judgement:
Civil Appeal No. 1083 of 1969.
Appeal from the Judgment and Order dated 5 12 1967 of the Allahabad High Court in Special Appeal No. 1068 of 1967.
J. P. Goyal and Sobhagmal Jain for the Appellant.
G. N. Dikshit and O. P. Rana for Respondents 1 3.
Yogeshwar Prashad and Mrs. section Bagga for Respondent No. 4.
The Judgment of the Court was delivered by TULZAPURKAR, J.
This appeal by certificate is directed against the judgment rendered by the Allahabad High Court on December 5, 1967 in Special Appeal No. 1068 of 1967 and raises a short question whether the appellant is entitled to the benefit of certain concessions (deductions) in the minimum price notified by the Cane Commissioner in his order issued on June 1, 1955 ? The appellant (Shri Janki Sugar Mills & Company) is a partnership firm carrying on the business of manufacturing sugar.
By an order passed on November 1, 1954 under section 15 of the Uttar Pradesh Sugar Cane (Regulation of Supply and Purchase) Act 1953, the Cane Commissioner reserved certain sugarcane centres for the appellant 's sugar 781 factory.
On November 12, 1954 (i.e. within 14 days of the reservation of the sugarcane centres) the respondent No. 4 (Laskar Co operative Cane Development Union Ltd.) made an offer for the 1954 55 crushing season for the supply of 6 lac maunds of sugarcane out of a total estimated yield of 12 lac maunds of sugarcane from certain centres.
This offer was accepted by the appellant firm on November 27, 1954 (i.e. within 14 days of the receipt of the offer) and an agreement in the prescribed Form 'C ' was duly executed on February 9, 1955.
It contained the usual term that the appellant firm will pay for the sugarcane supplied to it "at the minimum price notified by the Government subject to such deductions, if any, as may be notified by the Government from time to time".
On March 22, 1955 the respondent No. 4 made another offer for supplying additional quantity of 2 lac maunds of sugarcane to the appellant firm, which offer was also accepted on May 4, 1955 and a composite agreement in prescribed Form 'C ' was entered into on that very day for the supply of 8 lac maunds of sugarcane (inclusive of the initial 6 lac maunds).
This agreement also contained the usual term with regard to the payment being made "at the minimum price subject to such deductions as may be notified by the Government from time to time".
By a Press Note dated May 23, 1955 the Government of India notified its decision that certain deductions in the minimum cane price, on the basis of recovery of sugar from sugarcane, will be allowed to sugarcane factories in Uttar Pradesh on the cane supplied to them on and after May 1, 1955 but that the deductions will be allowed only on "unbonded cane" crushed by each factory and not on "bonded cane", the latter of which shall have to be purchased by each factory at the minimum cane price already fixed for the season.
In exercise of the powers under section 3 of the , (delegated to him by the Government of India under a Notification dated April 25, 1955), the Cane Commissioner, Uttar Pradesh issued a Notification on June 1, 1955 whereunder "the producers of sugar by vacuum pan process were allowed to make deductions as specified in the Schedule thereto from the minimum price of per maund of cane fixed for the season 1954 55 in respect of the unbonded sugarcane crushed on and after May 1, 1955".
The appellant firm taking advantage of this Notification granting concessions in the minimum price, made payments to Respondent No. 4 after making deductions in respect of the two lac maunds of sugarcane supplied to it, in respect whereof the offer had been made to it on March 22, 1955.
However, a Recovery Certificate under sections 17 and 18 of Uttar Pradesh Sugar Cane (Regulation of Supply and Purchase) Act, 1953 against the appellant firm for a sum of Rs. 53,878/10/ being the amounts deducted by the 782 appellant firm while making payments to Respondent No. 4.
The appellant firm disputed the legality of the Recovery Certificate on the ground that it had the right to make the deductions in view of the Cane Commissioner 's Notification dated June 1, 1955.
The said dispute was referred by the Cane Commissioner to the District Cane Officer, Bulandshahr as the sole arbitrator under Rule 108 of the U.P. Sugarcane (Regulation of Supply & Purchase) Rules, 1954.
By his award dated May 30, 1962, the District Cane Officer held that the appellant firm had wrongly made the deductions in respect of the supply of two lac maunds of sugarcane which was "bonded cane" and that the appellant firm was liable to pay the minimum price therefor.
Aggrieved by the award the appellant firm preferred an appeal to the Divisional Commissioner, Meerut under Rule 118 of the said Rules, but the appeal was dismissed on March 30, 1963.
The appellant firm challenged the legality of the award of the District Cane Officer as also the appellate order of the Divisional Commissioner by means of a writ Petition in the Allahabad High Court being Civil Miscellaneous Writ No. 2003 of 1963.
The learned Single Judge who heard the writ petition dismissed the same by his judgment and order dated October 24, 1967.
A further Special Appeal No. 1068 of 1967 carried by the appellant firm to the Division Bench of that Court also proved unsuccessful on December 5, 1967.
The appellant firm has come up in appeal to this Court.
The only contention that was urged by counsel for the appellant firm before us in this appeal was that the supply of two lac maunds of sugarcane made by respondent No. 4 to the appellant firm was not bonded sugarcane at all and as such the appellant firm was entitled to the concessions (deductions) in the minimum price payable in respect thereof to respondent No. 4 in view of the Cane Commissioner 's Notification dated June 1, 1955.
In support of this contention counsel relied upon sub cls.
(2) and (3) of cl. 3 of the U.P. Sugarcane Supply and Purchase Order, 1956 issued under section 16 of the Uttar Pradesh Sugarcane (Regulation of Supply & Purchase) Act, 1953 and it was pointed out that under sub cl.
(2) within 14 days of issue of the reserving certain areas for a factory a cane grower or a Cane growers ' Cooperative Society has to make an offer to supply cane grown in the reserved area to the occupier of the factory and under sub cl.
(3) it was obligatory upon the occupier of the factory for which such area has been reserved to accept the same within 14 days of the receipt of the offer and enter into an agreement in the prescribed form and it was urged that unless such offer was made within 14 days as prescribed 783 by sub cl.
(2) and was accepted within 14 days as prescribed by sub cl.
(3) the supply of sugarcane thereunder could not be regarded as supply of bonded sugarcane.
Counsel pointed out that the offer of two lac maunds of sugarcane in the instant case was made by respondent No. 4 long after the expiry of 14 days from the issuance of the order reserving certain areas for the appellant firm 's factory and that offer had been accepted not within the limit prescribed in sub cl.
(3) and, therefore, the sugarcane so supplied by respondent No. 4 to the appellant firm was not bonded sugarcane but ought to be classified as 'unbonded sugarcane ' and as such the appellant firm was entitled to the concessions in the minimum price notified in the Cane Commissioner 's Notification dated June 1, 1955.
It was further pointed out that though under sub cl.
(4) of cl. 3 of the U.P. Sugarcane supply and Purchase Order, 1954, the Cane Commissioner had the power to extend the date for making offers in respect of any reserved area, no such extension had been granted by the Cane Commissioner in the instant case, and, therefore, the offer of two lac maunds of sugarcane which was made by respondent No. 4 on March 22, 1955, long after the expiry of 14 days from the issuance of the order of the Cane Commissioner on November 1, 1954 reserving certain sugarcane centres for the appellant 's factory under section 15 of the Act, could not culminate into an agreement under the statute or the U.P. Sugarcane Supply and Purchase Order, 1954, that the agreement entered into between the parties on May 4, 1955 in respect of the said supply must be regarded as an ordinary contract under the Indian Contract Act and that the sugarcane supplied under such ordinary contract must be regarded as unbonded sugarcane.
In other words, the contention was that only such sugarcane as would be supplied by a cane grower or a Cane growers ' Cooperative Society under an agreement made in strict compliance of sub cls.
(2) and (3) of cl. 3 of the U.P. Sugarcane Supply and Purchase Order, 1954 could be regarded as bonded sugarcane.
The question raised in the appeal really turns upon what is meant by the expression "unbonded sugarcane" occurring in the Cane Commissioner 's Notification dated June 1, 1955 and the true effect of sub cls.
(2) and (3) of cl. 3 of the U.P. Sugarcane Supply and Purchase Order, 1954.
It must be stated, however, that neither the expression "bonded sugarcane" nor "unbonded sugarcane" has been defined either in the statute or in the U.P. Sugarcane Supply and Purchase Order 1954 and, therefore, regard must be had to the ordinary dictionary meaning of the said expressions.
