to set out the names of the stations which, it may, however, be stated, are all in the erstwhile Central Provinces.
Clause 6 provides: "6.
Measurements: The goods under this contract shall be measured under the supervision of the Company 's representative in accordance with the following stipulations: 707 The contractor agrees to accept the decision of the Company 's Factory Manager at Ambernath as final and binding.
" The prices of the logs to be supplied under the contract are specified as " F.O.R. Ambernath " in cl. 7 which concludes with the following sentence: " The money so due and payable shall be paid by the Company to the Contractor when the measurements of the goods have been completed under the supervision of the Company 's representative." Pursuant to the agreement between the respondent and WIMCO, the former loaded diverse quantities of Sawar logs on railway wagons and despatched the same by railway from Chanda or other railway stations in the Central Provinces to Ambernath in the erstwhile province of Bombay and outside the Central Provinces.
It is not disputed that on many occasions the representative of WIMCO was present at the railway station when the logs were sorted out and loaded into the wagons.
The statement of the case submitted along with the reference under section 23(1) of the Act is silent on the point as to whether the railway receipts were made out with WIMCO as the consignee; but it is abundantly clear from the order of the Assistant Commissioner, Sales Tax, which is part of the record and it has not been disputed before us that " the railway receipt which is a document of title according to section 2(4) of the Indian is taken in the name of the consignee.
" The course of dealings between the parties also appears to be that, on arrival of the logs at Ambernath, the consignee buyer WIMCO, paid the railway freight and the logs were inspected and measured by WIMCO 's Factory Manager and the prices, calculated at the agreed rates, were paid to the respondent 's agent at Bombay.
There is no doubt that the price of the logs supplied by the respondent to WIMCO under the agreement and accepted by the latter during the period in question amounted to Rs. 30,067 9 0.
The question for our 708 decision is whether the respondent is liable to pay any sales tax under the Act.
It will be convenient at this stage to refer to the relevant provisions of law applicable to the facts of this case.
Section 4 of that Act is the charging section.
According to this section safes tax is payable " on all sales effected after the commencement of the Act." " Sale " is defined by section 2(g) of the Act.
At the relevant period, that section, omitting Explanation 1, which is not material for our purpose, ran as follows: " 'Sale ' with all its grammatical variations and cognate expressions means any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods made in course of the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge.
. . . . . . . . . . Explanation II: Notwithstanding anything to the contrary in the Indian , the sale of any goods which are actually in the Central Provinces and Berar at the time when the contract of sale as defined in that Act in respect thereof is made, shall, wherever the said contract of sale is made, be deemed for the purpose of this Act to have taken place in the Central Provinces and Berar.
" The Act being a piece of legislation enacted by the legislature of the erstwhile Province of Central Provinces and Berar, its operation is limited to the territories of that province.
Therefore, the question arises: Does the sum of Rs. 30,067 9 0 represent the prices of logs sold by the respondent within the Central Provinces ? Sale being the transfer of property in the goods agreed to be sold, we have to enquire if the property in the goods which fetched the sale proceeds on which the sales tax is sought to be levied was transferred in the Central Provinces as contemplated in the main definition or if those goods were actually in the Central Provinces at the time when the contract for sale as defined in the in respect thereof was made as required by Explanation II set 709 out above.
This takes us to the .
Section 4 of the is expressed in the words following: "4.
Sale and agreement to sell: (I) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price.
There may be a contract of sale between one part owner and another.
(2) A contract of sale may be absolute or conditional.
(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell.
(4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.
" There can be no doubt that the agreement pursuant to which the logs were supplied by the respondent to WIMCO was an agreement to sell within the meaning of the above section.
There is also no controversy between the parties that at the date when this agreement was entered into, the logs were unascertained goods.
The question is: When did that agreement to sell unascertained goods become a sale and where did such sale take place ? In other words, when and where did the property in those goods pass from the respondent to WIMCO ? The transfer of property in the goods as between the seller and buyer is dealt with in Ch.
III of the .
Section 18 of the runs thus : " 18.
Goods must be ascertained: Where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained.
" Passing over sections 19 to 22 which (except as to sub section
(3) of section 19) apparently apply to contracts for the sale of 710 specific or ascertained goods, we come to section 23 which provides : " 23.
Sale of unascertained goods and appropriation : (I) Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer.
Such assent may be expressed or implied, and may be given either before or after the appropriation is made.
(2) Delivery to carrier: Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.
" Reference may next be made to section 33 and section 39(1).
Section 33 says: " 33.
Delivery : Delivery of goods sold may be made by doing anything which the parties agreed shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorised to hold them on his behalf" Section 39(1) runs as follows: " 39.
Delivery to carrier or wharfinger: (1) Where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer, or delivery of the goods to wharfinger, for safe custody, is prima facie deemed to be delivery of the goods to the buyer.
" Keeping the provisions of the above quoted sections of the two Acts in view, we have to decide when and where the property in the logs passed from the respondent to WIMCO.
The Assistant Commissioner of Sales Tax assessed the respondent to a tax of Rs. 939 10 0 and imposed on the respondent a penalty of Rs. 100 under section 25 of 711 the Act for not having submitted its return in contravention of r. 19 of the Central Provinces and Berar Sales Tax Rules.
The Assistant Commissioner took the view that the loading of the logs into the wagons at railway stations within the Central Provinces and the taking out of the railway receipts in the name of the consignee, WIMCO, and the delivery of the same to WIMCO, had the effect of putting the latter in pos session of the goods as laid down in section 39(1) of the Indian and he accordingly held that the sale of the goods took place at Chanda and other railway stations in the Central Provinces and that the assessee was, consequently, liable to pay the sales tax under the Act.
The respondent preferred an appeal to the Sales Tax Commissioner who upheld the Assistant Commissioner 's order of assessment as well as of the penalty.
He laid greater emphasis on Explanation II to section 2(g) of the Act as over riding the provisions of the Indian in respect of the transfer of property in the logs and held that as the ' logs were in the Central Provinces at the date when the contract for sale was made, the transfer in them must be deemed to have taken place there under that Explanation.
He also agreed with the Assistant Commissioner that the delivery of the logs to the railway company and the sending of the documents of title to WIMCO had, under section 39(1) of the , the effect of putting WIMCO in possession of the logs.
