judgement:
Appeal No. 605 of 1966.
Appeal by special leave from the judgment and decree dated March 27, 1964 of the Allahabad High Court in Special Appeal No. 322 of 1964.
E.C. Agarwala and E. Udayarathnam, for the appellant.
M.C. Chagla and P.C. Agrawala, for the respondent.
The Judgment of the Court was delivered by Ramaswami, J.
The appellant is a partnership firm consisting of two brothers Lala Baburam and Shri Prakash Chandra, carrying on the business of manufacturing Khandsari sugar in the district of Muzaffarnagar.
The partnership firm carries on its business through its two units (1) one located in the village Basera and run under the name and style of M/s. Baburam Ashok Kumar and (2) the other located in village Morna and run under the name and style of M/s. Baburam Prakash Chandra, both in the district of Muzaffarnagar.
The case of the appellant was that the business of manufacturing Khandsari was seasonal and was carried on at both the places for less than 5 months in a year, i.e., from the month of November to the beginning of April.
Under the U.P. District Boards Act No. X of 1922, the District Board of Muzaffarnagar was empowered to levy tax under sections 108 and.
114 in the rural area.
Section 114 was to the following effect: "The power of a board to impose a tax on circumstances and property shall be subject to the following conditions and restrictions namely : (a) The tax may be imposed on any person residing or carrying on business in the rural area provided that such person has so resided or carried on business for a 520 total period of at least six months in the year under assessment.
(b) The total amount of tax imposed on any person shall not exceed such maximum (if any) as may be prescribed by rule.
Under section 123 of that Act the matters relating to the assessment and collection of taxes were to be governed by rules framed under section 172 of that Act.
On March 1,.
1928, the Government of U.P. issued notification No. 315/LX 413 notifying the rules for the rules for the assessment and collection of a tax on circumstances and property in the rural area of the Muzaffarnagar district.
The rules provided, among other matters, that all the activities of an assessee within the district, whether carried on under the same or different name, shall be considered in calculating the total amount to be assessed; and the tax shall be assessed by an Assessing Officer appointed by the District Board, and the list of assessment of the preceding year ending December 31, shall be completed on or before January 20, and shall be submitted to the Board which will return it by February 15 to the Assessing Officer for being revised and thereafter the Assessing Officer shah give notice of a date not less than one month when he will proceed to consider the objection.
The assessee may file objections before the date fixed and thereafter the Assessing Officer shall allow the assessee an opportunity to be heard.
Rule 16 read with Rule 2 fixed the maximum limit of the total amount of tax assessed on any person not to exceed Rs. 2,000/ in any year, having regard to all the activities of an assessee within the district whether carried on under the same or a different name.
In the year 1950 the Constitution of India was promulgated and under el. 2 of article 276 the total amount payable in respect of any one person to the district board, local Board or other local authority in the State by way of taxes on professions, trades, callings and employments shall not exceed two hundred and fifty rupees per annum.
On August 22, 1958, the U.P. Antarim Zila Parishad Act of 1958 (U.P. Act No. XXII of 1958) passed by the U.P. Legislature received the assent of the Governor and was published in the U.P. Gazette dated August 23, 1958.
Clause (3) of section 1 of the U.P. Antarim Zila Parishad Act, 1958 runs as follows : "It shall be deemed to have come into force on the 29th day of April, 1958, and shall expire on the 31st day of December, 1959.
" But the Amending Act (U.P. Act No. 1 of 1960) received the assent of the Governor on January 5, 1960 whereby the figure 1960 was substituted in place of 1959 in el.
(3) of section 1 of U.P. Act XXII of 1958.
The case of the appellant is that the original 521 Act No. XXII of 1958 had expired on December 31, 1959 and as such could not be revived on January 5; 1960 when the Amending Act No. 1 of 1960 received the assent of the Governor and that fresh legislation was necessary.
On March 20, 1960, a copy of the Assessment Order assessing the appellant to the maximum amount of Rs. 2,000/ as circumstances and property tax for the assessment year 1959 60 was issued by the Antarim Zila Parishad Muzaffarnagar.
The assessment order was issued by Shri O.P. Varma purporting to act as a Taxing Officer of the Antarim Zila Parishad.
Aggrieved by the assessment order, the appellant filed a Civil Miscellaneous Writ Petition No. 1780 of 1960 in the Allahabad High Court challenging the authority of the respondent Antarim Zila Parishad to impose the tax and praying for the grant of a writ to quash the said assessment order.
The writ petition was summarily dismissed on July 21, 1960 by Jagdish Sahai, J. on a preliminary point that the appellant had a right to appeal to the prescribed authority under section 128 of U.P. Act No. X of 1922.
The appellant thereafter preferred a Special Appeal No. 452 of 1960 in the Allahabad High Court against the order of Jagdish Sahai, J. which was also dismissed on the ground that the appellant had an alternative remedy of appeal.
During the pendency of the Special Appeal No. 452 of 1960, another new Act, namely the U.P. Kshetra Samitis and Zila Parishads Adhiniyam of 1961 (i.e., the U.P. Act No. XXXII of 1961).was passed by the U.P. Legislature and on November 29, 1961 received the assent of the President of India.
The case of the appellant is that on January 15, 1962, without giving any notice or inviting any objections, the Taxing Officer Shri O.P. Verma passed the assessment order for 1961 62 in respect of the circumstances and property tax regarding the Basera Unit.
Being aggrieved by the two separate assessment orders of Rs. 2000/ each in respect of the two units of Morana and Basera for the years 1961 62, the.
appellant filed again in the Allahabad High Court a writ petition No. 2371 of 1962 under article 226 of the Constitution.
The writ petition was summarily dismissed by section N. Dwivedi, 1.
on, February 13, 1964.
The appellant took the matter in appeal in.
Special Appel No. 322 of 1964 but the Special Appeal was dismissed by the Division Bench on March 27, 1964 on the ground ' that the appellant had not availed himself of the alternative remedy by way of appeal.
The present appeal is brought to this Court by special leave from the judgment of the Division Bench of the Allahabad High Court dated March 27, 1964 in Special ' Appeal No. 322 of 1964.
The sole argument presented on behalf of the appellant is that the High Court was in error in holding that an appeal under the U.P. District Boards Act No. X of 1922 was an adequate and efficacious remedy and that the appellant should have exhausted ' the statutory remedy before applying for a writ under article 226 of the Constitution.
522 It is a well established proposition of law that when an alternative and equally efficacious remedy is open to a litigant he should be required to pursue that remedy and not to invoke the special jurisdiction of the High Court to issue a prerogative writ.
It is true that the existence of a statutory remedy does not affect the jurisdiction of the High Court to issue a writ.
But, as observed by this Court in Rashid Ahmed vs The Municipal Board, Kairana(1), "the existence of an adequate legal remedy is a thing to be taken into consideration in the matter of granting writs" and where such a remedy exists it will be a sound exercise of discretion to refuse to interfere.
in a writ petition unless there are good grounds therefore.
But it should be remembered that the rule of exhaustion of statutory remedies before a writ is granted is a rule of self imposed limitation, a rule of policy, and discretion rather than a rule of law and the court may therefore in exceptional cases issue a writ such as a writ of certiorari notwithstanding the fact that the statutory remedies have not been exhausted.
In The State of Uttar Pradesh vs Mohammad Nooh(2), S.R. Das, C.J., speaking for the Court, observed: "In the next place it must be borne in mind that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy.
It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute.
(Halsbury 's Laws of England, 3rd Ed., Vol.
II, p. 130 and the cases cited there).
The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in ' arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, if any.
But this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party.
had other adequate legal remedies.
In the King vs Postmaster .
General Ex parte Carmichael a certiorari was issued although the aggrieved party had and alternative remedy by way of appeal.
It has been held ' that the superior court will readily issue a certiorari in a case where there has been a denial of natural justice before a court of summary jurisdiction.
(1) ; (2) ; , 605.
523 case of Rex vs Wandsworth Justices Ex parte Read is an authority in point.
In that case a man had been convicted in a court of summary jurisdiction without giving him an opportunity of being heard.
It Was held that his remedy was not by a case stated or by an appeal before the quarter sessions but by application to the High Court for an order of certiorari to remove and quash the conviction.
" There are at least two well recognised exceptions to .the doctrine with regard to the exhaustion of statutory remedies.
In the first place, it is well settled that where proceedings are taken before a Tribunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby to move the High Court under article 226 for issuing appropriate writs for quashing them on the ground that they are incompetent, without his being obliged to wait until those proceedings run their full course. (See the decisions of this Court in Carl Still G.m.b.H.v.
The State Bihar(1) and The Bengal Immunity Co. Ltd. vs The State Bihar(2).
In the second place, the doctrine has no application in a case where the impugned order has been made in violation of the principles of natural justice (See The State of Uttar Pradesh vs Mohammad Nooh(3).
It is manifest in the present case that the appellant had alleged in the writ petition that the Taxing Officer had no authority to impose the tax and there was no validly constituted Antarim Zila Parishad after December 31, 1959.
It was further alleged that sections 114 and 124 of the U.P. District Boards Act No. X of 1922 violated article 14 of the Constitution as arbitrary power was granted to District Boards as well as the State Government to exempt any person or class of persons or any property or class of properties from the scope of the Act.
There is also an allegation that the imposition of the tax violated the provisions of article 276 of the Constitution and that the Antarim Zila Parishad could not impose the tax beyond the maximum limit of Rs. 250/per annum prescribed in that Article.
It was further contended on behalf of the appellant that the procedure for assessment of the tax was not followed and there was violation of the principles of natural justice.
