judgement:
Appeal No. 145 of 1953.
Appeal by Special Leave from the Judgment and Order dated the 8th day of September, 1950, of the High Court of Judicature for the State of Punjab at Simla in Civil Reference No. 3 of 1949.
Achhru Ram (R. section Narula and Naunit Lal, with him) for the appellants.
M. C. Setalvad, Attorney General for India, (G. N. Joshi and P. G. Gokhale, with him) for the respondent.
October 25.
The Judgment of the Court was delivered by DAS J.
This appeal by special leave arises out of a consolidated reference made on the 19th April, 1949, under section 66(1) of the Indian Income tax Act read with section 21 of the Excess Profits Tax Act by the Income tax Appellate Tribunal, Madras Bench.
The reference arose out of four several proceedings for assessment to excess profits tax of the appellant, the chargeable accounting periods being periods ending with 31st March of each of the years 1942, 1943, 1944 and 1945.
The relevant facts appearing from the consolidated statement of the case are as follows: Narain Swadeshi Weaving Mills, the appellant before us (hereinafter referred to as the assessee firm), is a firm constituted in 1935 upon terms and conditions set forth in a deed of partnership dated the 6th November, 1935.
The partners were Narain Singh and two of his sons, Ram Singh and Gurdayal Singh, their respective shares in the partnership being 6 annas, 5 annas and 5 annas.
The business of the firm which was carried on 954 at Chheharta, Amritsar, in the Punjab, was the manufacture of ribbons and laces and for this purpose it owned buildings, plant, machinery , etc.
On the 7th April, 1940, a public limited liability company was incorporated under the name of Hindus,tan Embroidery Mills Ltd. The objects for which the company was established were to purchase, acquire and take over from the assessee firm the buildings and leasehold rights, plant, machinery, etc., on terms and conditions mentioned in a draft agreement and the other objects set forth in the Memorandum of Association of the said company.
Out of the total subscribed capital represented by 41,000 shares 23,000 shares were allotted to the assessee firm.
Of these 23,000 shares so allotted 20,000 shares were not paid for in cash but the remaining 3,000 shares were paid for in cash.
The directors of the company were Narain Singh and his three sons Ram Singh, Gurdayal Singh and Dr. Surmukh Singh and one N. D. Nanda, a brother in law of Gurdayal Singh.
Dr. Surmukh Singh was at all material times residing in South Africa.
These 4 directors between themselves hold 33,340 shares including the said 23,000 shares.
The company was, accordingly, a director controlled company.
The funds available to the company were not sufficient to enable it to take over all the assets of the assessee firm.
The company, therefore, purchased only the buildings and the leasehold rights therein but took over the plant, machinery, etc.
on lease at an annual rent of Rs. 40,000.
On the 28th July, 1940, the company executed a managing agency agreement in favour of Uppal & Co., a firm constituted on the same day with Ram Singh and Gurdayal Singh, two of the sons of Narain Singh, as partners with equal shares.
Under the managing agency agreement dated the 28th July, 1940, Uppal & Co., was to be paid 10% of the net profits of the company besides salary and other allowances mentioned therein.
On the 25th January, 1941, the company appointed as its selling agent Ram Singh & Co., a firm which 955 came into existence on the same day with Ram Singh, Gurdayal Singh and Dr. Surmukh Singh, the three sons of Narain Singh, as partners, each having an one third share.
The terms of this partnership were recorded in writing on the 17th March, 1941.
Ram Singh & Co., was to get a commission of 3% on the net sales and 6% on the gross income of the company.
In the two new firms so constituted Narain Singh had no share and eventually with a view to make up for his loss the shares of the partners in the assessee firm were modified by an agreement made by them on the 21st April, 1941.
Under this agreement Narain Singh was to get a 12 annas share and the two sons Ram Singh and Gurdayal Singh 2 annas share each.
All the three firms mentioned above, namely, the assessee firm, Uppal & Co., and Ram Singh & Co., were registered as firms under section 26A of the Indian Income tax Act.
On the facts summarised above, the Excess Profits Tax Officer came to the conclusion that the main purpose of the formation of the company and the two firms of Uppal & Co., and Ram Singh & Co., was the avoidance of liability to excess profits tax.
Accordingly, on the 16th November, 1944, the Excess Profits Tax Officer issued notices under section 10A of the Excess Profits Tax Act to the company and the three firms.
Eventually, however, the proceedings against the company were dropped and the Excess Profits Tax Officer considered the case of the three firms only.
He held that the three firms were really one and he, therefore, amalgamated the income of all three and proceeded to assess the assessee firm to excess profits tax on that basis for the four several chargeable accounting periods mentioned above.
Under sub section (3) of section 10 A the assessee company preferred four several appeals to the Appellate Tribunal.
In their order the, Appellate Tribunal considered the four following issues: (1)Whether the income of the firms styled as "Uppal & Co.," and "Ram Singh & Co.," could be amalgamated with the income of the assessee firm 956 under the provisions of section 10 A of the Excess Profits Tax Act ? (2) Whether the share of income of Dr. Surmukh Singh, a partner in the selling agency of Ram Singh & ,Co., could be included under section 10 A in the excess profits tax assessment of the assessee firm ? (3) Whether the lease money obtained by the assessee firm could be legally treated as business profits liable to excess profits tax ? (4) Whether proper opportunity under section 10 A had been given to the assessee firm?" Before the Appellate Tribunal, as before the Excess Profits Tax Officer, the assessee firm objected to the application of the provisions of section 10 A of the Excess Profits Tax Act.
The contention was.
that as the assessee firm did not, during the relevant chargeable accounting periods, carry on any business within the meaning of section 2(5) of the Excess Profits Tax Act, section 10 A had no application and, therefore, the profits of Uppal & Co., and Ram Singh & Co., could not be amalgamated with its own income.
In other words, the argument was that there must be an existing business of an assesses during the relevant period before section 10 A could be applied in respect of transactions concerning that business.
The Appellate Tribunal took the view that instead of using the plant, machinery, etc., for its own manufacture the assessee firm turned that revenue yielding asset into another use by lettinh it out on an annual rent of Rs. 40,000 and that this was certainly an adventure in the nature of trade as contemplated by section 2(5) of the Excess Profits Tax Act read with rule 4 of Schedule I thereto.
Accordingly, it decided issue No. 3 against the assessee firm holding that the assessee firm carried on business in the letting out of the plant, machinery, etc., on hire and the lease money obtained thereby could be legally treated as business profits liable to excess profits tax.
On issue No. I the Appellate Tribunal agreed with the Excess Profits Tax Officer that it was evident beyond doubt that a definite scheme was adopted creating separate charges in order to avoid excess profits tax 957 by the three firms, namely, the assessee firm, Uppal & Co., and Ram Singh & Co., taken together.
Thefirst step in the scheme was the formation of the company.
The second step was the appointment of Uppal & Co., as managing agents instead of appointing the assessee Tfirm itself.
The third step was the creation of the firm Ram Singh & Co., for taking up the selling agency of the company and the final step was to adjust the shares of the partners of the assessee firm so as to equalise, as far as possible, the share of Narain Singh with the shares which his sons got in the several firms.
The Appellate Tribunal held that all the various steps noted above need not necessarily have been fictitious or artificial but they were certainly transactions so as to attract the operation of section 10 A.
The Appellate Tribunal decided issues Nos. 2 and 4 against the assessee.
All the four appeals were accordingly dis missed by the Appellate Tribunal.
The assessee firm thereupon preferred four several applications under section 66(1) of the Income tax Act read with section 21 of the Excess Profits Tax Act praying that the following questions arising out of the order of the Appellate Tribunal be referred to the High Court : (1) Whether, under the facts and circumstances of the case, the application of section 10 A with a view to amalgamating the income of the firms "Uppal & Co." and "Ram Singh & Co.", with the income of the appellant firms was correct and valid in law ? (2) Whether, in view of the facts admitted on record, the share of income of Dr. Surmukh Singh, a partner in the selling agency and not a partner in the appellant firm, could be legally included along with the share of income of section Ram Singh and section Gurdial Singh and is this inclusion at all within the purview of section 10 A ? (3) Whether, in view of the facts, circumstances and observations on record, the lease money obtained by the appellant firm could be legally treated as business profits or profits from an adventure in trade liable to excess profits tax ? 122 958 (4) Whether the type of a notice served on the appellant, under the facts and the circumstances of the case, legally amounts to a proper opportunity under section 10 A of the Excess Profits Tax Act, and if not ,what is the legal effect of such opportunity being not afforded ? (5) Whether the proceedings under section 1O A were not null and void ab initio, for want of necessary previous sanction from the Inspecting Assistant Commissioner of Excess Profits Tax, the fact of such previous sanction having been obtained being neither mentioned in the order nor proved before the Appellate Tribunal at the time of hearing although expressly required by the Court.
The Appellate Tribunal declined to refer questions (4) and (5) sought to be raised by the assessee firm and no grievance has been made before us on that score.
The Appellate Tribunal referred the earlier three questions after reframing the same so as to read as follows : (1) Whether there is any evidence before the Tribunal to support the conclusion that the main purpose of the transactions was the avoidance of excess profits tax ? (2) Whether on the facts admitted or proved the share of income of Dr. Surmukh Singh in the firm of Ram Singh & Co., can be legally included along with the share of income of Ram Singh and Gurdayal Singh ? (3) Whether on the facts and circumstances of the case the leasing of machinery, etc., by the assessee firm to the company was a business within the meaning of section 2(5) of the Excess Profits Tax Act ? The learned counsel appearing for the assessee firm submitted before the High Court that the third of the referred questions should be discussed and decided first, but the High Court took the view that the decision of the first question was a necessary preliminary to the consideration of the third question.
Taking up, then, the first question first the High Court referred to the ,several facts found by the Appellate Tribunal and 959 described as steps and regarding them as circumstantial evidence came to the conclusion that it could not be said that there was no evidence upon which the Tribunal was justified in coming to the conclusion that the formation of the firms, Uppal & Co., and Ram Singh & Co., was mainly for the purpose of avoidance or reduction of liability to excess profits tax.
In the result, the High Court held that the three firms, the assessee firm, Uppal & Co., and Ram Singh & Co., were in fact one and the same and on that basis proceeded next to take up the third question.