In Shorter Oxford English Dictionary the legal and technical meaning of the expression ' "bond" 784 is given as "a deed by which the Obliger binds himself, his heirs, executors, or assigns to pay a certain sum to the obligee".
In Stroud 's Judicial Dictionary (4th Edn.) the expression "bond" is explained as: "an obligation by deed".
It will thus be clear that the expression "bonded sugarcane" must mean sugarcane secured by a bond or deed.
Under the Notification of the Cane Commissioner dated June 1, 1955 certain deductions from the minimum price per maund of cane fixed for the season 1954 55 had been notified in respect of the "unbonded sugarcane" crushed on or after May 1, 1955.
In other words, the concession is granted in respect of the supply of 'unbonded sugarcane ' in contradistinction with supply of 'bonded sugarcane '.
There is nothing in the Notification to suggest that any particular bond or a bond in accordance with the provisions of the U.P. Sugarcane Supply and Purchase Order 1954 was intended and therefore supply of 'bonded sugarcane ' would mean supply of sugarcane which has been secured by a bond or an agreement and such supply will not be entitled to the concession.
On a plain reading of the Notification in question, therefore, it will appear clear that since the supply of two lac maunds of sugarcane made by respondent No. 4 to the appellant firm had been secured by the agreement that was entered into between the parties on May 4, 1955 the said supply will have to be regarded as supply of "bonded sugarcane" and as such the appellant firm was not entitled to the concession in the minimum price payable in respect thereof to respondent No. 4.
Considering the question in the context of sub cls.(2) and (3) of cl.3 of the U.P. Sugarcane Supply and Purchase Order 1954 also we are clearly of the view that the appellant firm was not entitled to the benefit of the Cane Commissioner 's Notification dated June 1, 1955.
For this purpose it will be necessary to refer to section 15 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 and set out Cl.
3 of the U.P. Sugarcane Supply and Purchase Order, 1954.
Under s.15(1) of the Act power has been conferred upon the Cane Commissioner after consulting the factory and the cane grower/Canegrowers ' Co operative Society to (a) reserve any area (hereinafter called the reserved area) or, (b) assign any area (hereinafter called an assigned area) for the purpose of the supply of sugarcane to a factory in accordance with the provisions of s.16 during one or more crushing seasons as may be specified.
It was under this provision that the Cane Commissioner has passed order dated November 1, 1954 reserving certain sugarcane centres (reserved area) for the appellant firm for the 1954 55 season.
785 Clause 3 of the U.P. Sugarcane Supply and Purchase Order 1954 runs thus: "3.
Purchase of cane in reserved areas. (1) The occupier of a factory shall estimate or cause to be estimated by the 31st day of October or such later date in a crushing season as, on an application being made to the Cane Commissioner by the occupier of a factory, may be fixed by the Cane Commissioner, the quantity of cane with each grower enrolled in the Grower 's Register and shall on demand submit the estimate to the Cane Commissioner and the Collector.
(2) A cane grower or a Cane growers ' Co operative Society may within 14 days of the issue of an order reserving an area for a factory, offer in Form A of the Appendix, to supply cane grown in the reserved area, to the occupier of the factory.
(3) The occupier of the factory for which an area has been reserved, shall, within fourteen days of the receipt of the offer enter into an agreement in Form B or Form C of the Appendix, with the Cane grower or the Canegrowers ' Cooperative Society, as the case may be, in respect of the cane offered: Provided that any purchase of cane made before the execution of the prescribed agreement shall be deemed to have been made in accordance with such agreement.
(4) The Cane Commissioner may, for reasons to be recorded in writing, extend the date for making offers in respect of any reserved area.
On a fair reading of the sub cls.(2) & (3) of cl. 3 of the Order two or three things become at once clear.
In the first place sub cl.(2) uses the expression 'may ' and provides that a cane grower or Canegrowers ' Co operative Society may within 14 days of the issue of an order reserving an area for a factory make an offer to supply the cane grown in the reserved area to the factory.
That the period of 14 days mentioned in this sub clause is not imperative or mandatory is also clear from sub cl.(4) which confers power upon the Cane Commissioner to extend the date for making offer in respect of any reserved area.
Secondly, sub cl.(3) uses the expression 'shall ' indicating that an imperative obligation is cast upon the factory to accept the offer 786 within 14 days from the receipt of the offer.
Reading the two sub clauses together, it becomes clear that if a cane grower or Canegrowers ' Cooperative Society makes an offer within 14 days mentioned in sub cl.(2) it is obligatory upon the occupier of the factory to accept that offer within 14 days of the receipt of the offer, this only means that if the offer is made by the cane grower or Cane growers ' Cooperative Society beyond the period specified in sub cl.(2) or the extended time under sub cl.(4) it would not be obligatory but optional for the occupier of the factory to accept the said offer but if such offer made beyond the prescribed or extended period is accepted by the occupier of the factory a binding agreement comes into existence between the parties and sugarcane supplied thereunder would be 'bonded sugarcane ', more so when the agreement is entered into in the prescribed form.
Merely because the offer from the cane grower or Cane growers ' Co operative Society emanates after the expiry of the period mentioned in sub cl.(2) it does not mean that the parties are prevented from entering into an agreement in the prescribed form and if they do enter into an agreement in the prescribed form, as was the case here, the sugarcane supplied thereunder would be 'bonded sugarcane '.
It is not possible to accept the contention of learned counsel for the appellant that sugarcane supplied by the cane growers or Canegrowers ' Cooperative Society could be regarded as 'bonded Sugar Cane ' only if offer of the Cane grower or the Cane Growers ' Co operative Society emanates within the period prescribed by sub cl.(2) and the same is accepted by the occupier within the period prescribed by sub cl.
As stated earlier, the true effect of sub cls.
(2) and (3) read together is that the compulsion or obligation to accept the offer on the part of the occupier of the factory arises only when the offer is made by the cane grower or Cane growers ' Co operative Society within the time prescribed by sub cl.(2) or the extended time under sub cl.(4) but if the offer is made after the expiry of that period it is optional for the factory occupier to accept it or not but in cases where he accepts such offer a binding agreement comes into existence, and the sugarcane supplied thereunder becomes "bonded sugarcane".
In the instant case the offer of additional quantity of two lac maunds of sugarcane was undoubtedly made long after the expiry of the period of sub cl.(2) but the same was accepted by the appellant firm and a binding agreement came into existence and what is more that a binding agreement was executed by the parties in the prescribed Form 'C '.
Further the conduct on the part of the appellant firm in referring the dispute to arbitration and filing an appeal against the arbitrator 's award under the relevant Rules clearly shows that the parties, particularly the appellant firm, treated the agreement dated May 4, 1955 787 as one under the Act and the U.P. Sugarcane and purchase Order, 1954.
We are, therefore, of the view that the authorities below were right in coming to the conclusion that the said additional supply of two lac maunds of sugarcane by respondent No.4 to the appellant firm was the supply of "bonded sugarcane" and, therefore, the appellant firm was not entitled to the benefit of the Cane Commissioner 's Notification dated June 1, 1955.
In the result the appeal fails and is dismissed with costs.
V.D.K. Appeal dismissed.

summary/full:
The Government of India notified its decision that certain deductions in the minimum cane price, on the basis of recovery of sugar from sugarcane will be allowed to sugarcane factories in U.P. on the cane supplied to them on and after May 1, 1955 but that the deductions will be allowed only on "unbonded cane" crushed by each factory and not on "bonded cane", the latter of which shall have to be purchased by each factory at the minimum cane price already fixed for the season.
In exercise of the powers delegated to him under section 3 of the , the Cane Commissioner U.P. issued a Notification on June, 1, 1955, whereunder "the producers of sugar by vacuum pan process were allowed to make deductions as specified in the Schedule thereto from the minimum price of per maund of cane fixed for the season 1954 55 in respect of the unbonded sugarcane crushed on and after May 1, 1955.
The appellant firm taking advantage of this Notification granting concession in the minimum price, made payment to Laskar Co operative Cane Development Union Ltd; after making deductions in respect of 2 lac maunds of sugarcane supplied to it, under an agreement entered into pursuant to the offer made to it on March 22, 1955.
However, on December 21, 1955 the Cane Commissioner issued a Recovery Certificate under Sections 17 and 18 of U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 against the appellant firm for a sum of Rs. 53,879.10 being the amount deducted by the appellant firm while making payments to Laskar Co operative Union.
