judgement:
ivil Appeal No. 500 of 1985.
From the Judgment and Order dated 25.7.1984 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. 923/81 A in Order No. 559/84 A. Soli J. Sorabjee, A.N. Haksar, Sanjay Grover and K.J. John for the Appellant.
G. Ramaswamy, Additional Solicitor General, Mrs. Indira Sawhney, Miss A. Subhashini and Mrs. Sushma Suri for the Respondent.
The Judgment of the Court was delivered by OZA, J.
This appeal involves the determination of the only question as to whether the appellant is entitled to refund of Rs.22,42,002.09 paid as excise duty on the price of packing material used for packing of superfine cement which according to the appellant was paid under protest whereas according to the respondent, it was not 717 paid under protest and therefore, the claim of refund is barred by time.
The brief facts necessary for determination are.
The appellant company is a manufacturer of superfine cement.
The company preferred the claim for refund of Rs.22,43,002.09 alleged to be duty on price of packing material of the aforesaid product paid during July 4, 1974 to March 1, 1975.
This claim of refund was rejected by Assistant Collector of Central Excise Tirunelveli on the ground that Rule 11 of the Central Excise Rules 1944 was applicable as duty was not paid under protest and the claim was barred by time.
On appeal, the Appellate Collector of Custom and Central Excise by the judgment dated February 7, 1981 maintained the order passed by the Assistant Collector on the same ground of limitation, as the merits of the claim was not disputed by the department.
This is clear from the following observa tions in the Appellate Collector 's order: "They based their claim on the Trade Notice No. 232/79 dated 29.10.79 of Madras Collector ate declaring that the said cement is not the variety of cement requiting packing to prevent deterioration, and the cost of packing of such cement is not liable to be included in the assessable value.
The ground on which the claim was made are not disputed in this ap peal.
" Thereafter, the appellant unsuccessful ly approached the Customs, Excise and Gold (Control) Appellate Tribunal.
Before the Tribunal also, only the question of limitation was put against the appellant.
The Tribunal by its order dated July 25, 1984 has stated: "Before us, the only question argued was the question of limitation.
It was urged that the letter dated 11.6.74 amounted to a protest so that the period of limitation prescribed in Rule 11 of the Rules ceased to be applicable.
" The Tribunal also took the view that the letter dated June 11, 1974 was not a protest to save the period of limi tation.
Hence this appeal.
718 We heard learned counsel for parties.
It is not in dispute that the duty was paid for the period from July 4, 1974 to March 1, 1975.
If it was paid under protest, the orders of the authorities cannot be sustained.
It is, there fore, necessary to refer to the contents of the letter dated June 11, 1974.
The letter raised many objections against the levy of packing charges.
It was stated that the duty on packing charges on superfine cement was not leviable.
The appellant finally said: "If the department feels that the duty is leviable on packing charges, we have no op tion, but to suggest the rates fixed by the Government of India from quarter to quarter, as packing charges.
" The counsel also referred to us the decision of the Central Government in the case of Birla Cement Works where a similar claim was allowed by order dated December 31, 1980.
Counsel further referred to us the Trade Notice dated Octo ber 29, 1979 issued by the Collectorate, Madras wherein it was clearly indicated that the costs of packing was not liable to be included in the assessable value.
Learned Additional Solicitor General frankly conceded that at the material time, there was no particular form prescribed for protesting against the levy or paying under protest.
He also contended that if the letter is treated as a protest and the payments are held to be payments under protest then the limitation prescribed under Rule 11 admit tedly would not be applicable, but the Trade Notice issued by the Madras Collectorate on October 29, 1979 could not be given retrospective effect and, therefore, the matter should go back to the Tribunal for disposal on other questions.
We gave our anxious considerations to the rival submis sions.
A perusal of the letter dated June 11, 1974 clearly shows that all possible contentions which could be raised against the levy of duty on the value of packing material were raised.
If this could not be said to be a protest one fails to understand what else it could be.
It does not require much time to analyse the contents of the letter.
An ordinary reading with common sense will reveal to anybody that the appellant was not accepting the liability without protest.
We have no hesitation to hold that the letter was in the nature of protest.
That being the position, the question of limitation does not arise for refund of the duty.
719 It is rather strange that learned Additional Solicitor General wants the matter to go back to the Tribunal for considering the effect of Trade Notice.
The Central Govern ment in their revisional order dated December 31, 1980 in the case of Birla Cement Works gave the benefit without any Trade Notice.
There it was observed: "In the circumstances Government accepted the petitioner 's pleas and observe that superfine cement is nothing other than ordinary portland which is grounded to a very high fineness of not less than 3500 CM 2/gm and that this higher fineness does not lead ' to its deterio ration without packing.
The Government, there fore, accept the contention of the petitioners and hold that the impugned good being capable of being sold without packing like ordinary gray portland cement the cost of packing for superfine cement should not be added to the assessable value.
" The authorities ought to have extended the view taken by the Central Government in the case of Birla Cement Works to all similar cases.
Moreover, the Appellate Collector and the Tribunal clearly stated that the only question agitated before them was the question of limitation.
The order does not indicate that the counsel for the Department or the departmental representative raised any other question on merits.
Indeed no objection could have been raised on the merits of the matter in view of the order of the Central Government in the Birla Cement Works.
In these circumstances, the appeal is allowed, the orders passed by the Tribunal and Other authorities are set aside.
It is declared that the appellant is entitled to refund of the amount.
The appellant shall be paid interest at the rate of six per cent from the date of refusal of refund with costs of this appeal quantified at Rs. 10,000.
N.P.V. Appeal al lowed.

summary/full:
The appellant Company, a manufacturer of superfine cement, preferred a claim for refund of duty on price of packing material of the product, paid by it during July 4, 1974 to March 1, 1974, on the ground that duty on packing charges on superfine cement was not leviable.
But the claim was rejected by the Assistant Collector of Central Excise, the Appellate Collector and also the Appellate Tribunal on the ground of limitation under Rule 11 of the Central Excise Rules, 1944, since the duty was not paid under protest.
The Tribunal also held that the letter dated July 11, 1974, in which the appellant had stated that the duty was not levi able on packing charges and if the department felt it was leviable they had no option but to suggest the rates fixed by Government from quarter to quarter as packing charges, was not a protest to save the period of limitation pre scribed in Rule 11.
In the appeal before this Court, on behalf of the Compa ny, it was submitted that a similar claim was allowed by the Central Government in the case of Birla Cement Works and that the Trade Notice dated 29.10.1979 by the Collectorate clearly stated that the cost of packing was not liable to be included in the assessable value.
While conceding that there was no particular form of protest, it was contended on behalf of the department that if the payments were held as made under protest, by treating the letter as a protest, then the period of limitation under Rule 11 of the Central Excise Rules, 1944 would not be applicable but the Trade Notice of 20.1.1979 could not be 716 given retrospective effect and, therefore, the matter had to be remitted to the Tribunal for disposal on other questions.
Allowing the appeal, HELD: The letter of the appellant clearly shows that all possible contentions which could be raised against the levy of duty on the value of packing material were raised, and that the appellant was not accepting the liability, without protest.
Therefore, the letter was in the nature of protest.
That being the position, the question of limitation does not arise for the refund of the duty.
i718 H] Giving the benefit without any Trade Notice in a similar case, the Central Government held, in their revisional order, that as superfine cement was capable of being sold without packing like grey portland cement, the cost of packing for superfine cement should not be added to the assessable value.
The authorities ought to have, therefore, extended this view to all similar cases.
[719A, D] In these circumstances, the appellant is entitled to refund of the duty paid by it.
[719F]


judgement:
ivil Appeal No. 1357 of 1973.
From the Judgment and Order dated 10.10.1972 of the Gujarat High Court in Second Appeal No. 93 of 1968.
689 G.A. Shah and M.N. Shroff for the Appellants.
Krishan Kumar and Vimal Dave (N.P.) for the Respondents.
, The Judgment of the Court was delivered by VENKATARAMIAH, J.
The question for consideration in this case is whether the hereditary right of the respondents to recover a sum of Rs.3,500 per annum under an agreement dated 10.8.1914 entered into between the predecessor in interest of the respondents and the former princely State of Junagadh came to an end by virtue of provisions contained in the Gujarat Surviving Alienations Abolition Act, 1963 (hereinaf ter referred to as 'the Act ').
There was one Darbar Harsurvala of Mandavad in the former princely State of Junagadh.
He had a hereditary right to collect certain quantities of grass, fire wood and timber from the Gir Forest in the State of Junagadh and that right was recognised by a declaratory decree made by the Rajastha nik Court of Kathiawar in the year 1884.
