judgement:
s Nos. 39 & 92 of 1969.
Under Article 32 of the Constitution of India for the enforcement of Fundamental rights.
V.M. Tarkunde, G.R. Chopra and C.M. Kohli for the petitioners.
Gobind Das and section K. Nayar, for the respondents (in W.P.No. 39/69) and respondents Nos.
1 4 (in W.P. No. 92/69).
P.K. Chatterjee and G.S. Chatterjee, for respondents Nos.
5 6 (in W. P No. 92/69).
Judgment of the Court was delivered by MATHEW, J. These are petitions filed under article 32 of the Constitution praying for issue of appropriate direction or order for the enforcement of the fundamental right of the petitioners under article 31(1) of the Constitution.
The question raised in the petitions is that we propose to deal with Writ Petition No. 39 of 1969 decision there will govern and dispose of Writ No. 92 of 1969.
The petitioner is a company incorporated under the Indian Companies Act, 1913.
It has its registered office in Calcutta and a branch office at Binani House, Khundi Katra, Mirzapur, U.P.
The petitioner is an importer and a dealer in non ferrous metals like zinc, lead, copper, tin, etc.
and is on the approved list of registered suppliers to the Directorate General of Supplies and Disposals, hereinafter referred to as DGS&D.
It is also a registered dealer in the State of West Bengal under the Bengal Finance Act, 1941 and the .
The petitioner used to procure nonferrous metals from various countries and also from within the country for fulfilling its contracts with the Government of India through _the DGS&D.
The import of non ferrous metals was under Open General Licence till June 30, 1957.
Thereafter, a licensing systems was introduced by the Government of India and the established traders including M 602 Sup CI/74 622 the petitioner were asked to get their quotas fixed on the basis of their past imports.
On April 2, 1958, the Government of India promulgated the Non Ferrous Metals Control Order, 1958 under the Essential Commodities Act, 1951 by virtue of which free sale of copper was banned.
Any import of copper by the established licence holders was to be distributed under the directions of the Controller of Nonferrous Metals.
Under the Non Ferrous Metals Control Order, 1958.
and also under the Import Trade Regulations, the established importers were not free to sell the metals imported by them against their quota licences even to the DGS&D.
The petitioner, in order to effect supplies to the DGS&D had to obtain additional import licence.
Under the Import Trade Control Policy, the established importers including the petitioner obtained quota licences for import of non ferrous metals for the licensing period upto April, 1964 March, 1965, but the imports mentioned here were to be distributed only under the directions of the Controller of Non Ferrous Metals or the Import Trade Control Authority.
On September 14, 1965, the Government of India promulgated the Scarce Industrial Materials Control Order, 1965, under the Defence of India Rules.
Stocks of non ferrous metals including incoming imports were thus frozen.
The Non Ferrous Metals Control Order, 1958, was repealed.
The Scarce Industrial Materials Control Order, 1965 was also repealed on June 6, 1966.
The Government of India, in placing orders with the petitioner used to grant import licences in terms of the contract.
The petitioner had been importing and supplying non ferrous metals to respondents 1, 2 and 3 during the last 19 years.
Respondent No. 2 had agreed to pay and was paying the Central Sales Tax and/or West Bengal Sales Tax whichever was applicable to the petitioner in terms of the contract.
In 1966, this Court held in K.G. Khosla and Co. vs Deputy Commissioner of Commercial Taxes(1) hereinafter.
referred to as the Khosla Case, that the sale by Khosla & Co. to DGS&D in India of axle box bodies manufactured in Belgium by their principal occasioned the movement of goods in course of import and sales tax was not exigible on the transaction in view of section 5(2) of the .
On the basis of this judgment, respondent No. 2 issued an order.
(Annexure P 1) to all the authorities concerned including respondent No. 4, namely, the Pay and Accounts Officer, Ministry of Works, Housing and Supply directing that sales tax should not be allowed in respect of supply of stores which has been specifically imported against licences issued by the Chief Controller of Imports and Exports on the basis of Import Recommendation Certificates issued by the DGS&D or other authorities like the State Trading Corporation for supplies against contracts placed by the DGS&D.
The Pay and Accounts Officer, acting on Annexure P 1 deducted the amounts of sales tax paid by the respondents under all the old contracts from the current bills which were submitted by the petit ioner to him.
Respondent No. 4 actually deducted a sum of Rs. 60,780/ from the bills which were pending payment and also threatened to recover Rs. 2,35,130 01 being the amount paid by respondent No. 2 as sales tax in respect of (1) ; 623 contracts which had, already been executed.
The assessments on the petitioner upto the year ending October, 27, 1962, were completed prior to the date of judgment in Khosla Case and the issue of the order at Annexure P 1.
The petitioner, when it came to know of Annexure P 1 Order, approached the Sales Tax authorities in West Bengal and filed revised returns in the pending assessments and claimed refund of taxes paid on the sales, treating the sales as having been made in the course of import on the basis of the judgment in Khosla Case.
The West Bengal Sales Tax authorities took the view that there were two sales involved in the transactions in question, namely, sale to the petitioner by the foreign sellers and sale by the petitioner to the DGS&D, that there was no privity of contract between the DGS&D and the foreign sellers, that the petitioner, under the import licences granted to it, was entitled to import the goods from any person or country and that the import licences issued as against the contracts with the DGS&D imposed no obligation on the petitioner to supply the goods to the DGS&D after they had been imported.
They, therefore, held that tax was exigible on the sales by the petitioner to the DGS&D.
The questions which arise for consideration are, whether, on the basis of Annexure P 1 Order, respondent No. 4 was entitled to deduct Rs. 60 780/ from the amount due to the petitioner in respect of pending bills and whether the claim of the respondents to recover a further sum of Rs. 2,35,130.01 from the petitioner is justified.
It was contended on behalf of the petitioner that the transactions in question, namely, the sales which the petitioner made to DGS&D were not the sales which occasioned the movement of the goods in the course of import and as those sales were separate and distinct from the contracts of purchase made by the petitioners with the foreign sellers which alone occasioned the movement of goods in the course of import, tax was exigible upon the transactions of sale by the petitioner to DGS&D and, therefore, the decision in Khosla Case has no application to facts here.
Article 286(1)(b) provides: "286.
(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (b) in the course of import of the goods into, or export of the goods out of, the territory of India".
In State of Travancore Cochin & Others vs The Bombay Co. Ltd. (1) Patanjali Sastri, C.J. said that a sale by export involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the country by land or sea and that such a sale cannot be dissociated from the export without which it cannot be effectuated, and the sale and resultant export form parts of a single transaction.
Of these two integrated activities which together (1) ; 624 constitute an expert sale, whichever first occurs can well be regarded as taking place in the course of the other.
In State of Travancore Cochin & Others vs Shanmugha Vilas Cashew Nut Factory and Others (1), it was observed by the same learned Chief Justice that the phrase 'integrated activities ' was used in the previous decision to denote that 'such a sale ' (i.e. a sale which occasions the export)"cannot be dissociated from the export without which it cannot be effectuated ', and the sale and the resultant export form parts of a single transaction" and that it is in that sense that the two activities the sale and the export were said to be integrated.
There was no definition of the expression 'in the course of import ' before the Sixth Amendment of the Constitution.
By that Amendment, Parliament was given power to formulate the principles for construing the expression.
And, in s.5(2) of the , Parliament has given a legislative meaning to the expression "5(2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India.
" In Ben Gorm Nilgiri Plantations Company V. Sales Tax Officer(2), the question was whether the sales of the tea chests at auctions held at Fort Cochin were exempt from levy of sales tax by virtue of article 286(1)(b).
