judgement:
Appeal No. 421 of 1961.
Appeal from the judgment and decree dated December 24, 1959 of the Calcutta High Court in Appeal from Original Decree No. 181 of 1956.
M. C. Setalvad, section C. Ghose, J. B. Dadachanji, O.C. Mathur and Ravinder Narain, for the appellant.
862 Bishan Narain and P. D, Xenon, for the respondent.
April 5.
The judgment of the Court was delivered by GAJENDRAGADKAR J.
This appeal arises out of a suit filed by the appellant, the New Marine Coal (Bengal) Private Ltd. against the respondent, the Union of India, on the original side of the Calcutta High Court to recover Rs. 20,343/8/ .
The appellant 's case was that it had supplied coal to the Bengal Nagpur Railway Administration in the month of.
June, 1949, and the amount claimed by it represented the price of the said coal and salestax thereon.
The appellant also made an alternative case, because it was apprehended that the respondent may urge that the contract sued on was illegal and invalid since it did not comply with s.175 (3) of the Government of India Act, 1935.
Under this alternative claim, the appellant alleged that the coal had been supplied by the appellant not intending so to do gratuitously, and the respondent had enjoyed the benefit thereof, and so, the respondent was bound to make compensation to the appellant in the form of the value of the said Coal under section 70 of the Indian Contract Act.
The appellant 's case was that since the said amount had to be paid to it at its Esplanade office in Calcutta, the original side of the Calcutta High Court had jurisdiction to entertain the said suit.
Since a part of the cause of action had accrued outside the limits of the original jurisdiction of the Calcutta High Court, the appellant obtained leave to see under cl. 12 of the Letters Patent.
In its written statement, the respondent admitted the delivery of the coal to the Bengal Nagpur Railway Administration and did not dispute the appellant 's case that it had forwarded to the 863 respondent bills in regard to the amount alleged to be payable to the appellant for the said supply.
The respondent, however, pleaded that the contract on which the suit was based was illegal inasmuch as it had been entered into in contravention of the provisions of section 175 (3) of ' the Government of India Act, 1935; and it was urged that section 70 of the Indian Contract Act had no application.
Besides, the respondent alleged that following the usual practice and course of dealings between the parties, an intimation card was issued and sent to the appellant by the respondent requesting the appellant to obtain payment on presentation of a proper receipt and authority against its bills in question.
Thereafter, the respondent, on receipt of the said intimation card and a proper receipt executed on behalf of the appellant, paid the amount covered by the said bills by an 'account payee ' cheque on the Reserve Bank of India drawn in favour of the appellant which was delivered to the person purporting to have authority to receive payment on behalf of the appellant.
The respondent thus alternatively pleaded satisfaction of the claim, and so, urged that the appellant had no cause of action for the suit.
On these pleadings, seven substantive issues were framed by the learned trial judge.
Issues I & 2 which were framed in respect of the jurisdiction of the Court were not pressed by the respondent, and so, no findings were recorded on them.
On issue No. 3 the learned trial judge found that the contract on which the appellant based his claim was invalid and unenforceable.
Issue No. 4 in regard to the alleged payment of the bills was found against the respondent.
On issue No. 5, the trial Court held that the respondent was bound to pay to the appellant the amount claimed by way of compensation.
Issue No. 6 which was raised by the respon dent under section 80 of the Code of Civil Procedure was not pressed, and therefore, no finding was recorded 864 on it, Issue No. 7 which was framed on the appellant 's allegation that its claim had been admitted by the respondent was answered against the appellant.
In the result, the main finding on issue No. 5 decided the fate of the suit and since the said finding was in favour of the appellant, a decree was passed directing the respondent to pay to the appellant Rs. 20,030/81 .
This amount, according to the decree, had to carry interest at the rate of 6 Percent per annum.
This decree was challenged by the respondent by an appeal before a Division Bench of the said High Court.
The appeal was heard by P. B. Mukarji and Bose JJ.
Both the learned judges agreed that the respondent 's appeal should be allowed and the appellant 's claim dismissed with costs, but their decision was based on different grounds.
Bose J. held that the contract sued on was invalid and that the claim made by the appellant for compensation under section 70 of the Indian Contract Act was not sustainable.
He also found that the appellant 's contention that the said contract which was initially invalid had been duly ratified, had not been proved.
it is on these grounds that Bose J. came to the conclusion that the appellant 's claim could not be granted.
Incidentally, it may be added that Bose J., was not prepared to consider the plea of negligence which was raised by the respondent for the first time in appeal.
Mukarji, J., who delivered the principal judgment of the Appeal Court agreed with Bose J. in holding that the contract was invalid and section 70 was inapplicable.
He, however, took the view that the said contract had been duly ratified and so, he proceeded to examine the question as to whether the appellant 's claim was justified on the merits.
On this part of the case, the learned judge took the view that even if both the appellant and the respondent.
dent were held to be innocent, since the respondent Appeal dismissed. 865 had actually parted with the money, the appellant was not entitled to require the respondent to pay over the said money again, because he thought that as held by Ashhurst J. in Lickbarrow vs Mason (1), it was a well recognised principle of law "that whenever one of two innocent per sons must suffer by the acts of a third, he who enables such third person to occasion the loss must sustain it.
" In the opinion of the learned judge, the intimation card had been duly sent by post by the respondent to the appellant and the fact that the said intimation card went into unauthorised hands of dishonest persons who used it fraudulently for the purpose of obtaining a cheque for the amount in question from the respondent, showed that the appellant had by his negligence enabled the said fraudulent persons to secure the cheque, and so, it was not open to the appellant to claim the amount from the respondent.
It is on these grounds that Mukharji, J., allowed the appeal and dismissed the appellant 's suit with costs.
It is against this judgment and degree that the appellant has come to this Court with a certificate granted by the said High Court.
In the courts below, elaborate arguments were urged by the a ties on the question as to whether the contract, the subject matter of the Suit, was invalid and if yes, whether a claim for compensation made by the appellant could be sustained under section 70 of the Indian Contract Act.
Both these questions are concluded by a recent decision of this Court in the State of We, RI Bengal vs MIS.
B. K. Mondal & Sons (2).
As a result of this decision, there can be no doubt that the contract on which the suit is based is void and unenforceable, and this part of the decision is against the appellant.
It is also clear under this decision that if in pursuance of the said void contract, the appellant has performed his part and the respondent has received the benefit of the performance of the contract by the appellant, (1) 2 T. R. 63, 70.
(2) [1962] Supp. 1 S.C.R. 876.
866 section 70 would justify the claim made by the appellant against the respondent.
This part of the decision is in favour of the appellant.
It is therefore unnecessary to deal with this aspect of the matter at length.
Assuming then that the appellant is entitled to claim the amount from the respondent, two questions still remain to be considered.
The first question is whether the intimation card on the production of which the respondent always proceeded to ' issue a cheque against the bills received by it from the appellant, was received by the appellant or not, and if this question is answered in the affirmative, the other question which will call for our decision is whether by virtue of the fact that after the intimation card had been duly posted by the respondent to the appellant it fell into dishonest hands and was fraudulently used by some persons, that would create an impediment in the way of the appellant 's claim on the ground that the appellant was negligent and his negligence creates estoppel.
Before addressing ourselves to these questions, it would be necessary to set out the material facts as to the dispatch of the intimation card and the fraudulent use which was made of it by persons in whose hands the said card appears to have fallen.
It appears that according to the ordinary course of business, on receiving the bills from the appellant, the respondent used to send an intimation card to the appellant and the said card had to be sent back by the appellant with a person having the authority of the appellant to receive the payment and when it was so produced before the respondent, a cheque used to be issued.
In the present case, it is common ground that a bill was sent by the appellant to the respondent making a total claim of Rs. 20,343/8/ on August 18, 1949.
Thereafter, on October 10, 1949, the respondent sent the intimation card to the appellant addressed at its place of business 135, Canning Street, Calcutta.
This card intimated to the appellant 867 that its claim for the amount specified in its bill would be paid on presentation of a proper receipt and authority between 11 A.M. to 3 P.M. on ordinary days and between 11 A.M. to 1 P. M. on Saturdays.
Along with the card, a form of the receipt was sent and the appellant was asked to sign it.
This intimation card was duly posted.
Later, one Mr. B. L, Aggarwal produced the intimation card before the respondent.
In doing so he produced an endrosement which purported to show that the appellant had authorised him to receive the payment on its behalf.
When the intimation card with the appropriate authority was shown to the respondent, Mr. Aggarwal was asked to pass a receipt and when the receipt was passed in the usual form, an 'account payee ' cheque for the amount in question was given to him.
