judgement:
Appeal No. 856 of 1966.
Appeal by special leave from the judgment and decree dated September 7, 1965 of the Madhya Pradesh High Court, Indore Bench in Second Appeal No. 275 of 1962.
M.C. Chagla and A. K. Nag, for the appellants.
K. A. Chitale and R. Gopalakrishnan, for the respondent.
The Judgment of the Court was delivered by Ramaswami, J.
This appeal is brought by special leave from the judgment of the Madhya Pradesh High Court dated September 7, 1965 in Second Appeal No. 275 of 1962.
Dulichand and Bhagirath were brothers and the properties concerned are, according to the written statement of the defendant himself, ancestral.
Plaintiff Sitabai is the widow of Bhagirath, who predeceased Dulichand, his eider brother sometime in 1930.
It is the admitted case of both the parties that after Bhagirath died, the plaintiff Sitabai was living with Dulichand as a result of which connection an illegitimate child defendant Ramchandra was born in 1935.
Dulichand died on March 13, 1958.
Sometime before his death Sitabai adopted plaintiff No. 2 Suresh Chandra and an adoption deed was executed on March 4, 1958.
After the death of Dulichand Ramchandra took possession of the joint family properties.
The plaintiff therefore brought the present suit for ejectment of the defendant Ramchandra, the illegitimate son of Dulichand from the disputed properties.
The suit was contested by the defendant on the ground that Dulichand had in his lifetime surrendered the lands to the Jagirdar who made resettlement of the same with the defendant.
As regards the house the contention of the defendant was that Dulichand had executed a will before his death making a bequest of his house entirely to him.
The trial court decided all the issues in favour of the plaintiff and 3 granted the plaintiffs a decree for possession with regard to the land and the house.
The defendant took the matter in appeal to the District Judge who modified the decree.
The District Judge took the view that the will executed by Dulichand was valid so far as half of his share in the house was concerned and, therefore, defendant was entitled to claim half the share of the house in dispute.
The defendant preferred a second appeal before the Madhya Pradesh High Court which reversed the decree of the lower courts and held that the plaintiff was not entitled to any relief and the suit should be dismissed in its entirety.
The High Court held that plaintiff No. 2 became the son of plaintiff No. 1 in 1958 from the date of adoption and did not obtain any coparcenary interest in the joint family properties.
The High Court thought that on the date of adoption Dulichand was the sole coparcener and there was nobody else to take a share of his property and plaintiff No. 2 had no concern with the coparcenary property in the hands of Dulichand.
The first question to be considered in this appeal is whether the High Court was right in holding that plaintiff No. 2 Suresh Chandra at the time of his adoption by plaintiff No. 1 did not become a coparcener of Dulichand in the joint family properties.
It is the admitted case of both the parties that the properties consisted of agricultural land and a house jointly held by Bhagirath and Dulichand.
After the death of Bhagirath, Dulichand became the sole surviving coparcener of the joint family.
At the time when plaintiff No. 2 Suresh Chandra was adopted the joint family still continued to exist and the disputed properties retained their character of coparcenary properties.
It has been pointed out in Gowli Buddanna vs Commissioner of Income tax, Mysore(1) that under the Hindu system of law a joint family may consist of a single male member and widows of deceased male members and that the property of a joint family did not cease to belong to a joint family merely because the family is represented by a single coparcener who possesses rights which an absolute owner of property may possess.
In that case, one Buddappa, his wife, his two unmarried daughters and his unmarried son, Buddanna, were members of a Hindu undivided family.
Buddappa died and after his death the question arose whether the income of the properties held by Buddanna as the sole surviving coparcener was assessable as the individual income of Buddanna or as the income of the Hindu Undivided Family.
It was held by this Court that since the property which came into the hands of Buddanna as the sole surviving coparcener was originally joint family property, it did not cease to belong to the joint family and income from it was assessable in the hands of Buddanna as income of the Hindu Undivided Family.
As a pointed out by the Judicial Committee in Attorney General of Ceylon vs
A.R. Arunachalam Chettiar(2) it is only by analysing (1) (2) [1957] A.C. 540.
4 the nature of the rights of the members of the undivided family, both those in being and those yet to be born, that it can be determined whether the family property can properly be described as 'joint property ' of the undivided family.
In that case one Arunachalam Chettiar and his son constituted a joint family governed by the Mitakshara school of Hindu law.
The father and son were domiciled in India and had trading and other interests in India, Ceylon and Far Eastern countries.
The undivided son died in 1934 and Arunachalam became the sole surviving coparcener in the Hindu undivided family to which a number of female members belonged.
Arunachalam died in 1938, shortly after the Estate Ordinance No. 1 of 1938 came into operation in Ceylon.
By section 73 of the Ordinance it was provided that property passing on the death of a member of the Hindu undivided family was exempt from payment of estate duty.
On a claim to estate duty in respect of Arunachalam 's estate in Ceylon, the Judicial Committee held that Arunachalam was at his death a member of the Hindu undivided family, the same undivided family of which his son, when alive, was a member and of which the continuity was preserved after Arunachalam 's death by adoption made by the widows of the family and since the undivided family continued to persist, the property in the hands of Arunachalam as a single coparcener was the property of the Hindu undivided family.
The Judicial Committee observed at p. 543 of the report. " . though it may be correct to speak of him as the 'owner ', yet it is still correct to describe that which he owns as the joint family property.
For his ownership is such that upon the adoption of a son it assumes a different quality; it is such, too, that female members of the family (whose members may increase) have a right to maintenance out of it and in some circumstances to a charge for maintenance upon it.
And these are incidents which arise, notwithstanding his so called ownership, just because the property has been and has not ceased to be joint family property.
Once again their Lordships quote from the judgment of Gratiaen, J.
To my mind it would make a mockery of the undivided family system if this temporary reduction of the coparcenary unit to a single individual were to convert what was previously joint property belonging to an undivided family into the separate property of the surviving coparcener.
To this it may be added that it would not appear reasonable to impart to the legislature the intention to discriminate, so long as the family itself subsists, between property in the hands of a single coparcener and that in the hands of two or more coparceners.
" 5 The basis of the decision was that the property which was the joint family property of the Hindu undivided family did not cease to be so because of the "temporary reduction of the coparcenary unit to a single individual".
The character of the property, viz. that it was the joint property of a Hindu undivided family, remained the same.
Applying the principle to the present case, after the death of Bhagirath the joint family property continued to retain its character in the hands of Dulichand as the widow of Bhagirath was still alive and continued to enjoy the right of maintenance out of the joint family properties.
The question next arises whether Suresh Chandra, plaintiff No. 2, when he was adopted by Bhagirath 's widow became a coparcener of Dulichand in the Hindu joint family properties.
The High Court has taken the view that Suresh Chandra became the son of plaintiff No. 1 with effect from 1958 and plaintiff No. 2 would not become the adopted son of Bhagirath in view of the provisions of the (Act 78 of 1956).
It was argued on behalf of the appellant that the High Court was in error in holding that the necessary consequence of a widow adopting a son under the provisions of Act 78 of 1956 was that the adopted would be the adopted son of the widow and not of her deceased husband.
In our view the argument put forward on behalf of the appellant is well founded and must be accepted as correct.
Section 5(1) of Act 78 of 1956 states: "(1) No. adoption shall be made after the commencement of this Act by or to a Hindu except in accordance with the provisions contained in this chapter . " Section 6 deals with the requisites of a valid adoption and provides: "No adoption shall be valid unless (i) the person adopting has the capacity, and also the right, to take in adoption.
(ii) the person giving in adoption has the capacity to do so; (iii) the person adopted is capable of being taken in adoption; and (iv) the adoption is made in compliance with the other conditions mentioned in this Chapter.
" Sections 7 and 8 relate to the capacity of a male Hindu and a female Hindu to take in adoption Under section 7 any male Hindu who is of sound mind and is not a minor has the capacity to take a son or a daughter in adoption.
If he is married, requires the consent of his wife in connection with the adoption.
A person 6 having more than one wife is required to have the consent of all his wives.
Under section 8 any female Hindu, who is of sound mind and not a minor is stated to have capacity to take a son or a daughter in adoption.
The language of this section shows that all females except a wife have capacity to adopt a son or a daughter Thus,, an unmarried female or a divorcee or a widow has the legal capacity to take a son or a daughter in adoption.
Section 11 relates to "other conditions for a valid adoption".
Clause (vi) of section 11 states: "(vi) the child to be adopted must be actually given and taken in adoption by the parents or guardian concerned or under their authority with intent to transfer the child from the family of its birth to the family of its adoption.
" Section 12 enacts: "An adopted child shall be deemed to be the child of his or her adoptive father or mother for all purposes with effect from the date of the adoption and from such date all the ties of the child in the family of his or her birth shall be deemed to be severed and replaced by those created by the adoption in the adoptive family; Provided that (a) (b) (c) the adopted child shall not divest any person of any estate which vested in him or her before the adoption." Section 14 provides: "( 1 ) Where a Hindu who has a wife living adopts a child, she shall be deemed to be the adoptive mother.
(2) Where an adoption has been made with the consent of more than one wife ', the senior most in marriage among them shall be deemed to be the adoptive mother and the others to be step mothers.
(3) Where a widower or a bachelor adopts a child any wife whom he subsequently marries shall be deemed to be the step mother of the adopted child.
(4) Where a widow or an unmarried woman adopts a child, any husband whom she marries subsequently shall be deemed to be the step father of the 7 adopted child.
" It is clear on a reading of the main part of section 12 and sub section
(vi) of section 11 that the effect of adoption under the Act is that it brings about severance of all ties of the child given in adoption in the family of his or her birth.
The child altogether ceases to have any ties with the family of his birth.
Correspondingly, these very ties are automatically replaced by those created by the adoption in the adoptive family.
The legal effect of giving the child in adoption must therefore be to transfer the child from the family of its birth to the family of its adoption.
The result is, as mentioned in section 14(1) namely where a wife is living, adoption by the husband results in the adoption of the child by both these spouses; the child is not only the child of the adoptive father but also of the adoptive mother.