In view of the allegations of the appellant that the taxing provisions are ultra vires and that there was violation of the principles of natural justice, we think that the High Court was in error in summarily dismissing the writ petition on the ground that the appellant had an alternative remedy of statutory.
appeal.
It was contended by Mr. Chagla on behalf of the respondent that in dismissing the writ petition the High Court was acting in its discretion.
But it is manifest in the present case that (1) ; (2) (3) [1958] s.c.R,.
524 the discretion of the High Court has not been exercised in accordance with law and the judgments of the Division Bench dated March 27, 1964 and of the learned Single Judge dated February 13, 1964 summarily dismissing the writ petition are defective in law.
For the reasons expressed we hold that this appeal must be allowed, the judgments of the Division Bench in Special Appeal No. 322 of 1964 dated March 27, 1964 and of the learned Single Judge dated February 13, 1964 should be set aside and Civil Miscellaneous Writ No. 2371 of 1962 should be restored to file and dealt with in accordance with law.
There will be no order with regard to the costs of this appeal in this Court.
G.C. Appeal allowed.

summary/full:
The appellant was a partnership firm carrying on the business of manufacturing Khandsari Sugar in the District of Muzaffarnagar, U.P.
Under section 114 of the U.P. District Boards Act X of 1922 a District Board had power to levy a tax on circumstances and property subject to certain conditions and restrictions.
The powers of District Boards, under the aforesaid Act were by virtue of the U.P. Antarim Zila Parishad Act, 1958 conferred on the Parishads formed under the latter Act.
The U.P. Antarim Zila Parishad Act 1958 expired on 31st December, 1959 but its life was extended to 31st December, 1960 by .Amending
Act No. 1 1960 which received the assent of the Governor on January 5, 1960.
When the taxing officer of the Antarim Zila Parishad Muzaffarnagar subjected the appellant to circumstances and property tax for 1959 60 the appellant filed a writ petition in the High Court contending inter alia that Amending Act No. 1 of 1960 could not continue the Act of 1958 because the latter had already expired on 31st December, 1959 while the former received the consent of the Governor on January 5, 1960.
The constitutionality of the taxing provisions was also challenged.
The writ petition was dismissed by the High Court on the sole ground that the remedy by way of appeal under section 128 of the District Boards Act 1922, had not been exhausted.
The U.P. Kshetra Samitis and Zila Parishads Adhiniyam of 1961 (U.P. Act 32 of 1961) was passed in November, 1961.
Acting under it the .taxing officer of the Zila Parishad subjected the appellant to circumstances and property tax for the year 1961 62 without giving any notice or inviting objections.
In respect of this assessment also the appellant filed a writ petition in the High Court pleading denial of natural justice as well as challenging the constitutionality of the taxing provisions.
This petition was also dismissed on the same ground as the earlier one.
The appellant came to this Court.
HELD: The rule of exhaustion of statutory remedies before a writ is granted is a rule of self imposed limitation, a rule of policy and discretion rather than a rule of law and the court may therefore in exceptional cases issue a writ such as a writ of certiorari notwithstanding the fact that the statutory remedies have not been exhausted.
[522 C] State of Uttar Pradesh vs Mohammad Nooh, [1958] S.C.R. 596, 605, relied on.
There are at least two well recognised exceptions to the doctrine with regard to the exhaustion Of statutory remedies.
In the first place it is well settled that where proceedings are taken before a Tribunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby to move the High Court under article 226 for issuing appropriate writs for quashing them on the ground that they are incompetent.
without his being obliged to wait until those proceedings run their full course.
[523 C] 519 Cart Still G.M.B.H.v.
State of Bihar, A.I.R. 1961 S.C. 1615 and The Bengal Immunity Co. Ltd. vs State of Bihar, , relied on.
In the second place the doctrine has no application in a case where the impugned order has been made in violation of the principle of natural justice.
[523 D] State of Uttar Pradesh vs Mohammad Nooh, [1958] S.C.R. 596, 605, referred to.
In the present case in view of the allegations of the appellant that the .taxing provisions were ultra vires and that there was a violation of the principles of natural justice the High Court was in error in summarily dismissing the writ petition on the ground that the appellant had an alternative remedy of statutory appeal.
The High Court was no doubt vested with a discretion but in the present case the discretion had not been exercised in accordance with law.
[523 C 524 A]


judgement:
Appeal No. 560 of1966.
Appeal by special leave from the Award dated September 28, 1964 of the Industrial Tribunal, Bihar in Reference No. 32 of 1963.
A.C. Mitra and D.N. Gupta, for the appellant.
O.P. Sharma and V.C. Parashar, for the respondents.
The Judgment of the Court was delivered by Shelat, J.
This appeal, by special leave, is against the award dated September 28, 1964 of the Industrial Tribunal, Patna.
The appellant company is an all India complex having establishments in different parts of the country.
In Bihar alone, it has two factories, one at Jamshedpur and the other at Ranchi, and has depots at Patna and other towns.
The factory at Jamshedpur is an establishment under the Bihar Shops and Establishments Act.
Certain disputes having arisen between the a_appellant company and its workmen employed in the factory at Jamshedpur, the com 553 pany and the said workmen represented by their.
union called the Indoxco Labour Union, Jamshedpur, made a joint application dated September 7, 1963 to the Government of Bihar for a reference under section 10(2) of the .
By a notification dated October 23, 1963, the Government referred five disputes to the Tribunal for adjudication.
We are concerned ' in this appeal with only two disputes arising from demands Nos3 and 5.
These demands were, No. 3.
"The payment of overtime to office staff should be 11/2 times the ordinary rate beyond their normal duty hours.
" No. 5. "Union representatives should be allowed special leave to attend to law courts for matters connected with the workers and the management, to attend to annual conventions of their federation, to attend to Executive Committee meeting of the union federation and convention of central organisation i.e., INTUC." As required by r. 3 of the Industrial Disputes (Bihar) Rules, 1961, the statement accompanying the said application signed by the District Manager on behalf of the company and the General Secretary of the said union representing the said workmen contamed inter alia the following information, namely, "( c ) Number of workmen employed in the undertaking affected 352 (d) Estimated number of workmen affected or likely to be affected by the dispute 352" It is quite dear from the said application and the statement signed by the parties, ( 1 ) that the said disputes concerned the 352 workmen employed in the company 's factory at Jamshedpur and (2) that these 352 workmen were represented by the Indoxco Labour Union.
The said notification also stated "Whereas the Governor of Bihar is of opinion that an industrial dispute exists or is apprehended between the management of Indian Oxygen Limited .
Jamshedpur 7 and their workmen represented by Indoxco Labour Union . .
Jamshedpur, regarding the matters specified in their joint applications dated 7 9 1963 annexed hereto .
Now, therefore, in exercise of powers conferred by sub sec.
(2 ) of section 10 of the (XIV of 1947), the Governor of Bihar is pleased to refer the said dispute . .
" The notification thus makes it clear that the disputes referred to the Tribunal were disputes set out in the said agreement and state 554 ment and were between the management of the appellant company 's factory at Jamshedpur and their workmen represented by the Indoxco Labour Union.
It appears, however, that the union at its general meeting held on January 6, 1963, purported to amend its constitution by a resolution passed thereat by changing the name of the union to Indian Oxygen Workers Union and making the workmen of all the establishments of the appellant company in Bihar eligible for its membership.
C is the copy of a letter dated January 21, 1963 by which the Secretary of the said union informed the District Manager of the appellant company at Jamshedpur of the said purported amendment.
The Tribunal appears to be of the view that the ' constitution of thesaid Indoxco Labour Union came to be amended as from January 6, 1963 and that as the said reference was made in October 1963, i.e., after the said purported amendment, "the mention in it of the dispute as a dispute between the company and Indoxco Labour Union does not materially affect the position that the dispute raised by the union is in respect of the employees of the company wherever they may be stationed.
Consequently, the award in this case shall be effective in respect of all of them and cannot be restricted to the workmen working at Jamshedpur".
So far as the workmen 's demands Nos. 3 and 5 were concerned, the Tribunal after observing that the company 's wage scales were satisfactory, compared the rates of overtime paid by other industrial concerns in Jamshedpur and awarded 1 1/4 times the ordinary wages for overtime work exceeding 39 hours but not exceeding 48 hours per week.
If the overtime exceeded 48 hours per week, 48 hours of work being the maximum provided by the Bihar Shops and Establishments Act, the company would be liable to pay at double the ordinary rate of wages as provided in that Act.
Regarding demand No. 5, the union produced three letters addressed to its Secretary, ( 1 ) a letter by the General Secretary of the Tara Workers Union, (Ext.
I) dated November 30, 1963, wherein it was stated that the officials of that union were granted special leave to attend the union 's executive committee meetings, the meetings of their federation and the meetings of the I.N.T.U.C. if held at Jamshedpur; (2) a letter dated January 25, 1964 by the General Secretary of Golmuri Tinplate Workers Uni , Jamshedpur, to the effect that members of the executive committee of that union were relieved from duty with pay to attend meetings of the executive committee or any other meeting called by the union except mass meetings and the union 's delegates were also.
allowed special leave with p.ay to attend I.N.T.U.C. sessions; and (3) a letter dated December 7, 1963 by the Secretary of Telco Workers Union, Jamshedpur, to the effect that members of the executive committee of that union and office bearers were allowed to attend union 's meetings without loss of pay.
The Tribunal noted that the appellant company 555 had been allowing without loss of pay the representatives of the workmen to attend proceedings before conciliation officers and Industrial Tribunals.
