judgement:
rt allowed the reauction to be held on 19th April 1984.
Since the highest bidder in the reauction did not deposit the necessary amount in time as required under the Rules the Court set aside the reauction.
As the appellant offered to take the shop on lease for a sum of Rs. 30 lacs and the Additional Solicitor General appearing for the administration of Andaman and Nicobar Islands accepted the offer.
The Court sanctioned the lease in favour of the appellant on the condition of making the necessary deposit within 10 days from that day.
[36B; F G] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4416 of 1984 Appeal by Special leave from] the Judgment and order dated 4th April, 1984 of the Calcutta High Court in F. M. A. T. No. 992 of 1983 26 Vasanta Pai, Ms. section Vaidalingam and P. J. George for the Appellant.
Bina Gupta for the respondent.
K. G. Bhagat ' Addl Sol.
General.
R. N. Poddar and M. N. Krishnumani, for the Respondent.
R. Karanjawala and Miss M. Karanjawala for the applicant in Intervention appln.
K. Parasaran, Atty.
General and D. N. Sinha at request of Court.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
"Curiouser and curiouser", Alice would have certainly exclaimed with us had the mischievous state of affairs of the present case come to her notice.
We confess that the state of affair is but the inevitable consequence of a most curious procedure said to be followed over the years by the Calcutta High Court, a practice which we are happy to say, no other High Court in the country follows, a practice which do put in the mildest terms is unhealthy and likely to lead to harm and abuse and a practice which we now propose to forbid in the exercise of our powers under article 141 of the Constitution.
The practice, the consequences and our precept will reveal themselves as we proceed to state the facts.
We may mention at the Cutset Act in response to our invitation the learned Attorney General very graciously addressed us and indeed made forceful submissions.
We are grateful to him to his valuable assistance.
An auction of the right to sell liquor at Rangat, Andaman Islands was held on 15.
2. 84 by the Deputy Commissioner, Port Blair.
One B. K. Hariwat was the highest bidder.
M/s Samarais Trading Co. Pvt. Ltd. having an office at Port Blair, the petitioner before us in the Special Leave Petition, was one of the participants in the auction but not section Samual, S/o Swami Das Pillai, 12, Cathral Road, Madras, who figures before us as the first respondent.
As B. K. Hariwat did not deposit fifty per cent of the license fee as clause 14 of the terms and conditions of the auction, the sale was not confirmed and the shop had to be auctioned again.
The second auction was held on 28.
3. 1984.
At this auction M/s Samarias Trading Co. Pvt. Ltd. was the highest bidder.
The bid was for a 27 sum of Rupees 25 lakhs.
section Samuel also participated in the auction A but his bid was just over Rupees 17 Lakhs only.
The highest bidder (M/s Samarias Trading Co. Pvt. Ltd.) deposited sum of Rs. 10,000, 2,50,000 and 9,90,000 on 29.
3. 1984.
3. 1984 and 29. 3.
1984 respectively.
The sale was confirmed and shop was awarded to M/s Samarias Trading Co. Pvt. Ltd. The license was to enure for the period 1. 4.
1984 to 31.
3. 1985.
In the meanwhile, things moved at Calcutta on 30.
3. 1984.
When the Court was about to rise for the day Shri Shankardas Banerjee Senior Advocate mentioned to a learned Single Judge of the Calcutta High Court (Shri Justice Pyne) that he desired to move an application before the judge in his chambers after the court rose.
The learned judge granted leave and accordingly Sarvashari section D. Banerjee, Ashoke Kumar Ganguly and K. K. Bandopadhyay, learned Advocate purporting to appear on behalf of a person professing to be section Samuel moved the learned Single Judge of the Calcutta High Court in his chambers under article 226 of the Constitution and obtained an ex parte order in the following terms: "On the oral application of Mr. section D. Banerjee and upon his undertaking to move application by Tuesday next there will be an order as follows.
The respondents are directed to maintain status quo in respect of the liquor shop at Rangat in Middle Andaman and not to proceed on the basis of the alleged liquor auction held on 28.
3. 1984.
The order will remain in force till Tuesday next.
Let a plain copy countersigned by Asstt.
Registrar (Court) be given to the learned Advocate to the petitioner.
Sd/R. N. Pyne.
" The remarkable fact worthy of immediate attention is that there was no written application before the learned Judge.
The order of the learned Judge was made on an oral application and makes not the slightest attempt to indicate even briefly the facts told him, the question of law, if any, raised before him and the reasons which prompted him to make the interim order that he did.
All that we can gather from the proceedings and the record of the court is that some oral application was made, an oral undertaking was given to make a written application within four days and an interim order was issued by the court directing the maintenance of status quo in regard to an.
auction of liquor shops already held.
28 The order does not disclose that the learned Single Judge was aware that the bid was for such a large amount as Rs. 25 lakhs, that at least Rupees Twelve and half lakhs would have been deposited by the time the order was made and that the license itself was to take effect from 1. 4. 1984.
What was to happen to the amount already deposited ? Who was to run the liquor shop from 1. 4. 1994 ? What security had been taken from the petitioner to protect the revenue and the other respondents '? We get no indication from the order.
In fact the order made no provision to protect any one from any resulting mischief.
And all this on an oral undertaking given by an advocate that a petition would be filed on behalf of a party whose very existence we now find is doubtful, as we shall have occasion to point out hereafter.
No record, not a scrap of paper, was filed into court at that stage and no contemporaneous record was prepared by anyone containing the barest allegations constituting the foundation of the oral application that was actually made, the written application that was proposed to be filed and the interim order issued.
A most curious procedure indeed for a court of record to follow ! And, a situation where a judge would have to turn witness if any dispute arose subsequently as to what the allegations were and shy the judge made the order ! Shri section section Ray, who appeared before us at some stages of the case, informed us that a practice of this nature of obtaining interim orders on oral applications subject to undertaking being given proposing to file written applications later, had always been in vogue in the Calcutta High Court.
It was a matter of great surprise to us that a court of justice and at that, a court of record, should have been following such a practice, The learned Attorney General informed us that such a practice was not followed in any other High Court and he placed before us substantial and compelling reasons vigorously deprecating such a practice, reasons which have found favour with us.
Shri Lal Narain Sinha, former Attorney General, who practiced for a considerable length of time in the Patna High Court which generally inherited, if we may use such an expression, the practice and procedure of the Calcutta High Court and who happened to be present before us at another stage of the hearing of the cases and whose assistance we sought and for which we are grateful to him told us that in his long experience he was not aware of any such practice and that such a practice was never followed in the Patna High Court. . . . . . .
We our selves are personally familiar with the practice followed in the Madras, Karnataka, Andhra Pradesh, Madhya Pradesh and 29 Rajasthan High Courts and we can assert that such a practice is not heard of in these courts.
Some counsel from Bombay who . were present before us also told us that no such practice is followed in their High Court.
We do not have the slightest doubt that, if the practice exists any where, it is a most unwholesome practice, likely to lead to vicious and pernicious results.
It is a practice to be strongly deprecated, a practice reminiscent of the feudal days when the French nobility could procurea lettre de cachet under the Sovereign 's seal authorising a subject 's imprisonment with out trial and without mention of any reason.
It is a practice which strikes at the very root of the system of open and even handed justice as we know it and the sooner it is abandoned the better for the administration of justice.
We express our disapprobation and forbid the practice of entertaining oral applications by any court in matters of consequence without any record before it.
We do not mean to suggest that oral application may never be made or entertained by a Court.
Far from the contrary.
For example, all applications for adjournment are generally made orally.
Often, during the course of the hearing of a case it becomes necessary to n make applications of a formal nature and such applications are permitted by the Presiding judge.
But in all such cases the court is already seized of the principal matter or dispute and there is a record pertaining to it before the court.
But we hardly see any justification for the entertainment of an oral application and the issuance of an interim order with no record whatever of what was submitted to the court or the reasons for the order made by the court.
To permit a procedure by which oral applications may be made and interim orders obtained without any petition in writing, without any affidavit having been sworn to as prima facie proof of allegations and without any record being kept before the court may lead to very serious abuse of the process of the court.
In fact, we have come across instances in the past where the Calcutta High Court had exercised jurisdiction in matters in which no part of the cause of action arose within its jurisdiction, a situation which would surely not have arisen if a written and not an oral application had been made.