The respondent preferred what in form appeared to be a second appeal to the Board of Revenue.
As, however, there could be no second appeal under section 22(4) of the Act, the Board treated the memorandum of appeal as an application for revision under sub section
5 of section 22 of the Act read with r. 57.
Both the members of the, Board of Revenue came to the same conclusion, namely, that the sales were liable to assessment under the Act, but the reasonings adopted by them were somewhat different.
Shri Shrivastava, a member of the Board of Revenue, took the view that as soon as logs answering the description agreed upon were brought to the railhead at Chanda and sorted out and 712 loaded in the wagons in the presence of WIMCO 's re presentatives, there was an implied contract of sale of specific and ascertained goods, as evidenced by the conduct of parties and the property in each consignment passed immediately from the respondent to WIMCO at the railway station in the Central Provinces where such implied contracts were made.
The Chairman of the Board of Revenue, however, took the view that the contract of sale was made outside the Central Provinces, namely, in Bombay and that, under the , the property in the logs passed to WIMCO in Ambernath outside the province but that as the logs were in the Central Provinces, either in the form of logs or in the form immediately preceding, namely, trees standing on the land which had been impliedly agreed to be severed from the land before actual sale, Explanation II to section 2(g) of the Act applied and the sale must, accordingly, be deemed to have taken place within the Central Provinces and, must, therefore, be liable to sales tax under the Act.
The Board rejected the application but remitted the penalty.
On the application of the respondent under section 23(1) of the Act, the Board of Revenue submitted to the High Court a statement of case raising the following questions: " (1) Did the agreements of the kind on record the one dated 18 10 40 and the other dated 2 3 45constitute contracts of sale either express or implied in respect of sawar wood supplied by the assessee to WIMCO? (2) If the answer to question No. I be in the affirmative, did the contracts relate to specific or ascertained goods or to unascertained or future goods? (3) Did the property in the goods pass to WIMCO by consignment simpliciter at different railway stations within this province, or did it pass at Ambernath when the goods were approved as provided in the contract ? (4) Was reliance on the definition of I goods ' contained in section 2(7) of the in order in applying Explanation II to section 2(g) of the Sales Tax 713 Act in cases, where the goods sold were in the form of trees standing on the land in this province at the time of the contract of sale?" In its judgment dated June 29, 1954, the High Court took the view that the sales in question did not take place in the Central Provinces and Berar and consequently were not " sales " within the meaning of the Act and, therefore, not liable to tax.
It gave the following answers to the above questions: " Our answers to the questions referred for decision are : (1) The agreement in question was an express agreement to sell sawar logs to WIMCO.
There was neither an express nor an implied contract each time goods were railed.
(2) The contract was not for delivery of specific goods but of unascertained or future goods by description.
(3) The property in the goods did not pass to the buyer by the delivery to the railway for carriage.
It passed at Ambernath where the goods were appropriated by the buyer to the contract with the assent of the seller.
(4) The word ' goods ' in the definition of I sale in the Sales Tax Act must be interpreted according to its definition in section 2(d) of the Act and not according to the definition in section 2(7) of the .
The standing sawar trees are not goods within the meaning of the former Act.
" The effect of the answers being to nullify the assessment order, the Commissioner of Sales Tax has come up on appeal before us after obtaining special leave of this Court.
The answers to the first two questions have not been questioned before us.
The main arguments have centred round the answers to questions 3 and 4.
The answer to question 3 turned on the construction placed by the High Court on section 23 of the .
After quoting section 23, the High Court observed as follows: " After sorting the logs with the assent of the buyer 's representative, the applicant appropriated the 90 714 logs to the contract by railing them to the buyer 's destination at Ambernath.
The statement of the case is silent on the point whether the railway receipts were made out with the Company as the consignee.
The assent of the representative was provisional and was not binding on the Company.
Under the agreement it did not agree to unconditionally appropriate the logs to the contract as soon as they were delivered to the railway with the assent of its representative for carriage to Ambernath.
It had expressly reserved its right to reject the goods on examination at Ambernath.
The agreement therefore was that the buyer should, with the assent of the seller, appropriate the goods to the contract at Ambernath.
The appropriation under section 23 was not complete till the goods reached Ambernath and were appropriated by the Company to the contract.
The appropriation of the goods by the applicant at the railheads was conditional on their acceptance by the buyer at Ambernath.
There is nothing in the statement of the case to show that the logs were not so appropriated.
Therefore, the property in the logs passed to the buyer at Amber nath." The learned counsel for the department appearing in support of this appeal contends that property in the logs passed from the respondents to WIMCO under section 23 when sawar logs were brought to the railway station and loaded in the wagon and the railway receipts taken in the name of WIMCO were forwarded to the latter.
There was an unconditional appropriation of the goods to the contract by the respondent.
There was, according to learned counsel, assent on the part of WIMCO to this appropriation in two ways, namely, (a) expressly given by its representative who was present at the railway station, and (b) impliedly given by WIMCO by having agreed in advance that the goods should be despatched by rail from the stations mentioned in cl. 4 of the agreement, all of which were situate in the Central Provinces.
There is no doubt and indeed it has been categorically conceded by learned counsel for the department that the contract was for sale of unascertained goods and consequently the property in them could 715 not, under section 18, pass unless and until the goods were ascertained.
His contention is that logs of the contract quality and description having been unconditionally appropriated by the respondent to the contract without reserving to itself any right of disposal and WIMCO having expressly through its representative or impliedly by the very terms of the contract assented to such appropriation, property in them passed under section 23 from the respondent to WIMCO at the railway stations within the Central Provinces as soon as the sawar logs were loaded on the wagons and the railway receipts were taken out in the name of WIMCO.
It is said that so far as the respondent is concerned it unconditionally appropriated the logs to the contract.
Seeing that they were actually accepted by WIMCO on their arrival at Ambernath it is quite clear that the logs were of the contract quality and description.
The only question, according to learned counsel for the department therefore, is whether there was assent of WIMCO to such appropriation.
It has been found as a fact that WIMCO 's representative was not present on all occasions when sawar logs used to be loaded on the railway wagons.
There is no evidence that he was actually present when these particular sawar logs, with the sale proceeds of which we are concerned, were put into the wagons.
Nor is there an iota of evidence that the representative of WIMCO had any authority to.
bind WIMCO by any assent.
