judgement:
Civil Appeal No. 70 of 1952.
Appeal by special leave from the Judgment and Decree dated the 5th May, 1949, of the High Court of Judicature at Patna (Manohar Lall and Mahabir Prasad JJ.) in Appeal from Appellate Decree No. 2091 of 1946.
C.K. Daphtary, Solicitor General far India (G. N. Joshi and Porus A. Mehta, with him) for the appellant.
P. Sinha (Nuruddin Ahmed, with him) for the respondent.
February 11.
The undisputed facts of the case are:That the respondent was appointed a Sub Inspector of Police by the Inspector General of Police, Bihar and Orissa, in January, 1920.
In the year 1937 departmental proceedings were taken against him and he was found guilty of cowardice and of not preparing search lists and was punished by demotion for ten years.
On appeal; the Deputy Inspector General of Police held 788 that the respondent was guilty of cowardice but acquitted him of the other charge.
By an order dated the 23rd July, 1940, which was communicated to the respondent on the 29th of July, 1940, the Deputy Inspector General of Police having found him guilty of cowardice made an order dismissing him from service.
Further appeals by the respondent to the Inspector General of Police and to the Governor of Bihar were unsuccessful.
Aggrieved by the departmental action taken against him, the respondent filed the suit out of which this appeal arises in the court of additional subordinate judge against the State of Bihar for a declaration that the order of the Deputy Inspector General of Police dismissing him from service was illegal and void and that he should be regarded as continuing in office.
He also claimed a sum of Rs. 4,241 from 30th July, 1940, to the date of the suit on account of arrears of salary.
The State contested the claim and pleaded that the plaintiff held his service at the pleasure of the Crown, and could not call in question the grounds or the reasons which led to his dismissal, and that in any case he had been reinstated in service from the 30th of July, 1940, and the order of dismissal therefore was no longer operative, and the suit had thus become infructuous.
The additional subordinate judge by his judgment dated the 2nd February, 1945, dismissed the suit on the finding that the Government having reinstated the respondent he had no cause of action.
As regards the arrears of salary, it was held that the claim to it could only be made according to the procedure prescribed under rule 95 of section 4 of Chapter IV of Bihar and Orissa Service Code.
This decision was confirmed in appeal by the additional district judge.
On further appeal the High Court reversed these decisions and decreed the claim for arrears of salary in the sum of Rs. 3,099 12 0.
It was held that rule 95 of the Bihar and Orissa Service Code had no application because the respondent had never been dismissed within the meaning of that rule.
It was further held that the plaintiff was entitled to maintain the suit for arrears of pay in view of the decision 789 of the Federal Court in Tara Chand Pandit 's case(1) the correctness o15 which was not affected by decisions of the Privy Council in cases of 1.
M. Lall(2) and Suraj Narain Anand(3).
The principal questions involved in this appeal are: (1) Whether the High Court correctly held that rule 95 above mentioned had no application to the case ? (2) Whether a suit 15or arrears of salary by a civil servant is competent in a civil court ? Rule 95 of the Bihar and Orissa Service Code provides: Rule 95 "When the suspension of a Government servant as a penalty for misconduct is, upon reconsideration or appeal, held to have been unjustiliable or not wholly justifiable; or when a Government servant who has been dismissed or removed, or suspended pending enquiry into alleged misconduct is reinstated; the revising or appellate authority may grant to him for the period of his absence from duty (a) if he is honourably acquitted, the full pay to which he would have been entitled if he had not been dismissed, removed or suspended and, by an order to be separately recorded, any allowance of which he was in receipt prior to his dismissal, removal or suspension; or (b) if otherwise, such proportion of such pay and allowances as the revising or appellate authority may direct.
" The provisions of this rule enable an appellate or revising authority, when making an order of reinstatement to grant the reliefs mentioned in the rule.
Obviously these provisions have no application to the situation that arose in the present case.
The respondent here was dismissed by the Deputy Inspector General of Police, though he was appointed by the Inspector General of Police.
This was clearly contrary to the (1) (2) 75 I.A. 225.
(3) 75 I.A. 343.
790 provisions of section 240 (3) of the Government of India Act, 1935, which provides that no person shall be dismissed from the service of His Majesty by an authority subordinate to that by which he was appointed.
But nevertheless the appeal preferred by him to the Inspector General of Police was rejected and his petition to the Government of the State met with the same fate, so that he was never reinstated by the order of any revising or appellate authority.
It was only after the present suit was filed that the Government reinstated him.
This was no proceeding in revision or appeal.
In these circumstances the enabling provisions of rule 95 had no application whatsoever to the case of the plaintiff.
What happened subsequently is a matter wholly outside the contemplation of the rule.
After the institution of the suit, the Chief Secretary to the Government of Bihar realising the untenability of the Government 's position wrote to the Inspector General of Police that the order of dismissal should be treated as null and void and that the respondent should be reinstated.
Thus the reinstatement of the plaintiff the telegram of the 30th December, 1943, was not made at the instance of any of the authorities mentioned in the rule in exercise of their jurisdiction, appellate, or revisional, but was made at the instance of the defendant in the suit who had realised that it was not possible to defend the order of dismissal.
For the reasons given above we are of the opinion that the High Court was right in holding that rule 95 had no application to the facts and circumstances of this case and that the enabling provisions of this rule did not operate as a bar to the plaintiff 's action.
The next contention of the learned Solicitor General that a suit by a public servant against the State for recovery of arrears of salary cannot be maintained in a civil court is again, in our opinion, without substance.
We think that the matter is covered by the decision of the Federal Court in Tara Chand Pandit 's case(1) with which we find ourselves in respectful agreement.
In that case the learned Attorney General had argued with great force all the points that were (1) 791 urged in this appeal before us by the learned SolicitorGeneral and were dealt with by the Federal Court in great detail.
It was there held that the prerogative right of the Crown to dismiss its servants at will having been given statutory form in sub section (1)of section 240 of the Government of India Act, 1935, it could only be exercised subject to the limitations imposed by the remaining sub sections of that section and that it must follow as a necessary consequence that if any of those limitations was 'contravened the public servant concerned had a right to maintain an action against the Crown for appropriate relief and that there was no warrant for the proposition that that relief must be limited to a declaration and should not go beyond it.
It was further held that even if apart from the prerogative of the Crown to terminate the service of any of its servant at will, the further prerogative could be invoked that no servant of the Crown could maintain an action against the Crown to recover arrears of pay even after the pay had been earned and had become due and that the prerogatives of the Crown had been preserved in the case of India by section 2 of the Constitution Act, it must be presumed that this further prerogative had been abandoned in the case of India by the provisions of ' the Code of Civil Procedure and that it was not possible to subscribe to the proposition that while a creditor of a servant of the Crown was entitled as of right to compel the Crown to pay to him a substantial portion of the salary of such servant in satisfaction of a decree obtained against him the servant himself had no such right.
Mr. Justice Kania, as he then was, in a separate but concurring judgment, negatived the contention of the Attorney General in these terms: "The question whether the law in England and India is the same on this point should be further considered having regard particularly to the provisions found in the Civil Procedure Code.
In this connection, section 60(1) and clauses (i) and (j) of the proviso, and explanation (2) should be noted.
Under section 60 all property belonging to the judgment debtor is liable to be attached.
In stating the 792 particulars of what may not be attached and sold, exemption to a limited extent is given in respect of the salary of a public servant.
These provisions of the Code of Civil Procedure were not noticed in Lucas vs Lucas and High Commissioner for India(1 ), as the application was made in England and the Civil Procedure Code of 1908 did not apply there.
The provisions of section 60 of the Civil Procedure Code give a right to the creditor to attach the salary of a servant of the Crown.
There can be no dispute about that.
If the contention of the appellant was accepted, the result will be that while the civil servant cannot recover the money in a suit against the Crown, his ,creditor can recover the same in execution of a decree against the civil servant.
This right of the creditor to receive money in that manner has been recognised in innumerable decisions of all High Courts.
There were similar provisions in the Civil Procedure Code of 1882 also.
By reason of section 292 of the Constitution Act, the Code of Civil Procedure, 1908, continues in force, in spite of the repeal of the Government of India Act of 1915.
Could the Imperial Parliament ' in enacting section 240 and being deemed aware of the provisions of section 60 of the Civil Procedure Code, have thought it proper to give this privilege to a creditor, while denying it to the officer himself ? To hold ' so, the words of section 240 of the Constitution Act will have to be unduly and unnaturally strained.