After referring to section 2(5) and certain judicial decisions, the High Court concluded as follows: " The argument of Mr. Pathak when applied to the present case would have force were it a fact that the sole concern of the assessee firm was the receipt of hire of machinery from a company or firm, in which the assessee firm had Do interest.
But this is not the state of affairs.
On the finding under the first question referred, the assessee firm, the firm of managing agents and the firm of selling agents are really one and the same firm.
This firm and its partners held the majority of shares in the company.
The agreement for payment of Rs. 40,000 as rent of machinery is an agreement between the assessee firm and the company which the assessee firm controls.
The business of the assessee firm was, and in effect still is, the manufacture of ribbons and laces, and the receipt of Rs. 40,000 is a profit from that business diverted into the pockets of the assessee firm.
" The High Court accordingly answered the third question in the affirmative and against the assessee firm.
The necessary certificate of fitness for appeal to this Court having been refused by the High Court, the assessee firm obtained special leave of this Court to prefer the present appeal.
The learned counsel appearing for the assessee firm has submitted before us and we think rightly that the approach of the High Court was erroneous in that they took up the discussion of question No. I first.
That question, as framed, proceeded on the assumption 960 that section 1O A applied to the case and only raised the question as to whether there was any evidence to support the finding of the Appellate Tribunal arrived at as a result of the enquiry under that section, namely, that the main purpose of the transaction was the avoidance of excess profits tax.
The long title and the preamble of the Excess Profits Tax Act refer to the imposition of tax on excess profits arising out of certain businesses.
Section 4, which is the charging section and section 5 which lays down the application of the Act to certain business, clearly postulate the existence of a business carried on by the assessee on the profits of which the excess profits tax can be imposed.
Therefore, if there is such a business during the relevant period, then and then alone can arise the question of the applicability of section 10 A.
If there is no such business as is contemplated by the Act, then the Act does not apply and section 10 A cannot come into operation at all.
Before the Excess Profits Tax Officer can embark upon an enquiry as to whether a transaction was effected for the avoidance or reduction of liability to excess profits tax and to make such adjustments as he considers appropriate_ there must be proof that the assessee was, during the chargeable accounting period, carrying on any business of the kind referred to in section 5 of the Act.
Logically, therefore, the Appellate Tribunal as well as the High Court should have taken up question No. 3 first, for on a decision of that question would depend the applicability of section 1O A and if that question were answered in favour of the assessee firm the further question of law as raised in question No. I would not, in such event, arise.
The approach of the High Court was, therefore, logically misconceived on the facts of this case.
What then are the facts found by the Appellate Tribunal apart from its findings under section 10 A ? The findings are that after the formation of the company the assessee firm was left with no business at all.
The company purchased the leasehold rights in the lands and buildings where the plant, machinery, etc., were installed.
The firm as such ceased to manufacture any ribbons and laces.
It was left with the plant, 961 machinery, etc., which it did not require and which ceased to be a commercial asset in its hands, for it had no longer any manufacturing business at all.
Further, the assessee firm had put it out of its power to use the plant, machinery, etc.
, for it had no right in the lands and buildings where the plant, machinery, etc., had been installed.
In these circumstances, the assessee firm let out the plant, machinery, etc., to the company.
It was thenceforth the company which was carrying on the business of manufacturing ribbons and laces and for that purpose hired the plant, machinery, etc., from the assesee firm.
Prima facie it was the company which appointed the managing agents and the selling agents.
Ex facie and apart from the alleged result of any enquiry under section 10 or section 1O A of the Excess Profits Tax Act those were not transactions of the assessee firm.
The assessee firm was, therefore, left only with some property which at one time was a commercial asset but had ceased to be so.
The assessee firm thereupon let out that property on rent.
The question is whether such letting out in such circumstances amounted to carrying on of a business.
"Business" as defined in section 2(5) of the Excess Profits Tax Act includes amongst others, any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture.
The first part of this definition of "a business" in the Excess Profits Tax Act is the same as the definition of a business in section 2(4) of the Indian Income tax Act.
Whether a particular activity amount to any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture is always a difficult question to answer.
On the one hand it has been pointed out by the Judicial Committee in Commissioner of Income tax vs Shaw Wallace & Co.(1), that the words used in that definition are no doubt wide but underlying each of them is the fundamental idea of the continuous exercise of an activity.
The word "business" connotes some real, substantial and systematic or organised course of activity or conduct with a set purpose.
On the other hand, a single and (1) Cal.
962 isolated transaction has been held to be conceivably capable of falling within the definition of business as 'being an adventure in the nature of trade provided the transaction bears clear indicia of trade.
The question therefore, whether a particular source of income is business or not must be decided according to our am ordinary notions as to what a business is.
The case of Commissioner of Excess Profits Tax, Bombay City vs
Shri Lakshmi Silk Mills Ltd.(1), decided by this Court is clearly distinguishable.
There, the respondent company which was formed for the purpose of manufacturing silk cloth installed a plant for dying silk yarn as a part of its business.
During the relevant chargeable accounting period, owing to difficulty in obtaining silk yarn on account of the war, it could not make any use of this plant and it remained idle for some time.
In August, 1943, the plant was let out to another company on a monthly rent.
The question arose whether the income received by, the respondent company in the chargeable accounting period by way of rent was income from business and assessable to excess profits tax.
It should be noted that in that case the respondent company was continuing its business of manufacturing silk cloth.
Only a part of its business, namely, that of dying silk yarn had to be temporarily stopped owing to the difficulty in obtaining silk yarn on account of the war.
In such a situation, this Court held that part of the assets did not cease to be commercial assets of that business since it was temporarily put to different use or let out to another and accordingly the income from the assets would be profits of the business irrespective of the manner in which that asset was exploited by the company.
This Court clearly indicated that no general principle could be laid down which would be applicable to all cases and that each case must be decided on its own circumstances according to ordinary common sense principles.
In the case before us the assessee firm 's business had entirely closed.
It no longer 'manufactured any ribbons and laces.
It had accordingly no further trading or commercial activity.
It could not in fact use the plant, machinery, etc., (1) ; 963 after the land and the buildings where they were installed had been sold to the company.
In these circumstances the assessee firm let out the plant, machinery, etc., on an annual rent of Rs. 40,000.
These facts are very similar to those found in Inland.
Revenue , Commissioners vs Broadway Car Co., Ltd.(1).
There the war conditions bad reduced the company 's business to very small proportions.
In that situation it was observed that in that case the company dealt with part of its property which bad become redundant and was sublet purely to produce incomes transaction quite apart from the ordinary business activities of the company.
The ratio decides in that case which was noticed in the judgment of this Court appears to us to apply to the facts found in the present case apart from the findings Under section 10 A. Applying also the common sense principle to the fact so found it is impossible to hold that the letting out of the plant, machinery, etc., was at all a business operation when its normal business activity had come to a close.
It is interesting to note that sub sections (3) and (4) of section 12 of the Indian Income tax Act recognise that letting out of plant, machinery, etc., may be a source of income falling under the head "other sources" within that section and not necessarily under the head "business" dealt with in section 10 of that Act.
In the facts and circumstances of this case, therefore, the letting out of the plant, machinery, etc.
,cannot be held to fall within the body of the definition of "business" under section 2(5) of the Excess Profits Tax Act.
In this view of the matter it is not necessary for us to express an opinion as to the meaning or implication of the proviso to that definition or rule 4(4) of Schedule I to the Act.
In our opinion, in the facts and circumstances of this case, question No. 3 should have been answered in the negative.
The question of law raised in the third question being answered in favour of the assessee firm, the question of the applicability of section 1O A of the Excess Profits Tax Act could not arise, for the assessee firm having, during the relevant period, no business to which that (1) 964 Act applied section 1O A could not be invoked by the revenue and, therefore, the question whether there was "evidence to support the finding of the Tribunal under that section could not arise.
On the contrary, the further question of law which would really arise out of the order of the Appellate Tribunal consequent upon the aforesaid answer to question No. 3 would be whether under the facts and circumstances of the case the application of section 1O A with a view to amalgamating the income of the firms Uppal & Co., and Ram Singh & Co., with the income of the assessee firm was correct and valid in law and that was precisely the first question which the assessee firm sought to raise by its application.
In our view the High Court should not only have answered question No. 3 in the negative but should also have raised, as a corollary to that answer to question No. 3, the further question of law on the lines indicated in question No. I of the assessee 's petition.
In other words, the High Court should have, after answering question No. 3 in the negative reframed the referred question No. I by restoring question No. 1 as suggested by the assessee firm in its petition and should have answered the question so restored in the negative and in favour of the assessee.
For the reasons stated above, we allow this appeal, reframe question No. I by restoring the first question suggested by the assessee firm, namely " Whether under the facts and circumstances of the case the application of section 1O A with a view to amalgamating the income of the firms Uppal & Co., and Ram Singh & Co., with the income of the appellant firm was correct and valid in law?" and we answer the question so reframed in the negative.
Question No. 2 must be answered in the negative and in favour of the assessee by way of necessary corollary.
We also answer question No. 3 in the negative.
The appellant will be entitled to the costs of this appeal and we order accordingly.

summary/full:
As condition precedent to the applicability of section 10 A of the Excess Profits Tax Act, 1940, it must be proved that during the chargeable accounting period the assessee was carrying on the kind of business to which the Act applies by virtue of section 5 of the Act.
Section 2(5) of the Act states what is included in the word "business".
It is not possible to lay down a general definition which would cover all cases of business.
Business involves the fundamental idea of a continuous activity.
It connotes some real, substantial and systematic or organised course of activity with a set purpose.
Single isolated transaction may also bear the clear indicia of trade or an adventure in the nature of trade which is included in the word "buisiness" mentioned in section 2(5) of the Act.
Hence whether a particular source of income is business or not must be decided on the facts and circumstances of each case according to our ordinary conception of business.
Since 1935 the assessee firm carried on the business of manufacturing ribbons and laces and for this purpose owned buildings, leasehold rights, plant, machinery etc.
On April 7, 1940, a public limited liability company was incorporated with the object of acquiring and taking over the buildings, leasehold rights, plant, machinery etc.
, from the assessee firm.
The company purchased leasehold rights in the lands and buildings where plant, machinery etc. were installed.