In view of these difficulties, learned counsel for the department did not press the case of express assent of the representative of WIMCO and concentrated on the case of implied assent.
It is quite clear from the language of section 23 itself, that the appropriation may be by the seller with the assent of the buyer or by the buyer with the assent of the seller, that assent to representation may be express or implied and that it may be given after the appropriation or in advance before such appropriation.
Learned counsel for the department lays strong emphasis on the provision of cl. 4 in the contract that the sawar logs should be despatched by rail from certain stations within the Central Provinces and contends that delivery by the seller of sawar logs of the contract quality and 716 description to the railways in terms of the contract without the reservation of any right of disposal has the effect of passing the property therein to WIMCO at the railway stations in the Central Provinces under section 23 as well as of constituting delivery of them at the railway stations under sections 33 and 39(1).
The argument is prima facie sound unless there be some other provision in the contract to negative this conclusion, e. g., that the logs must be carried to Ambernath and delivered there (See The Badische Anilin and Soda Fabrik vs The Basle Chemical Works, Bindschedler (1)).
Learned counsel for the department does not urge that if the matter had to be decided on the terms of the earlier contract dated October 18, 1940, he could properly say that there was nothing in the contract negativing the idea of the passing of property in the logs within the Central Provinces.
The cumulative effect of the provisions of el. 2 that the property in the rejected logs would ' pass to WIMCO upon the failure of the respondent to remove the same after rejection, of el. 3 that the goods shall be delivered at Ambernath in the presence of WIMCO 's Factory Manager and of el. 6 providing that the prices will be " F.O.R. Ambernath " clearly militate against the theory of passing of property immediately on the goods being loaded into the wagons.
While not contesting this, learned counsel for the department urges that there is no such contrary intention indicated in the later contract of March 2, 1945, which really governs the case.
We are unable to accept this distinction as of any substance.
It is true that in this later contract cl. 2 is differently worded and there is no express provision that the goods should be delivered at Ambernath.
There are, nevertheless, several other provisions in the later contract indicating that property in the logs loaded in the wagon will not pass to WIMCO until after the goods arrive at Ambernath and are inspected, measured and accepted by WIMCO 's Factory Manager.
Clause 2 of the later contract quite clearly reserves the right of WIMCO to examine the goods on arrival and to reject the same if they are found, in the opinion of its Factory Manager, not to (1) , 717 conform with the specifications.
This reservation, which is made notwithstanding the fact that the logs may have been accepted by its representative before they were railed to Ambernath, clearly indicates that the so called acceptance by the representative was not final but was entirely tentative and subject to approval of the logs by WIMCO 's Factory Manager at Ambernath after their arrival.
This circumstance certainly militates against the property in them having already 'passed to WIMCO at the railway stations in the Central Provinces.
The provisions of cl. 6 that the goods shall be measured under the supervision of WIMCO 's representative, the decision of its Factory Manager at Ambernath being binding on the respondent and of el. 7 that the prices shall be " F.O.R. Ambernath " and shall be payable after such measurement of the logs by WIMCO 's representative further reinforce the conclusion that the intention of the parties was that property in the goods shall not pass until the logs arrive at Ambernath and are there inspected, measured and accepted by WIMCO.
In our judgment the prima facie case of what might have been the appropriation of the logs by the respondent by loading on the wagons logs of the contract quality and description with the assent of WIMCO given in .advance by the terms of el. 4 is effectively displaced by the provisions of cls. 2, 6 and 7 of the later contract which clearly indicate a contrary intention.
On a proper construction of the contract as a whole the intention of the parties clearly was that the respondent would send the logs by rail from the different stations in the Central Provinces to Ambernath where WIMCO 's Factory Manager would inspect, measure and accept the same if in his opinion they were of the description and quality agreed upon.
In other words the respondent sent the logs and left it to WIMCO to appropriate to the contract such of them as they accepted as of contract quality and description.
The respondent, therefore, gave in advance its assent to WIMCO 's appropriation of the goods at Ambernath.
Therefore, the decision of the High Court cannot be assailed but must be accepted as well founded in fact and in law.
Learned counsel for the department then falls back 718 upon the Argument founded on Explanation II to section 2(g) and 'argues, somewhat halfheartedly, that notwithstanding the provisions of the regarding the passing of property in the goods the sale under consideration must be deemed, in the light of that Explanation, to have taken place within the Central Provinces.
The question of the constitutional validity of that Explanation was not raised in the High Court and indeed, in view of the decision of this Court in Poppatlal Shah vs State of Madras (1) and other ' cases, cannot now be raised and we must proceed on the footing that Explanation 11 did not transgress the legislative competency of the Legislature which enacted the same.
It will be noticed that Explanation II can apply only if the goods " in respect of " which the contract of sale is entered into are, at the date of such contract, actually in the Central Provinces.
Learned counsel for the department urges that the logs delivered must have been in existence in the Central Provinces either in the shape of ';logs or in the shape of standing timber.
There is no evidence that at the date when the agreement for sale was made, the particular logs delivered thereunder were in the Central Provinces in the shape of logs at all.
Learned counsel says that, at any rate, they must have been in existence there in the shape of standing timber.
Apart from anything else,, the agreement here was riot " in respect of " any standing timber and there was no provision in the agreement as between the respondent and WIMCO for severance of the standing timber before sale under that agreement.
In order to attract Explanation II the goods, in respect of which the contract of sale is made, must, at the date of the contract be in existence in the Central Provinces, that is to say, that the goods must at the date of the contract be there in the form in which they are agreed to be sold.
There is not an iota of evidence on that point.
In our judgment, there is no force in this alternative argument.
The result, therefore, is that this appeal is dismissed with costs.
Appeal dismissed.

summary:
The respondent company was a dealer in matchwood called sawar " and his place of business was situate in Chanda in the erstwhile Central Provinces.
Pursuant to an agreement between the respondent and a match factory, the former loaded diverse quantities of " sawar " logs on railway wagons and despatched the same by rail from Chanda and other railway stations in the Central Provinces to Ambernath, a town in the erstwhile Province of Bombay.
Under cl. 4 Of the agreement the goods to be supplied under the contract shall be despatched by the contractor from certain railway stations within the Central Provinces, while cl. 2 reserved the right of the consignee to examine the goods on arrival at.
Ambernath and to reject the same if they, were found, in the opinion of the factory manager, not to conform with the specifications.