In case of there lying two wives, the child becomes the adoptive child of the senior most wife in marriage, the junior wife becoming the step mother of the adopted child.
Even when a widower or a bachelor adopts a child, and he gets married subsequent to the adoption, his wife becomes the step mother of the adopted child.
When a widow or an unmarried woman adopts a child, any husband she marries subsequent to adoption becomes the step father of the adopted child.
The scheme of sections 11 and 12, therefore, is that in the case of adoption by a widow ' the adopted child becomes absorbed in the adoptive family to which the widow belonged.
In other words the child adopted is tied with the relationship of sonship with the deceased husband of the widow.
The other collateral relations of the husband would be connected with the child through that deceased husband of the widow.
For instance, the husband 's brother would necessarily be the uncle of the adopted child.
The daughter of the adoptive mother (and father) would necessarily be the sister of the adopted son, and in this way, the adopted son would become a member of the widow 's family, with the ties of relationship with the deceased husband of the widow as his adoptive father.
It is true that section 14 of the Act does not expressly state that the child adopted by the widow becomes the adopted son of the husband of the widow.
But it is a necessary implication of sections 12 and 14 of the Act that a son adopted by the widow becomes a son not only of the widow but also of the deceased husband.
It is for this reason that we find in sub section
(4) of section 14 a provision that where a widow adopts a child and subsequently marries a husband, the husband becomes the "step father" of the adopted child.
The true effect and interpretation of sections 11 and 12 of Act No. 78 of 1956 therefore is that when either of the spouses adopts a child, all the ties of the child in the family of his or her birth become completely severed and these are all replaced by those created by the adoption in the adoptive family.
In other words the result of adoption by either spouse is that the 8 adoptive child becomes the child of both the spouses.
This view is borne out by the decision of the Bombay High Court in Arukushi Narayan vs Janabai Sama Sawat(1).
It follows that in the present case plaintiff No. 2 Suresh Chandra, when he was adopted by Bhagirath 's widow, became the adopted son of both the widow and her deceased husband Bhagirath and, therefore, became a coparcener with Dulichand in the joint family properties.
After the death of Dulichand, plaintiff No. 2 became the sole surviving coparcener and was entitled to the possession of all joint family properties.
The Additional District Judge was, therefore, right in granting a decree in favour of the plaintiff No. 2 declaring his title to the agricultural lands in the village Palasia and half share of the house situated in the village.
It is contended on behalf of the respondent that the rights of the Inamdar 's tenants were not heritable under the Madhya Bharat Land Revenue and Tenancy Act, 1950 (Act No. 66 of 1950) and therefore the plaintiffs could not claim to become the Inamdar 's tenants after the death of Dulichand in the absence of a contract between the Inamdar and themselves.
Reference was made to sections 63 to 88 dealing with the rights of pakka tenants and it was argued that there was no provision in the Act dealing with the rights of an ordinary tenant.
Section 87 states: "An ordinary tenant is entitled to hold the land let to him in accordance with such terms as may be agreed upon with the person from whom he holds, provided that they are not inconsistent with the provisions of this Act.
" Section 89 deals with the rights of sub tenants and reads: "( 1 ) A sub tenant is entitled to hold the land let to him in accordance with such terms as may be agreed upon with the person from whom he holds, subject to his compliance with the general conditions of tenancy as laid down in section 55, provided that he shall, in no circumstances, lease out the land to any person.
" It is not possible to accept the argument advanced on behalf of the respondent that under the scheme of Act 66 of 1950 the rights of ordinary tenant are not heritable.
It is true that there are special provisions with regard to heritability as regards pakka tenant.
But in the absence of any special statutory provision, the heritability of ordinary tenancies must be governed by the personal law of the tenants concerned.
Section 86 of the Act contains provisions with regard to mutation of names.
Sub section (1) of section 8 6 states: (1) 67 B.L.R. 864 9 "When a holder of land, other than an assignee of proprietary rights, loses his rights, in any land in a village by death or by surrender of abandonment of the land or by transfer of his rights to any other person, or by dispossession or otherwise, the patwari of the village in which the land is situated shah forthwith report the fact to the Tehsildar intimating the name of the new holder and the grounds on which the latter claims to succeed to the title of the former holder.
Any person claiming to succeed to the title of the former holder may also apply to the Tehsildar for the mutation of his name within a period of two years from the date the last holder loses his rights.
" The section applies to all classes of tenants and contemplates heritability and transferability of the rights of a tenant or a subtenant.
We accordingly reject the argument of the respondent that the rights of Dulichand were not heritable.
It is also urged on behalf of the respondent that the jurisdiction of the Civil Court was barred by the provisions of the Madhya Bharat Land Revenue Administration and Ryotwari Land Revenue and Tenancy Act, 1950 (Act No. 66 of 1950).
This issue was decided against the respondent in the trial court and also in the first appellate court.
The decision of the lower courts on this point was not challenged in the High Court and it is not permissible for the respondent to raise this question at this stage.
For the reasons already given we hold that the judgment and decree of the High Court of Madhya Pradesh dated September 7, 1965 in Second Appeal No. 275 of 1962 should be set aside and the judgment and decree of the Additional District Judge, indore dated April 21, 1962 in First Appeal No. 26 of 1961 should be restored.
This appeal is accordingly allowed with costs.
V.P.S. Appeal allowed.

summary/full:
Two brothers were in possession of ancestral properties consisting of a house and tenancy rights of an ordinary tenant in agricultural lands.
The eider brother died in 1930 leaving a widow, the first appellant.
The first appellant continued to live with the younger brother and had an illegitimate son by him, the respondent.
In March 1958, she adopted the second appellant, and some time later, the surviving brother died.
After his putative father died the respondent took possession of all the joint family properties.
The two appellants thereupon filed a suit for ejectment.
The trial court decreed the suit.
The first appellate court found that a will executed by the respondents father (the younger brother) was valid in so far as his half share in the house was concerned and therefore modified the decree by granting a half share of the house to the respondent.
In second appeal, the High Court held that the appellants were: not entitled to any relief and that there suit should be dismissed, on the grounds that: (1) the joint family properties ceased to have that character in the hands of the surviving brother when he became the sole surviving coparcener and (2) the second appellant did not become, on his adoption, a coparcener with his uncle in the joint family properties.
In appeal to this Court.
HELD: (1) The joint family properties continued to retain their character in the hands of the surviving brother, as the widow (the first appellant) of the eider brother was still alive and continued to enjoy the right of maintenance out of the joint family properties.
[5 B] Gowli Buddanna vs
C.I.T. Mysore, , followed.
A. G. of Ceylon vs
A.R. Arunachalam Chettiar , applied.
(2) The scheme of sections 11 and 12 of the , is that in the case of adoption by a widow the adopted child becomes absorbed in the adoptive family to which the widow belonged.
Though section 14 of the Act does not expressly state that the child adopted by a widow becomes the adopted son of her deceased husband, it is a necessary implication of sections 12 and 14 of the Act.
That is why, section 14(4) provides that when a widow adopts a child and subsequently marries, that husband becomes the step father of the adopted child.
There 2 fore, in the present case, when the the second appellant was adopted by the first appellant he became the adopted son of the first appellant and her deceased husband, namely, the elder brother, and ' hence became a coparcener with the surviving brother in the joint family properties; and, 'after the death of the surviving brother the second appellant became the sole surviving coparcener entitled to the possession of all the joint family properties except those bequeathed under the will, that is, except the half share of the house.
[7 D G; A B] Arukushi Narayan vs Janabai Sama Sawat, 67 B.L.R. 864, approved.
(3) Section 86 of the Madhya Bharat Land Revenue and Tenancy Act, 1950 'applies to the rights of an ordinary tenant in agricultural lands which were therefore heritable.
In the absence of any special statutory provision, the heritability is governed by the personal law of the tenants.
Therefore, the second appellant was entitled to the tenancy rights of his uncle on his death.
[8 G H; 9 C D]


judgement:
ption that the profits would be diminished or greatly reduced ' it could not be held that there was any infringement of article 19(1)(g).
[57 A D] (iii) Under Act XVI of 1952 as amended by Act X of 1958 the Government could grant exemption from payment of tax, by means of a notification, in respect of any motor vehicle running in a particular area, and such an exemption was given to the operators in the Telengana region 53 for the reason that before the extension of the Act XVI of 1952 to this area no tax similar to the ,one levied under that Act was payable in that area and that this exemption was granted under a different enactment.
Therefore, the challenge Under article 14 could not succeed.
[58 A C] No question of discrimination arose when taxes were being imposed under two different sets of laws in different States or geographical areas The laws in Madras and Andhra Pradesh were different and persons having primary permits from Madras were naturally governed by the laws operating in that State.
[58] & CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 69, 112 and 113 of 1968.
Appeal from the judgment and order dated October 25, 1962 of the Andhra Pradesh High Court in Writ Petitions Nos.
1307, 1305 and 1353 of 1961.
K. Srinivasamurthy and Naunit Lal, for the appellants (in all the appeals).
P. Ram Reddy and P. Parmeshwara Rao, for the respondent No. 1 (in all the appeals).
The Judgment of the Court was delivered by Grover, J.
These appeals by certificate from a judgment of the Andhra Pradesh High Court which disposed of several petitions under article 226 of the Constitution including the petitions filed by the appellants involve the question of the constitutionality of the Andhra Pradesh Motor Vehicles (Taxation of Passengers and Goods Amendment and Validation) Act, 1961, Andhra Pradesh Act XXXIV of 19 61.
The appellants hold permits either for stage carriage or for public.
carriers issued under the .
They ply these vehicles on different routes in the State as also on some of the inter State routes.
They were subject to tax levied under the Madras Motor Vehicle Taxation Act, 1931.
1952 the Madras Motor Vehicles (Taxation of Passengers and Goods) Act, 1952 (Act XVI of 1952) was enacted by which every operator had to pay Rs. 12.50 per seat per quarter or 37 naye paise per seat per mile over and above the tax payable under the Madras Motor Vehicles Taxation Act, 1931.