This concession, it considered, was sufficient and, therefore, rejected the demand for special leave with pay to attend the law courts.
But it awarded that the union 's representatives should be given special leave to attend (1 ) meetings of its executive commit, tee, (2) meetings of the federation of the union, (3) the annual convention of that federation when held at Jamshedpur and (4) the convention of the I.N.T.U.C.
The first contention urged on behalf of the appellant company was that the Tribunal was in error in making its award operative not only to the said workmen at its Jamshedpur factory but also to workmen at its other establishments and that in doing so it acted beyond jurisdiction.
In our view, this contention must be upheld.
In the first place, the agreement by which the parties agreed to refer the said disputes for adjudication was clearly between the management of the appellant company 's factory at Jamshedpur and the workmen employed in that factory and represented by their said union the Indoxco Labour Union.
The statement accomping that agreement clearly stated that the disputes agreed to be referred to were between the workmen of that factory and the management of that factory.
The notification referring those disputes to the Tribunal also made it Clear that the disputes referred to were those set out in the said agreement and the statement and no other dispu,tes and further that they were the disputes between the parties to that agreement.
There was no evidence before the Tribunal that similar demands were raised by workmen engaged in the appellant company 's other establishments.
Even assuming that the Indoxco Labour Union validly amended its constitution so as to extend its membership to the company 's other workmen in its other establishments, inasmuch as the disputes referred to the Tribunal were only those set out in the said agreement and the said statement, any award made by the Tribunal in respect of those disputes must necessarily be confined to the disputes referred to it, the parties to those disputes 'and the parties who had agreed to refer those disputes for adjudication.
Next, as to the claim of the Union that it had amended its constitution on January 6, 1963 and, therefore, as the workmen of the factory at Jamshedpur came henceforth to be represented by the Indian Oxygen Workers ' Union which represented also workmen employed in the appellant company 's other establishments, the reference extended to them also and the Tribunal 's award would cover them also.
We fail to see any connection between the purported amendment of the union 's constitution and 556 the reference made by the government on the basis of the said agreement and the said ' statement.
These, as aforesaid, related to the disputes between the management and the workmen of the appellant company 's factory at Jamshedpur who alone had made the aforesaid demands and disputes arising from those demands only were agreed to be referred to and were actually referred to the Tribunal by the said notification.
There is nothing to show in that notification that other workmen of the company had raised similar demands or that there were any disputes existing or apprehended which were included in that reference.
The question next is whether the union 's constitution was duly amended on January 6, 1963 as claimed by the union and held by the Tribunal.
The constitution of the union prior to its purported amendment contained amongst other Articles, Articles 1 and 3.
These Articles read as follows: "ARTICLE NO. 1: Name and Address: 1.
This Union is a Trade Union Organisation of wage earners of the Indian Oxygen & Acetylene Co. Ltd., Jamshedpur and shall be called.
Indoxco Labour Union.
The situation of the Registered Office shall not be changed except by resolution of the General Body Meeting specially held for the purpose.
Any change of the address of the Registered Office of the Union will be communicated to the Registrar of the Trade Unions within 14 days of such change." Article XII of the said constitution deals with alteration of rules and cl.
(e) thereof provides that copies of all new rules and amendments or revisions of .rules shall be submitted to the Registrar within the prescribed period as required by section 28(3) of the .
This rule had to be incorporated in the constitution in view of the express terms of that section.
Section 6 of the provides that a trade union would not be entitled to registration under the Act unless the executive thereof is constituted in accordance, with the provisions of this Act, and the rules thereof provide amongst other things for its name and the manner in which the rules shall be amended, varied or rescinded.
Section 28(3) provides that a copy of every alteration made in the rules of a registered trade union shall be sent to the Registrar Within fifteen days of the making of the alteration.
Section 29 contains the power of the appropriate government to make regulations and sub section 2(a) provides that without prejudice to the generality of the power in sub section
(1 ) such regulations may provide inter alia for the manner in which trade unions and their rules shall be registered.
Section 30(3) lays 557 down that regulations so made shall be published in the official gazette and on such publication shall have effect as if enacted in this Act.
In pursuance of the power to make regulations the Central Government framed Central Trade Unions Regulations, 1938, regulation 9 whereof provided that on receiving a copy of an alteration made in the rules of a trade union under section 28(3), the Registrar shall register the alteration in the register maintained for this purpose and shall notify the fact that he has done so to the secretary of the trade union.
The combined effect of secs.
6(g), 28(3), 29 and 30(3) and regulation 9 is that a registered union can alter its rules.
only in the manner provided in these provisions, that is, it has to send the amended rules to the Registrar within 15 days from the amendment and until the Registrar is satisfied that the amendments are in accordance with the rules of the union and on such satisfaction registers them in a register kept for that purpose and notifies that fact to the union 's secretary, the amendments do not become effective.
The union did not produce any evidence to show that the amendments purported to have been carried out by the said resolution dated January 6, 1963 were sent to the Registrar as provided in the aforesaid provisions, nor did it produce any communication of the Registrar notifying the fact of his having registered the said amehdments.
The only evidence it produced was its letter dated May 21, 1964 to the appellant company which indicated that the Registrar notified to the union of his having registered the said amendments on May 13, 1964.
The Tribunal 's conclusion, therefore, that the union 's constitution was duly amended on either January 6, or 21, 1963 or that, therefore, the/ndian Oxygen Workers Union represented the workmen of the company 's factory at Jamshedpur and that consequently it made no difference that the name of Indoxco Labour Union as representing the workmen concerned was mentioned in the said agreement and the said statement and not that of the Indian Oxygen Workers Union is erroneous and cannot be sustained.
Any award, therefore, made by the Tribunal in these circumstances can operate only in respect of the workmen of the appellant company 's factory at Jamshedpur and the Tribunal 's extension of that award to workmen in the company 's other establishments was clearly without jurisdiction.
The decisions in The Associated Cement Companies Ltd. vs Their Workmen(1) and Ramnagar Cane and Sugar Co. Ltd. vs Jatin ChakravortY(2) on the effect and interpretation of section 18 of the , relied on by counsel for the union are beside the point and do not assist him.
As regards the Tribunal 's finding on demand No. 3, counsel for the company raised two contentions: (1 ) that the company 's factory at Jamshedpur having been declared an establishment (1) ; (2) 558 under the Bihar Shops and Establishments Act, it could be made liable to pay for overtime work at the rate provided in that Act, viz. at double the ordinary rate when a workman was asked to.
work beyond 48 hours per week as provided therein.
Therefore, the argument ran, the appellant company could not be asked to pay more than its ordinary rate of wages payable to workmen if they were asked to work beyond 39 hours but not exceeding 48 hours.
And (2) that the comparative statement (Ext.
M) of overtime rates paid by other concerns in Jamshedpur before the Tribunal showed that if the company were made to pay 11/4 times its ordinary rate of wages it would, in the light of its higher scale of wages be paying more than the other concerns.
In our judgment both these contentions are unsustainable.
Under the conditions 'of service of the company, the total hours of work per week are 39 hours.
Any workman asked to work beyond these hours would obviously be working overtime and the company in fairness would be expected to pay him compensation for such overtime work.
The Bihar Shops and Establishments Act has no relevance to this question as that Act fixes the maximum number of hours of work allowable thereunder, i.e. 48 hours a week, and provides for double the rate of ordinary wages for work done over and above 48 hours.
It is not, therefore, as if the provisions of that Act govern overtime payment payable by an employer where maximum hours of work are governed by the conditions of service prevailing in his establishment.
Therefore, no reliance can be placed on the provisions of that Act for the company 's contention that it cannot be called upon to pay for overtime work anything more than its ordinary rate of wages if the workmen do work beyond 39 hours but not exceeding 48 hours a week.
It is obvious that if the company were asked to pay at the rate equivalent to the ordinary rate of wages for work done beyond 39 hours but not exceeding 48 hours work a week, it would be paying no extra compensation at all fo.r the work done beyond the agreed hours of wo.rk.
The company would in that case be indirectly increasing the hours of work and consequently altering its conditions of service.
M., relied on by counsel, gives the overtime rate paid by six industrial concerns situate in Jamshedpur.
Out of these six concerns, four pay overtime compensation at 11/2 times the ordinary wages and dearness allowance payable by them.
If after taking into consideration the fact of the comparatively higher scale of wages prevailing in the appellant company the Tribunal fixed the rate for overtime work at 1 1/4 times the ordinary.
rate of wages, it is impossible to say that the Tribunal erred in doing so or acted unjustly.
The company 's contention, thcrefore, as regards this demand must be rejected.
559 As regards demand No. 5, counsel for the company very seriously challenged that part of the award as unjustified and contended that an obligation to grant special leave to attend the meetings of the executive committee of the union, the meetings of the federation and the conventions of the I.N.T.U.C. over and above the various types of leave available to the company 's workmen was tantamount to the company having practically to finance the administration and management of the union.
He argued that imposing such an obligation on the company cannot be justifled on the ground of social justice or promotion of trade unionism.
Counsel for the union, on the other hand, sought to support this part of the award on the ground that such a demand was justified, as the Tribunal has observed, in the interest of a proper growth ' of trade union movement and the promotion of harmony in industrial relations inasmuch as if facilities are given to the workmen to conduct the administration of the union themselves, there would be less possibility of outside elements establishing their hold on the union.
We apprehend the argument does not take into consideration certain important aspects of the demand.
As aforesaid, the appellant company has been allowing those of its workmen who are the tmion 's representatives to attend without loss of pay 'proceedings before conciliation officers and industrial tribunals.