Again, we do not mean to suggest that other urgent oral applications may never be made.
If someone is going to be deported in a few minutes or if some grossly inenquitous act is about to be perpetrated and any delay would result in the fait accompli of a monstrosity, urgent oral applications may be moved and urgent interim order issued.
If urgent interim orders are imperative, at least skeletal applications setting out the bare facts 30 and the questions involve(1 should be insisted upon.
A detailed application could be permitted to be filed later.
Surely a Court would be in a more advantageous position with something in writing from a party who can take responsibility for the statements made than an oral submission based on oral instructions from "God knows who".
If the matter is so urgent as not even to brook any insistence upon a written application, the judge should at least take the trouble and the care to record in his order the facts mentioned to him and the submissions made to him.
It is essential that there be a contemporaneous record.
Otherwise the Court ceases to be a court of record.
After all there are always two sides to a picture.
In the absence of a petition in writing, in the absence of an order containing a narration of the facts and the reasons for the orders, what is an affected person to do ? What allegation is he supposed to meet ? How is he to avert the mischief and damage which may result from the order ? Is he to await the pleasure of the petitioner who having obtained an interim order is naturally interested in not filing his written petition till the very last minute so as to prolong the life of the interim order and the mischief.
One may very well imagine a case where a party instructs an Advocate to move an oral application before a Judge, obtains an interim order and disappear from the scene without filing any regular petition.
What is the under taking worth in such an event ? The facts of this very case, we shall presently point out, have led to such an abuse.
To resume the Stranger than fiction story, on 30th March 1984 itself, Shri K.K. Bandhopadhyay, Advocate, Calcutta sent a telegram to the Deputy Commissioner, District Andaman, Port Blair.
informing him about the order of stay granted by the Calcutta High Court.
The Deputy Commissioner duly informed M/s Samerias Trading Co. Pvt. Ltd. about the stay granted by the Calcutta High Court.
immediately on receipt of the information, the representative of M/s Samarias Trading Co. Pvt. Ltd. and their Advocate went to Calcutta on 2.4.
1984 where they obtained confirmation that a learned Single Judge of the Calcutta High Court had made an order such as claimed by Shri K.K. Bandhopadhyay in his telegram.
M/s Samarias Trading Co. Pvt. briefed a senior Advocate, Shri Saktinath Mukherjee to appear before Shri Justice Pyne on 3.4.1984.
The information was that the writ petition would be taken up for orders at 2.30 P.M.
On 3.4.1984.
While the representative of M/s. Samarias Trading Co. Pvt. Ltd and their advocate 31 were waiting in the court, they came to learn that the matter A had been mentioned to Shri Justice Pyne in his chamber by Shri Bhola Nath Sen the Senior Advocate representing Mr. section Samuel and that the order of status quo had been extended until further orders.
The representative of M/s Samarias Trading Co. Pvt. Ltd. and their advocate and the Deputy Commissioner of Andamans, all of whom were waiting in the Court were not told that the matter was going to be mentioned in the learned Judge 's chamber.
As soon as they came to know about the continuance of the order of status quo they requested Mr. Justice Pyne to re consider the order but the learned judge declined to do so.
Interrupting our narrative here for a momemt, we are once again constrained to comment on the peculiar procedure that was adopted in the case.
The reason, we are told, for moving the application in the chamber of the learned judge instead of in open Court was that Mr. Justice Pyne was sitting on the original Side in Court and so the application which had to made on the Appellate Side had to be moved in his Chamber.
We are unable to understand why it should be so and why the application could not be moved in open court.
A sitting in chambers could be held when both sides are represented and the sittings are held openly so that members of the public, if they desire to attend, may have access even in the chamber.
To grant interim orders on oral application in chambers when the judge is otherwise sitting in open court for other matters would seriously reflect on the fairness of the procedure adopted by the courts and may have the unpleasant effect of undermining public confidence in courts.
Sometimes when a learned judge is sitting in a Division Bench or a Full Bench, some application may have to be made to him individually in which case permission is always sought in open Court to move the application in the chamber.
The Registry then prepares a special list, puts it up on the notice board and before and before the Judge 's chamber and also circulates a copy to the Bar Association.
This procedure is followed in some High Courts and if such a procedure is followed then alone can we keep up the high tradition of open justice.
A public hearing is one of the great attributes of a court, and courts of this country are therefore require to administer justice in public.
Otherwise, there is a risk that justice may even be undone.
As most admirably expressed by Fletcher Moulton L.J. in Scott vs Scott Courts of Justice who are the guardians of civil liberties, ought 32 to be doubly vigilant against encroachment by themselves.
It is not as a matter of policy but as a matter of law ' that the hearing of a cause he public except in the limited class of cases with which we are not now concerned.
Th It rule was violated by the learned Single Judge in this case.
After all the administration of justice is a vital concern first of public more than any private party, the public has a right to present in court and watch the proceeding and its conduct except in the very rare cases where the very cause of advancement of justice requires that proceeding be held in camera.
In Naresh Shridhar Mirajkar & ors.
vs State of Maharashtra & Anr.(1) it was observed by this Court as follows: "It is well settled that in general, all cases brought before the Courts, whether civil, criminal or others, must be heard in open Court.
Public trail in open court is undoubtedly essential for the healthy, objective and fair administration of justice.
Trial held subject to the public scrutiny and gaze naturally acts as a check against judicial caprice or vagaries, and serves as a powerful instrument for creating confidence of the public in the fairness, objectivity, and impartiality of the administration of justice.
Public confidence in the administration of justice is of such great significance that there can be no two opinions on the broad proposition that in discharging their functions as judicial Tribunals, courts must generally hear causes in open and must permit the public admission to the court room.
As Bentham has observed: "In the darkness of secrecy sinister interest, and evil in every shape, have full swing.
Only in proportion as publicity has place can any of the checks applicable to judicial injustice operate.
Where there is no publicity there is no justice.
Publicity is the very soul of justice.
It is the keenest spur to exertion, and surest of all guards against improbity.
It keeps the Judge himself while trying under trial (in the sense that) the security of securities is publicity".
(Scott vs Scott) In Mc pherson vs Mc pherson, (2) the Judicial Committee observed (1) [1966l 3 section
C.R 744.
(2) AIR 1936 PC 246.
33 "Moreover the potential presence of the public almost necessarily invests the proceedings with some degree of formality.
And formality is perhaps the only available substitute for the solemnity by which, ideally at all events such proceedings,. should be characterised.
That potential presence is at least some guarantee that there shall be ascertain decorum of procedure These are some of the considerations which have led their Lordships to take a more serious view the absence of the public from the trial of this (divorce) action that has obtained in the Courts below.
influenced by them their Lordships have felt impelled to regard the inroad upon the rule of publicity made in this instance unconscious thought it was as one not to b. justified and now that it has been disclosed as one that must be condemned so that it shall not again be permitted.
" To resume the narrative M/s Samarias Trading Co. Pvt. Ltd. immediately filed a Writ Appeal under the Letters Patent before the Division Bench consisting of Mr. Justice M M. Dutt r. and Mr. Justice Ajit Kumar Sen Gupta.
The matter was mentioned before the Division Bench at 3 4S l '.M.
By consent of parties the Writ Appeal filed by M/s Samaries Trading Co. Pvt. Ltd. and the Writ Petition filed by Samuel were both directed to be listed for hearing b(fore them on 4. 4. 1984.
With great difficulty M/s Samarias Trading Co. Pvt. Ltd. were able to get a copy of the writ petition at that stage.
The Division bench disposed of both the writ petition and writ appeal finally on 4 4.
1984 itself.
The order of Division Bench was in the following terms: "By consent of parties, we treat the appeal as on day 's list.
As prayed for by the learned Advocates for the parties, we also treat the Writ Petition as on day 's list.
After hearing the learned Advocates for the parties and after considering the facts and circumstances of the case, we are of the view that the auction for vending of liquor that has been held should be set aside.
Accordingly, we set aside the auction and direct the Deputy Commis 34 sioner of Andaman and Nicobar Islands to hold a fresh auction on the basis of the new terms and conditions that have already been circulated, being annexure to the Writ Petition.
The auction will be held on the 19th, April, 1984 at 11 A. M. at the Conference Hall, Deputy Commissioner 's office, at Port Blair.