On the death of Harsurvala the said right was being enjoyed by his son Jiva Vala till the year 1914.
On 10th August, 1914 an agreement was entered into between Jiva Vala and the State of Junagadh under which the State of Junagadh agreed to pay every year (commencing with 1st September of the preceding year and ending with the 31st August of the succeeding year) in the month of January a sum of Rs.3,500 to Jiva Vala and after him to the heirs claiming under him in lieu of the right to collect grass, fire wood and timber which was being exer cised by Jiva Vala.
Accordingly, Jiva Vala was receiving the sum of Rs.3,500 every year and on his death his son Kalubhai was receiving the said sum every year from the State of Junagadh and on the State of Junagadh becoming part of the Union of India from the Saurashtra State, then from the State of Bombay in which Saurashtra State was merged and thereafter from the State of Gujarat which came to be estab lished under the Bombay Reorganisation Act, 1960 till his death.
After his death Respondent No.1 Kamlaben, the wife of Kalubhai and the other respondents, who were children of Kalubhai were receiving the amount due to them till the year 1964.
However, in January, 1965 the Mamlatdar of Visavadar issued notice under the orders of the Collector, Junagadh to the respondents stating that the right to receive the said amount had come to an end on the coming into force of the Act, i.e., the Gujarat Surviving Alienations Abolition Act, 1963, which had come into force on 1st October, 1963 and threatening the respondents that measures such as attachment etc.
would be taken if the amount 690 paid for the year 1.9.1963 to 31.8.1964 was not refunded by them to the State Government.
Thereupon the respondents instituted the suit before the Court of the Civil Judge, Junagadh out of which this appeal arises for a declaration that they continued to enjoy the right to receive the sum of Rs.3,500 per annum hereditarily and for an injunction re straining the appellants, the State of Gujarat and the Collector of Junagadh from taking any action to recover the amount which had already been paid to them.
The Trial Court dismissed the suit.
Aggrieved by the judgment and decree of the Trial Court, the respondents filed an appeal before the District Judge, Junagadh in Civil Regular Appeal No. 135 of 1966.
The District Judge allowed the appeal holding that the right to receive the amount had not come to an end on the coming into force of the Act.
The decree passed by the learned District Judge was confirmed by the High Court of Gujarat in Second Appeal No. 93 of 1968 vide its Judgment dated 10.10.1972.
The appellants have filed this appeal by special leave against the judgment of the High Court.
There is no dispute about the facts involved in this case.
The right of Harsurvala to take grass, fire wood and timber from the Gir Forest belonging to the State of Juna gadh had been declared in a decree (Exhibit 21) passed by the Rajasthanik Court on April 14, 1884.
By a further agree ment dated 10th August, 1914 (Exhibit 24) which had been arrived at between Jiva Vala, descendant of Harsurvala and the State of Junagadh, the State of Junagadh had agreed to pay every year a sum of Rs.3,500 to Jiva Vala and his heirs in lieu of the right to collect grass, fire wood, timber from the Gir Forest, as stated above.
That the State of Junagadh and then the State of Saurashtra, the State of Bombay and the State of Gujarat were paying the said amount annually to Jiva Vala and his successors till the year 1964.
The only question which arises for consideration is whether the said right to receive Rs.3,500 per annum came to an end on the coming into force of the Act.
The Act was passed with the object of abolishing certain alienations which were not affected by the earlier enact ments which had been enacted for the abolition of various kinds of alienations in the State of Gujarat and to provide for matters consequential and incidental thereto.
The ex pression 'alienation ', as defined in clause (3) of section 2 of the Act reads thus: "3, 'alienation ' means 691 (a) any right in respect of an aghat land enjoyed by an aghat holder immediately before the appointed day, (b) any right in respect of a Taluqdari watan enjoyed by the holder thereof immediate ly before the appointed day, (c) any right, with or without any condition of service, in respect of any other land, village or portion of a village and consisting of (i) any proprietary interest in the soil coupled or not coupled with exemption from the payment of the whole or part of the land revenue, or (ii) a right only to the land revenue or a share of land revenue of the land, vil lage or portion of a village, enjoyed by the holder thereof for the time being and subsisting immediately before the appointed day in limitation of the right of the State Government to assess the land or village or portion of a village to land reve nue in accordance with the Code, whether by virtue of an express grant or recognition as a grant by the ruling authority for the time being or otherwise, or (d) any right to any cash allowance or allowance in kind, by whatever name called, payable by the State Government and enjoyed by any person immediately before the appointed day;" Section 6 of the Act reads thus: "6.
Abolition of alienations together with their incidents and alienated lands liable to payment of land revenue.
Notwithstanding any usage or custom, settlement, grant, agree ments, sanad or order or anything contained in any decree or order of a court or any law for the time being applicable to any alienation, with effect on and from the appointed day (a) all alienations shall be and are hereby abolished; (b) save as expressly provided by or under this Act, 692 all rights legally subsisting on the said day under such alienations and all other incidents of such alienations (including any right to hold office, or any liability to render serv ice appertaining to an alienation) shall be and are hereby extinguished; (c) subject to the other provisions of this Act, all alienated lands shall be, and are hereby made liable to the payment of land revenue in accordance with the provisions of the Code and the rules made thereunder; and accordingly the provisions therein relating to unalienated land shall apply to all alienated lands.
" On such abolition the alienee is entitled to compensation as provided in section 13 of the Act, if the alienation is one covered by section 2(3)(d) of the Act.
The right to receive a sum of Rs.3,500 per annum which the respondents were enjoying admittedly did not fall under sub clauses (a), (b) and (c) of clause (3) of section 2 of the Act.
The question is whether the said right falls under sub clause (d) of clause (3) of section 2 of the Act and if it falls under that clause whether the payment of the said sum can be abolished constitutionally under the Act.
Sub clause (d) of clause (3) of section 2 of the Act is very widely worded and refers to any right to any cash allowance or allowance in kind, by whatever name called, payable by the State Government and enjoyed by any person immediately before the appointed day.
The Act is included in the Ninth Schedule to the Constitution of India as Item No. 33 which reads thus: "33.
The Gujarat Surviving Alienations Aboli tion Act, 1963 (Gujarat Act XXXIII of 1963), except in so far as this Act relates to an alienation referred to in sub clause (d) of clause (3) of section 2 thereof." Sub clause (d) of clause (3) of section 2 of the Act having been specifically excluded, the said clause does not receive the protection of Article 31B of the Constitution of India.
The question which remains to be considered is wheth er the said sub clause can be deemed to be protected by Article 31A of the Constitution of India.
Article 3 IA of the Constitution of Indian refers to matters described in sub clauses (a) to (e) of Article 31A(1) of the Constitution of India.
It is not claimed 693 on behalf of the State Government that the present case falls under sub clauses (b) to (e) of Article 31A(1) of the Constitution of India.
It is, however, urged that the present case falls under sub clause (a) of clause (1) of Article 31A of the Constitution of India, which reads thus: "(a).
the acquisition by the State of any estate or of any rights therein or the extin guishment or modification of any such rights, or" In other words it is urged that the provision in question should be treated as a part of a legislation intended for bringing about agrarian reform to which Article 31A(1)(a) of the Constitution of India is attracted.
In the instant case the right which the family of the respondents possessed was the right to collect grass, fire wood and timber etc.
from the Git Forest and that right had already been surrendered under the agreement dated 10.8.1914 by the said family in lieu of the annual payment of Rs.3,500.
In an earlier deci sion in Civil Application No. 1399 of 1968 decided on 18/19.3.1971 a Division Bench (J.M. Mehta and A.D. Desai, JJ.) of the Gujarat High Court had held that sub clause (d) of clause (3) of section 2 of the Act was not ultra vires so far as the alienation in question was by way of an agrarian reform.
The judgment in that case had been delivered by J.M. Mehta, J. The Judgment out of which the present Second Appeal arises was also rendered by J.M. Mehta, J. himself.
Distinguishing his earlier decision from the present case J.M. Mehta, J. has observed thus: "In the present case the right of plaintiff has originated in the right to take forest produce of the Gir Forest belonging to the former Junagadh State and which had been enjoyed by the ancestor Shri Harsurvala.
The right was recognised by the Rajasthanic Court of the then Kathiawad Agency.
It was under the agreement, exhibit 24 dated August 10, 1914 that this right was commuted into a lump sum amount of Rs.3,500 and this was enjoyed hereditarily by the plaintiffs ' ancestor.
Therefore, this alienation has nothing to do with any agrarian reform and this alienation would not fall within the section 2(3)(d) so that it can have any immunity from the challenge.