This is fair because conciliation proceedings are likely to get thwarte if the workmen 's representatives are not there to discuss the disputes and put forward their point of view before conciliation officers and wherever possible to arrive at a settlement or compromise.
Over and above this facility, the workmen get various types of paid leave.
As the figures of such leave are not correctly 'stated in the award, we collected them from counsel on both sides.
The following table shows the types of leave enjoyed by the workmen: Factory Staff: Earned leave . 21 Festival leave . 10 Casual leave . 7 Medical leave . 15 53 Office Staff: Earned leave . 21 Festival leave . 17 Casual leave . 7 Medical leave . 15 560 General Staff: Earned leave . 15 Festival leave . 17 Casual leave . 7 Medical leave . 15 54 It is impossible to say that the leave granted by the company with full pay is not fair or even liberal.
In conceding the demand of the union the Tribunal does not appear to have considered the adverse effect on the company 's production if further absenteeism were to be allowed especially when the crying need of the country ' s economy is more and more production and employers are exhorted to streamline their management to achieve this objective and to bring down their cost in line with international cost.
In awarding this demand the Tribunal also did not specify on how many occasions the executive committee meetings of the union and other meetings would be held when the company would be obliged to give special leave with pay to the union 's representatives.
Similarly there is no knowing how many delegates the union would send to attend the conventions of the federation and the I.N.T.U.C.
The Tribunal could not in the very nature of things specify or limit the number of such meetings for such an attempt would amount to interference in the administration of the union and its autonomy.
Its order must of necessity, therefore, have to be indefinite with the result that the appellant company would not know before hand on how many occasions and to how many of its workmen would be called upon to grant special leave.
Further in case there are more than one union in the company 's establishment, the representatives of all such unions would also have to be given such leave to attend the aforesaid meetings.
A healthy growth of trade union movement undoubtedly would lead to industrial peace and harmony and consequently to higher efficiency.
But a demand of the type we have before us has to be considered from a11 aspects and its implications and results have to be properly examined.
In considering such a demand, the first question which strikes one is as to why the meetings of the executive committee of the union cannot be held outside the hours of work.
It was said that it may not be possible always do so if an emergency arises.
But emergencies are not of regular occurrence and if there be one, the representatives can certainly sacrifice one of their earned leave.
There can obviously be no difficulty in so doing.
The meetings of the federation and the annual conventions of the I.N.T.U.C. too can be attended by the union 's delegates by availing themselves of their earned leave.
561 Industrial adjudication, as observed in 1.
K. Cotton and Spinning and Weaving Mills vs Badri Mali(1) cannot and should not ignore the claims of social justice, a concept based on socio economic equality, and which endeavours to resolve conflicting claims of employers and employees by finding not a one sided but a fair and just solution.
A demand for special leave has, however, nothing to do with any disparities or inequalities social or economic.
On the other hand, too much absenteeism harms both the employers and the employees inasmuch as it saps industrial economy.
In our view, the Tribunal, on the considerations aforesaid, was not justified in obliging the appellant company to grant special leave demanded by the union.
The result is that except for the overtime rate allowed by the Tribunal which we confirm, the rest of the appeal has to be allowed and the Tribunal 's award set aside.
We hold that the award is operative in respect of the workmen of the appellant company 's factory at Jamshedpur and not the workmen of its other establishments.
The demand for special leave comprised in demand .No.
5 is disallowed.
There will be no order as to costs.
Y.P. Appeal allowed in part.

dataset_name: IN-Abs

summary/full:
The appellant and its workmen, represented by their unio.n called the Indoxco Labour Union, Jamshedpur, made a joint application to the Government referring certain disputes to the Industrial Tribunal.
The application stated that the number of workmen employed in the undertaking affected were those employed in the company 's factory at Jamshedput, and that the same number were likely to be affected by the disputes.
The Government referred the disputes to the Industrial Tribunal, and the notification also stated that the disputes were between the management of the appellant company 's factory at Jamshedpur and their workmen represented by Indoxco Labour Union.
Two of the demands were (1) payment of overtime to office staff should be 1 1/2 times the ordinary rate .and (2) the union representatives should be allowed special leave to attend law courts for matters connected with the workers and the management, to attend the annual conventions of their federation, to attend to Executive Committee meetings of the union federation and the conventions of the central organisation i.e., INTUC.
The union at a general meeting, held prior to the reference, had passed a resolution changing the name of the union to Indian Oxygen Workers Union and making the workmen of all the establishments of the Appellant company in Bihar eligible for its membership.
By a letter the union informed the appellant company at Jamshedpur of this amendment.
The Tribunal held that (i) the award in this case was to apply to all of the workmen and could not be restricted to the workman working at Jamshedpur; (ii) 11/2 times the ordinary wages 'for overtime work exceeding 39 hours but not exceeding 48 hours per week should be paid; and if the overtime exceeded 48 hours per week, the company would be liable to pay double the ordinary rate of wages; and (iii) the appellant company had been allowing without loss of pay the representatives of the workmen to attend proceedings before conciliation officers and Industrial Tribunals, and that this concession was sufficient; therefore the Tribunal rejected the demand for special Leave with pay to attend the law courts; but held the union 's representatives were to be given special leave to attend (a) meetings of its executive committee, (b) meetings of the federation of the union, (c) the annual convention of that federation when held at Jamshedpur and (d) the convention of the INTUC.
In appeal to this Court, HELD: (i) The award was operative only in respect of the workmen of the appellant company 's factory at Jamshedpur and not the workmen of its other establishments.
[561 C D] The agreement by which the parties agreed to refer the said disputes for adjudication was between the management of the appellant company 's factory at Jamshedpur.
and the wo 'rkmen employed in that factory and represented by their said union, the Indoxco Labour Union.
Under the notification of the Government also 'the disputes referred to the Tribunal 551 were those set out in the said agreement.
Even assuming that the Indoxco Labour Union validly amended its constitution so as to extend its membership to the company 's other workmen in its other establishments, inasmuch as the disputes referred to.
the Tribunal were only those set out in the said agreement, any award made by the Tribunal in respect of those disputes must necessarily be confined to the disputes refered to it, the parties to those disputes and the parties who had agreed to refer those disputes for adjudication.
There is nothing to show in that notification that other workmen of the company had raised similar demands.
or that there were any disputes existing or apprehended which were included in that reference.
[555 D G] The Union did not produce any evidence to show that the amendments purported to have been carried out by the resolution were sent to the Registrar as provided in sections 6(g), 28(3), 29 and 30(3) of the Trade Union Act and regulation 9 of the Central Trade Union Regulation, nor did it produce any communication of the Registrar notifying the fact of his having registered the said amendments.
The only evidence it produced was its letter to the appellant company which indicated that the Registrar notified to the union of his having registered the said amendments.
The Tribunal 's conclusion, therefore, that the union 'section constitution, was duly amended or that the Indian Oxygen Workers Union represented the workmen of the company 's factory at Jamshedpur and that consequently it made no difference that the name of Indoxco Labour Union as representing the workmen concerned was mentioned in the said agreement and the said statement and not that of the Indian Oxygen Workers Union is erroneous and cannot be sustained.
Any award, therefore, made by the Tribunal in these circumstances can operate only in respect of the workmen of the appellant company 's factory at Jamshedpur and the Tribunal 's extension of that award to workmen in the company 's other establishments was clearly without jurisdiction.
[557 D G] The Associated Cement Companies Ltd. vs Their Workmen, ; a 'nd Ramnagar Cane and Sugar Co. Ltd. vs Jatin Chakravorty, , distinguished.
(ii) Under the conditions of service of the co.mpany, the total hours of work per week were 39 hours.
The Bihar Shops and Establishments Act fixes the maximum number of hours of work allowable thereunder, i.e. 48 hours a week, and provides for double the rate of ordinary wages for work done over and above 48 hours.
But no reliance can be placed on the provisions of that Act for the company 's contention that it cannot be called upon to.
pay for overtime work anything more than its ordinary rate of wages if the workmen do work beyond 39 hours but not exceeding 49 hours a week.
Any workman asked 'to work beyond 39 hours would obviously be working overtime and the company in fairness would be expected to pay him compensation for such overtime work.
If the company pays at the ordinary rate of wages for work done beyond 39 hours but not exceeding 48 hours work a week, it would be paying no extra compensation at all for the work done beyond the agreed hours of work.
The company would thus be indirectly increasing the hours of work and consequently altering its condition of service.
[558 C F] If after taking into consideration the fact of the comparatively higher scale of wages prevailing in the appellant company, the Tribunal fixed the rate for overtime work at 11/2 times the ordinary rate of wages, it is impossible to say that the Tribunal erred in doing so or acted unjustly.
(iii) The demand for special leave must be disallowed.
552 The appellant company.
has been allowing those,of its workmen who are the union 's representatives to attend without loss of pay proceedings before conciliation officers and industrial tribunals.
In conceding the demand of the union for more leave the Tribunal does not appear to have considered the adverse effect on the company 's production if furthern absenteeism were to be allowed especially when the crying need of the country 's economy is more and more production.
In awarding this demand the Tribunal also did not specify on how many ' occasions the executive committee meetings of the union and other meetings would be held when the company would be obliged to give special leave with pay to the union 's representatives.
Similarly, there is no knowing how many delegates the union would send to attend the conventions of the federation and the INTUC.
The Tribunal could not in the very nature of things specify or limit the number of such meetings for such an attempt would amount to interference in the administration of the union and its autonomy.
Its order must of necessity, therefore, have to be indefinite with the result that the appellant company would not know before hand on how many occasions and to how many of its workmen it would be called upon to grant special leave.