Mr. Aggarwal took the cheque and left the respondent 's office.
Meanwhile, it appears that some persons had entered into a conspiracy to make fraudulent use of the intimation card which had gone into their custody.
In order to carry out this conspiracy, they purported to form a limited company bearing the same name as that of the appellant.
A resolution purported to have been passed by the Directors of this fictitious company on October 17, 1949 authorised the opening of an account in favour of the Company in the United Commercial Bank Ltd., Calcutta.
This resolution purported to be signed by the Chairman of the Board of Directors Mr. Abinash Chander Chatterji.
Armed with this resolution an, application was made to open an account in the United Commercial Bank Ltd., and while doing so, the Articles of Association purporting to be the Articles of the said fictitious Company were produced and the account was opened with a cheque of Rs. 500/ on October 27, 1949.
On October 26, 1919, the cheque received from the 868 respondent was credited in the said account, and as was to be expected, withdrawals from this account, began in quick succession, with the result that by November 1, 1949, only Rs. 68/ were left in this account.
That, in brief, is the story of the fraud which has been committed in respect of the cheque issued by the respondent to the appellant for the bill dated August 18, 1949.
In the Courts below, the appellant denied that it had received the intimation card from the respondent,and it was alleged on its behalf that in delivering the cheque to the person who presented the said card with the authority purporting to have been issued by the appellant, it cannot be said that the respondent bad given the cheque to any person authorised by the appellant, and so, the appellant was justified in saying that it had not received the payment for its bill.
In support of its case, the appellant examined its Director., Mr. Parikh and its officer, Mr. Bhat.
The respondent led no oral evidence; it, however, relied on the fact that the intimation card bore the postal mark which showed that it had been posted and it was urged that the said postal mark raised a presumption that the card which had been duly posted in the Post office must have, in ordinary course, reached the addressee.
The trial Court noticed the fact that the intimiation card did not bear a corresponding delivery mark as it should have, and it took the view that the onus was on the respondent to show that the said card had in fact been delivered to the appellant.
It then considered the oral evidence adduced by the appe llant and having regard to the fact that.
no evidence had been led by the respondent, it came to the conclusion that the respondent had failed in showing that the intimation card had been duly delivered to the appellant.
Substantially ' it is on the basis of this finding that the decree was passed by the trial Court in favour of the appellant.
869 In appeal, Mukarji, J. took the view, and we think.
, rightly, that the posting of the card having been duly proved, a presumption arose that it must have been delivered to the addressee in ordinary course.
He also considered the oral evidence given by Mr. Parikh and Mr. Bhat and was not satisfied that it was trustworthy.
In particular, the learned judge was inclined to take the view that Mr. Parikh 's statement that his office did not employ any dispatch clerk and did not keep any Chiti note book like the Inward and Outward Register was unbelievably.
In the result, he made a finding that the appellant was negligent in receiving, arranging, recording and dealing with letters addressed to it.
The position of the evidence in respect of this point is no doubt unsatisfactory.
It appears that Mr. Parikh who is the Director of the appellant Company since 1948 is also the Director of K. Wara Ltd. which manages eight collieries like that of the appellant.
K. Wara Ltd., has its office at 135, Canning Street.
The appellant Company also has one office at the said place.
A Post Box in which letters addressed to the appellant and K. Wara Ltd. could be dropped has been kept on the ground floor of the building in which the said offices are situated.
The said Post Box is locked and naturally the key is given to one or the other of the Peons to open the said Box and take out the letters and deliver them to Mr. Parikh Mr. Parikh 's evidence shows that his denial that be had received any intimation card could not be accepted at its face value for two reasons; the first was that even if the intimation card had been received by the Peon and had not been delivered by him to Mr. Parikh, Mr. Parikh would not know that the card had been received and though his statement that he did not get the card may be literally true,, it would not be true in the sense that the card had not been delivered to the 870 appellant Company.
Besides., Mr. Parikh 's statement that he did not employ any dispatch clerk and kept no inward or outward register is prima facie unbelievable, and so, Mukarji J.was inclined to hold that the intimation card may have been received by the appellant Company.
Having made this finding, Mukarji J. proceeded to examine the true legal position in regard to the appellant 's claim, and as we have already observed,he held that since the appellant was guilty of negligence which facilitated the commission of the offence by some strangers,it was precluded from making a claim against the respondent.
As we have already seen, Bose, J. has put his decision on the narrow ground that the contract was invalid and section 7o did not help the appellant.
That ground, however, cannot now sustain the final conclusion of Bose,J., in view of the recent decision of this Court in the case of M/s. B. K. Mondal & Son 's(1).
Therefore, in dealing with the present appeal,we will assume that the finding recorded by Mukarji J., is correct and that the intimation card sent by the respondent to the appellant can be deemed to have been delivered to the appellant.
The question which arises for our decision then is:if the intimation card was thereafter taken by somebody else and fraudulently used,does that create an estoppel against the appellant in regard to the claim made by it in the present case ? In dealing with this point, it is necessary to bear in mind that though the evidence given by Mr. Parikh may be unsatisfactory and may.justify the conclusion that despite his denial, the intimation card may have been delivered to Mr. Parikh, it is not the respondent 's case that Mr. Parikh deliberately allowed either one of his employees or somebody else to make fraudulent use of the said intimation card.
In other words, we must deal with the point of law raised by the appellant on the basis that Mr. Parikh had no connection whatever with the (1) [1962] Supp. 1 S.C.R. 876.
871 fraud committed on the respondent and that whoever obtained the intimation card from Mr. Parikh 's office and used it for a fraudulent purpose acted on his own without the knowledge or consent of Mr. Parikh.
The short question which falls to be considered is if the arrangement for keeping the intimation card in safe custody was not as good and effective as it should have been and somebody managed to pilfer the said card, does it justify the respondent 's case that the appellant was negligent and by virtue of its negligence, it is estopped from making the present claim ? In dealing with this question, it is necessary to remember that the plea of negligence on which estoppel was pleaded by the respondent against the appellant had not been alleged in the written statement.
It is remarkable that the pleadings of both the parties completely ignored the fact known to both of them before the present suit was filed that a cheque had been issued by the respondent and had been fraudulently used by some strangers.
The appellant in its plaint does not refer to the issue of the cheque and its fradulent use and makes a claim as though the respondent had not honoured the bill submitted to it by the appellant; whereas the respondent in its written statement ignores the fact that the cheque had not been received by the appellant but had been fraudulently obtained and encashed by some other persons.
That being the nature of the pleadings filed by the parties in the Trial Court, neither party pleaded any negligence against the other.
It is true that both the parties argued the point of negligence against each other in the appellate Court.
The appellant urged that the respondent should not have delivered the cheque to the person who presented the bill and the intimation card because a stamped receipt had not been produced by the said person as it should have been; the appellant 's case was that it was usual that 872 a stamped receipt had to be produced alongwith the intimation card by a person duly authorised by the appellant before the cheque was delivered to him and since without a stamped receipt the cheque had been delivered, the respondent was guilty of negligence.
This point has been rejected by Mukarji J., but that is another matter.
On the other hand, the respondent pleaded that the appellant was negligent inasmuch as the intimation card which had been sent to it and which must be presumed to have been delivered to it fell into the hands of strangers owing to the negligent manner in which it was handled after it was delivered in the Letter Box of the appellant in 135, Canning Street, Calcutta.
As we have already noticed, Bose, J., refused to entertain the plea of negligence urged by both the parties, whereas Mukarji J., considered it and made a finding in favour of the respondent and against the appellant.
Mr. Setalvad contends that a plea of negligence should have been raised by the respondent in its pleadings and the appellate Court was, therefore, in error in allowing such a plea to be raised for the first time in appeal.
In our opinion, there is some force in this contention.
Negligence in popular language and in common sense means failure to exercise that care and diligence which the circumstances require.
Naturally what amounts to negligence would always depend upon the circumstances and facts in any particular case.
The nature of the contract, the circumstances in which the performance of the contract by one party or the other was expected, the degree of diligence, care and attention which, in ordinary course, was expected to be shown by the parties to the contract, the circumstances under which and the reason for which failure to show due diligence occurred are all facts which would be relevant before a judicial finding can be made on the plea 873 of negligence.
Since a plea of negligence was not raised by the respondent in the trial Court, the appellant is entitled to contend that it had no opportunity to meet this plea and dealing with it in appeal has, therefore, been unfair to it.