The assesses firm as such ceased to manufacture ribbons and laces and was left with plant and machinery etc.
which it did not require and which ceased to be commercial asset in the hands of the firm.
The land and the buildings having been sold the assessee firm put it out of its power to use the plant, machinery etc.
In these circumstances the company took and the assessee firm granted a lease of the plant, machinery etc., at an annual rent of Rs. 40,000.
Held, that this lease of the plant, machinery etc., given by the assesses firm could not be "business" within the meaning of section 2(5) of the Excess Profits Tax Act, 1940.
953 Commissioner of Excess Profits Tax, Bombay City vs Shri Lakshmi Silk Mills Ltd. ([1952] S.C.R. 1), distinguished.
Inland Revenue Commissioner vs Broadway Car Co., Ltd. ([1946] 2 A.E.R. 609), relied upon.
Commissioner of Income tax vs Shaw Wallace & Co., ([1932] I.L.R. , referred to.


judgement:
Appeal No. 707 of 1966.
Appeal by special leave from the judgment and order dated January 20, 1965 of the Allahabad High Court, Lucknow Bench in First Appeal No. 67 of 1948.
V. section Desai and K. P. Gupta, for the appellant.
A. K. Sen, E. C. Agarwala, section R. Agarwala and P. C. Agarwala, for respondent Nos. 1 to 6.
The Judgment of the Court was delivered by Hegde, J.
In this appeal by special leave though number of contentions were taken we have not thought it necessary to go into all of them as in our judgment High Court 's conclusion that Shyam Behari Lal (1st defendant) had been validly adopted by Gopal Das ,is well founded.
The suit from which this appeal arises is for possession of the suit properties on the basis of title.
The 1st plaintiff Debi Prasad claims title to the properties as the nearest heir to Gopal Das, his maternal uncle who died in 1934.
The 2nd plaintiff is an alienee from the 1st plaintiff.
In order to properly understand the controversy in the present case, it is necessary to have before us the family pedigree.
The admitted pedigree is as shown below 103 LAJJA RAM Kooramal (died in 1874) Kedar Nath Hiralal (died Laddoomal Ramass (died in 1897) during his (died father 's life issueless time) in 1871) (1St wife (2nd wife) died in Dwaramal 1874) alias Shyam Behari Dwarkadas Mantoo Mal Lal (died in (died in (adopted by 1885) 1897) at Gopal Das) age 25 or 27.
No. 1 (other children, died during minority).
Changumal Smt.
Misro Smt.
Kaushilla died in 1923 (died in 1917) (dead) Smt.
Raj Rani Shanker Sahai Manohar Das (died childless (died in (alive) 1944 or 1945) 1929) Smt.
Radhey Rani Smt.
Drupati Mukut Behari Lal (Deft.
No. 2) Govind Prasad Ram Kumar Ram Swarup Mahesh Bebari Ram Prasad (Deft. No. 3) (Deft. No. 4) (Four other children died 1940 41) Gopal Das Smt.
Kundan Smt.
Shyamo Masani Din (died on (died in (died in (died issueless) 18 2 34) 1914) 1923 or 1904) Smt.
Bhagwan Baghumal Kedar Nath Del (died in 1932) (died in 1925) (died on 19 10 1934) Debi Prasad Plff.
No. 1 Minor son Minor Minor daughter (all died before 1890) 104 The common ancestor of the family was Lajja Ram who died in 1874.
We are now concerned with the branch of Kedar Nath, the father of Gopal Das who died on February 18, 1934.
His widow Bhagwan Dei died on October 19, 1934.
The contention of Debi Prasad is that Gopal Das had separated from his family; he died intestate and, therefore, being the nearest heir of Gopal Das, he is entitled to the properties left by Gopal Das.
The plaintiffs claim was resisted by the 1st defendant Shyam Behari Lai, who claimed to be the adopted son of Gopal Das.
According to Shyam Behari Lai, he had been adopted by Gopal Das in about the year 1892 when he was only an infant.
He also resisted the suit on the ground that Gopal Das was an undivided member of his family and therefore the 1st plaintiff in any event cannot claim any right to the suit properties.
His further contention was that the 1st plaintiff was estopped from contending that he was not the adopted son of Gopal Das.
Shyam Behari Lai died luring the pendency of the appeal before the High Court and his legal representatives are contesting this appeal Debi Prasad also died during the pendency of this appeal.
The trial court substantially accepted the claim made in the plaint but in appeal the High Court reversed the decree of the trial court and dismissed the suit.
The principal question that we have to decide in this case is whether the adoption pleaded by Shyam Behari Lai is true and valid.
According to Shyam Behari Lai, Gopal Das took him in adoption on February 8, 1892, on the very day he was born.
He says that very soon after his birth, his natural parents handed him over to Gopal Das and his wife who took him over as their adopted son and thereafter performed the necessary ceremonies according to the custom of their community.
He also pleaded that in the community of Gopal Das, there is a custom of taking a child.
in adoption on the very day of its birth.
The plaintiffs have denied both the factum of adoption as well as the custom pleaded.
We may at the very outset mention that Shyam Behari Lai had not been able to establish the custom pleaded by him.
Nor was he able to adduce any satisfactory evidence about the actual adoption but he has produced considerable documentary evidence to show that (Gopal Das) was treating him for over a quarter of century as his son.
There is also plenty of reliable evidence to show that close relations of Gopal Das including Debi Prasad treated Shyam Behari Lai as the son of Gopal Das both during the life time of Gopal Das and also thereafter till about the time the suit from which this appeal arises was instituted.
As mentioned earlier Gopal Das as well as his wife died in 1934 and the suit from which this appeal arises was filed in 1946.
105 While considering the question of proof of the adoption pleaded, we must bear in mind the fact that the same is alleged to have taken place in 1892 nearly 54 years before the present suit was instituted.
Therefore, naturally, it was extremely difficult for Shyam Behari Lai to adduce any oral evidence in proof of that adoption.
All the persons who could have known about the adoption are likely to have died.
Shyam Behari Lai himself could not speak to that adoption.
His evidence is at best hearsay.
It is true, as observed by this Court in Addagada Raghayamma and anr.
vs Addagada Chenchamma and anr.
(1) that it is settled that (a person.
who seeks to displace the natural succession to property by alleging an adoption must discharge the burden that lies upon him by proof of the factum of adoption and its validity).
Again as held by this Court in Lakshman Singh Kothari vs Smt.
Rup Kanwar(2) that in order that an adoption may be valid under the Hindu law, there must be a formal ceremony of giving and taking.
This is true of the regenerate castes as well as of the Sudras.
Although no particular form is prescribed for the ceremony, the law requires that the natural parent should hand over the adoptive boy and the adoptive parent must receive him, the nature of the ceremony varying according to the circumstances.
In the course of the judgment Subba Rao J. (as he then was) who spoke for the, Court quoted with approval the following observations of Gopalchandra Sarkar in his book on Hindu Law, 8th Edn.; "The ceremonies of giving and taking are abso lutely necessary 'in all cases.
These ceremonies must be accompanied by the actual delivery of the child; symbolical or constructive delivery by the mere parol expression of intention on the part of the giver and the taker without the presence of the boy is not sufficient.
Nor are deeds of gift and acceptance executed and registered in anticipation of the intended adoption nor acknowledgment, sufficient by themselves to constitute legal adoption, in the absence of actual gift and acceptance accompanied by actual delivery; a formal ceremony being essential for that purpose.
" That is also the view expressed in Mayne 's Hindu Law wherein it is observed that the giving and receiving are absolutely necessary to the validity of an adoption; they are the operative part of the ceremony, being that part of it which transfers the boy from one family to another; but the Hindu law does not require that there shall be any particular form so far as giving and acceptance are concerned; for a valid, adoption all that the law requires is that the natural father shall be asked by the adoptive (1) ; L11SupCI 8 (2) ; 106 parent to give his son in adoption, and that the boy shall be handed over and taken for this purpose.
There is no doubt that the burden of proving satisfactorily that he was given by his natural father and received by Gopal Das as his adoptive son is on Shyam Behari Lal.
But as observed by the Judicial Committee of the Privy Council in Rajendrao Nath Holder vs Jogendro Nath Benerjee and ors.(1); that although the person who pleads that he had been adopted is bound to prove his title as adopted son, as a fact yet from the long period during which he had been received as an adopted son, every allowance for the absence of evidence to prove such fact was to be favourably entertained, and that the case was analogous to that in which the legitimacy of a person in possession had been acquiesced in for a considerable time, and afterwards impeached by a party, who had a right to question the legitimacy, where the defendant, in order to defend his status, is allowed to invoke against the claimant every presumption which arises from long recognition of his legitimacy by members of his family; that in the case of a Hindoo, long recognition as an adopted son, raised even a stronger presumption in favour of the validity of.
his adop tion, arising from the possibility of the loss of his rights in his own family by being adopted in another family.
In Rup Narain and anr.
vs Mst.
Gopal Devi and ors.
(1), the Judicial Committee observed, that in the absence of direct evidence much value has to be attached to the fact that the alleged adopted son had without controversy succeeded to his adoptive father 's estate and enjoyed till his death and that documents during his life and after his death were framed upon the basis of the adoption.
A Division Bench of the Orissa High Court in Balinki Padhano and anr.
vs Gopalkrishntt Padhano and ors(3); held that in the case of an ancient adoption evidence showing that the boy was treated for a long time as the adopted son at a time when there was no controversy is sufficient to prove the adoption although evidence of actual giving and taking is not forthcoming.
We are in agreement with the views expressed in the decisions referred to above.
In the case of all ancient transactions, it is but natural that positive oral evidence will be lacking.
Passage of time gradually wipes out such evidence.
Human affairs often have to be judged on the basis of probabilities.
Rendering of justice will become impossible if a particular mode of proof is insisted upon under all circumstances.
In judging whether an adoption pleaded has been satisfactorily proved or not, we have to bear in mind the lapse of time between the date of the alleged adoption and the date on which the concerned party is required to adduce proof.
In the (1) 14 Moore 's Indian Appeals p.67. (2) 36 I.A. p. 103.
(3) A.I.R. 1964 Orissa p. 117.