Under that Act the operators were paying tax of Rs. 30 per seat per quarter.
The validity of Act 16 of 1952 was challenged before the Madras High Court.
In Mathurai Pillai vs The State of Madras(1) its validity was upheld except as to.
the proviso to section 3 of the Act.
After the formation of Andhra Pradesh State the Governor promulgated an Ordinance amending Madras Act 16 of 1952 in the light of the (1) (1954) I.M.L.J. 110.
54 above judgment.
The provisions contained in the Ordinance were subsequently reenacted as President 's Act 11 of 1954.
The operators, therefore, paid taxes imposed under Act 16 of 1952 as amended in the State of Andhra Pradesh.
By means of Act 21 of 1959 the legislature of Andhra Pradesh amended Act 16 of 1952.
Section 3 of Act 16 of 1952 as amended read as follows: "In cl.
(a) of sub rule (i) of rule 1 in the schedule to the Principal Act, for the words 37 np.
per seat per year per mile the words Rs. 1.48 np.
per seat per year per mile and for the words Rs. 12.50 np.
per seat per quarter the word Rs. 50/ per seat, per quarter shall be substituted and cl.
(b) of the said Sub rule for the words Rs. 22.50 np.
per month the words Rs. 45/ per month shall be substituted." The validity of the Amending Act 21 of 1959 was challenged by means of writ petitions before the High Court.
A Division Bench.
struck down the impugned provisions as unconstitutional and ultra vires on the ground that since that Act imposed a restriction on the operators ' freedom of trade and commerce under article 301 of the Constitution the previous sanction of the President was necessary under the proviso to article 304(b) and because that had not been obtained the Act was legally inoperative: Venson Transport vs The State of Andhra Pradesh(1).
Subsequently Act 34 of 1961 was enacted after the sanction of the President was obtained to the Bill under the proviso to article 304(b).
It validated two acts, namely, Act 21 of 1959 and Act 22 of 1959 and also amended Act 16 of 1952 and substituted sub section
(3) of section 3 of that Act by a new sub section.
It further validated the realisation of the tax paid or payable and the fee paid or payable and other action taken under Act 21 of 1959 and Act 22 of 1959.
It empowered the Government to levy additional tax at the rate of Rs. 50/ per seat per quarter from May 8, 1959 to January 16, 1961.
Thereafter from January 17, 1961 to November 3, 1961 the rate was fixed at Rs. 12.50 per seat per quarter.
After the commencement of the Validating Act 34 of 1961 the rate was to be Rs. 37.50 per seat per quarter.
This was to be operative till April 1, 1962 when the Act would cease to have any effect.
The validity and constitutionality of Validating Act 34 of 1961 were challenged by means of various petitions under article 226 of the Constitution.
It was sought to be contended before the High Court that the impugned legislation was not regulatory in character.
The sole object was to augment the revenues of the State.
This brought the statute within the mischief of article (1) [1961] I. An.
W.R. 351.
55 301 of the Constitution.
The High Court was of the view that the question whether the statute was regulatory or compensatory was relevant in the context of Part XIII of the Constitution only in the event of non compliance with the proviso to article 304(b) of the Constitution.
As the previous sanction of the President had been obtained in terms of the proviso such points could no longer be canvassed.
The challenge on the ground of article 14 before the High Court also failed.
An argument was addressed that the impugned Act was repugnant to article 19(1)(g) of the Constitution.
The reasonableness of the restriction within the meaning of article 304(b) also came up for consideration.
The High Court, in the light of the facts and figures placed before it, held that the increase in surcharge of the fares and freights contemplated by the impugned Act did not constitute an impediment to the trade of the transporters and that the restriction in the shape of additional imposts was not unreasonable.
It is unnecessary to refer to the other points agitated before and decided by the High Court.
Counsel for the, appellant has urged the following points before us: (1) The impugned Act imposed a tax for augmenting the revenues of the State.
It was neither regulatory nor compensatory in nature and it fell directly within the mischief of article 301 of the Constitution.
(2) Even though there had been compliance with the proviso to article 304(b) in the matter of obtaining the requisite sanction it was open to the court to go into the question of reasonableness both with reference to the aforesaid provision and article 19(1)(g) read with clause (6) of that Article.
The court was equally entitled to determine whether the imposition was in the public interest.
(3) The impugned Act violated article 14 of the Constitution and was discriminatory inasmuch as (a) it had not been made applicable to the Telengana area although it was applicable to the Andhra area and (b) the vehicles on inter State routes on 'permits granted by other States had not been subjected to tax.
In order to decide these points the principles which have been settled by this Court with regard to article 301 and article 304(b) may be noticed.
According to the majority view in Automobile Transport (Rajasthan Ltd. vs The State of Rajasthan & Others(1) if a tax is compensatory in character it cannot be said to fall within the mischief of article 301.
Subba Rao J., (as he then was) (1) [1963] 1 S.C.R. 491.
56 who concurred in the majority decision but delivered a separate judgment preferred to rest his view on the regulatory nature of such taxing statute as would escape the mischief of article 301.
In Khyerbari Tea Co. Ltd. & Anr.
vs The State of Assam(1) the difference between the view expressed in the Automobile Transport (Rajasthan) case(2) and an earlier decision in Atiabari Tea Co. Ltd. vs The State of Assam & Others(3) with regard to the scope and effect of the provisions of article 304(b) was noticed .
It was observed that according to the majority view expressed in Atiabari Tea Co. case(3) if the Act is passed under article 304(b) and its validity is impeached the State may seek to justify the Act on the ground that the restrictions imposed by it are reasonable and in public interest and in doing so it may rely on the fact that the taxes levied by the impugned Act are compensatory in character.
On the other hand, according to the majority decision in the Automobile Transport (Rajasthan)(2) case compensatory taxation would be outside article 301 and cannot fall under article 304(b).
since it was not urged that the tax was of a compensatory nature in Khyerbari Tea Co. Ltd.(1) case this Court proceeded to examine whether the restrictions imposed by the statute impugned in that case were reasonable and in public interest within the meaning of article 304(b).
The effect of compliance with the provisions of the proviso to article 304(b) by obtaining the previous sanction of the President to the Bill was also considered and it has been laid down that notwithstanding the sanction the question of the restrictions.
being reasonable and in public interest is op.en to examination by the court.
The Act can be held to.
be valid only if it is shown that the restrictions imposed by it are reasonable and in public interest.
It has not been contended on behalf of the State that the impugned Validating Act imposes a tax which is by way of a regulatory or compensatory measure.
It has, therefore, to be seen whether the restrictions imposed are reasonable and in public interest within the meaning of article 304(b).
Before the High Court an attempt was made on behalf of the appellants to show that by raising the rate of tax the burden had been increased to such an extent that the business of the appellants had been virtually annihilated.
According to some of the affidavits filed on behalf of the writ petitioners, profits derived in recent years did not exceed an average of Rs. 2,000/ per stage carriage even without the additional burden which had been imposed and the transporters would suffer heavy losses if the tax as increased by the impugned legislation were to be realized.
The High Court referred to the computation of the income by the Income tax department of some (1) [1964] 5 S.C.R.975.
(2) (3) ; 57 of the transporters in whose assessments the income in regard to each bus had been calculated at a figure of Rs. 7,000/ annually, which showed that the profits were much higher than Rs 2,000/ .
It was not disputed before the High Court that the transporters had been permitted to enhance the fares.
If the fares could be enhanced it was obvious that the burden would not fail on the transporters.
It was urged that owing to competition from the railways and from operators whose vehicles had been registered in the Madras State and who could charge lower rates the appellants were not in a position to collect extra fares which they had been permitted to do.
This argument also cannot hold and was rightly repelled by the High Court on the ground that if the operators were not prepared to charge higher rates as a matter of policy or for the purpose of business competition that could not impinge on the reasonableness of the restriction.
Apart from a faint attempt to repeat some of the arguments which were addressed before the High Court on this point nothing new has been brought to our notice which would justify the view that the tax which has been imposed exceeds the limits of permissible reasonableness.
As regards public interest we are unable to find nor has any attempt been made to satisfy us that the provisions of the impugned Validating Act with regard to imposition of tax are not in public interest.
This is sufficient to dispose of the challenge under article 19(1)(g), as well.
We may in this connection refer briefly to the conclusion of the High Court which was reached on a consideration of the affidavits filed before it.
It has been found that there is no material which would warrant the conclusion that the increase in the surcharge of the fares and freight contemplated by the impugned Validating Act would constitute an impediment to the trade.
The utmost that could be said was that it would result in the diminution of profits.
Even on the assumption that the profits would be diminished or greatly reduced it cannot be held that there is any infringement of article 19(1)(g).
Coming to the attack on the ground of violation of article reference may be made to the background relating to taxation of passengers and goods carried in motor vehicles in the State prior to the formation of Andhra Pradesh.
It appears that there was no law in the erstwhile Hyderabad State imposing any tax on passengers and goods.
After the merger of Telengana and Andhra areas the laws in operation in the Telengana region continued to remain in force by virtue of the provisions of section 119 of the States Reorganization Act, 1956.
By Act X of 1958 the State of Andhra Pradesh amended Act XVI of 1952 inter alia extending that to the Telengana area.
This Act (Act X of 1958) also amended the Principal Act by adding section 19 according to which the 1 sup.
CI/70 5 Government could grant an exemption by means of a notification in respect of any motor vehicle running in a particular area.
On November 4, 1961 a notification was issued exempting passengers, luggage and goods carried in stage carriages from payment of tax under the aforesaid Act within the Telengana area.
There can be no manner of doubt that this exemption was given to the operators in the Telengana region for the reason that before the extension of the parent Act to this area no tax similar to the one levied under the parent Act was payable in that area and that this exemption was granted under a different enactment.
It is apparent that for these reasons the challenge under article 14 cannot succeed.
The same is the position with regard to the tax payable by the appellants and that which the transporters having permits for inter State routes have to pay.
As has been pointed out in the affidavits filed on behalf of the State the laws in the two States, Madras and Andhra Pradesh are different and persons having primary permits from Madras are naturally governed by the laws operating in that State.