Moreover in explanation (2) of section 60 the word 'salary ' is defined.
In the proviso to section 60 clause (i) the word 'salary ' is used as applicable to private employees and to Government servants also.
The word 'salary ' in respect of a private employee must mean an enforceable right to receive the periodical payments mentioned in the explanation.
In that connection it is not used in the sense of a bounty.
It will therefore be improper to give the same word, when used with regard to a civil servant under the Crown a different meaning in the same clause.
It seems to me therefore that the Imperial Parliament has not accepted the principle that the Crown is not liable to pay its servant salary (1) 793 for the period he was in service, as applicable to British India or as forming part of the doctrine that service under the Crown is at His Majesty 's pleasure." The learned Solicitor General contended that the decision in Tara Chand Pandit 's case(1), was no longer good law and should be deemed to have been dissented from and overruled by the decision of their Lordships of the Privy Council in I. M. Lall 's case(2), and that in any event the view expressed in that decision should be preferred to the view expressed in Tara Chand Pandits case.
We are unable to uphold this contention.
It seems that during the arguments in Lall 's case attention of their Lordships was not drawn to the decision of the Federal Court in Tara Chand Pandit 's case because the point was not directly involved therein.
In that case no claim had been made by the plaintiff for arrears of his pay.
The plaintiff had sued for a declaration simpliciter that the order of his removal from the office was illegal and that he was still a member of the Indian Civil Service.
The High Court granted that declaration.
The Federal Court, on appeal, substituted for the declaration made by the High Court a declaration that the plaintiff had been wrongfully dismissed.
The case was remitted to the High Court with a direction to take such action as it thought necessary in regard to any application by the plaintiff for leave to amend the claim for recovery of damages.
On appeal to the Privy Council the decree and the order made by the Federal Court was modified and their Lordships held that in their opinion the declaration should be varied so as to declare that the purported dismissal of the respondent on the 10th August, 1940, was void and inoperative and the respondent remained a member of the Indian Civil Service at the date of the institution of the suit, 20th of June, 1942.
The High Commissioner for India had also appealed against the order of the Federal Court remitting the case to the High Court for amendment of the plaint.
The plaintiff did not want to maintain the order of the Federal Court to remit, before the (1) (2) 75 I.A. 225.
14 95 S.C.I./59 794 Privy Council.
He however urged that he was entitled to recover in the suit his arrears of pay from the date of the purported order of dismissal up to the date of action, though this was not one of the reliefs claimed by him in the suit at all.
This relief that was claimed by him before the Board was negatived by their Lordships on the ground that no action in tort could lie against the Crown and that such an action must either be based on contract or conferred by statute.
Their Lordships approved of the judgment of Lord Blackburn in the Scottish case of Mulvenna vs The Admiralty(1), in which that learned Judge laid down the rule in the following terms after reviewing various authorities: "These authorities deal only with the power of the Crown to dismiss a public servant, but they appear to me to establish conclusively certain important points.
The first is that the terms of service of a public servant are subject to certain qualifications dictated by public policy, no matter to what service the servant may belong, whether it be naval, military or civil, and no matter what position he holds in the service, whether exalted or humble.
It is enough that the servant is a public servant, and that public policy, no matter on what ground it is based, demands the qualification.
The next is that these qualifications are to be implied in the engagement of a public servant, no matter whether they have been referred to when the engagement was made or not.
If these conclusions are justified by the authorities to which I have referred, then it would seem to follow that the rule based on public policy which has been enforced against military servants of the Crown, and which prevents such servants suing the Crown for their pay on the assumption that their only claim is on the bounty of the Crown and not for a contractual debt, must equally apply to every public servant.
It also follows that this qualification must be read, as an implied condition, into every contract between the Crown and a public servant, with the effect that, in terms of their contract, they have no right to their remuneration which can be (1) 795 enforced in a civil court of justice, and that their only remedy under their contract lies in an appeal of an official or political kind '.
" The observations made in Mulvenna vs The Admiralty(1), which is a Scottish case, could not have been made if in the law of that country there were provisions similar to the provisions made in various sections of the Code of Civil Procedure referred to by the Federal Court in Tara Chand Pandit 's case(2).
It was further urged that the same view was taken by Pilcher J. inLucas vs Lucas and the High Commissioner for India(a).There the question for consideration was whether the sterling overseas pay of an Indian civil servant was a debt owing and accruing within the meaning of rule 1 of Order XLV of the Rules of the Supreme Court and which could be attached in satisfaction of an order for the payment of alimony.
The real point for decision in that case was whether the whole or any portion of the salary of a member of the Indian Civil Service was liable to attachment in England in satisfaction of the judgment debt.
It appears that the attention of the learned Judge was not invited to the provisions of section 60 and other relevant provisions of the Code of Civil Procedure and the learned Judge applied the dictum of Lord Blackburn in Mulvenna vs The Admiralty( 1 ), to the case of a civil servant from India.
As the application was made in England and the Civil Procedure Code did not apply there, the provisions of the Code were not noticed in that case.
We are therefore of the opinion that the rule laid down by their Lordships of the Privy Council in 1.
M. Lall 's case(4), without a consideration of the provisions of the Code of Civil Procedure relevant to the inquiry and without a consideration of the reasoning of the Federal Court in Tara Chand Pandit 's case(2), cannot be treated, particularly because the matter was not directly involved in the suit, as the final word on the subject.
We are in no way bound by the decision given either in Tara Chand Pandits case(2 ), or by the (1) (3) (2) (4) 75 I.A. 225.
796 decision given by the Privy Council in I. M. Lall 's case (1).
But on a consideration of the reasons given in the two judgments we think that the rule of English law that a,civil servant cannot maintain a suit against the State or against the Crown for the recovery of arrears of salary does not prevail in this country and that it has been negatived by the provisions of the statute law in India.
Reliance was also placed by the learned Solicitor General on the decision of the Federal Court in Suraj Norgin Anand vs North West Frontier Province(2).
In that case Suraj Narain having been appointed a Sub Inspector of Police posted in the North West Frontier Province by the Inspector General of Police of the Province was subsequently dismissed by the Deputy Inspector General of Police.
Failing to get relief by departmental proceedings he instituted a suit in the Court of the Senior Subordinate Judge, Peshawar.
The subordinate judge dismissed the suit as being unsustainable.
This decision was upheld by the Court of the Judicial Commissioner.
The Federal Court held that the Courts below were not justified in dismissing the suit, that the plaintiff was at least entitled to a declaration that the order of dismissal passed against him was void.
That court accordingly set aside the decree of the Judicial Commissioner and remitted the case with a declaration that there shall be substituted for the decree appealed against a declaration in the terms above stated, with such further directions as the circumstances of the case may require in the light of the observations of their judgment.
The Province appealed to the Privy Council against the decision of the Federal Court.
It was held by the Board in the first instance allowing the appeal of the North West Frontier 'Province and reversing the decision of the Federal Court of India, that the North West Frontier Province Police Rules, 1937, had become operative in 1938 at some date before April 25, 1938, when the respondent was dismissed, and that rule 16 (1)was a valid rule made under the authority conferred on the (1) 75 I.A. 225.
(2) 797 appellant by section 243 of the Government of India Act, 1935, and that the respondent 's suit was rightly dismissed, but subsequently on the petition of the respondent asking the Board to reconsider ' their decision on the ground that it had been ascertained that the Police Rules of 1937 were in fact printed and published on April 29, 1938, that was, four days after the date of his dismissal, the Board heard the appeal further, when the respondent 's allegation was admitted and, :applying the reasoning in their previously delivered judgment, the Board reversed their former decision and affirmed the judgment of the Federal Court which had held that ' the respondent 's dismissal was void and :inoperative.
During the arguments before the Privy ,Council reference was made to section 60 of the Code of Civil Procedure and to the decision of the Federal 'Court in Tara Chand Pandit 's case(1), and it was also noticed that following on the remit of the case to the Judicial.
Commissioner by the order of the Federal Court, dated December 4, 1941, the respondent had ,obtained a decree for payment of Rs. 2,283 against the appellant in respect of arrears of pay from the date of dismissal to the institution of the suit.
When the appeal came before the Board for further hearing their Lordships on the 6th August, 1948, caused a letter to 'be addressed to the solicitor representing the appellant, informing him that their Lordships now proposed 'humbly to advise His Majesty that the appeal should 'be dismissed, and stating that the order as to costs would not be varied.
The letter pointed out that if this :advice were tendered, and if His Majesty were pleased to accept it, the effect would be that the declaratory 'judgment of the Federal Court would stand.