Further, in case there are more than one union in the company 's establishment, the representatives of all such unions would also have to be given such leave to attend the aforesaid meetings.
In considering such a demand, the question as to why the meetings of the executive committee of the union cannot be 'held outside the hours of work should be considered.
It was said that it may not be possible always to do so if an emergency arises.
But emergencies are not of regular occurrence and if there be one, the representatives can certainly sacrifice one of their earned leave.
Similarly the meetings of the federation and the annual conventions of the INTUC too can be artended by the union 's delegates by availing themselves of their earned leave.
[559 D E; 560 C H] J. K. Cotton and Spinning and Weaving Mills vs Badri Malt, [19641 3 S.C.R. 724, referred to.


judgement:
Appeal No. 955 of 1965.
470 Appeal by special leave from the judgment and decree dated March 17, 1961 of the Patna High Court in Appeal from Appellate Decree No. 897 of 1956.
U.P. Singh, for the appellants.
K.K. Sinha for respondent No. 1.
The Judgment of the Court was delivered by Hegde, J.
In this case a Full Bench of the Patna High Court differing from the view taken in a series.
of earlier decisions of that High Court as well as the High Court of Calcutta held that the provisions of Bihar Tenancy Act (to be briefly referred to hereinafter as the Act) do not apply to a lease of a homestead though that homestead was a part of an earlier lease which was admittedly an agricultural lease and to which the provisions of the Act applied.
The appellant challenges the correctness of that decision.
The relevant facts as.
found by the fact finding courts are:One Chakrapani Singh was the lessee of a plot which consisted of agricultural lands as well as a homestead.
The homestead was later separately leased to defendants 1 and 2 (appellants).
Thereafter the plaintiffs purchased the rights of the main lessee and sued the appellants for possession of the homestead.
The appellants resisted the suit mainly on the ground that it had not been brought in accordance with the provisions of the Act and hence not maintainable.
The contention of the plaintiffs is that the lease is invalid as it did not conform to the provisions of section 117 of the Transfer of Property Act and therefore they are entitled to evict the appellants.
The trial court decreed the plaintiff 's suit but the first Appellate Court reversed the decree of the trial court and dismissed it.
It followed the earlier rulings of the Patna High Court to the effect that if the main lease is a lease for agricultural purposes all sub leases of portions of that leasehold should also be considered as agricultural leases despite the fact that a particular sub lease may be that of a homestead only.
The plaintiffs took the matter in second appeal to the High Court which was decided by a Full Bench which allowed the appeal as mentioned earlier.
Two questions that arise for decision are (1) was the High Court right in holding that the lease in favour of the appellants is governed by section 117 of the Transfer of Property Act and (2) whether in view of the uniform view taken in the earlier decisions during a period of nearly 55 years the High Court was justified in reopening the question.
Till the decision under appeal High Courts of Patna and Calcutta proceeded on the basis that if the main lease is governed 471 by the provisions of the Act and consequently taken out of the scope of the Transfer of Property Act then it must be held that all sub leases of portions of the properties included in the main lease are agricultural leases; otherwise the main lease would cease to be a purely agricultural lease as it must be held to relate to both agricultural and non agricultural lands.
We agree with the Full Bench that the ratio of these decisions is open to question.
If the legal position had not been firmly settled by a long chain of decisions commencing from 1903 onwards, it is likely that we would have concurred with the view taken by the Full Bench.
But if we do so we would be unsettling a settled view of the law on the basis of which various rights must have been created, transactions entered into and titles founded.
The rule laid down in the earlier decisions was never departed from in the past.
The Act was amended a number of times but yet the legislature did not think it necessary to alter or modify the said rule.
Different considerations would have arisen if the disputed interpretation related to a penal provision or the same is detrimental to public interest or causes public inconvenience.
Law is not always logic.
It is a part of life and more so in a democratic set up.
In law finality is of utmost importance.
Unless so required in public interest, questions.
of law firmly settled by a long course of decisions should not ordinarily be disturbed and it is all the more so in the case of an interpretation affecting property fights.
In the instant case, there were no compelling reasons for the High Court to depart from the rule laid down earlier.
The decision of the High Court, if allowed to stand is bound to disturb numerous transactions.
It is solely on that ground we propose to set aside that decision.
Now we shall refer to the; decided cases on the point.
The earliest decision on the point is Babu Ram Roy vs Mahendra Nath Sarnanta(1).
The material facts of that case are similar to the facts of this case.
The main lease in that case consisted of an agricultural lands as well as a homestead.
The homestead was separately given on sub lease by the main lessee but no registered lease deed was taken.
Subsequently the main lessee sued for possession of the homestead.
It was contended on his behalf that the lease in favour of the sub lessee being a lease of non agricultural property, the same is invalid as it was not given under a registered lease deed and hence he was entitled to a decree directing the ejectment of the defendants.
The High Court rejected the plaintiff 's claim holding that in order to maintain a suit for ejectment a notice ,under section 49 el. 6, Bengal Tenancy Act was necessary and that notice had to be served in accordance with the rules framed under that Act.
No notice having been given under that provision, the suit was held to be non (1) VIII, C.W.N. 454.
472 maintainable by Mitra J.
His view was affirmed 'by a Division Bench consisting of Maclean C.J. and Pargiter J.
The above decision was affirmed by another Division Bench of the Calcutta High Court in Abdul Karim Patwari vs A bdul Rahaman (1).
The same view was taken by the said High Court in Krishna Kanta Ghosh vs Jadu Kasya(2) and in Kadrutulla and OrS. vs Upendra Kumar Chowdhury(3).
The decision in Arun Kumar Sinha and Ors vs Durga Charan Basu(4) iS Of special importance.
That case was decided by a Division Bench consisting of B.K. Mukherjea J. who later became the Judge as well as the Chief Justice of tiffs Court and Roxburgh J.
There the learned Judges doubted the correctness of the earlier decisions but yet were of the opinion that public interest required that the interpretation placed on the provision of law by a long series of consistent decisions should not be departed.
This what the learned Judges observed in that case.
"But the principle was never dissented from, that in a case of this description, the question whether the tenancy is governed by the Bengal Tenancy Act or the Transfer of Property Act, would depend on the nature of the original tenancy, and not on the character of the parcel included in the sub tenancy.
The learned advocate who, appears for the appellants has subjected these decisions to a good deal of criticism.
Had the matter been yes integral, we might have some hesitation in accepting the view enunciated in them.
In the Bengal Tenancy Act, the raiyat is defined to be a person who acquires land primarily for purposes of cultivation; unless the letting was for purposes of agriculture the tenancy would not be governed by the Bengal Tenancy Act even if the superior interest was vested in the holding of the tenure to which the Bengal Tenancy Act was applicable.
We do not think also.
that any real anomaly would arise if as between a raiyat and his sublessee the rights were governed by the Transfer of Property Act.
Mr. Das who appears for the respondents has contended that difficulties would arise in enforcing the provisions of ch.
14 Ben.
What he says is that the purchaser of a raiyati holding has the right to annul all sub tenancies which are incumbrances under section 161, Ben.
Act; but if the raiyat has created a non agricultural tenancy in respect of a portion of his lands for a fixed period which is.
governed by the (1) 15 Cal.
Law Journal 672.
(2) (3) A.I.R. 1925 Cal.
(4) A.I.R. 1941 Cal.
473 Transfer of Property Act, to allow a purchaser to annul such sub tenancies would be to entitle him to go against the provisions of the Transfer of Property Act.
We do not think that there is any substance in this contention.
It is not necessary that the incumbrances which can be annulled under section 167 Ben.
Act must be incumbrances created under that Act.
A mortgage is certainly an incumbrance which is created under the Transfer of Property Act but it can never be suggested that because it is governed by the Transfer of Property Act, it cannot be annulled by a purchaser who purchased the holding at a sale in execution of a rent decree under Chap.
14, Ben.
The difficulty however is created by the way in which the expression "under Raiyat" has been defined in section 4 Ben.
An under raiyat has been defined to be a tenant who holds immediately or mediately under a raiyat.
It is not stated here, as in the case of a raiyat, that he must hold also for purposes of cultivation.
It may be argued that this must be the implication, for the provisions relating to under raiyats which are contained in Chap.
7 Ben.
Act are appropriate only to this character as an agricultural tenant.
It cannot be denied however that the wording of section 4, clause (3) Ben.
Act is very wide, and ' when the word has been interpreted in one way for a period of nearly 40 years without any dissension whatever, we think that we should not be justified in upsetting the long series of decisions.
It is significant to note that considerable changes have been introduced the Bengal Tenancy Act in recent years but the Legislature which must be presumed to be aware of the law as laid down in the abovementioned decisions did not consider it necessary to make any changes in this respect.
" It was not denied by the learned counsel ' for the respondents that the principle enunciated in the abovementioned decisions was consistently followed by the Calcutta High Court even up to date.
Hence it is not necessary to refer to the other decisions of that court.
The Patna High Court consistently followed the decisions of the Calcutta High Court.
In Mian Ahir and Ors vs Paramhans Pathak(1) while considering a case similar to the present case, the rule laid down in Babu Ram Roy 's case was followed.
also in Shrikishun Lal vs Harihar Sah and another (2).
The law (1) A.I.R. 1939 Pat. 409.
(2) A.I.R. (36) 1949 Pat.
474 laid down in those decisions was accepted as correct till the decision of the Full Bench in the present case.
At page 154 of Craies on Statute Law (6th Edition) it is observed: "In 1958 Lord Evershed M.R. said: "There is wellestablished authority for the view that a decision of long standing, on the basis of which many persons will in the course of time have arranged their affairs, should not lightly be disturbed by a superior court not strictly bound itself by the decision.