Apart.
from this aspect of the matter, there is another serious objection which has been taken by Mr. Setalvad against the view which prevailed with Mukarji, J. He argues that when a plea of estoppel on the ground of negligence is raised, negligence to which reference is made in support of such a plea is not the negligence as is understood in popular language or in common sense ; it has a technical denotation.
In support of a plea of estoppel on the ground of negligence, it must be shown that the party against whom the plea is raised owed a duty to the party who raises the plea.
just as estoppel can be pleaded on the ground of misrepresentation or act or omission, so can estoppel be pleaded on the ground of negligence ; but before such a plea can succeed, negligence must be established in this technical sense .
As Halsbury has observed : "before anyone can be estopped by a representation inferred from negligent conduct, there must be a duty to use due care towards the party misled, or towards the general public of which he is one (1).
" There is another requirement which has to be proved before a plea of estoppel on the ground of negligence can be upheld and that requirement is that "the negligence on which it is based should not be indirectly or remotely connected with the misleading effect assigned to it but must be the proximate or real cause of that result (2).
" Negligence, according to Halsbury, which can sustain a plea of estoppel must be in the transaction itself and it should be so connected with the result to which it led that it is impossible to treat the two separately.
This aspect of the matter has not been duly examined by Mukarji J. when he made his finding against the appellant.
(1) Halsbury 's Laws of England Vol.
15, page 243.
par& 451.
(2) Halsbury 's Laws of England Vol.
15 page 245 para 453, 874 Mukarji, J. thought that the principle laid down by Ashhurst, J. in the case of Lackbarrow (1), was a broad and general principle which applied to the facts in the present case.
It may be conceded that as it was expressed by Ashhurst, J., in the case of Lickbarrow, the proposition no doubt has been stated in a broad and general manner.
Indeed, the same proposition has been affirmed in the same broad and general way by the Privy Council in Commonwealth Trust Ltd. vs Akotey (2).
In that case, the respondent who was a grower of cocoa in the Gold Coast Colony, consigned by railway 1050 bags of cocoa to L., to whom he had previously sold cocoa.
Before a difference as to the price had been settled L. sold the cocoa to the appellants and handed the consignment notes to their agent, who reconsigned the cocoa to the appellants.
The appellants bought in good faith and for the full price.
The respondent then sued the appellants for damages for conversion.
It was held by the Privy Council that by his conduct the respondent was precluded from setting up his title against the appellants, and so his claim was rejected.
In support of the view taken by the Privy Council, reliance was placed on the well known statement of Ashhurst, J., in the case of Lickbarrow) 1), and so, it may be conceded that the broad principle enunciated by Ashhurst,J., received approval from the Privy Council.
Subsequently, however, this question has been elaborately examined by the Privy Council in Mercantile Bank of India Ltd. vs Central Bank of India Ltd., (1), and the validity of the broad and general proposition to which we have just referred has been seriously doubted by the Privy Council.
Lord Wright who delivered the judgment of the Board, referred to the decision in the case of Lickbarrow (1), and observed " 'that it may well be that there were facts in that case not fully elucidated in the report which would justify the decision; but on the (1) 2 T.R. 63, 70.
(2) (3) (1937) L.R. 65 I.A. 75, 86, 875 face of it their Lordships do not think that the case is one which it would be safe to follow.
" Then reference was made to the opinion of Lord Sumner in the case of R .
E. Jones Ltd. vs Waring & Gillow Ltd., (1) where the principle enunciated by Ashhurst J. was not accepted, because it was held that the principle of estoppel must ultimately depend upon a duty.
Lord Lindley similarly in Farquharson Bros. & Co. vs King & Co. (2), pointed out that the dictum of Ashhurst J. was too wide.
A similar comment has been made as to the said observation by other judges to which Lord Wright has referred in the course of his judgment.
It would thus be seen that in the case of The Mercantile Bank of India Ltd. (3 ) the Privy Council has seriously doubted the correctness of the broad observations made by Ashhurst J, in the case of Lickbarrow (4), and has not followed the decision in the care of Commonwealth Trust Ltd. (5).
Therefore, it must be held that the decision of Mukarji J, which proceeded on the basis of the broad and unqualified proposition enunciated by Ashhurst, J., in the case of Lickbarrow cannot be sustained as valid in law.
There arc two other decisions to which reference may usefully be made in considering this point.
In Arnold vs The Cheque Bank, (6), Lord Coleridge, C.J., in dealing with the question of negligence, observed that "no authority whatever had been cited before them for the contention that negligence in the custody of the draft will disentitle the owner of it to recover it or its proceeds from a person who has wrongfully obtained possession of it.
In the case before them, there was nothing in the draft or the endorsement with which the plaintiff had anything to do, calculated in any way to mislead the defendants.
It was regularly endorsed and was then enclosed in a letter to the plaintiffs correspondents, to be sent through the post.
There could be no negligence in relying on the honesty of their (1) (2) (3) (1937) L.R, 65 I.A. 75, 86.
(4) 2 T. If. 63, 70.
(5) (6) , 588, 876 servants in the discharge of their ordinary duty, that of conveying letters to the post; nor can there be any duty to the general public to exercise the same care in transmission of the draft as if any or every servant employed were a notorious thief.
" These observations illustrate how before invoking a plea of estoppel on the ground of negligence, some duty must be shown to exist between the parties and negligence must be proved in relation to such duty.
Similarly, in Baxendale vs Bennett, (1) Bramwell, L.J., had occasion to consider the same point.
In that case, the defendant gave H. his blank acceptance on a stamped paper and authorised H. to fill in his name as drawer.
H. returned the blank acceptance to the defendant in the same state in which he received it.
The defendant put it into a drawer of his writing table at his chambers, which was unlocked, and it was lost or stolen.
C. afterwards filled in his own name without the defendant 's authority, and an action was brought on it by the plaintiff as endorsee for value.
The court of Appeal held that the defendant was not liable on the bill.
Dealing with the question of negligence attributed to the defendant, Bramwell L.J. observed that "the defendant may have been negligent, that is to say, if he had the paper from a third person, as a bailee bound to keep it with ordinary care, he would not have kept it in a drawer unlocked.
" But, said the learned judge, this negligence is not the proximate or effective cause of the fraud.
A crime was necessary for its completion, and so, it was held that the defendant was not liable on the bill.
This decision shows that negligence must be based on a duty owed by one party to the other and must, besides, be shown to have been the proximate or the immediate cause of the loss.
It is in the light of this legal position that the question about estoppel raised by the respondent (1)) (1878) 3 Q,.
B. D. 525, 530.
877 against the appellant in the Appellate Court may be considered.
Can it be said that when the appellant received the intimation card, it owed a duty to the respondent to keep the said card in a locked drawer maintaining the key all the time with its Director? It would not be easy to answer this question in the affirmative; but assuming that the appellant had a kind of duty towards the respondent having regard to the fact that the intimation card was an important document the presentation of which with an endorsement as to authorisation duly made would induce the respondent to issue a cheque to the person presenting it, can the Court say that in trusting its employees to bring letters from the letter box to the Director, the appellant had been negligent ? As we have already observed, in dealing with the present dispute on the basis that the intimation card bad been dropped in the letter box of the appellant, it is possible to hold either that the said card was collected by the Peon and given over to Mr. Parikh, or it was not.
In the former case, after Mr. Parikh got the said card, it had been removed from Mr. Parikh 's table by someone, either by one of the employees of Mr. Parikh or some stranger.
In the latter case, though, technically, the card had been delivered in the latter box of the appellant, it had not reached Mr. Parikh.
In the absence of any collusion between Mr. Parikh and the person who made fraudulent use of the intimation card, can the respondent be heard to say that Mr. Parikh did not show that degree of diligence in receiving the card or in keeping it in safe custody after it was received as he should have ? In our opinion, it would be difficult to answer this question in favour of the respondent.
In ordinary course of business, every office that receives large correspondence keeps a letter box outside the premises of the office.
The box is locked and the key is invariably given to the Peon to collect the letters after they are delivered by Postal Peons.
This course 878 of business proceeds on the assumption which must inevitably be made by all businessmen that the servants entrusted with the task of collecting the letters would act honestly.
Similarly, in ordinary course of business, it would be assumed by a businessman that after letters are placed on the table or in a file which is kept at some other place, they would not be pilferred by any of his employees.
Under these circumstances, if the intimation card in question was taken away by some fraudulent person, it would be difficult to hold that the appellant can be charged with negligence which, in turn, can be held to be the proximate cause of the loss caused to the respondent.
In our opinion, therefore, Mukarji.