The State could only succeed if the term 'alienation ' in section 2(3)(d) is interpreted in such wide context which would make it ultra vires as per the settled legal position in the aforesaid Divi 694 sion Bench decision.
That is why narrow inter pretation was given by me confining to only those alienations which were incidental to the agrarian reform.
The present alienation which consisted of cash allowance as per exhibit 24 is not incidental to any agrarian reform, and therefore, ,the Act would not abolish this alienation.
The plaintiffs ' rights are to take forest produce and on commutation of their rights by exhibit 24 they are property rights.
When such allowance is being paid the right to this cash allowance could never be acquired by the State as per the aforesaid settled legal position . ." In view of the foregoing the High Court held that sec tion 2(3)(d) of the Act should be read down and construed as not including payment of cash allowance of the type in question.
It held that otherwise the said clause would be violative of Articles 14, 19 and 31 of the Constitution of India.
It is not disputed by the learned counsel for the State Government that unless the present case receives the protec tion of Article 3 IA of the Constitution of India the action taken by the State Government to treat the right of the respondents as having come to an end would be unconstitu tional since it would be violative of Articles 14, 19 and 31 of the Constitution of India.
It is, therefore, necessary to examine the nature of the transaction under which the amount of Rs.3,500 was payable every year to the respondents on the hereditary basis in order to find out whether the abolition of the said right can be considered as a part of agrarian reform which re ceives the protection of Article 31A of the Constitution of India.
An extract of the Records of Rights giving particu lars of the agreement dated 10th August, 19 14 entered into between Vala Jiva Harsur and the State of Junagadh is pro duced before the Court.
It shows that Vala Jiva Harsur, the predecessor in interest of the respondents had the right to remove from the Gir Forest every year (i) 75 cart loads of teak wood, (ii) 100 cart loads of atcot wood, (iii) 600 cart loads of sarpan, and (iv) 250 cart loads of grass, in addi tion to the right of grazing of cattle and removing two lakhs bundles of grass during the time of famine.
It is clear from the above statement that certain rights which the family of respondents possessed in the land comprised in the Gir Forest were agreed to be surrendered against payment of Rs.3,500 annually.
It is no doubt true that long before the date on which the Act came into force the agreement had come into existence but it was a 695 right which was originally annexed to land.
It may be that the said land formed part of the said forest, but still it falls within the definition of the expression 'estate ' in clause (a) of Article 31A(2) of the Constitution of India.
Article 31A(2)(a)(iii) states that any land held or let for purposes.
of agriculture or for purposes ancillary thereto, including waste land, forest land for pasture or sites of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans is includ ed in the expression 'estate ' for purposes of Article 3 IA of the Constitution of India.
Article 3 IA, as it stood on the date of the passing of the Act, provided that notwith standing anything contained in Article 13, no law providing for the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights shall be deemed to be void on the ground that it was inconsistent with or took away or abridged any of the rights conferred by Article 14 or Article 19 or Article 31 of the Constitution of India.
The expression 'rights ' is again defined in Article 31A(2) of the Constitution of India as in relation to an estate, including any rights vesting in a proprietor, sub proprietor, underproprietor, tenure hold er, raiyat, under raiyat or other intermediary and any rights or privileges in respect of land revenue.
It is an inclusive definition.
The Fight which was being enjoyed by the predecessor ininterest of the respondents was a right in a waste land or a forest land or a land for pasture.
In order to .treat a particular law as a part of an agrarian reform, it is not necessary that on the land which is the subject matter of the said law actual cultivation should be carried on.
In the State of Kerala and Anr.
vs The Gwalior Rayon silk Manufacturing (Wvg.) Co. Ltd. etc.
; , the.
constitutionality of the Kerala Private Forests (Vesting and Assignment) Act, 1971 came up for consideration before this Court.
In that case one of the questions which arose for consideration was whether the said Act which related to private forests envisaged a scheme of agrarian reform.
In that case this Court held that even though the said legislation had the effect of extinguishing or modifying rights annexed to or arising out of the forest land it could be considered as part of agrarian reform because such forest lands also if prudently and profitably exploited could bring about relief to people engaged in agriculture.
This Court further observed in that case that agrarian reform was more humanist than mere land reform and scientifically viewed covered not merely abolition of inter mediary tenures, zamindaris and the like but restructuring of village life itself taking in its broad embrace the socia economic regeneration of the rural population.
In the present case the extinguishment of the right to receive a certain amount in lieu of the right to remove timber, grass, etc.
from a forest area, therefore, formed part 696 of the process of agrarian reform as there was clear nexus between the agreement to pay the amount and the rights arising out of the forest area.
It is significant that under the agreement of the year 1914 the State of Junagadh under took to pay Rs.3,500 every year hereditarily in lieu of the rights which the predecessor in interest of the respondents had in the forest area, thereby meaning that if the amount was not paid, the original right to carry timber, grass etc.
from the forest area would revive.
It cannot, therefore, be said that the extinguishment of the right to receive money alone unconnected with land was contemplated in the instant case.
When once the above conclusion is reached then the legislation in question should be construed as having the effect of bringing about the extinguishment of the right in an estate for the purpose of better management of the forest area keeping in view the interests of the people of the State in general and of the people living in or around the Gir Forest in particular.
Sub clause (d) of clause (3) of section 2 of the Act should be deemed to include the cash allowance of the type involved in this case and the Act must be held to be valid even though it affects the rights of the respondents which undoubtedly originated from the land covered by the forest area.
We, therefore, hold that the view taken by the High Court that it the transaction in question is construed as covered by sub clause (d) of clause (3) of section 2 of the Act, the Act would become void to that extent is not correct.
We are of the view that the legislation has the effect of validly extinguishing the right of the respondents to receive annually a sum of Rs.3,500 on a hereditary basis.
The respondents are entitled to the payment of whatever compensation is payable under the Act notwithstanding the provisions of Articles 14 and 19 and Article 31 of the Constitution of India (as it existed prior to its deletion).
We, therefore, set aside the judgment of the High Court and dismiss the suit instituted by the respondents.
We, however, make it clear that the dismissal of the suit does not come in the way of the respondents being paid whatever compensation they are entitled to under the Act.
If such compensation has not been paid yet, the authority concerned shall proceed to compute the amount of compensation payable to the respondents and to disburse it within three months from today.
The appeal is accordingly allowed.
No costs.
R.N.J. Appeal allowed.

dataset_name: IN-Abs

summary/full:
One Darbar Harsurvala by virtue of a declaratory decree made in 1884 had the hereditary right of collecting grass, firewood, timber etc.
from Gir Forest in the erstwhile state of Junagarh.
This right devolved on his son Jiva Vala.
The State by an agreement dated 10th August 1914 agreed to pay Rs.3,500 every year to Jiva Vala and on his demise to his heirs, in lieu of the right to collect grass, firewood etc.
In January 1965 the revenue authorities issued a notice to the Respondents successors in interest of Harsurvala that the right to receive the aforesaid amount had come to an end on the coming into force of the Gujarat Surviving Alienations Abolition Act, 1963 and asked them to refund the amount paid to them for the year 1963 64.
The respondents filed a de claratory suit for a declaration that they continued to enjoy the right to receive Rs.3,500 hereditarily and for an injunction restraining the State from recovering the amount already paid to them.
The Trial Court dismissed the suit.
On appeal the District Judge allowed the appeal holding that the right to receive the amount annually had not come to end.
The High Court confirmed the decree passed by the District Judge.
The State came up in appeal by special leave against that judgment of the High Court.
Allowing the ap peal, this Court.
HELD: The Gujarat Surviving Alienations Abolition Act, 1963 was passed with the object of abolishing certain alien ations which were not affected by the earlier enactments which had been enacted for the abolition of various kinds of alienations in the State of Gujarat.
[690G] 688 The Act is included in the Ninth Schedule to the Consti tution as Item No. 33.
[692F] Sub clause (d) of clause (3) of section.
2 of the Act having been specifically excluded, the said clause does not receive the protection of Article 31 B of the Constitution of India.
[692G] The 1963 Act should be construed as having the effect of bringing about the extinguishment of the right in an estate for the purpose of better management of the forest area keeping in view the interests of the people of the State in general, and of the people living in or around the Gir Forest, in particular.
[696C] In order to treat a particular law as a part of an agrarian reform contemplated under article 31 A(1) it is not necessary that on the land which is the subject matter of the said law actual cultivation should be carried on.
[695E] In the instant case, the right which the family of the respondents possessed was the right to collect grass, fire wood and timber etc.
from the Gir Forest and that right had already been surrendered under the agreement dated 10 8 1914 by the said family in lieu of the annual payment of Rs.3,500.