On a challenge to legality of the Recovery Certificate, the dispute was referred to the sole arbitrator, the District Cane Officer under Rule 108 of the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954.
The arbitrator found that the supply of sugarcane was "bonded cane" and therefore gave an award that the appellant was not entitled to the concession and was liable to pay the minimum price therefor.
An appeal to the Divisional Commissioner having been dismissed, the appellant firm filed a Writ Petition in the Allahabad High Court which also was rejected.
A further special appeal also proving unsuccessful the appellant firm appealed to the Supreme Court after obtaining a certificate of fitness.
Dismissing the appeal, the Court, ^ HELD: 1.
Neither the expression "bonded sugarcane" nor "unbonded sugar cane" has been defined either in the Statute or in the U.P. Sugarcane Supply and Purchase Order, 1954.
Having regard to the ordinary dictionary 779 meaning of the said expressions, the expression "bonded sugarcane" must mean Sugar Cane secured by a bond or deed.
[783 G H, 784 A] 2.
Under the Notification of the Cane Commissioner dated June 1, 1955 certain deductions from the minimum price per maund of cane fixed for the season 1954 55 had been notified in respect of the "unbonded sugarcane" crushed on or after May 1, 1955.
In other words, the concession is granted in respect of the supply of 'unbonded sugarcane in contradistinction with supply of 'bonded sugarcane.
There is nothing in the Notification to suggest that any particular bond or a bond in accordance with the provisions of the U.P. Sugarcane Supply and Purchase Order 1954 was intended and therefore supply of bonded sugarcane ' would mean supply of sugarcane which has been secured by a bond or an agreement and such supply will not be entitled to the concession.
On a plain reading of the Notification in question, therefore, it will appear clear that since the supply of two lac maunds of sugarcane made by respondent No. 4 to the appellant firm had been secured by the agreement that was entered into between the parties on May 4, 1955 the said supply will have to be regarded as supply of "bonded sugarcane" and as such the appellant firm was not entitled to the concession in the minimum price payable in respect thereof to respondent No. 4, Laskar Co operative Cane Development Union.
[784 B E] 3.
On a fair reading of the sub cls.
(2) and (3) of cl. 3 of the Order two or there things become at once clear.
In the first place sub cl.
(2) uses the expression 'may ' and provides that a cane grower or cane growers ' cooperative Society may within 14 days of the issue of an order reserving an area for a factory make an offer to supply the cane grown in the reserved area to the factory.
That the period of 14 days mentioned in this subclause is not imperative or mandatory is also clear from sub cl.
(4) which confers power upon the Cane Commissioner to extend the date for making offer in respect of any reserved area.
Secondly, sub cl.
(3) uses the expression 'shall ' indicating that an imperative obligation is cast upon the factory to accept the offer within 14 days from the receipt of the offer.
Reading the two sub clauses together, it becomes clear that if a cane grower or cane growers ' Co operative Society makes an offer within 14 days mentioned in sub cl.
(2) it is obligatory upon the occupier of the factory to accept that offer within 14 days of the receipt of the offer; this only means that if the offer is made by cane grower or cane growers ' Co operative Society beyond the period specified in sub cl.
(2) or the extended time under sub cl.
(4) it would not be obligatory but optional for the occupier of the factory to accept the said offer but if such offer made beyond the prescribed or extended period is accepted by the occupier of the factory a binding agreement comes into existence between the parties and sugarcane supplied thereunder would be bonded sugarcane ', more so when the agreement is entered into in the prescribed form.
Merely because the offer from the cane grower or cane growers ' Co operative Society emanates after the expiry of the period mentioned in sub cl.
(2) it does not mean that the parties are preventive from entering in to an agreement in the prescribed form and if they do, as was the case here, the sugar cane supplied there under would be 'bonded sugarcane '.
Therefore, considering the question in the context of sub cl.
(2) and sub cl.
(3) of the U.P. sugarcane supply and Purchase Order 1954, also the appellant firm was not entitled to the benefit of the Cane Commissioner 's Notification dated June 1, 780 4.
The contention that sugarcane supplied by the cane growers or cane growers ' Co operative Society could be regarded as "bonded sugarcane" only if offer of the Canegrower or the Canegrowers Co operative Society emanates within the period prescribed by sub clause (2) and the same is accepted by the occupier within the period prescribed by sub cl.
(3) is not correct.
[786 D F] 5.
The true effect of sub clauses (2) and (3) read together is that the compulsion or obligation to accept the offer on the part of the occupier of the factory arises only when the offer is made by the cane grower or Cane growers ' Co operative Society within the time prescribed by sub cl.
(2) or the extended time under sub cl.
(4) but if the offer is made after the expiry of that period it is optional for the factory occupier to accept it or not but in cases where he accepts such offer a binding agreement comes into existence, and the sugarcane supplied thereunder becomes "bonded sugarcane".
[786 E M].
In the instant case the offer of additional quantity of two lac maunds of sugarcane was undoubtedly made long after the expiry of the period of sub cl.
(2) but the same was accepted by the appellant firm and a binding agreement came into existence and what is more a binding agreement was executed by the parties in the prescribed Form 'C '.
Further the conduct on the part of the appellant firm in referring the dispute to arbitration and filing an appeal against the arbitrator 's award under the relevant Rules clearly shows that the parties, particularly the appellant firm, treated the agreement dated May 4, 1955 as one under the Act and the U.P. Sugarcane Supply and Purchase Order, 1954.
[786 F H]


judgement:
N: Criminal Appeal No. 118 of 1972.
Appeal by Special Leave from the Judgment and Order dated 24 4 1972 of the Punjab and Haryana High Court in Criminal Appeal No.303 of 1969.
A. N. Mulla, Harbans Singh and Faqir Chand for the Appellant.
Hardev Singh for the Respondent.
The Judgment of Court was delivered by UNTWALIA, J.
The appellant in this appeal by special leave was convicted by the Additional Sessions Judge, Jullundur under section 304 Part I, Indian Penal Code and sentenced to undergo rigorous imprisonment for seven years and a fine of Rs. 10,000/ in default to two years ' further rigorous imprisonment.
The fine, if recovered, was directed to be paid to the dependants of the deceased in equal shares.
The appellant filed a criminal appeal in the High Court of Punjab and Haryana against his conviction and sentence.
The State 808 also filed an appeal and the widow of the deceased filed a revision in the High Court for convicting the appellant under section 302 of the Penal Code instead of section 304 Part I.
The High Court dismissed both the appeals as also the revision.
The appellant only has preferred this appeal in this Court.
The appellant was running a factory at Jullundur and on account of non availability of raw materials the factory remained closed for a fortnight from the 14th to 28th September, 1967 resulting in lay off of the workmen.
A dispute arose between the management and the workmen in regard to the payment of wages for the period aforesaid.
Ultimately a settlement was arrived at through the intervention of the Labour cum Conciliation Officer, Jullundur and the terms of the settlement were reduced to writing which was marked Ext.
D.A. in the case.
Rightly or wrongly the workers, according to the prosecution case, got the impression that they were to be paid their wages for the period of lay off.
They accordingly went to the appellant on 7th October, 1967 for demanding the wages.
The appellant is said to have told them that the same would be paid on the 11th October.
On this date again they went to the factory and sent P.W. Mota Singh to demand wages from the appellant.
He asked him to go away.
Mota Singh came out and passed on the information to the workers present outside the factory premises, who, amongst others, included Sant Ram, the deceased, Darshan Singh, P.W. 4 and Gurcharan Singh, P.W. 5.
According to the prosecution case the workers then started raising innocuous slogans demanding their wages and did nothing else.
It is said that thereupon the appellant opened the door of his office and fired a shot from his revolver towards the workers who were raising slogans.
The shot hit on the forehead of Sant Ram who fell down and died instantaneously at the spot.
The occurrence took place at 2.00 p.m. on the 11th October, 1967.
A First Information Report was lodged at the Thana at 2.15 p.m., on the written report of Mota Singh, P.W. 2, Shadi Lal, P.W. 13, Sub Inspector of Police reached the place of occurrence at about 2.30 p.m. and started investigation.
After submission of Charge Sheet and commitment the appellant was tried for having committed the offence of murder of Sant Ram punishable under section 302 of the Penal Code.
The defence set up by the appellant was that the Labour Officer had given the decision contained in Ext.
D.A. on the 28th September, 1967 that no wages would be paid for the lay off period but that the workmen would be treated on leave and would be paid as per leave due to each one of them.