No question of discrimination can arise when taxes are being imposed under two different sets of laws in different States or geographical areas.
The appeals, therefore, fail and are dismissed with costs.
One hearing fee.
R.K.P.S. Appeals dismissed.

dataset_name: IN-Abs

summary/full:
The appellants, motor transport operators, challenged the increase in surcharge of the fares and freights imposed by the Andhra Pradesh Motor Vehicles (Taxation of Passengers and Goods) Amendment and Validation Act, 1961.
They urged: (i) the Act was neither regulatory nor compensatory in nature and, it fell directly within the mischief of article 301 of the Constitution; (ii) the imposts exceeded the limits of permissible reasonableness, were not in the public interest and, therefore, violated articles 304(b) and 19(1)(g); and (iii) the Act violated article 14 (a) inasmuch as it had not been made applicable to the Telegana area although it was applicable to the Andhra area and (b) the vehicles on inter State routes on permits granted by other States had not been subjected to tax.
HELD: (i) It was not the contention of the State that the impugned Act imposed a tax by way 'of a regulatory or compensatory measure.
Therefore, it had to be been whether the restrictions imposed were reasonable and in the public interest within the meaning of article 304(b); these questions were open to examination by the court notwithstanding the fact that the sanction of the President was obtained in compliance with the Article.
[55 E F] Mathurai Pillay vs State of Madras, , Automobile Transport (Rajasthan) Ltd. vs State of Rajasthan vs State of Assam. ; and Atiabari Tea Co. Ltd. vs State of Assam, ; , referred to.
(ii) There was no material which would justify the view that the tax which had been imposed exceeded the limit of permissible reasonableness or was not in the public interest.
The argument that by raising the rate of tax the burden had been increased to such an extent that the business of the appellants had been virtually annihilated had no substance.
The operators had been permitted to enhance the freights and if the freights could be enhanced, obviously, the burden would not fall on them.
If the operators were not prepared to charge higher rates as a matter of policy or for the purpose of business competition that could not impinge on the reasonableness of the restrictions.
This disposed of the challenge under article


judgement:
Civil Appeal No. 2321 of 1968.
Appeal by Special Leave from the Judgment and Order dated the 1st November, 1968 of the Madhya Pradesh High Court, Indore Bench in Civil Miscellaneous Appeal No. 111 of 1967.
C.K. Daphtary and B. Dutta for the Appellant.
P.C. Khanna for Respondent No. 1.
The Judgment of the Court was delivered by J.
C. SHAH, AG.
C.J. Pratap Singh, Preetam Singh and Diwan Singh are three brothers.
Pratap Singh and Preetam Singh carried on business in partnership, at three places (1) Pipliya in Madhya Pradesh, in the name of the Jaora Slate Pencil Works; (2) Bombay, in the name of Partap Brothers; and (3) Nagpur, in the name of Nice Tiles and Marble, Nagpur.
By an agreement dated December 18, 1965 disputes between Pratap Singh and Preetam Singh relating to the partnership business were referred to the arbitration of their brother Diwan Singh.
The arbitrator entered upon the reference, but he was unable to complete the reference within four months.
Diwan Singh applied to the Court of the Subordinate Judge, Delhi, under section 28 of the Arbitration Act for extension of time.
Preetam Singh objected to the jurisdiction of the Subordinate Judge at Delhi to entertain the application.
The Subordinate Judge overruled the objection and granted extension of time for making the award.
A revision application preferred against the order is pending before the High Court of Delhi.
778 In the meanwhile Preetam Singh filed an action in the Court of the Additional District Judge, Mandsaur against Pratap Singh and Pritipal Singh (brother in law of Preetam Singh) for a decree for rendition of account of the dealing in respect of the Jaora Slate Pencil Works and for appointment of a receiver.
By amendment of the plaint a claim for dissolution of partnership was also made.
Pratap Singh applied under section 34 of the for stay of the suit, and the application was granted.
But the Additional District Judge directed that a receiver be appointed of the properties of the Jaora Slate Pencil Works at Pipliya.
Against that order an appeal was carried to the High Court of Madhya Pradesh.
The High Court was of the view that a case was made out for the appointment of the receiver.
The Court further held that having regard to the proceedings pending in the High Court at Delhi it was a case in which without adjudicating upon the jurisdiction of the Subordinate Judge at Delhi, the application for appointment of the receiver was maintainable.
Against that order, with special leave, this appeal has been preferred.
The only question argued in this appeal is about the jurisdiction of the Additional District Judge, Mandsaur to entertain the suit and to appoint a receiver.
The relevant statutory provisions may in the first be noticed.
By cl. 3 of Sch. 1 of the the arbitrator is required to make an award within four months after entering on the reference.
Section 28 of the Act provides that the Court may, if it thinks fit, whether the time for making the award has expired or not and whether the award has been made or not, enlarge from time to time the time for making the award, and the expression "Court" is defined in section 2 (c) as meaning "a Civil Court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit, but * * * * * Section 31 of the Act provides.
(1) . . (2) . . (3) All applications regarding the conduct of arbitration 779 proceedings or otherwise arising out of such proceedings shall be made to the Court where the award has been, or may be, filed, and to no other Court.
(4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and no other Court.
" Section 34 of the Act provides for stay of a suit.
In so far as it is material it enacts.
"Where any party to an arbitration agreement . commences any legal proceedings against any other party to the agreement . in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the application was, at the time when the proceedings were commenced, and still remains ready and willing to do all things necessary to the proper conduct of the arbitration such authority may make an order staying the proceedings.
" An application for stay of the suit pending before the Additional District Judge, Mandsaur was made by Pratap Singh and it was granted.
But thereby the jurisdiction of the Court to pass appropriate orders for protecting the subject matter of the suit was not excluded.
An application for appointment of a receiver could be granted notwithstanding the order of stay of suit under section 34 of the .
But it was urged that it is open to the Court as defined in section 2 (c) under section 41 read with the Schedule to the 780 to appoint a receiver of any other property in dispute or in relation to any proceedings before the arbitrator, and by conferment of that power, the power of the Civil Court in a suit to appoint a receiver is excluded.
On that premise it was urged that the only Court competent to entertain an application for appointment of a receiver was the Subordinate Judge 's Court at Delhi and not the Court of the Additional District Judge, Mandsaur.
It is true that an application for extension of time to make the award was made to the Court of the Subordinate Judge, Delhi and normally the parties would have to resort to that Court for interim relief in respect of the subject matter of the dispute before the arbitrator.
But so long as the jurisdiction of the Court of the Subordinate Judge, Delhi to entertain the application for extension of time was in dispute the Civil Court which is seized of the suit was entitled to make appropriate orders for preserving the property which is the subject matter of the suit.
We are therefore of the view that the Civil Court at Mandsaur was competent to appoint a receiver of the property until the question about the jurisdiction of the Delhi Court under section 31 (4) to entertain applications arising out of the order of reference is finally determined.
After the High Court of Delhi determines that question, receiver appointed, in order to comply with the requirements of the statute, may be made subject to the jurisdiction of the Delhi Court, if it be held that Delhi Court had jurisdiction to entertain the application.
It was urged that the suit filed at Mandsaur only relates to the assets, of the partnership at Pipliya within the State of Madhya Pradesh and does not relate to the properties at Bombay and Nagpur and that by the expedient of obtaining an order for appointment of a receiver Preetam Singh has managed to remain in possession of the properties at Bombay and Nagpur to the exclusion of Pratap Singh.
We cannot at this stage, decide whether the suit in so far as it relates to the assets of the partnership at Pipliya alone is maintainable.
The arbitration proceedings undoubtedly relate to all the assets of the Partnership and if Preetam Singh, as contended by Pratap Singh, has remained in possession of the properties of the partnership at Bombay and Nagpur to the exclusion of Pratap Singh and it is just and equitable to have a receiver appointed, his remedy is to com 781 mence appropriate proceedings for that purpose and to apply to a competent court to appoint a receiver of the properties.
The appeal fails and is dismissed.
There will be no order as to costs.
P.B.R. Appeal dismissed.

summary/full:
The appellant and the respondent were carrying on three businesses at three different places Pipliya in Madhya Pradesh, Bombay and Nagpur.
Certain disputes relating to the partnership business were referred to an arbitrator.
Having not been able to complete the reference within four months, the arbitrator applied to the Subordinate Judge, Delhi for extension of time.
Overruling the objection as to his jurisdiction to entertain the application the Subordinate Judge, Delhi granted extension of time for making the award.
When the revision application against this order was pending before the High Court of Delhi, the respondent filed a suit in the court of the Additional District Judge in Madhya Pradesh for certain reliefs.
In the meantime the appellant applied under section 34 of the Arbitration Act for stay of the suit.
The Additional District Judge appointed a receiver of the properties.
In appeal the Madhya Pradesh High Court held that having regard to the proceedings pending in the High Court at Delhi it was a case in which, without adjudicating upon the jurisdiction of the Subordinate Judge at Delhi, the application for appointment of the receiver was maintainable.
In appeal to this Court it was contended that it was open to a Court to appoint a receiver of any other property in dispute or in relation to any proceedings before the arbitrator and by confirment of that power, the power of the Civil Court in a suit to appoint a receiver was excluded and, therefore, the only Court competent to entertain an application for appointment of a receiver was the Subordinate Judge at Delhi and not the court of Additional District Judge in Madhya Pradesh.
Dismissing the appeal, ^ HELD: Normally for the grant of interim relief in respect of the subject matter of the dispute before an arbitrator the parties would have to resort to that court to which the application for extension of time to make the award was made.
But as the jurisdiction of the Court of the Subordinate Judge, Delhi to entertain the application for extension of time was in dispute the Civil Court 777 which is seised of the suit was entitled to make appropriate orders for preserving the property which is the subject matter of the suit.
[780 C D] Therefore, the Civil Court in Madhya Pradesh was competent to appoint a receiver of the property until the question about the jurisdiction of the Delhi Court under section 31 (4) of the Arbitration Act to entertain applications arising out of the order of reference was finally determined.