The right which was being enjoyed by the predeces sor in interest of the respondents was a pasture.
[693C D] The extinguishment of the right to receive a certain amount in lieu of the right to remove timber, grass, etc.
from a forest area, therefore, formed part of the process of agrarian reform contemplated under article 31 A(1) as there was clear nexus between the agreement to pay the amount and the rights arising out of the forest area.
[695H; 696A] The respondents are entitled to the payment of whatever compensation is payable under the Act notwithstanding the provisions of Article 14 and 19 and Articles 31 of the Constitution of India.
[696E F] State of Kerala & Anr.
vs The Gwalior Rayon Silk Manu facturing (Wvg.) Co. Ltd. etc.
; , referred to.


judgement:
ivil Appeal No. 575 (NT) of 1975.
From the Judgment and Order dated the 24.4.1973 of the Calcutta High Court in Income Tax Reference No. 202 of 1969.
B. Ahuja and Ms. A. Subhashini for the Appellant.
K.P. Bhatnagar, S.P. Mittal and B.P. Maheshwari for the Respondent.
The Judgment of the Court was delivered by PATHAK, CJ.
This appeal by special leave is directed against the judgment of the High Court at Calcutta answering the following question in favour of the assessee and against the Revenue: "Whether, on the facts and in the circum stances of the case, the share of profit of the assessee 's wife was includable in the total income of the assessee under section 64(1)(iii) of the Income Tax Act, 1961?" 739 The assessee was assessed in the status of an individual for the assessement year 1962 63 corresponding to the previ ous year 26 March, 1961 to 13 April, 1962.
At the material time the assessee was a partner in a firm, Messrs Ramesh and Co., with a share of eight annas therein.
The balance was shared by three other partners, the assessee 's father, Kunjilal Agarwala, the assessee 's brother, Hariram Agarwala and a stranger, Jagdish Prasad.
On 10 November, 1960 and on 28 November, 1960 the assessee made two gifts of Rs.21,000 and Rs.30,000 respectively to his wife, Kaushalya Devi, from his account in the firm.
On 28 November, 1960 he made anoth er gift of Rs. 11,000 to his mother Chili Bai from that account.
It may be observed that Chili Bai received another gift of Rs.20,000 from her husband, Kunjilal, effected by similarly drawing from his account with the firm.
The assessee 's wife, Kaushalya Devi, as well as his mother Chili Bai became partners with three other persons in a newly constituted firm, Messrs Kunjilal Hariram & Co. The three other partners were the assessee 's grand father, Moharilal Agarwala, the assessee 's brother, Hariram Agarwala and the stranger, Jagdish Prasad Gup.
The Partnership Deed dated 10 November, 1960 provided that the business was to commence from 12 November, 1960.
The preamble to the deed stated: "Whereas the partner of the Fifth Part who has extensive experience and outstanding talent of organisation in Jagree and Grains Trade but little finance requested the partners of the First four Parts to enter into co partnership with him on contributing the necessary finance to carry on business in Jagree and Grains and also act as Commission Agents in Jagree Grains and allied commodities to which request they acceded." Clause 4 of the Partnership Deed stipulated: "That the partners of the First Four Parts shall initially contribute Rs.25,000 each to be put in within six months from the commence ment of the partnership.
The said contribu tions augmented by further deposits and prof its or depleted by withdrawals and tosses shall carry interest at the rate of 6% per annum.
The amount if any, standing to the credit of the partner of the Fifth Part shall carry interest at the same rate." 740 On 12 November, 1960 Kaushalya Devi contributed Rs.21,000 as capital, which came out of the gift made by the assessee on 10 November, 1960.
She also contributed Rs.30,000 as capital, which amount came out of the gift made on 28 November, 1960.
In the course of assessment proceedings for the assess ment year 1962 63 in respect of the assessee the Income Tax Officer included the profits of the assessee 's wife from the firm, Messrs. Kunjilal Hariram & Co., under section 64(1)(iii) of the Income Tax Act, 1961.
An appeal by the assessee was dismissed by the Appellate Assistant Commissioner of Income Tax, who observed that the wife would not have become a partner of the firm unless she had contributed capital, and as the capital was provided by the husband the inclusion of the wife 's share of income in the assessment of the assessee was justified.
In second appeal, it was conceded by the assessee before the Income Tax Appellate Tribunal that the interest received by the assessee 's wife on her capital contribution to the firm was includible in the total income of the assessee, but it was contended that the balance of the share of profit was not so includable as the assessee 's wife had become a part ner in the firm in her own right, and it was immaterial that the capital invested by her had been provided as a gift by the assessee.
The Appellate Tribunal found that the admis sion of the assessee 's wife as partner in the firm was solely on account of her contribution of capital to the firm, that the assets in the form of cash were transferred directly by the assessee to his wife otherwise than for adequate consideration, and that the income must be said to have arisen indirectly from the assets transferred.
The second appeal was dismissed.
At the instance of the assessee the question of law set forth earlier was referred to the High Court at Calcutta for its opinion.
The High Court has taken the view that the share of profits arose to the assessee 's wife primarily because the partnership made a profit and although it had connection with the gift it did not arise as a result of the gift, that the income arose from the share of profits only because the other partners agreed to take the assessee 's wife as partner and was allowed to contribute to the partnership firm, that the admission of the assessee 's wife to the partnership was not in consequence of the gift, and that, therefore, upon all those circumstances, the connection between the income of the share of profits and the gifts by the assessee to his wife was too remote to be included within the provisions of section 64(1)(iii) of the Income Tax Act.
741 S.64(1)(iii) of the Income Tax Act, 1961, as it stood at the relevant time, provides: "64(1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly (i) xx xx xx (ii) xx xx xx (iii) subject to the provisions of cl.
(i) of section 27, to the spouse of such individual from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration or in connec tion with an agreement to live apart.
" The income may arise directly or indirectly, but there must be a proximate connection between the accrual of the income and the assets transferred by the assessee.
In Commissioner of Income tax, West Bengal 111 vs Prem Bhai Parekh and Others, this Court held that the income of minor sons, who had invested capital in the firm out of moneys gifted to them by their father (the assessee) could not be included in the assessment of the assessee.
The Court observed: "Before any income of a minor child can be brought within the scope of section 16(3)(a) (iv), it must be established that the said income arose directly or indirectly from assets transferred directly or indirectly by his father.
There is no dispute that the assessee had transferred to each of his minor sons, a sum of Rs.75,000.
It may also be that the amount contributed by those minors as their share in the firm came from those amounts.
But the question still remains wheth er it can be said that the income with which we are concerned in this case arises directly or indirectly from the assets transferred by the assessee to those minors.
The connection between the gifts mentioned earlier and the income in question is a remote one.
The income of the minors arose as a result of their admission to the benefits of the partnership.
It is true that they were admitted to the 742 benefits of the partnership because of the contribution made by them.
But there is no nexus between the transfer of the assets and the income in question.
It cannot be said that income arose directly or indirectly from the transferor the assets referred to earlier.
Section 16(3) of the Act created an artificial income.
That section must receive strict construction as observed by this court in Commissioner of Income tax vs Keshavlal Lal lubhai Patel, In our judgment before an income can be held to come within the ambit of section 16(3), it must be proved to have arisen directly or indirectly from a transfer of assets made by the assessee in favour of his wife or minor children.
The connection between the transfer of assets and the income must be proximate.
The income in question must arise as a result of the transfer and not in some manner con nected with it.
" It seems to us that the observations of this Court in that case fully cover the case before us.
There is no doubt that the wife became a partner because of the capital contributed by her in the firm, but, as observed by the High Court, in the judgment under appeal, it was upon agreement by the remaining partners that she became a member of the partner ship.
The mere contribution of the capital by the wife into the firm would not automatically have entitled her to part nership in the firm.
The partnership was based on agreement, and it is the event of agreement between the partners that brought the assessee 's wife into the firm as partner.
Learned counsel for the Revenue relies on Commissioner of Income tax, Bangalore vs J.H. Gotla, ; Commissioner of Income tax, Assam Tripurn and Manipur vs Jwalaprasad Agarwala, ; V.D. Dhanwatey vs Commissioner of Income tax, Madhya Pradesh, Nagpur and Bhandara, and Smt.
Mohini Thapar vs Com missioner of ' Income tax (Central), Calcutta, and Others, but we are not satisfied that those cases are of assistance to the Revenue.
Reliance was placed on Potti Veerayya Sresty vs Commissioner of Income Tax, A.P., where the Andhra Pradesh High Court upheld the inclusion of the wife 's income from cloth business carried on by her, into which cloth business she had invest ed a portion of the assets transferred by the assessee.