He along with his son and driver Bansi 809 Lal was in the office at about 1.50 p.m. on the 11th October when eight or nine labourers of his factory and fifteen or twenty labourers who are outsiders came to his factory.
Some of them entered his office while others stood outside.
They demanded wages not only for the period of lay off but also for the period from 7th October onwards when they had decided not to join the work until their wages were paid.
The factory gates were closed and a big crowd of labourers collected outside.
They became violent.
They shouted very abusive and obnoxious slogans and were saying that they would not leave the owner of the factory alive that day.
They showered brick bats at the factory premises.
His office air conditioner was broken so was the electric globe outside the office.
The brick bats hit the office wall and damaged it and also damaged the table glass on the table inside the office.
Numerous brick bats fell both inside and outside the office.
Apprehending imminent danger to his life and in exercise of the right of private defence of property and person, Bansi Lal, the appellant 's driver fired the shot from the revolver and not he.
The labourers had started breaking the barbed wire fixed on the boundary wall of the factory on the other side of which they were standing.
Some of them including Sant Ram tried to scale the boundary wall.
It was in such a situation that the bullet hit Sant Ram causing his death.
Largely, almost wholly, agreeing with the conclusions arrived at by the Trial Court, the High Court has arrived at the following findings of fact: (1) The version of the labourers that they were entitled to their wages for the lay off period was not countenanced by Ext.
D.A., rather, that of the appellant was borne out by it.
"The demand of the workers made on 7th October, 1967 and 11th October, 1967 for payment of full wages was not in accordance with this agreement and therefore was not legal." (2) "That after the refusal by the accused to pay wages to the workers for the lay off period they raised some slogans and might have hurled some brick bats into the factory premises of the accused and caused damages as observed by Shadi Lal (P.W. 13) Sub Inspector, who arrived at the spot within about half an hour of the occurrence." (3) "The workers did not break the barbed wire affixed on the boundary wall of the factory nor they tried to 810 scale the boundary wall and there is no reliable evidence on the file to show that they were armed with any DANDAS or sticks.
Their purpose was to hold a demonstration against the accused when he refused to consider their demand of wages for the lay off period which was obviously not justified in view of the agreement arrived on 28th September, 1968, copy of which is Exhibit D.A." (4) "Provocative slogans might have also been raised by them at that time, when the accused was sitting in the office." (5) "Admittedly the workers were, at that time, standing outside the factory wall which was 5 1/2 feet high and on which barbed wire is fixed.
The distance between that outer wall and the office of the accused was about 13 feet.
No brick bats hurled by the workers could, therefore, enter the office room of the accused.
The defence version that some brick bats fell inside the office of the accused and broke the glass of his table is false and incorrect." (6) The mob hurled bricks bats on the building and the globe outside his office was broken and some damage was done to the air conditioner and as such the mob was guilty of mischief." (7) "The accused on hearing slogans of the workers came out of his office and stood on the THARI in front of the office and fired the shot towards the workers, who were raising slogans outside the factory and as a result of that shot Sant Ram died instantaneously.
" On the basis of the findings aforesaid the High Court, in agreement with the Trial Court, came to the conclusion that the appellant had the right of private defence of property extending to the voluntary causing of any harm other than death to the workers but not to the causing of death and obviously he exceeded his right of private defence and thus this offence falls under Exception 2 of section 300 of the Indian Penal Code.
The High Court found the appellant in the first instance guilty of culpable homicide amounting to murder within the meaning of clause '4thly ' of section 300.
And since the appellant 's case was found to have been covered by Exception 2 he was convicted under section 304, Part I. 811 Mr. A. N. Mulla appearing for the appellant submitted that he was not challenging the concurrent findings of the courts below that it was the appellant who had fired the shot from his revolver and not his driver.
But then, according to his submission, he was forced to do so apprehending imminent danger to his life or of grievous hurt to him and the shot was fired not only to defend his property.
He was, therefore, in exercise of that right, entitled to and justified in law in using force even to the extent of causing the death of Sant Ram, although he never intended to kill any one.
It was further submitted that the workmen were the aggressors.
They had thrown brick bats even inside the office damaging the office table glass; had collected in large numbers outside the boundary wall; had broken the barbed wire on it and some of them were trying to scale down the wall.
In such a situation the appellant was not expected to act like a coward and run from the place, but he had a right to defend his property and person.
In any view of the matter, counsel submitted, that the case did not come under clause '4thly ' of section 300 or even if it falls within that provision, on the application of Exception 2 he could only be convicted under Part II of section 304 and not Part I. On the facts and in the circumstances of this case, counsel submitted, that the sentence imposed upon him is highly excessive and even if his conviction is maintained justice demands only an imposition of fine on him under section 304 Part II.
Mr. Hardev Singh appearing for the State endeavoured to show that the labourers were justified in demanding their wages for the layoff period; they were very few in number and even if their demand was not warranted on the terms of the settlement embodied in Ext.
D.A. they had a right to peacefully demonstrate and ventilate their grievance.
They did nothing which could give any right of private defence to the appellant either of his property or person.
He could escape from his office for his safety or would have taken recourse to the protection of the public authorities.
Counsel further submitted that the appellant was not at all justified in causing the death of Sant Ram by his revolver and his conviction recorded under section 304 Part I is correct and the sentence is not at all excessive.
After having appreciated all that was placed before us by learned counsel for the parties and on perusal of the relevant pieces of evidence in the case we have come to the conclusion that none of the findings recorded by the Courts below is such or so erroneous that we can justifiably interfere with it either this way or that way.
And this, apart from the fact, that since the State had not come to this Court 812 in appeal it was not open to it to argue that the appellant had no right of private defence at all.
The argument that the appellant had time to escape like a coward for protecting his person leaving his property to any amount of danger of being damaged, to say the least, was an obviously wrong argument and has been stated merely to be rejected.
D.A. clearly shows that the workmen were not entitled to claim down right cash wages for the period of lay off.
Their absence was to be adjusted against their leave.
To start with, therefore, the High Court was right in saying that their demand was not legal.
Yet that, by itself, could not give any right of private defence either of property or of person to the appellant.
We have carefully gone through the evidence of P. Ws. 2, 4 and 5 and also the evidence of Vidya Sagar, D.W. 2 on which great reliance was placed by Mr. Mulla.
We see no ample Justification for us to say that any brick bats thrown by the labourers had entered the office room of the appellant breaking the glass of his office table.
But then, brick bats were thrown; they did hit and damage the office wall, the air conditioner and the globe of the electric light.
It may not be possible to determine with exactitude the number of labourers present outside the boundary wall at the time of the occurrence.
But it does appear to us that they were neither present in very large number of hundred or more nor the number was as meagre as about ten as deposed to by the P.Ws.
The factory of the appellant is situated in an industrial area.
It is reasonable to think that some other workers also must have joined their agitational move.
Be that as it may, the number of the workers present outside the boundary wall is not of any great significant although it has some significance.
They did throw brick bats damaging the appellant 's property and endangering it to further damage.
Hurling of brick bats by the labourers towards the office of the appellant must have caused apprehension of some hurt or injury to him but not necessarily the causing of the grievous hurt as on the facts and in the circumstances of this case it was not possible to draw an inference to that extent.
The High Court would have been well advised to try to record a definite finding on the question of hurling of brick bats instead of saying that the workers "might have hurled some brick bats into the factory premises of the accused.
" Similarly the High Court ought to have come to a definite conclusion as to whether the slogans raised by the workers were merely innocuous as they claimed to be or they were raising provocative slogans also which were not only obnoxious but went to the length of saying that the appellant should be killed and the factory should be burnt.
We are inclined to think that the 813 slogans raised by the workers were more offensive and provocative than claimed by them.
But we are not prepared to accept the contention of the appellant in disagreement with the findings of the courts below that they had broken barbed wire or that some of them tried to scale down the boundary wall.
It may well be that some of them tried to raise their heads to mark the reaction of the appellant on the hearing of their slogans.
The boundary wall was only 51/2 high.
The appellant came out of his office room and stood on the THARI which was about 1 1/2 high from the ground level of the factory and fired the shot.
It is not possible to accept his contention that he did so merely to scare away the crowd of the workers.
He could and did fire the shot so that it could pass over the boundary wall almost grazing it.
Sant Ram was standing at a distance of about 5 ' or 6 ' from the boundary wall.
The bullet which must have passed just over the boundary wall could and did hit Sant Ram.