After the High Court of Delhi determined that question, the receiver appointed, in order to comply with the requirements of the statute, may be made subject to the jurisdiction of the Delhi Court if it be held that the Delhi Court had jurisdiction to entertain the application.
[780 E]


judgement:
Appeals No.s.
2276 10 2278 of 1968.
33 Appeal by special leave from the judgment and order dated February 23, 1968 of the Calcutta High Court in Income tax Reference No. 158 of 1964.
Jagdish Swarup, Solicitor General, T.A. Ramachandran, R.N. Sachthey and B.D. Sharma, for the appellant (in all the appeals).
P. Burman, R. Ghose and Sukumar Ghose, for the respondent (in all the appeals).
C.J. Shaila Behari Lal Singha hereinafter called 'the assessee ' is a shareholder of a company styled the Ukhara Estates Zamindaries Ltd. The following table sets out the amounts of dividend received by the assessee from the Company and the years in respect of which they were received : Year of Year of declaration Amount of assessment of dividend dividend 1951 52 1357 B.S. Rs. 37,125/ 1952 53 1358 B.S. Rs. 29,250/ 1953 54 1359 B.S. Rs. 28,125/ The assessee claimed that out of the amounts set out in the table only Rs. 8,669/ for the year 1357 B.S., Rs. 20,469/ for the year 1358 B.S., and Rs. 21,822/ for the year 1359 B.S. were taxable as dividend, and the remaining amounts were not taxable, since they were declared out of capital gains of the Company which comprised salami or premia received by it as consideration for grant of long term mining and other leases and as compensation for compulsory acquisition of lands for public purposes.
The Income tax Officer brought the entire amount to tax declared as dividend for each of the three years in question and grossed up the amounts under section 16(2) of the Income tax Act, 1922.
In appeal, the Appellate Assistant Commissioner held that the entire amount for each year was income in the hands of the assessee, but only a part of it being dividend, within the meaning of section 2(6A) of the Income tax Act, 1922, was liable to be grossed up.
In second appeal, the Appellate Tribunal held that part of the amount distributed which was attributable to salami received by the Company for the grant of longterm leases was not taxable as dividend, but as income of the assessee from "other sources".
34 The Tribunal then referred under section 66(1) of the Indian Income tax Act, 1922, three questions to the High Court of Calcutta the first two questions were referred at the instance of the assessee, and the third question at the instance of the Commissioner : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the distribution to the assessee of the amount attributable to land acquisition compensation received by the Ukhara Estate Zamindaries (P) Ltd., after the 31st March, 1948, was in the hands of the assessee, receipt of dividend within the meaning of section 2(6A) of the Indian Income tax Act, 1922? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the receipt by the assessee of the amount attributable to salamis realized by the Ukhara Estate.
Zamindaries (P) Ltd. for grant of long term leases after the 31st March, 1948, was a receipt of income in the hands of the assessee and taxable as the income of the assessee from other sources ? (3) Whether, on the facts and in the circumstances of the case, the distribution to the assessee of the amount attributable to, salamis realised by the Ukhara Estate Zamindaries (P) Ltd. for grant of long term leases after the 31st March, 1948, was not in the hands of the assessee receipt of dividend within the meaning of section 2(6A) of the Indian Income tax ACt, 1922 ?" The High Court recorded answers on all the questions in the negative, following their earlier judgments in Income tax References Nos.
131 of 1961 and 3 of 1964.
The High Court however observed that it was agreed between the parties that the answers in the negative on all the questions were subject to the final decision in appeals filed against the orders made in Income tax References Nos.
131 of 1961 and 3 of 1964 and pending in this Court.
In our judgment, even with the consent of the parties, the learned Judges could not dispose of the reference in the manner they have done.
They had to record their answers and their reasons in support of the answers: those answers were, insofar as the High Court was concerned, final.
They could not stand modified by reason of any judgment in other cases decided by this Court.
Apart from the technical defect that the High Court has not recorded final answers, the order is subject to another infirmity.
The High Court had to decide on the facts of each case 35 whether any amount of salami was capital gain, and whether any part of the compensation received for compulsory acquisition of land was capital gain.
Prima facie, receipt of compensation for land compulsorily acquired which forms part of the fixed assets of a Company is of a capital nature: Senairam Doongarmall vs Commissioner of Income tax, Assam(1), but interest which is statutorily payable on compensation is income and is not capital gain: Dr. Shamlal Narula vs Commissioner of Income tax, Punjab, Jammu and Kashmir, Himachal Pradesh and Patiala(2).
The assumption made that the entire amount of compensation is deemed to be capital gain cannot therefore be sustained.
It is also, necessary to observe that in Appeals Nos.
737 to 739 of 1968 and 13 of 1968 and 1621 of 1968 which arose out of Reference No. 131 of 1961 and other references, decided by this Court on July 25, 1969, the only question of law raised was whether distribution of dividend out of capital gains was taxable.
The scope of enquiry in this group of cases, in view of the form of the questions, is more extensive.
In appeals Nos. 737 to 739 of 1968 we held that, having regard to the Explanation to section 2(6A) capital gains arising after 31st day of March, 1948 (and before the 1st day of April, 1956) were not part of accumulated profits, and if dividend be distributed to the shareholders of the Company out of those capital gains, to ' the extent of the distribution out of the capital gains the dividend must be deemed exempt from liability to tax under section 12 as dividend income liable to tax.
In that case we could not consider whether the receipt from the capital gains was still income liable to tax from "other sources" (not being dividend) under section 12 of the Indian Income tax Act, for no such question was referred.
But that question has been expressly referred in this case.
The order passed by the High Court is therefore set aside and the case is remanded to the High Court for disposal according to law.
There will be no order as to costs in this Court.
Costs in the High Court will be costs in the references.

summary/full:
The assessee was a share holder of a company.
The Income tax Appellate Tribunal referred three questions to the High Court namely, (i) whether the amount distributed to the assessee out of the amount attributable to land acquisition compensation received by the company was, in the hands of the assessee, receipt of 'dividend ' within the meaning of section 2(6A) of the Income tax Act, 1922; (ii) whether the amount distributed to the assessee out of the amount attributable to salamis realised by the company for grant of long term leases was a receipt in the hands of the assessee taxable as income from 'other sources '; and (iii) whether the amount referred to in question (ii) was not, in the hands of the assessee, a receipt of 'dividend ' within the meaning of section 2(6A) of the Act.
The High Court, following its earlier judgment, answered the questions in the negative and observed that it was agreed between the parties that the answers were subject to the final decision in appeals against that earlier judgment, pending in the Supreme Court.
In appeal to this Court, HELD: The High Court erred in the manner in which it disposed of the reference.
(1) Even where there was consent of the parties the High Court had to record its answers to the questions referred and give its reasons; and such answers would be final and could not be modified by a judgment of this Court in some other case.
[34 G H] (2) The High Court had to decide on the facts of each case whether any amount of salami was capital gain.
[35 A] (3) The High Court had to decide on the facts of each case whether any part of the compensation received for compulsory acquisition of land was capital gain, because, the interest which is statutorily payable on compensation is income and not capital gain.
[35 B] Shamlal Narula vs
C.I.T. Punjab, Jammu and Kashmir, H.P. and Patiala , referred to.
(4) Further, the question whether the receipt from capital gains was income liable to tax from 'other sources ' (not being dividend) under section 12 of the Act, was not the subject matter of the appeal pending in this Court against the earlier judgment.
[35 E F]


judgement:
Appeals Nos. 1235 to 1237 of 1966:.
Appeals from the judgment and decree dated September 20, 1963 of the Kerala High Court in Appeal Suit No. 304 of 1962.
Rameshwar Nath, Mahinder Narain and Swaranjit Sodhi, for ' the appellants (in C.A. No. 1235 of 1966) and respondent No, 11 (in C.As.
Nos. 1236 and 1237 of 1966).
K. Javaram and R. Thiagarajan, for the appellants (in C.As.
Nos. 1236 and 1237 of 1966) and respondents Nos. 1 to 7 (in C.A. No. 1235 of 1966).
M.R.K. Pillai, for respondent No. 3 (.in C.As.
1236and 1237 of 1966) and respondent No. 9 (in C.A. No. 1235 of 1966).
The Judgment of the Court was delivered by Ramaswami, J.
KavaIappara estate is an impartible estate.
Succession thereto is governed by the Marumakkathayam law, that is to say, the eldest member of the family by female descent will succeed to the Gaddi and hold the estate.
The parties to the suit are members of the Kavalappara Swaroopam, the 1st defendant being the Sthanee.
The 7th defendant is the mother and the 9th defendant the elder brother of the plaintiffs.
The plaintiffs claimed maintenance based on family custom entitling the members ' to maintenance out of the entire income of the Sthanam.
Past maintenance was claimed for each of the plaintiffs 1 to 4 for 12 years at Rs. 500/ per mensem; for plaintiff No. 5 at the above rate and for plaintiffs 6 to 8 at Rs. 400/ per mensem from their respective dates of birth.
Future maintenance from date of suit was also claimed at the aforesaid rates.
The suit was contested by the 1st defendant on the ground that the plaintiffs had no enforceable legal right to maintenance from the Sthanam estate; that from olden times two kalams, Palachithara and Velliyad of the Sthanam estate had been set apart for the maintenance of the 38 junior members of the Swaroopam that the plaintiffs have to look to those two kalams only for their maintenance "as deposed by him in the former suit" in O.S. No. 46 of 1934; that even after the Privy Council had decided O.S. No. 46 of 1934 declaring him to be absolute owner of the Sthanam properties, he had been paying maintenance out of affection; that though there was no recognised custom binding on him, he had been adopting the generosity of the predecessor Sthanees and paying to the junior members of the Swaroopam Rs. 17,000/ annually and that the plaintiffs had no right to claim income from the Sthanam estate.
The trial court granted maintenance for the period claimed until the date of decree at the rate of Rs. 250/ per mensem for each of the plaintiffs charged on the corpus and income of the Sthanam estate.