J. was in error in holding that the respondent could successfully plead estoppel by negligence against the appellant.
As we have already observed, the question as to whether the claim made by the appellant against the respondent under section 70 is concluded by the decision of this Court in the case of M/s. B. K. Mondal & Sons (1), in favour of the appellant, and so, it must be held that the Division Bench of the High Court erred in dismissing the appellant 's claim.
The result is, the appeal is allowed.
, the decree passed by the appellate Court is set aside and that of the trial Court restored with costs throughout.
Appeal allowed.
[1962] Supp.
I. section R. 876 .

summary/full:
The appellant filed a suit on the Original Side of the Calcutta High Court against the respondent for the recovery of a certain amount representing the price of coal supplied to the respondent.
The appellant 's case was that if the contract under which the coal was supplied was illegal by, reason of it being in contravention of section 175 (3) of the Government of India Act, 1935, the respondent was liable to pay compensation under section 70 of the Indian Contract Act, since the Coal was not supplied gratuitously and the respondent had enjoyed the benefit thereof.
The respondent 's case was that the contract was illegal and section 70 of the Indian Contract Act was not attracted.
It was further alleged that the respondent had issued and sent bills to cover the amount and intimation cards in accordance with the usual practice and ordinary course of dealings.
The respondent, it was allowed paid the amount by a cheque to a person authorised by the appellant and on presentation of proper receipts.
It was therefore alternatively pleaded that the appellant 's claim having been satisfied, he had no cause of action.
It was established in the course of the trial that the appellant had not in fact authorised any person to issue the receipts but a certain person not connected with the appellant 860 firm, without the consent or knowledge of the appellant got hold of the intimation cards and bills addressed to the appellant forged the documents and fraudulently received the cheque from the respondent and appropriated the amount for himself.
The respondent had not pleaded in its written statement that it was due to the negligence of the appellant that the third person was able to get hold of the intimation card and perpetrate the fraud.
Neither was it proved in the case that the appellant was in fact negligent.
The Trial Judge found that the respondent was bound to pay compensation under section 70 of the Indian Contract Act and rejected the alleged payment of the bills and in the result decreed the amount prayed for by the appellant.
The respondent thereupon appealed to a Division Bench.
Both the judges agreed that the appeal should be allowed.
Regarding the invalidity of the agreement and the inapplicability of section 70 of the Contract Act both the Judges agreed in favour of the present respondent.
But while one of the Judges was not prepared to consider the plea of negligence which was raised by the present respondent for the first time in the appeal the other judge held that there was negligence on the part of the present appellant.
The present appeal was filed on a certificate granted by the High Court.
In this Court, apart from the questions of the invalidity of the contract under section 175 (3) of the Government of India Act and the applicability of s: 70 of the Contract Act, it was argued on behalf of the appellant that a plea of negligence should have been raised by the respondent in its pleadings and that the appellate court was in error in allowing such a plea to be raised for the first time in appeal.
It Was contended further that in support of the plea of negligence it must be shown that the party against whom the plea is raised owed a duty to the party who raises the plea and that the negligence must not be merely or indirectly connected with the misleading effect but must be the proximate cause of the result.
Held that the contract is illegal and void.
If in pursuance of the void contract, the appellant has performed his part and the respondent has received the benefit of the performance of the contract by the appellant, section 70 of the Contract Act would justify the claim made by the appellant against the respondent.
State of West Bengal v, B. K .
Mondal, [1962] Supp 1, section C. R. 876, referred to.
861 Since a plea of negligence was not raised by the respondent in the trial court the appellant is entitled to contend that it had no opportunity to meet this plea and dealing with it in appeal has, therefore, been unfair to it.
Before invoking a plea of estoppel on the ground of negligence, some duty must be shown to exist between the parties and negligence must be proved in relation to such duty.
The Arnold v, The Cheque Bank, , referred to.
The negligence alleged must be proved to be the proximate or the immediate cause of the loss.
Bexendale vs Bennett, , referred to.
The broad proposition "that whenever one of two innocent persons must suffer by the acts of a third, he who enables such third person to occasion the loss, must sustain it" laid down by Ashhurst, J., in Lickbarrow vs Mason, 2 T. R. 63, on which one of the,Judges of the Division Bench has based his decision cannot be sustained as valid in law.
Commonwealth Trust Ltd. vs Akotey, , Mercantile Bank of India Ltd. vs Central Bank of India Ltd. (1937) L. R. 65 I. A. 75, R. E. Jones Ltd. vs Waring & Gillow Ltd., and Farquharson Bros. & Co. vs King & Co., , referred to.
The appellant cannot be charged with negligence.
which, in turn, can be held to be the proximate cause of the loss caused to the respondent.
The appellant is entitled to be compensated under section 70 of the Contract Act.


judgement:
Appeal No. 445 of 1962.
Appeal from the judgment and order dated April 1 1 and 12.
1960, of the Bombay High Court in Income tax Reference No. 52 of 1959.
R. J. Kolah and I.N. Shroff, for the appellant.
K. N. Rajagopal Sastri, and R.N. Sachthey, for the respondent.
April 10.
The judgment of the Court was delivered by section K. DAS, J.
This is an appeal on a certificate of fitness granted by the High Court of 973 Bombay under section 66 A (2) of the Indian Income tax Act, 1922.
The New Jehangir Vakil Mills Co., Ltd. Bhavnagar, appellant before us and called tile assessee, carried on the business of manufacturing and selling textile piecegoods at Bhavnagar in the former Bhavnagar State.
The present appeal is concerned with the assessment year 1945 46, the account year being the calendar year 1944.
In the said assessment year the Income Tax officer concerned added to the taxable income of the assessee a sum of Rs. 1,86,931/ (which was later reduced to Rs. 1,23,840/ ) as a revenue receipt, representing an amount by which the sale price exceeded the original cost of certain shares and securities purchased and sold by the appellant.
It was held that in the relevant account year in which the shares were sold and profits made as also in the preceding years, the assessee was a dealer in shares and securities.
In respect of this addition of Rs. 1,23,840/ the assessee raised two contentions.
The first contention was that it was not a dealer in shares and securities in the relevant account year or in the years past and that the shares and securities were held by way of investment and the investment surplus was in the nature of a capital receipt.
The second contention was that even if the assessee was a dealer in shares and securities in the relevant account year, the Income tax officer committed an error in the matter of the computation of profits in not taking the market value of the shares as at the opening day of that year as the cost thereof.
These were the two questions along with a third question which were referred to the High Court under section 66 (2) of the Act.
The third question does not now survive, and therefore we set out below the two questions which fall for decision in this appeal: 1.
In the event of the surplus aforesaid being held to be income assessable to income tax 974 whether the income should be ascertained by taking the market value of the shares as at the opening day of the year as the cost ? 2.
Whether there is any evidence on record to justify the Tribunal 's finding that the assessee company was a dealer in shares not only in the year under consideration but in the years past ? Now, as to the contention whether the assessee was a dealer or not in shares and securities in the calendar year 1944 the position appears to be that the Income tax officer found against the assessee.
There was an appeal to the appellate Assistant Commissioner who remanded the case to the Income tax officer on the ground that the materials in the record were not adequate to decide the question.
The the remand proceedings the assessee filed before the Income tax officer statements showing the position of transactions relating to shares and securities from 1939 onward.
These statements marked as annexure 'C ' form part of the statement of the case.
In his remand report dated April 1, 1952 which is also a part of the statement of the case, the Income tax officer examined the purchase and sale of shares in different years by the assessee and came to the conclusion that the assessee was a dealer in shares at least from the year 1942 by reason of the frequency and multiplicity of the transactions which the assessee conducted since that year.
It further pointed out that the assessee had sold certain shares out of a block of shares in the year 1943, and after taking out the price of the shares realised in 1943, the remaining amount was shown in the balance sheet as the value of the remaining shares in each block.
The value of such shares as shown in the balance sheet for 1943 was not the cost price of the assessee.
In some cases it was below 975 cost.
As a result of this valuation in the balance sheet, the profits from the sale of shares during 1945,46 would be Rs. 1,23,8401 .
If, however, the difference between the sale price and the market value of the shares as on the first day of the account year was taken into account, the results might be different.
On the basis of the aforesaid remand report the Appellate Assistant Commissioner examined the records of the transactions and observed : "There are five different transactions of purchase and two transactions of sale in 1942.
The tempo of purchases and sales goes up from 1943.
There are purchases of fifteen or twen ty different dates in 1943.
There is a similar number of transactions in 1944.
Many of the shares purchased in 1943 have been disposed of in 1944.
Several scrips purchased in 1944 have been sold within the year.