Clause 6 provided that the goods shall be measured under the supervision of the factory 's repre sentative, the decision of the factory manager at Ambernath being binding on the contractor, and by cl. 7 the prices of the goods shall be " F. O.R. Ambernath ".
The course of dealings between the parties was that on arrival of the logs at Ambernath the logs were inspected and measured by the factory manager and the prices, calculated at the agreed rates, were paid to the respondent 's agent at Bombay.
The question was as to when and where the property in the logs passed from the respondent to the consignee and whether the respondent was liable to pay sales tax under the provisions of the Central Provinces and Berar Sales Tax Act, 1947.
At the date when the agreement was entered into, the logs were unascertained goods.
There was also no evidence that at that date the particular logs delivered thereunder were in the Central Provinces in the shape of logs at all.
The sales tax department levied the tax on the respondent on the grounds, inter alia, that (1) the property in the logs passed from the respondent to the factory consignee under section 23 Of the Indian , when the logs were loaded in the wagons at railway stations within the Central Provinces and the railway 703 receipts taken in the name of the factory were forwarded to the latter, and that (2) in any case, as the logs were in the Central Provinces at the date when the contract for sale was made, the transfer in them must be deemed to have taken place there under Explanation II to section 2(g) Of the Central Provinces and Berar Sales Tax Act, 1947.
Held : (1) that on a proper construction of the contract as a whole the intention of the parties was that the respondent would send the logs by rail from the different stations in the Central Provinces to Ambernath where the factory manager would inspect, measure and accept the same if in his opinion they were of the description and quality agreed upon.
Conse quently, as the respondent sent the logs and left it to the factory to appropriate to the contract such of them as they accepted as of contract quality and description, the property in the logs did not pass to the buyer by the mere delivery to the railway for carriage but passed only at Ambernath when the logs were appropriated by the factory with the assent of the seller within the meaning of section 23 of the Indian .
(2) that Explanation II to section 2(g) of the Central Provinces because under the Explanation the goods, in respect of which the contract of sale is made, must, at the date of the contract be in existence in the Central Provinces, that is to say, that the goods must at the date of the contract be there in the form in which they are agreed to be sold and there was no evidence, in the present case, for this.


judgement:
Appeal No. 284 of 1958.
Appeal from the judgment and order dated April 21, 1956, of the former Judicial Commissioner 's Court, Rewa, in Misc.
Civil Writ No. 27 of 1956.
Naunit Lal, for the appellant.
694 Bhagwan Das Jain, for respondent No. 1. 1959.
April 21.
The Judgment of the Court was delivered by SARKAR, J.
This appeal arises out of an application for a writ of certiorari and involves questions of interpretation of the (4 of 1939), by.
which grants of permits to run stage carriages and all matters connected therewith are governed.
The appellant was the holder of a permit to run a stage carriage on a stretch of the public highway called the Rewa Singrauli route, in the State of Vindhya Pradesh which is now merged in the State of Madhya Pradesh.
That permit was due to expire on December 11, 1955, and so on September 12, 1955, he made an application for its renewal for a further period.
The respondent Anant Prasad who will be referred to as the respondent, made a representation against the renewal of the appellant 's permit.
He also applied for the grant of the permit to himself.
On December 9, 1955, the State Transport Authority, Vindhya Pradesh, made an order in the following terms: " Renewed for three years ".
It is not in dispute that the order meant that the appellant 's permit was renewed for three years.
No express order was made on the respondent 's application for the grant of the permit to him.
The respondent preferred an appeal against this order to the Vindhya Pradesh Transport Appellate Tribunal, the appellate authority under the Act.
It was contended by the appellant before the Appellate Tribunal that the appeal was not competent.
The Appellate Tribunal rejected this contention and passed an order cancelling the Permit granted to the appellant by the State Transport Authority and issuing the permit to the respondent.
The appellant then moved the Judicial Commissioner, Vindhya Pradesh, for a writ of certiorari quashing the order of the Appellate Tribunal on the ground that it disclosed an error on the face of it because under the Act no appeal lay from the order that was passed by the subordinate authority.
The learned Judicial Commissioner held that the appeal 695 was competent and dismissed the application for the writ.
Hence the present appeal.
The question is, Did an appeal lie to the Appellate Tribunal from the order made by the State Transport Authority in the present case ? Section 64 of the Act contains the provisions for appeals.
Whether the appeal lay or not will have to be decided by reference to these provisions.
The portion of the section which will have to be considered is in these terms: " Section 64.
Any person (a) aggrieved by the refusal of the State or a Regional Transport Authority to grant a permit,. . . .or (e) aggrieved by the refusal of renewal of a permit,. or (f) being a local authority or police authority or an association which, or a person providing transport facilities who, having opposed the grant of a permit is aggrieved by the grant thereof . . " may. . . appeal to the prescribed authority The prescribed authority was as we have earlier stated, the Appellate Tribunal.
Clearly the respondent was not a person contemplated by cl.
(e) of the section.
It is also not in dispute that he was not one of those mentioned in cl.
The respondent does not claim that any of these clauses gave him the right of appeal.
He however claims a right of appeal under cl.
In our view that claim is justified.
He had applied for a permit and had not got it.
He was therefore a person aggrieved by the refusal to grant a permit and clearly came within cl.
It is true that the order of the State Transport Authority did not expressly refuse him the permit.
But that no doubt was the effect of the order that was made.
He had made an application for the grant of the permit to him and the application was disposed of without granting him the permit but granting it to a competing applicant.
There was only one permit which could be granted 696 and the result of the order was to give it to the appellant.
The permit was thereby necessarily refused to the respondent.
The fact that an express order was not made cannot operate to his prejudice.
In section Gopala Reddi vs Regional Transport Authority, North Arcot (1), in circumstances identical to those in the present case an order was made by the Transport Authority in the same terms as we have here and it was said, " The grant of a permit to one, would automatically mean the refusal of the permit to the other ".
We are in entire agreement with the view expressed there.
Therefore it seems to us that the respondent was a person who had been aggrieved by the refusal to grant him a permit and the appeal by him was fully competent.
But it was said on behalf of the appellant that in the present case it would be wrong to imply an order refusing the permit to the respondent for none such could be made under the Act and therefore here there was no scope for applying section 64(a).