The first defendant appealed to the Kerala High Court in A.S. No. 304 of 1962.
The plaintiffs preferred cross objections.
The High Court partly allowed the appeal negativing the plaintiffs ' claim for arrears of maintenance and modified the trial court 's decree.
The High Court dismissed the cross object.ions of the plaintiffs.
C.A. No. 1235 of 1966 is brought to this Court by certificate on behalf of defendant No. 1 and C.As. 1236 and 1237 of 1966 are brought to this Court by certificate on behalf of plaintiffs.
The first question to be considered is whether the plaintiffs are entitled to maintenance out of the Sthanam properties as a matter of family custom.
It is argued on behalf of the 1st defendant that the maintenance allowance was previously given by the Sthanee only as an act of generosity and not in recognition of any legal claim of junior members of the Swaroopam.
In any case it was contended that the practice prevailing in the past was that the income from two kalams "Pilachithara" and "Velliyad" was given to the Amma Nethiar for the benefit of the members of the Swaroopam and that the members of the Swaroopam could not insist on anything more than the same as a matter of right.
In our opinion there is no justification for this argument.
There is sufficient evidence on the record of the case to support the finding of the Subordinate Judge and the High Court that the plaintiffs have established a customary right of maintenance from the Sthanam properties.
In the first place there are two decisions O.S. 991 and 992 of the year 1817 granting a decree for maintenance to two members of the Kavalppara Sthanam (Exhibits A 57 and A 58).
It was contended for the Sthanee in those suits that separate properties had been allotted to Amma Nethiar to maintain all the females and minors in the Swaroopam, that only major males in the Swaroopam can claim separate maintenance from him and that those members who chose to live away from the palace had no right to claim maintenance.
These contentions were not accepted by the Court which gave each of the plaintiffs a money 39 decree for maintenance both past and future.
The material portions of the two decisions are quoted below: "On a careful consideration of all the particulars referred to and in view of the circumstances that the Plaintiff went separate from the tarwad members in disregard of the orders of Defendant who is the present Moopil Nair of Kavalppara and in opposition to the status, ranks and dignities (Sthanamanams) and propriety of Sthanam and merely for their own pleasure and that, even after the Moopu had caused negotiations to be made through Brahmins and other respectable persons under his (Moopu 's) written authority with a view to avoid the Moopu (Sthanam) falling into disgrace (as a result of family) dissension and in view of the fact that, in spite of the efforts of the said persons, the plaintiff did not return and live together (have common residence and mess), it is only proper, as the Defendant contends in his written statement, that it is the Amma Nethiar who should provide for the maintenance of the plaintiff along with that of the lady members.
The plaintiff 's witnesses Cherumpatte Manakkal Vasudevan Bhattathiripad and Pannasseri Adisseripad state on solemn affirmation that, since it is the Moopu that manages the properties forming the assets of the Swaroopam (esstate) and received 16,000 and old fanams being 2 per 10 from the Government if the next nephew as well as the heir and next of kin of the Moopil Nair were to live separate from the Moopil Nair and demand maintenance for whatever reasons it might be, such person ought to be paid maintenance expenses and supported as befitting the Sthanamanam (rank and dignity) of such person and not necessary (sic).
The plaintiff and his mother Valiakava Nethiar left Kavalappara on the 16th Medom 992 (26th April 1817) and went to and stayed at Mangalathu, Panambala Kode and Melarkode for reasons not apparent.
Under the orders of the Defendant maintenance had been paid to plaintiff, the said Nethiar and 20 persons from that date, 16th of Medom (26th of April) to the month of Edavam (May June).
Thereafter the defendant ordered payment of maintenance to 16 persons from 1st Mithunam (13th June) and to 12 persons thereafter.
Subsequently the Moopu ordered that maintenance need be paid for 8 persons only including (the plaintiff).
The written statement (deposition) does not make any mention as to nor have the plaintiff 's witnesses proved as to what expenses the sum of claimed in the plaint relate to.
It is therefore 40 decreed that the Defendant do pay plaintiff 450 fanams being the maintenance expenses for 3 months as evidenced by the plaintiff 's witnesses after deducting 25 (? ) fanams from the amount claimed in the plaint, that the Defendant do also pay the plaintiff 's future maintenance at the rate of 150 fanams a month as mentioned above and that the plaintiff and Defendant do pay and receive proportionate costs.
" Ext.
A 58: "On looking into the matters mentioned above, there is nothing to show on what ground the plaintiff had gone and lived separate from the tarwad members of her own accord in disregard of the order of the present Kavalappara Moopil Nair and without considering the status, dignity and propriety (of the Sthanam).
Even though the Defendant 's contention in his written statement that it is the Amma Nethiar who should look after the maintenance of the plaintiff in as much as the plaintiff did not return to and stay in the Kavalppara in spite of the attempts made through the Brahmins and other respectable persons to avoid the Moopu getting a bad name owing to a rumour getting afloat that there is dissension among the members as a result of the plaintiffs action, is a proper only, the court is of the opinion that, if the members who are related to the Moopil Nair as his direct sister and direct nephew like the 3rd Nair and who are closely related together as heirs to the properties live separate for any reason whatsoever and ask for their maintenance, the Moopil Nair ought to have ordered payment of their maintenance, amounts and maintained them in accordance with their status in the Sthanam.
Instead of doing this, the Moopil Nair cannot stop the maintenance paid to the Anandaravas who may be of bad temperament.
The plaintiff 's and defendant 's witnesses prove that the plaintiff had been paid for the maintenance from the Medom 992 (April May, 1817) when she went separate until the 30th of Karkitakam (about the 16th of August) and that the Moopil Nair had stopped paying for the maintenance thereafter.
From the evidence of the plaintiff 's witnesses it has been proved that the plaintiff and the persons staying with her would all together require 3 fanams for maintenance expenses and 1 fanam for extra expenses for a day.
It, therefore, does not appear from the oral and documentary evidence that they would require anything more than fanams for the maintenance for the 3 months from 41 the 1st of Chingam (14th August) to the 1st of Vrichigam (14th November) the date of the suit, calculating at 120 fanams a month.
It is not clear from the plaint as to what expenses the sum of Rs. 150 claimed in the plaint relates.
I therefore direct the defendant to pay to plaintiff a sum of Rs. 360 fanams after deducting 165 fanams from the amount claimed by the plaintiff and I also direct that the Defendant do pay to the plaintiff the future maintenance at the rate of 120 fanams a month and that the plaintiff and Defendant do pay and receive proportionate costs.
" Exhibit B 1 is a deposition given in O.S. 2 of 1859 by the then Sthanee of the Kavalappara Swaroopam.
The deposition is marked as exhibit 67(b) in O.S. 46 of 1934 and reads as follows: "The properties belong to the Sthanam only.
Two Kalams (lands attached to two granaries) have been set apart for the maintenance of the members of the tarwad.
And it has been the practice that the rest of the members maintain themselves therefrom.
It has been so separately allotted from ancient times.
When precisely, is not known.
It could be seen from the accounts that It has been so set apart.
It is only if I think it necessary to take back what has been so set apart, that I should give them their maintenance expenses .
I have not enquired whether there were any other places where the entire properties and the Malikhan belonged to the Sthanam only and the tarwad has no separate property of its own." [The High Court has observed that this translation is not correct and that 'kalam ' denotes a division of the estate for purposes of collecting rents from the tenants.
Again a true translation of the first sentence in the above quotation would be 'only the Sthanam has properties and no.t the properties belong to the Sthanam only".] This deposition shows clearly that the Sthanee in office admitted over a century ago his obligation to maintain junior members of the Swaroopam.
The next piece of evidence is the deposition of the Sthanee in O.S. No. 46 of 1934.
In the present case the 1st defendant did not give evidence.
He admitted that his deposition in the previous suit O.S. No. 46 of 1934 contained a true statement of facts.
The previous deposit;on of the 1st defendant in exhibit B 13 and reads as follows: "4.
The eldest lady in the Swaroopam is called Aroma Nethiyar.
Some properties had been allotted for the L 1 Sup CI/70 4 42 maintenance of the members in the name of Amma Nethiar . .
Those properties had been allotted in ancient times in her name from the properties of the Moopil Nair.
The Moopil Nair was originally a ruling chief.
The grant of properties in the name of Amma Nethiyar should have been made when the Moopil Nair was a ruling chief.
The present Amma Nethiyar has even now the right to manage the properties which had been so allotted.
It was in ignorance of such allotment that my eider brother and after him, myself managed those properties along with the stanam properties.
I am willing to hand back the management of those properties to Amma Nethiyar.
If those properties are handed back, I shall no more be liable to pay the maintenance of the members.
" In his written statement defendant No. 1 made the following admission in para 6: " . .
The defendant does not deny that the members of the Swaroopam are entitled to be maintained by the Moopil Nayar by virtue of custom.
But that does not make him any the less a Stani nor detract from the Stanom character of the properties.
" In our opinion the evidence adduced in the case sufficiently proves a custom in Kavalappara Estate by which the Sthanee was legally obliged to give maintenance to junior members of the family.
It is possible that the practice of paying maintenance to junior members originated as an act of generosity of the previous Sthanee.
But it has continued without interruption for such a length of time that it has acquired the character of a legal right.
On behalf of defendant No. 1 it was contended that the Judicial Committee had said that the payment for maintenance was an act of generosity on the part of the Sthanee and was not a legal right of the junior members.
Reference was made to the following passage in the judgment in Kochunni vs Kuttanunni(1): "The maintenance claimed was a customary one originating in ancient times when admittedly the Muppil Nair was a Sthani in possession of Sthanam rights.
There is no evidence as to how the maintenance allowance arose, whether it was given in recognition of a legal claim or was only a generous provision made for the benefit of the women and younger members, which the Raja was perfectly competent to do out of property (1) A.I.R. 1948(P.C.).47at p. 52. 43 which he regarded exclusively as his own.
The claims of generosity often prevail over a sense of ownership, especially when the recipient of the bounty is a near relative in a dependent position.