The number of transactions is, in my opinion, sufficiently numerous to show that the assessee is a dealer in shares.
" There was an appeal then to the Tribunal.
The Tribunal came to the conclusion that so far as Government securities were concerned the assessee was obliged to keep its large cash invested in Government securities and, therefore, so far as these securities were concerned, the amount realised by their sale was not a revenue receipt and should not be included in the total income of the assessee.
It held, however, that the assessee was a dealer in shares in 1944 and as to the computation of the profits made on the sale of the shares, such profits were correctly computed to be the difference between the original cost price of the shares to the assessee at the time of purchase and the price realised at the time of sale, and the Tribunal significantly added that this computation was correct on the finding that the 976 assessee was a dealer not only in 1944 but from 1942onward.
We may here state that for the years prior to the account year 1944, the department had treated the assessee as an investor and not a dealer in shares and had made assessments accordingly for those years.
Those assessments have now become final.
When the matter went to the High Court on a case stated by the Tribunal, the High Court observed that the crucial year was the year 1943, for if the assessee was a dealer in shares since 1943 and sold some of them in the account year 1944 and made profits thereon, then both the questions referred to the High Court must be answered against the assessee.
The High Court re framed the second question by substituting the words "in the year 1943" for the words "in the years past".
The High Court further pointed out that in the exercise of its advisory jurisdiction it did riot sit in appeal over the decision of the Tribunal that the assessee was a dealer in shares in the year 1943.
It also held that on the materials on record it was open to the Tribunal to come to the conclusion that the assessee was a dealer in shares in 1943 and as to the computation of profits it pointed out that if the assessee was a dealer in 1943 also, then it was not open to the assessee to say that the market value of the shares as on the opening day of the year 1944 should be taken as the cost of the shares.
Accordingly, the High Court answered both the questions against the assessee.
Learned counsel for the appellant has addressed us at length on both questions.
However, it appears to us that by reason of the re framing of the second question, the two questions really merge into one, namely, was the assessee a dealer in shares in 1943 and continued to be such a dealer in 1944 which is the relevant account year ? The question no doubt has two aspects.
Firstly, there is the aspect whether there is any evidence to justify the finding that the 977 assessee was a dealer in shares in 1943.
,Secondly, there is the aspect as to how the profits made from the sale of shares in 1944 should be computed in the assessment year 1945 46.
It is however manifest that it ' the assessee was a dealer in 1943 also, then the principle laid down by this court in Commissioner of Income tax vs Bai Shirinbai K. Kooka (1), will not apply, for that decision proceeded on the footing that the assessee of that case converted her investment shares into a stock in trade and carried on a trading activity as from April 1, 1946, the relevant account year being the financial year 1946 47.
If the assessee in the present case was a dealer in 1943, then nothing happened on the opening day of the relevant account year, namely, January 1, 1944 and there is no reason why the market value of the shares on that date should be taken into consideration in computing the profits.
Learned counsel for the assessee has however pressed an argument which may now be stated.
He has submitted that he is not arguing that it was not open to the assessing authorities to consider the question whether the assessee was a dealer in shares in 1944 which was the relevant account year.
What he contends is that it was not open to the taxing authorities to consider and find that the assessee was a dealer in shares in 1943; because for all years prior to 1944 the department had already assessed the assessee on the footing that it was an investor of shares and not a dealer and those assessments having become final could be re opened only either under section 34 or section 35 of the Act.
The argument is that in assessing the assessee for the account year 1944 it was open to the department to treat the assessee as a dealer in 1944 but not for any earlier year which was not the subject of the assessment proceedings Learned counsel states that if he is right in his first contention, then the profits made on the sale of shares in 1944 must be computed in the manner laid down in Commissioner of Income tax vs Bai Shirinbai K. Kooka(1), (1) [1962] Supp, 3 S.C.R. 391. 978 because the assessee will be treated as a dealer for the first time in the relevant account year 1944.
The argument appears plaussible at first sight and it may perhaps be conceded that the question of the computation of profits in a case like this is not entirely free from difficulty.
However, on a very careful consideration of the argument we have come to the conclusion that it is not worthy of acceptance.
As to the first aspect of the question we see no difficulty.
The appellate Assistant Commissioner and the Tribunal have referred to various transactions relating to shares shown in the books of the assessee.
From those transactions they came to the conclusion that the assessee was a dealer in 1943.
The High Court has also summarised the various transactions in which the assessee indulged in the year 1943.
Having regard to the frequency and nature of those transactions it was open to the taxing authorities to come to the conclusion that the assessee was a dealer in shares in 1943.
We are not prepared to say that the rule of "no evidence" can be applied to the present case.
We therefore consider that the High Court correctly answered the question relating to this aspect of the case.
Now, as to computation of profits.
Though it is true that the question which directly arose before the taxing authorities in the present case was ' whether the assessee was a dealer in 1944, the question of the position of the assessee in 1943 also arose in determining how the profits made in 1944 should be computed.
It is not therefore quite correct to say that the position of the assessee in 1943 was completely outside the scope of the assessment proceedings of 1945 46.
In determining or computing the profits made by the sale of shares in 1944, the assessing authorities had to go into the question did the assessee start its trading 979 activity on January 1, 1944 or did it start the trading activity at an earlier date ? If the assessee was a dealer when the shares sold in 1944 were originally purchased, then obviously the principle in Commissioner of Income tax vs Bai Shirin Bai K. Kooka (1), will not apply and the profits will be the excess of the sale price over the original cost price.
The extent to which a decision given by an Income tax officer for one assessment year affects or binds a decision for another year has been considered by courts several times and speaking generally it may be stated that the doctrine of res judicata or estoppel by record does not apply to such decisions; in some cases it has been held that though the Income tax officer is not bound by the rule of res judicata or estoppel by record, he can re open a question previously decided only if fresh facts come to light or if the earlier decision was rendered without taking into consideration material evidence etc.
As to the argument based on sections 34 and 35, it is enough to point out that the assessment relating to the year 1943 is not being reopened.
That assessment stands.
What is being done is to compute the profits of 1944, which the assessing authorities could do, by finding out when the trading activity in shares began? The question of the profits in 1944 was not and could not be the subject of any assessment proceeding relating to 1943, for such profits arose only on the sale of the shares in 1944.
In Broken.
Hill Proprietary Company vs Broken Hill Municipal Council (2), the question was one of the capital value of a mine for rating purposes.
This question of valuation as between the parties was determined by the High Court of Australia in a previous year.
But it was held that the decision did not operate as res judicata.
The reason given was : "The decision of the High Court related to a valuation and a liability to a tax in a previous (1) [1962] Supp. 3 S.C.R. 391.
(2) 980 year, and no doubt as regards that year the decision could not be disputed.
The present case relates to a new question namely, the valuation for a different year and the liability for that year.
It is not eadem questio and therefore the principle of res judicata cannot apply.
" In another decision reported in the same volume, Hoystead vs Commissioner of Taxation (1), one of the questions was whether certain beneficiaries under a will were joint owners.
It was held that though in a previous litigation no express decision had been given whether the beneficiaries were joint owners, it being assumed and admitted that they were, the matter so admitted was so fundamental to the decision then given that it estopped the Commissioner.
The latter decision was distinguished in Society of Medical officers of Health vs Hope (2).
Both the decisions were again considered by the judicial Committee in Caffoor vs Income Tax Commissioner (3).
The decision in Broken Hill Proprietary Company 's case (4), was approved and the principle laid down was that in matters of recurring annual tax a decision on appeal with regard to one year 's assessment is said not to deal with eadem questio as that which arises in respect of an assessment for another year and consequently not to set up an estoppel.
As to the decision in Hoystead 's case (1), it was stated : "Their Lordships are of opinion that it is im possible for them to treat Hoystead 's case as constituting a legal authority on the question of estoppels in respect of successive years of tax assessment.
So to treat it would bring it into direct conflict with the contemporaneous decision in the Broken Hill case ; and to follow it would involve preferring a decision, in which the particular point was either assumed without (1) (2) (3) (4) , 981 argument or not noticed to a decision, in itself consistent with much other authority, in which the point was explicitly raised and explicitly determined.
" In Installment Supply (P) Ltd. vs Union of India (1) this court referred to the decisions just mentioned and said that it was well settled that in matters of taxation there would be no question of res judicata.
On the principle stated above, it seems to us that it was open to the taxing authorities to consider the position of the assessee in 1943 for the purposes of determining how the gains made in 1944.
should be computed, even though the subject of the assessment proceedings was the computation of the profits made in 1944.