107 case of an adoption said to have taken place years before the same is questioned, the most important evidence is likely to be that the alleged adoptive, father held out the person claiming to have been adopted as his son; the latter treated the former as his father and their relations and friends treated them as father and son.
There is no predetermined way of proving any fact.
A fact is said to have been proved where after considering the matters before it, the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
Hence if after taking an overall view of the evidence adduced in the case, we are satisfied that the adoption pleaded is true, we must necessarily proceed on the basis, in the absence of any evidence to the contrary, that it is a valid adoption as well.
As mentioned earlier Shyam Behari Lal has not been able to substantiate the custom pleaded by him; nor has he adduced any direct evidence relating to the factum of adoption.
His case entirely rests upon the decumentary evidence that he has produced to show that he had been consistently and continuously treated as the son of Gopal Das, by Gopal Das himself, during his life time and by all his friends and relations including Debi Prasad.
Before dealing with the evidence mentioned earlier, it is necessary to mention that the High Court has relied in proof of the adoption pleaded, on the evidence of D.W. 10 Rikhab Das and D.W. 15 Chhotey Lal.
Both of them were the close relations of the wife of Gopal Das.
They are disinterested witnesses.
Their evidence is to the effect that sometime after the birth of Shyam Behari Lal, the wife of Gopal Das took him to her paternal home where Paon Pheri ceremony was performed.
There is satisfactory evidence to show that this ceremony is customarily performed in the parental home of a lady who has given birth to her first child.
We see no reason to disbelieve the testimony of these witnesses.
Their evidence clearly indicates the fact that Shyam Behari Lal must have been taken in adoption by Gopal Das.
We may also at this stage refer to another important circumstance appearing in the case.
As mentioned earlier, both Gopal Das and his wife died in the year 1934.
The suit from which this appeal arises was instituted only in 1946, just a few months before the period of limitation for instituting the same expired.
Debi Prasad has not given any satisfactory explanation for this inordinate delay in instituting the suit.
This circumstance tends to show that the suit is likely to be speculative one.
Now coming to the documentary,evidence referred to earlier, it is proved that Shyam Behari Lal was admitted to school in 1907.
A 658, is the application made for admission on December 12, 1907.
That application was signed by Gopal Das, 108 It recites that Shyam Behari Lal is the son of Gopal Das.
This admission of Gopal Das is an extremely important piece of evidence.
No reason is given why Gopal Das should have made a false statement in that application.
The explanation that someone must have filled in the form and Gopal Das must have signed the same in ignorance is not worthy of credence.
A 261, is the certified copy of the deposition of Gopal Das in Regular Suit No. 104 of 1917 in the court of the Subordinate Judge, Faizabad.
That deposition was given on May 9, 1918.
Therein Gopal Das admitted in more than one place that Shyam Behari Lal was his son.
We next come to Exh.
A 364, a copy of the nomination paper filed by Shyam Behari Lal for election to the municipal council.
Gopal Das was one of the persons who proposed his name.
Therein again Shyam Behari Lal was described as the son of Gopal Das.
Gopal Das was an income tax assessee.
He was assessed as the Karta of his Hindu Undivided Family.
A 299 is the assessment order for the year 1921 22; Exh.
A 300 is the assessment order for the year 1922 23; Exh.
A 3 01 is the assessment order for the year 1923 24; Exh.
A 302 is the assessment order for the year 1924 25; Exh.
A 303 is the assessment order for the year 1925 26; Exh.
A 304 is the assessment order for the year 1926 27; Exh.
A 305 is the assessment order for the year 192728; Exh.
A 306 is the assessment order for the year 1928 29; Exh.
A 307 is the assessment order for the year 1929 30; Exh.
A 309 is the assessment order for the year 1931 32 and Exh.
A313 is the assessment order for the year 1935 36.
While computing the income of the H.U.F. the professional income of Shyarn Behari Lal as a lawyer was taken into consideration.
Those assessment orders proceed on the basis that Gopal Das and Shyam Behari Lal constituted a joint Hindu family.
It may be noted that most of those assessment orders were made during the life time of Gopal Das and evidently on the basis of the returns submitted by him.
If Shyam Behari Lai had not been the son of Gopal Das, he could not have been treated as a member of the 'coparcenary of which Gopal Das was the Karta, nor his professional income would have been added to the income of the joint family of Gopal Das.
These assessment orders have considerable evidentiary value.
It may be noted that these documents came into existence at a time when there was no dispute.
Next we come to the admissions made by the plaintiff him self.
A 233 is the certified copy of the deposition of the plaintiff given in Regular Suit No. 55 of 1935 in the court of Additional Subordinate Judge, Faizabad.
This deposition he 109 gave on May 20, 1935, nearly a year after Gopal Das died.
Is that deposition he stated : "I am partner of the firm of Gopal Dass Chhangamal.
Plaintiff No. 2 is the proprieter of the said firm", If Debi Prasad was the rightful heir to the estate of Gopal Das, he could not have admitted in the year 1935 that Shyam Behari Lal was the proprietor of the firm Gopal Dass Chhangamal.
Debi Prasad 's explanation that on the date he gave that deposition, he was unaware of the fact that he was the heir of Gopal Das, cannot be believed.
In Exh.
A 226, the decree in the aforesaid suit, Shyam Behari Lal was described .as the son of Gopal Das.
A 274 is another certified copy of the deposition given by Debi Prasad.
This was, given on July 19, 1923 in a suit where Gopal Das was the plaintiff.
Therein he stated in cross "The plaintiff No. 1 has got a son named B. Shyam Behari Lal Vakil .
Our business is also ancestral business.
His son Shyam Behari and his grand son Mukut Behari are members of a joint Hindu family.
" He further stated therein "Lala Gopal Das, his son (referring to Shyam Behari Lal) and grand son are the sole owners of the firm styled Kuramal Kedar Nath".
A 236 is the certified copy of the plaint filed by Shyam Behari Lal and Debi Prasad jointly in Suit No. 353 of 1935 in the court of Civil Judge, Faizabad.
In paragraph 1 of the plaint, it is stated : "The proprietor of the said shop was Gopal Das, father of the plaintiff No. 1 till his life time and after his death to which about a year, nine months and half have passed, the plaintiff No. 1, as survivor became and is the proprietor of the said property.
" This is an extremely important admission.
This admission was made after the death of Gopal Das.
Therein Debi Prasad not only admitted that Shyam Behari Lal was the son of Gopal Das, he further admitted that he became the proprietor of the concern by survivorship.
This could have only happened if Shyam Behari Lal had been adopted by Gopal Das.
A 352 and 356 are two applications made for registration of a firm under the .
The first, application was made on March 26, 1936.
It was returned 'with some objection and the second application was made on May 4, 1936.
Both these applications bear the signature of Debi Pradsad as Well 110 as Shyam Behari Lal.
In those applications, it was stated that Shyam Behari Lal had succeeded as a partner of the firm whose registration was sought in the place of his father Gopal Das who had died.
A 358 is an application for transfer of shares made to the Banaras Cotton & Silk Mills Ltd. by Debi Prasad.
Thereunder he sought to transfer his 100 shares to Shyam Behari Lal whom he described in his application as the son of Gopal Das.
Similar avertments were made in Exh.
A 359.
A 262, 656, 657 and A 276 are the statements made by the relations of Shyam Behari Lal and Debi Prasad wherein Shyam Behari Lal was described as the, son of Gopal Das.
A large number of documents have been produced to show that friends, relations and even strangers were treating Shyam Behari Lal as the son of Gopal Das.
The documents produced before the court conclusively prove that right from 1907 till 1946, Shyam Behari Lal wag treated as the son of Gopal Das.
This continuous and consistent course of conduct on the part of Debi Prasad, Gopal Das and others affords a satisfactory proof of the fact that Shyam Behari Lal must have been the adopted son of Gopal Das.
No other reasonable inference can be drawn from the material on record.
Mr. Desai appearing on behalf of the appellants contended that we should not accept the adoption pleaded firstly because, it was unlikely that Gopal Das would have taken a child in adoption as far back as 1892 when he was only 32 years of age; secondly the story that an one day old child was taken in adoption when the family must have been in pollution must be rejected as being repugnant to Hindu notions and lastly in a decree of 1910, Shyam Behari Lal was described as the son of Ram Das, his natural father.
We are unable to accept these contentions.
It is in evidence that Gopal Das had lost three children even before 1890.
Evidently he had lost all hopes of getting a natural son.
Further it is not necessary to speculate in the face of the documentary evidence referred to earlier why Gopal Das should have taken a son in adoption when there was every possibility for him to get a natural son.
Coming to the question of adoption on the very day Shyam Behari Lal was born, that plea rests on hearsay information.
There is no positive evidence before us as to when exactly Shyam Behari Lal was adopted.
From the evidence of D.Ws.
10 and 15, it is clear that he must have been adopted very soon after his birth.
That is the best that can be said on the basis of the evidence.
That a art custom differs from place to place and from community to community.
It is true that in a decree made in 1910, Shyam Behari Lal was described as the son of Ram Das.
But in the very next year in another decree, he was 111 described as the son of Gopal Das.
We do not think that the evidence afforded by that solitary document showing Shyam Behari Lal as the son of Ram Das can outweigh the other evi dence which is both satisfactory as well as voluminous.
On an appreciation of the entire evidence on record, we are in agreement with the High Court 's conclusion that Shyam Behari Lal was the adopted son of Gopal Das and there is nothing to show that the said adoption was invalid for any reason.
In view of this conclusion, it is unnecessary to consider the other contentions raised in the appeal.
In the result this appeal fails and the same is dismissed with costs.
Y.P. Appeal dismissed.

dataset_name: IN-Abs

summary/full:
The appellant filed a suit in 1946 claiming to be the nearest heir to his maternal uncle G, who died in 1934.
S defendant No. 1 (the predecessor of the respondents) resisted the suit on the ground that he had been adopted by G on the very day he was born in 1892.
Close relations of the wife of G deposed that after the birth of S, the wife of G took him to her paternal home where Paon Pheri ceremony was performed, as was customary in that family.
The application for admission to the school recited that S was the son of G, and it was signed by G. G deposed before courts that S was his son.
S filed a nomination paper, proposed by G mentioning that his father was G.
In income tax assessment which proceeded on the basis that G and S formed a H.U.F. of which G was the karta, the professional income of S was added.