The contention was put in this way: When there are a number of applications in respect of the same permit, one of which is by way of renewal to which objections have been filed and the others, fresh applications, the latter could not be taken up for consideration till the former and the objections made to it had been considered.
If the objections to the renewal failed, the application for renewal had to be granted and the fresh applications for permit could not then be considered at all.
If on the other hand, the objections to the renewal succeeded, the renewal could not be granted and the choice had then to be made from the new applicants for the permit.
In the present case the objection to the renewal of the applicant 's permit raised by the respondent failed and the appellant 's permit was in consequence renewed.
Therefore the respondent 's application for a permit, which was an application for a new permit, never fell to be considered and that is why no order on it was made at all.
We think this contention completely lacks substance.
It was said that was the result of sections 47, (1) 697 57 and 58 of the Act but we find nothing in any of them to support it.
Section 47 does not deal with the order in which applications for the renewal or grant on a new permit are to be heard and does not help at all Section 57 (3) provides that after an application for a permit had been made others can make representations against it.
These are the objections to an application for the grant or renewal of a permit earlier referred to.
Sub section (5) of section 57 provides that the application for a permit which includes an application for the renewal of a permit and the representations against it shall be disposed of at a public hearing at which the person making the application and the persons making the representations shall be given an opportunity of being heard.
But this does not show that all other applications for the same permit and all other repre sentations in connection therewith, cannot be disposed of at the same hearing.
Indeed, section 58 (2) puts it beyond doubt that an application for renewal of a permit and the fresh applications for the same permit have to be heard together.
That section so far as is relevant is in these terms: Section 58 (2) A permit may be renewed on an application made and disposed of as if it were an application for a permit: (a). . . . . . . . . . (b). . . . . . . . . .
Provided further that, other conditions being equal, an application for renewal shall be given preference over new applications for permits ".
The section therefore requires an application for the renewal of a permit to be dealt with in the same way as a new application for a permit.
Such an application has therefore to be heard along with new applications for the permit.
Again, no question of giving an application for renewal preference over new applications for permits which the section requires to be given, can arise unless they are considered together.
We are therefore unable to hold that in the present case the 88 698 State Transport Authority had no jurisdiction to consider the respondent 's application or to make any order in respect of it as it granted the appellant 's application for renewal.
It follows that the order that was made amounted in fact to a refusal to grant the permit to the respondent.
It was then said that a renewed permit was a continuation of the old permit and hence once the old permit was renewed, no question of considering the applications for new permit arose.
We find nothing to support this view.
It is true that in V. C. K. Bus Service Ltd. vs Regional Transport Authority, Coimbatore(1), this Court held that a renewed permit was a continuation of the old permit but it did not hold that the appropriate authority could not consider the applications for a fresh permit along with the application for renewal of the permit.
This case does not assist the appellant at all.
It was then contended that section 64 did not provide for an appeal by a person aggrieved by the renewal of a permit unless he was one of those mentioned in section 64 (f), which the respondent was not, and therefore even if an appeal by the respondent was competent under section 64 (a), in such an appeal the Appellate Tribunal could not set aside the order of renewal made by the State Transport Authority.
It was said that if in such an appeal the order granting a renewal could be set aside, in effect an appeal against an order renewing a permit would become competent though the law did not per mit this.
We were referred to Dholpur Co operative Transport Etc.
Union Ltd. vs The Appellate Authority, Rajasthan (2), in support of this contention.
It was there said: " Where an appeal has been made under el.
(a)against the refusal of a permit, the Appellate Authority will generally have the right to give relief to the appellant by the grant of a permit, but will not have any jurisdiction to cancel the permit granted to another person, unless a foundation has been laid before the Regional Transport Authority for an appeal provided (1) (2) A.I.R. , 26.
699 by el.
(f) by an objection of somebody entitled to appeal under that clause.
If such an objection has been made then it does not matter whether that particular person appeals or not.
In such a case, on an appeal under section 64(a), the Appellate Authority may consider the objection of the nature specified in cl.
(f) before the Regional Transport Authority and give its own decision in the matter.
" It was said that the respondent though he had filed objections was not a person who can claim a right of appeal under el.
(f) of section 64.
It was therefore contended on the authority of the observations referred to above that no foundation had been laid for an appeal provided by cl.
(f) and so the Appellate Tribunal could not cancel the permit granted to the appellant by the subordinate authority.
We are unable to agree that in an appeal which is competent under cl.
(a) of the section, the order renewing or granting a permit cannot be set aside unless the case was such that an appeal under el.
(f) would have also been competent.
So to hold would result in making the right of appeal given by cl.
(a) wholly infructuous in those cases where no relief can be given in the appeal except by setting aside the order granting or renewing a permit, for example, where there was only one permit to grant as in the present case.
Such an interpretation has to be rejected.
It is based on cl.
But this clause cannot be construed in a manner so as to render infructuous another clause in the same section.
Nor do we find anything in el.
(f) to justify such a construc tion.
The different clauses in the section deal with different situations.
Each is independent of the others.
Clause (f) deals with a case where an objection had been filed against the fresh grant or the renewal of a permit but the permit has none the less been granted or renewed.
The clause gives the objector a right of appeal against the result of the rejection of his objection if he is one of the persons mentioned in it.
The clause gives him that right irrespective of the fact whether he has a right of appeal under any of the other clauses or not.
It does not say that a permit granted or renewed cannot be questioned except at the 700 instance of the persons mentioned in cl.
(f); it does not affect the right of appeal under the other clauses.
If an appeal lies under any of the other clauses, that of course must be an effective appeal and the appellate authority must therefore have all powers to give the relief to which the appellant is found entitled.
Again section 64 is not concerned with defining the powers of the appellate authority and does not purport to do so.
Nor is there anything in the Act to lead to the conclusion that an applicant for a permit is bound to put in objections against the applications of competing applicants for the grant or the renewal of the permit.
The relief that can be granted in an appeal by any person which is competent would not depend on whether he bad put in objections against the applications of the competing applicants or not.
We do not therefore think that cl.
(f) of section 64 in any way restricts the power of the Appellate Tribunal to grant all proper reliefs in an appeal competent under el.
(a) of the section.
If cl.
(f) does not so restrict the power of the Appellate Tribunal, nothing else has been pointed out to us as having that effect.