The circumstance that in an earlier assessment relating to 1943 the assessee was treated as an investor would not in our opinion estop the assessing authorities from considering, for the purpose of computation of the profits of 1944, as to when the trading activity of the assessee in shares began.
The assessing authorities found that it began in 1943.
On that finding the profits were correctly computed and the answer given by the High Court to the question of the computation of the profits was correctly given.
For these reasons the appeal fails and is dismissed with costs.

dataset_name: IN-Abs

summary/full:
The assessee appellant carried on the business of manu facturing and selling textile piece goods.
In the assessment year 1945 46, the Income tax officer added to the taxable income of the assessee a sum of Rs. 1,86,931 which was later on reduced to Rs. 1,23,840 as a revenue receipt, representing an amount by which the sale price exceeded the original cost of certain shares and securities purchased and sold by the appellant.
The assessee was held to be a dealer in shares and securities.
The contention of the assessee was that it was not a dealer in shares and securities in the relevant account year or in the years past and the shares and securities were held by way of investment and the investment surplus was in the nature of capital receipt.
Even if the assessee was a dealer in shares and securities in the relevant account year, the Income tax officer committed an error in the matter of the computation of profits in not taking the market value of the shares as at the opening day of that year as the cost thereof.
The Appellate Assistant Commissioner rejected the contentions of the appellant and held that the number of transactions was sufficiently large to show that the assessee was a dealer in shares.
The Appellate Tribunal rejected the contentions of the appellant.
These assertions were then referred to the High Court and they were decided against the assessec appellant.
972 Held that the assessee was a dealer in shares and securities and the income from their sale was a revenue receipt and not capital receipt.
The profits of the assessee were the difference between the original cost price of the shares to the assessee at the time of purchase and the price realized at the time of sale.
Held also that in the matter of taxation, there was no question of resjudicata.
It was open to the taxing authorities to consider the position of the assessee in 1943 for the purpose of determining how the gains made in 1944 should be computed, even though the subject of the assessment proceedings was the computation of the profits made in 1944.
The circumstance that in an earlier assessment relating to 1943, the assessee was treated as an investor would not estop the assessing authorities from considering, for the purpose of computation of the profits of 1944, as to when the trading activity of the assessee in shares began.
The assessing authorities found that it began in 1943 and on that finding, the profits were correctly computed.
Commissioner of Income tax vs Bai Shirinbai K. Kooka, [1962] Supp.
3 S.C.R. 391, Broken Hill Property Company vs Broken Hill Municipal Council, , Boystead vs Commissioner of Taxation, Society of Medical officer of Health vs Hope, , Caffoor vs Income tax Commissioner, and Installment Supply (P) Ltd. vs Union of India, ; , referred to,


judgement:
iminal Appeal No.96 of 1952.
Appeal by special leave granted by the Supreme Court on the 14th February, 1952) from the Order dated the 17th September, 1951 of the High Court of Judicature at Bombay (Bavdekar and Chainani JJ.) in Criminal Appeal No. 1026 of 1951 arising out of Judgment and Order dated the 28th July, 1951, of the Court of the Third Additional Sessions Judge of Poona in Sessions Case No. 78 of 1951.
A. section B. Chari and J. B. Dadachanji for the appellant.
C. K. Daphtary, Solicitor General for India, (Porus A. Mehta, with him) for the respondent.
March 30.
The Judgment of the Court was delivered by MAHAJAN J.
The appellant on 28th July, 1951, was convicted on a charge under section 366, Indian Penal Code, for having kidnapped at Poona a minor girl Shilavati in order that she may be forced or seduced to illicit intercourse and was sentenced to undergo rigorous imprisonment for two years after a trial before the third additional Sessions Judge of that place sitting with a jury of live.
The jury returned a verdict of guilty by a majority of three to two.
The Sessions Judge came to the conclusion that the verdict was not perverse.
He therefore accepted it.
The appellant preferred an appeal to the High Court 811 but this was summarily dismissed.
This appeal is before us by special leave.
The prosecution case was that on the 12th December, 1949, the appellant who was a. music teacher went to the house of Shilavati and on the pretext that there was a girl waiting in his house and that he ' wanted to compare the voice of Shilavati with the voice of the girl took her to his house, and with the assistance of one Iqbal Putlabai (accused 2) kidnapped her.
Shilavati was traced in Bombay after four months in the house of one Babu Konde.
Thereafter she was medically examined and it was found that she was pregnant.
To prove the case against the appellant the prosecution examined in all sixteen witnesses.
Out of these four were eye witnesses, viz., Prahlad, Jamunabai, Namdeo and Shilavati.
Yamunabai, the mother of Shilavati, stated that on 12th December when she returned home in the evening she learnt from her sister in law Jamunabai and others that the appellant had taken Shilavati on the pretext that he wanted to compare her voice with that of one Prabha who was waiting in his house and thereafter Shilavati had not come back, that on getting this information she along with her brothers and sister in law went to the house of the appellant and questioned him as to why Shilavati was not sent back, whereupon the appellant replied that he had sent her by bus.
As Shilavati did not return home, she went to the police and lodged a complaint.
Ananda, uncle of the girl, deposed to the same effect.
Prahlad, brother of Shilavati, a boy of school going age, deposed that he saw Shilavati going with the appellant while he was playing outside the school.
Namdeo, who is a bricklayer, stated that on the 12th December while he was returning after completing his work at about 3 30 p. m. he saw Shilavati going with the appellant.
On medical examination it was found that Shilavati was a girl of 15 or 16 years of age and that 'she was pregnant.
Shilavati was examined as P, W, 10 and she deposed 105 812 that the accused came to her house at about 3 30 p.m. and told her that there was a singing party at Kirkee and that she should accompany him there, that she went with him on the promise that the appellant would send her back before her mother returned home, that while at the appellant 's house she was asked to smell certain scents and she felt giddy and could not speak and when she came to senses in the morning she found herself in Bombay in a hut at Sion.
She further said that on enquiry from one Kassam she was told that the appellant had left her there.
On the 12th December at about 11 40 p.m.
Yamunabai went to Padamji Gate police station and lodged a complaint there.
In the complaint it was stated that Shilavati had quarrelled with one Shantabai and had left the house and since then she had not returned.
The police were asked to find out her whereabouts.
On the 13th she sent a complaint to the Police Inspector, A Division, Poona.
Therein she made the allegation that the appellant used to come to her house for coaching Shilavati in harmonium, that she learnt that he had sent a chit to her daughter in her absence and had called her to his house and that on enquiries about Shilavati 's whereabouts he had given evasive answers.
The police head constable who was on duty on receipt of this complaint examined Yamunabai.
He read out the application to her and recorded her statement which reads thus: " My daughter Shilavati age about 13/14 has left my house at 4 p.m.
I made search for my daughter at the house of my paternal aunt, but I could not find her there.
M. H. Gyani (appellant) used to come to my house for coaching up my daughter in singing.
I do not know whether he has taken away my daughter nor have I seen him taking her away.
I have mentioned his name in my application through mistake.
My daughter has gone out of my house to some other place.
A search should therefore be made for her. .
I again state that my daughter left the house 813 after quarrelling with my mother Harnabai.
This is given in writing.
" In July, 1950, Yamunabai sent an application to the Collector of Poona.
In this application she said that she had appointed the appellant as a. music master for her daughter, that on Monday the 12th December, 1949, at about 6 p. m. the appellant and his friend Badsha had induced and kidnapped her to an unknown place.
She asserted therein that she was sure that nobody but both M. H. Gyani and Badsha had kidnapped her daughter.
In the witness box Yamuna Bai, as already stated, gave a different story and Shilavati herself did not fully support the version of her mother.
On the 14th March, 1950, a letter, Exhibit 4 G, was sent by Shilavati to her mother.
The relevant part of this letter is in these terms: " Since last so many days, I have left the house and I have not sent any letter to you and you must also be worrying as to where I have gone.
I am at Bombay and quite well too.
Do not worry about me, I had gone to the river at Bamburda, and there some one forced me and brought me to Bombay and he was prepared to marry with me.
He was an ordinary and old fellow.
J did not like it and he was going to convert me ' to Mahomedanism.
I felt very sorry for this and I was very much sad.
He beat me twice or thrice.
To whom shall I express my sorrow ? But there was a boy staying, there whom I told all the facts and told him to save me anyhow.
He promised to save me.
There were two days remaining for my marriage.
Till then, he arranged for my stay and also for dinner, and one day before the marriage, previous night he took me out from that place.
There were many police complaints against him, and he, at the cost of his life, saved me.
I married him in order to return his obligations.