The nature of the transaction was as follows: A manufacture obtains from the Tea Board allotment of export quota, the manufacturer then puts the tea in chests which are sold in public auctions; bids are made by agents or intermediaries of foreign buyers; agents and intermediaries then obtain licences from the Central Government for export.
This Court found nothing in the transaction from which a bond could be said to spring between the sale and the.
intended export linking them as parts of the same transaction.
The sellers had no concern with the export, the sale imposed or involved no obligation to export and there was possibility that the goods might be diverted for internal consumption.
The Court considered the sales as sales for export and not in the course of export.
The Court observed that to occasion export there must exist such a bond between the contract of sale and the actual exportation, that each link is in extricably connected with the one immediately preceding it and that without such a bond, a transaction of sale cannot be called a sale in the course of export of goods out of the 'territory of India.
The Court further said that in general where the sale is effected by the seller, and he is not connected with the export which actually takes place, it is a sale for export and where the export is the result of the sale, the export being inextricably linked up with the sale so that the bond cannot be dissociated without a breach of the obligation arising (1) ; ,63.
(2) ; 625 by statute, contract or mutual understanding between the parties arising from the nature of the transaction, the sale is in the course of export.
In the Khosla Case, the assessee entered into a contract with the DGS&D, New Delhi, for the supply of axle box bodies.
The goods were to be manufactured in Belgium according to specifications and 'the DGISD, London or his representative had to inspect the goods at the works of the manufacturers and issue an inspection certificate.
Another inspection was provided for at Madras.
The assessee was entitled to be paid 90 per cent.
after inspection and delivery of the stores to the consignee and the balance of 10 per cent.
was payable on final acceptance by the consignee.
In the case of deliveries on f.o.r.
basis the assessee was entitled to 90 per cent.
payment after ins pection on proof of despatch and balance of 10 per cent.
after receipt of stores by the consignee in good condition.
The assessee was entirely responsible for the execution of the contract and for the safe arrival of the goods at the destination.
The contract provided that notwithstanding any approval or acceptance given by an Inspector, the consignee was entitled to reject the goods, if it was found that the goods were not in conformity with the terms and conditions of the contract in all respects.
The manufacturers consigned the goods to the assessee by ship under bills of lading and the goods were cleared at the Madras Harbour by the Assessee 's Clearing Agents and despatched for delivery to the Southern Railway in Madras and Mysore.
The question was whether the sales by the assessee to the Government departments were in the course of import and export from taxation under s.5(2) of the .
Sikri, J. (as he then was), delivering the judgment of the Court said after referring to s.5(2) of the that the movement of goods to India was occasioned by the contract of sale between the appellant (Khosla & Co.) and the DGS&D, that if the movement of goods is the result of a covenant or incidental to the contract of sale, it is quite immaterial that the actual sale took place after the import was over.
In Coffee Board vs Joint Commercial Tax Officer (1), hereinafter referred to as Coffee Board Case, the Coffee Board claimed that as certain sales of coffee to registered exporters in March and April, 1963 were sales made 'in the course of export ',it could not be taxed under the Madras General Sales Tax Act, 1959.
The rules framed by the Coffee Board provided that only dealers who had registered themselves as exporters of coffee with the Coffee Board or their agents and who held permits from the Chief Coffee Marketing Officer in that behalf would be permitted to participate in the auction , and after the bidding comes to an end, the payment of price would take place in a particular way.
Condition No.26 he added "export guarantee" provided that it was an essential condition of the auction that the coffee sold thereat shall be exported to the destination stipulated in the Catalog of lots, or to any other foreign country outside.
India as may be approved by the Chief Coffee Marketing Officer, within three (1) ; 626 months from the date of Notice of Tender issued by the Agent and that it shall not under any circumstances be diverted to another destination, sold, or be disposed of, or otherwise released in India.
Condition 30 stated that if the buyer failed or neglected to export the coffee as aforesaid within the prescribed time or within the period of extension, if any granted to him, he shall be liable to pay a penalty calculated a Rs. 50 per 50 kilos which shall be deductible from out of the amount payable to him as per condition 31.
And Condition 31 provided that no default by the buyer to export the coffee aforesaid Within the prescribed time or such extension thereof as may be granted, it shall be lawful for the Chief Coffee Marketing Officer, without reference.
to the buyer, to seize the un exported coffee and take possession of the same and deal with it as if it were part and parcel of Board 's coffee held by them in their Pool stock.
The case of the petitioners before this Court was that the purchases at the export auctions were really sales by the Coffee Board in the course of export of coffee out of the territory of India since the sales themselves occasioned the export of Coffee and that the coffee so sold was not intended for use in India or for sale in the Indian markets.
The case of the Sales Tax Authorities, oil the other hand, was that these sales were not inextricably bound up with the export of coffee and that the sales must therefore be treated as sales taking place within the State of Tamil Nadu liable to sales tax under the Madras General Sales Tax Act.
This Court held that the Board was not entitled to the exemption claimed.
The Court said that the phrase 'sale in the course of export ' comprises three essentials, namely, that there must be a sale, that goods must actually be exported and that the sale must be a part and parcel of the export.
The Court further said that the sale must occasion the export and that the word 'occasion ' is used as a verb and means 'to cause ' or 'to be the immediate cause of '.
The Court was of the view that the sale which is to be regarded as exempt from tax is a sale which causes the export to take place or is the immediate cause of the export, that the introduction of an intermediary between the seller and the importing buyer breaks the link, for, then there are two sales, one to the intermediary and the other to the importer, and that the first sale is not in the course of export, for the export begins from the intermediary and ends with the importer.
According to the Court the test was that there must be a single sale which itself causes the export and that there is no room for two or more sales in the course of export, The Court, therefore, held that though the sales by the Coffee Board were sales for export, they were not sales in the course of export, that there were two independent sales involved in the export programme: the first sale by the Coffee Board to the export promoter, and the second sale by the export promoter to a foreign buyer which occasioned the movement of goods and that the latter sale alone could earn the exemption from sales tax as being a sale the in the course of export.
Khosla Case, it might be recalled that Khosla and Co. entered into.
the contract of sale with the DGS&D for the Supply of axle bodies manufactured by its Principal.
in Belgium and the goods were to be 627 inspected by the buyer in Belgium but under the contract of sale the goods were liable to be rejected after a further inspection by the buyer in India.
It was in pursuance to this contract that the goods were imported into the country and supplied to the buyer at Perambur and Mysore.
From the statement of facts of the case as given in the judgment of the High Court it is not clear that there was a sale by the manufacturers in Belgium to Khosla & Co., their agent in India.
it would seem that the only sale was the sale by Khosla & Co. as agent of the manufacturer in Belgium In the concluding portion of the judgment of this Court it was observed as follows : ".
It seems to us that it is quite clear from the contract that it was incidental to the contract that the axle box bodies would be manufactured in Belgium, inspected there and imported into India for the consignee.
Movement of goods from Belgium to India was in pursuance of the conditions of the contract between the assessee and the Director General of Supplies.
There was no possibility of these goods being diverted by the assessee for any other purpose.
Consequently we hold that the sales took place in the course of import of goods within s.5(2) of the Act, and are, therefore, exempt from taxation.
" As already stated, there was to be an inspection of the goods in Belgium by the representative of the DGS&D but there was no completed sale in Belgium as, under the contract, the DGS&D reserved a further right of inspection of the goods on their arrival in India.
Be that as it may, in the case under consideration we are concerned with the sales made by the petitioner as principal to the DGS&D. No doubt, for effecting these sales, the petitioner had to purchase goods from foreign sellers and it was these purchases from the foreign sellers which occasioned the movement of goods in the course of import.
In other words, the movement of goods was occasioned by the contracts for purchase which the petitioner entered into with the foreign sellers.