The reserved price for the auction of the liquor shop is fixed at Rs. 30,00000 (thirty lacs).
It must he made clear that the period for which the auction of the liquor shop will be held will be from 22nd April,1984 till 31st of March, 1985.
The auction will be advertised once in the Statesman in Calcutta and once in the Indian Express in Madras at least five days before the auction.
In the event the reserved price of rupees thirty lacs is not bid, in that case, the writ petitioner undertakes to this Court that he will take the license at the reserved price of rupees thirty lacs and in that event the appellant under takes to this Court not to carry on the business of liquor after the 21st of April, 1984.
The participants in the bid will be at liberty to take with them their respective Advocates The appellant shall be liable to pay to the Administra tion the proportionate license fee for the days in the month of April upto 21st of April, 1984 during which he will carry on the business of liquor on the basis of his offer already made, that is, Rs. 2500000 (Twenty five lacs) for one year.
The Deputy Commissioner is directed to refund to the appellant the amount of the deposit which he has made in respect of the disputed auction loss the proportionate license fee for the days for which he will carry on business in the month of April upto 21st April, 1984 immediately the day on which the appellant starts vending liquor.
Further, the Deputy Commissioner shall issue necessary orders enabling the appellant to carry on the liquor business till 21st April, 1994.
35 The appeal and the writ appeal are disposed of as above.
There will be no order for costs.
The appellant does not admit the allegations made in the writ petition.
Let plain copies of this order countersigned by the Assistant Registrar (Court) he given to the learned Advocates for the parties".
On the next day, the order was modified as follows: This matter has been mentioned by both the parties for the purpose of rectifying one clerical mistake.
It is directed in modification of our order dated April, 4 1984 that in the event the reserve price of Rs. 30,00000 (thirty lacs) is not bid, in that case, the writ petitioner undertakes to this Court that he will take the license at the reserved price of 30, 00000 and, in that case, the appellant undertakes to this Court not to carry on the business of liquor at Rangat, Middle Andmans, pursuant to the existing license after the 21st April, 1984.
If, however, any new license is granted to the appellant pursuant to the auction that will be held on the 19th April, 1984, the appellant will, of course, be able to carry on the business of liquor at that place upto 31st March, 1985.
Our order dated 4th April, 1984 is modified to the above extent and the rest of the said order will stand".
Aggrieved by the order of the Calcutta High Court M/s Samarias Trading Co. Pvt. Ltd. filed the special leave petition out of which the present appeal arises on 11.
4. 1984.
One George Joseph claiming to be "working for gain with Respondent No. 1, Shri Samuel" filed a counter affidavit purporting to be on behalf of Respondent No. 1.
At the first hearing of the special leave petition on 17.4.
1984, Shri section section Ray, Senior Advocate, appeared for the respondent No. 1.
On that day, the learned counsel appearing for the M/s Samarias Trading Co. Pvt.
Ltd. produced before us an affidavit dated 16.
4. 1984 purporting to be that of section Samuel in which he disclaimed that he ever instructed any one to file any writ peti 36 tion in the Calcutta High Court on his behalf.
This affidavit appeared to destroy the very foundation of the order of the Calcutta High Court.
The genuineness of the affidavit was however, disputed by Shri George Joseph, who Was present in court and section section Ray, senior advocate appearing on behalf of section Samuel.
In that situation we directed the issue of notice to all parties and bound over George Joseph to appear before us at the next hearing.
We directed that section Samuel should be present before us at the next hearing.
We also directed that the re auction, as ordered by the Calcutta High Court, should be held on April 19, 1984, but that the sale should not be confirmed.
The matter came before us again on April 26, 1984.
We were told that the re auction had fetched a bid of Rs. 36 lakhs and 80 thousand .
We were also told that because of our direction that the sale should not be confirmed, the amount required to be deposited within 48 hours could not be deposited.
We, therefore, directed the highest bidder to deposit the amount required to be deposited under the rules on or before April 30,1984.
Fresh notices were issued to section Samuel and we instructed the Registry to mention in the notice that if Samuel failed to appear at the next hearing, a non bailable warrant would be issued for his arrest.
We also issued a notice to Dr. D. K. Banerjee, Advocate who prepared the affidavit filed by Mr. section Samuel, in the Calcutta High Court to appear before us on may 3, 1984.
George Joseph was bound over to appear before us.
He was also directed to file an affidavit setting out the full facts of the case which were within his knowledge.
At the next hearing on May 3, 19. 4, we were informed that Subramaniam had breached the undertaking given to us on April 26, 1984 that he would deposit the amount required to be deposited by the rules before April 30, 1984.
We, therefore, had no option but to set aside the auction.
Fortunately the petitioner, M/s. Samarias Trading Co. Pvt. Ltd. offered to take the shop on lease for a shop of Rs. 30 lakhs and the Additional Solicitor General appearing for the administration of the Andaman and Nicobar Islands accepted the offer.
The lease was sanctioned by us subject to the petitioner making the necessary deposit within 10 days from that day.
On August 7, 1984, George Joseph failed to appear before us notwithstanding that he had executed a bond undertaking to be present before us.
We therefore, directed the issue of a non bailable warrant against him for his production before us on August 23, 1984 Mr. Samuel was also bound over to appear before us on August 37 23, 1984.
On that day, Shri K.K. Bandopadhyay filed a statement before us seeking to explain the circumstances under which he appeared before Mr.Justice Pyne to assist Shri Ashok Kumar Ganguly.
He is a junior advocate working in the chambers of Shri Mahitosh Majumdar at whose instance it was that he was asked to assist Shri A.K. Ganguly.
He was told that Shri S.D. Benerjee, senior advocate, would make an oral application.
He met a group of people, one of whom claimed to be section Samuel.
A consultation was held by Shri A.K. Ganguly and the gentleman holding himself out as Samuel with Shri S.D. Banerjee in his presence in the court premises at about 3.15 p.m.
On the same day.
Thereafter Shri S.D. Banerjee entered the court room of Mr. Justice Pyne and moved an unlisted motion before the hon 'ble judge at 4.00 p.m. when the court was about to rise.
Shri S.D. Banerjee sought the permission of the hon 'ble judge to move the matter in the chamber of the hon 'ble judge by way of an oral application.
Leave was granted and the application was moved before the learned judge in his chamber at 4.10 p.m.
Shri A.K. Ganguly and Shri K.K Bandyopadhyay appeared along with Shri S D. Banerjee.
That evening the gentleman who held himself out as section Samuel and two or three others met Shri K.K. Bandyopadhyay and the latter requested Shri M. Lahiri, advocate to draft a writ petition.
The two of them prepared the writ petition and got it ready for filing on April 3,1984.
section Samuel also handed over a Vakalatnama to him.
On 3rd, the said gentleman appeared before the oath Commissioner and the papers were duly lodged as Mr. Justice Pyne was sitting on the original side on April 3,1984 according to Shri Bandyopadhyay.
The oral application had to be moved in the chamber of the learned judge.
Accordingly, Shri B.N.Sen, senior counsel, moved the application assisted by Shri Lahiri and Shri Bandyopadhyay.
Later the matter was mentioned in court on behalf of M/s. Samarias Trading Co. Pvt. Ltd. before the Division Bench and an oral prayer was made for suspending the order of Mr. Justice Pyne.
Both the writ petition and the appeal were directed to be listed on the next day.
As we thought it imperative that George Joseph should be present before us, we adjourned the matter to August 23,1984 for his production.
On August 23,1984, when the matter was next taken up, George Joseph continued to be absent and a non bailable warrant was issued for his arrest and production on September 11, 984.
Mr. Samuel was also bound over to be present in the court 38 on September 11, 1984.
We also now have before us the affidavi ts of S/Shri section D. Banerjee, B. N. Sen, M. Mazumdar and A. K. Ganguly of the Calcutta Bar explaining the facts and circumstances pertaining to the proceedings that took place in the Calcutta High Court.
Their affidavits which confirming the facts already narrated by us, disclose that none of them personally knew Samuel, as indeed one may not expect an advocate to know every client of his personally.
They were like others, taken for a ride, if one may be permitted to use so common an expression.
Their affidavits only emphasise what we have already said about the undesirability of making oral applications of consequence before courts with nothing placed in the court 's record to vouch for the authenticity of the facts forming the basis of the representations made to the court, etc.