Then there were admissions of the appellant in Courts after the death of G that S was the proprietor of the firm of G.
In other application for transfers, the appellant described S as son of G.
But there was a decree of a Court in 1990 where S was described as son of his natural father.
The trial court decreed the suit, but the High Court reversed that decree.
The High Court held on the evidence that S was validly adopted by G, though S had not been able to establish the custom pleaded by him, nor was he able to adduce any satisfactory evidence about the actual adoption but he has produced considerable documentary evidence to show that G was treating him for over a quarter of century as his son; then there was also plenty of reliable evidence to show that close relations including the, appellant treated S as the son of G both during the life time of G and also, thereafter till about the time the suit was instituted.
HELD : A person who seeks to displace the natural succession to property by alleging an adoption must discharge the burden that lies upon him by proof of the factum of adoption and its validity.
In order that an adoption may be valid under the Hindu law, there must be a formal ceremony of giving and taking.
This is true of the regenerate castes as well as of the Sudras.
Although no particular form is prescribed for the ceremony, the law required that the natural parent should hand over the adoptive boy and the adoptive parent must receive him, the nature of the ceremony varying according to the circumstances.
[105 A D] Although the person who pleads that he had been adopted is bound to prove his title as adopted son, as a fact yet from the long period during which he had been received as an adopted son, every 'allowance for the absence of evidence to prove such fact was to be favourably entertained.
The case was analogous to that in which the legitimacy of a person in possession had been acquiesced in for a considerable time, and afterwards impeached by a party, who had a right to question the legitimacy, where the defendant, in order to defend his status, is allowed to invoke against the claimant every presumption which arises from long recognition of his 102 legitimacy by members of his family.
In the case of a Hindu long recognition as an adopted son, raised even a stronger presumption in favour of the validity of his adoption, arising from the possibility of the loss of his rights in his own family by being adopted in another family.
In the absence of direct evidence much value has to be attached to the fact that the alleged adopted son had without controversy succeeded to his adoptive 'father 's estate and enjoyed till his death and that documents during his life and after his death were framed upon the basis of the adoption.
[106 B F] On the evidence, S was the adopted son of G and there was nothing to show that the said adoption was invalid for any reason.
While considering the question of the proof of adoption pleaded, the 'fact that the suit was filed nearly 54 years after the alleged adoption had taken place must be borne in mind.
Therefore, naturally it was extremely difficult far the adopted son to adduce any oral evidence in proof of that adoption.
Addagada Raghavamma and anr.
vs Addagada Chenchamma and anr.
2 S.C.R. 933; Lakshman Singh Kothari vs Smt.
Rup Kanwar ; ; applied.
Rajendrao Nath Holder vs Jogendro Nath Banerjee and ors.
14, Moore 's Indian Appeals p. 67, approved.


judgement:
Appeal No. 354 of 1967.
Appeal from the judgment and decree dated August 25, 1965 of the Madras High Court in Appeal No. 177 of 1961.
section V. Gupte, R. Thiagarajan, Janendra Lal and B. R. Agar wala, for the appellant.
N. H. Hingorani and K. Hingorani, for the respondent.
The Judgment of the Court was delivered by Shah, J.
Perumal Nadar married Annapazham (daughter of Kailasa Nadar an Indian Christian) on November 29, 1950, at Kannimadam in the State of Travancore Cochin according to Hindu rites.
Annapazham gave birth to two children the first on September 14, 1951 and the other on March 5, 1958.
The elder child died shortly after its birth.
The younger named Ponnuswami acting through his mother Annapazham as his guardian filed an action in the Court of the Subordinate Judge, Tirunelveli, for separate possession of a half share in the properties of the joint family held by his father Perumal.
The suit was defended by 51 Perumal contending that he had not married Annapazham as claimed by her; that if it be proved that marriage ceremony had been performed, it was invalid, and in any event Ponnuswami was an illegitimate child and could not claim a share in his estate.
The Trial Court rejected the defence, and decreed the suit.
Perumal appealed to the High Court of Madras, but without success.
With certificate under article 133(1)(c) of the Constitution, this appeal is preferred.
Three contentions are urged in support of this appeal : (1) that Annapazham was an Indian Christian and a marriage between a Hindu and an Indian Christian is regarded by the Courts in India as void; (2) that the marriage was invalid because it was prohibited by the Madras Act 6 of 1949; (3) that Annapazham and Perumal were living apart for a long time before the birth of Ponnuswami and on that account Ponnuswami could not be regarded as a legitimate child of Perumal.
Annapazham was born of Christian parents and she followed the Christian faith.
She married Perumal when she was about 19 years of age.
It is not now in dispute that on November 19, 1950 she went through the ceremony of marriage and lived with Perumal as his wife for several years thereafter.
The children born to Annapazham in September 1951 and March 1958 were entered in the Register of Births as Hindus.
On the occasion of the marriage, printed invitations were sent to the relatives of Perumal and of Annapazham and an agreement was executed by Perumal and Annapazham reciting that: "Individual No. 1 (Perumal) among us has married Individual No. 2 (Annapazham) as settled by our parents and also with our full consent.
As our relatives are of the opinion that our marriage should be registered, this agreement has been registered in accordance therewith.
We have executed this agreement by consenting that both of us shall lead a family life as husband and wife from this day onwards, that we shall not part each other both in prosperity and adversity and that we shall have mutual rights in respect of the properties belonging to us, under the Hindu Mitakshara Law.
" The marriage ceremony was performed according to Hindu rites and customs : a bridal platform was constructed and Perumal tied the sacred than which it is customary for a Hindu husband to tie in acknowledgement of the marriage.
The High Court on a consideration of the evidence recorded the following finding: "Oral evidence was adduced to prove that the marriage was celebrated according to Hindu rites and Sams 52 karas.
Invitations were issued at the time of the marriage and usual customary tying of thali was observed.
After the marriage she ceased to attend the Church, abandoned the Christian faith and followed the Hindu customs and manner prevailing among the Hindu Nadar community of Travancore." Perumal who had previously been married to one Seethalakshmi agreed to and did go through the marriage ceremony.
It is in evidence that marriage between Hindu males belonging to the Nadar community and Christian females are common and the wife after the marriage is accepted as a member of the Hindu Nadar community.
Mr. Gupte on behalf of Perumal contends that a valid marri age mistake place between two Hindus only and not between a Hindu and a non Hindu and in the absence of any evidence to show that Annapazham was converted to Hinduism before she married Perumal, the marriage, even if performed according to the Hindu rites and ceremonies, is not valid in law.
Counsel also contended that the evidence that Annapazham lived after the marriage is a Hindu will not validate the marriage.
It is not necessary to decide in this case whether marriage between a Hindu male and an Indian Christian female may be regarded as valid for, in our judgment, the finding of the Courts below that Annapazham was converted to Hinduism before her marriage with Perumal is amply supported by evidence.
A person may be a Hindu by birth or by conversion.
A mere theoretical allegiance to the Hindu faith by a person born in another faith does not convert him into a Hindu, nor is a bare declaration that he is a Hindu sufficient to convert him to Hinduism.
But a bona fide intention to be converted to the Hindu faith, accompanied by conduct unequivocally expressing that intention may be sufficient evidence of conversion.
No formal ceremony of purification or expiation is necessary to effectuate conversion.
In Muthusami Mudaliar vs Masilamani alias Subramania Mu liar(1) the validity of a marriage according to Hindu rites between a Hindu and a Christian woman fell to be determined.
It was held that the marriage contracted according to Hindu rites by a Hindu with a Christian woman, who before marriage is converted to Hinduism, is valid, though the marriage was not in strict accordance with the Hindu system of law.
Such a marriage is still common among and recognised as valid by the custom of the caste to which the man belongs.
In Goona Durgaprasada Rao and Another vs Goona Sudarasa naswami and others(1), Mockett, J., observed that no gesture or (1) I.L.R. (2) I.L.R. 53 declaration may change a man 's religion, but when on the facts it appears that a man did change his religion and was accepted by his co religionists as having changed his religion and lived and died in that religion, absence of some formality cannot negative what is an actual fact.
Krishnaswami Ayyangar, J., observed that a Hindu who had converted himself to the Christian faith returned to Hinduism and contracted a second marriage during the life time of his first wife and remained and died a Hindu having been accepted as such by the community and co religionists without demur.
Absence of evidence of rituals relating to conversion cannot justify the Court in treating him as having remained a Christian.
The evidence clearly establishes that the parents of Anna pazham arranged the marriage.
The marriage was performed according to Hindu rites and ceremonies in the presence of relatives who were invited to attend : customary ceremonies peculiar to a marriage between Hindus were performed : no objection was raised to the marriage and after the marriage Annapazham was accepted by the local Hindu Nadar community as belonging to the Hindu faith, and the plaintiff was also treated as a Hindu.
On the evidence there can be no doubt that Annapazham bona fide intended to contract marriage with Perumal.
Absence of specific expiatory or purificatory ceremonies will not, in our judgment, be sufficient to hold that she was not converted to Hinduism before the marriage ceremony was performed.
The fact that Perumal chose to go through the marriage ceremony according to Hindu rites with Annapazham in the presence of a large number of persons clearly indicates that be accepted that Annapazham was converted to Hinduism before the marriage ceremony was performed.
The second contention has little substance.
The Madras Hindu (Bigamy Prevention and Divorce) Act 6 of 1949 provided by sections 3 & 4(1) : section 3 "This Act applies to Hindus domiciled in the State of Madras.
Explanation.
This Act shall also apply if either of the parties to the marriage was a Hindu domiciled in the State of Madras." section 4(1) "Notwithstanding any rule of law, custom or usage to the contrary, any marriage solemnized after the commencement of this Act between a man and a woman either of whom has a spouse living at the time of such solemnization shall be void, whether the marriage is solemnized within or outside the State of Madras : Provided. . . . . . " 54 Mr. Gupte contended that Perumal was domiciled in the village of Kannamkulam, Taluka Nanguneri, District Tirunelveli in the State of Madras and on that account governed by Madras Act 6 of 1949, and since Perumal had been previously married to Seethalakshmi who was alive, his marriage with Annapazham was invalid.