Finally, 'the letter referred to the award of Rs. 2,283 to the respondent by the Court of the Judicial Commissioner 'which, according to a submission made by the appellant 's counsel, was open to challenge, and inquired whether the appellant wished to have an opportunity ,of satisfying their Lordships that the point was open, and of being heard on it.
By their Lordships ' direction a copy of this letter was sent to the respondent.
(1)[1947] F.C.R. 89.
798 An intimation was received by the Privy Council that the appellant did not wish to offer any further arguments on the case.
The respondent also did not desire an opportunity of arguing that he should now beawarded arrears of pay from the date of the institution of the suit onwards.
In these circumstances the Board refused to deal further with the matter and advised His Majesty that the declaratory judgment of the Federal Court be restored and proceeded to observe that it would be open to the respondent to pursue any remedy which flows from that declaratory judgment in an appropriate court.
Their Lordships concluded the judgment with the following observations : "Their Lordships must not be understood, however, as expressing an opinion that the respondent was entitled as of right to recover the sum of Rs. 2,283 which was awarded to him, or that he has any claim to a further sum in respect of arrears of pay.
It is unnecessary, owing to the very proper attitude of the appellant, to express any view as to the former question, and the latter question does not arise in this appeal which is from the decision of the Federal Court.
If that decision is affirmed the respondent who did not himself enter an appeal, cannot now ask for anything more.
" It is thus clear that in express terms in this decision their Lordships declined to give any opinion on the question whether the respondent was entitled as of right to recover arrears of pay awarded to him by the" Judicial Commissioner, in spite of the circumstance that their attention had been drawn to the decision of the Federal Court in Tara Chand Pandit 's case(1).
This decision therefore cannot be said to support the view contended for by the learned Solicitor General.
On the other hand, it must be assumed that in spite of their decision in 1. M. Lall 's case(1), their Lordships in this case, the judgment in which was delivered subsequent to the decision in 1.
M. Lalls case(2), on November 4, 1948, did not reaffirm the propositions (1) (2) 75 I.A. 225.
799 laid down in that case but preferred to express no opinion on the point.
It was suggested that the true view to take is that when the statute says that the office is to be held at pleasure, it means "at pleasure", and no rules or regulations can alter or modify that; nor can section 60 of the Code of Civil Procedure, enacted by a subordinate legislature be used to construe an Act of a superior legislature.
It was further suggested that some meaning must be given to the words "holds office during His Majesty 's pleasure" as these words cannot be ignored and that they bear the meaning given to them by the Privy Council in 1.
M. Lall 's case (1).
In our judgment, these suggestions are based on a misconception of the scope of this expression.
The expression concerns itself with the tenure of office of the civil servant and it is not implicit in it that a civil servant serves the Crown ex grati or that his salary is in the nature of a bounty.
It has again no relation or connection with the question whether an action can be filed to recover arrears of salary against the Crown.
The origin of the two rules is different and they operate on two different fields.
The rule that a civil servant holds office at the pleasure of the Crown has its origin in the latin phrase" durante bene placito" ("during pleasure") meaning that the tenure of office of a civil servant, except where it is otherwise provided by statute, can be terminated at any time without cause assigned.
The true scope and effect of this expression is that even if a special contract has been made with the civil servant the Crown is not bound thereby.
In other words, civil servants are liable to dismissal without notice and there is no right of action for wrongful dismissal, that is, that they cannot claim damages for premature termination of their services.
[See Fraser 's Constitutional Law, page 126; Chalmer 's Constitutional Law, page 186; Shenton vs Smith (2); Dunn vs The Queen(3) ].
This rule of English law has not been fully adopted in section 240.
Section 240 itself places restrictions (1) 75 I.A. 225.
(2) , 234.
(3) 800 and limitations on the exercise of that pleasure and those restrictions must be given effect to.
They are imperative and mandatory.
It follows therefore that whenever there is a breach of restrictions imposed by the statute by the Government or the Crown the matter is justiciable and the party aggrieved is entitled to suitable relief at the hands of the court.
As pointed out earlier in this judgment, there is no warrant for the proposition that the relief must be limited to the declaration and cannot go beyond it.
To the extent that the rule that Government servants hold office during pleasure has been departed from by the statute, the Government servants are entitled to relief like any other person under the ordinary law, and that relief therefore must be regulated by the Code of Civil Procedure.
Section 292 of the Government of India Act, 1935, provides that the law in force in British India immediately before the commencement of the Act shall continue in force until altered, repealed or amended by a competent legislature.
Sections 100 to 104 of the Government of India Act.
1935, confer legislative powers on the different legislatures in the country.
Item 4 of the concurrent list in the Seventh Schedule reads thus: "Civil Procedure and all matters included in the Code of Civil Procedure, at the date of the passing of this Act.
" It is clear therefore that the Indian Legislatures were conferred by the Government of India Act, 1935, power to regulate the procedure in regard to actions against the Grown and to make provision for reliefs that could be granted in such actions.
These provisions of the Government of India Act, 1935, stand by themselves independently of what is contained in section 240,and therefore no question arises that section 60 of the Code of Civil Procedure which has the sanction of the Government of India Act, 1935, itself is in status lower than the rule laid down in section 240.
The rules of English law that the Grown cannot be sued by a civil servant for money or salary or for compensation has its origin in the feudal theory that the Crown cannot be sued by its vassals or subjects in its 801 own courts.
From this theory the common law lawyers in England deduced two rules, namely, (1) that the King can do no wrong, and (2) that as a matter of procedure no action can lie in the King 's courts against the Crown.
(See Ridge 's Constitutional Law, eighth edition, page 295, and Fraser 's Constitutional Law, page 164).
The subject, in this situation, could only proceed by way of a petition of right which required the previous permission of the Crown.
Permission was given by a fiat justitia issued by the Crown.
It was not in practice refused to a petitioner who had any shadow of a claim, so that probably the disadvantages of this form of procedure were more theoretical that substantial.
Petitions of right and various other special forms of English procedure applicable exclusively to actions by and against the Crown were abolished by the Crown Proceedings Act, 1947, which provides that in future claims against the Crown might be enforced as of right and without the fiat of His Majesty, and that they should be enforceable by ordinary procedure in accordance with the rules of the High Court or the County Court as the case might be.
Arrears of salary were being actually recovered by the procedure of petition of right in England. '[See Bush vs R. (1)] There the judgment resulted in favour of the suppliant.
The claim was in respect of the amount of salary due to him as Master of the Court of Queen 's Bench in Ireland.
(Robertson 's Civil Proceedings by or against the Crown, page 338).
In India, from the earliest times, the mode of procedure to proceed against the Crown has been laid down in the Code of Civil Procedure and the procedure of petition of right was never adopted in this country, and the same seems to have been the rule in Australia and other Colonies.
Section 56 of the Judiciary Act, 1903, relating to the Commonwealth of Australia provides: "Any person making any claim against the Commonwealth, whether in contract or in tort, may respect of the claim bring a suit against the (1) [1869] Times News, May 29.
802 Commonwealth in the High Court or in the Supreme Court of the State in which the claim arose.
" Under the New South Wales Act, 39 Vict.
No. 38, the Government of the Colony is liable to be sued in an action of tort as well as in contract.
Section 65 of the Government of India Act, 1858, conferred the right of suit against the Government.
It provided that "all persons and bodies politic shall and may have and take the same suits, remedies and proceedings legal and equitable, against the Secretary of State in Council of India as they could have done against the said company" (the East India Company).
This was replaced by section 32 of the Government of India Act, 1915.
Sub section (2) of that section ran as follows : "Every person shall have the same remedies against the Secretary of State in Council as he might have had against the East India Company if the Government of India Act, 1858, and this Act had not been passed.
" This was replaced by section 176(1)of the Government of India Act, 1935, which substantially reproduced these provisions.
From these provisions it is clear that the Crown in India was liable to be sued in respect of acts, which in England could be enforced only by a petition of right.
As regards torts of its servants in exercise of sovereign powers, the company was not, and the Crown in India was not, liable unless the act had been ordered or ratified by it.
Be that as it may, that rule has no application to the case of arrears of salary earned by a public servant for the period that he was actually in office.
The present claim is not based on tort but is based on quantum meruit or contract and the court is entitled to give relief to him.
The Code of Civil Procedure from 1859 right up to 1908 has prescribed 'the procedure for all kinds of suits and section 60 and the provision of Order XXI substantially stand the same as they were in 1859 and those provisions have received recognition in all the Government of India Acts that have been passed since the year 1858.