No movement of goods in the course of import took place in pursuance to the contracts of sale made by the petitioner with the DGS&D.
The petitioner 's sales to DGS&D were distinct and separate from his purchases from foreign sellers.
To put it differently, the sales by the petitioner to the DGS&D did not occasion the import.
It was purchases made by the petitioner from the foreign sellers which occasioned the import of the goods.
The purchases of the goods and import of the goods in pursuance to the contracts of purchases were, no doubt, for sale to the DGS&D.
But it would not follow that the sales or contracts of sales to DGS&D occasioned the movement of the goods Into this country.
There was no privity of contract between DGS&D and the foreign sellers.
The foreign sellers did not enter into any contract by themselves or through the agency of the petitioner to the DGS&D and the movement of goods from the foreign countries was not occasioned on account of the sales by the petitioner to DGS&D.
It was contended on behalf of the Central Government that the contracts of sale between the petitioner and the DGS&D envisaged 628 the import of goods for fulfilling the contracts and it was for that reason that there was first the recommendation for issue of import licences by DGS&D and then the actual issue of import licences and, as the contracts of sale visualised the import of goods for fulfilling them, the movement of goods in the course of import was occasioned by the contracts of sale to the DGS&D, and, therefore, the sales to the DGS&D were the sales which occasioned the movement of goods in the course of import.
There was no obligation under the contracts on the part of the DGS&D to procure import licences for the petitioner.
On the other hand, the recommendation for import licence made by DGS&D did not carry with it any imperative obligation upon the Chief Controller of Imports and Exports to issue the import licence.
Though under the contract DGS&D undertook to provide all facilities for the import of the goods for fulfilling the contracts including an Import Recommendation Certificate, there was no absolute obligation on the DGS&D to procure these facilities.
And, it was the obligation of the petitioner to obtain the import licence.
Therefore,even if the contracts envisaged the import of goods and their supply to the DGS&D from out of the goods imported, it did not follow that the movement of the goods in the course of import was occasioned by the contracts of sale by the petitioner with DGS&D.
We see no reason in principle to distinguish this case from the decision in the Coffee Board Case though that case was concerned with the question when a sale occasions the movement of goods in the course of export.
In the result, we quash Annexure P 1 order so far as the petitioners are concerned and allow the writ petitions with costs.
S.C. Petitions allowed.

summary/full:
In W. P. No. 92 of 1969, the Petitioner Company prayed for issue of appropriate direction or order for the enforcement of its fundamental rights guaranteed under article 31(1) of the Constitution.
The facts are as follows: The petitioner company was a dealer in non ferrous metals and was a registered supplier to the Directorate General of Supplies and Disposals.
The company was also a registered dealer in the State of West Bengal.
The petitioner used to procure non ferrous metals from various countries and also from within the country for fulfilling its contracts with D.G.S. & D.
The import of non ferrous metals was under open General licence till June, 30, 1957.
Thereafter, a licensing system was introduced by the Government of India and the petitioner was asked to get their quotas fixed on the basis of their past imports.
On April 2, 1958, the Government of India promulgated the Non ferrous Metals Control Order, 1958 by virtue of which free sale of copper was banned.
Any import of copper by the licence holders was to be distributed under the directions of the Controller of Non ferrous metals.
Under the Non ferrous Metals Control Order, 1958, and also under the Import Trade Regulations, the established importers were not free to sell the metals imported by them against their quota licences even to D.G.S.& D. The petitioner, in order to effect supplies to D.G.S. & D. had to obtain additional import licence.
The petitioner obtained quota licences for import of non ferrous metals for the licensing periods upto April 1964, March 1965; but the imports were to be distributed only under the directions of the Controller.
On Sept. 14, 1965, the Govt.
of India promulgated the Scarce Industrial Materials Control Order 1965, under the Defence of India Rules.
Stocks of non ferrous metals including incoming imports were thus frozen.
The Non ferrous Metals Control Order 1958 and the Scarce Industrial Materials Control Order 1965 were both repealed.
The Government of India in placing orders with the petitioner used to grant import licences in terms of the contract.
The petitioner had been importing and supplying non ferrous metals to respondents 1,2 and 3 during the last 19 years.
Respondent No. 2 had agreed to pay and was paying the Central Sales Tax and/or West Bengal Sales Tax, whichever was applicable to the petitioners in terms of the contract.
In 1966, the Supreme Court held in K. G. khosla and Co. vs Deputy Commissioner of Commercial tax ; that the sale by Khosla & Co. to DGS & D in India of axle box bodies manufactured in Belgium by their principal, occasioned the movement of goods in the course of import and sales tax was not exigible on the transaction in view of Sec.
5(2) of the , and article 286 of the Constitution.
Thereafter, respondent No. 2 issued an order to respondent No. 4 that Sales Tax should not be allowed in respect of supply of stores which had been specifically 620 imported against contracts placed by D.G.S. & D. Respondent No. 4, acting in terms of the order, deducted Rs. 60,780/ being the Sales Tax already paid from the pending bills of the petitioner and also threatened to recover more than Rs. 2 lakhs being the amount paid by respondent No. 2 as Sales Tax in respect of contracts which had already been executed.
The petitioner, thereafter, approached the Sales Tax Authorities in W. Bengal and filed revised returns in the pending assessments and claimed refund of taxes paid on the sales, treating the sales as having been made in the course of import on the basis of the judgment in Khosla 's case.
The West Bengal Sales Tax Authorities took the view that there were two sales one, to the petitioner by the foreign seller and the other, by the petitioner to D.G.S. & D. and that there was no privity of contract between D.G.S. & D. and the foreign sellers, that the petitioner under the import licences granted to it, was entitled to import the goods from any person or country and that the import licences issued as against the contracts with the Directorate General of Supplies & Disposals imposed ,no obligation on the petitioner to supply the goods to the D.G.S. & D after they had been imported, they therefore, held that tax was exigible on the sales by.
the petitioner to the D.G.S. & D.
The questions which arose for consideration were: (i) whether on the basis of the order, respondent No.4 was entitled to deduct Rs. 60,780 from the amount due to the petitioner and (ii) Whether the claim of the respondent to recover a further sum of more than Rs. 2 lakhs from the petitioner was justified.
The petitioner contended that the sales which the Company made to D.G.S. & D. were not the sales which occasioned movement of any goods in the course of import as those sales were separate and distinct from the contracts of purchase made by the Company with the foreign sellers which alone occasioned the movement of goods in the course of import, tax was exigible upon the sales by the petitioner to D.G.S & D. and therefore, the decision in Khosla 's Case has no application to the facts here.
Allowing the writ petitions, HELD : (i) article 286(1) (b) provided that no law of a State shall impose a tax on the sale or purchase of goods where such sale or purchase takes place in the course of the import or export of the goods in India.
A sale by export involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the country by land or sea and that such a sale cannot be dissociated from the export without which it cannot be effectuated, and the sale or resultant export from parts of a single transaction of these two integrated activities which together constituted an export sale, whichever occurs first can well be regarded as taking place in the course of the other.
[623H] State of Travancore Cochin and Ors.
vs The Bombay Co. Ltd. ; 12, referred to (ii) The words, 'Integrated activities ' were used in the earlier case to denote that such a sale ' (i.e. a sale which occasions the export) ' cannot be dissociated from the export without which it cannot be effectuated, and the sale and the resultant export form parts of a single transaction ', and in that case the sale and the export were said to be integrated.
[624B] per Patanjali Sastri C.J. in State of Travancore Cochin and Ors.
vs Shamugha Vilas Cashew Nut Factory and Ors. ; referred to .