It is sufficient to observe that the cloth business was her own business and, as the High Court pointed out, there was no necessity to depend upon the agreement of others.
It is on that basis that the High Court distinguished Prem Bhai Parekh 's case (supra).
743 We are of the view that the High Court is right in answering.
the . question referred to it in the negative, in favour of the assessee and against the Revenue.
In the result the appeal fails and is dismissed with costs.
R.S.S. Appeal dismissed.

summary/full:
The respondent assessee was one of the partners In a firm in which the five other partners were his wife, mother, grand father, brother, and a stranger.
His wife had contrib uted Rs.51,000 as capital in the firm, which amount came out of two gifts made to her by the assessee.
in the course of assessment proceedings for the assessment year 1962 63 in respect of the assessee, the Income Tax Officer included the profits of the assessee 's wife from the firm, under section 64(1)(iii) of the Income Tax Act, 1961.
The.assessee 's appeal was dismissed by the Appellate Assistant Commissioner who observed that the wife would not have become a partner of the firm unless he had contributed capital which was provided by the husband.
The Appellate Tribunal, while dismissing the second appeal of the assessee, found that the admission of the assessee 's wife as a partner in the firm was solely on account of her contribution of capital to the firm.
It was conceded by the assessee before the Tribunal that the interest received by the assessee 's wife on her capital contribution to the firm was includible in the total income of the assessee.
The High Court, while answering the question referred to it in favour of the assessee, took the view that the income arose from the share of profits only because the other partners agreed to take the assessee 's wife as partner and she was allowed to contribute to the partnership firm, and that the admission of the assessee 's wife to the partnership was not in consequence of the gift.
Dismissing the Revenue 's appeal, it was HELD: (1) The income may arise directly or indirectly, but for application of the provisions of section 64(1)(iii) of the Income Tax Act, 738 1961 there must be a proximate connection between the accru al of the income and the assets transferred by the assessee.
[741D] Commissioner of Income tax, West Bengal 111 vs Prem Bhai Parekh, followed.
(2) The mere contribution of the capital by the wife into the firm would not automatically have entitled her to partnership in the firm.
The partnership was based on agree ment, and it is the event of agreement between the partners that brought the assessee 's wife into the firm as partner.
[742E] Commissioner of Income tax, Bangalore vs J.H. Gotla, ; Commissioner of Income tax, Assam, Tripura and Manipur vs Jwalaprasad Agarwala, ; V.D. Dhanwatey vs Commissioner of Income tax, Madhya Pradesh, Nagpur and Bhandara, ; Smt.
Mohini Thapar vs Commissioner of Income tax (Central), Calcutta, ; Potti Veerayya Sresty vs Commissioner of Income tax, A.P., distinguished.


judgement:
vil Appeal Nos. 208 and 209 (NT) of 1975.
From the Judgment and Order dated 4th August, 1971 of the Andhra Pradesh High Court in Reference Case No. 12 of 1968.
K.B. Rohtagi for the Appellant.
V. Gauri Shankar and Ms. A. Subhashini for the Respondent.
The Judgment of the Court was delivered by PATHAK, CJ.
These appeals by special leave are directed against the judgment of the High Court of Andhra Pradesh answering the following two questions of law in favour of the Revenue and against the assessee: 1.
Whether the Tribunal was right in hold ing that the re assessments being only conse quent on a change as to the method of computa tion of the profits the initiation of proceed ings under section 148 for each of the assessment years 1959 1960 and 1960 61 was justified? 2.
Whether the Tribunal was right in law in holding that the original assessment for each of the years having been made on the agents, the re assessment proceedings could not be initiated against the assessee direct? The appellant assessee is a non resident sterling compa ny whose business consists in the purchase of tobacco from India and its sale outside.
The tobacco is sold directly on the assessee 's own account and for commission on behalf of others.
The purchases of tobacco were 734 effected through the British India Corporation Ltd., Guntur, who were appointed agents of the assessee under section 43 of the Indian Income tax Act, 1922.
For the assessment years 1959 60 and 1960 61, the agents filed returns of income on behalf of the assessee.
The Income tax Officer, Guntur, after examining the balance sheet and profit and loss account of the assessee for the relevant previous years, the calendar years 1958 and 1959, completed the assessments under section 23(3) of the Indian Income tax Act, 1922.
For the year 1.958 the gross profit on the sale of Indian tobacco, including commission, was shown in the balance sheet and profit and loss account of the assessee at 11,108.
As the assessee carried on business not only in India but in other places, the Income Tax Officer worked out the proportionate overhead expenses of the assesse for its business in India at L16,760 taking the total sales of tobacco at L534031 and the sales of Indian tobacco at L448590.
The Income Tax Officer comput ed the loss at L5652, and one half of this amount namely L2826 (Rs.37680) was taken as the adjusted loss, being the percentage attributable to the purchasing operation in India.
On the same basis for the assessment year 1960 61, after setting off the income against the previous loss, the total loss was found to be Rs.96,482.
Subsequently, in the course of assessment proceedings for the assessment year 1962 63, the Income Tax Officer appears to have noticed that a mistake had been committed in the computation of the over head expenditure.
The return filed on behalf of the assessee for that year had disclosed that the over head expenses were attributable to the entire business of the assessee, including the business as commis sion agents, and not merely for the business of purchase and sale of tobacco.
The Income Tax Officer believed that he ought to have first computed the proportionate overhead expenses in relation to the total profits by taking the proportion which the profits bore to the total of profits and commission, and then worked out the proportionate over head expenses for the profits arising out of the Indian sales.
On that basis he determined that the adjusted profits would be L160 (Rs.2253), and this would have to be substi tuted in place of the loss of Rs.37,680 arrived in the original assessment, Similarly for the assessment year 1960 61 the Income Tax Officer realised that the original assessment would have to be varied accordingly.
In the opinion that income had escaped assessment for the two assessment years 1959 60 and 1960 61, he issued notices on 18 January, 1964 under section 148 of the Income Tax Act, 1961 to the statutory agents.
The agents contested the validity of the notices and contended that in view of section 149(3) of the Act no notice of re assessment could be served on the agent of a non resident assessee after the expiry of two years from the end of the relevant assess 735 ment year.
The Income Tax Officer upheld the objection and dropped the proceedings.
Thereupon the Income Tax Officer issued notice under section 148 for the two assessment years directly to the assessee to their London address on 29 February, 1964.
The assessee filed returns on 19 August, 1964 for both the years under protest, contending that it could not be served with those notices inasmuch as the Income Tax Officer had already, proceeded against its agents.
The Income Tax Officer reject ed the objections and made re assessments on the assessee for the two assessment years.
The appeals filed by the assessee before the Appellate Assistant Commissioner were dismissed, but in second appeal the Income Tax Appellate Tribunal took the view that the re assessments proceeded on a mere change of opinion on the part of the Income Tax Officer and, therefore, were without jurisdiction, and further as the assessments had been made originally on the agents it was not open to the Income Tax Officer to proceed directly against the assessee.
According ly, the Appellate Tribunal allowed the appeals and set aside the re assessments made on the assessee.
At the instance of the Revenue, the Appellate Tribunal referred the two questions of law set forth earlier to the High Court of Andhra Pradesh for its opinion.
On the first question the High Court held that it was not a mere change of opinion on the part of the Income Tax Officer pursuant to which he made the re assessments, but that the Income Tax Officer had received information subsequent to the original assessments from the records of the subsequent assessment year that the overhead expenses related to the entire busi ness, including the business as commission agents, and not merely to the business of the purchases and sales of tobac co.
On the second question the High Court held that there was nothing to prevent the Income tax Officer, when he found that re assessment proceedings could not be taken against the agents, from proceeding directly against the assessee and re assessing it for the two assessment years.
Two points have been urged before us by learned counsel for the assessee.
It is contended that the Income Tax Offi cer has no jurisdiction to take proceedings under sections 147 and 148 of the Income tax Act because the conditions pre requisite for making the reassessments were not satisfied.
The re assessments were made with reference to cl.
(b) of section 147 of the Act, and apparently the Income Tax Officer pro ceeded on the basis that in consequence of information in his possession he had reason to believe that income charge able to tax had 736 escaped assessment for the two assessments years.
From the material before us it appears that the Income Tax Officer came to realise that income had escaped assessment for the two assessment years when he was in the process of making assessment for a subsequent assessment year.
While making that assessment he came to know from the documents pertain ing to that assessment that the overhead expenses related to the entire business including the business as commission agents and were not confined to the business of purchase and sale.
It is true, as the High Court has observed, that this information could have been acquired by the Income Tax Officer if he had exercised due diligence at the time of the original assessment itself.