The salary of its civil servants in the 803 hands of the Crown has been made subject to the writ of civil court.
It can be seized in execution of a decree attached.
It is thus difficult to see on what grounds the claim that the Crown cannot be sued for arrears of salary directly by the civil servant, though his creditor can take it, can be based or substained.
What could be claimed in England by a petition of right can be claimed in this country by ordinary process.
For the reasons given above we are of the opinion that this appeal is without force and we accordingly dismiss it with, costs.
Appeal dismissed.

summary/full:
Held, that the rule of English law that a civil servant cannot ' maintain a suit against the State or against the Crown for the 787 recovery of arrears of salary does not prevail in India and it has been negatived by the provisions of the statute law in India.
Section 240 of the Government of India Act, 1935, places restrictions and limitations on the exercise of the pleasure of the Crown and these restrictions must be given effect to.
They are imperative and mandatory.
Therefore whenever there is a breach of restrictions imposed by the statute ' by the Government or the Crown the matter is justiciable and the aggrieved party is entitled to suitable relief at the hands of the court.
Government servants are entitled to relief like any other person under the ordinary law, and that relief must be regulated by the Code of Civil Procedure.
Punjab Province vs Pandit Tara Chand ([1947] F.C.R. 89) approved.
High Commissioner OF India and Pakistan vs I.M. Lall ([1948] L.R. 75 I.A. 225) distinguished.


judgement:
iminal Appeal No. 10 of 1965.
Appeal by special leave from the judgment and order dated July lo, 1964 of the Mysore High Court in.
Criminal Appeal No. 223 of 1963.
R. H. Dhebar and section P. Nayyar, for the appellant.
The respondent did not appear.
674 The Judgment of the Court was delivered by Shelat, J.
This appeal, by special leave, raises the question as to the true meaning of section 42(1) of the (4 of 1939).
The respondent, the owner of a motor car bearing No. MYU 1089, carried 8 passengers in his said car on Nanjangud Mysore Road on April 5, 1963 and collected Rs. 5 from each of them.
He was charge sheeted under section 42(1) read with section 123 of the Act for having used the said car as "a transport vehicle" without the permit required under section 42(1).
The trial Magistrate did not go into the merits though the prosecution led evidence and acquitted him relying on the decision of the High Court of Mysore in Jayaram vs The State of Mysore(1).
The State took the matter in appeal to the High Court urging that the said decision required reconsideration.
On the view that it did not, , the High Court dismissed the appeal.
Hence this appeal.
In B.S. Usman Saheb vs The State of Mysore(2) the question arose whether an owner of a motor car who had carried cement bags and other goods from one place to another without a permit under "section 42(1) could be said to have used a "goods vehicle", and, therefore, could be said to have contravened section 42(1).
The trial Magistrate convicted the accused on the ground that once the car was used to transport goods, the vehicle was converted into "a goods vehicle" and required permit.
The High Court set aside the conviction holding that the mere fact that the owner of such motor vehicle used it for transporting goods did not mean that the vehicle was converted into a "goods vehicle" so as to attract section 42(1).
Likewise in Jayaram vs The State of Mysore(1) the accused who had his motor vehicle registered as a motor car used it for ,carrying passengers, for reward.
The High Court held that the ,said vehicle having been registered as a motor car as defined by section 2(16) was not "a transport vehicle" and no prosecution could lie under section 42(1).
The State of Mysore challenges the correctness of these decisions contending that though a motor vehicle is registered as a motor car, if it is used for a purpose set out in section 42(1) viz., carrying passengers for hire or reward, the motor vehicle on that occasion must be said to have been used as a "transport vehicle", and if so used without a permit, there would be a breach of that provision and the owner so using it or permitting it to be so used would be liable to be convicted.
To test the correctness of this contention, some of the relevant 'provisions of the Act may first be considered.
Section 2(18) Redefines a "motor vehicle" as meaning any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion (1) (2) 675 is transmitted thereto from an external or internal source. ' Section 2(16) defines a "motor cat" as meaning any motor vehicle other than a transport vehicle, omnibus, road roller, motor cycle or in.valid carriage.
:Clause 25 of section 2 defines "public service vehicle" as any motor vehicle used or adapted to be used for the carriage of passengers for, hire or reward, and includes a motor cab, contract carriage and stage carriage.
Section 2(33) defines "transport vehicle" as, meaning a public service vehicle or a goods vehicle.
Section 3 requires a person driving a motor vehicle in any public place to have an effective driving licence issued to himself authorising him to drive the vehicle and provides that no person shall drive a motor vehicle as a paid employee or, shall so drive a. transport vehicle unless his driving licence specifically entitles him so to do.
Section 42 in,Chapter IV deals with control of transport vehicles.
Sub section (1)provides: "No owner of a transport vehicle shall use or permit the use of the vehicle in any public place save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or,the Commission authorising the use of the vehicle in that place in a manner in which the vehicle is being used." Section 42(1) no doubt uses the words "owner of a transport vehicle" and provides that he shall not use or permit its use in any public place save in accordance with the conditions of a permit granted or countersigned by the prescribed authority.
These words, however, cannot mean that the 'sub section applies only to cases where the motor vehicle in question is registered as a transport vehicle.
If that were so, a person can use his motor vehicle,provided it is not "a transport vehicle", for carrying passengers for hire or reward without having to take out a permit for its use as"a transport vehicle".
Since the section is enacted for control of transport ,vehicles, it could never be the intention of the Legislature to allow such an anomalous result.
The sub section, therefore, must be construed in such a manner as to effectuate the object for which it was enacted.
So construed, it must mean that if a person owns.
a motor vehicle and uses it or permits its use as a transport vehicle he can do so provided he takes out the requisite permit therefor If he does not take out the permit and uses it or permits its use ;Ls "a transport vehicle" he commits an infringement of the subsection.
What the sub section emphasises is the use of a motor vehicle as a transport vehicle and the necessity of a Permit which is reqred for purposes of exercising control over vehicles used 'as transport vehicles.
This is clear from the definitions of "transport vehicle" and a "public service vehicle".
A "transport vehicle" means a "public service vehicle" and "a public service vehicle" means any motor vehicle either used or adapted to be used for carriage of passengers for hire or ' reward.
Therefore, any motor vehicle used for carriage of passengers for hire or reward is regarded when so M2Sup.
Cl/67 14 676 used as a public service vehicle and therefore a transport vehicle.
it is the use of the motor vehicle for carrying passengers for hire or reward which determines the category of the motor vehicle whether it is adapted for that purpose or not.
It must follow that even if a motor vehicle is occasionally used for carrying passengers for hire or reward it must be regarded when so used as a public service vehicle and therefore a transport vehicle and if it is so used without the necessary permit such use would be in breach of section 42(1) and the owner who uses it or permits it to be so used would be liable to be punished under section 42(1) read with section 123.
A similar construction wag given to para 5(d) of Sch.
11 of the Finance Act, 1920 and section 14 of the Finance Act, 1922 in Payne vs Allcock.(1) Section 14 of the Finance Act, 1922 provided that where a licence was taken out for a mechanically propelled vehicle at any rate under the Second Schedule of the Finance Act, 1920 and the vehicle was at any time, while such a licence was in force, used in an altered condition or in a manner or for a purpose which brings it within, or which if it was used solely in that condition or in that inianner or for that purpose would bring it within a class or description of vehicle to which a higher rate of duty was applicable under the said Schedule, duty at such higher rate would be chargeable in respect of the licence for the vehicle.
The appellant in that ,case, who carried on.
business as a green grocer held a licence for a private motor car, duty having been paid thereon at the horsepower rate under para 6, Scb.
II of the Finance Act, 1920.
The car was neither "constructed" nor "adapted" for use for conveyance of goods, but the appellant, while the licence was in force, used the said car occasionally for conveyance of goods in the course of his trade.
It was contended that this user was "for a purpose" which brought the car within a class to which higher rate of duty under para 5 of Sch.
11 of Finance Act, 1920 became chargeable.
The court accepted the contention and held that the user was for a purpose which brought the car Within para 5 Sch.
II of the said Act and the appellant was rightly convicted.
It was not in dispute that the car was used by the appellant only occasionally for conveyance of goods in connection with his trade.