The Courts below have held that Perumal had married Seethalakshmi before he married Annapazham, and that Seethalakshmi was alive at the date of Perumal 's marriage with Annapazham.
But no contention was raised in the written statement filed by Perumal that he was domiciled in the State of Madras.
The marriage with Annapazham took place in Kannimadam which is admittedly within the territory of the State of Travancore Cochin and after the marriage Perumal and Annapazham lived at Kannimadam.
M. Thangiah Nadar P.W. 2, and Kailasa Nadar P.W. 4 have deposed that the families of Annapazham and Perumal were the subjects of the Travancore Maharaja and that evidence was not challenged.
Perumal and Annapazham were married according to the ceremonies which make a valid marriage: they had lived as husband and wife and if it was the case of Perumal that the marriage was, by reason of the prohibition contained in Madras Act 6 of 1949, invalid, it was for him to set up and to establish that plea by evidence.
It is true that an attempt was made after plaintiff closed her case to suggest to witnesses examined that he Perumal was a resident of Kannamkulam and that he occasionally visited Kannimadam where he had a house.
But no argument was raised that Perumal was domiciled in the State of Madras.
In the absence of any such contention, the Trial Court held that Perumal was not domiciled in the State of Madras.
It cannot be held in the absence of a specific plea and issue raised to that end that Perumal was domiciled in the State of Madras and was on that account governed by the provisions of the Madras Hindu (Bigamy Prevention and Divorce) Act 6 of 1949.
We agree with the High Court that it is not proved that Perumal was domiciled in the State of Madras at the date of his marriage with Annapazham.
Nor can we accept the contention that the plaintiff Ponnu swami is an illegitimate child.
If it be accepted that there was a valid marriage between Perumal and Annapazham and during the subsistence of the marriage the plaintiff was born, a conclusive established that at the time when the plaintiff was conceived, Peru presumption arises that he was the son of Perumal, unless it be mal had no access to Annapazham.
There is evidence on the record that there were in 1957 some disputes between Annapazham and Perumal.
Annapazham had lodged a complaint before the Magistrate 's court that Perumal had contracted marriage with one Bhagavathi.
That complaint was dismissed and the order was 55 confirmed by the High Court of Madras.
Because of this com plaint, the relations between the parties were strained and they were living apart.
But it is still common ground that Perumal and Annapazham were living in the same village, and unless Perumal was able to establish absence of access, the presumption raised by section 112 of the Indian Evidence Act will not be displaced.
In Chilukuri Venkateswarlu vs Chilukuri Venkatanarayana(1) in a suit filed by a Hindu son against his father for partition it was contended that the plaintiff was not the legitimate child of the defendant.
The defendant relied upon certain documents by which he had agreed to pay maintenance to the plaintiffs mother, and upon a deed gifting a house to her and assertions made in a previous suit that he had no intercourse with her after he married a second wife.
The Court in that case observed, following the judgment of the Privy Council in Karapaya vs Mayandi(1) that .,non access could be established not merely by positive or direct evidence; it can be proved undoubtedly like any other physical fact by evidence, either direct or circumstantial, which is relevant to the issue under the provisions of the Indian Evidence Act, though as the presumption of legitimacy is highly favoured by law it is necessary that proof of non access must be clear and satisfactory", and since on the basis of that proof there was evidence on the record that the plaintiffs mother lived in the house gifted to her by her husband and there was no impossibility of cohabitation between the parties, there was no acceptable evidence of non access.
In Ammathayee vs Kumaresain (3) this Court held that the conclusive presumption under section 112 of the Indian Evidence Act can.
only be displaced if it is shown that the parties to the marriage had no access at any time when the child could have been begotten, There is a concurrent finding of the Trial Court and the High Court that there is no evidence to establish that Perumal living in the same village as Annapazham had no access to Annapazham during the time when the plaintiff could have been begotten.
The appeal fails and is dismissed with costs.
G.C. Appeal dismissed.
(1) (2) I.L.R. 12 Rang.

summary/full:
One Perumal Nadar, a Hindu, married Annapazham, daughter of an Indian Christian, on November 29, 1950 at Kannimadam in the State of Travancore Cochin according to Hindu rites.
Of the two children born of the marriage one died.
The younger child, a son born in 1958, acting through his mother, the afoResaid Annapazham, as his guardian, filed an action in the Court of the Subordinate Judge, Tirunelveli, for separate possession of a half share in the properties of the joint family held by his father Perumal.
The 'suit was defended by Perumal.
The trial court decreed the suit and the High Court confirmed the decree.
In appeal to this Court by certificate Perumal, the appellant, contended : (i) that Annapazham was an Indian Christian and a marriage between a Hindu and an Indian Christian must be regarded as void; (ii) that the marriage was invalid because the appellant was already married .before he married Annapazham and bigamous marriages were prohibited by Madras Act 6 of 1949; (iii) that the appellant and Annapazham were living apart for a long time before the birth of the plaintiff and on that account the plaintiff could not be regarded as a legitimate child of the appellant.
HELD : (i) The question whether marriage between a Hindu male and a Christian female is valid or not did not arise for consideration in the present case because the finding of the Courts below that Annapazham was converted to Hinduism before her marriage with Perumal was amply supported by evidence.
[52 D E] A person may be a Hindu by birth or conversion.
A mere theoretical allegiance to the Hindu faith by a person born in another faith does not convert him into a Hindu, nor is a bare declaration that he is a Hindu sufficient to convert him to Hinduism.
But a bona,fide intention to be converted to the Hindu faith, accompanied by conduct unequivocally expressing that intention may be sufficient evidence of conversion.
No formal ceremony of purification or expiration is necessary to effectuate conversion.
[52 E F] Muthusami Mudaliar vs Musilamani alias Subramania Mudaliar I.L.R. and Goona Durgaprasada Rao vs Goona Sudarasanaswami, I.L.R. , referred to.
The evidence in the present case established that the parents of Annapazham arranged the marriage.
The marriage was performed 50 according to Hindu rites and ceremonies in the presence of relatives who were invited to attend : customary ceremonies peculiar to a marriage between Hindus were performed : no objection was raised to the marriage and after the marriage Annapazham was accepted by the local Hindu Nadar community as belonging to the Hindu faith; and the plaintiff was also treated as a Hindu.
On the evidence there could be no doubt that Annapazham bona fide intended to contract marriage with Perumal.
Absence of specific expiatory or purificatory ceremonies would not be sufficient to hold that she was not converted to Hinduism before the marriage ceremony was performed.
The fact that the appellant chose to go through the marriage ceremony according to Hindu rites with Annapazham in the presence of a large number of persons clearly indicated that he accepted that Annapazham was converted to Hinduism before the marriage ceremony was performed.
[53 C E] (ii) On the facts and pleadings the High Court was right in holding that it was not proved that the appellant was domiciled in the State of Madras at the date of his marriage with Annapazham.
He could not therefore rely upon the provisions of the Madras Hindu (Bigamy Prevention and Divorce) Act 6 of 1949.
[54 F] (iii) There was a concurrent finding by the courts below that there was no evidence to establish that the appellant living in the same village as Annapazham had no access to her during the time when the plaintiff could have been begotten.
Therefore, in view of section 112 of the Indian Evidence Act it could not be held that the plaintiff was an illegitimate child.
[55 A B] Chilukuri Venkateswarlu vs Chilukuri Venkatanarayana, , Karapaya vs Mayandi, I.L.R. 12 Rang.
243 (P.C) and Ammathayee vs Kumaresain, , applied.


judgement:
Appeal No. 1641 of 1966.
Appeal from the judgment and decree dated March 10, 11, 1965 of the Bombay High Court in Appeal No. 26 of 1958 from Original Decree.
L10Sup Cl (NP)/70 14 922 L. M. Singhvi and B. D. Sharma, for the appellant.
H. R. Gokhale, Y. section Chitale, Janendra Lal and B. R. Agarwala, for respondent No. 1.
The Judgment of the Court was delivered by Bhargava, J.
The Union of India, as the owner of the Central Railway, instituted a suit for refund of Rs. 2,76,967/ collected as tax from the Railway Administration by the respondent Municipality during the period from 1931 till the institution of the suit in November, 1954.
The facts leading up to the suit are that the G.I.P. Railway, which was a Private Company, had land situated within the limits of the respondent Municipality.
On this land, stood the railway station, their Water Reservoir at Bhusi, bungalows of Officers, and certain other buildings.
There were also vacant lands and some lands on which railway lines were laid out.
In this area, which belonged to the G.I.P. Railway, the Railway Company itself built roads, supplied water from its Bhusi Reservoir, arranged for the lighting, and provided other services.
In fact, up to the year 1916, the Railway used to supply water even to the Municipality from its Bhusi Reservoir on payment.
The Municipality was governed, at that time, by the Bombay District Municipal Act No. 3 of 1901 (hereinafter referred to as "the Act of 1901") under which a tax on lands and buildings situated within the municipal limits used to be charged @ 4 per cent of the annual rental value, but no tax was levied on the buildings and lands of the G.I.P. Railway in view of section 135 of the Indian Railways Act No. 9 of 1890.
In the year 1914, the Government of India issued a notification under section 135 of the Railways Act declaring that the Administration of the G.I.P. Railway shall be liable to pay, in aid of the funds of the local authorities set out in the Schedule, the taxes specified against each of those authorities.
Against the 'lame of Lonavla Municipality, which is the respondent in this case, the tax mentioned was house tax.
Thus, the exemption granted to the Railway Administration was taken away by this notification in respect of house tax and house tax became payable by the G.I.P. Railway to the respondent.
In 1916, the respondent constructed its own water reservoir and became independent of the Railway for water supply, but no water rate was charged from the Railway even thereafter, though water charges for actual quantities of water supplied in three of the bungalows was charged from the occupants of the bungalows.
The rest of the Railway Colony continued to be supplied with water from the Railway Reservoir at Bhusi.
On 4th May 1916, the respondent promulgated new rules for taxation and, instead of charging separate house tax and water rate it decided to charge a consolidated tax assessed as a rate on 923, buildings and lands in accordance with clause (c) of the proviso to section 59(1) of the Act of 1901.
Thereafter, it appears that the respondent demanded this consolidated tax from the Railway in respect of the Railway lands and buildings.