So far as this appeal is concerned, there is nothing further to be done by us we have now sanctioned the lease of the liquor shop in favour of the appellants for the year April 1, 1984 to March 31, 1985.
We are, however, informed by the petitioner that though the lease has been confirmed in their favour from April l, 1984 to March 31, 1985 for a sum of Rs. 30 lakhs, the administration of the Andaman Nicobar Islands, is demanding from them a sum of Rs. One lakh and odd towards the lease for the few days that they ran the liquor shop after April 1, 1984 under the orders of Calcutta High Court, calculated at the rate of Rs. 25 lakhs per year.
We are unable to see any justification for the demand since the lease as sanctioned and as confirmed is admittedly for the entire period April 1, 1984 to March 31, 1985 for Rs. 30 lakhs.
The demand is directed to be withdrawn.
The appeal is allowed in the terms indicated.
A notice will however issue to George Joseph to show cause why he should not be committed for contempt of court for breaching the undertaking given by him.
A nonbailable warrant will also issue for his production before us.
Since the real Samuel has disclaimed all responsibility in the matter and since we do not know who was the person who represented himself as Samuel before the Calcutta High Court, we are unable to award costs against anyone.

dataset_name: IN-Abs

summary/full:
A single Judge of the Calcutta High Court, on an oral application made in his chamber on behalf of a person professing to be respondent No. 1, and on giving an oral undertaking to make a written application within 4 days, issued an interim order directing maintenance of status quo in regard to an auction of a liquor shop held in favour of the appellant.
The said order did not make any attempt to indicate even briefly the facts, the question of law, if any, raised before the Judge and the reasons which prompted him to make such an interim order.
On receiving the information about the said order, the appellant contacted the High Court and got the information that the subsequent writ petition filed by respondent No. I under Article 226 would be taken up for orders at 2.
30 p.m.
On 3. 4. 1984.
While the representatives of the appellant and their advocate were wailing in the court, they came to know that the matter had been mentioned in the chamber of the learned Judge who had earlier granted stay and that the order of statues quo had been extended until further orders.
The appellant told the learned Single Judge that they were waiting in the Court and .
were not informed that the matter was going to be mentioned in his chamber and in view of this they requested the learned Judge to reconsider his order.
But, the Judge declined to do so.
There upon the appellant filed a Writ Appeal.
The Writ Petition filed by respondent No. I along with the Writ Appeal of the appellant were heard together by a Division Bench which set aside the auction and directed that a fresh auction be held on 19th April 1984.
Aggrieved by the said order, the appellant has filed the present appeal.
Disposing of the appeal, ^ HELD: There is hardly any justification for the entertainment of an oral application and the issuance of an interim order with no record whatever of what was submitted to the court of the reasons for the order made by the court.
To permit a procedure by which oral applications may be made and internal orders obtained without any petition in writing, without any affidavit having been sworn to as prima facie proof of allegations and without any record before kept before the court may lead to very serious abuse of the process of the court.
Therefore, this Court expresses its disapprobation and forbids the 25 practice of entertaining oral applications by any court in matters of consequence A without any record before it.
[29E G] (2) This Court does not mean to suggest that oral application may never be made.
Often during the course of the hearing of a case it becomes necessary to make applications of a formal nature and such application are permitted by the Presiding Judge.
But in all such cases the court is already seized of the principal matter or dispute and there is a record pertaining to it before the 13 court.
Again, this Court does not mean to suggest that other urgent oral applications may never be made.
If urgent interim orders are imperative, at least skeletal applications setting out the bare facts and the questions invoked should be insisted upon.
A detailed application could be permitted to be filed later.
If the matter is so urgent as not even to brook any insistence upon a written application, the judge should at least take The trouble and the care to record in his order the facts mentioned to him and the submissions made to him.
It is essential that there be a contemporaneous record.
Otherwise the court ceases to be a court of record.
[29G H; 30A B] (3) A sitting in chambers could be held when both sides are represented and the sittings are held openly so that members of the public, if they desire to attend, may have access even in the chamber.
To grant interim orders on oral applications in chambers when the judge is otherwise sitting in open court for other matters would seriously reflect on the fairness of the procedure adopted by the courts and may have the unpleasant effect of undermining public confidence in courts.
A public hearing is one of the great attributes of a court, and courts of this country are therefore required to administer justice in public.
Otherwise, there is a risk that justice may even be undone.
It is not 'as a matter of policy but as a matter of law ' that The hearing of a cause be public except in the limited class of cases.
That rule was violated by the learned Single Judge in this case.
[3lE;H; 32A.B] Naresh Shridhar Mirajkar & ors.
vs State of Maharashtra PC 246 referred to.


judgement:
Civil Appeal No. 621 of 1975 Appeal by Special leave from the Judgment and order dated the 13th March, 1973 of the Allahabad High Court in Special Appeal No.9 of 1973.
R.K Garg and M. Qamaruddin for the Appellant.
Prithvi Raj and Mrs. Shobha Dikshit for the Respondent.
The Judgment of the Court WCIS delivered by PATHAK, J This appeal by special leave is directed against the judgment and order of the Allahabad High Court dismissing the appellant 's writ petition against an order terminating his services.
The appellant, Nepal Singh, was employed in a temporary capacity as Sub Inspector of Police.
He was serving at Shahjahanpur in 1968 when the Superintendent of Police, Shahjahanpur initiated disciplinary proceedings under S.7 of the Police Act against him on the charge that while posted at Pithoragarh he had, in November, 1964, contracted a second marriage while his first wife was alive, and as this was done without obtaining the prior permission of the Government the appellant had violated Rule 29 of the U.P. Government Servants ' Conduct Rules, 1956.
The appellant filed a reply and denied the charge.
The oral testimony of about twelve witnesses for the prosecution and an almost equal number for the defence was recorded.
But in January, 1970 the Superintendent 4 of Police, Shahjahanpur wrote to the Deputy Inspector General of Police, Bareilly Range that as the act alleged against the appellant related to the district of Pithoragarh the disciplinary proceedings taken by him would be without jurisdiction unless there was an existing order transferring the proceedings from Pithoragarh to Shahjahanpur.
Accordingly, on March 12,1 970, the Deputy Inspector General of Police, Bareilly Range ordered the quashing of the disciplinary proceedings.
It appears that no further action was taken and the proceedings were dropped.
About this time the Inspector General of Police, Uttar Pradesh issued a circular letter to the Superintendents of Police throughout the State requiring them to submit a list of Sub Inspector who fell in any of the following three categories: "1.
Whose reputation and integrity is very low and/or 2.
Who are generally involved in scandals, like drinking, immorality etc.
which blackens the face of the U.P. Police ' and/or. 3.
Everywhere they are a big problem because they encourage gambling, excise offences, brothels, criminals, etc.
The Superintendent of Police, Shahjahanpur drew up a list of such Sub Inspectors on February S, 1970 and directed them to appear before the Deputy Inspector General of Police, Bareilly Range on February 10, 1970 during his inspection of the district.
The list included the name of the appellant with the note; "A corrupt officer, who is not straight forward.
Married two wives against Government Servants Conduct Rules. ' Does not do his duty sincerely.
Wherever he goes creates problem.
" Thereupon, on April 27,1970 the Deputy Inspector General of Police, Bareilly Range, made an order purporting to be under the rules published by Notification No. 230/II B 1953 dated January 30, 1953 that the appellant 's services were not required any more and were terminated with one month 's pay in lieu of notice.
The appellant filed a writ petition in the High Court against 5 the order terminating his services and on November 17,1972 a learned A Single Judge of the Allahabad High Court dismissed the writ petition holding that the order of termination was passed bonafide that it was an order of termination simpliciter, and that it did not constitute the removal of the appellant from service.
That view was endorsed, on appeal filed by the appellant, by a Division Bench of the High Court by its judgment and order dated March 13,1973.
The learned judges have taken the view that the case in respect of the appellant was covered by the first and third of the three categories enumerated earlier, that is to say, his integrity was low and he was a problem officer ' who encouraged gambling, excise offences, brothels, criminals, etc.
" The allegation that he had married two wives against the Government Servants Conduct Rules, 1956, the learned Judges said, did not bring him within any of the three categories as, in their view, the second marriage without prior permission of the Government gave rise merely to a tinkle charge.