(iii) There was no definition of the expression 'in the course of import ' before the Sixth Amendment of the Constitution.
Later Parliament gave legislative meaning to the expression in section 5(2, of the which provides that a sale or purchase of goods in the course of the import into India, shall be deemed to take place if the sale or purchase either occasions such import or is effected by a transfer of documents of title before the goods have crossed the customs frontiers of India.
[624C] 621 (iv) In the present case, the petitioner as principal made the sale to the D.G.S. & D. 'For effecting the sales, the petitioner had to purchase goods from foreign sellers and it was these purchases from the foreign sellers which occasioned the movement of goods in the course of imports.
In other words, the movement of goods was occasioned by the contracts for the purchase, which the petitioner entered into with the foreign sellers.
No movement of goods in the course of import took place in pursuance to the contracts of sales made by the petitioner with the D.G.S. & D. The petitioner 's sales to D.G.S. & D. were distinct and separate from his purchases from foreign sellers.
There was no privity of contract between the D.G.S. & D. and the foreign sellers.
The foreign sellers did not enter into a contract by themselves or through the agency of the petitioner to the D.G.S.& D. and the movement of goods through foreign countries was not occasioned on account of the sales by the petitioner to D.G.S. & D.
Even if the contracts between the petitioner and the D.G.S. & D. envisaged the import of goods, and their supply to the D.G.S. & D. from out of the goods imported, it did not follow that the movement of the goods in the course of import was occasioned by the contracts of sale by the petitioner with the D.G.S. & D.
The present case, therefore, cannot be distinguished from the decision in the Coffee Board 's case though that case was concerned with the question when a sale occasioned the movement of goods in the course of export.
The order issued by respondent No. 2, was, therefore, quashed.
, [627E 628E]


judgement:
Appeal No. 419 of 1973.
From the Judgement and Order dated the 22nd December 1972 of the Punjab and Haryana High Court at Chandigarh in Election Petition No. 2 of 1972.
Hardyal Hardy, V. P. Chaudhry, Jitendra Sharma and Sharma Chaudhury and Rathi, for the appellant.
M. N. Phadke, Bakhtawar Singh, D. N. Misra, and J. B. Dadachanji, for respondent No. 1.
The Judgment of P. JAGANMOHAN REDDY and P. K. GOSWAMI, JJ. was delivered by Goswami, J. section N. Dwivedi, J. gave a separate Opinion.
GOSWAMI, J.
This appeal under section 116A of the Representation of the People Act, 1951 (briefly the Act, is directed against the judgment and order passed by the High Court of Punjab and Haryana in Election Petition No. 2 of 1972 dismissing it on the preliminary ground that the appellant had failed to comply with the mandatory requirement of section 81(3) of the Act inasmuch as the requisite number of spare copies of the petition for the respondents were not filed along With the petition in the High Court.
It was further held by the High Court that the said defect could not be cured subsequently even within the period of limitation prescribed for filing the election petition.
The High Court further held that the spare copies were actually filed beyond the period of limitation.
The facts may be briefly stated.
In the general election to the Haryana Legislative Assembly held on March 11, 1972, the appellant and the four respondents were the contesting candidates for the Safidon Assembly Constituency No. 30; two candidates having already withdrawn from the contest.
The counting of votes took place on March 12, 1972 and on the following day.
The counting disclosed that the first respondent obtained 19570 votes as against 19462 votes secured by the appellant.
The first respondent was, therefore, declared elected on March 13,1972.
The appellant filed an election petition in the High Court challenging the election of the first respondent on several grounds of corrupt practice within the meaning of section 123 of the Act.
It is not necessary for the purpose of this case even to detail these.
The election petition was presented by Mr. R. section Mittal, Advocate incharge, to the Deputy Registrar (Judicial) of the High Court on April 18, 1972.
The same was ordered to be put up for scrutiny on April 24, 1972.
It is admitted that the application was filed on April 18, 1972, without the requisite spare copies and was, therefore, incomplete on the date of presentation.
No schedules were also filed along with the petition but that point is not pressed before us by the respondent 's counsel.
It is also admitted that the limitation for filing the election petition was up to April 27, 1972.
According to the appellant the spare copies were filed with the Superintendent of the Election Branch in the afternoon of April 24, 1972, well within the period ' of limitation.
22 It may be necessary to briefly note the sequence of events for the purpose of appreciating the controversy raised between the parties as noted earlier, the election petition was presented personally by Mr. Mittal without the spare copies on April 18, 1972, and the Deputy Registrar had ordered it to be put up on April 24, 1972, for scrutiny according to the rules of the High Court.
When the petition came up for scrutiny before the Deputy Registrar on April 24, 1972, Mr. Mittal appeared and requested for time to remove the defects pointed out by the office.
It may be appropriate to extract that particular order : "Present: Shri R. section Mittal, Advocate.
He has requested time to remove the defects pointed out by the office.
Let it be refixed on 28 4 72, after the defects had been removed as agreed to by the counsel.
Sd/. D. D. Khanna 24 4 72" The next order passed by the Deputy Registrar on April 29, 1972, runs as follows: "Shri R. section Mittal has informed me on the phone that he is indisposed and as such the case may not be taken up for scrutiny to day.
Put up tomorrow, the 29th April, 1972 for orders.
Counsel may be informed.
Sd/ D. D. Khanna 28 ' 4 72" .
The High Court has observed that it is common case of both side that by the time the case was placed before the Deputy Registrar on April 29, 1972, the spare copies of the petition had been filed by the petitioner and the other defects had also been removed.
The final order of scrutiny passed by the Deputy Registrar on April 29, 1972, is in the following terms: "Present Shri R. section Mittal.
, Advocate for petitioner.
The petition was filed on 18 4 72 and the result in this case was declared on 13 3 72; hence it is within time.
The petition is accompanied with the security receipt in the sum of Rs. 2,000/ deposited in this Court before filing of the petition under the rules.
The petition was scrutinised and as the defects pointed out on the previous date have been removed, it is now prima facie in order.
Issue notice for scrutiny of service for 22nd May, 1972, and for settlement of issues for 26th May, 1972.
Sd/ D. D. Khanna 29 4 72".
23 The matter ultimately came up for hearing before the learned single Judge to whom this election petition was assigned.
Several preliminary objections were taken by the sole contesting first respondent.
The other respondents did not enter appearance ' We are concerned with only one preliminary objection, namely, that the petition was not in conformity with section 81(3) of the Act inasmuch as the requisite spare copies thereof were not enclosed with the petition when it was originally presented on April 18, 1972, and that the election petition was liable to be dismissed.
The learned counsel for the appellant, Mr. Hardyal Hardy, has made only the following two submissions before us : (1) The requirement under section 81(3) of Representation of the People Act, 1951 that spare copies of an election petition shall accompany the petition, is directory and not mandatory (2) It is substantial compliance with the said directory provision if the spare copies of an election petition, inst ead of accompanying the petition, are filed before the petition is laid before the Judge for orders or even within the time that may be granted by the Judge for the purpose.
Before the High Court both sides examined witnesses.
To establish his case, the appellant examined himself as PW 6, the Election Assistant, Shri O. P. Popli (PW 3), Deputy Registrar, Shri D. D. Khanna (PW 4), Shri R. section Mittal, Advocate (PW 5), Shri Adish Chand Jain, Advocate (PW 7), Shri Jai Singh Dhillon, Advocate (PW 9) and Shri Jaswant Rai, Advocate (PW 10).
All the Advocates except Shri Mittal were from Jind.
Shri Mittal is an Advocate practicing in the High Court.