In our view, there is nothing in the Act to prevent the Appellate Tribunal from setting aside the order of the State Transport Authority renewinu the appellant 's permit.
We think the matter was correctly put in section Gopala Reddi 's case (1) when it was said at p. 132: "The appeal was, in our opinion, perfectly competent as an appeal against the order of the Regional Transport Authority, refusing to grant a permit.
The fact that such an appeal involved an attack on the order granting a renewal of a permit to the 4th respondent would not prevent the appeal being what it was, viz., an appeal against a refusal to grant a permit, to the appellant.
The Central Road Traffic Board erred in presuming that it was not open to them in the appeal to consider the merits of the order granting renewal of the 4th respondent 's permit.
Indeed, the first question which had to be determined in the appeal filed by the appellant would be the propriety of the action of the Regional Transport Authority in granting (1) 701 renewal to the 4th respondent.
The filing of the appeal by the appellant set at large the order of the Regional Transport Authority granting the renewal.
" In the Dholpur Co operative Transport etc.
Union Ltd. case( ') on which the appellant relies, no objection had been filed against any of the competing applications for the grant of a permit and it was held that the appellate authority had no power in such circumstances on appeal by a person whose application for the grant of the permit had been refused, to give relief by cancelling a permit granted by the subordinate authority to one of the applicants.
It was there thought that Nadar Transport, Tiruchirapalli vs State of Madras (2) led to this conclusion.
For the reasons earlier mentioned we are unable to agree with this part of the decision in the Dholpur Co operative Transport etc.
Union Ltd. case (1).
With the rest of the decision there we are not concerned and as to that we do not say anything.
We also find nothing in the Nadar Transport case (2), to support the conclusion arrived at in Dholpur Co operative Transport etc.
Union Ltd. case(1).
In the Nadar Transport case(2), on the contrary, it was observed that " see.
64, sub sees.
(a) and (f) are intended in our opinion to apply to different situations " and that " the power of the appellate authority is not restricted in any manner either by the provisions of section 64 or by any of the rules made under the powers conferred by the Act ".
It was there held that in an appeal under section 64 (a) no grounds other than those taken before the lower authority could be canvassed.
That does not lead to the conclusion that on proper grounds all reliefs necessary to make the appeal effective cannot be granted.
We think that the Nadar Transport case (2) was misunderstood.
The result is that this appeal fails and it is dismissed with costs.
Appeal dismissed.
(1) A. I. R. , 26.
(2) A. I. R. , 3.

dataset_name: IN-Abs

summary:
The appellant who was the holder of a permit to run a stage carriage, which was about to expire, made an application to the State Transport Authority for its renewal for a further period.
The respondent made a representation against the renewal of the appellant 's permit and also applied for the grant of the permit to himself.
The State Transport Authority made an order in the terms " Renewed for three years " in respect of the appellant 's permit but no express order was made on the respondent 's application for the grant of the permit to him.
On appeal by the respondent, the Appellate Tribunal cancelled the appellant 's permit and granted the permit to the respondent.
The appellant then moved the judicial Commissioner, Vindhya Pradesh, for a 693 writ of certiorari quashing the order of the Appellate Tribunal on the ground that it disclosed an error on the face of it because under the Act no appeal lay from the order that was passed by the subordinate authority.
The learned judicial Commissioner held that the appeal was competent and dismissed the application for the writ.
It was contended for the appellant that the respondent 's appeal to the Appellate Tribunal was not maintainable on the grounds (1) that no express order was made against the respondent by the State Transport Authority, and so section 64(a) of the Act did not give him a right of appeal and (2) that in view Of sections 47, 57 and 58 Of the Act, the State Transport Authority had no jurisdiction to consider the respondents application or to make an order in respect of it after the appellant 's permit was renewed, and therefore could not make an order rejecting it.
It was also contended that section 64 of the Act did not provide for an appeal by a person aggrieved by the renewal of a permit unless he was one of those mentioned in cl.
(f) of that section which the respondent was not, and therefore even if an appeal by the respondent was competent under section 64(a) in such an appeal, the Appellate Authority could not set aside the order of renewal.
Held: (1) that the order made by the State Transport Authority in the present case did amount, infact, to a refusal to grant the permit to the respondent.
The respondent 's appeal to the Appellate Authority was therefore maintainable under section 64(a) of the Act.
section Gopala Reddi vs Regional Transport Authoyity, North Arcot,[1955] , approved.
V. C. K. Bus Service Ltd. vs Regional Transport Authoyity,Coimbatore, , distinguished.
(2) that section 58(2) Of the Act shows that an application for the renewal of a permit and a fresh application for the same permit have to be heard together, and that there was nothing in sections 47 and 57, indicating a contrary course.
(3) that cl.
(f) of section 64 Of the Act does not in any way restrict the power of the Appellate Tribunal to grant all reliefs in an appeal under cl.
(a) of the section.
Consequently, the order of the Appellate Tribunal setting aside the order of renewal was valid.
Dholpur Co operative Transport Etc.
Union Ltd. vs The Appellate Authority, Rajasthan, A.I.R. , in so far as it decided to the contrary, disapproved.


judgement:
Appeal No. 343 of 1958.
Appeal by special leave from the judgment and order dated March 8, 1958, of the Madhya Pradesh High Court in First Appeal No. 141 of 1957, arising out of the judgment and order dated December 5, 1957, of the Election Tribunal, Jabalpur, in Election Petition Case No. I of 1957.
G. C. Mathur, for the appellant.
P. Rama Reddy and R., Mahalingier, for respondent No. 1. 1959.
April 9.
The Judgment of the Court was delivered by GAJENDRAGADIKAR, J.
This appeal by special leave arises out of an election petition filed by respondent I (No. 320 of 1957) before the Election Commission, New Delhi, in which he prayed that the appellant 's election to the Madhya Pradesh Legislative Assembly from Bargi constituency should be declared to be void and that it should be further declared that he had himself been duly elected from the said constituency.
The polling for the election in question was taken on March 9, 1957, and the result was declared on March 12, 1957.
Of the three candidates who had stood for election, the appellant secured 9308 votes, respondent 1, 8019 votes and the third candidate, respondent 2, 3210 votes.
The petition filed by respondent I was entrusted to the Election Tribunal, Jabalpur, for trial.