The Railway felt that, since, under the notification of 1914, house tax only was payable by the Railway Administration, there was no justification for the respondent to charge consolidated tax from it and, consequently, protested against this payment.
Thereafter, on 26th July, 1917, the Government of India issued a fresh notification tinder section 135 of the Railways Act, whereby the Railway Administration was rendered liable to pay what was described as "tax on lands and buildings".
On the issue of this notification, the respondent started charging the G.I.P. Railway this consolidated tax and this continued until some time in the year 1927 by which time the G.I.P. Railway was taken over by the Government and became a Government undertaking.
In the Rules promulgated on 4th May, 1916, the consolidated tax described as a general rate on buildings and lands was not chargeable on government property.
Relying on this provision in the Rules, an objection was raised that the charge of the tax was illegal when the Railway had become government property.
Subsequently, the respondent Municipality amended its Rules and promulgated fresh Rules on the 6th October, 1931.
By this time, the respondent Municipality had been constituted into a Borough under the Bombay Municipal Boroughs Act No. 18 of 1925 (hereinafter referred to as "the Act of 1925").
These new Rules were thus promulgated under this Act of 1925.
Under these Rules, the exemption in respect of government property to the charge of the general rate on buildings and lands, which was contained in the Rules of 1916 was deleted and all lands and buildings within the Municipal Borough became chargeable irrespective of their being owned by the Government.
A separate clause was incorporated giving certain exemptions, but, since they do not affect the case before us, they need not be mentioned.
In pursuance of these Rules of 1931, the respondent started collecting the consolidated tax assessed as a rate on buildings and lands of the Railway from it.
In the year 1940, the Railway Administration preferred an appeal under section 110 of the Act of 1925 against one of the demand notices issued in respect of this tax on the 6th October, 1940.
This appeal came up before the Sub Divisional Magistrate Western Division, Poona, who held that the levy of this consolidated tax was ultra vires and set aside the demand notice.
On a revision by the respondent under section 111 of the Act of 1925, the District and Sessions Judge set aside the order of the Sub Divisional Magistrate, holding that the imposition of the tax was valid.
Against this decision, the Railway Administration filed a revision 924 before the High Court of Bombay under section 115 of the Code of Civil Procedure.
The High Court, on 12th February, 1945, refused to exercise its special powers under section 115, C.P.C., with the further remark that the proper remedy to be sought was by means of a suit.
Under these circumstances, the Union of India, which had come to be the owner of this Railway under the name of the Central Railway, filed the suit on 27th November, 1954 for refund of the entire amount which was collected by the respondent from the Railway in pursuance of the Rules of 193 1.
The trial court held that the levy of this tax was void inasmuch as, under the notification issued on the 26th July, 1917, only the rate on lands and buildings was payable by the Railway Administration.
The suit for the refund filed by the Union of India was, on this ground, decreed.
On appeal, the ' High Court disagreed with the trial court and held that even the consolidated tax was payable in view of the notification of 26th July, 1917, so that the tax had been rightly collected.
The High Court, thereupon, set aside the decree of the trial court and dismissed the suit.
It is against this decree that the Union of India has come up in this appeal by certificate under Article 133 of the Constitution.
In order to appreciate the submissions made by counsel for parties in this appeal, it is necessary to set out the relevant provisions of section 59 of the Act of 1901 and of section 73 of the Act of 1925 which are as follows : "Section 59 of the Act of 1901.
(1) Subject to any general or special orders which the State Government may make in this behalf, any Municipality many impose, for the purposes of this Act, any of the following taxes, that is to say, (i)a rate on buildings or lands or both, situate within the municipal district; (vii) a general sanitary cess for the construction or maintenance, or both construction and maintenance, of public latrines, and for the removal and disposal of refuse; (viii) a general water rate or a special water rate or both for water supplied by the Municipality, which may be imposed in the form of a rate assessed on buildings 925 and lands, or in any other form, including that of charges for such supply, fixed in such mode or modes, as shall be best adapted to the varying circumstances of any class of cases or of any individual case; (ix) a lighting tax; . .
Provided further that . .
(c) the Municipality in lieu of imposing separately any two or more of the taxes described in clauses (i), (vii), (viii) and (ix) may impose a consolidated tax assessed as a rate on buildings or lands, or both situate within the municipal District.
" "Section 73 of the Act of 1925 73. (1) Subject to any general or special orders which the State Government may make in this behalf and to the provisions of sections 75 and 76, a municipality may impose for the purposes of this Act any of the following taxes, namely: (i) a rate on buildings or lands or both situate within the municipal borough; . .
(viii)a general sanitary cess for the construction and maintenance of public latrines, and for the removal and disposal of refuse; . .
(x) a general water rate or a special water rate or both for water supplied by the municipality, which may be imposed in the form of a 'rate assessed on buildings and lands or in any other form, including that of charges for such supply, fixed in such mode or modes as shall be best adapted to the varying circumstances of any class of cases or of any individual case; (xi) a lighting tax; . .
926 Provided further that . .
(c) the municipality in lieu of imposing separately any two or more of the taxes described in clauses (i), (viii), (x) and (xi) may impose a consolidated tax assessed as a rate on buildings or lands or both situated within the municipal borough.
" In the year 1914, the respondent Municipality had only levied a rate on buildings an& lands under clause (i) of section 5 9(1) of the Act of 1901.
There was no question of imposing a general or special water rate as the respondent had no water works of its own and was taking water supply from the G.I.P. Railway.
It was in these circumstances that the notification was issued by the Central Government dated the 13th May, 1914 making the Railway Administration liable to pay house tax to the Municipality of Lonavla.
The notification was obviously intended to make the Railway liable to pay the tax which had been imposed as a rate on buildings and lands under section 59(1)(i) of the Act of 1901 by the respondent.
Subsequently,, in the year 1916, the respondent Municipality not only arranged for water supply and imposed a general water rate, it proceeded to make rules for imposition of a consolidated tax assessed as a rate on buildings and lands under clause (c) of the second proviso to section 59(1) in lieu of the existing tax imposed as a rate on buildings and lands under clause (i) as well as the water rate, imposed under clause (viii) of section 59(1).
Thereafter, the Central Government issued the notification dated 26th July, 1917 under section 135(1) of the Railways Act making the G.I.P. Railway liable to tax on buildings and lands imposed by the Lonavla Municipality.
It is to be noted that, in this notification, the Government used the word "tax" and not the word " rate".
The tax imposed under section 59(1) was described as "a rate on buildings and lands".
If the intention of the Government had been that the G.I.P. Railway should be liable to that tax only, it could have used the word "rate" instead of the word "tax ' in the notification.
In fact, if the, notification had been left untouched, the liability of the G.I.P. Railway would have continued to be in respect of the rate on buildings or lands because of the earlier notification of 1914, under which the Railway had been made liable to House tax.
The notification of 26th July, 1917 made the Railway liable to tax on buildings and lands obviously because the Government intended that the Railway should be liable to the consolidated tax under clause (c) of the second proviso to section 59(1).
Clause (c) permits the imposition of a consolidated tax assessed as a rate on buildings or lands, or both.
The moment a tax is assessed as a rate on buildings or lands, it naturally becomes a tax 9 2 7 on building and lands.
The fact that it was a consolidated tax was immaterial.
It was this consolidated tax which was intended to be made payable by the G.I.P. Railway when the Central Government used the expression "tax on buildings and lands" in place of the earlier words "House Tax" and chose not to refer to the liability being in respect of a rate on buildings and lands.
It is true that all taxes are not rates but all rates are taxes.
A rate on buildings and lands is 'a tax on buildings, so also any other tax ' assessed as a rate on buildings and lands becomes a tax on buildings and lands.
We are unable to accept the submission made by counsel for the appellant that the expression "tax on buildings and lands" used in the notification of 26th July, 1917 could only refer to a rate on buildings and lands under clause (i) of section 59(1) and would not cover the con solidated tax referred to in clause (c) of the second proviso.
It is true, as urged by him, that the tax under clause (c) of the second proviso is not identical with, and is different in nature from, the rate on buildings and lands imposed under clause (i), but that circumstance does not imply that it is not a tax on buildings and lands.
The mere use of the word "consolidated" cannot make any difference to this interpretation.
It is also significant that clause (c) of the second proviso does not purport to lay down that the consolidated tax will be the sum total of the taxes described in clauses (i), (vii), (viii) and (ix).
The consolidated tax envisaged by that clause is in lieu of separate imposition of any two or more of the taxes described in clauses (i), (vii), (viii) and (ix) which means that the power to impose.
this consolidated tax has been given for the purpose of substituting it for the multiple taxes which could be imposed under those clauses.
This consolidated tax cannot, therefore, be held to be of the same nature as the taxes in all those clauses.
The intention appears to be that, though the Municipality was empowered to impose four different kinds of taxes, it was permitted under clause (c) of the second proviso to simplify matters by having a single tax on buildings and lands in lieu of those multiple taxes.
Such a single tax had to be assessed as a rate on buildings and lands.
This being the nature, it obviously becomes a tax on buildings and lands, so that the notification of 26th July, 1917 clearly makes the Railway liable to payment of this tax.
The position under the Act of 1925 is exactly the same where also the language of clause (c) to the second proviso is identical with that contained in the Act of 1901, so that the liability imposed on the Railway by the notification of the Government dated 26th July, 1917 under s.135(1) of the rail ways Act continued even under the Act of 1925.
It is also significant to note that the Rules, which we 're framed by the Municipality under the Act of 1901 and by the Municipal .Borough later under the Act of 1925 which were promulgated on 928 the 4th May, 1916 and the 6th October, 1931 respectively, described the tax as a general rate on buildings and lands in rule 1.
It is true that, in the heading of the Rules, the expression used was that "the Rules were for the levy of a consolidated rate on buildings and lands", but, in the main provision, the tax was described only as "a general rate on buildings And lands".
A general rate on buildings and lands is obviously a tax on buildings and lands and would, therefore, be covered by the notification of the Central Government dated 26th July, 1917.
Apart from this interpration which we have arrived at on the basis of the language used in the two Acts, the Rules, and the notification of the Central Government, there are two circumstances which indicate that this must be the correct construction of the notification issued by the Central Government.