In view of the opinion that the impugned order was ex facie innocuous and could not be said to cast any stigma or be regarded as imposing the punishment of dismissal or removal, the learned Judges dismissed the appeal.
It seems to us that the High Court has failed to consider the true content of the case set up by the appellant.
The entire thrust of the appellant 's case is that in terminating the appellant 's Services the competent authority treated him unfairly and arbitrarily.
It is well settled that in dealing with a Government servant the state must conform to the constitutional requirements of articles 14 and 16 of the Constitution.
An arbitrary exercise of power by the State violates those constitutional guarantees, for a fundamental implication in the guarantee of equality and of protection against discrimination is that fair and just treatment will be accorded to all, whether individually or jointly as a class.
When a Government servant satisfies the Court prima facie that an order terminating his services violates articles 14 and 16, the competent authority must discharge the burden of showing that the power to terminate the services was exercised honestly and in good faith, on valid considerations fairly and without discrimination.
The High Court has observed that within the framework of the three categories defined in the Inspector General 's circular the allegation of a second marriage by the appellant was of no significance, and that the principal intent in terminating the appellant 'section 6 services was to rid the State of an unsuitable officer.
The Superintendent of Police has noted that the appellant created problems wherever he went, but it is not disclosed in the affidavits what were those "problems".
It is not shown that the problems were of the nature specifically indicated by the circular issued by the Inspector General of Police We are unable to conclude from the material before us that the Superintendent of Police applied his mind to the requirements of the case.
The Superintendent of Police has also commented that the appellant was a corrupt officer who was not straightforward (whatever that might mean).
On that we have this to say.
Where the a services of a Government servant on temporary appointment are terminated on the ground that his reputation for corruption makes him unsuitable for retention in the service, the reputation for corrupt behavior must be based on something more than a mere allegation.
The other grounds mentioned in the report of the Superintendent of Police, which impressed the High Court, appear to us to be equally vague and unspecific.
The State, and for that matter any statutory employer, must take great care when proceeding to terminate a career on the ground of unsuitability, to ensure that its order is founded in definable material, objectively assessed and relevant to the ground on which the termination is effected.
Proceeding from there, we may advert to a further aspect of the case.
It would seem that the dominating factor which influenced the mind of the Deputy Inspector General of Police was the allegation that the appellant had married a second wife against the Government Servants ' Conduct Rules it is clear that a full fledged enquiry was instituted into the matter, evidence was recorded but before any findings could be rendered the enquiry was dropped for want of jurisdiction.
No attempt was made thereafter to institute proper enquiry by the appropriate authority.
In the circumstances, it was not open to the Superintendent of Police to mention in his report, as a statement of fact, that the appellant had married a second time against the Government Servants ' Conduct Rules.
With the dropping of the enquiry the allegation remained unverified.
We may observe that where allegations of misconduct are levelled against a Government servant, and it is a case where the provisions of article 311(2) of the Constitution should be applied, it is not open to the competent authority to take the view that holding the enquiry contemplated by that clause would be a bother or a nuisance and 7 that therefore it is entitled to avoid the mandate of that provision and resort to the guise of an ex facie innocuous termination order.
A The Court will view with great disfavor any attempt to circumvent the constitutional provision of Art.311 (2)in a case where that provision comes into play.
For all the aforesaid reasons, we are unable to uphold the judgment and order of the High Court, and in the result the appeal must he allowed.
The appeal is allowed and the order dated April 27, 1970 of the Deputy Inspector General of Police, U.P. Bareilly Circle is quashed.
The appellant is entitled to be treated as continuing in service without interruption.
It will be open to the authorities to take fresh proceedings against the appellant in accordance with law.
It will also be open to them to determine whether the appellant was gainfully employed for the purpose of considering the extent of relief, if any, to which he may be entitled pursuant to our present order quashing the impugned order.
In the circumstances, there is no order as to costs.
section R Appeal allowed.

summary/full:
On an allegation that the appellant, a temporary Sub inspector of Police, while posted at Pithoragarh had contracted in November 1964 a second marriage, while his first wife was alive, without obtaining the prior permission of the Government and in violation of Rule 29 of the U. P. Government Servants ' Conduct Rules, 1956 the Superintendent of Police, Shahjahanpur initiated in 1968 disciplinary proceedings under section 7 of the Police Act against him.
1 However, after the evidence was closed in January 1970, the Superintendent noticed that his action was without jurisdiction and pointed out the same lo the Deputy Inspector General of Police, Bareilly Range, who ordered the quashing of the disciplinary proceedings on March 12, 1970.
About this time the Inspector General of Police, Uttar Pradesh issued a circular letter to the Superintendent of Police throughout the State requiring them to submit a list of Sub Inspectors who fell in any of the following three categories: 1.
Whose reputation and integrity is very low and/or 2.
Who are generally involved in scandals, like drinking, immorality, etc.
which blackens the face of the U. P. Police and/or 3.
Everywhere they are a big problem because they encourage gambling, excise offences, brothels, criminals, etc.
The Superintendent of Police, Shahjahanpur drew up a list of such Sub Inspectors on February S, 1970 and directed them to appear before the Deputy Inspector General of Police, Bareilly Range on February 10, 1970 during his 2 inspection of the district.
The list included the name of the appellant with the note: "A corrupt officer, who is not straight forward.
Married two wives against Government Servants Conduct Rules.
Does not do his duty sincerely.
Wherever he goes creates problem".
Thereupon, on April 27, 1970, the Deputy Inspector General of Police, Bareilly Range, made an order purporting to be under the rules published by Notification No. 230/ 1953 dated January 30, 1953 that the appellant 's services were not required any more and were terminated with one month 's pay in lieu of notice.
The appellant thereupon filed a Writ Petition in the High Court against the order terminating his services and on November 17, 1972 a learned Single Judge of the Allahabad High Court dismissed the Writ Petition holding that the order of termination was passed bonafide, that it was an order of termination simpliciter and that it did not constitute the removal of the appellant from service.
On appeal filed by the appellant that vice was endorsed by a Division Bench of the High Court by its judgment and order dated March 13, 1973 and the appeal was dismissed holding that the impugned order was ex facie innocuous and could not be said to cast any stigma or be regarded as imposing the punishment of dismissal or removal.
Hence the appeal by Special Leave of the Court.
Allowing the appeal, the Court ^ HELD; 1.
It is well settled that in dealing with a government servant the State must conform to the constitutional requirements of Articles 14 and 16 of the Constitution.
An arbitrary exercise of power by the State violates these constitutional guarantees, for a fundamental implication in the guarantee of equality and of protection against discrimination is that fair and just treatment will be accorded to all, whether individually or jointly as a class.
When a government servant satisfies the Court prima facie that an order terminating his services violates Articles 14 and 16 the competent authority must discharge the burden of showing that the power to terminate the services was exercised honestly and in good faith, on valid considerations fairly and without discrimination.
[S E G] 2.
Where the services of a government servant on temporary appointment arc terminated on the ground that his reputation for corruption makes him unsuitable for retention in the service, the reputation for corrupt behavior must be based on something more than a mere allegation.
The State, and for that matter any statutory employer must take great care when proceeding to terminate a career on the ground of unsuitability, to ensure that its order is found in definable material, objectively assessed and relevant to the ground on which the termination is effected.
[6 C E] In the instant case, the Superintendent of Police did not apply his mind to the requirements of the case.
The Superintendent of Police has noted that the 3 appellant created problems wherever he went, but it is not disclosed in the affidavits what those problems were and that the problems were of the nature specifically indicated by the circular issued by the Inspector General of Police.
The other grounds mentioned in the report of the Superintendent of Police are equally vague and unspecific.
[ 6A B] 3.
Where allegations of misconduct are leveled against a Government Servant, and it is : case where the provisions of Article 311 (2) of the Constitution should be applied(l, it is not open to the competent authority to take the view that holding the enquiry contemplated by the clause would be a bother or a nuisance and that therefore it is entitled to avoid the mandate of that provision and resort to the guise of an ex facie innocuous termination order.
The Court will view with great disfavour any attempt to circumvent the constitutional provision of Article 311 (2) in a case where that provision comes into play.