On October 12, 1957, the appellant filed before the Election Tribunal, an objection under section 90, sub section
(3) of the Representation of the People Act, 1951 (hereinafter called the Act), alleging that respondent 1 had not complied with the provisions of section 117 of the Act in regard to 529 the making of the deposit of the security for costs and praying that his election petition should be dismissed on that account under section 90, sub section
(3) of the Act.
Respondent I disputed these allegations and urged that there was no justification for dismissing his petition under section 90, sub section (3) of the Act.
By its order passed on December 5, 1957, the Election Tribunal held that the provisions of section 117 were mandatory and that they had not been complied with by respondent 1.
ID the result the application filed by the appellant was allowed, his objection was upheld and the election petition presented by respondent I was dismissed under section 90, sub section
(3) of the Act.
On December 27, 1957, respondent I preferred an appeal in the High Court of Madhya Pradesh at Jabalpur against the said order (Appeal No. 141 of 1957).
In the High Court a preliminary objection was urged on behalf of the appellant that the appeal preferred by respondent I was incompetent under section 116A of the Act.
This objection was overruled and the merits of the appeal were considered by the High Court.
On the merits the High Court held that respondent I had substantially complied with section 117 and so the order passed by the Election Tribunal dismissing the election petition filed by respondent I was set aside and the said petition was sent back to the Election Tribunal for disposal in accordance with law.
On February 22, 1958, the appellant applied to the High Court for a certificate of fitness but his application was dismissed.
Thereupon the appellant applied for, and obtained, special leave to appeal from this.
Court on April 14, 1958.
That is how this appeal has come to this Court.
The first point which calls for our decision in this appeal is whether the High Court was right in holding that the appeal preferred before it by respondent I was competent.
The appellant 's contention is that the impugned order was passed under section 90, sub section
(3) and no appeal is provided against such an order under section 116A.
Section 116A provides that an appeal shall lie from every order made by the tribunal under section 98 67 530 or section 99 to the High Court of the State in which the tribunal is constituted.
We are not concerned in the present appeal with section 99.
The case for respondent I is that in substance and in law the impugned order must be deemed to have been passed under section 98.
That is the view which the High Court has taken and we are satisfied that the High Court is right.
It is true that in terms and in form the order was passed under section 90 sub section
(3); and it is also true that the right to prefer on appeal is a creature of the statute and no appeal can be held to be competent unless it is shown that such a right flows from the relevant statutory provision itself, In order to decide whether or not an order passed under section 90, sub section
(3) can be regarded in law and in substance as an order passed under section 98, it would be relevant to consider the scope and effect of the provisions of the said two sections.
Section 98(a) provides that at the conclusion of the trial of an election petition the tribunal shall make an order dismissing the election petition.
There is no doubt that in the present case the Election Tribunal has dismissed the election, petition filed by respondent 1.
But the appellant 's contention is that this dismissal cannot be said to be under section 98(a) because the order dismissing the petition has not been passed at the conclusion of the trial of the election petition.
This argument is not well founded.
Section 90, subs.
(3) under which the impugned order purports to have been passed occurs in ch.
III of Pt.
VI which deals with the trial of election petitions.
In other words., section 90, sub section
(3) confers power on the tribunal to dismiss the election petition after the trial of the election petition has commenced.
The scheme of ch.
III clearly indicates that once an election petition is referred to an Election Tribunal for trial under section 86 the tribunal is possessed of the petition and all proceedings before it are proceedings in the trial of the said petition.
Section 85 shows that for failure to comply with the provisions of sections 819 82 and 117, the Election Commission is empowered to dismiss the election petition.
If the Election Commission exercises its jurisdiction and passes an order 531 dismissing any election petition, it may be said that the election petition never reached the stage of trial ; but once the petition has passed the scrutiny of the Election Commission under section 85 and it has been referred.
to the Election Tribunal for trial, any, further action taken by the parties or any order passed by the tribunal under the said petition would constitute a part of the trial of the said petition.
This question has been incidentally considered by this Court in Harish Chandra Bajpai vs Triloki Singh (1) while it was dealing with section 90, sub section
(2) of the Act; and it has been held that " the provisions of ch.
III read as a whole clearly show that I the trial is used as meaning the entire proceedings before the tribunal from the time the petition is transferred to it under section 86 until the pronouncement of the award ".
Therefore, there can be no doubt that the order passed under section 90, sub section
(3) is an order passed at the conclusion of the trial.
It is true that it is an order on a preliminary point of law raised by the appellant; but even so the decision of the preliminary issue is undoubtedly a part of the trial of the petition and it cannot be said that the order passed on such a preliminary point is not an order passed at the conclusion of the trial when it, in fact, concludes the trial.
Section 90, sub section
(3) provides that the tribunal shall dismiss an election petition which does not comply with the provisions of sections 81, 82 or 117 notwithstanding that it has not been dismissed by the Election Commission under section 85.
It would thus be clear that an objection raised against the competence of the election petition on the ground that the provisions of the aforesaid sections have not been complied with can be considered by the Election Commission suo motu under section 85 and if it is upheld the election petition can be dismissed without any further enquiry; but if the Election Commission does not dismiss the petition under section 85, then the same objection can be raised before the Election Tribunal by the respondent to the election petition ; and when it is so raised it assumes the character of a preliminary objection and (1) ; ,387.
532 is dealt with by the Election Tribunal as any preliminary objection would be dealt with by a civil court under the Code of Civil Procedure.
That being so, a preliminary objection has been tried and the decision on the preliminary objection being in favour of the respondent the election petition is dismissed.
Though the order of dismissal in form may be under section 90, subs.
(3), it is in substance and in law an order of dismissal passed at the conclusion of the trial and must be deemed to be an order under section 98(a).
That is the view which the Madhya Pradesh High Court has taken in Gulshar Ahmed vs Election Tribunal(1) and it was this decision which was followed by the High Court in the present proceedings.
In our opinion, therefore, the contention raised by the appellant that the appeal preferred by respondent I before the High Court was incompetent must be rejected.
The question of construing section 90 can be considered from another point of view.
It provides for the procedure before the tribunal and lays down that it is open to the tribunal to dismiss an election petition under section 90, sub section
(3); but this being a procedural provision is would not be unreasonable to hold that, when the actual order dismissing the petition is passed, it would be referable to the provisions of section 98(a).
The same conclusion would follow if we consider the provisions of sections 103, 106 and 107.