" Again at page 155, it is observed: 'Earlier in Morgan vs Crawshay, Lord Westbury had thus stated the rule: After explaining that it was unnecessary to examine the interest of a galee in iron ore mines, because supposing it to be regarded as a tenement and not merely as an incorporeal right, I should still arrive at the conclusion that we must bow to the uniform interpretation which has. been put upon the statute of EliZabeth and must not attempt to disturb the exposition it .has.
received.
If we find a uniform interpretation of a statute upon a question materially affecting property and perpetually recurring and which has been adhered to without interruption it would be impossible for us to introduce the precedent of disregarding that interpretation.
Disagreeing with it would thereby shaking rights and ritles which have been rounded through so many years upon the c onviction that interpretation is the legal and proper one and is one which will not be departed from.
In that the House of Lords decided that iron mines and all other mines except coal mines were, under the Statute of Elizabeth, exempt from liability to.
the poor rate.
The statute mentioned coal mines only, and a long course of decision had established that the rule expressi unius est exclusio alterius applied to the enactment." (that decision is reported in In Harding vs Howell(1) Lord Fitzgerald speaking for the Privy Council while dealing with the interpretation of a provision in a statute observed: "Their Lordships do not intend in the least to question the principle which governs the construction and effect of that statute as now long established by decided cases.
It has been over and again said that 'so many titles stand on it that it must not be shaken ' and in that their Lordships concur." (1) 14 A.C. 307. 475 In Pugh vs Golden Valley Railway Co.(1).
Thesiger L.J. bserved: "And the case is in principle a distinct authority for the proposition that in such circumstances as those which exist in the present case, the diversion of a river is unjustifiable.
Viewed simply as the decision of a Court of first instance, the authority of this case, notwithstanding the respect due to the Judges who decided it, is not binding upon us; but, viewed in its character and practical results, it is one of a class of decisions which acquire a weight and effect beyond that which attaches to the relative ' position of the Court from which they proceed.
It constitutes an authority which, after it has stood for so long a period unchallenged, should not, in the interests of public convenience, and having regard to the protection of private rights, be overruled by this Court except upon very special considerations.
For twelve years and upwards the case has continued unshaken by any judicial decision or criticism as an authoritative exposition of the meanmg of sect.
16 of the Railways Clauses Consolidation Act, 1845, in respect of the matter here in dispute.
During such period hundreds.
of Special Acts of Parliament have been passed sanctioning the construction of lines of railway and the consequent interference with private fights, and mcorporating for that purposes the provisions of the General Act.
Promoters.
must have sought their powers, landowners must have regulated their course of action, and parliamentary committees must have given their sanction to the projects submitted to them upon the faith and footing of a limit to the powers sought and conceded being found in the provisions of the general Act 'as interpreted from time to time by judicial decisions.
If so., it is to be presumed that the limit put upon the powers of a railway company in regard to the diversion of roads and rivers by the decision of the Court of Kueens ' Bench in Reg.
vs Wycombe Railway Company must have exercised a material influence upon the relations of persons owing land proposed to be affected by special railway legislation and the promoters of that legislation.
" In Murphy vs Deichler and Ors(2).
Lord Loreburn L.C. speaking for the House of Lords observed: "I think this case falls within the rule that it is ' not necessary or advisable to disturb a fixed practice (1) 15 Ch.
Division 330.
(2) 476 which has been long observed in regard to the disposition of property, even though it may have been disapproved at times by individual judges, where no real point of principle has been violated.
" The Full Bench was of the view that the rule laid down in Babu Ram Roy 's case and the decisions following it are clearly wrong.
Hence even though that rule held the field for about 55 years, there is no justification for sustaining it.
The Full Bench was of the opinion that in all cases where the terms of the statute are clear even a long and uniform course of judicial interpretation of it may be overruled if it is contrary to the meaning of the enactment. 'It accepted that to be the correct position in law and that rule is unqualified.
In support thereof they relied on the Full Bench decision of the Allahabad High Court in Lallu Singh vs Gur Narain and Ors.(1) and the decision of the Privy Council in Tricomdas Cooverji Bhoja vs Sri Gopinath Jiu Thakur(2).
The Full Bench decision of the Allahabad High Court relied on the Privy Council decision in Tricomdas Cooverji Bhoja 's case and the Privy Council in its turn followed the decision in Arthur John Pate vs W.C. Pate and Ors(3).
In the Allahabad case the contention of the defendant was that under Hindu Law as settled by decisions delivery of possession was absolutely necessary for the completion of a gift.
Their Lordships held that whatever might have been the strict law prior to the passing of the Transfer of Property Act, it must now be held that gift of immovable property can be validly effected by registered instruments signed either by or on behalf of the donor and attested by at least two witnesses and nothing further is necessary to effectuate the transfer.
It is in that context their Lordships observed that Where the terms of the statute or ordinance are clear then even a long and uniform course of judicial interpretation of it may be overruled, if it is contrary to the clear meaning of the enactment.
In fact in that case the learned Judges did not depart from the rule laid down in the earlier cases as regards the scope of section 123 of the Transfer of Property Act.
They held that the earlier decisions under the Hindu Law cannot be followed in view of the change in the law effected by section 123 of the Transfer of Property Act.
In Tricomdas Cooverjee 's(2) case, the Privy Council did not depart from any well established principle of law.
In fact their Lordships in the course of the Judgment referred to certain conflict of decisions on the point under consideration and in that context they happened to make the observations to which we have referred while dealing with the Allahabad decision.
As mentioned (1) A.I.R 1922 All. 467.
(2) A.I.R. 1916 P.C. 182.
(3) [1915]A.C. 1100.
477 earlier the decision of the Privy Council which was followed by the Full Bench of the Allahabad High Court relied on the decision in Pate vs Pate (1).
That decision if we may say so with all respect explains the true legal position.
In that case while dealing with the various decisions cited before them their Lordships observed: "With aH respect to the learned judges who so read the Ordinance in 1871, their Lordships not only think that their decision was erroneous, but also that even after the interval of forty four years it ought to be overruled.
The present is not one of those cases in which inveterate error is left undisturbed because titles and transactions have been founded on it which it would be unjust to disturb." (emphasis supplied).
From these observations it is clear that the rule that where the terms of a statute or ordinance are clear then even a long and uniform course of judicial interpretation of it may be overruled, if it is contrary to the clear meaning of the enactment is inapplicable to decisions on the basis of which titles and transactions must have been founded.
For the reasons mentioned hereinbelow this appeal is allowed and the suit dismissed with costs of this Court.
G.C. Appeal allowed.

summary/full:
C was the lessee of a plot which consisted of agricultural land as well as a homestead.
The homestead was later leased to the appellants.
The respondents purchased the rights of C and brought a suit against the appellants for possession of the homestead.
The contention of the appellants in defence was that the suit had not been brought according to the provisions of the Bihar Tenancy Act and hence was not maintainable.
The contention of the respondents was that the lease of the homestead was not an agricultural lease within the meaning of section 117 of the Transfer of Property Act and was invalid under the provisions of the latter Act.
The trial court decreed the suit.
The first appellate court however dismissed it.
In doing so it relied on earlier rulings of the Patna and Calcutta High Courts which had held the field for over 55 years, to the effect that if the main lease is a lease for agricultural purposes all sub leases of portions of that leasehold should also be considered as agricultural leases despite the fact that a particular lease may he that of a homestead only.
The High Court in further appeal departed from the view taken in the earlier cases and decided against the appellants, who came to this Court.
The main question for consideration was whether the High Court was justified in departing from the settled view.
HELD: The rule laid down in the earlier decisions was never departed from in the past.
The Tenancy Act was amended a number of times but yet the legislature did not think it necessary to alter or modify the said rule.
In law finality is of the utmost importance.
Unless so required in public interest questions of law firmly 'settled by a long course of decisions should not ordinarily be disturbed and it is all the more so in the ease of an interpretation affecting property rights.
[471 C E] The rule that where the terms of a statute or ordinance are clear then even a long and uniform course of judicial interpretation of it may be overruled, if it is ' contrary to the clear meaning of the enactment is inapplicable to decisions on the basis of which titles and transactions must have been rounded [477 D] Case law referred to.


judgement:
Appeal No. 2526 of 1966.
590 Appeal from the judgment and order dated October 30, 31, 1963 of the Gujarat High Court in Special Civil Application .No.
1098 of 1962.
, C.K. Daphtary, Attorney General and 1.
N. Shroff, for the appellant.
M.C. Chagla, R.M. Vin and R. Gopalakrishnan, for resportdent No. 1.
R.H. Dhebar and S.K. Dholakia, for respondent No. 2.
The Judgment of the Court was delivered by Hegde, J.
The only question for decision in this appeal is whether the notice issued by the appellant on June 23, 1961 under section 6 of the as amended by Act 32 of 1959 (to be hereinafter referred to as the Act) is valid.
The High Court has come to the conclusion that it is not a valid notice.
On 4th January 1923, the father of respondent No. 1 was granted a licence to supply electric energy within 'the area consisting of municipal limits of Dabhoi and the territories comprised within half mile radius from the municipal boundary lines by the Government of Baroda under the Baroda Electricity Act Samvat 1964 (Act 1 of 1964).
The said Company was known as Dabhoi Electricity Company.
Respondent No. 1 was at all material times the holder of this licence.
The said licence conferred an option on the Government to purchase the undertaking in accordance with the terms of the licence.
Clause 26(a) of that licence is material for our present purpose.