In such a situation the High Court was right in the first instance in not finding the appellant guilty of having committed culpable homicide amounting to murder within clauses '1stly, 2ndly or 3rdly ' and finding him guilty with the aid of clause '4thly ', where the intention to cause murder is absent but "the person committing the act knows that it is so imminently dangerous that it must, in all probability, cause death or such bodily injury as is likely to cause death".
The clause further says that the person "commits such act without any excuse for incurring the risk of causing death or such injury as aforesaid.
" The appellant must have committed the act with the knowledge that it was imminently dangerous and in all probability must cause death or such bodily injuries as was likely to cause death.
Dehors Exception 2 which we shall presently refer he had no excuse for committing the said act.
The law regarding the right of private defence of property or person is well settled and may be briefly recapitulated here.
The onus is on the accused to establish this right not on the basis of the standard of proving it beyond doubt but on the theory of preponderance of probability.
He might or might not take this plea explicitly or might or might not adduce any evidence in support of it but he can succeed in his plea if he is able to bring out materials in the records of the case on the basis of the evidence of the prosecution witnesses or on other pieces of evidence to show that the apparently criminal act which he committed was justified in exercise of his right of private defence of property or person or both.
But the exercise of this right is subject to the limitations and exceptions provided in section 99 of the Penal Code the last one being "The right of private defence in no case extends to the inflicting of more harm than it is necessary to inflict for 814 the purpose of defence." As to when the right of private defence of the body extends to causing death is provided for in section 100.
The appellant 's case is not covered by it.
In the view which we have expressed above we think that the appellant had not only the right of private defence of his properly but also his body to a limited extent with in the meaning of section 101 subject to the restrictions mentioned in section 99.
This did not extend to the inflicting of so much harm to Sant Ram and causing his death, nor the right of private defence of property available to the appellant extended to causing his death as it was not covered by any of the clauses of section 103.
Mr. Mulla tried to bring it under '4thly ' which says: "Theft, mischief, or house trespass, under such circumstances as may reasonably cause apprehension that death or grievous hurt will be the consequence, if such right of private defence is not exercised.
Mischief was caused to his property but it was not caused under such circumstances as may reasonably cause apprehension in his mind that death or grievous hurt would be the consequence if such right of private defence was not exercised.
A mere claim of such apprehension is not enough.
The Court on objective test and on the facts and circumstances of each case must arrive at the conclusion that the situation was such as was likely to reasonably cause such apprehension.
The right of private defence of property also, therefore, in the appellant 's case extended to causing of any harm other than the death.
Undoubtedly the appellant did exceed this right of private defence and apparently the murder which he committed within the meaning of clause '4thly ' of section 300 squarely fell within Exception 2 thereof.
He exceeded the power given to him by law and caused the death of Sant Ram against whom he was exercising such right of defence.
He did so without premeditation and without any intention of doing more harm than was necessary for the purpose of such defence.
He thought that by indulging in this imminently dangerous act he would be able to scare away the labourers and stop them from continuing their unjustified agitation, the raising of the slogans and the throwing of the brick bats.
But then, although the intention was not to kill or cause such bodily injury as was sufficient in the ordinary course of nature to cause death, yet he must have committed the act knowing that it was so imminently dangerous that it must in all probability cause death or such bodily injury as was likely to cause death of the worker or workers standing on the other side of the boundary wall.
815 A question now arises whether the appellant was guilty under Part I of section 304 or Part II.
If the accused commits an act while exceeding the right of private defence by which the death is caused either with the intention of causing death or with the intention of causing such bodily injury as was likely to cause death then he would be guilty under Part I.
On the other hand if before the application of any of the Exceptions of section 300 it is found that he was guilty of murder within the meaning of clause '4thly ', then no question of such intention arises and only the knowledge is to be fastened on him that he did indulge in an act with the knowledge that it was likely to cause death but without any intention to cause it or without any intention to cause such bodily injuries as was likely to cause death.
There does not seem to be any escape from the position, therefore, that the appellant could be convicted only under Part II of section 304 and not Part I. Even so on the facts and in the circumstances of this case we do not feel persuaded to let off the appellant with an imposition of fine only.
We, however, thought that sentence of three years ' rigorous imprisonment would meet the ends of justice in this case.
We were informed at the Bar and an affidavit sworn by the appellant 's wife was also filed before us to the effect that the appellant was in jail for about nine months as an under trial prisoner and for about four months after conviction.
Thus he has already undergone imprisonment for a period of about a year and a month.
The occurrence took place more than a decade ago.
The appellant had to pass this long ordeal all these years both mentally and financially.
Considering, therefore, the totality of the circumstances while maintaining the imposition of fine of Rs. 10,000/ and in default two years ' further imprisonment, we reduce his substantive term of imprisonment to the period already undergone and maintain the conviction of the appellant not under Part I of section 304 of the Penal Code but under Part II.
In the result the appeal is dismissed but subject to the modification made above in regard to the appellant 's conviction and sentence.
N.V.K. Appeal dismissed.

dataset_name: IN-Abs

summary/full:
There was a dispute between the appellant, a factory owner and his employees in regard to wages, during the period of their lay off.
The prosecution alleged that on the day of the occurrence when the workers gathered outside the factory and raised innocuous slogans demanding their wages, the appellant came out and fired a shot from his revolver, which hit a worker resulting in his death.
The appellant on the other hand alleged that a large number of labourers who collected outside the factory, shouted very abusive slogans, threatening that they would not leave him alive and showered brickbats at the factory premises causing damage to the appellant 's property.
Apprehending imminent danger to his life and property, his driver fired a shot from the revolver which resulted in the death of the deceased.
The trial court, with whose findings the High Court agreed, found that the workers might have hurled brickbats into the factory premises; but they did not break the barbed wire on the boundary wall nor did they try to scale the boundary wall.
that they did not carry any sticks, that no brickbats hurled by the workers could enter the appellant 's office and therefore his version that some brickbats damaged the glass on his office table was incorrect and that it was the appellant and not his driver that fired his revolver which resulted in the death of the deceased.
The High Court, agreeing with the trial court, held that though the appellant had the right of private defence of property it did not go to the extent of causing death and, therefore, he exceeded his right of private defence.
Holding that the offence fell under Exception 2 to section 300 IPC the High Court convicted him under section 304, Part I.
In appeal to this Court it was contended on behalf of the appellant that in the exercise of his right of private defence the appellant was entitled to and justified in law in using force even to the extent of causing death although he never intended to kill the deceased or anyone.
On the facts and circumstances of the case, it did not come within clause 4thly of section 300; or even if it fell within that provision, on the application of exception 2, he could only be convicted under Part II of section 304 and not under Part I. Even if his conviction were maintained, imposition of fine would meet the ends of justice.
Dismissing the appeal in part, ^ HELD: The appellant could be convicted only under Part II of section 304 and not Part I. [813 C].
806 (1) The High Court was right in not finding the appellant guilty of having committed culpable homicide amounting to murder within clauses Firstly, Secondly or Thirdly and finding him guilty with the aid of clause 4thly where the intention to cause murder is absent but "the person committing the act knows that it is so imminently dangerous that it must, in all probability, cause death or such bodily injury as is likely to cause death".
The clause further says that the person "commits such act without any excuse for incurring the risk of causing death or such injury as aforesaid.
" The appellant must have committed the act with the knowledge that it was imminently dangerous and in all probability must cause death or such bodily injury as was likely to cause death.
Dehors Exception 2, he had no excuse for committing the said act.
[813 D E] In the present case the workers ' demand for wages was not legal.
The workers raised provocative slogans and did throw brickbats damaging the appellant 's property and endangering it to further damage.
But that by itself could not give any right of private defence of person to the appellant.
There is no evidence to show that the workers had broken the barbed wire or that some of them tried to scale the boundary wall.
It may well be that some of them tried to raise their heads above the boundary wall.
The appellant came out of his office and fired the shot, which could not be merely to scare away the crowd of workers.
He could and did fire the shot so that it could pass over the boundary wall almost grazing it.
The bullet which must have passed just over the boundary wall could and did hit the deceased killing him instantaneously.
[812C 813C] 2.
(a) In the matter of exercise of the right or private defence of property or person the onus is on the accused to establish this right not on the basis of the standard of proving it beyond doubt but on the theory of preponderance of probability.
He might or might not take this plea explicitly or might or might not adduce any evidence in support of it but he can succeed in his plea if he is able to bring out materials on the record on the basis of evidence of the prosecution witnesses or on other pieces of evidence to show that the apparently criminal act which he committed was justified in exercise of his right of private defence of person or property or both.