It cannot be suggested that the order passed by the tribunal dismissing the election petition for noncompliance of section 117 is not required to be communicated to the Election Commission under section 103 or transmitted by the Election Commission to the appropriate authority under section 106.
Similarly it cannot be said that such an order would not take effect as soon as it is pronounced by the tribunal under section 107.
It would thus be noticed that though the provisions of these sections are obviously applicable to an order dismissing the election petition on the ground of non compliance of section 117, in terms the said sections refer to orders passed under section 98 or section 99.
Therefore, we think it would be reasonable to hold that, where the tribunal dismisses an election petition by virtue of the provi (1) A.I.R. 1958 Madh.
Pra, 224.
533 sions contained in section 90, sub section
(3), the order of dismissal must be deemed to have been made under section 98.
Similarly section 99(1) (b) which empowers the tribunal to fix the total amount of costs payable and to specify the person by and to whom that shall be paid in terms refers to cases where an order is made under section 98.
It cannot be suggested that, where an order of dismissal is passed under section 90, sub section
(3), the tribunal cannot, make an appropriate order of costs.
This provision also indicates that the order passed under section 90, sub section
(3) is in law and in substance an order passed under section 98(a).
It is true that in cases where such ail order is passed section 99(1)(a) would not come into operation, but that can hardly affect the position that an order ' under section 90, sub section
(3) is nevertheless an order under section 98.
We would like to add that by Act 58 of 1958 an explanation has been added to section 90, sub section
(3) which clarifies the legislative intention on this point.
This explanation provides that an order of the tribunal dismissing an election petition under this sub section shall be deemed to be an order made under cl.
(a) of section 98.
After the enactment of this explanation there can be no doubt that ail order passed under section 90, sub section
(3) would be appealable under section 116 A of the Act.
That takes us to the second point raised by the appellant that the High Court was in error in holding that respondent I bad complied with the provisions of section 117 of the Act.
Section 117 provides that the petitioner shall enclose with the petition a Government Treasury Receipt showing that a deposit of Rs. 1,000/has been made by him either in a Government Treasury or in the Reserve Bank of India in favour of the Secretary to the Election Commission as security for costs of the petition.
In the present case, respondent 1 has deposited the requisite security, but it is urged that the security has not been deposited as required by section 117.
This is how the security deposit has been made 534 Under Amount.
By whom On what account.
rupees in brought.
words.
Rs. A. P. Shiv Prasad Security deposits for Rs. One 1,000 0 0.
Chanpuria.
Election Petition of Thous Bargi Assembly Con and and stituency No. 97 one D i s t t., Jabalpur, only.
Madhya Pr ad es h. Refundable by order of the Election Commission of India, New Delhi.
Total . 1000 0 0.
The argument is that the security has not been deposited in the name of the Secretary to the Election Commission as required by section 117 and it is deposited with the condition that it is refundable by the order of the Election Commission of India.
In other words, the only power which the Election Commission of India can exercise in respect of the security is to refund the amount to respondent I ; and it would not be competent to the Commission to direct the amount to be paid to the appellant even if the election petition filed by respondent I is dismissed with costs.
In our opinion, this objection is purely, technical.
It has recently been held by this Court in Kamaraj Nadar V. Kunju Thevar (1) that s.117 should not be strictly or technically construed and that wherever it is shown that there has been a substantial compliance with its requirements the tribunal should not dismiss the 'election petition under section 90, sub section (3) on technical grounds.
Indeed it is clear that the receipt with which this Court was concerned in the case of Kamaraj Nadar (1), was perhaps slightly more defective than the receipt in the present case.
The argument based on the use of the word " refundable " ignores the fact that the security in terms has been made in respect of the election petition in question and it has been duly credited as towards the account of the Election Commission.
Therefore, there can be no doubt that if an (1) A.I.R. 1958 S.C. 687.
535 occasion arises for the Election Commission to make an order about the payment of this amount to the successful party the use of the word "refundable" will cause no difficulty whatever.
We hold that the security has been made by, respondent.
1 as required by section 117 of the Act and would be at the disposal of the Election Commission in the present proceedings.
We would like to add that even section 117 has been subsequently amended by Act 58 of 1958 and the reference to the Secretary has been deleted.
The result is the appeal fails and must be dismissed with costs.
Appeal dismissed.

summary:
Respondent I filed an election petition challenging the election of the appellant.
The security required to be deposited under section 117 Of the Representation of the People Act, 1951, was made in the following terms: " Security deposits for Election Petition of Bargi Assembly Constituency No. 97, Distt.
Jabalpur, Madhya Pradesh.
Refundable by order of the Election Commission of India, New Delhi.
" Before the Election Tribunal the appellant made an applica tion alleging that there was non compliance with the provisions section 117 inasmuch as (i) the deposit was not in favour of the Secretary to the Election Commission, and (ii) the amount was only refundable to the depositor and would not be payable to appellant in case the petition was dismissed under section 90(3).
The Tribunal upheld the objections and dismissed the petition under section 00(3).
Respondent I preferred an appeal under section 116 A of the Act to the High Court.
The High Court allowed the appeal, set aside ,the order of the Tribunal and sent back the petition for trial.
The appellant contended that no appeal lay to the High Court and that there was non compliance with the provisions of s.117.
Held, that, an appeal lay to the High Court under section 116 A of the Act against the dismissal of the election petition under section 90(3) by the Tribunal.
The order passed by the Tribunal under section 90(3) was an order passed at the, conclusion of the trial of the petition and was in substance and in law one under section 98.
Once an election petition was entrusted to the Tribunal the trial started and any order passed by the Tribunal which concluded the trial was an order at the conclusion of the trial.
Harish Chandra Bajpai vs Tirloki Singh, ; , referred to.
Gulsher Ahmad vs Election Tribunal, A.I.R. 1958 Madh.
Pra. 224, approved.
Held, further that, there had been substantial compliance with the provisions of section 117 of the Act.
Section 117 was not to be strictly or technically construed and a substantial compliance with its requirements was sufficient.
The security in this case 528 had been made in respect of the election petition in question and it had been credited towards the accounts of the Election Commission.
The use of the words " refundable " would not prevent the Election Commission from making an order of payment of the amount to the successful party.
Kamraj Naday vs Kunju Thevar, A.I.R. , applied.