[6 G H, 7A B]


judgement:
Civil Appeal No. 3491 of 1979.
on appeal by Certificate from the Judgment and order dated 10.12.79 of the Allahabad High Court in W.P. No. 2402 of 1979.
71 Appellant in person.
A Girish Chandra and R.N. Poddar for the respondents.
The order of the Court was delivered by The appellant had filed a writ petition in the High Court of Allahabad challenging the continuance in office of Shri Charan Singh ' as the Prime Minister and Shri S.N. Kacker as Minister of Law, Justice and Company Affairs.
Stated briefly, the contention of the appellant is that Shri Charan Singh failed to seek the mandate of the Lok Sabha within three weeks after assuming the office of the Prime Minister as directed by the President of India, that instead of "facing the House" he submitted the resignation of his Government on August 20, 1979 and that his continuation in office therefore as a caretaker Prime Minister without taking a fresh oath of office was unconstitutional.
The writ petition was dismissed by the High Court by a judgment dated December 10, 1979 but it has granted a Certificate of fitness to the appellant to file this appeal.
It is a well known fact of history that the Government of Shri Charan Singh was in office for a very brief spell.
It fell soon after it assumed office, indeed, too soon the issues raised by the appellant are no longer live and it is not the practice of this Court to decide questions of more academic importance.
We must, however, hasten to add that the High Court is right in its view that Shri Charan Singh 's appointment as the Prime Minister could not be said to be conditional upon his seeking a mandate of the Lok Sabha.
Our Constitution knows no such hybrid thing as a "Prime Minister subjected to a condition of defeasance".
Conditions imposed by the President may create considerations of political morality or conventional propriety but not of constitutional validity.
The High Court is also right that it was not necessary for Shri Charan Singh and his ministers to take a fresh oath after being called upon by the President to continue in office as a caretaker Government.
Thus, the continuation in office of Shri Charan Singh and his ministers was not unconstitutional.
For these reasons, the appsal is dismissed.

summary/full:
The appellant in his writ petition to the High Court challenged the continuance in office of Shri Charan Singh as the Prime Minister contending that Shri Charan Singh failed to seek the mandate of the Lok Sabha".a within three weeks after assuming the office of the Prime Minister as directed by the President of India, that instead of "facing the House" he submitted the resignation of his Government on August 20, 1979, and that his continuation in office thereafter as a caretaker Prime Minister without taking a fresh oath of office was unconstitutional.
The High Court dismissed the writ petition, but granted a certificate of fitness to appeal to this Court Dismissing the Appeal, ^ HELD: 1.
The continuation in office of Shri Charan Singh and his ministers was not unconstitutional.
[71 G] 2.
It is not the practice of this Court to decide questions of mere academic importance The issues raised by the appellant are no longer live.
171 E] 3.
Our Constitution knows no such hybrid thing as a "Prime Minister subject to a condition of defeasance".
Conditions imposed by the President may create considerations of political morality or conventional propriety but not of constitutional validity.
[71 F]


judgement:
l Appeals Nos.
162 of 1955, 38, 39, 40, 41, 42, 43 and 44 of 1956.
Appeal from the judgment and order dated January 5, 1953, of the Calcutta High Court (Original Side) in Income Tax Reference Appeal No. 12 of 1942 and appeals from the judgment and order dated July 2, 1952, of the Assam High Court at Gauhati in Agricultural Income Tax References Nos. 1, 2, 3, 7, 9, 6 and 8 of 1949 respectively.
Veda Vyasa and Naunit Lal, for the appellants in C.A. No. 162 of 1955 and respondents in C. As.
38 to 44 of 1956.
B. Baksi, section N. Mukerjea and R. B. Biswas, for the respondents in C. A. No. 162 of 1955 and appellants in C. As.
38 to 41, 43 and 44 of 1956.
Appellant in C. A. No. 42 of 1956 not represented.
1957 April 24.
The Judgment of the Court was delivered by KAPUR J.
In all these appeals the question for decision is the character and purport of the payment termed 'Salami ' and whether it falls within the meaning of " agricultural income " as defined in the Assam Agricultural Income Tax Act (Ass. IX of 1939) hereinafter called the " Act ".
C. A. No. 162 of 1955 is directed against the judgment of the Calcutta High Court dated January 15, 1953.
C. A. Nos.
38 to 44 of 1956 have been brought against the judgment of Assam High.
Court dated April 2, 1952.
These matters were all heard together in the Assam High Court and were disposed of by one judgment C. A. No. 162 of 1955 relates to the assessment year 1941 42.
The assessee in that case was a /8/9 annas 1021 co sharer in a zamindari estate known as " Parbatjoar estate " in Assam.
The original assessee was Jyotindra Narayan Chowdhury who died on January 25, 1953, and on his death his widow, Shrimati Sindhurani Chowdhurani and others were substituted.
The gross in, agricultural income of the assessee was Rs. 89,633 and income from salami was Rs. 9,331 9 4 which was received from settlement of 414 different holdings out of which 278 were holdings of virgin lands and 136 were those of what are described as auction purchase lands.
Out of the gross income from salami 15 per cent. has been allowed as collection charges and the amount in dispute in this appeal therefore is Rs. 7,934.
The Agricultural Income Tax Officer held this sum to be "agricultural income " by his order dated November 10, 1941, which was affirmed on appeal to the Assistant Commissioner of Agricultural Income Tax.
The revision taken to the Commissioner under section 27 of the Act was dismissed but at the instance of the assessee the following two questions were referred for the opinion of the High Court.
(1)Whether the single non recurring premia or salamis paid to the landlord assessee once only as consideration for the settlement of agricultural land at the time of granting a lease can be held to be income within the meaning of the Act ? (2)Whether single non recurring premia or salamis paid to the landlord assessee as consideration for the settlement of agricultural land once only at the time of granting lease when such premia or salamis are not dependent on the rate of rent charged, can be held to be income within the meaning of the Act ? The Calcutta High Court by its judgment dated April 12, 1945, held these receipts to be " agricultural income.
" Against this judgment an appeal was taken to the Privy Council but on the abolition of the jurisdiction of the Privy Council the appeal was transferred to the Federal Court and was heard by that court as C. A. No. 30 of 1949.
That court set aside the judgment of the High Court and remitted the case to the High Court " to be dealt with again after ascertaining and considering the following additional factors likely 1022 to show the true nature of the receipts described as It salami in the present case.
The number of settlement of waste lands and abandoned holdings during the accounting year and, the maximum and the minimum extents settled and salami received.
Does the salami vary with the quality of the land, the facilities for irrigation and such other favourable factors ? 3.
How many tenants ejected under section 69 during the accounting year and how long they had been in occupation before such eviction? 4.
Is salami received when lands are relet after eviction? 5.
Is salami that is paid in the zamindary of the assessee in the nature of a I present ' given by the tenant to the landlord for the permission to occupy the land or whether it is in substance a premium payable by lessee at the inception of the tenancy? After the remand the case was again stated by the Member of Assam Board of Agricultural Income Tax, Dr. Goswami, and answers to these questions were : 1.
Total number of settlements were 414, maximum extent being 59 bighas 2 Cottahs and 10 Dhurs, and salami Rs. 161 8 61 and minimum extent was 15 Cottahs and salami received therefrom Rs. 2 11 9. 2.
Rate of salami varies with the quality of the lands, two fixed rates being Rs. 7 per bigha for jungle lands and Rs. 10 per bigha for non jungle lands.
There was no eviction of tenants under section 69 of the Goalpara Tenancy Act, but action was taken in a large number of cases under section 68 of that Act.
Salami is realized when lands are relet after eviction.
Salami is not in the nature of a present.
It is a compulsory payment by the tenant to the landlord at the inception of the tenancy.
In the Statement of the Case the Board said that the zamindar 's business or vocation was letting out holdings 1023 against payment.
The area of land held by him was a large one "which he lets out piecemeal to various tenants on conditions among others that the would be tenant will first pay a fee which he prefers to call salami ' and that he will pay an annual rent.
" It held that this payment was not "a windfall", that the " isalami ' arose from the landlord 's business of letting out his lands, and. . is an income", that because of the " regularity or periodicity " attached to the receipt of salami, " it satisfies the test of I income ' " and therefore the amounts received as salami were agricultural income " within section 2(a)(1) of the Act.