It does not appear however, that the attention of the Income Tax Officer was directed by anything before him to the fact that the overhead expenses related to the entire business.
The information derived by the Income Tax Officer evidently came into his possession when taking assessment proceedings for the subsequent year.
In the circumstances, it cannot be doubted that the case falls within the terms of cl.
(b) of section 147 of the Act, and that, therefore, the High Court is right in holding against the assessee.
The second point urged before us is that when the Income tax Officer had taken the assessment proceedings against the Indian agent of the assessee it was not open to him to take assessment proceedings against the assessee.
It is open to an Income Tax Officer to assess either a non resident asses see or to assess the agent of such nonresident assessee.
It cannot be disputed also that if an.
assessment is made on one there can be no assessment on the other, and therefore, in this case if the assessment had been made on the Indian agent the assessment could not have been made on the asses see.
However, the facts show that the re assessment proceed ings commenced on the agent were found to be barred by time by reason of section 149(3) of the Act.
The issue of notice under section 148 of the Act to the agent after the expiry of two years from the end of the relevant assessment year is prohibited by the statute.
The Income Tax Officer dropped the proceed ings when he was made aware of that prohibition.
The assess ment proceedings taken by him against the agent have to be ignored and cannot operate as a bar to assessment proceeding directly against the assessee.
On this point also the High Court has taken the correct view when it answered the ques tion in favour of the Revenue.
In the result the appeals fail and are dismissed with costs.
N.P.V. Appeals dismissed.

summary/full:
The appellant assessee, a non resident sterling company, carrying on business of purchase and sale of tobacco, on its own and for commission, effected purchases through its Indian agents.
The agents filed returns of income on behalf of the assessee for the assessment years 1959 60 and 1960 61.
The Income tax Officer completed the assessment to tax under section 23(3) of the Indian Income tax Act, 1922.
However, in the course of assessment proceedings for the assessment year 1962 63, the Income tax Officer noticed that there was a mistake in computing the overhead expenditure.
Therefore, in the opinion that income had escaped assessment for the two assessment years he issued notices to the statu tory agents, under section 148 of the Income tax Act, 1961, but dropped the proceedings, upon the agents ' objection to the issue of the notice of reassessment on the agent of a non resident assessee after the expiry of two years from the end of the relevant assessment year.
Thereupon the Income Tax Officer issued notice directly to the assessee.
The assessee filed returns for both the years under protest.
Rejecting the assessee 's contention that it could not he served with the notices since its agents had already been proceeded against, the Income Tax Officer made reassessments on the assessee for the two assessment years.
The appeals filed by the assessee were dismissed by the Appellate Assistant Commissioner.
In second appeal, the Income Tax Appellate Tribunal held that the reassessments were without jurisdiction, as they were proceeded on a mere change of opinion of the Income Tax Officer and that the assessee could not he proceeded against directly as the 732 assessments were made originally on the agents.
On a reference made at the instance of the Revenue, the High Court held that reassessments were not made due to a mere change of opinion of the Income Tax Officer, but pursu ant to information received subsequent to the original assessments from the records of the .
subsequent assessment year that the overhead expenses related to the entire busi ness, including the business as commission agents, and not merely to the business of purchase and sale of tobacco, and that there was nothing to prevent the Income Tax Officer from proceeding directly against the assessee and re assess ing it for the two assessment years, when he found that reassessment proceedings could not be taken against the agents.
In the appeal before this Court, on behalf of the asses see, it was contended that the Income Tax Officer had no jurisdiction to take proceedings under sections 147 and 148 of the income tax Act because the conditions pre requisite for making the reassessments were not satisfied, and it was not open to the Income Tax Officer to take assessment proceed ings against the assessee when he had taken assessment proceedings against the Indian agent.
Dismissing the. appeals, HELD: 1.
The Income Tax Officer came to realise that income had escaped assessment for the two assessment years when he was in the process of making assessment for a subse quent assessment year.
While making that assessment, he came to know from the documents pertaining to that assessment that the overhead expenses related to the entire business, including as commission agents, and not confined to the business of purchase and sale.
The attention of the Income Tax Officer was not directed by anything before him at the time of original assessment to the fact that the overhead expenses related to the entire business.
In the circum stances, there is no doubt that the case fails within the terms of cl.
(b) of section 147 of that Act and there was justi fication for initiating the proceedings for reassessment for the two assessment years in question.
[736A D] 2.
It is open to an Income Tax Officer to assess either a non resident assessee or the agent of such non resident assessee.
But if an assessment is made on one there can be no assessment on the other.
[736E] 733 Therefore, in the instant case, if the assessment had been made on the Indian agent, the assessment could not have been made on the assessee.
However, the reassessment pro ceedings commenced on the agent were barred by time by reason of section 149(3) of the Act.
The issue of notice under section 148 of the Act to the agent after the expiry of two years from the end of the relevant assessment year is prohibited by the statute.
Hence, the assessment proceedings against the agent have to be ignored, and cannot operate as a bar to assessment proceeding directly against the assessee.
[736F G]


judgement:
ivil Appeal No. 2488 of 1989 etc.
From the Judgment and Order dated 24.1.
1989 of the Bombay High Court in Appeal No. 67 of 1989.
G. Ramaswamy, Additional Solicitor General, A.M. Khan wilkar and A.S. Bhasme for the Appellant.
T.R. Andhrujina, R.F. Nariman, Mrs. K.K. Pradhan, R. Karanjawala, Mrs. Manik Karanjawala, H.S. Anand, P.B. Agar wal, P.G. Gokhale, R.B. Hathikhanawala, K.R. Nagaraja, R.S. Hegde, section Menon, M.C. Shah, Madan Lokur, Adur Sanjay Vasant, and Mrs. Urmila Sirur for the Respondents.
Mrs. Kitty Kumaramangalam, Kailash Vasdev, Ms. Vijaylax mi and S.P. Pandey for the Intervener.
The Judgment of the Court was delivered by DUTT, J.
Special leave is granted in all these matters.
Heard learned Counsel for the parties.
These appeals preferred by the State of Maharashtra involve the question as to the admission in the MBBS Course in the Medical Colleges in the State of Maharashtra.
In the city of Bombay, there are three Medical Colleges run by the Municipal Corporation of Greater Bombay.
Besides the said three Municipal Colleges, there is another College in Bom bay, namely, Grant Medical College, which is a Government College run by the Government of Maharashtra.
712 Shorn of all details, it may be stated that after pro viding for 15 per cent of seats under the All India Quota and the seats which are to be reserved under Article 15 of the Constitution of India, the Government of Maharashtra laid down a policy of reservation of 70 per cent of the remaining seats for the local students in the city of Bombay and 30 per cent of seats for the students outside Bombay within the State of Maharashtra.
Certain students feeling aggrieved by the said method of filling up of the seats in the MBBS Course in the said Medical Colleges in the city of Bombay moved writ petitions before the Bombay High Court.
A learned Single Judge of the High Court took the view that it was not proper on the part of the State Government to first of all fill up the 70 per cent of the seats out of the local Bombay students and thereafter the remaining 30 per cent of seats from amongst the students residing outside Bombay.
The learned Single Judge, however, gave no specific direction as to the admis sion of the writ petitioners, but left it to the State Government for the purpose.
The State of Maharashtra pre ferred a Letters Patent Appeal to the Division Bench of the High Court.
The said appeal was summarily dismissed by the Bench holding that the two points urged by the Assistant Government Pleader appear to be quite frivolous.
The writ petitioners also preferred Letters Patent Appeals before the Division Bench.
From time to time, the Bench passed some orders.
The only order which is relevant for the purpose of these appeals is dated February 8, 1989.
By that order, the Division Bench of the High Court directed creation of 5 additional seats in each of the three Municipal Colleges and 4 additional seats in the Government Medical College, that is, in all, 19 additional seats.
Certain directions were also given by the said order for admission of students in those additional seats and also the seats under the All India Quota.
It has been strenuously urged by Mr. G. Ramaswamy, learned Additional Solicitor General appearing on behalf of the State of Maharashtra, that the High Court was not justi fied in directing that the 30 per cent of seats meant for the candidates outside Bombay to be filled in before the 70 per cent of seats are filled in by local candidates.
It may be stated at this stage that by virtue of the judgment in the case of Nidamarti Maheshkumar vs State of Maharashtra and others; , relating to admission in Medi cal Colleges in Maharashtra, the State of Maharashtra laid down the policy of regional reservation of 70 per cent of seats for the region of Bombay and the remaining 30 per cent of seats for the candidates outside Bombay but within the State of Maharashtra.