Although the appellant summoned Shri Harsukh Rai Hantroo, Superintendent of the Election Branch, and was present ' in court on 20th July, 1972, when the first four witnesses were also examined, Shri Mittal, who was conducting the case on behalf of the appellant, made a statement before the court that he gave up Shri Harsukh Rai Hantroo 'as unnecessary '.
The respondent 's counsel, however, submitted that he should be examined as a court witness and the court ordered for his examination on that very day observing that "in the interest of justice that the Superintendent of the Election Branch who was the only other official working between the Deputy Registrar (Judicial) on the one side and P.W. 3 on the other, should also be examined to clarify the matters so far as possible.
" The respondent examined himself and R. W. Ch.
Hari Ram, Senior subordinate Judge cum Chief Judicial Magistrate, Jind.
The appellant sought to establish before the High Court that the spare copies were submitted on April 24, 1972, by relying upon the endorsement of Shri Mittal, "objections removed, R. section Mittal" (Ext PW 5/1) below the order of the Deputy Registrar of April 24, 1972, which we have already set out.
There is no date given by Shri Mittal when her made his endorsement in the order sheet of the Registry.
PW 3, who had initially scrutinised the petition and found the defects, was on leave 24 on April, 24, 1972, and the Superintendent (CW 1) was only present.
According to Shri Mittal, he.
went to the Election Office along with the appellant and his Clerk, Manphool Sharma, and filed these papers at 2 00 P M. on April 24,1972, and made also the above ' endorsement (Ext.
PW 511.) Although, however, Shri Mittal was conscious that the papers had to be filed within time to save the defective petition from being dismissed, curiously enough, he did not take the necessary care to get any official endorsement in the order sheet by the Deputy Registrar or even by the Superintendent of the Election Branch to the effect that the documents were filed and defects were removed on that day, namely, on 24th April, 1972, notwithstanding the further fact that he had earlier at 11.00 A.M. on the same day requested the Deputy Registrar for time to remove the defects and the next date was fixed on April 28, 1972.
In face of the order of the Deputy Registrar of 24th April, Shri Mittal 's responsibility as counsel was greater than he seemed to have thought.
On April 28, 1972, Shri Mittal informed the Deputy Registrar over the phone that he was indisposed and requested for time till the next day which was given.
He deposed that he had even informed the Deputy Registrar that scrutiny could be made in his absence since the defects had already been removed.
On this particular aspect of the matter, the Deputy Registrar was silent in his evidence and although it was Shri Mittal again who personally examined the Deputy Registrar in court, he never put this question to him with regard to his informing him over the phone about removal of defects on 24th April.
Again, from Shri Mittal 's evidence it. appears that, although he was feverish, he actually came to the Election Office on April 28, 1972, in connection with Election case No. 3 of 1972 (Sagar Ram vs Banarsi Das & Ors.) and removed certain defects in that case on that day, namely ' 28th April, 1972 although that case was set down for April, 29, 1972, which date had been fixed by the Deputy Registrar in his presence on April 24, 1972.
There is an endorsement in that case by Shri Mittal, this time, with date 28h April, 1972, below the order of the Deputy Registrar dated April 24, 1972, to the effect "objections removed".
The records of that case were also called for in the High Court and were also shown to us here.
It is pointed out that the endorsement in that case with date and the endorsement in Ext.
PW 5/1 of Shri Mittal are with the same pen and ink as is even admitted by Shri Mittal.
The respondent, therefore attaches great significance on the omission of the date in Ext.
PW 511 and describes the endorsement as a suspicious entry.
it is strenuously submitted by the respondent that the papers were not submitted on April 24, 1972, as alleged.
Since Shri Mittal asserted in his evidence that he along with the appellant filed the spare copies of the petition in the afternoon of April, 24, 1972, the respondent by examining the Subordinate Judge (RW 1) sought to establish that the appellant as advocate actually appeared in his court at Jind on April, 24, 1972, in a contested civil suit (Kati Ram vs Ram Tirath, etc.
Civil Suit No. 422 of 1967 on behalf of the plaintiff where the defendent was cross examined by him.
The appellant denied this and stated that his junior, Shri Jai Singh Dhillon (PW 9) actually conducted the case on that day.
This point, was also sought to be supported by examining two other Advocates appearing 25 on behalf of the defendant in that suit, namely, Adish Chand Jain (PW 7) and Jaswant Rai (PW 10).
It appears that Shri Dhillon even did not file his vakalatnama in that suit and at one stage when he had appeared on behalf of the appellant in that suit, it was recorded in the ,order sheet, as was the practice of that court that he was appearing as proxy for the original counsel.
There was, however, no such entry in the order sheet that he appeared on behalf of the appellant on April 24, 1972.
From the evidence of RW 1, who deposed from the records of the suit produced in the court and gave some convincing reasons, the High Court was reasonably and, in our opinion, rightly satisfied that the appellant appeared in the court of the subordinate Judge, Jind, on April 24, 1972.
The High Court has also rightly held that PWs 7 and 1 0 gave hazy evidence from their memory with regard to the appearance of the appellant in the suit on April 24,1972.
The High Court also found several infirmities and contradictions in the evidence of Shri Mittal.
It is nobody 's case that if the appellant appeared in the suit at Jind on 24th April he could be present in the Election Branch at Chandigarh at2.00 P.M. on that day.
PW3 has correctly deposed that" the words (objections removed ' in the handwriting of Shri R.S. Mittal, Advocate and the signature of Shri R. section Mittal thereunder were not there when he made the endorsement 'informed ' (Ext PW 3/1) on April 28, 1972".
Even the Deputy Registrar has admitted in his evidence that the endorsement "objections removed" in the handwriting of and above the signature of Mr. R. section Mittal was not made in his presence.
He also stated that "I do not recollect having seen this endorsement at the time I passed my order, dated April 28, 1972".
The evidence of the Deputy Registrar consistent with that of PW 3 is rightly preferred by the High Court to the evidence of Shri Mittal, of the appellant and even of the Superintendent of the Election Branch who also deposed from memory.
After again carefully examining the evidence of all the witnesses on this point, we have no reason to differ from the conclusion of the High Court that the requisite spare copies of the election petition were not submitted by the appellant on April 24, 1972.
We will, therefore, have to decide the first submission of the learned counsel for the appellant on the basis that the spare copies were not filed within the period of limitation.
The short question is whether section 81(3) of the Act is mandatory and, if so, whether non compliance with the same will visit the election ' petitioner with the penalty of dismissal of his petition under section 86(1 of the Act.
This question was mooted in Jagat Kishore Prasad Narain Singh vs Rajindra Kumar Poddar and Others(1) but the Court did not find it necessary to decide the same.
Whether a particular provision in a statute is mandatory or directory has to be construed from the scheme and object of the provisions [1971] (1) SCR 821.
26 This Court observed in Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur(1) as follows: "The question whether a particular provision of a statute which on the face of it appears mandatory, inasmuch as it uses 'the word 'shall as in the present case is merely directory cannot be resolved by laying down any general rule and depends upon the facts of each case and for that purpose the object of the statute in making the provision is the determining factor.
The purpose for which the provision has been made and its nature, the intention of the legislature in making the provision, the serious general inconvenience or injustice to persons resulting from whether the provision is read one way or the other, the relation of the particular provision to other provisions dealing with the same subject and other considerations which may arise on the facts of a particular case including the language of the provision, have all to be taken into account in arriving at the conclusion whether a particular provision is mandatory or directory".
The Privy Council also in Montreal Street Railway Company Normandin,(2) observed to the same effect: 'The question whether provisions in a statute are directory or imperative has very frequently arisen in this country but it has been said that no general rule can be laid down, and that in every case the object of the statute must be looked at. .
Now there are two parts in section 81(3).
The first part 'provides that "every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition.