On a consideration of the facts found by the Board in this case and after reference to the reported judgments of the various courts, the Calcutta High Court held that the amounts received by the assessee as salami were not " agricultural income " and the Board has brought this appeal (C.A. No. 162 of 1955) against that judgment.
In the Assam Appeals also the areas of land held by the assessees were large and total income in the case of " Parbatjoar estate " was Rs. 1,15,510 and in the case of Mechpara estate it was Rs. 2,82,106 which was divisible amongst the various co sharers.
Salami rates in Parbatjoar estate varied from Rs. 7 per.bigha for forest land to Rs. 10 per bigha for other lands depending upon the quality of the land.
In Mechpara estate the rates in hilly tracts were Re. 1 to Rs. 2 for good sail land and Re. 1 to Rs. 6 for other class of land and in the plains they varied from Rs. 2 to Rs. 3 for good sail land, and Re. 1 to Rs. 6 for other lands and As. 8 to Re. 1 for newly formed Char lands.
In Bijni Raj estate the minimum salami was Re. 1 per bigha irrespective of the area of the land.
In Gauripur estate the holdings were settled by auction and the amount of salami was determined by the demand, depending upon the quality of land and facilities for irrigation.
Similarly ;in the Chapter Trust estate holdings were settled by auction.
The finding of the High Court was: " It is abundantly clear from the above statement of facts that the rates of salami vary with the quality 1024 land in each estate.
They have no relation to rent which is admittedly fixed and invariable.
Lands are settled generally in small plots.
The highest figure received as salami in a single transaction in the years with which we are concerned was in Parbatjoar.
A sum of Rs. 621 was received on a settlement of an area measuring 88 B., 14 K., 15 D.
In Mechpara an area measuring 165 B., 16 K., 12 D., was settled for Rs. 318.
The minimum extent of area settled in one transaction was also in Mechpara.
Lands measuring only 2 K. was settled.
Salami received was Rs. 3 5 0.
Between these two extremes the extent of areas settled varies.
" There were no evictions under section 69 of the Assam Tenancy Act of non occupancy tenants but ejectments did take place and action was taken under section 68 of the Act.
After the re statement of the case on the lines suggested by the Federal Court, the Assam High Court held that " salami " is not rent but revenue derived from land and is therefore income. . .
The question for decision is whether the amounts received as salami are rent or revenue within the definition of " agricultural income " and therefore liable to agricultural income tax.
The basis of the first Calcutta judgment dated May 12, 1945, in C.A. No. 162 of 1955 was that salamis were a normal and regular feature of these estates and there was periodicity.
When the matter came up in appeal to the Federal Court the learned Chief Justice was of the opinion that the receipt termed salami if nothing more is stated in respect of it cannot be treated as a capital receipt and therefore exempt from taxation nor could it merely as such be treated as income and therefore assessable to income tax.
Mahajan J. (as he then was) said: " It may be a recurring or a periodical payment if it is a fee or a fine levied annually on the holder of rent free tenures as a quit rent; on the other hand, it may not be a periodical payment or a recurring payment if it is in the form of gratuity or offering on receiving a lease or settling for the revenue or on receiving any favour real or implied." He was of the opinion that in the former case it would be agricultural 102 income but in the latter case it would be a capita receipt being the price for that small " modicum of ownership which the landlord transfers to the tenant. ' In the Assam cases Ram Labhaya J. said that by settling the lands and accepting salami the landlord parts with the right of immediate occupation.
The characteristics and incidence of salami disclosed from the " statements of the cases " are that it is a lump sum non recurring receipt of money by a landlord from a tenant before making a settlement of the holding which in C.A. No. 162 of 1955 varied from Rs. 7 to Rs. 10 per bigha and was less in other cases.
He is also entitled to charge a fixed periodical amount of 11 annas per bigha per annum.
Salami is charged when.
ever a fresh settlement is made whether it is of a piece of virgin land or of an auction purchase holding.
Thus salami is a payment by a tenant to the landlord antecedent to the constitution of the relationship of landlord and tenant.
It is really a payment by the tenant to the landlord for being allowed to take possession of the land for cultivation under the lease.
In all those cases under appeal the leases were oral and the duration and conditions thereof were regulated by Statute The Assam Tenancy Act.
Salami is not a recurring or periodical payment or a fee or fine levied at fixed intervals from the tenant for the same holding.
In these cases it has not been contended or even suggested nor was it contended before the Federal Court that salami is capitalised rent.
As a matter of fact the Federal Court found that it was not rent.
In ' consideration of the payment of salami an estate in land is transferred by the landlord to the tenant although the estate taken by the tenant in the first instance is a non occupancy tenancy which grows into an occupancy tenancy by the efflux of time.
But in no case in any of the appeals was action taken under section 69 of the Assam Tenancy Act which regulates the rights and liabilities of non occupancy tenants and no tenant was ejected from his non occupancy tenancy.
On the other hand whenever action had to be taken for non payment of rent and ejectment it was taken 132 1026 under section 68 of the Goalpara Tenancy Act.
This section s as follows: A permanent tenure holder, a raiyat at fixed rates, or an occupancy tenant, shall not be liable to ejectment for arrears of rent, but his tenure or holding shall be liable to sale in execution of a decree for the rent thereof, and the rent shall be a first charge thereon.
In execution of decrees for arrears of rent the estates of the occupancy tenants were sold, the purchaser in all cases being the landlord himself and thus for recovering the arrears of rent the landlord had to bring to sale the right, title and interest of his tenant and after purchase of this right he relet the land, on receiving the salami from the new tenant.
This process again shows that the landlord did part with some interest in land, which cannot be said to be precarious, when he made the settlement of land on receipt of salami, which was a single nonrecurring payment by the lessee for the acquisition of his rights under the lease. " Agricultural income" which, it is claimed by the Board comprises salami, has been defined in section 2(a)(i) of the Act.
The relevant portion of this section is: S.2(a)(i).
Any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land revenue in Assam or subject to a local rate assessed and collected by officers of the Government as such.
Salami is not rent and, therefore, unless it is revenue it will not fall within this definition.
" Income" was described by Sir George Lowndes in Commissioner of Income Tax vs Shaw Wallace & Co. (1) as "a periodical monetary return coming in with some sort of regularity, or expected regularity, from definite sources." In Captain Maharaj Kumar Gopal Saran Narain Singh vs The Commissioner of Income Tax, Bihar & Orissa (2), Lord Russell of Killowen after referring to the definition given by Sir George Lowndes held that life annuity paid out of an estate is income.
(1) (1932) L.R. 59 I.A. 2o6, 212.
(2) (1935) L.R. 62 I.A. 207.
1027 Salami was described by Lord Wright in Kamakshya Narain Singh vs The COMMissioner of Income Tax (1), a case of a grant of a mining lease for a period of 999 years, in the following words: " The salami has been, rightly, in their Lordships 'opinion, treated as a capital receipt.
It is a single payment made for the acquisition of the right of lessees to enjoy the benefits granted to them by the lease.
That general right may properly be regarded as a capital asset, and the money paid to purchase it may properly be held to be a payment on capital account.
" The importance lies in the use of the words "the money paid to purchase it ", i.e., the right of the lessee to enjoy the benefits granted under the lease.
In Raja Shiv Prasad Singh vs The Crown(2) where also the lease was a mining lease for a period of 999 years, salami was described as a sum which is payable at the inception of the lease and as a nonrecurring payment in the nature of a premium for granting a lease.
In Commissioner of Income Tax vs Maharajadhiraj Kumar Visheshwar Singh (3) an area measuring 41 bighas of land was settled for an indefinite (bemead) period on a yearly rent and in the event of default of two consecutive instalments the lessee could be dispossessed and was also liable to other penalties.
This land was settled with the lessee to enable him to build a " gola house" and a platform for the rice mill.
The lease was taken to be in the nature of a permanent lease and it was held that salami represented the price for parting with the land and was not merely an advance rent and as it was not a recurring payment, it did not fall within the definition of the word 'income ' as given in Commissioner of Income Tax vs Shaw Wallace & Co. (4).
Manoharlal J. who gave a concurrent judgment, at page 824 described salami as the amount of money which a landlord "insists on receiving as a condition precedent for parting with the land in favour of the lessee." lie also held that salami (1) (1943) L.R. 70 I.A. 180, 190.
(2) Patna 73.