" In our opinion this argument proceeds on a misreading of the judgment of the Judicial Committee.
The Judicial Committee has observed that the claim for maintenance was based on customary rights and was not ex gratia payment.
In the course of the judgment Mr. M.R. Jayakar states: "The documents material in this connection are Exs. 'O ' and 'P ' being the decree and judgment respectively in two suits for maintenance brought in the year 1817 against the then Muppil Nair, the first by the then third Nair, a minor, and the second by his mother.
It is material to note what the issue was and what was decreed in these suits.
In the pleadings of both the parties the claim for maintenance was stated to be based on customary rights.
The plaintiff alleged it is 'the usual custom ' that Nair should pay the maintenance.
The defendant admitted 'the custom ' but denied his liability to pay the maintenance on the ground that his ancestors in ancient times had already settled in accordance with the 'usual practice ' certain lands on a lady called Amma Nethiar for the maintenance of herself and the junior members, and that the maintenance claimed in the suit, even if it was due, which he denied, should primarily come out of the lands so set aside in previous times.
He also denied his liability on the ground that the minor and his mother, contrary to his advice and that of the well wishers of the family had gone away to live elsewhere.
The defendant denied his liability also on other grounds which it is unnecessary to consider in tiffs case.
He, however, expressed his willingness to supplement the maintenance, if the Court thought proper, on particular occasions.
The Judge, while admitting that it was the responsibility of Amma Nethiar to maintain the plaintiffs, held that as the plaintiffs stood in the very near relationship of sister and nephew to the defendant and were his next heirs it was 'only proper ' that the defendant should grant them a periodical allowance for past and future maintenance.
In the light of the pleadings set out above, the admissions made therein by bolt sides about the customary nature of the maintenance and the words it was 'only proper ' in the judgment, their Lordships cannot accept this as a decision contra 44 dicting the incidents of the property in the hands of the Muppil Nair.
" In any event the question as to whether the right of maintenance was given by the Sthanee in recognition of the legal claim or whether it was an ex gratia payment was not directly in issue in the previous suit.
The question for determination was whether the existence of maintenance allowance was inconsistent with the Sthanam character of the properties in possession of the then Moopil Nair.
On this point it was held by the Judicial Committee that the payment of the maintenance allowance for junior members was not inconsistent with the Sthanam character of the property on which it was grounded.
At p. 53 of the Report Mr. Jayakar has observed; "Their Lordships think that in the proceedings of these two cases there is hardly anything to support the view of the High Court that the decrees in these two suits are inconsistent with the Sthanam character of the properties in the possession of the then Muppil Nair or that he did anything which could be regarded as an admission that the properties in his hands were not Sthanam properties.
On the question whether and how far the existence of a maintenance allowance is inconsistent with the Sthanam character of the property, on which it is grounded, the following passage in Sundata Aiyar 's book (p. 255, bottom) may be noted: "The point of view suggested in some cases in which the question has arisen is that the members of the family have rights of maintenance in the property of the Sthanam itself: that is practically assimilating these properties to impartible zemindaries before the recent cases. ' Besides, the Sthanam in dispute in this case belonged, as stated above, to the second category, and in such a case the existence of maintenance allowance would be perhaps not so inconsistent as in the case of a Sthanam of the third class, carved out of the family property for the support and dignity of its senior member.
" The question at issue before the Judicial Committee was whether the Kavalppara Estate was a Tarawad or joint family property belonging to the joint family or whether the properties appertained to the Sthanam and belonged to defendant No. 1 as a Sthanee exclusively.
The question as to the right of maintenance of the plaintiffs was incidentally gone into and it was ultimately held that the existence of such maintenance fight of junior members of 45 the family was not inconsistent with the Sthanam character of the properties.
In our opinion the High Court.
was right in its finding that the plaintiffs have established their right to maintenance from the Sthanam properties as a matter of custom.
Counsel on behalf of defendant No. 1 has been unable to make good his argument on this aspect of the case.
An alleged custom, in order to be.
valid, must be proved by testimony to have been obeyed from consciousness of its obligatory character.
A mere convention between family members or an arrangement by mutual consent for peace and convenience cannot be recognised as custom.
In Ramroa vs Yeshwantrao(1) it was proved that it had been the practice in a Deshpande Vatandar 's family for over a hundred and fifty years, without interruption or dispute of any kind whatever, to leave the performance of the services of the vatan and the bulk of the property in the hands of the eider branch and to provide the younger branches with maintenance only.
It was held that such practice was due in its origin to a local or family usage and not to a mere arrangement and that it was therefore to be recognized and acted upon as a legal and valid custom.
In order, therefore, that a custom should acquire the character of law the custom must be accompanied by the intellectual element, the opinion necessitatis "the conviction on the part of those who use a custom that it is obligatory and not merely optional".
In other words the mark which distinguishes custom in the legal sense from mere convention is the opinion necessitatis, the recognition that there is authority behind it. "In the modern state the custom, if legally recognized has behind it the court and an apparatus of coercion.
In primitive communities we do not find authority necessarily organized in the institutional sense.
We must ask, 'what is the ultimate power in the group to settle conflicts or to prescribe rules ? ' It may be the old men, the military group, the priests, or merely a general consensus of opinion.
But the opinion necessitatis can come into existence only when the community in some way throws its force behind the particular rules.
" (See G.W. Paton Jurisprudence 3rd edn.
p. 164) We have shown in the present case that the plaintiffs have established their right to maintenance from the Sthanam properties not merely as an act of generosity on the part of the Sthanee but the (1) I.L.R. 10 Bombay 327.
payment of maintenance has been made by the Sthanee as a matter of legal obligation.
The next question is whether the plaintiffs are entitled to arrears of maintenance.
It appears that after the decision of the Privy Council declaring the ist defendant as exclusive owner of properties he has paid Rs. 17,000 annually to the Amma Nethiar for the maintenance of the junior members of the Swaroopam.
It is not disputed by the plaintiffs that such payments were made before the institution of the present suit.
Even after the institution of the suit the 1st defendant had been depositing annually Rs. 25,000 in court for the maintenance of the plaintiffs and other members of the Swaroopam as ordered by the trial court.
It was alleged by the plaintiffs that they have not been paid any maintenance.
But the High Court found that maintenance had been given to the plaintiffs ' mother with whom plaintiffs had been living.
For these reasons the High Court held that there was no ground for awarding arrears to maintenance before the date of suit.
We see no reason for taking a view different from that of the High Court in the matter.
As regards the rate of maintenance the trial court granted decree at the rate of Rs. 250/ p.m. for every one of the plaintiffs irrespective of age.
It has been found by the trial court that the net income of the Swaroopam was about Rs. 2 lakhs per annum.
It is admitted that the income of the Swaroopam consists mostly of rents from cultivating tenants.
With the abolition of perquisites and the fixation of fair rents by recent tenancy legislation there appears to have been a reduction of the net income of the Sthanam in recent years.
It also appears that the plaintiffs are the only minor members in the family and excepting the 7th defendant who is their mother the defendants are males whose children would not be members of the Swaroopam.
In the Madras Estates (Abolition and Conversion into Ryotwari) Act 26 of 1948 compensation to members of the family entitled to maintenance out of an impartible estate is fixed at 1/5 of what is paid for the estate in view of these considerations the High Court held that the provision of Rs. 250/ p.m. to each of the plaintiffs was adequate.
The High Court, however, directed that it is open to the parties after two years to move the trial court for variation in the rate of maintenance fixed on the ground of altered circumstances of the Estate.
Having heard the parties we see no reason for interfering with the judgment of the High Court in this matter.
In the result we dismiss all the three appeals (Civil Appeals Nos. 1235, 1236 and 1237 of 1966).
There will be no order as to costs with regard to any of the appeals.
G.C. Appeals dismissed.

summary/full:
Defendant No. 1 was the Sthanee of Kavalappara estate which was an impartible estate governed by Marumakkathayam law.
The plaintiffs claimed maintenance based on a family custom entitling the members to maintenance out of the entire income of the Sthanam.
Past maintenance was claimed as also future maintenance from the date of the suit.
Defendant No. 1 denied that the plaintiffs had any right based on custom as claimed by them; according to him from older times two kalams of the Sthanam had been set apart for their maintenance.
He claimed that the Privy Council in suit No. 46 of 1934 had declared him absolute owner of the Sthanam properties but despite that, out of generosity only he had been paying to the junior members of the Swaroopam Rs. 17.000/ annually.
The trial court granted maintenance to the plaintiffs for the period claimed at the rate of Rs. 250/ per mensem for each of the plaintiffs.
Defendant No. 1 appealed to the High Court and the plaintiffs filed cross objections as the rate of maintenance allowed to them was lower than they had claimed.
The High Court partly allowed the appeal negativing the plaintiffs ' claim for arrears of maintenance, and dismissed the cross objections of the plaintiffs.
Both the parties appealed to this Court.
The questions that fell for consideration were: (i) whether the right to maintenance as claimed by the plaintiffs was based on custom; (ii) whether the High Court was right in disallowing the claim of the plaintiffs to arrears of maintenance; (iii) whether the rate of maintenance as ordered by the trial court and ' confirmed by the High Court was justified.
HELD: (i) An alleged custom, in order to be valid, must be proved by testimony to have been obeyed from consciousness of its obligatory character.
A mere convention between family members or an arrangement by mutual consent for peace and convenience cannot be recognised as custom.
In order that a custom should acquire the character of law the custom must be accompanied by the intellectual element, the opinion necessitatis.
the recognition that there is authority behind it.
[45 B C; D E] Rarnrao vs Yeshwantrao, I.L.R. , applied.
In the present case the evidence sufficiently proved a custom in Kavalappara estate by which the Sthanee was legally obliged to give maintenance to junior members of the family.
It was possible that the practice of paying maintenance to junior members originated as an act of generosity of the previous Sthanee.
But it had continued without interruption for such a length of time that it had acquired the character of a legal right.
[42] Kochuni vs Kuttanunnt, A.I.R. 1948 (P.C.) 47, 52, explained.