The second part relates to the manner in which "such copy shall be attested by the petitioner under his own signature to be a true copy of the petition".
We are concerned only with the first part in this appeal.
Part VI of the Act deals with disputes regarding election.
Chapter 11 therein provides for presentation of election petitions while chapter III for trial of election petitions.
The right to challenge an election is conferred under the Act which is made in conformity with the provisions of Article 329(B) of the Constitution.
It is well settled that it is a special right conferred under a self contained special law and the court will have to seek answer to the questions raised within the four corners of the Act and the powers of the court are circumscribed by its provisions.
it is not a common law right and an election petition cannot be equated with a plaint in a civil suit.
We may, therefore, immediately read the material sections 80, 81(1) 84(3) and 86(1) which run as follows (1) ; , 975.
(2) ; (quoted in 1965 (1) S.C.R. at pages 975 976.) 27 Section 80 No election shall be called in question except by 'an election petition presented in accordance with the provisions of this Part." Section 81(1)"An election petition calling in question any election may be presented on one or more of the grounds specified in sub section (1) of section 100 and section 101 to the High Court by any candidate at such election or any elector within fortyfive days from, but not later than, the date of election of the returned candidate, or if there are more than one returned candidate at the election and the dates of their election are different, the later of those two date section" Section 81(3)"Every election petition shall be accompanied by as many copies thereof ' as there are respondents mentioned in the petition. , and every such copy shall be attested by the petitioner under his own signature to be a true of the petition".
Section 86(1)"The High Court shall dismiss an election petition which does not comply with the provisions of section 81 or section 82 or section 117.
Explanation : An order of the High Court dismissing an election petition under this sub section shall be deemed to be an order made under clause (a) of section 98".
Section 86 (1) refers to three sections, namely, section 81, section 82, which deals with parties to the petition and section 117 of the Act providing for security for costs.
While dealing with section 117 of the Act this Court spoke through one of us (Reddy, J) in Charan Lal Salhu vs Nandkishore Bhatt and others(1), and held as follows : "The right to challenge an election is a right provided by Article 329(b) of the Constitution of India, which provides that no election to either House of Parliament or to the House or either House of the Legislature of a State shall be called in question except by an election petition presented to such authority and in such manner as may be provided for by or under any law made by the appropriate Legislature.
The right conferred being a 'statutory right, the terms of that statute had to be (1) ; ,533.
28 complied with.
There is no question of any common law right to challenge an election.
Any discretion to condone the delay in presentation of the petition or to absolve the petitioner from payment of security for costs can only be provided under the statute governing election disputes.
If no discretion is conferred in respect of any of these matters, none can be exercised under any general law or on any principle of equity.
This court has held that the right to vote or stand as a candidate for election is not a civil right but is a creature of statute or special law 'and must be subject to the limitations imposed by it.
In N. P.Ponnuswami vs Returning Officer Namakkal Constituency and Others (1) it was pointed out that strictly speaking, it is the sole right of the legislature to examine and determine all matters relating to the election of its own members, and if the Legislature takes it out of its own hands and vests in a special tribunal an entirely new and unknown jurisdiction, that special jurisdiction should be exercised in accordance with the law which creates it". 'Similarly in Krishan Chander vs Ram Lal (2) dealing with section 82(b) of the Act and examining the scheme and the object of the pro ' visions this Court again held the same as mandatory.
This Court observed: "The provisions of sec.
82(b) would avoid any such delay as they make obligatory for a person filing an election petition when he makes an allegation of corrupt practice against any candidate to make him a party on pain of the petition being dismissed under section 86(1) if he omits to do. .
This then is the rationale underlying the mandatory requirements of section 82(b)".
It is true in Ch.
Subba Rao vs Member Election Tribunal, Hyderabad(3) reiterating two earlier decisions viz. Kamaraj Nadar vs Kunju Thevar(4) and Murarka vs Roop Sing(5), the Court in ' view of the peculiar facts ,add circumstances of that case and the nature of the defects held ,that section 81(3) was substantially complied with and left open the ,wider question whether section 81(3) or any part thereof is mandatory or directory.
In a later decision in Dr. Anup Singh vs Shri Abdul Ghani and another(6), which followed Subba Rao 's case (supra), ,this Court observed : "An exactly similar matter came to be considered by this Court in Ch.
Subba Rao vs Member, Election Tribunal (3).
In that case also the copies were signed by the petitioner but there was no attestation in the sense that the words "true copy" were omitted above the signature of the petitioner.
This Court held that as the signature in original was there in the copy, the presence of such original signature in the copy was sufficient (1) ; (2) ; ,769.
(3) ; (5) ; ,41. 29 to indicate that the copy was attested as true copy, even though the words "true copy" were not written above the signature in the copies.
This Court further held that there was substantial compliance with section 81(3) of the Act and the petition could not be dismissed under section 90(3)".
Keeping in the forefront the proper functioning of democracy, the principal object of the Act is purity of elections.
When therefore, an election of a returned candidate is challenged under the Act, expeditious trial of the election dispute is sought to be enforced by the legislature making all safeguards against delay.
Trial has to be necessarily expedited to rid the candidate as well as the constituency interested in the result of the election, of any taint or suspicion of corrupt practices which are again clearly enumerated in the Act.
To take, therefore, another important object of the Act, viz., expeditious, disposal of an election petition, by section 86(6) "the trial of an election petition shall, so far as is practicable consistently with the interests of justice in respect of the trial, be continued from day to day until its conclusion, unless the High Court finds the adjournment of the trial beyond the following day to be necessary for reasons, to be recorded".
Again under section 86(7), " every election petition shall be tried as expeditiously as possible and endeavour shall be made to conclude the trial within six months from the date on which the election petition is presented to the High Court for trial".
Further section 87(1) introduces the Civil Procedure Code only subject to the provisions of the Act and of any rules made thereunder.
Section 87(2) makes a deeming provision for application of the Evidence, Act only subject to the Act.
Therefore, there is no scope for free play in the application of the provisions of those two Acts.
The very object of expeditious trial will be defeated if the presentation of ' the election petition should be treated casualty and lightly permitting, all kinds of devices to delay the ultimate trial.
The purpose of enclosing the copies of the election petition for all the respondents is to enable quick despatch of the notice with the contents of the allegations for service on the respondent or respondents so that there is no delay in the trial at this very initial stage when the election petition is presented.
If there is any halt or arrest in progress of the case, the object of the Act will be completely frustrated.
We are, therefore, clearly of opinion that the 1st part of section 81(3) with which we are mainly concerned in this appeal is a peremptory provision and total, non compliance with the same will entail dismissal of the election petition under section 86 of the Act.
We are, therefore, not required to consider the second submission, of the learned counsel for the appellant with regard to substantial compliance made on the basis of the provisions of section 81(3) being, directory.
We may only add here that, in the absence of any provision under the Act or the rules made thereunder, the High Court Rules cannot confer upon the Registrar or the Deputy Registrar any power to permit correction or removal of defects in an election petition presented in the High Court beyond the period of limitation 30 provided for under the Act.
It may be noted that section 169 of the Act provides that the Central Government is the authority to make rules after consulting the Election Commission and in sub section (3) thereof the rules have to be laid before each House of Parliament in the manner provided therein.
The only reference to the High Court Rules is found in section 117 of the Act.
At any rate, we do not feel called upon to pass on the High Court Rules referred to in the judgment of the High Court in this case, In the result we find no reason to interfere with the decision of the High Court dismissing the election petition.
The appeal is dismissed with costs.
DWIVEDI, J.
I agree with my brethren that the requisite copies of the election petition were not filed in Court within the period of limitation by the appellant.