Negativing the contention that the car was not chargeable to higher duty as it was not adapted.
forcarriage of goods, Avory, J., observed that "the section referred to cases where the vehicle, while the licence is in force, had been used in an altered condition or in a manner or for a purpose which brings it within, or which if it was used solely in that condition or in that manner or for that purpose would bring it within, a class or description of vehicle to which a higher rate of ,duty is applicable." He added that to construe that section, one has only to see what was the purpose for which the car was being used which would bring it within the class to which a higher rate of (1) [1932]2 K.B. 413.
677 duty was applicable.
The purpose which brought it within para 5, as distinguished from para 6 of Sch.
11, was the purpose of conveyance of goods.
At palge 421 of the Report it was further observed, "twhere a licence had been taken out and the vehicle was at any time, while that licence was in force, used, (a) in an altered condition, (b) in a manner, or (c) for a purpose, which brings it within or which if it was used solely in that condition or in that manner or for that purpose could bring it within a class or description of vehicle to which a higher rate of duty is applicable, then duty at the higher rate becomes chargeable.
" It is thus clear that what brought the motor vehicle under para 5, Sch.
II was the purpose for which it was used.
Similarly in Public Prosecutor vs Captain R. Rajagopalan(1) the High Court of Madras held that though rule 30(a) of the Madras Motor Vehicles Rules was intended to apply to motor vehicles used for the express purpose of letting for hire, if a motor vehicle was used even once for such a purpose, then, on that one occasion it was nonetheless let for hire.
Hence if a person undertakes to convey goods for reward in his private vehicle on one occasion without the necessary licence he would be regarded as having let his vehicle for hire and would commit an offence under that rule.
It was contended in that case that the Legislature did not intend to compel an owner of a private vehicle, who ordinarily uses his vehicle for his own purposes, to take out a licence merely because on one occasion he conveyed goods for hire in his private lorry.
That contention was negatived on the ground that a motor vehicle even if used once for conveying goods for reward would nonetheless be regarded on that occasion as one let out for hire.
In Re. Manager, Indian Express(2) a motor car owned by the petitioner was twice used for taking bundles of newspapers from the office of the Indian Express to the Railway Station.
It was held that when the car was used for taking the said bundles, it came within the definition of a "goods vehicle" as defined by section 2 (8) and, therefore, permit under section 42 (1) was necessary and as the owner had no permit thereunder, he was guilty of an offence punishable under section 123.
The combined effect of section 42(1) and the definitions of a "motor vehicle", a "public service vehicle" and a 'transport vehicle" is that if a motor vehicle is used as a transport vehicle, the owner who so uses it or permits it to be so used is required to obtain the necessary permit.
It is the use of the motor vehicle for carrying passengers for hire or reward which determines the application of section 42(1).
Therefore, whenever it is so used without the permit, there is an infringement of the subsection.
If the construction of that subsection adapted by the High Court of Mysore were correct, it would mean that whereas an owner of a transport vehicle is required to have the permit, the owner of a motor vehicle not constructed or (1) A.LR.
(2) A.I.R. 1945 Mad.
678 adapted as a transport vehicle can carry with impunity passengers for hire or reward without any permit therefor.
Section 42(1) has been enacted for the purpose of controlling vehicles carrying passengers, the object of such control being obviously to ensure safety of passengers.
The construction accepted by the Mysore High Court would defeat the object for which the Legislature provided such control in the interest of and for the safety of passengers.
The view taken by the Mysore High Court with respect is not correct and the view taken by the High Court of Madras is not only correct but is in consonance with the purpose and object of section 42(i).
The appeal is, therefore, allowed.
The order of acquittal passed by the trial Magistrate and confirmed by the High Court is set aside and the Magistrate is directed to proceed with the case on merits in accordance with law and in the light of the observations made in this judgment.
V.P.S. Appeal allowed.

dataset_name: IN-Abs

summary/full:
Under section 42(1) of the , no owner of a trans port vehicle shall use it or permit it to be used in any public place save in accordance with the conditions of a permit issued by the appropriated authority.
A "transport vehicle" means, under section 2(33) a "public ser , vice vehiicle" and a "public service vehicle" means,, under section 2(25), a motor vehicle either used or adapted to be used for the carriage of passengers for hire or reward.
The respondent was the owner of a motor vehicle registered as a "motor car" as defined in section 2(16) of the Act and not, as a "transport vehicle".
He was charged with an offence under section 42(1) read with section 123 of the Act, as the car was used on one occasion, for carrying passengers on payment of hire, that is for having used the car as a "transport vehicle" without the requisite permit.
The trial court, and the High Court on appeal, acquitted him on the ground that as section 42(1) uses the words "owner of a transport vehicle" the sub section applies only to cases where the motor vehicle was registered as a transport vehicle.
In appeal to this Court, HELD : It is the use of the motor vehicle for carrying passengers for hire or reward which determines the category of the vehicle and the.appli 'cation of section 42(1).
Therefore, even if the motor vehicle was occasionally used for carrying passengers for hire or reward, it must be regarded when so used, as a "public service vehicle" and therefore a "transport vehicle ' and, if it was so used without the necessary permit the owner who uses it or permits it to be so used would be liable under section 42(1) read with,: section 123.
The interpretation of the High Court would lead to the anomalous result, namely : that whereas the owner of a transport vehicle is required to have the permit, the owner of a motor vehicle not constructed or adapted as a transport vehicle could carry with impunity passengers without any permit, and such an interpretation would defeat the object of the legislature in making the provision in the interest of the safety of passengeii.
A B; 677 H; 678 A B] B section Usman Saheb vs State of Mysore, and.
Jayaram vs State of Mysore, , overruled.


judgement:
Appeal No. 1172 of 1965.
Appeal from the judgment and order dated December 17, 1963 of the Patna High Court in Misc.
Judicial Case No. 566 of 1960.
R. H. Dhebar for R. N. Sachthey, for the appellant.
section P. Varma, for the respondent.
The Judgment of the Court was delivered by Mitter, J.
, This is an appeal from a judgment and answer of the High Court of Judicature, Patna, on a certificate granted by it under section 66 A(2) of the Income tax Act of 1922 corresponding to section 261 'of the Income tax Act of 1961.
The Tribunal referred two questions of law to the High Court under section 66(1) "I.
Whether on the facts and circumstances of the case, could assessment be made upon the Manager of Court of Wards, Bettiah Estate, in respect of the income from the Bettiah Estate ? 2.
If the assessment could be made on the Manager of the Court of Wards in respect of the income from the 749 Bettiah Estate, was it chargeable to tax at maximum rates under section 41(1) of the I ncome tax Act?" The facts of the case are as follows : Maharani Janki Kuer who was the last holder of the Bettiah Estate in Bihar died on November 27, 1954.
For many years past before her death, the estate was under the management of the Court of Wards and continued under such management even after her death as it was not known whether she had left any heirs.
Under section 13 of the Bengal Court of Wards Act (IX of 1879) "Whenever, on the death of any ward, the succession to his property or any part thereof is in dispute, the Court may either direct that such property or part thereof be made over to any person claiming such property, or may retain charge of the same until the right to possession of the claimant has been determined under Bengal Act VII of 1876, or until the dispute has been determined by a competent Civil Court.
" "Court ' here means the Court of Wards.
One Suresh Nandan Sinha filed a suit claiming the estate on the allegation that he was the nearest heir of the deceased Maharani.
After the death of the Maharani, the Income tax Officer made an assessment on the Manager of the Court of Wards as representing the estate of Bettiah, the assessment relating to the assessment year 1956 57 the accounting year being the financial year 1955 56.
The Government of Bihar claimed that the estate had vested in the State Government by escheat and the Manager, Court of Wards put forward that claim before the Income tax authorities.
There was a further contention raised by the Manager that even if the assessment was made on him representing the estate, the income should not be taxed at a maximum rate under section 41 (1) of the Income tax Act, 1922.
As the litigation was pending, the Income tax Officer and the Appellate Assistant Commissioner both held that it could not be said of the estate that the same had vested in the State by escheat and they also held that the income was taxable at the maximum rate.
The same plea was raised before the Appellate Tribunal and the Tribunal observed that as no notification had been issued by the Government on the death of the Maharani or later to the effect that the estate had vested in the State of Bihar by escheat, there was no certainty as to who would be found to be the ultimate heir in view of the pending litigation.
The High Court on the case stated, referred to articles 289 and 296 of the Constitution and taking note of the contentions urged on behalf of the parties observed : "In the circumstances of the present case, it is manifest that the Income tax authorities cannot validly impose a tax upon the Manager, Court of Wards, 750 Bettiah Estate, merely because a title suit has been filed with regard to the heirship of the Bettiah Estate without deciding the question as to whether the claim of the State of Bihar that the property has vested in it by escheat is established or not." On this view, the first question was answered in favour of the assessee and no answer was given to the second question because it was academic.