(3) Patna 805.
(4) (1932) L.R. 59 I.A. 206, 212.
1028 could not be treated as a revenue receipt and that it was received by the landlord "not because of the use of the land but before the land was put into use by the assessee.
" The same court in Province of Bihar vs Maharaja Protap Udai Nath Sahi Deo (1) followed the definition of the word 'salami ' as given in Kumar Visheshwar Singh 's case.
Harries C.J. there held that where salami cannot be regarded as payment of rent in advance, it will not be income and would, therefore, not be taxable.
He said "prima facie, salami is not income, and it is impossible upon the facts as stated to say that salamis received. . . constitute part of his income." Rankin C.J. in Re Gooptu Estate Limited (2) held payment of one lakh of rupees as salami not to be income.
In that case it was demanded and paid in respect of resettlement of a lease which had still to run for 48 years but had been forfeited for the non payment of rent.
In certain cases, however, payment by way of salami has been held to be 'agricultural income '.
In Birendra Kishore Manikya vs Secretary of State for India (3) it was held that the consideration for the grant of a lease is the capitalised value of the sum periodically payable along with the premium so that "the larger the one element the smaller the other.
" On this basis the premium paid for the settlement of waste lands or abandoned holdings was regarded as rent or revenue ' derived from land and therefore within the definition of agricultural income in section 2(1)(a) of the Indian Income Tax Act.
This was a case which was decided under the Indian Income Tax Act and the question whether it was a capital receipt or revenue receipt and therefore exempt or not from taxation did not arise because the Bengal Agricultural Income Tax Act was passed in 1944 and the Assam Act in 1939.
It was not necessary for the purpose of that case to decide whether it was a capital receipt or revenue because what was to be decided was whether salami was (1) Patna 699, 722.
(2) (3) Cal, 766.
1029 exempt from income tax under section 2(a)(i) of the Indian Income Tax Act.
As a matter of fact the assessee argued in that case that these sums constituted " agricultural income".
Moreover the dictum the smaller the salami the higher the rent and vice versa did not receive acceptance by the Federal Court when the present matter was heard in that court before remand (C.A. No. 30 of 1949).
In Meher Bano Khanum vs Secretary of State for India(1) 'salami ' was defined to be an amount received by the landlord for the recognition of the transfer of a non transferable holding which was paid to the landlord because of his ownership of the land.
It was held to be "agricultural income" as it was "rent or revenue" within the meaning of that expression.
The Standing Counsel who appeared for the Secretary of State in that case conceded that it was not revenue but his argument was that it was not revenue derived from land but that it was an incident of the transfer and not of tenancy and therefore did not flow from the land.
In neither of these cases was it argued whether salami was a revenue receipt or capital receipt.
In a Full Bench of the Patna High Court in Raja Rajendra Narayan Bhanja Deo vs Commissioner of Income Tax (2 ) mutation fees were held to be agricultural income but that was a case of payment after the relationship of landlord and tenant had come into existence.
Similarly in the Commissioner of Income Tax vs K. C. Manavikraman Rajah (3) monies paid for the renewal of leases were held to be agricultural income within the meaning of section 2(1)(a) of the Indian Income Tax Act.
Here again the monies were paid not for the constitution of the relationship of landlord and tenant but after that relationship had come into existence and for its continuance.
In H. H. Maharaja Sir Bir Bikram Kishore Manikya Bahadur vs The Province of Assam (1), a case under the Act, Harries C.J. referred to Kamakshya Narain Singh 's case (5) and held that it had to be decided on (1)(1925) I.L.R. (2) Patna 1.
(3) I.L.R. (4) (5) (1943) L.R. 70 I.A. 18o, 190. 1030 the facts of each case whether salami was agricultural income or not because it was not known in respect of what transaction the amount was received.
The Orissa High Court in section M. Bose vs Secretary, 'Board of Revenue (1) has held that salami is not a payment of rent in advance nor is it income but is a payment by way of capital receipt.
It was contended before us that the Privy Council in Kamakshya Narain Singh 's case (2 ) based its decision on the wasting nature of the assets under the lease.
But the definition given by Lord Wright is in general terms and just describes what the characteristics of a payment by way of salami are without any reference as to the nature of assets under a lease.
In all these appeals before us the assessees derived considerably large amounts of income from agricultural holdings.
It is not shown as to what the number of the holdings were but they must have been considerably large.
On the other hand the number of settlements was comparatively small a few hundreds and consisted of settlements of virgin lands as well as of auction purchase lands and were not derived from the same holdings at regular intervals.
This and the findings of fact given above negative the finding as to "regularity and periodicity" of payment of salami and also that it "arose out of business of letting out his land.
" The payments by way of salami were made by the prospective lessees anterior to the constitution of the relationship of landlord and tenant as the price for the lessor agreeing to the parting of his rights in an agricultural holding in favour of the proposed lessee.
In Principles of Mohamadan Law by Macnaughton ,salami is defined as; "a free gift by way of compliment or in return of a favour." In Wilson 's Glossary the meaning given to it is: " a complimentary present, a douceur. . ; a present to a superior upon being introduced to him; a gratuity or offering on receiving a lease. . . (1) A.I.R. 1955 Orissa 288.
(2) (1943) L.R. 7o I.A. 180, 190.
1031 In the Arabic English Dictionary by Johnson it means: " a present on being introduced to a superior; earnest money; a free gift from a farmer to Government on taking lands. . ." In Vol.
I of Baden Powell 's "Land Systems of British India" it is stated at page 543; ". .the
Zamindar, to raise money, had sold so many taluqs or under farms for 'salami ' or fees paid down Thus all these definitions show that salami is a payment by the tenant as a present or as price for parting by the landlord with his rights under the lease of a holding.
It is a lump sum payment as consideration for what the landlord transfers to the tenant.
The manner in which the leases were dealt with and the fact that 'in no case was a non occupancy tenant evicted and his tenure was allowed to mature into an occupancy holding shows that the leases were in practice not so precarious as was suggested by the Board, but had an element of stability and permanency attached to them.
Therefore, when a tenant paid salami he did so in order to get in return an estate in the land owned by the zamindar.
Salami is thus not rent and both parties have proceeded on that basis and it could not be called revenue within the meaning of the word used in the definition of agricultural income under section 2(1)(a) of the Act because it was a payment to the landlord by the tenant as a consideration for the transfer of a right in zamindari lands owned by the landlord.
It has therefore all the characteristics of a capital payment and is not revenue.
In the result appeal No. 162 of 1955 brought by the State of Assam is dismissed with costs throughout and the appeals brought by the assessees in C.A. Nos. 38 to 44 of 1956 are allowed, the judgment of the High Court set aside and the referred questions answered in the negative.
The assessees will have their costs in this court in one set and the courts below except in appeal No. 42 of 1956 where the appellant was not present, 1032 but it appears that she could not be served and given notice of the hearing of the appeal and, therefore, although her appeal is allowed, as it is based on a point common to other appeals, the parties will bear their own costs in that appeal.
Appeal No. 162 of 1955 dismissed.
Appeals Nos.
38 to 44 of 1956 allowed.

summary/full:
The true indicia of salami are (1) its single non recurring character and (2) payment prior to the creation of the tenancy.
It is the consideration paid by the tenant for being let into possession and can be neither rent nor revenue but is a capital receipt in the hands of the landlord.
Kamakshya Narain Singh vs The Commissioner of Income Tax (1943) L.R. 70 I.A. 180, relied on.
Case law reviewed.
Birendra Kishore Manikya vs Secretary of State for India, Cal.
766, Meher Bano Khanum vs Secretary of State for India, Cal.
34, Raja Rajendra Narayan Bhanja Deo vs Commissioner of Income Tax, Pat. 1 and Commissioner of Income Tax vs K. C. Manavikramato Rajah, I.L.R. , distinguished.
Consequently, where payments described as salamis and received by certain zamindar assessees as consideration for granting agricultural leases, by no means of a precarious nature, were (1) (2) 1020 all made prior to such grants and were of a non recurring character, but calculated at rates varying with the nature of the lands and chargeable on every subsequent eviction and re letting, they were properly so described and were neither rent nor revenue within the definition of 'agricultural income ' contained in section 2(a) (1) of the Assam Agricultural Income Tax Act and could not be assessed to tax under the Act.