But the exercise of this right is subject to the limitation and exceptions provided in section 99 of the Code.
As to when the right of private defence of the body extends to causing death is provided for in section 100.
[813 F 814 A] (b) The appellant had not only the right of private defence of his property but also his body to a limited extent within the meaning of section 101 subject to the restrictions mentioned in section 99.
This did not extend to the inflicting of so much harm to the deceased and causing his death, nor does the right of private defence of property available to an accused extend to causing death, unless it is covered by any of the clause of section 103.
[814 B] (c) When mischief is caused to property it must be shown that it was caused under such circumstances as may reasonably cause apprehension that death or grievous hurt would be the consequence if such right of private defence was not exercised.
A mere claim of such apprehension is not enough.
The court on objective tests and on the facts and circumstances of each case must arrive at the conclusion that the situation was such as was likely to reasonably cause such apprehension.
[814 D E] 807 (d) The right of private defence of property in the appellant 's case extended to causing of any harm other than death.
The appellant did exceed this right of private defence and the murder which he committed was within the meaning of clause '4thly ' of section 300 squarely and fell within Exception 2 thereof.
[814 F] (e) The appellant exceeded the right given to him by law and caused the death of the deceased against whom he was exercising such right of defence.
He did so without premeditation and without any intention of doing more harm than was necessary for the purpose of such defence.
He thought that by indulging in this imminently dangerous act he would be able to scare away the labourers and stop them from continuing their unjustified agitation, the raising of the slogans and the throwing of brickbats.
But then, although the intention was not to kill or cause such bodily injury as was sufficient in the ordinary course of nature to cause death, yet he must have committed the act knowing that it was so imminently dangerous that it must in all probability cause death of the worker or workers standing on the other side of the boundary wall.
[814 G H] 3.
If the accused commits an act while exercising the right of private defence by which death is caused either with the intention of causing death or with the intention of causing such bodily injury as is likely to cause death then he would be guilty under Part I.
On the other hand if before the application of any of the Exception of section 300 it is found that he was guilty of murder within the meaning of clause "4thly" then no question of such intention arises and only the knowledge is to be fastened on him that he did indulge in an act with the knowledge that it was likely to cause death but without any intention to cause it or without any intention to cause such bodily injury as was likely to cause death.
In the instant case the appellant could be convicted only under Part II of section 304 and not Part I. [815A C]


judgement:
Civil Appeal No. 1314 of 1975.
Appeal by Special Leave from the Judgment and Order dated 29 1 1975 of the Allahabad High Court in S.T.R. No. 771 of 1972.
623 S.C. Manchanda, Mrs. Urmila Kapoor and Miss Kamlesh Bansal for the Appellant.
G.N. Dikshit and O.P. Rana for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
The short question that arises for determination in this appeal by special leave is whether a contract for fabrication and erection of a 3 motion electrical overhead travelling crane is a contract of sale or a contract for work and labour.
The question is fortunately not beset with much difficulty since there is a recent decision of this Court in Sentinel Rolling Shutters & Engineering Co. (P) Ltd. vs Commissioner of Sales Tax, Maharashtra which affords considerable guidance and almost concludes the determination of the question in favour of the assessee.
The assessee, who is the appellant before us, is a partnership firm carrying on the business inter alia of manufacturing and erection of cranes.
During the assessment year 1965 66, the assessee entered into two contracts for supply and erection of 3 motion electrical overhead travelling cranes, one with M/s Kamlapat Moti Lal Sugar Mills and the other with M/s Upper Doab Sugar Mills Ltd. The contract with M/s Kamlapat Moti Lal Sugar Mills provided for supply and erection of one 3 motion electrical overhead travelling crane at the price of Rs. 1,34,500/ and on the terms and conditions set out in a letter addressed by M/s Kamlapat Moti Lal Sugar Mills to be assessee: "We confirm all the specifications given in your above referred quotation with the following changes: 1.
Structural capacity will be suitable for safeload of two unloading crabs, i.e. 10 tons.
Span of the long gantry which is given 50 ' will be confirmed shortly.
Your supply will also include gantry of 35 ' x 50 ' to make the crane three motions.
We shall not be required to give any material except electric line up to the crane.
You will be supplying crane drivers cabin with automatic control panel free provided its trial is successful.
624 6.
The minimum number of operations will be 30 per hour approx.
You will give us working trial of the equipment at least by 30th September, 1965.
The price of the above equipment will be Rs.1,34,500/ f.o.r.
Khatauli, sales tax, excise duty will be extra, if payable.
This price includes erection charges.
Terms of payment 40% advance with the order 10% after one month from the date of the order 25% after the erection of bridge and columns 15% after trial.
10% after one month 's satisfactory performance.
A penalty of 1/2% will be payable per week by you in case of delay per week after 30th September, 1965, and to a maximum of 5% of the total value.
You will send your staff for erecting the unloader and we shall be providing you necessary tools and tackles and welding set when required.
Available accommodation will also be provided.
" The contract between Upper Doab Sugar Mills Ltd. was for supply and erection of two 3 motion electrical overhead travelling cranes with two crabs each at the price of Rs. 1,19,000/ for each crane and it was on the following terms and conditions: "That the contractor will supply the company two cranes with two crabs each as under: (i) Crane bridge: The structural design of the crane bridge will be in accordance with the structural specifications of B.S.S. 466 for electric overhead travelling crane.
The structural parts will be fabricated from good quality Tata tested steel sections.
The girders for the main bridge will be of lattice construction type heavy duty.
(ii) Drivers cabin: The driver 's cabin will be of weather proof outdoor construction.
It will be with material in a position that the operator 's view is not obstructed 625 during the load handling and will travel along with the crane crab.
(iii)Electrical equipment for driver 's cabin: The driver 's cabin will be provided with the following electrical equipment and other necessary fittings: 1.
One protective paner for electrical equipment.
Drum controllers for all the motors.
Plug and sockets for hand lamp.
One electric light point.
One alarm bell and all other necessary fittings.
Steps ladders will be provided from the crane bridge for easy access to the cabins.
(iv) Wiring: Wiring with V.I.R. Wrain steel conduit pipes will be provided between individual motors and controllers, current collectors and resistances in the cabin.
For connection of current to the trolley, a set of bars copper conductors complete with insulators and strainers mounted on the bridge will be provided.
A set of current collectors will be mounted on the trolley, containing renewable graphitic carbon collectors.
PRICE: That for two complete cranes of the above mentioned specifications with two crabs each including erection, the company will pay to the contractor at the rate of Rs.1,19,000/ per crane with two crabs each including erection complete in all respects with necessary equipment.
Mode of Payment: 1.
30% with the order 2.
20% after two months of the actual commencement of work 3.
25% after the completion of erection of columns and bridge.
4. 15% after completion and giving satisfactory trials.
10% after one month 's satisfactory work.
That the contractor will execute the entire work i.e. fabrication, erection and construction latest by 30th day of September, 1964 so that the trials can begin on the 1st October, 1964.
The defects will be 626 rectified by the 10th October, 1964.
If the work is not completed by the 30th September, 1964, a penalty of Rs. 400/ per day from the 1st October, 1964 will be paid by the contractor to the company till the date of completion and satisfactory operation of the cranes.
That all such items which are considered defective by the company will be replaced at the contractor 's cost within the above specified date to the company 's entire satisfaction so that regular working of the cranes is ensured.
That all materials will be provided by the contractor and electricity will be charged at cost if consumed by the contractor.
Only such tools which are available in the stores of the Co., will be given to the contractor on loan on returnable basis and the contractor will pay to the company the cost of such material which are not returned to the company.
The final payment of the bills of the contractor will be made on his getting NOTHING DUE clearance certificate from the Stores Department of the Company.
That there will be no liability and responsibility of the company whatsoever besides payment of price of the cranes.
That sales tax or excise duty and other government duty, if any, will be extra.
Packing and forwarding charges will also be extra.
" The assessee carried out both these contracts and fabricated and erected one 3 motion electrical overhead travelling crane at the factory of M/s Kamlapati Moti Lal Sugar Mills and two 3 motion electrical overhead travelling cranes at the factory of M/s Upper Doab Sugar Mills Ltd. according to the contracts specifications.