37 (ii) Although it had been alleged by the plaintiffs that they had not been paid any maintenance, the High Court had ' found that maintenance had been given to the plaintiffs ' mother with whom the plaintiffs had been living.
The High Court 's refusal to grant to the plaintiffs arrears of maintenance before the date of the, suit must, in the circumstances, be upheld.
[46 C] (iii) The High Court in fixing the amount of maintenance for each of the plaintiffs at Rs. 250./ per month had taken into account all the relevant factors.
It had further directed that it was open to the parties after two years to move the trial court for variation in the rate of maintenance fixed on the ground of altered circumstances of the Estate.
There was no reason for interfering with the judgment of the High Court in this matter.
[46. G]


judgement:
Appeal No. 1733 of 1966.
Appeal by special leave from the judgment and decree dated March 30, 1966 of the Madhya Pradesh High Court, Indore Bench in Second Appeal No. 341 of 1964.
M.C. Bhandare and P.C. Bhartari, for the appellant.
S.K. Mehta, A.P. Tayal and K.L. Mehta, for the respondent 48 The Judgment of the Court was delivered by Ray, J.
This is an appeal from the judgment dated 30th March, 1966 of the High Court of Madhya Pradesh (Indore Branch) allowing the appeal and setting aside the decree of the lower appellate court and restoring the decree of the trial court with costs.
The plaintiff 's suit against the Indore Municipal Corporation was for a declaration that the dismissal of the plaintiff was illegal and that the plaintiff was still on the post of Removal Sub Inspector and a decree against the defendant for Rs. 7,488/ on account of salary at the rate of Rs. 104/ p.m. from 15th April, 1953 till the date of institution of the suit, viz., 15th April, 1959 and other reliefs.
The trial court decreed the suit.
The lower appellate court set aside the decree.
The High Court restored the decree passed by the trial court.
The case of the plaintiff Niyamatulla was that the plaintiff was suspended by the order of the Municipal Engineer dated 15th April, 1953.
One Shri Ghatpande who acted in place of the Municipal Commissioner in the month of May 1953 directed the dismissal of the plaintiff.
The plaintiff contended that the dismissal could have been only under the orders of the Municipal Commissioner.
The plaintiff further contended that there was no opportunity given to the plaintiff against the proposed dismissal.
The defence of the Municipal Corporation was that the plaintiff preferred a review petition to the Municipal Commissioner who rejected the same.
The plaintiff thereafter preferred an appeal to the Appeal Committee of the Municipal Corporation which was dismissed.
Thereafter, a revision petition against the order was heard by the Minister in charge of the Government of Madhya Bharat and the same was rejected in the month of September, 1955.
It was, therefore, contended that the plaintiff had no right to file the suit.
Another defence was that the suit was barred by limitation.
Counsel for the appellant canvassed three grounds.
First, that the order of dismissal was valid and Shri Ghatpande had jurisdiction to pass the order of dismissal.
Secondly, the suit was barred by limitation.
Thirdly, the provisions of section 135 of the Indore Municipality Act was a plea in bar of the suit.
The authority of Shri Ghatpande to dismiss the plaintiff was based on the provisions contained in section 13 of the Indore Municipal Act, 1909.
Section 13 of the Indore Municipal Act, inter alia, reads as follows: "(1) The Municipal Commissioner for the City of Indore shall, from time to time, be appointed by the Government.
49 (2) (a) Leave of absence may be granted to the Commissioner, from time to time, according to the Indore Civil Service Regulations.
(b) During such absence of the Commissioner the Government may appoint any person to act as Commissioner.
Every person so appointed shall exercise the powers and perform the duties conferred and imposed by the Act or by any other enactment at the time in force, on the person for whom he is appointed to act, and shall be subject to the same liabilities, restrictions and conditions to which the said person is liable and shall receive such monthly salary as may be determined by the Government.
In order to rest the defence on section 13 of the Indore Act, it has to be first found out that there is an appointment by the Government of any person to act as Commissioner.
The finding of fact by the High Court is that no order of the Government was produced to show that Shri Ghatpande was appointed to act in place of Shri Rao who was the then Municipal Commissioner.
The further finding of the fact was that the order of dismissal was passed by Shri Ghatpande.
The defence of limitation pleaded by the Indore Municipal Corporation was in general terms that this suit was barred by limitation.
The plaintiff in the plaint alleged that the cause of action arose on 15th April, 1953 and on ist May, 1953 when the plaintiff was dismissed from service and on 11th January, 1954 when it was passed by the Appeal Committee of the Indore Municipality.
At the trial the plaintiff contended that the suit was well constituted and was governed by Article 120 of the Limitation Act, 1908.
At the time of the hearing of the appeal before the District Judge, Indore, the Municipal Corporation, Indore contended that under section 135(2) of the Indore Municipal Act, 1909 a suit in respect of any act done or purporting to be done under the Act by an officer or servant of the municipality or by any person acting under the order of the Government was to be filed within six months from the date of the actual of the cause of action.
The District Judge accepted the plea.
The alternative contention on behalf of the Municipal Corporation before the District Judge was that Article 115 of the Limitation Act, 1908 will apply if the special period of limitation prescribed by the Act did not apply.
The District Judge did not accept that contention on the reasoning that the plaintiff was not under any contract of service and Article 115 applied to compensation for breach of 50 contract.
The District Judge held that Article 14 of the Limitation Act, 1908 would apply when an order of an officer in his official capacity was set aside and no special period of limitation was prescribed.
In the High Court the Municipal Corporation repeated the plea under section 135 of the Indore Municipal Act, 1909.
The High Court, however, repelled that contention by holding that Shri Ghatpande was not the Commissioner when he passed the order, and, therefore, the order being without jurisdiction, the provisions contained in section 135(2) of the Indore Municipal Act were inapplicable and the plaintiff 's suit was governed by Article 120 of the Limitation Act, 1908.
The provisions of the Code of Civil Procedure enjoin that if any special plea of limitation is a defence such a defence of limitation should be pleaded.
In the present case, the Municipal Corporation did not plead section 135 of the Indore Municipal Act, 1909 as a defence.
Such a plea was not taken in the pleadings or in the trial court and the District Judge should have not entertained such a plea.
The provisions contained in section 135 of the Indore Municipal Act will be applicable to things done under the Act.
It is manifest that in the present case the order of dismissal passed by Shri Ghatpande was beyond his jurisdiction and is therefore not an act done under the Act.
Furthermore, section 8(1)(b) of the Indore Act says that the Council shall bear the name of the Municipal Council of the Indore City and be a body corporate and have perpetual succession and a common seal and by such name may sue and be sued.
A distinction is to be noticed between suing the Municipal Council of the Indore City as contemplated in section 8(1)(b) of the Act and suits against the Commissioner or any officer or servant of the Municipality or any person acting under the direction of the Government or the Commissioner as contemplated in section 135 of the said Municipal Act.
One of the purposes of section 135 of the Municipal Act is to, afford an opportunity to the persons mentioned in the section to make amends within the period of notice.
The suit that was filed in the present case was not in respect of any act done or purported to be done under the Act.
This Court in the case of Bharat Kala Bhandar Ltd. vs Municipal Committee, Dhamangaon(1) examined the provisions of section 48 of the Central Provinces and Berar Municipalities Act, 1922 which was to the effect that no suit shall be instituted against any Committee or any member, officer or servant thereof or any person acting under the direction of any such committee, member, officer or servant for anything done or purporting to be done under the Act, until the expiration of two months next after notice (1) ; 51 in writing stating the cause of action, the name and place of abode of the intending plaintiff and the relief which he claims.
Section 48 of the said Central Provinces and Berar Municipalities Act further provided that every such suit shall be dismissed unless it was instituted within six months from the date of the actual of the cause of action.
The appellant in that case contended that it was a case of recovery of an illegal tax and therefore a claim for its refund fell outside the provisions of section 48 of the said Act.
The respondent, on the other hand, contended there that the collection of tax was not without jurisdiction but only irregular and therefore the suit would be in respect of a matter purporting to be done under the Act.
This Court held that where power existed to assess and recover a tax up to a particular limit the assessment or recovery of an amount in excess was wholly without jurisdiction.
To such a case, the statute under which action was purported to be taken could afford no protection.
On logic and principle the same reasoning applies to the provisions contained in section 135 of the Indore Municipal Act, 1909 with the result that the suit in the present case is not within the mischief of section 135 of the Indore Municipal Act.
For these reasons, the appeal fails and is dismissed with costs.
Appeal dismissed.

summary/full:
The respondent an employee of the appellant Municipality filed a suit for declaring his dismissal illegal as the order of dismissal was not passed by the Municipal Commissioner as required by section 13 of the Indore Municipal Act, but was made by one G, who was then acting in place of the Municipal Commissioner.
The trial court accepted the respondents plea and decreed the suit.
The District Judge in appeal set aside the decree holding that the suit was barred by limitation as under section 135(2) of the Act a suit in respect of any act done under the Act by an officer of the Municipality had to be filed within six months of the actual of the cause of action.
The special plea of limitation under section 135(2) was not taken in the trial court, though in general terms a plea of limitation was raised.
The: High Court set aside the decree of the District Judge and restored that of the trial court.
The High Court on the evidence came to the conclusion that no order of the Government was produced to show that G, was appointed to act in place of the Municipal Commissioner, and that the order of dismissal was passed by G, Dismissing the appeal, this Court, HELD: On the findings.
the dismissal order passed by G, was beyond his jurisdiction.
The provisions contained in section 135 of the Act will be applicable to things done under the Act.
Since the order of dismissal passed by G was beyond his jurisdiction, it was, therefore, not an act done under the Act.
[50 D E] If any special plea of limitation is a defence such a defence of limitation should be pleaded.
In the present case the Municipal Corporation did not plead section 135 of the Indore Municipal Act, 1909 as a defence.
Such a plea was not taken in the pleadings or in the trial court and the District Judge should not have entertained such a plea.
[50 C D] Bharat Kala Bhandar Ltd., vs Municipal Committee, Dhamnangaon, ; , followed.