It has already been noticed that the High Court 713 iS Of the view that the 30 per cent of seats should have been filled up first and, thereafter, 70 per cent of region al seats should have been filled up.
We have not been able to understand the reason for this view of the High Court.
If 30 per cent of seats are filled up first, the candidates who are residing outside Bombay will have to compete with the local Bombay students who are also eligible for admission in the said seats.
It may so happen that most of the seats meant for candidates outside Bombay may be filled up by the local Bombay candidates.
If, however, 70 per cent of seats are filled up first, the more meritorious Bombay students would be admitted and those, who would not be admitted, would obviously be candidates obtaining lesser marks and it will not be difficult for the outside candidates to compete with them for the said 30 per cent of seats.
The question whether 70 per cent of seats or 30 per cent of seats should be filled up first is a question which should be left to the discretion of the Government.
In our opinion, this aspect is not within the purview or the jurisdiction of the Court.
We do not find any unreasonableness or impropriety in the State Government 's decision to fill up 70 per cent of seats first.
The High Court was not, therefore, justified in directing admission on the basis of filling up 30 per cent of the seats first and, thereafter 70 per cent of seats and such direction has created some complications in the matter.
There is considerable force in the contention of Mr. Ramaswamy that the High Court was also not justified in directing creation of additional seats.
The additional seats can be created only if the Indian Medical Council approves of such creation.
In the instant case, the Indian Medical Council has vehemently opposed before us the creation of the additional seats.
There is also the question of bearing the cost of creation of additional seats.
The High Court, in our opinion, should not have directed the creation of additional seats.
In exceptional circumstances and for ends of justice, the Court may direct the creation of one or two seats after giving the Indian Medical Council an opportunity of being heard, but surely the Court should not direct the creation of so many additional seats when neither the Government nor the Indian Medical Council consents to such creation.
In the circumstances, it is difficult to sustain the impugned judgment of the High Court.
We are told by the learned Additional Solicitor General that 4 seats in the Grant Medical College in Bombay and 34 seats in the other Medical Colleges outside Bombay under the All India Quota are available for admission.
We are also told that there are about 30 candidates who are to be admit ted in these seats.
Of these 30 candidates, we find 714 that one Sandeep Chaudhary and Miss Chaudhary Seena, the applicants in Civil Miscellaneous Petitions Nos.
9049 of 1989 and 9050 of 1989 respectively, were already admitted in the 2 out of the 4 seats in the Grant Medical College, Bombay.
They were initially admitted in the Gwalior Medical College, but on their representation they were transferred to the Grant Medical College, Bombay, by the Director Gener al of Health Services in compliance with the guidelines laid down by this Court in its judgment in the case of Amanjit Singh Gill vs Directorate General of Health Services, ; , but in view of the impugned judgment of the High Court they have been thrown out for no fault of theirs.
The admission of these two candidates in the Grant Medical College, Bombay, is restored and will not be disturbed.
So far as the remaining 36 seats are concerned (2 seats in the Grant Medical College.
Bombay, and 34 seats in the Medical Colleges Outside Bombay), the admission to these seats shall be made strictly in order of merit.
The appellants shall complete the admissions in the said 36 seats within a week from today.
The impugned judgments of the High Court are set aside and the appeals are allowed to the extent indicated above.
There will be no order as to costs.
The writ petitions and all other applications for inter vention are also disposed of as above without any order as to costs.
P.S.S. Appeals allowed.

summary/full:
The appellant State by virtue of the judgment in Nida marti Maheshkumar vs State of Maharashtra & Ors.
, ; , after providing 15 per cent of seats under the All India Quota and under Article 15 of the Constitution for admission to MBBS course, laid down the policy of reserva tion of the remaining seats for local students in the city of Bombay and for students from outside Bombay but within the State of Maharashtra, in the ratio of 70:30.
In the writ petitions preferred by the respondents a Single Judge of the High Court took the view that 30 per cent of seats meant for students from outside Bombay should have been filled in before 70 per cent of seats were filled in by local students.
The Division Bench dismissed the Letters Patent Appeal by the State.
In the Letters Patent Appeals by the respondents it directed creation of five additional seats in each of the three Municipal Medical Colleges and four additional seats in the Government Medical College.
Allowing the appeals, HELD: 1.
There was no unreasonableness or impropriety in the State Government 's decision to fill up 70 per cent of seats first.
The question whether the seats reserved for local students or for those residing outside Bombay should be filled up first was not within the purview or the juris diction of the Court.
The High Court was, therefore, not justified in directing admission on the basis of filling up 30 per cent of seats first.
[713C D] 2.
The Additional seats can be created only if the Indian Medical 711 Council approves of it.
There is also the question of bear ing the cost of creation of such seats.
In the instant case, neither the Government nor the Indian Medical Council had consented to such creation.
In exceptional circumstances and for ends of justice, the court may direct the creation of one or two seats after giving the Indian Medical Council an opportunity of being heard.
The High Court, therefore, should not have directed the creation of so many additional seats.
[713E G] [Appropriate directions issued for admission to four seats in the Grant Medical College in Bombay and thirty four seats in the other Bombay available under the All India Quota.]


judgement:
ivil Appeal No. 3119 of 1984.
From the Judgment and Order dated 20.9.1982 of the Delhi High Court in S.A.O. No. 181 of 1979.
Dr. Y.S. Chitale and Mukul Mudgal for the Appellant.
R.K. Garg, Gopal Singh, L.R. Singh and Mrs. Vimal Sinha for the Respondent.
The Judgment of the Court was delivered by: PATHAK, CJ.
This is a landlady 's appeal by special leave arising out of proceedings for the ejectment of the respondent tenant.
The appellant let out the premises in suit to the respondent on 1 September, 1962, the rent being stipulated as payable in advance.
With effect from 1 January, 1972 the rent payable was Rs. 515 per month.
On 29 November, 1972, the contractual tenancy was determined by notice.
The re spondent received a notice on 7 May, 1976 calling upon him to pay the arrears of rent.
The rent in fact had been re ceived upto 31 March, 1976 and, therefore, when the notice of demand was served on the appellant, rent for the months of April and May 1976 had fallen due.
The rent was payable in advance.
On 13 May, 1976, the respondent offered a bank draft of Rs.515 to the appellant.
The appellant refused to accept it.
Two days later, the respondent sent the same bank draft by registered post.
The appellant 746 received the bank draft and retained it.
On 7 June, 1976, the appellant wrote to the respondent informing him that his tender was not valid.
On 11 June, 1976, the appellant sent another bank draft for Rs.515 to the landlady, and this draft again was neither encashed nor returned.
On 2 August, 1976, the appellant filed an application for ejectment out of which the present appeal arises.
After filing the application for ejectment, the appellant informed the respondent that both the bank drafts sent by him were lying uncashed.
The Additional Controller, Delhi, dismissed the eviction petition holding that the tenant was not in default.
The Rent Control Tribunal, Delhi, noted that the rent was pay able in advance in accordance with the agreement between the parties, that the respondent had earlier enjoyed the benefit of section 14(2) of the Act, that when the notice of demand was served on 7 May, 1976 the arrears of rent for the months of April and May 1976 had arisen, that the bank draft sent on 13 May, 1976 related to the rent of April 1,976 only, that as the rent for the month of May 1976 had also become due but had not been tendered, the landlady was justified in not accepting the tender, and that when the respondent again sent a draft on 11 June, 1976 to cover the rent for the month of May 1976 the rent for the month of June 1976 had also fallen due but was not tendered.
Holding that the respondent had not tendered the arrears of rent due up to date within two months of the notice of demand, the Tribunal held that the ground of non payment of rent stood estab lished.
The Tribunal noted that the rent had not been paid for the months of April, May and June 1976 in advance for each month and, therefore, the respondent had committed three consecutive defaults.
That being so, the Tribunal observed, the respondent was not entitled to the benefit of section 14(2) again.
In second appeal, the High Court reversed the decision of the Rent Control Tribunal and dismissed the application for ejectment upon the finding that the notice demanding the arrears of rent related to the months of April and May 1976, and as one draft had been sent on 13 May, 1976 and another on 11 June, 1976 representing a total of two months ' rent, and as this rent had been paid within two months of the service of notice of demand, it must be taken that the rent due at the time of the service of notice of demand had been tendered by the respondent to the appellant.
The High Court proceeded on the view that section 14(1)(a) of the Act made out a ground for eviction only where the tenant had neither paid nor tendered the whole of the arrears of rent legally recov erable from him within two months of the date on 747 which a notice of demand for the arrears of rent was served on him by the landlord, the arrears being the rent due on the date of the notice.