It was asserted on behalf of the respondent and not denied by the appellant that the suit of Suresh Nandan Singh had been dismissed, but an appeal had been preferred therefrom and was pending.
On the facts as the same appear to us at present, it is not possible to hold that the estate of Bettiah has escheated to the State of Bihar.
It is obvious that in case of such escheat there can be no assessment to income tax.
The position will be clarified after the appeal by Suresh Nandan Sinha is disposed of.
In this view of the matter, the judgment of the Patna High Court is set aside.
The proceedings should be finalised after the disposal of the litigation and the High Court may call for a supplementary statement of case, if it thinks necessary.
The question as to whether the estate has escheated to the State of Bihar is left open, and the costs of this appeal will abide by the ultimate decision of the High Court.
In case it be found that the escheat had taken place, the appellant before us will have to pay the costs of this appeal and if there is no escheat, the Commissioner will have the costs of this appeal.

summary/full:
During the pendency of a suit by a person claiming to be the heir of the Bettiah estate which was in the possession of the Manager, Court of Wards, the Income Tax Officer made an assessment on the Manager.
In those proceedings the State of Bihar and the Manager claimed that the estate had vested in the State by escheat and therefore the income was not liable to tax.
The Income tax Officer, the Appellate Assistant Commissioner and the Tribunal held that as the litigation was pending it could not be said of the estate that the same had vested in the State by escheat.
The High Court on reference held that the income tax authorities could not impose the tax.
Setting aside the judgment of the High Court this Court in appeal.
HELD : The proceedings should be made final after the disposal of the litigation and the High Court could call for a supplementary statement of the case if necessary [750 D]


judgement:
Appeal No. 225 of 1965.
Appeal by special leave from the judgment and order dated September 6, 1962 of the Madhya Pradesh High Court in Misc.
Civil Case No. 108 of 1958.
I.N. Shroff, for the appellant.
S.T. Desai, section N. Andley, Rameshwar Nath, P. L. Vohra, and Mahinder Narain, for the respondent.
225 The Judgment of the Court was dilevered by Sikri, J.
This appeal by special leave is directed against the judgment of the High Court of Madhya Pradesh in a reference made to it under section 46 of the Gwalior War Profits Tax Ordinance, Samvat 2001 hereinafter called the Ordinance.
Three questions were referred to the High Court by the War Profits Tax Commissioner, but we are only concerned with question No. 1, which reads as follows: "Whether the dividend income of Rs. 11,09,332/received from the Binod Mills was chargeable under the War Profits Tax?" When the reference was first heard by the High Court three contentions were raised by M/s Binodram Balchand of Ujjain, respondents before us, hereinafter referred to as the assessees.
They were: "(1) The assessees did not deal in shares and their holdings in the Binod Mills Limited were purely in the nature of investments, having no connections with their business as defined in Section 2(5) read with Rule 1 of Schedule 1, of the Gwalior War Profits Tax Ordinance.
The business of the secretaries, treasurers and agents of the Binod Mills Limited, which was carried on by them did not require any holding of the shares of the company and was not dependent on their investment in the said company.
(2)The dividend income accrued or arose from the profits of the Binod Mills Limited, and as the Ordinance applied to the business carried on by this company, the dividends were excluded under the explanation to Rule 3(1) of Schedule 1.
(3)The dividend income should be considered as income of the full accounting period, i.e., from Diwali of 1943 to Diwali of 1944 and should be apportioned on that basis".
The High Court by its judgment dated April 19, 1957, accepted the first contention of the assessees and accordingly answered the question in their favour.
It did not deal with contentions Nos. 2 and 3.
The Commissioner appealed to this Court and this Court by its judgment dated December 20, 1961, set aside the judgment of the High Court and answered the first contention in relation to question No. I against the assessees and remanded the case to the High Court for the consideration of the other two contentions with reference to that question.
The High Court on remand accepted the second contention of the assessees and answered question No. 1, set out above, in favour of the assessees.
The Commissioner having obtained special leave, the appeal is now before us for disposal.
226 A few facts may be given in order to appreciate the point that has. been argued before us.
The assessees were, at the relevant time, the Managing Agents of the Binod Mills Ltd., Ujjain, which was a private limited company carrying on the business of manufacturing and selling textile goods in 1944.
The Ruler of the Gwalior State promulgated the Gwalior War Profits Tax Ordinance, Samvat 2001, for the purpose of imposing tax on excess profits arising out of certain businesses.
The Ordinance came into force on July 1, 1944, and applied originally to the counting period falling within the period commencing on July 1, 1944, and ending on June 30, 1945.
By virtue of a notification the period was extended to June 30, 1946.
The assessees carried on the Managing Agency business during the aforesaid period in Gwalior State and being liable to be assessed to war profits submitted a return for the period commencing from July 1, 1944, to October 16, 1944.
It appears that Rs. 11,09,332/ was received by the assessees on July 5, 1944, on account of dividend on shares of the Binod Mills for the year 1943.
The assessees inter alia contended before the War Profits Tax Officer that this sum was not liable to be charged.
The War Profits Tax Officer, however, by order dated July 9, 1951, in.; clouded this sum of Rs. 11,09,132/ in the taxable income and his view was upheld in appeal by the Appellate Assistant Commissioner and the Commissioner.
As stated above, the Commissioner, at the instance of the assessees, referred three questions, including the one with which we are concerned, to the High Court.
It appears that before the High Court the learned counsel for the Commissioner did not seriously dispute the contention of the assessees that the dividend income which the assessees had received was exempted by the Explanation to r. 3 of Schedule 1 of the Ordinance.
The rule as it existed originally was as follows: "3(1) Income received from investments shall be included in the profits of a business liable to the War Profits Tax, unless it is proved to satisfaction of the War Profits Tax Officer that the investments have no connec tion whatever with the business.
(2)In the case of business which consists wholly or mainly in the dealing in or handling of investments, income received from investments shall be deemed to be profits of that business, and in the case of a business, a specific part only of which consists in dealing in investments, the income received from investments held for the purposes of that part of the business shall be deemed to be profits of that part of the business".
227 By section 2 of the Gwalior War Profits Tax (Amendment) Ordi nance, Samvat 2002 hereinafter referred to as, Ordinance 2002, r. 3 of the First Schedule to the Ordinance was amended as follows: "In rule 3(2) of the First Schedule to Ordinance the following shall be added, namely: Explanation "The income from investments to be included in the profits of the business under the provisions of this rule shall be computed exclusive of all income received by way of dividends or distribution of profits from a company carrying on a business to the whole of which the Section of the Ordinance imposing the War Profits Tax applies", This Ordinance was promulgated on February 28, 1946.
Another Ordinance called the Gwalior War Profits Tax (Amendment) Ordinance, Samvat 2004 hereinafter referred to as Ordinance 2004 was promulgated on September 6, 1947.
This Ordinance amended the Explanation to sub rule (2) of rule 3 of Schedule 1 as follows "In the explanation of sub rule (2) of Rule 3 of Schedule 1 of the Gwalior War Profits Tax Ordinance, Samvat 2001 a comma is added after the words "from a company carrying on a business" and before the words "to the whole of which" and shall be always deemed to be there from the date from which the said Ordinance came into force".
The High Court felt no difficulty in holding that the expla nation applied, and that on its plain terms the dividend income which the assessees received from the profits of Binod Mills Ltd. was not liable to be included in the taxable income.
The High Court observed: "The language of the explanation is very plain, and it means that if income is received by way of dividends or profits from a company carrying on a business, to the whole of which the section of the Ordinance imposing the War Profits Tax applies, then the income has to be excluded in the assessment to War Profits Tax of the assessee receiving that income.
The object of the explanation is clearly to avoid double taxation.
Here it is not disputed that the dividend income which the assessee received was from the profits of the Binod Mills Limited and the Mills were subject to the burden of the War Profits Tax under the Ordinance.
That being so, the explanation in terms applies to the case, and the assessee is entitled to claim that the dividend income of Rs. 11,09,332/ received from Binod Mills could not 228 be included in the computation of its profits for the purposes of War Profits Tax and was consequently not chargeable under the War Profits Tax Ordinance.
Learned Advocate General appearing for the State did not dispute this position".