The question arose in the assessment of the assessee to sales tax for the assessment year 1965 66 whether the amount of Rs. 1,34,500/ received by the assessee under the contract with M/s Kamlapati Moti Lal Sugar Mills and the amount of Rs. 2,38,000/ received under the contract with M/s Upper Doab Sugar Mills Ltd. formed part of the turnover of the assessee and liable to sales tax.
The answer to this question depended upon whether the contracts with M/s Kamlapati Moti Lal Sugar Mills and M/s Upper Doab Sugar Mills Ltd. were contracts of sale or contracts for work and labour.
If they were contracts of sale, the amounts of Rs.1,34,500/ and Rs. 2,38,000/ would be taxable as sale price forming part of the turnover, but not so, if they were contracts for work and labour.
The Sales Tax Officer 627 took the view that the contracts were essentially contracts of sale of ready made cranes and the erection of the cranes at the factory site was merely incidental to the sale and the amounts of Rs.1,34,500/ and Rs. 2,38,000/ received under the contracts were, therefore, taxable.
This view was upheld by the Assistant Commissioner in appeal, but on an application for revision being filed by the assessee, the Additional Judge (Revisions) held that each of the two contracts was a works contract not involving any sale of goods and hence the amounts of Rs. 1,34,500/ and Rs. 2,38,000/ were not exigible to sales tax.
The Commissioner of Sales Tax thereupon applied for a reference and on his application, the following two questions of law were referred for the opinion of the High Court: 1.
Whether in the facts and circumstances of the case the turnover of Rs. 1,34,500/ made by the assessee in respect of Kamlapati Motilal Sugar Mills amounts to a works contract or sale of goods? If so, to what extent? 2.
Whether in the facts and circumstances of the case the turnover of Rs. 2,38,000 made by the assessee in respect of the Upper Doab Sugar Mills amount to a works contract or sale of goods? If so, to what extent? The High Court took the view that each of the two contracts was for supply of 3 motion electrical overhead travelling crane as a complete unit and "the predominent object was supply of crane as a complete unit" and "the bestowing of labour and skill in the execution of the contract" appeared "to have been incidental to the supply of the machine".
The High Court observed that in its view the parties "intended the property to pass in the subject matter of the contract,namely, the completed crane as movable property" and concluded that it was a contract of sale of goods and not a contract for work and labour.
The High Court accordingly answered both the questions referred to it in favour of the Revenue and against the assessee.
The assessee thereupon brought the present appeal with special leave obtained from this Court.
Now, the distinction between a contract of sale and a contract for work and labour has been pointed out in Halsbury 's Laws of England, 3 ed., volume 34, para 3 at page 6 in the following words: "A contract of sale is a contract whose main object is the transfer of the property in, and the delivery of the possession of, a chattel as a chattel to the buyer.
Where the main 628 object of work undertaken by the payee of the price is not the transfer of a chattel qua chattel, the contract is one for work and labour.
The test is whether or not the work and labour bestowed and in anything that can properly become the subject of sale; neither the ownership of the materials, nor the value of the skill and labour as compared with the value of the materials, is conclusive, although such matters may be taken into consideration in determinating, in the circumstances of a particular case, whether the contract is in substance one for work and labour or one for the sale of a chattel.
" The primary test is whether the contract is one whose main object is transfer of property in a chattel as a chattel to the buyer, though some work may be required to be done under the contract as ancillary or incidental to the sale or it is carrying out of work by bestowal of labour and service and materials are used in execution of such work.
This test has been recognised and approved in a number of decisions of this Court and it may now be regarded as beyond controversy, but the real difficulty arises in its application as there are a large number of cases which are on the border line and fall within what may be called grey area.
To resolve this difficulty, the courts have evolved some subsidiary tests and one of such tests is that formulated by this Court in Commissioner of Sales Tax, Madhya Pradesh vs Purshottam Premji where it has been said: The primary difference between a contract for work or service and a contract for sale of goods is that in the former there is in the person performing work or rendering service no property in the thing produced as a whole.
In the case of a contract for sale, the thing produced as a whole has individual existence as the sole property of the party who produced it, at some time before delivery, and the property therein passes only under the contract relating thereto to the other party for price.
" This was the test applied by this Court in the State of Rajasthan vs Man Industrial Corporation for holding that a contract for providing and fixing four different types of windows of certain sizes according to "specifications, designs, drawings and instructions" set out in the contract was a contract for work and labour and not a contract for sale Shah, J., speaking on behalf of the Court, analysed the nature 629 of the contract and pointed out that "The window leaves did not pass to the Union of India under the terms of the contract as window leaves.
Only on the fixing of the windows as stipulated, the contract could be fully executed and the property in the windows passed on the completion of the work and not before".
The contract was not for transfer of property in the window leaves as window leaves.
It was a contract for providing and fixing windows and windows could come into existence only when the window leaves were fixed to the building by bestowing labour and skill and it was for this reason that it was held to be a works contract.
The same test reasoning was applied by this Court in Sentinel Rolling Shutters & Engineering Co. (P) Ltd. vs Commissioner of Sales Tax, Maharashtra (supra).
There the question was whether a contract for fabrication, supply and erection of certain types of rolling shutters was a contract of sale or a contract for work and labour.
This Court analysed the nature of the contract and pointed out that "not only are the Rolling Shutters to be manufactured according to the specifications, designs, drawings and instructions provided in the contract, but they are also to be erected and installed at the premises of the company.
The price stipulated in the contract is inclusive of erection and installation charges and the contract does not recognise any dichotomy between fabrication and supply of the Rolling Shutters and their erection and installation so far as the price is concerned.
The erection and installation of the Rolling Shutters is as much an essential part of the contract as the fabrication and supply and it is only on the erection and installation of the Rolling Shutters that the contract would be fully executed.
" This Court then proceeded to examine what is a rolling shutter and how it is erected and installed in the premises and observed that a rolling shutter consists of several component parts and 'the component parts do not constitute a rolling shutter until they are fixed and erected on the premises.
It is only when the component parts are fixed on the premises and fitted into one another that they constitute a rolling shutter as a commercial article and till then they are merely component parts and cannot be said to consitute a rolling shutter.
The erection and installation of the rolling shutter cannot, therefore, be said to be incidental to its manufacture and supply.
It is a fundamental and integral part of the contract, because without it the rolling shutter does not come into being.
The manufacturer would undoubtedly be the owner of the component parts when he fabricates them, but at no stage does he become the owner of the rolling shutter as a unit so as to transfer the property in it to the customer.
The rolling shutter comes into existence as a unit when the components 630 parts are fixed in position on the premises and it, therefore, becomes the property of the customer as soon as it comes into being.
There is no transfer of property in the rolling shutter by the manufacturer to the customer as a chattel.
It is essentially a transaction for fabricating component parts and fixing them on the premises so as to constitute a rolling shutter.
" The contract for fabrication, supply and erection of the rolling shutters was, on this reasoning, held by the Court to be a contract for work and labour and not a contract for sale.
If we consider what is a 3 motion electrical overhead travelling crane and how it is fabricated, erected and installed, it will become immediately clear that the analogy of the decision in Sentinel Rolling Shutters & Engineering Co. (P) Ltd. 's case (supra) to the present case is striking and it must lead us to the conclusion that each of the two contracts with which we are concerned here is not a contract for sale but a contract for work and labour.
The publication of the Indian Standards Institution which lays down the Code of Practice for Design of Overhead Travelling Cranes and Gantry Cranes clearly shows that a 3 motion electrical overhead travelling crane consists of 44 main component parts and it is only when they are put together and assembled at the site that they assume the shape of a crane.
It is not as if a 3 motion electrical overhead travelling crane is fabricated by the manufacturer and then sold and delivered to the customer as a chattel.
One single 3 motion electrical overhead travelling crane covers an area of 10,549 Square Feat at the site.
When an order for fabrication and erection of 3 month electrical overhead travelling crane is received by the manufacturer from the customer alongwith the specifications of the size and the materials, the manufacturer designis the machine according to the specifications and prepares the necessary drawings for its fabrication and manufacture and two copies of the drawings are sent to the customer for preparing the foundation at the site for erection of the columns which are ten in number along with four supporting columns.
Each column has to be placed on a grouted foundation which is 7 feet deep and is securely bolted with foundation bolts, 5 on each side.
which are grouted so as to be able to support the weight of the columns.
The columns thus become permanent fixtures on the land of the customer and they constitute a permanent foundation for the 3 motion electrical overhead travelling crane.
The detailed specifications of the foundation bolts and the columns are given in the publication of the Indian Standards Institution.