That clause reads: "The option of purchase given by section 8 of the Act shall be exercisable on the expiration of 40 years computed from the commencement of .this licence and thereafter on the expiration of every subsequent period of 8 years during the subsistence of this licence . " On the merger of Baroda State with the then Province of Bombay, the and the Indian Electri city (Supply) Act, 1948 were made applicable to the territories of the former State of Baroda and the corresponding Baroda Act was repealed with the saving clause that the licenoes issued under the repealed Act shall continue to remain in force until the expiration of the period of licence as if they were issued under Act of 1910.
In exercise of the powers conferred by section 5 of the India , the State Government constituted the appellant Corporation.
The appellant served upon resport 591 dent No. 1 a notice on June 23, 1961.
That notice is important for our present purpose.
Hence we shall quote the same in full.
It is as follows : "THE GUJARAT ELECTRICITY BOARD Kothi Building, Raopura Road, Baroda Dated 23 June, 1961.
A.D. Ref.
No. PLE.BRD.7(A) 19648.
To The Dabhoi Electric Power Supply Co. C/o Shri Girdharlal Motilal Contractor (Sheth), Ajit Bungalow, Pratapnagar Society, Baroda.
SUB: (i) Notice under section 6 of the and exercise of option vested in the Gujarat Electricity Board to purchase your undertaking.
(ii) The Dabhoi Electric Licenee 1923 granted by the Government of Baroda under the State Electricity Act, Samvat 1964.
Dear Sir, In exercise of the powers conferred on the Gujarat Electricity Board by virtue of section 71 of the , read together with section 6 of the , as amended by the Indian Electricity (Amendment) Act, 1959 (32 of 1959) this is to give you notice that the Gujarat Electricity Board has decided to exercise and shall exercise the option of purchasing your undertaking on 3 1 1963, the date on which the license granted to you by the Government of Baroda expires.
The receipt of this notice may please be acknowledged.
Yours faithfully, Sd/ Secretary, The Gujarat Electricity Board.
" As this notice was issued after the was amended by Act 32 of 1959, we have to see whether that notice complies with the requirements of section 6(1)(a) of the Act which says: "Where a license has been granted *to any person not being a local authority, the State Electricity Board shall. (a) in the case of a license granted before the commencement of the Indian Electricity (Amend 592 ment) Act, 1959 on the expiration of each, such period as is specified in the license . have the option of purchasing the undertaking and such option shall be exercised by the State Electricity Board serving upon the licensee a notice in writing of not less than one year requiting the licensee 'to sell the undertaking to it at the expiry of the relevant period referred to in this sub section.
" These provisions confer a power on the State Electricity Board to purchase the property of the licensee but that right can be exercised only in the manner provided in the Act and not in any other way.
It must be remembered that the provisions in question empower the State Electricity Board to interfere with the property rights of the licensee.
Therefore such a power will have to be strictly construed.
The legislature has prescribed a mode for the exercising of that power and hence that power can be exercised only in that manner and in no other manner.
See Nazir Ahmad vs King Emperor(1) and Ballavdas Agarwala vs Shri S.C. ChakravartY(2).
Before the option to purchase the undertaking can be exercised, the State Electricity Board must call upon the licensec by means of a notice in writing within the period mentioned in section 6 (1 ) to sell the undertaking to it on the expiration of the period for which licence was given.
The impugned notice does not require the licensec to sell the undertaking.
It merely notifies the respondent that the appellant Board has decided to exercise and shall exercise the option of purchasing the respondent 's undertaking on 3 1 1963, the date on which the licence granted to him by the Government of Baroda expired.
It was contended by the learned Attorney General on behalf of the appellant that in matters like these rigid compliance with the provisions of law should not be insisted upon.
According to him if the legal requirements are substantially satisfied the validity of the notice given, should be upheld.
Proceeding further he urged that so long as the notice given by the Electricity Board is sufficient to intimate the licensee the intention of the Board, the mandate of the law is complied with; in a notice under section 6(1) what is of the essence is the substance of the matter mentioned therein and not the manner in which the notice is worded.
He urged that the licensee must have imported some commonsense into the notice received by him and he could not be allowed to ' riggle out of his obligation by having recourse to technicalities.
In advancing these arguments.
the learned Attorney General overlooked the fact that notice required by section 6 (1 ) is not a notice of an action to be taken or merely a procedural step.
It is a mode (1) L.R. 63 I.A. 372.
(2) ; 593 of exercising the power conferred on the State Electricity Board by the exercise of which the property rights of the licensees can be affected.
Section 6( 1 ) confers power on the State Electricity Board to take away the property of the licensec.
Such a power must be exercised strictly in accordance with law.
The legislature has prescribed the manner of its exercise.
It must exercise in that manner and in no other way.
It must also be seen that the Parliament deliberately changed the form of the nonce to be given from what it was before Act 32 of 1959 was.
enacted.
It prescribed that the notice must specifically call upon the licensee to sell the undertaking.
The mandate of the law is clear and it must be obeyed.
We agree with Mr. M.C. Chagla learned Counsel for the licensee that the issuing of a notice strictly in accordance with the provisions of section 6 ( 1 ) is a condition precedent to the exercise of the power conferred on the State Electricity Board to purchase the undertaking.
That being so, we must hold that section 6 (1 ) is mandatory and it must be strictly complied with.
In this case we are not satisfied that the requirements of law have at least been substantially complied with.
Obviously the person who issued the notice was not familiar with the legal position.
He appears to be under the misapprehension that section 71 of the was still in operation when he gave the notice.
He appears to have been in two minds.
He was not sure whether he should issue the notice under the provisions of the Act as they stood ' on the date of the notice or in accordance with the provisions as they were prior to the coming into force of Act 32 of 1959.
At the top of the notice it is mentioned that it is given under section 6 of the Act but in the body of the notice it is purported to be given in exercise of the power available under section 71 of the Indian .
Again the contents of notice indicate that it is a notice under section 7 ( 1 ) read with section 7 ( 4 ) of the as they stood prior to 1959.
Quite clearly the notice speaks in two voices.
It is the product of a confused mind.
We fail to see how any commonsense can be read into it.
On reading that notice the licensec could not have been definite whether the State Electricity Board purported to exercise the power under the law as it was.
on the date of the notice or as it was under the unamended Act.
Rights and liabilities of the Electricity Board and the licensec before Act 32 of 1959 came into force are substantially different from their rights and liabilities under the Act.
On reading the impugned notice it could not have been clear to the licensee that he had been called upon to sell the .undertaking in accordance with the law as it then stood.
We are unable to accede to the request of the Attorney General to read into the notice words which are not there.
594 For the reasons mentioned hereinbefore we agree with the High Court that the impugned notice is 'invalid and by virtue of that notice the appellant cannot compel the respondents to sell the undertalcing in question.
Accordingly this appeal fails and the same.
is dismissed with R.K.P.S. Appeal dismissed.

summary/full:
The respondent held a licenee granted by the Government of Baroda under the Baroda Electricity Act 1 of 1964 to supply electric energy within certain defined territories.
On June 23, 1961 the appellant, which was constituted under section 5 of the Indian , served a notice on the respondent to the effect that in exercise of the powers conferred on it by virtue of section 71 of the read together with section 6 Qf the , as amended by the Indian Electricity (Amendment) Act 32 of 1959, the appellant.
had decided to and would exercise the option to purchase the respondent 's undertaking on 3 1 1963 i.e. the date on which the licenee was due to expire.
The respondent challenged the validity of this notice and the High Court held the notice was invalid.
On appeal to this Court.
HELD: The High Court was right in holding that the impugned notice Was invalid and by virtue of that notice the appellant could not compel the respondent to sell the undertaking.
[594 A] Before the option to purchase the undertaking can be exercised, the State Electricity Board must call upon the licensec by means of a notice in writing within the period mentioned in section 6( 1 ) to sell the undertaking to it on the expiration of the period for which the licenee was given.
The impugned notice did not require the licensec to sell the undertaking.
It merely notified the respondent that the appellant Board has decided to exercise and would exercise the option of purchasing the respondent 's undertaking on the date of expiry of the licenee.
[592 D E] Nazir Ahmad vs King Emperor, L.R. 63 I.A. 372: and Ballavdas Agarwala vs Shri S.C. Chakravarty, [1960] 2 S.C.R. 739; referred to.
There was no force in the contention that the notice complied substantially with the requirements of the law and should therefore be given effect to.
The issuing of a notice strictly in accordance with the provisions section 6(1), which prescribes that the notice must specifically call upon the licensec to sell the undertaking, is a condition precedent to the exercise of the power conferred on the State Electricity Board to purchase the undertaking.
Furthermore, on reading the impugned notice, the licensec could not have been definite whether the appellant Board purported to exercise the power under the law as it was on the date of the notice i.e. the as amended by Act 32 of 1959, or as it was under the unamended act.
The rights and liabities of the Electricity Board and the licensee before Act 32 of 1959 came into force were ,SUbstantially different from those after the amendment.
[593 C G]


judgement:
ppeal No. 23 of 1954.
Appeal under article 133(1) of the Constitution of India from the Judgment and Decree dated the 28th February, 1952, of the High Court of Judicature at Allahabad in Writ Application No. 7297 of 1951.
C. P. Lal for the appellant.
N. C. Chatterjee (Radhey Lal Aggarwal, with him) for the respondent.
May 3.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
This is an appeal by the Sales Tax Officer, Pilibhit, against the judgment of the High Court of Allahabad granting firstly, a writ of certiorari quashing certain assessment orders made against the respondent, and secondly, a writ of prohibition in respect of certain other proceedings for 244 assessment of tax under the provisions of the Uttar Pradesh Sales Tax Act (Act XV of 1948).