The first circumstance is that, when this notification was issued, the only tax which was being imposed by the Lonavla Municipality which the Central Government could have intended should become payable by the, G.I.P. Railway was the consolidated tax under clause (c) of the second proviso.
There was no other tax which could have been covered by this notification.
In fact, the notification would be meaningless if we were to hold that this consolidated tax is not covered by the expression "tax on buildings and lands".
This notification was issued while the earlier notification of 1914 was ,already in existence and, if the intention was to cover only the rate mentioned in clause (i) of section 59(1), there was no need to issue this fresh notification as the liability of the Railway to pay that tax already existed under that notification of 1914.
The second circumstance that we can take notice of is the historical background in which this notification of 26th July, 1917 was issued.
It appears that, after the Rules for imposition of this consolidated tax came into force in 1916, the Municipality demanded payment of this consolidated tax from the G.I.P. Railway.
Thereupon, the Agent of the G.I.P. Railway Company wrote a letter to the Secretary, Railway Board, Simla, on the 1st December, 1916, stating that the Company did not agree that it should pay the new consolidated tax as it comprised a house tax and a water rate.
The Company had its own arrangements for the supply of water and it was obviously unfair that it should be called upon tO pay any tax which includes a water rate, when no municipal water was being consumed by the Railway at Lonavla.
The Secretary, Railway Board, forwarded this letter to the Secretary to the Government of Bombay, General Department, with a letter dated 12th December, 1916, enquiring whether the Agent 's information was correct and, if so, whether the Bombay Government had any remarks to offer on the, Agent 's 92 9 contentions.
On 11th May, 1917, the Secretary to the Government of Bombay replied to the Secretary, Railway Board, pointing.
out that, originally, the Municipality, proposed to levy a general water rate on all houses, in addition to the existing house tax, but, on representations from property owners of Lonavla and Khandalla, it had decided to.
impose a consolidated rate on buildings and lands in lieu of the house tax and the proposed general water rate.
Consequently, they were, levying, in lieu of house tax, a consolidated rate, which included a general water rate, on a sliding scale, on all properties situated within the municipal limits.
The water rate imposed was not intended to cover expenses on any service rendered in the nature of a general tax as opposed to a service tax.
In equity, the Railway Company 's property in Lonavla had no better right to exemption than the properties of private individuals who, although they did not take private pipe connections, were paying the general water rate.
In these circumstances, a request was made to the Secretary, Railway Board, to move the Government of India to declare the Administration of the G.I.P. Railway liable to pay to the Lonavla Municipality the consolidated tax on buildings and lands in lieu of the, housetax in respect of the railway properties situated within the municipal limits.
It was suggested that the Schedule annexed to the notification dated 13th May, 1914 may be amended accordingly.
It was in pursuance of this move by the Bombay Government that the notification of 26th July, 1917 was issued by the Central Government.
That the notification of 26th July, 1917 was issued in pursuance of this correspondence is clarified by the Memorandum dated 17th August, 1917, with which a copy of the new notification was forwarded by the Government of India, Railway Department (Railway Board) to the Secretary to the Government of Bombay.
These circumstances, in which the notification of 16th July, 1917 was issued, make it plain that the Government of India, when they used the expression ' 'tax on buildings and lands" in the notification, intended to make the G.I.P. Railway liable to the consolidated tax which had been imposed by the Municipality under the Rules of 1916.
The decision of the Bombay High Court in Borough Munici .
pality, Ahmedabad vs Ahmedabad Manufacturing and Calico Printing Co. Ltd. (1) on interpretation of, section 73 and 1 1 0 of the Act, of 1925 also supports the view that we have taken above.
The, question that arose in that case was whether the right of an appeal ' envisaged by using the expression "in the case of a rate on buildings or lands or both" in section 110 could be availed of in respect of, a general water rate imposed under clause (x) of section 73(1) which described that tax as a general water rate imposed in the form of a. (1) , 930 rate assessed on buildings and lands.
It was held that there was no distinction between a rate on buildings or lands and a tax in the form of a rate assessed on buildings or lands.
In the case before us, ,on that analogy, a consolidated tax assessed as a rate on buildings and lands cannot be distinguished from a tax on buildings and lands.
Reference may also be made to a decision of the Allahabad High Court in Raza Buland Sugar Co., Ltd. Rampur vs Municipal Board, Rampur(1) where it was held that a water rate is a tax on buildings and lands and is not, in fact, a service tax chargeable in respect of water supplied.
Counsel for the appellant referred to a decision of the Madras High Court in Municipal Council, Cuddappah vs M & section M. Ry.
Co. Ltd.(1); but that case is of no assistance as it turned on the special language which had been used in the Act and the notification which came up for consideration in that case.
In fact, the expression that had to be interpreted was "property tax" and not "tax on buildings and lands".
We agree with learned counsel for the appellant that much assistance cannot be derived from the decision of this Court in Patel Gordhandas Hargovindas vs Municipal Commissioner, Ahmedabad ( 3 ) which was relied upon by the High Court.
However, as we have held ,above, on the proper interpretation of the language used in the two Acts, the Rules, and the notification, and taking into account the circumstances under which the notification of 1917 was issued, the only conclusion that can be arrived at is that the Railway was made liable to this consolidated tax, so that the decision of the High Court is perfectly correct.
The appeal fails and is dismissed with costs.
R.K.P.S. Appeal dismissed.
(1) A.I.R. 1962 Alld.
(2) A.I.R. 1929 Mad. 746.

summary/full:
The respondent Municipality, which at the time was governed by the Bombay District Municipal Act 3 of 1901 levied a tax on lands and buildings situated within its municipal limits at 4 per cent of the annual rental value.
However, no such tax was levied on the buildings and lands of the G.I.P. Railway situated within its limits in view of section 135 of the Indian Railways Act, 9 of 1890.
In 1914,the Government of India issued a notification under section 135 persuant to which the G.I.P. Railway administration was required to pay house tax to the respondent.
Upto 1916 the respondent municipality used to draw water from the Railway 's reservoir but constructed its own reservoir during that year.
Both prior to and after this date, no water rate was charged by the respondent municipality from the railway.
On 4th May, 1916 the respondent promulgated new rules for taxation and instead of charging separate house tax under section 59(1)(i) or a general water rate under section 59(1) (viii) of the Act of 1901, it decided to charge a consolidated tax assessed as a rate on buildings and lands in accordance with clause (c) of the proviso to section 59(i).
Although the respondent demanded this consolidated tax from the railway in respect of its lands and buildings, the railway resisted payment contending that under the notification of 1914, house tax only was payable by it.
On 26th July, 1917, the Government of India issued a fresh notification under section 135 of the Railways Act whereby the railway administration was rendered liable to pay what was described as "tax on lands and buildings".
Thereafter the respondent charged the railway the consolidated tax until some time in 1927 when the G.I.P. railway was taken over by the Government.
In the rules promulgated on 4th May, 1916, the consolidated tax was not chargeable on Government property.
Relying on this provision, an objection was raised that the charge of tax was illegal when the railway had become Government property.
The respondent Municipality amended its rules and promulgated fresh rules on 6th October, 1931 under the provisions of the Bombay Municipal Boroughs Act 18 of 1925 under which enactment the respondent municipality had by that time been constituted into a Borough.
Under these rules the exemption in respect of Government property was deleted.
In pursuance of these amended rules the respondent started collecting from the railway the consolidated tax assessed as a rate on its buildings and lands which was by then being levied under the provisions of s.73 of the Act of 1925 that were similar to those of s.59 of the Act of 1901.
In 1940 the railway administration preferred an appeal under section 110 of the Act of 1925 against one of the demand notices.
Although the 921 First Court set aside the demand notice, an appeal was eventually dismissed by the High Court with the remark that the proper remedy to be sought was by means of a suit.
The Union of India which had become the owner of the railway, field a suit in November 1954 for refund of the entire amount which was collected by the respondent from the railway in pursuance of the rules of 1931.
The, Trial Court granted a decree holding that the levy of this tax was void inasmuch as, under the notification issued on the 26th July, 1917, only the rate on lands and buildings was payable by the Railway Administration.
On appeal, the High Court disagreed with the trial court and set aside the decree.
, Oil appeal to this Court by a certificate under article 133 of the Constitution.
HELD : Dismissing the appeal, On the proper interpretation of the language used in two Acts, the Rules, the notification, and taking into account the circumstances under which the notification of 1917 was issued, the only conclusion that could be arrived at was that the Railway was made liable to the consolidated tax.
It is true that all taxes are not rates; but all rates are taxes.
A rate on buildings and lands is a tax on buildings; so also any other tax assessed as a rate on buildings and lands becomes a tax on buildings and lands.
It was not possible to accept the submission of the appellant that the expression "tax on buildings and lands" used in the notification of 26th July, 1917 could only refer to a rate on buildings and lands under clause (i) of section 59(1) and would not cover the consolidated tax referred to in clause (c) of the second proviso.
Although the tax under clause (c) of the second proviso is not identical with and is different in nature from,the rate on buildings and lands imposed under clause (i), that circumstance does not imply that it is not a tax on buildings and lands.
The mere use of the word "consolidated" cannot make any difference to this interpretation.
The intention appears to be that, though the Municipality was empowered to impose four different kinds of taxes, it was permitted under clause (c) of the second proviso to simplify matters by having a single tax on buildings and lands in lieu of those multiple .axes.
Such single tax had to be assessed as a rate on buildings and lands.
This being the nature, it obviously becomes a tax on buildings and lands, so that the notification of 26th July, 1917 clearly makes the Railway liable to payment of this tax.
The position under the Act of 1925 is exactly the same where also the language of clause (c) to the second proviso is identical with that contained in the Act of 1901, so that the liability imposed on the Railway by the notification of the Government dated 26th July, 1917 under section 135(1) of the Railways Act continued even under the Act of 1925.
[927 B H] Borough Municipality, Ahmedabad vs Ahmedabad Manufacturing and Calico Printing Co. Ltd., ; Raza Buland Sugar Co. Ltd. Rampur vs Municipal Board, Rampur, A.I.R. 1962 Alld.
83, Municipal Council, Cuddappah vs M.,& S.M. Ry.
Co. Ltd., A.IR and Patel Gordhandas Hargovindas vs Municipal Commissioner, Ahmedabad, ; ; referred to.