It may be noted that even so far as the columns are concerned, they are not fabricatetd by the manufacturer in his factory and then taken to the site.
Each column has a height of about 40 feet and it is made in three or four pieces and these pieces 631 are joined together with bolts and welded at the time of erection at the site.
Thereafter a 120 feet long gantry is assembled by the manufacturer in eight pieces and each piece is placed on two columns and the erection of the gantry on both sides is completed after bolting and svelaing the gantry with the columns.
Then about 60 pieces are fixed on to the gantry on both sides to form a platform to facilitate the operation and maintenance of the crane and the component parts of the railings are assembled at the site with bolts and welded to the gantry.
Two distance pieces assembled out of diverse component parts are then fixed between both ends of the gantry to ensure stability.
The manufacturer has to examine and ensure the levelling and alignment of the gantry and then the component parts of the rails are assembled and fixed on both sides of the gantry by means of M.S. cleats and bolts.
The bridge which is fabricated out of numerous component parts at the site, is then put on the rails so that it can run on the gantry and travel about 180 feet from one end Or the gantry to another.
Then rails are fixed on the bridge and the trolley is put on the rails.
The trolley consists of several component parts which are brought and assembled at the site.
There is also a platform erected on the bridge for maintenance of the bridge and trolley and lastly, there is a lifting grab which is made of 36 pieces assembled at the site and this grab is fitted on to the trolley.
It would thus be seen that the fabrication and erection of a 3 motion electrical overhead travelling crane is a highly skilled and specialised job and the component parts have to be taken to the site and they are assembled and erected there and it is only when this process is complete then a 3 motion electrical overhead travelling crane comes into being.
The process of assembling and erection, requires a high degree of skill and it is not possible to say that the erection of a 3 motion electrical overhead travelling crane at the site is merely incidental to its manufacture and supply.
The fabrication and erection is one single indivisible process and a 3 motion electrical overhead travelling crane comes into existence only when the erection is complete.
The erection is thus a fundamental and integral part of the contract, because without it the 3 motion electrical overhead travelling crane does not come into being.
The manufacturer would undoubtedly be the owner of the components parts when he fabricated them but at no stage does he become the owner of the 3 motion electrical overhead travelling crane as a unit so as to transfer the property in it to the customer.
The 3 motion electrical overhead travelling crane comes into existence as a unit only when the component parts are fixed in position and erected at the site, but at that stage it becomes the property of the customer because it is permanently embedded in the land belonging to the customer.
The result is that as 632 soon as 3 motion electrical overhead travelling crane comes into being it is the property of the customer and there is, therefore, no transfer of property in it by the manufacturer to the customer as a chattel.
It is essentially a transaction for fabricating component parts and putting them together and erecting them at the site so as to constitute a 3 motion electrical overhead travelling crane.
The transaction is no different than one for fabrication and erection of an open godown or shed with asbestos or tin sheets fixed on columns.
There can, therefore, be no doubt that the contract in the present case was a contract for work and labour and not a contract for sale.
This view which we are taking is completely supported by the decision of this Court in the Sentinel Rolling Shutters & Engineering Co. (P) Ltd. vs Commissioner of Sales Tax, Maharashtra (supra).
We accordingly allow the appeal, set aside the judgment of the High Court and hold that the contract in the present case was a con tract for work and labour and not a contract for sale and comformably with this view we answer the question referred by the Sales Tax Tribunal in favour of the assessee and against the Revenue.
The State will pay the costs of the assessee throughout.
V.D.K. Appeal allowed.

summary/full:
The appellant assessee was a partnership firm carrying on business inter alia of manufacture and erection of cranes.
During the assessment year 1965 66, the assessee entered into two contracts for supply and erection of 3 motion electrical overhead travelling cranes.
The assessee carried out both the contracts and fabricated and erected 3 motion electrical overhead travelling cranes according to the contract specifications.
A question arose in the assessment of the assessee to sales tax for the assessment year 1965 66 whether the amount of Rs. 1,34,500/ received by the assessee under the contract with M/s. Kamlapati Motilal Sugar Mills and the amount of Rs. 2,38,000/ received under the contract with M/s. Upper Doab Sugar Mills Ltd., formed part of the turnover of the assessee and was liable to sales tax.
The Sales Tax Officer took the view that the contracts were essentially contracts of sale of ready made cranes and the erection of the cranes at the factory site was merely incidental to the sales and the amounts of Rs. 1,34,500/ and Rs. 2,38,000/ received under the contracts were, therefore taxable.
This view was upheld by the Assistant Commissioner in appeal, but in revision the Additional Judge (Revisions) held that each of the two contracts was a works contract not involving any sale of goods and hence the amounts were not exigible to sales tax.
On a reference to the High Court at the instance of the Commissioner of Sales Tax, the High Court took the view that each of the two contracts was for supply of 3 motion electrical overhead travelling cranes as a complete unit and "the predominant object was supply of crane as complete unit" and "the bestowing of labour and skill in the execution of the contract" appeared to have been incidental to the supply of the machine.
" The High Court observed that in its view parties "intended the property to pass in the subject matter of the contract, namely, the completed crane as movable property" and concluded that it was a contract of sale of goods and not a contract for work and labour.
The High Court accordingly answered both the questions referred to it against the assessee and in favour of the Revenue.
Allowing the appeal by special leave the Court, ^ HELD: 1.
The primary test to find out whether a contract is a contract of sale or a contract for work and labour is whether the contract is one whose main object is transfer of property in a chattel as a chattel to the buyer, though some work may be required to be done under the contract as ancillary or incidental to the sale or it is carrying out of work by bestowal of labour and service and materials are used in execution of such work.
The Court 's have evolved some subsidiary tests to resolve the difficulty arising in the application of this primary test as there are a large number of cases which are on the 622 border line and fall within what may be called "grey area".
One such test formulated by the Supreme Court in Commissioner of Sales Tax, Madhya Pradesh vs Purshottam Premji, 26 STC 38 is: "The primary difference between a contract for work or service and a contract for sale of goods is that in the former there is in the person performing work or rendering service no property in the thing produced as a whole. .In the case of a contract for sale, the thing produced as a whole has individual existence as the sole property of the party who produced it (at some time before delivery, and the property therein passes only under the contract relating thereto to the other party for price." [628 C G] Commissioner of Sales Tax, M.P. vs Purshottam Premji, 26 STC 38; State of Rajasthan vs Man Industrial Corporation 24 STC 349; Sentinel Rolling Shutters & Engineering Co. (P) Ltd. vs Commissioner of Sales Tax, Maharashtra, ; ; applied.
Each of the two contracts for fabrication and erection of a 3 motion electrical overhead travelling crane is not a contract for sale but a contract for work and labour, (a) It is essentially a transaction for fabricating component parts and putting them together and erecting them at the site so as to constitute a 3 motion electrical overhead travelling crane.
The transaction is no different than one for fabrication and erection of an open godown or shed with asbestos or tin sheets fixed on columns, (b) It is not as if a 3 motion electrical overhead travelling crane is fabricated by the manufacturer and then sold and delivered to the customer as a chattel, (c) The fabrication and erection of a 3 motion electrical overhead travelling crane is a highly skilled and specialised job and the component parts have to be taken to the site and they are assembled and erected there and it is only when this process is complete, then a 3 motion electrical overhead travelling crane comes into being.
The process of assembling and erection requires a high degree of skill and it is not possible to say that the erection of a 3 motion electrical overhead travelling crane at the site is merely incidental to its manufacture and supply.
The fabrication and erection is one single indivisible process and a 3 motion electrical overhead travelling crane comes into existence only when the erection is complete.
The erection is thus a fundamental and integral part of the contract, because without it the 3 motion electrical overhead travelling crane does not come into being.
The manufacturer would undoubtedly be the owner of the component parts when he fabricated them but at no stage does he become the owner of 3 motion, electrical overhead travelling crane as a unit so as to transfer the property in it to the customer.
The 3 motion electrical overhead travelling crane comes into existence only when the component parts are fixed in position and erected at the site, but at that stage it becomes the property of the customer because it is permanently embedded in the land belonging to the customer.
The result is that as soon as 3 motion electrical overhead travelling crane comes into being, it is the property of the customer and there is, therefore, no transfer of property in it by the manufacturer to the customer as a chattel.
[630C D, 631E H 632 A] Sentinel Rolling Shutters & Engineering Co. (P) Ltd. vs Commissioner of Sales Tax, Maharashtra, [1979] 1 SCR page 644: followed.