I am constrained also to agree that for this procedural fault his election petition is liable to be dismissed in view of the decision of the Court in Jagat Kishore Prasad Narain Singh vs Rajindra Kumar Poddar and others(1).
In that case Hegde J. said: "The law requires that a true copy of the election petition should be served on the respondents.
That requirement has not been either fully or substantially complied with.
Therefore we have no doubt in our mind that the election petition is liable to be dismissed under s.86 of the Act.
" It makes me sad to read this requiem for this election petition.
Over a century ago a slip in procedure by a litigant meant denial of justice to him.
" Right down to the nineteenth century the choice of the wrong writ involved the loss of the action, even though all the merits were with the plaintiff.
"(2) Gradually, however, courts subordinated procedure to the claims of justice.
In Ma Shwe Mva vs Maung Mo Maung, (3) Lord Buckmaster said : "All rules of court are nothing but provisions intended to secure proper adminis tration of justice.
It is therefore essential that they should be made to serve and be subordinate to that purpose.
Speaking in the same vein, Justice Ameer Ali said : "Rules of procedure are not made for the purpose of hindering justice." (See (Raja) Indrajit Pratap Bahadur Sahi vs Amar Singh) (4) Our decision restores that primacy of procedure over justice.
It makes section 86(1) a tyrannical master.
The rigidity of the rule of precedent ties me to its chains.
My only hope now is that Parliament would make a just choice between the social interest in the supply of copies by the election petitioner along with his election petition and the social interest in the purity of election by excluding section 81(3) from the purview of section 96(1) of the Act.
Appeal dismissed.
V.P.S. (1) [1971] 1 section C. R. 821.
(2) Holdsworth: A History of English Law, 9, 248.
(3) A.I.R. 1922 P. C. 249 at p. 250.
(4) A.I.R. 1923 P. C. 128 at P. 135.

dataset_name: IN-Abs

summary/full:
The first part of section 81 (3) of the Representation of the People Act, 1951, provider that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition, and section 96 (1) provides that the High Court shall dismiss an election petition which does not comply with the provisions of section 81.
The appellant filed an election petition challenging the respondent 's election to the State Legislative Assembly, but did not file the requisite number of spare copies within the period of limitation.
The High Court dismissed the petition on the ground of non compliance with the mandatory requirement of section 81 (3).
Dismissing the appeal to this Court, HELD: (Per P. Jaganmohan Reddy and P. K.Goswami, JJ.) Whether a particular provision in a statute is mandatory or directory has to be construed from the scheme and object of the provisions.[25H] The right to challenge an election is conferred under the Representation of the people Act, which is made in conformity with the provisions of article 329 (b) of the Constitution.
It is a special right conferred under a self contained special law and the Court will have to seek answers to the questions raised within the four corners of the Act.
The power of the court are circumscribed by the provisions.
it is not a common law right and an election petition cannot be equated with a plaint in a civil suit.
Since the principal object of the Act is purity of elections, when an election is challenged under the Act, expeditious trial of the dispute is sought to be enforced by the Legislature making all safeguards against delay in getting rid of any taint in the result of the election.
But the very object of expeditious trial will be defeated if the presentation of the election petition should be treated casually and lightly, permitting all kinds of devices to delay the trial.
The purpose of enclosing the copies of the election petition for all the respondents is to enable quick dispatch of the notice with the contents of the allegations for service on the respondents.
if there is any halt or arrest in the progress of the case, the object of the Act will be completely.
frustrated.
Therefore, the first part of section 81 (3) is a peremptory provision and total non compliance with it will entail dismissal of the election petition under section 86.
[27H; 99E G] Jagat Kishore Prasad Narain Singh vs Rajindra Kumar Poddar and Others, [1971] 1 S.C.R. 821, Raza Buland Sugar Co. Ltd. V. Municipal Board Rampur , Montreal Street Railway Company vs Normandin, ; Charan Lal Sahu vs Nand Kishore Bhatt and Others, ; , Ch Subba Rao vs Member, Election Tribunal ; and Dr. Anup Singh vs Abdul Ghani ; , referred to.
Per Dwivedi J: The election petition is liable to be dismissed in view of the decision of this Court in Jagat Kishore Prasad Narain Singh vs Rajindra Kullar poddar and others, (19711 1 S.C.R. 821.
But this makes section 86 (1) a tyrannical master giving primacy to procedure over justice.
But it is for Parliament to make a just choice between the social interest in the Supply of copies for expeditious disposal and the social interest in the Purity of election by excluding section 81 (3) from the purview of section 96 (1).


judgement:
minal Appeal, No. 57 of 1973.
Appeal by special leave from the judgment and order dated the 9th February 1973 of the Gujarat High Court at Ahmedabad in Criminal Revision Application No. 86 of 1973.
Y. section Chitaley and section K. Dholakia, for the appellants.
G. Das, section N. Anand and M. N. Shroff, for the respondent.
The Judgment of the Court was delivered by CHANDRACHUD, J.
Appellants 1, 2, 4, 5 and 6 are the directors of Rajnagar Spinning and Weaving Manufacturing Co. Ltd., Ahmedabad, and appellant No. 3 is an officer of the said company.
On March 19, 1969 a complaint was lodged against them by respondent 1, an Inspector appointed under the Employees ' Provident Funds Act, 1952 that they bad failed to pay a sum of Rs. 1,39,419 .50 being the contribution to the Provident Fund for the months of June, July and August.
1968 and that thereby they had contravened the provisions of Paragraph 38(1) of the Employees ' Provident Funds Scheme.
1952, an act punishable under Paragraph 76(a) of the Scheme.
An investigation was made into the affairs of the company under section 15 of the Industries (Development and Regulation) Act, 1951 and on being satisfied that the company was managed in a manner highly detrimental to public interest, the Government of India issued an order dated January 7, 1972 authorising the Gujarat State Textile Corporation to take over the management of the company.
On May 69 1972 the Gujarat Government issued a notification declaring the company to be a "relief undertaking" under section 4(1)(a)(iv) of the Bombay Relief Undertakings (Special Provisions) Act, 1958 ( 'the Act '), and directing that "all rights, privileges, obligations and liabilities accrued or incurred before the undertaking was declared a relief undertaking and any remedy for the enforcement thereof shall be suspended and all the proceedings relative thereto pending before any Court, tribunal, officer or authority shall be stayed with effect from 6th May 1972. .
The appellants filed one application after another asking the court which was seized of the matter to stay the prosecution in view of the notification issued by the Government of Gujarat.
Two of such applications were rejected by the learned City Magistrate, III Court, Ahmeda bad.
Appellants acquiesced in one of the orders, carried the other in revision to the High Court but withdrew that proceeding.
on October 27, 1972 they made yet another application for the same relief which also was rejected by the learned Magistrate.
He took the view, as in the two earlier applications, that the operation of section 4 of the Act is restricted to the statutes mentioned in the Schedule to that Act and that clause (iv) of section 4(1) did not contemplate stay of criminal proceedings.
The High Court of Gujarat rejected summarily the revision application filed by the appellants against the judgment of the learned Magistrate.
This appeal by special leave is directed against the judgment of the High Court.
52 We are concerned in this appeal with the narrow question whether the prosecution pending against the appellants under Paragraph 76(a) of the Employees ' Provident Funds Scheme, 1952 is liable to be stayed by virtue of the notification issued by the Government of Gujarat on May 6, 1972.
That notification was issued in exercise of the power conferred by section 4(1)(a)(iv) of the Act, which reads thus : "4.