The respondent is a firm doing business in forward contracts, and was assessed in respect of such contracts to a tax of Rs. 1,082 8 0 for the year 1948 1949 by an order dated 27th February, 1950, Exhibit A, and to a tax of Rs. 7,369 for the year 1949 1950 by an order dated 23rd May, 1950, Exhibit B.
For the period, 1st April, 1950, to 31st January, 1951, the respondent paid a sum of Rs. 845 4 0 as tax.
Assessment proceedings were also started by the appellant in respect of certain forward contracts relating to gur and peas.
The respondent challenged the legality of these proceedings and of the assessment orders on the ground that the Act in so far as it imposed a tax on forward contracts was ultra vires the powers of the Provincial Legislature.
The learned Judges agreed with this contention, and issued a writ of certiorari quashing the orders of assessment, Exhibits A and B, and a writ of prohibition in respect of the proceedings for assessment of tax on forward contracts in gur and peas.
The matter now comes before us in appeal under a certificate of the ' High Court under article 133(1) of the Constitution.
Under the Government of India Act, 1935, the Pro vincial Legislature derived its power to impose a tax on the sale of goods under entry 48 in List 11 of the Seventh Schedule, and the Uttar Pradesh Sales Tax Act, XV of 1948, was enacted in exercise of this power.
Section 2(h) of the Act defines "sale" as follows : "Sale" means within its grammatical variations and cognate expressions, any transfer of property in goods for cash or deferred payment or other valuable consideration and includes forward contracts but does not include a mortgage, hypothecation, charge or pledge.
" It is the extended definition of sale as including forward contracts in this section that is relied on as conferring authority on the appellant to make the orders in Exhibits A and B. The point for decision in this appeal is whether the power to impose a tax on the sale of goods under entry 48 includes a power to impose a tax on forward contracts.
245 Under the statute law of India which is based on English law on the subject, a sale of goods and an agreement for the sale of goods are treated as two distinct and separate matters.
Section 4 of the Indian Sale of Goods Act (Act III of 1930), runs as follows: (1) "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.
" It will be noticed that though the section groups both sales and agreements to sell under the single generic name of "contracts of sale" following in this respect the scheme of the English Sale of Goods Act, 1893, it treats them as separate categories, the vital point of distinction between them being that whereas in a sale there is a transfer of property in the goods from the seller to the buyer, there is none in an agreement to sell.
When the contract is to sell future goods, and under section 6(3)of the Sale of Goods Act even if "the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods", there can be no transfer 'of title to the goods until they actually ' come into existence ; and even then, the conditions laid down in section 23 of the Act should be satisfied before the property in the goods can pass.
That was also the law under the repealed provisions in Chapter VII of the Indian Contract.
Act, 1872.
Section 77 of the Contract Act defined "sale" as follows: "Sale" is the exchange of property for a price.
It involves the transfer of the ownership of the thing sold from the seller to the buyer.
" 246 Section 79 enacted that, "Where there is a contract for the sale of a thing which has yet to be ascertained, made or finished, the ownership of the thing is not transferred to the buyer, until it is ascertained, made or finished.
" The corresponding provisions of the English Act are sections 1, 16 and rule 5 of section 18.
Section I is as follows: (1)"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 money consideration, called the 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.
" Section 16 enacts that, "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.
" Section 18, rule 5, provides for the passing of property is future goods after they are ascertained.
The distinction between a sale and an agreement to sell under section 1 of the English Act is thus stated by Benjamin on Sale, Eighth Edition, 1950: "In order to constitute a sale there must be (1)An agreement to sell, by which alone the property does not pass; and (2) an actual sale, by which the property passes.
It will be observed that the definition of a contract of sale, above cited includes a mere agreement to sell as well as an actual sale.
" 247 This distinction between sales and agreements to sell based upon the passing of the property in the goods is of great importance in determining the rights of parties under a contract.
The position is thus stated in Halsbury 's Laws of England, Volume 29, page 15, paragraph 13: "An agreement to sell, or, as it is often stated, an executory contract of sale, is a contract pure and simple, whereas a sale, or, as it is called for distinction, an executed contract of sale, is a contract plus a conveyance.
Thus, by an agreement to sell a mere jus in personam is created, by a sale a jus in rem is transferred.
Where goods have been sold, and the buyer makes default in payment, the seller may sue for the contract price, but where an agreement to buy is broken, usually the seller 's only remedy is an action for unliquidated damages.
Similarly, if an agreement to sell be broken by the seller, the buyer has only a personal remedy against the seller.
The goods are the property of the seller and he can dispose of them.
They may be taken in execution for his debts, and if he becomes bankrupt they pass to his trustee in bankruptcy.
But if there has been a sale, and the seller breaks his engagement to deliver the goods, the buyer has not only a personal remedy against the seller, but also the usual proprietary remedies in respect of the goods them selves, such as the actions for conversion and detinue.
Again, if there be an agreement for sale and the goods perish, the loss as a rule falls on the seller, while if there has been a sale the loss as a rule falls upon the buyer.
" Thus, there having existed at the time of the enactment of the Government of India Act, 1935, a welldefined and well established distinction between a sale and an agreement to sell it would be proper to interpret the expression sale of goods" in entry 48 in the sense in which it was used in legislation both in England and India and to hold that it authorises the imposition of a tax only when there is a completed sale involving transfer of title.
This conclusion is further strengthened, when regard is hood to the nature of the levy, Section 3 of the, Act 248 provides for a tax being imposed at three pies in the rupee on the turnover of the assessee, and "turnover" is defined in section 2 (i) as "the aggregate of the proceeds of sale by a dealer", and that would consist of the price and any charges paid at the time of the delivery of the goods, as provided in Explanation I.
The substance of the matter is that the sales tax is a levy on the price of the goods, and the reason of the thing requires that such a levy should not be made, unless the stage has been reached when the seller can recover the price under the contract.
It is well settled that an action for price is maintainable only when there is a sale involving transfer of the property in the goods to the purchaser.
Where there is only an agreement to sell, then the remedy of the seller is to sue for damages for breach of contract and not for the price of the goods.
The law was thus stated in Colley vs Overseas Exporters(1): In former days an action for the price of goods would only lie upon one or other of two counts.
First, upon the indebitatus count for goods sold and delivered, which was pleaded as follows: 'Money payable by the defendant to the plaintiff for goods sold and delivered by the plaintiff to the defendants ': Bullen and Leake, Precedents of Pleading, 3rd ed., p. 38.
This count would not lie before delivery: Boulter vs Arnott(2).
The count was applicable when upon a sale of goods the property has passed and the goods had been delivered to the purchaser and the price was payable at the time of the action brought.
Secondly, upon the indebitatus count for goods bargained and sold, which was pleaded as follows: Money payable by the defendant to the plaintiff for goods bargained and sold by the plaintiff to the defendant ': Bullen and Leake, p. 39.
This count was applicable where upon a sale of 'goods the property had passed to the purchaser and the contract had been completed in all respects except delivery, and the delivery was not a part of the consideration for the price or a condition precedent to its payment.
If the property had not passed the count would not lie: Atkinson vs Bell(3).
In my view the law as to the (1) at 309 310, (2) (1833) 1 Cr, & M. 333.
(3) ; , 249 circumstances under which an action will lie for the price of goods has not been changed by the Sale of Goods Act, 1893.
" That is also the law in this country under section 55 of the Sale of Goods Act.
The only exception to this rule is when, under an agreement between the parties, the price is payable on a day certain irrespective of delivery, and that is not material for the purpose of the present discussion.
The position therefore is that a liability to be assessed to sales tax can arise only if there is a completed sale under which price is paid or is payable and not when there is only an agreement to sell, which can only result in a claim for damages.
It would be contrary to all principles to hold that damages for breach of contract are liable to be assessed to sales tax on the ground that they are in the same position as sale price.
The power conferred under entry 48 to impose a tax on the sale of goods can therefore be exercised only when there is a sale under which there is a transfer of property in the goods, and not when there is a mere agreement to sell.
The State Legislature cannot, by enlarging the definition of " sale " as including forward contracts, arrogate to itself a power which is not conferred upon it by the Constitution Act, and the definition of "sale" in section 2(h) of Act XV of 1948 must, to that extent, be declared ultra vires.
For the same reason, Explanation III to section 2(h) which provides that forward contracts "shall be deemed to have been completed on the date originally agreed upon for delivery", and section 3 B which enacts that, "Notwithstanding anything contained in section 3, the turnover of any dealer in respect of transactions of forward contracts, in which goods are not actually delivered, shall be taxed at a rate not exceeding rupees two per unit as may be prescribed " must also be held to be ultra vires.
In the result, the decision of the High Court must be affirmed and this appeal dismissed with costs.

summary/full:
Held, that there is a well defined and well established distinction between a sale and an agreement to sell.
The words "Taxes on the sale of goods" in entry No. 48, List II, Schedule VII of the Government of India Act, 1935, confer power on the Provincial Legislature to impose a tax only when there has been a completed sale and not when there is only an agreement to sell.
Accordingly section 2(b) of the Uttar Pradesh Sales Tax Act, XV of 1948, enlarging the definition of "sale" so as to include forward contracts must, to that extent, be declared ultra vires.
For the same reason Explanation III to section 2(h) which provides that forward contracts "shall be deemed to have been completed on the date originally agreed upon for delivery" and section 3B of the Act must also be held to be ultra vires.
Colley vs Overseas Exporters ([1921] 3 K. B. 302 at 309, 310 referred to.