Mr. Shroff, the learned counsel for the Commissioner, contends, first, that the explanation was not in existence at the relevant time, and, therefore, cannot be taken into consideration; secondly, that the explanation is an explanation to r. 3(2) and not to r. 3(1) and, therefore, cannot be used to explain r. 3(1).
Mr. Shroff complains that the High Court was wrong in thinking that the explanation formed part of Ordinance 2001, as it was originally promulgated.
The High Court seems to have been under this impression because in the order refusing leave to appeal to this Court the High Court observed: "There was no omission at all on our part to consider the question whether the explanation was prospective or not.
Indeed, this question was never raised by the learned Advocate General, appearing for the Department and it was rightly not raised as the Explanation was not added subsequent to the promulgation of the Ordinance and the very basis of the assessment of the income of the assessee was that rule 3 of Schedule 1 of the Ordinance together with the Explanation applied to the income received by the assessee during the period from 1st July 1944 to 16th October 1944".
It seems that Ordinance 2002 and Ordinance 2004 were not placed before the High Court and for this reason it assumed that the explanation was not added subsequent to the promulgation of the Ordinance.
But even if it was added subsequently, in our opinion, the explanation applies to the computation of the profits of the chargeable accounting period July 1, 1944 to October 16, 1944.
If we read Ordinance 2002 and Ordinance 2004 together the legislative intention to make the explanation retrospective becomes clear.
Apart from Ordinance 2004, it would have been very arguable that the explanation inserted by Ordinance 2002 was retrospective because it dealt with the computation of profits and would apply to all computation of profits made by the Taxing authorities after February 28, 1946.
But we need not go into this question because Ordinance 2004 expressly assumes that the explanation was in existence from the date when the Ordinance came into force and no other meaning can be given to section 2 of Ordinance 2004 because by deeming that the comma shall be deemed to be there from the date from which the Ordinance came into force it expressly assumes that the explanation was also in force from that date.
Accordingly we are not inclined to 229 accept the first contention of Mr. Shroff and we must hold that the explanation applies to the computation of profits of the chargeable accounting period July 1, 1944 to October 16, 1944.
Regarding the second contention, Mr. Shroff says that Ordi nance 2002 expressly provides that the explanation shall be added in r. 3(2) of the First Schedule to the Ordinance.
He further says that this explanation is referred in Ordinance 2004 as "explanation of sub rule (2) of rule 3 of Schedule 1".
There is no doubt that Ordinance 2002 did purport to add this explanation to r. 3(2) but it seems to us that if we look at the language of the explanation it was meant to be an explanation not only to r. 3(2) but to r. 3(1) also.
First, the words "the income from investments to be included in the profits of the business under the provisions of this rule" are comprehensive and include income from investments both under r. 3(1) and r. 3(2).
Secondly, there is no reason why any distinction should have been made between investments mentioned in r. 3(1) and investments mentioned in r. 3(2).
Rule 3(1) is general and deals with all investments from profits of all businesses and would include investments mentioned in r. 3(2).
Rule 3(2) deals with investments of a certain business, i.e., business which consists wholly or mainly in the dealing in or holding of investments.
We have not been able to appreciate why, if Mr. Shroff is right, was it necessary to distinguish between income from investments mentioned in r. 3(1) and income from investments mentioned in r. 3(2).
At any rate, the language of the explanation is quite clear and it seems to us that by the words "in rule 3(2) of the First Schedule to the Ordinance, the following shall be added" what was really meant was to add the explanation below r. 3(2).
In the result we agree with the High Court that the answer to the question referred should be in the negative.
The appeal accordingly fails and is dismissed with costs.
Appeal dismissed.

summary/full:
The assessee was the managing agent of a Textile Mill in Uj jain.
In 1944, the Gwalior State promulgated the Gwalior War Profits Tax Ordinance.
In 1946, by the Gwalior War Profits Tax (Amendment) Ordinance, an Explanation was added after r. 3(2) of the First Schedule to the Ordinance of 1944.
In 1947, another Amendment Or dinance was promulgated whereby a comma was inserted in the Explanation.
In July 1944.
the assesses received about Rs. 11 lacs as dividend on its shares in the Textile Mill.
The War Profits Tax Officer included the amount in the assessee 's taxable income, and the order was upheld by the Appellate Assistant Commissioner and the Commissioner.
On the question: whether the dividend income was chargeable to war profits tax, the High Court held, on a reference, that the Explanation applied and that under the Explanation the dividend income was not liable to be included in the assessee 's taxable income.
In appeal to this Court, it was contended that the Explanation was not applicable, because, (i) it was not retrospective; and (ii) it was only an Explanation to r. 3(2) and not to r. 3(1) which was the rule applicable to the assessee.
HELD:The Explanation applies to the computation of the pro fits of the chargeable accounting period, because: (i) the Ordinance of 1947 expressly assumes that the Explanation was in existence from the date when the War Profits Tax Ordinance came into force in 1944; and (ii) on the language of the Explanation it was meant to be an Explanation not only to r. 3(2) but also to r. 3(1).
By the words "in r. 3(2) the following shall be added", in the amending Ordinance of 1946, all that was meant was that the Explanation should be added below r. 3(2).
[228 H 229 E]


judgement:
Appeal No. 866 of 1964.
Appeal by special leave from the judgment and order dated April 7, 1964 the Allahabad High Court in F.A.F.O. No. 367 of 1959.
S.G. Patwardhan,Rameshwar Nath.
and Mahinder Narain and Prayag Das Agarwal, for the appellants.
J. P. Goyal and Raghunath Singh for the respondents.
758 The Judgment of the Court was delivered by Bachawat, J.
This appeal incidentally raises a question of interpretation of article 164 of the Indian Limitation Act 1908.
The respondent instituted two suits against the appellant in the court of the First Civil Judge, Kanpur.
Suit No. 25 of 1958 was for the recovery of moneys due on a mortgage for Rs. 50,000.
Suit No. 22 of 1958 was to recover a sum of Rs. 8,000 due on a ruqqa.
On May 15, 1958, both the suits were decreed ex parte.
The appellant filed an application to set aside the ex parte decree passed in Suit No. 22 of 1958.
This application was numbered as miscellaneous case No. 104 of 1958.
On August 16, 1958, the First Civil Judge, Kanpur, passed an order setting aside this ex parte decree on certain conditions.
The order sheet in O.S. No. 22 of 1958, Misc.
Case No. 104 of 1958 on August 16, 1958 stated : "Heard parties counsel, accept the applicant 's affidavit and hold that due to non service applicant was prevented from being present.
Allowed on condition of payment of Rs. 150 as costs within a month and on condition that allotment shall continue.
Sd/ K. N. Goyal 16 8 58 Applicant is hereby informed of connected decree of 25 of 1958 as well.
Sd/ K. N.: Goyal 16/8.
" An appeal by the appellant from this order was dismissed on September 25, 1958.
On February 5, 1959, an advocate em ployed by the appellant to file a civil revision petition against the appellate order, obtained a certified copy of the order dated August 16, 1958.
On February 24, 1959, a civil revision petition was filed by the appellant against the appellate order.
On April 16, 1959, the appellant filed an application in the 'Court of the First Civil Judge, Kanpur, under 0.9, r. 13, C.P.C., for the setting aside of the ex parte decree passed in Suit No. 25 of 1958.
The Civil Judge dismissed the application An appeal from than order filed by the appellant was dismissed by the High Court.
Both the courts held that the summons in Suit No. 25 of 1958 was not duly served on the appellant but as more than 30 days had expired after the appellant had knowledge of the ex parte decree, the application was barred by Limitation under article 164 of the Indian Limitation Act, 1908.
The appellant Dow appeals to this Court by special leave.
Under 0.9, r. 13, C.P.C., a decree, passed ex parte against a ,defendant is liable to be set aside if the sununons was not duly 759 served or if the defendant was prevented by any sufficient cause from appearing when the suit was called on for hearing.
If the.
summons is not duly served, the defendant suffers an injury and be is entitled ex debito justitiae to an order setting aside the ex parte decree provided he applies to the court within the prescribed period of limitation.
Under article 164 of the Indian Limitation Act, 1908, the period of limitation for an application by a defendant for an order to set aside a decree passed ex parte was 30 days from "the date of the decree or when the summons was not duly served, when the applicant had knowledge, of the decree".
The Onus is on the defendant to show that the application is within time and that he had knowledge of the, decree within 30 days of the application.
If the defendant produces some evidence to show that the application is within the, it is for the plaintiff to rebut this evidence and to establish satisfactorily that the defendant had knowledge of the decree more than 30 days before the date of the application.