(1) Notwithstanding any law, usage, custom, contract, instrument, decree, order, award, submission, settlement, standing order or other provision whatsoever, the State Government may, by notification in the official Gazette, direct that (a) in relation to any relief undertaking and in respect of the period for which the relief undertaking continues as such under sub section (2) of section 3 (iv) any right, privilege, obligation or liability accrued or incurred before the undertaking was declared a relief undertaking and any remedy for the enforcement thereof shall be suspended and all proceedings relative thereto pending before any court, tribunal, officer or authority shall be stayed;" all proceedings relative thereto" patently means all proceedings relating to "any right, privilege, obligation or liability accrued or incurred before the undertaking was declared a relief undertaking".
The obligation or liability which sub clause (iv) speaks of is an obligation or liability incurred by the undertaking before it was declared a relief undertaking.
In other words sub clause (iv) concerns itself with the pre existing obligations and liabilities of the undertaking and not of its directors managers or other officers, The obligation or liability of these persons is not comprehended within the words of ' sub clause (iv).
Clause (a) of section 4(1) shows that the power of the State Government is itself restricted to giving directions referred to in sub clause (iv), "in relation to any relief undertaking".
Obligations and liabilities of the directors or other officers of the undertaking are not in a true sense obligations and liabilities in relation to the relief undertaking.
In plain and simple language they ark, the obligations and liabilities of such persons themselves.
Their obligations and liabilities have to be viewed from a different angle than the, obligations and liabilities of the company itself which only acts impersonally.
The object of section 4(1)(a)(iv) is to declare, so to say, a moratorium on actions against the undertaking during the currency of the.
notification declaring it to be a relief undertaking.
By sub clause (iv), any remedy for the enforcement of an obligation or liability against the relief undertaking is suspended and proceedings which are already commenced are to be stayed during the operation of the notification.
Under section 4(b), on the notification ceasing to have force, such obligations and liabilities revive and become enforceable and the proceedings which are stayed can be continued.
These provisions are 53 aimed at resurrecting and rehabilitating industrial undertakings brought by inefficiency or mismanagement to the brink of dissolution, posing thereby the grave threat of unemployment of industrial workers. 'Relief undertaking ' means under section 2(2) an industrial undertaking in respect of which a declaration under section 3 is in force.
By section 3, power is conferred on the State Government to declare an industrial undertaking as a relief undertaking, "as a measure of preventing unemployment or of unemployment relief". 'Relief undertakings, so long as they continue as such, are given immunity from legal actions so as to render their working smooth and effective.
Such undertakings can be run more effectively as a measure of unemployment relief, if the conduct of their affairs is unhampered by legal proceedings or the threat of such proceedings.
That is the genesis and justification of section 4(1)(a)(iv) of the Act.
Thus neither the language of the statute nor its object would justify the extension of the immunity so as to cover the individual obligations and liabilities of the director and other officers of the undertaking.
If they have incurred such obligations or liabilities, as distinct from the obligations or liabilities of the undertaking, they are liable to be proceeded against for their personal acts of commission and omission.
The remedy in that behalf cannot be suspended nor can a proceeding already commenced against them in their individual capacity be stayed.
Indeed, it would be strange if any such thing was within the contempla tion of law.
Normally, the occasion for declaring an industry as a relief undertaking would arise out of causes connected with defaults on the part of its directors and other officers.
To declare a moratorium on legal actions against persons whose activities have necessitated the issuance of a notification in the interest of unemployment relief is to give to such persons the benefit of their own wrong.
Section 4(i)(a)(iv) therefore advisedly limits the power of the State Government to direct suspension of remedies and stay of proceedings involving the obligations and liabilities in relation to a relief undertaking and which were incurred before the undertaking was declared a relief undertaking.
Paragraph 38(1) of the Employees ' Provident Funds Scheme, 1952 imposes an obligation on 'The employer ' to pay the Provident Fund contribution to the Fund within 15 days of the close of every month.
The Scheme does not define 'Employer ' but Paragraph 2(m) says that words and expressions which are not defined by the Scheme shall have the meaning assigned to them in the Employees ' Provident Funds Act.
Section 2(e)(ii) of that Act defines an 'Employer ', to the extent material, as the person who, or the authority which, has the ultimate control 54 over the affairs of an establishment and where the said affairs are entrusted to a manager, managing director Or managing agent, such manager, managing director or managing agent.
Thus the responsibility to pay the contributions to the Fund was of the appellants and if they have defaulted in paying the amount, they are liable to be prosecuted under Paragraph 76(a) of the Scheme which says that if any person fails to pay any contribution which he is liable to pay under the Scheme, he shall be punishable with six months ' imprisonment or with fine which may extend to one thousand rupees or with both.
Such a personal liability does not fall within the scope of section 4(1)(a)(iv) of the Act.
We therefore dismiss the appeal and direct that the prosecution shall proceed expeditiously.
P.B.R. Appeal dismissed.

summary/full:
The appellants, five of whom were directors and one an officer of a company, were prosecuted under the Employees Provident Funds Act, 1952 on the ground that they had failed to pay the contribution to the Provident Fund and thereby committed an offence punishable under paragraph 76(a) of the Employees Provident Fund Scheme, 1952.
Later, an investigation was made into the affairs of the company under section 15.
of the Industries (Development and Regulation) Act, 1951 and an order was issued authorising the Gujarat State Textile Corporation to take over the management of the company.
By a notification the State Government declared the company to be a "relief undertaking" under section 4 (1) (a) (iv) of the Bombay Relief Undertakings (Special Provisions) Act, 1958 and directed that "all rights, privileges, obligations and liabilities accrued or incurred before the undertaking was declared a relief undertaking and any remedy for the enforcement thereto shall be suspended and all the proceedings relevant thereto pending before any court, tribunal, officer or authority shall be stayed" with effect from a certain date.
An application filed by the appellants for stay of the prosecution in view of the notification issued by the Government was rejected by the lower court on the view that .the operation of section 4 of the 1958 Act was restricted to the statutes mentioned in the Schedule to that Act and that clause (iv) of section 4 (1) (a) did not contemplate stay of criminal proceedings.
On appeal the High Court summarily rejected the revision application.
The appellants came in appeal to this Court by special leave.
On the question whether the prosecution pending against the appellants under paragraph 76 (a) of the Employees Provident Funds Scheme 1952 is liable to be stayed by virtue of the notification issued by the State Government.
Dismissing the appeal, HELD : The personal liability of the directors and officers does not fall within the scope of section 4 (1) (a) (iv) of the Act.
The responsibility to pay the contribution to the Fund was of the appellants and if they had defaulted in paying the amount they were liable to be prosecuted under paragraph 76 (a) of the Scheme.
The phrase "all proceedings relative thereto" patently means all proceedings relating to "any right, privilege, obligation or liability accrued or incurred before the undertaking was declared a relief undertaking".
Sub clause (iv) concerns itself with the pre existing obligations and liabilities of the undertaking and not of its directors.
managers or other officers.
Neither the language of the statute nor its object would justify the extension of the immunity so as to cover the individual obligations and liabilities of the directors and other officers of the undertaking.
If they had incurred such obligation or liabilities as distinct from the obligations or liabilities of the undertaking they were liable to be proceeded against for their personal acts of commission and commission.
The remedy in that behalf cannot be suspended nor can a proceeding already commenced against them in their individual capacity be stayed.[52E; 53E] The occasion for declaring an industry as a "relief undertaking" would arise out of causes connected with the defaults on the part of its directors and other officers.
To declare a moratorium on legal actions against persons whose activities have necessitated the issuance of a notification in the interest of unemployment relief is to give such persons the benefit of their own wrong.
Section 4 (1) (a) (iv) advisedly limits the power of the State Government to direct suspension of all remedies and stay of proceedings involving the obligations and liabilities in relation to a relief undertaking and which were incurred before the undertaking was declared a relief undertaking.
[53F] 51