Now I am very happy, I am not in need of anything now.
He is an ordinary boy.
He works in a press, and he is a worker.
He is from us and his name is Baburao Konde and next 814 time we will send a photograph of both of us.
Do not worry about me.
I am very happy.
Namaskar to all, elderly persons and ashirwadas to youngsters.
Namaskar to grandmother Harnabai.
Convey namaskars to Anand mama, Vithal mama, Ram mama, Shankar, Prahlad, Laxman, Hirabai, Jamnabai, Yamunabai, Jaibai, and to master.
" Shilavati is admittedly a talented Harijan girl who used to take part in dramatic peformances and used to give public peformances in music and dancing on some remuneration.
The letter written by her from Bombay speaks for itself and it was on receipt of this letter and further correspondence to which it is not necessary to refer that the police got clue of her where abouts and were able to restore her to her mother Yamunabai.
The statute law in India in certain circumstances permits an appeal against a jury 's verdict and authorizes the appellate court to substitute its own verdict on its own consideration of the evidence.
It has conferred on the appellate court extensive powers of overruling or modifying the verdict of a jury in the interests of due administration of justice confident that the appellate judges who have not themselves seen and heard the witnesses, will not exercise lightly the responsible power entrusted to them.
Section 423 in sub section (2), Criminal Procedure Code, states as follows: " Nothing herein contained shall authorize the court to alter or reverse the verdict of a jury unless it is of opinion that such verdict is erroneous owing to a misdirection by the judge or to a misunderstanding on the part of the jury of the law as laid down by him.
" Section 537 in sub clause (d) provides that no finding, sentence or order passed by a court of competent jurisdiction shall be reversed or altered on appeal on account of any misdirection in any charge to the jury 816 unless such error, omission, irregularity or misdirection has in fact occasioned a failure of justice.
Unless therefore it is established in a case that there has been a serious misdirection by the judge in charging.
the jury which has occasioned a failure of justice and has misled the jury in giving its verdict the verdict of the jury cannot be set aside.
The learned counsel for the appellant contended that the judge in his charge to the jury misdirected it in several important particulars and violated the rules of criminal jurisprudence and of evidence in a number of ways.
It was said that he failed to warn the jury that it would be unsafe for it to act on the statement of Shilavati without her statement being corroborated by other evidence,in material particulars.
The judge, according to the learned counsel, should have told the jury that though in law it was open to them if in the circumstances of this case they thought fit to do, to act on the uncorroborated testimony of Shilavati but that ordinarily it was not safe to do so without that statement being corroborated in material particulars.
This omission on the part.
of the judge, it was urged, amounted in law to a grave misdirection and the jury in all likelihood without such a warning arrived at its verdict on the basis of the uncorroborated evidence of the girl.
That part of the charge in which reference was made by the judge to Shilavati 's evidence wherein she had said that she was told by Kassam Khan that the appellant had left her there was criticized on the ground that the jury bad been directed to act on inadmissible evidence.
Then it was contendad that it was a serious misdirection to direct the jury that it had to solve the jigsaw puzzle that had arisen in the case by using their own ingenuity and by piecing together the various pieces of the puzzle.
The last misdirection relied upon concerned the following part of the charge: "After weighing the probabilities of the case, the evidence on record, as prudent men if you come to the conclusion that the story given by the prosecution does not appear to be probable and that the 816 accused must not have committed the offence, then in that case you have to return a verdict of not guilty.
" In our judgment, it is not necessary to pronounce on all the points urged by the learned counsel, because we are of the opinion that the judge clearly misdirected the jury when he asked it to solve the problem that had arisen by exercising its ingenuity and by resorting, if necessary, to speculative reasoning.
In other words, the judge gave the jury a carte blanche to, come to its conclusion on the basis of its own conjectures, if necessary.
Not only that.
He told the jury to hold the accused not guilty in case it found it improbable that he must not have committed the offence.
These propositions placed before the jury are repugnant to all notions of criminal jurisprudence and they must necessarily have affected its mind in arriving at the conclusion.
This is how the charge on this point reads: " So you will find, gentlemen, that there are as many as six versions before this court and therefore you have to consider all these versions and probabilities of the case, to find out whether the improved version now before the court is a correct one.
I would like also to bring to your notice the letter written at the instance of Shilavati from Bombay.
That letter is Exhibit 4 G. Shilavati in her examination before the court does not admit that this letter was written at her instance.
However, she has admitted before the police that this letter was written at her instance, and this was brought out in her cross examination.
In this letter she had stated that she had gone on that day to Bamburda river and there she was forcibly kidnapped by some man who was about to marry her.
That man was an old man and she did not approve that marriage.
Fortunately, this Konde came to her rescue and took her to Bombay and married her.
That is her statement.
Now, gentlemen, this is a jigsaw puzzle kept before you.
In jigsaw puzzles all the pieces are kept before us and we have to use our ingenuity and piece them together.
Some 817 links are missing in this case.
However, as rightly sub mitted by the learned Assistant Public Prosecutor, in such cases you have to weigh the probabilities of the case and therefore you have to find out from the material before us whether you can solve this jigsaw puzzle.
Now these points are before you that there was a quarrel with Shantabai.
The chit was alleged to have been sent by accused No. 1, and then the girl went to Bamburda river and there she was kidnapped by somebody.
Now, gentlemen, you have to consider whether it is or it is not possible that the girl Shilavati might have received soma chit probably from the accused No. 1.
This chit was seen by Shantabai who exposed to Harnabai the grandmother of the girl.
The witness Harnabai is an old woman and probably she was put out and ;he might have taken her to task, and she might have even gone to the length of stating that she should go out of the house.
Here is a young girl having hot blood, and it is or is it not probable that the girl in desperation had gone to Bamburda, and she mentions the river, and gentlemen, you can find that there is a confluence of the rivers Mula and Mutha; why did she go to the river ? Whether it is probable that she wanted to commit suicide.
You will find, gentlemen, that near that confluence there is a mosque and in the evidence it has come out that the girl was found at the hut at Sion with an old Mahommedan named Kassam Khan and his keep.
You have to consider whether it is probable that this Kassam Khan and his keep induced the girl to go with them to Bombay and whether Kassam Khan wanted to marry her there.
You have to find out whether it is probable that this chivalrous man Konde rescued her from the old man Kassam Khan who was about to marry her and got himself married to the girl.
The fact remains that the girl was found with Konde in Bombay ultimately.
It is in evidence of the girl herself that she found herself in a hut at Sion and Kassam Khan and his keep were keeping a watch over her. . . .
So, gentlemen, you Will have to find out all the probabilities of the case and 818 before us by the prosecution. " Had the charge to the jury stopped with the sentence, "So you will find, gentlemen, that there are as many as six versions before this court and therefore you have to consider all these versions and probabilities of the case, to find out whether the improved version now before the court is a correct one", no exception could possibly have been taken to it.
When the learned judge however, proceeded to direct the jury to piece together the various pieces of the jigsaw puzzle by use of their ingenuity he clearly misdirected them inasmuch as he told them that they could in ' solving the problem draw upon their own imagination and exercise their ingenuity in the matter without reference to the evidence that had been placed by the prosecution on the record.
Not only that, the learned judge himself indulged in speculation and placed a number of conjectures before the jury for its consideration.
The learned judge surmised that the girl might well have gone to the river for committing suicide and asked the jury to consider this surmise as well.
It was further surmised that a chit from the accused was received by Shilavati and that Shantabai saw that chit, and disclosed it to Harnabai, the grandmother, who in all likelihood took her to task and told her to get out of the house and thereupon the hot blooded Shilavati went to the river to commit suicide.
There is no evidence whatsoever on the record about the actual receipt of that chit, of Shantabai seeing it and exposing this fact to Harnabai and of Harnabai threatening Shilavati.
All these considerations mentioned to the jury were the results of the judge 's fertile imagination and were bound to mislead it into the belief that they could indulge in like conjectures and surmises in their effort to solve the puzzle.
The direction to the jury that it was to solve the jigsaw puzzle by use of its ingenuity does not find place in an isolated passage of the charge, but runs through it.
While winding up the learned judge again reiterated it and Said; 819 "As I have already told you, you have to piece together all the pieces of the jigsaw puzzle and try to., find out what story appears to you to be probable; whether the girl was drugged at all, or whether as stated by her in her letter she went to a river at Bamburda and there she met this Kassam Khan and his keep and along with them she went to Bombay of her own accord.
" In the concluding part of the charge the learned judge said: "After weighing the probabilities of the case, evidence on record, as prudent men if you come to the conclusion that the story given by the prosecution does not appear to be probable and that the accused must not have committed the offence, then in that case you have to return a verdict of not guilty.