In Pundlick Rowji vs Vasant rao Madhavrao(1), Davar, J., held that the expression "knowledge of the decree in art ' 164 means knowledge not of a decree but of the particular decree which is sought to be set aside, a certain and clear perception of the fact that the particular decree had been passed against him.
On the facts of that case, Davar, J., held that a notice to the defendant that a decree had been passed against him in the High Court Suit No. 41 1 of 1909 in ' favour of one Pundlick Rowji with whom he had no dealings was not sufficient to impute to him clear knowledge of the decree in the absence of any information that the decree had been passed in favour of pundlick Rowji as the assignee of a promissory note which he had executed in favour, of another party.
This case was followed by the Calcutta ' High Court in Kumud Nath Roy Chowdhury vs Jotindra Nath Chowdhury(1).
, In Bapurao Sitaram Karmarkar vs Sadbu Bhiva, Gholap(3), the Bombay High Court held that the evidence of two, persons who had been asked by the plaintiff to.
tell the defendant ' about the decree and to settle the matter was not sufficient to impose knowledge of the decree on the defendant within the meaning of article 164.
Macleod C.J. said "We think.
the words of 'the article mean something more than mere knowledge that a decree had been passed in some suit in some Court against the applicant.
We think it means that the applicant must have knowledge not merely that a decree has been passed by some Court against, him, but that a particular decree has been passed 'against 'him in a particular Court in favour of a particular person for a particular sum.
A judgment (1) 11 B.L.R. 1296.
(2) I.L.R. 403.
(3) I.L.R. 7 60 debtor is not in such a favourable position as he used to be when he had thirty days from the time when execution was levied against him.
But we do not think that the Legislature meant to go to the other extreme by laying down that time began to run from the time the judgment debtor might have received some vague infor mation that a decree had been passed against him.
" This decision was followed in Batulan vs section K. Dwivedi(1) and other cases.
We agree that the expression "knowledge of the decree" in article 164 means knowledge of the particular decree which is sought to be set aside.
When the summons was not duly served, limitation under article 164 does not start running against the defendant because he has received some vague information that some decree has been passed against him.
It is a question of fact in each case whether the information conveyed to the defendant is sufficient to impute to him knowledge of the decree within the meaning of article 164.
The test of the sufficiency is not what the information would mean to a stranger, but what it meant to the defendant in the light of his previous dealings with the plaintiff and the facts and circumstances known to him.
If from the information conveyed to him, the defendant has knowledge of the decree sought to be set, aside, time begins to run against him under article 164.
It is not necessary that a copy of the decree should be served on the defendant.
It is sufficient that the defendant has knowledge of the material facts concerning the decree, so that he has a clear perception of the injury suffered by him and can take effective steps to set aside the decree.
In this case, in his application for setting aside the ex parte decree, the appellant stated that he got the information of the passing of the ex parte decree in suit No. 25 of 1958 for the first time from the respondent on April 13, 1959.
It has been shown conclusively that this statements false.
The respondent filed an affidavit stating that the appellant was directly informed of the passing of this ex parte decree by the First Civil Judge on August 16, 1958.
This statement was not denied by the appellant.
The courts below concurrently found that the appellant was personally present in the court of the First Civil Judge on August 16, 1958 when the learned judge informed him that an ex parte decree had been passed against him in Suit No. 25 of 1958.
The appellant was informed that suits Nos. 22 and 25 of 1958 were connected suits.
The appellant knew that he had dealings with the respondent in respect of a ruqqa and a mortgage.
He knew that the suit No. 22 of 1958 was filed on the ruqqa.
From the information conveyed to him by the Civil Judge on August 16, 1958, it must '.have been clear to the appellant that an ex parte decree had been passed against him in favour of the respondent in suit.
1025,1050 8. 761 of 1958 on the basis of the mortgage.
The appellant had thus on August 16, 1958 clear knowledge of the decree passed against him in suit No. 25 of 1958 which he now seeks to set aside.
Time began to run against him from August 16, 1958 under article 164 of the Indian Limitation Act, 1908.
The application filed by him on April 16, 1959 was, therefore, clearly barred by limitation and was rightly dismissed by the courts below.
In the result, the appeal is dismissed with costs.
V.P.S. Appeal dismissed.

summary/full:
The appellant had dealings with the respondent in respect of a ruqqa and a mortgage.
The respondent filed two suits against the appellant for recovery of the moneys due on the ruqqa and the mortgage respectively.
The summons in the suits was not duly served on the appellant and the suits were decreed ex parte.
The appellant then filed an application to set aside the ex parte decree in the suit on the ruqqa.
The court passed an order on 16th August 1958.
, setting aside that ex parte decree and also informed the appellant who was present in court on that day, of the passing of the ex parte decree in the mortgage suit.
On 16th April 1959 the appellant filed an application for setting aside the ex parte decree in the mortgage suit.
The trial court and the High Court held that the application was barred by limitation under article 164 of the Indian Limitation Act, 1908, as more than 30 days had expired after the appellant had knowledge of the ex parte decree.
In appeal to this Court, HELD The application was rightly dismissed.
Under article 164 of the Limitation Act, the period of 30 days is counted, when the summons is not duly served, from the date when the applicant had knowledge of the decree; and the expression "knowledge of the decree" means knowledge of the particular decree which is sought to be set aside.
It is a question 'of fait 'in each case whether the information` conveyed is sufficient to impute the knowledge, and, the test is not what the information would mean to a stranger, but what it meant to the defendant in the light of his previous dealings with the plaintiff and the facts and circumstances known to him [759 B; 760B D] Pundlik Rowji vs Vasantrao Madhav Rao 11 B.L.R. 1296; Kumud Nath, Roy Choudhury vs Jotindra Nath Chowdhury I.L.R. ; Bapuraa Sitaram Karmarkar vs Sadbu Bhiva Gholap.
I.L.R. and Batulan.v.
S.K. Dwivedi, I.L.R. 33 Patna, 1025, approved.


summary/full:
The Andhra Pradesh Land Revenue (Additional Assessment) and Cess Revision Act, 1962 (Act 22 of 1962) was passed with the object of bringing uniformity in assessment of land revenue in the Telengana and Andhra areas of the State.
It also provided for additional levies on certain classes of land.
When the assessment of land revenue was sought to be collected from the respondents, they filed writ petitions in the High Court challenging the constitutional validity of the Act and the petitions were allowed.
In appeal by the State to this Court.
, HELD : The Act offended article 14 of the Constitution and was there fore void.
Both in Andhra as well as Telengana area under the Ryotwari system, the land revenue which was a share of the produce of the land commuted in money value varied according to the classification of soil based upon its productivity; the soils of similar grain values were bracketed together in orders called 'tarams ' or 'Bhagana ' and the rates were further adjusted in the dry land having regard to the water supply.
But in both the cases, the quality and the grade of the soil divided in 'Tarams ' or 'Bhaganas ' was the main basis for assessment.
[37 E G] Sections 3 and 4 of the Act, in fixing the minimum flat rate for dry or wet lands, ignored the well established taram principle; and in the case of wet lands an attempt had been made to classify different systems on the basis of the ayacuts; but this test was unreasonable and had no relation to either the duration of water supply or to the quality or the productivity of the soil.
The classification attempted in either case had No. reasonable relation to the objects sought to be achieved, namely, imposition of fair assessments and rationalisation of the revenue assessment structure.
An arbitrary method has been introduced displacing one of the most equitable and reasonable methods adopted for many years in the revenue administration of the State.
[44 C E] Further, the imposition of assessment was left to the arbitrary discretion of the officers not named in the Act without giving any notice, opportunity or remedy to the assessees for questioning the correctness of any of the important stages in the matter of assessment such as ayacut taram, rate or classification or even in regard to the calculation of the figures.
It is not possible to read into the section the entire series of the Standing Orders of the Board of Revenue which deal with the mode of assessment: for if it was the intention of the Legislature that 29 the Standing Orders of the Board of Revenue should be brought into the Act by incorporation, it would have certainly used appropriates words to convey that idea.
[45 D E; 48 E F] Kunnathat Thathunni Moopil Nair vs The State of Kerala, ; , East India Tobacco Co. vs State of Andhra Pradesh, ; and Khandige Sham Bhat vs The Agricultural Income tax Officer, ; , applied.
C. V. Rajagopalachariar vs State of Madras, A.I.R. 1960 Mad.
543 and H. H. Vishwasha Thirtha Swamiar of Sri Pejavar Mutt vs The State of Mysore, , distinguished.