In this case, the High Court said, as the notice called for payment of the arrears due for the months of April and May 1976 and the bank drafts were ten dered within the period indicated in the notice, the notice was satisfied and no default could be said to have been committed in terms of section 14(1)(a) of the Act.
Accordingly, the High Court allowed the appeal and dismissed the applica tion for ejectment.
It is urged before us by learned counsel for the appel lant that section 14(1)(a) of the Act contemplates the payment or tender of the whole of the arrears of rent legally recovera ble from the tenant on the date when the demand notice is sent including the rent which has accrued after service of the demand notice.
When the notice was sent on 7 May, 1976, rent for the months of April and May 1976 had become due, and as two months was given for payment of the arrears, it would include also the rent which had accrued during the said period of two months.
We are not satisfied that there is substance in the contention.
The arrears of rent envis aged by section 14(1)(a) of the Act are the arrears demanded by the notice for payment of arrears of rent.
The arrears due cannot be extended to rent which has fallen due after serv ice of the notice of demand.
In this case, the two bank drafts representing the arrears of rent covered by the notice of demand had been tendered within two months of the date of service of the notice of demand.
The High Court is fight in the view taken by it.
We are not satisfied that the construction placed by B.C. Misra, J. in Jag Ram Nathu Ram vs Shri Surinder Kumar, S.A.O. No. 52 of 1975 decided on 28 April, 1976 and in S.L. Kapur vs Dr. Mrs. P.D. Lal, All India Rent Control Journal 1975 p. 322 lays down the control law on the point.
In the result, the appeal fails and is dismissed but there is no order as to costs.
P.S.S. Appeal dismissed.

summary/full:
The respondent tenant fell into arrears of rent for two months consecutively.
The rent was payable in advance.
He was served with a notice of demand, within seven days of which he sent a bank draft purporting to be the rent for the first month, and within a month another bank draft for the like amount.
The landlady neither encashed nor returned them.
After the notice period she filed an application for his ejectment.
The Rent Controller held that the tenant was not in default.
The Tribunal, however, found that when the notice of demand was served the arrears of rent for the two months had arisen, that the bank draft sent thereafter related to the rent for the first month only, that as the rent for the second month had also become due but had not been tendered, the landlady was justified in not accepting the tender, and that when the respondent again sent a draft for the second month the rent for the third month had also fallen due but was not tendered.
It thus took the view that the respondent had not tendered the arrears of rent due up to date within two months of the notice of demand, and held that the ground of non payment of rent stood established.
Allowing the appeal, the High Court took the view that section 14(1)(a) of the Delhi Rent Control Act, 1958 made out a ground for eviction only where the tenant had neither paid nor tendered the whole of the arrears of rent legally recov erable from him within two months of the date on which a notice of demand was served on him by the landlord, the arrears being the rent due on the date of the notice.
As in the instant case, the notice called for payment of the arrears due for the two months and the bank drafts were tendered within the period indicated in the notice, the notice was satisfied.
Dismissing the appeal by special leave, the Court, 745 HELD: The arrears of rent envisaged by section 14(1)(a) of the Delhi Rent Control Act are the arrears demanded by the notice for payment.
The arrears of rent due cannot be ex tended to rent which has fallen due after service of the notice.
[747DE] In the instant case, the two bank drafts representing the arrears of rent covered by the notice of demand had been tendered within two months of the date of service of the notice.
The High Court was, therefore, right in the view taken by it.
[747DE] Jag Ram Nathu Ram vs Shri Surinder Kumar, S.A.O. No. 52 of 1975 and S.L. Kapur vs Dr. Mrs. P.D. Lal, All India Rent Control Journal, [1975] 322, overruled.


judgement:
ivil Appeal No. 1842 of 1981.
From the Judgment and Order dated30.4.1981 of the Delhi High Court in S.A.O. No. 418 of 1978.
Mrs. Shyamala Pappu, H.K. Puri and S.D. Lal for the Appellant.
Dr. Y.S. Chitale, S.N. Kacker, Mukul Mudgal and N.S. Das Bahl for the Respondent.
The Judgment of the Court was delivered by PATHAK, CJ.
This is a tenant 's appeal arising out of proceedings for her ejectment.
The respondent, as landlord of the premises let to the appellant, filed a petition for her eviction on the ground set forth in section 14(1)(h) of the Delhi Rent Control Act, 1958, that is to say, that the appellant had "acquired vacant possession of . . a residence" after the com mencement of the Act, viz, her own house D 196, Defence Colony, New Delhi and was therefore liable to hand over possession of the rented premises occupied by her to the respondent.
It was alleged that the appellant had acquired vacant possession of her house on 20 November, 1973 after the premises in suit had been let out to her on April, 1971.
The appellant denied that she was liable to ejectment.
The Assistant Rent Controller, Delhi, and the Rent Control Tribunal concurrently held that the appellant was owner of house D 196, Defence Colony, New Delhi, that on 20 November, 1973 the previous tenant had vacated the premises and handed over vacant possession and that thereafter she had sold it to one Smt.
Leela Wati 750 on 24 November, 1973.
It was observed that during the period 20 November, 1973 to 24 November, 1973 it must be taken that she was in possession of alternative accommodation.
It was also held concurrently that even though on the date the petition for eviction was filed, the house, D 196, Defence Colony, New Delhi, was no longer in the occupation of the appellant it was sufficient for the purpose of section 14(1)(h) that some time prior to the filing of the eviction petition the appellant had obtained possession of the house.
The High Court endorsed the view taken by it earlier in Hem Chand Baid vs Smt.
Prem Wati Parekh., AIR 1980 Delhi 1 and in the view that the ground for ejectment had been made out when the eviction petition was filed it dismissed the appeal.
In this appeal it is urged on behalf of the appellant that before the earlier tenant of tile appellant had vacated the house the appellant had already entered into an agree ment to sell the house to another person, and that therefore in the presence of that obligation it was not possible to say that when the house was vacated the appellant was enti tled to enter into and to continue in possession of the house.
It is contended before us that before the original tenant vacated the house there was an oral agreement between the appellant and Smt.
Leela Wati to sell the house to Smt.
Leela Wati and that the agreement was only formalized in a written document on 24 November, 1973.
It is urged that when the original tenant vacated the house on 20 November, 1973 the appellant was under a legal obligation to sell the house to Smt.
Leela Wati, and that in the circumstances, the house cannot be said to constitute alternative accommodation for the purpose of section 14(1)(h) of the Act.
The Rent Control Tribunal has found against the existence of any such oral agreement.
Upon that it would seem that it was only after obtaining possession on 20 November, 1973 from the original tenant, that is, four days later, that the appellant execut ed an agreement for sale with Smt.
Leela Wati.
It is appar ent that on 20 November, 1973 the appellant came into the house belonging to her and it was available to her for her occupation.
The circumstances that she lost possession on the date when the eviction petition was filed does not protect the appellant against section 14(1)(h) of the Act.
In the result, the appeal fails .and is dismissed but there is no order as to costs.
N.P.V. Appeal dismissed.

summary/full:
The respondent landlord filed a petition for eviction of the appellant tenant from the suit premises under section 14(1)(h) of the Delhi Rent Control Act, 1958 on the ground that the appellant had acquired vacant possession of her house on November 20, 1973, after the suit premises had been let out to her on April 1, 1971.
The appellant contended that she was not liable to be ejected.
The Assistant Rent Controller and the Rent Control Tribunal concurrently held that even though the house owned by the appellant was not in her occupation on the date the petition was filed, it was sufficient for the purpose ors.
14(1)(h) that sometime before the filing of the petition she had obtained vacant possession of the house, and thus had alternative accommodation during November 20 24, 1973, i.e., from the date she obtained vacant possession from her tenant till she sold it.
The High Court also held that the ground for ejectment had been made out when the eviction petition was filed.
In the appeal before this Court, on behalf of the appel lant tenant it was contended that before the earlier tenant had vacated the house, the appellant had already entered into an oral agreement to sell the house to another person, which was formalized on a written document on November 24, 1973 and as the appellant was under legal obligation to sell the house she was not entitled to enter into and to continue in possession of the house when it was vacated, and there fore, the house could not be said to constitute alternative accommodation, for the purpose ors.
14(1)(h) of the Act.
Dismissing the appeal, 749 HELD: The Rent Control Tribunal has found against the existence of any oral agreement for the sale of the suit house.
It was only after four days of obtaining possession on November 20, 1973 from the original tenant that the appellant executed an agreement for sale.
Thus, it is clear that the appellant came into the house belonging to her on November 20, 1973 and it was available to her for her occu pation.
The circumstance that she lost possession on the date when the eviction petition was filed does not protect the appellant against section 14(1)(h) of the Act.
[750F G]