" It is not possible say that these words were likely to give a correct lead to the jury in reaching its conclusion.
All that the jury should have been told was that after weighing the probabilities of the case and the evidence on the record, as prudent men they should answer "whether the prosecution had made out the charge against the accused.
" We are satisfied that as a result of These misdirections the jury in all likelihood gave a divided verdict of guilty by three to two not on evidence but on the basis of assumptions and conjectures.
In this situation, the question for consideration is what procedure should be followed by this court for undoing the mischief that has happened and which would be most conducive to the ends of justice.
The simplest course open to us is to order a retrial of the appellant.
It is also open to us to remit the case to the High Court with a direction that it should consider the merits of the case in the light of our decision and say whether there has been a failure of justice as a result of these misdirections.
Lastly it is open to us to examine the merits of the case and 106 820 decide for ourselves whether there has been a failure of justice in the case and an innocent man has been convicted.
It is now well settled that in deciding whether there has been in fact a failure of justice in consequence of a misdirection the court is entitled to take the whole case into consideration.
[Vide Abdul Rahim vs Emperor(1)].
The words "in fact" in section 637 (d), Criminal Procedure Code, emphasize the view that the court is entitled to go into the evidence itself in order to determine whether there has been a failure of justice.
In the peculiar circumstances of this case we have chosen to adopt the third course, because at this moment of time it is most conducive to the ends of justice.
It seems plain to us that on the material on this record no reasonable body of persons could possibly have arrived at the conclusion that the appellant kidnapped Shilavati as alleged by the prosecution.
We have taken upon ourselves the responsibility of deciding this case without the valuable opinion of the High Court because we feel satisfied that any other course would cause unnecessary harassment to the appellant.
With great respect we are, however constrained to observe that it was not right for the High Court to have dismissed the appeal preferred by the appellant to that court summarily, as it certainly raised some arguable points which required consideration though we have not thought it fit to deal with all of them.
In cases which prima facie raise no arguable issue that course is, of course, justified, but this court would appreciate it if in arguable cases the summary rejection order gives some indication of the views of the High Court on the points raised.
Without the opinion of the High Court on such points in special leave petitions under article 136 of the Constitution this Court sometimes feels embarrassed if it has to deal with those matters without the benefit of that opinion.
(1) A.I.R. 1946 P.C. 821 The, learned Solicitor General contended that this was not a fit case where the court was justified in going behind the verdict of the jury and in deciding the case in accordance with its own view of the evidence.
It was argued that the charge to the jury had to be taken as a whole, that though some slight exception might be taken to certain passages in the charge the learned judge had placed the case of both sides fairly before the jury and that not only did the learned judge place fairly the case of both sides before the jury, he indicated his opinion on the evidence strongly against the prosecution and that being so, the accused could not be allowed to say that the charge which was strongly in his favour and against the prosecution was defective in law.
It was said that it was open to the jury to accept the statement of the mother of the girl as well as the statement of the girl in spite of the different conflicting versions mentioned in the charge and that the jury having done so, the matter stood concluded.
As already observed, charge to the jury cannot be said to be a fair charge if it tells the jury to approach the decision of the matter from a wrong angle, and directs it to reach its decision by exercise of its own ingenuity and by having recourse to conjectures and speculative reasoning.
This convention of the learned Solicitor General therefore cannot be seriously considered.
That the verdict of the jury was erroneous in that it could not be the verdict of any body of reasonable men in the circumstances of this case is fully established by the facts and circumstances on the record.
What Yamunabai deposed in court has been set out in the earlier part of this judgment.
Her case now is that when she returned home on the 12th December, 1949, at about 6 30 p.m., she found that Shilavati was not in the house, she made enquiries from Jamna and Hira, she was told that accused 1 came and told them that there was a girl in his house and her voice was to be compared with Shilavati 's voice and took her 822 away on that pretext.
Prahlad, P.W. 4, deposed that when his mother returned home at 6 p.m. he told her that Shilavati had been seen by him in the company of accused 1.
Jamnabai, P.W. 5, stated that the accused came to the house at 3 p.m. and on the pretext that one girl had come to his house for singing he took Shilavati and that when Yamunabai returned she informed her of what had happened.
Ananda, P.W. 6, repeated the same story.
This story stands completely demolished by the different complaints that Yamunabai made to the police.
There is no satisfactory explanation whatsoever why when she made her first report to the police at 11 40 p.m. she did not tell the police that she had been told by her son, by Jamuna and by Namdev that the girl had been taken away by the appellant and that he had told them that she had been sent back in a bus.
Not only this, after she had sent a written complaint on the 13th December to the Police Inspector, Poona, suspecting the appellant of having kidnapped her daughter, she made a statement to the head constable, withdrawing that allegation in most unambiguous terms and stated that the girl had left the house after quarrelling with Harnabai.
In the first report to the police she had said that the girl had left after quarrelling with one Shantabai.
These statements made by her could not be said to be the result of mere figments of her brain.
She must have made them on some basis.
They give the lie direct to her present version.
When later on she sent an application to the Collector accusing the appellant and Badsha of having kidnapped her daughter she.
asserted that they had taken her away to an unknown.place at 6 p. m., though the occurrence in then earlier complaints was alleged to have taken place at about 3 30 p. m.
The letter of 14th March, 1960, written at the instance of Shilavati to Yamunabai falsifies all the versions given by her and clearly suggests that the girl left the house of her own accord.
In this letter she sent her regards to the appellant.
If he had kidnapped, her, that expression of respect would 823 not have found place in that letter at all Another version was mentioned in the evidence as to how the occurrence took place.
It was stated that the girl received a chit from the appellant and.
on the basis of this chit a quarrel ensued and the girl left the house.
On this state of the record it is quite evident that the version now given by Yamunabai to court or by Shilavati after she had come under the influence of her mother cannot be accepted.
It seems that the appellant because he was a music master and had been giving lessons to the girl a few months before her disappearance has been convicted on a charge under section 366, Indian Penal Code, ' not on the basis of evidence but on the basis of surmises and, conjectures.
The learned Solicitor General referred us to the statement of the bricklayer and of the boy Prahlad.
A mere reading of their statements shows that these are not true and have been procured to fill in gaps in the prosecution case.
Harnabai was not produced as a witness in the case and the learned judge in his charge to the jury was right when he observed that a number of links were missing in the prosecution case and they could only be filled in on the basis of conjectures.
Both Yamunabai and Prahlad studiously avoided stating that the girl took part in dramas or that she danced in public places.
They tried to make out that Shilavati was an unsophisticated girl having no knowledge of the world and that she never danced in public places or she never acted in public dramas.
There is ample material on the record consisting of her photos in the advertisements as well as in the statements made to the police which establishes that she acted in various dramas for which she was paid at the rate of Rs. 5 for each perfor mance and that she gave, dance performances and she was intending to make singing and dancing as her profession.
The very fact that the brother and the mother were at pains to create a false impression on the court by deposing falsely was itself sufficient to show that no reliance could be placed on their 824 testimony.
We are therefore firmly of the opinion that there has been a grave failure of justice in this *case and the appellant, an innocent man, has been convicted of a serious offence on a verdict of the jury arrived at in all likelihood on the basis of conjectures and that that verdict was the.
consequence of the misdirection given to the jury by the judge.
For the reasons given above we allow this appeal, set aside the verdict of the jury, and acquit the appellant of the offence with which he was charged.
Appeal allowed.

summary/full:
In his charge to the jury the Judge told them that the case before them was a jig saw puzzle with some missing links and directed them to use their ingenuity to piece them together by finding out the probabilities and seeing whether they could successfully solve the puzzle.
Held, this was misdirection in that it invited the jury to exercise its ingenuity by having resort, if necessary, to speculative reasoning.
Where a jury has been misdirected and has based its verdict on assumptions and conjectures the Supreme Court may order a retrial or remit the case to the High Court with a direction that it should consider the merits of the case in the light of the decision of the Supreme Court and say whether there has been 810 failure of justice as a result of the mis direotions, or it may examine the merits of the case and decide for itself whether there has been a failure of justice in the case.
In deciding whether there has in fact been a failure of justice in consequence of a mis direction, the Court is entitled to take the whole case into consideration.
Abdul Rahman vs Emperor (A.I.R. referred to.
Though in cases which prima facie raise no arguable issue the High Court may dismiss an appeal summarily without giving any reasons, it is desirable that in arguable cases the High Court should in its summary rejection order give some indication of the views of the High Court on the points raised.