judgement:
Appeals Nos. 228 to 230 of 1960.
Appeals from the judgment and decree dated February ' 4, 1957, of the Madhya Pradesh High Court (Indore Bench) at Indore in Civil Reference No.15 of 1952.
B. Se??,, B. K. B. Yaidu and 1.
N. Shroff, for the appellants.
A. V. Viswanatha Sastri, K. A. Chitale, J. B. adachanji, section N. Andley, Rameshwar Nath and P. L. Vohra for the respondents.
April 3.
AYYANGAR, J. Rule 4 (1)(b) of Sch. 1 headed ((Rules for the computation of profits for the purposes of War Profits Tax" of the Gwalior War Profits Tax Ordinance, Samvat 2001 (hereinafter referred to as the Ordinance), provided: "4.
In computing the profits of a business carried on by a company, no deduction shall be made in respect of (1) remuneration paid to directors if during any part of the accounting period concerned they had controlling interest in the company; 207 Provided that this sub rule shall not apply (a). . . . . . . . (b) to the remuneration of any managing agent where such remuneration is included in the profits of The managing agents ' business for the purposes of the War Profits Tax".
The respondent Binod Mills Co. Ltd. which had its business at Ujjain in the State of Gwalior was a company whose profits were liable to War Profits Tax under the Ordinance.
The company was managed by a managing agency firm M/s.
Binodiram Balchand which had, by reason of its shareholding exceeding 50% of the issued sharecapital, a controlling interest in the company.
The respondent company was assessed to War Profits Tax for three chargeable accounting, periods July 1, 1944, to December 31, 1944 , January 1, 1945, to December 31, 1945, and January 1, 1946, to June 30, 1946.
During each of these accounting periods the respondent company had paid remuneration to its managing agents and claimed to deduct the remuneration so paid in the computation of its business profits during these three periods.
The assessingofficer disallowed the claim on the ground that the remuneration received by the managing agency firm had not been factually assessed in the hands of the managing agent and that consequently the matter was covered by the opening words of r. 4 and not saved by proviso (b) to the rule.
An appeal against this order of assessment was dismissed by the appellate authority and thereafter by the Commissioner of War Profits Tax in revision.
But at the request of the respondent the Commissioner submitted a reference under section 46 (1) of the Ordinance to the 208 High Court of Madhya Pradesh of the following question for its decision: "Whether in computing the profits of a business carried on by a company deduction shall be made in respect of any remuneration to any managing agent where such remuneration is included in the profits of the managing agent 's business for the purposes of the War Profits Tax ?" There was a consolidated reference in respect of the three chargeable accounting periods.
The learned Judges of the High Court answered the question in favour of the respondent and held that the remuneration, even though paid to a managingagent who had a controlling interest in the company, was a permissible deduction for the purpose of computing the profits of the company for the purposes of the War Profits Tax.
The High Court was thereafter moved by the appellant for the grant of certificates of fitness for appeals to this Court under section 47 of the Ordinance and the certificates having been granted these three appeals, which relate to the three chargeable accounting periods have been preferred to this Court.
Before proceeding further it might be convenient to set out certain facts to appreciate the form of the question which might provoke some enquiry.
There was not much dispute, and even if there was, it was abandoned fairly early, that M/s. Binodiram Balchand were "directors" of the company within the meaning of the Ordinance and bad a controlling interest in the company.
In this connection we might advert to the definition of ,director ' in section 2(10) of the Ordinance: "2.
'director ' includes any person occupying the position of a director by what ever name called and also includes any person who (i) is a manager of the company or 209 concerned in the management of the business; and (ii) is remunerated out of the funds of the business; and (iii) is the beneficial owner of not less than 20 per cent of the ordinary share capital of the company".
The controlling interest being established, it was common ground that the remuneration paid to the managing agent could not be deducted in computing the profits of the company unless it fell within proviso (b) of r. 4(1).
Before the departmental authorities it was suggested on behalf of the company that the expression 'included ' in proviso (b) meant ",disclosed in the return of the director" and on this basis it was contended that as M/s Binodiram Balchand had.
, in the statement of their own Profit & Loss account for Samvat 2000, 2001 and 2002, disclosed the managing agency commission received by them the remuneration had been "included" in their profits for the purposes of the War Profits Tax, though for reasons which are unnecessary to discuss they claimed that the sum was not liable to be brought to tax and this claim was accepted.
This argument which was rejected by the departmental authorities is however responsible for the form of the question referred to the High Court.
This contention however was not apparently repeated before the High Court and does not figure in the judgment as part of the reasoning of the learned Judges in the judgment now under appeal and has not been relied upon before us.
We shall therefore say no more about it, but proceed to deal with the substantial question raised.
The facts being as above stated the entire question in the appeals turns on the mean of the 210 expression "is included in the profits of the managing Agency business" in r.4(1) proviso (b) of Sch. 1 of the Ordinance.
Before however entering on a discussion of the words underlined and of proviso (b) in particular, it would be necessary to set out broadly the scheme underlying the levy of the tax under the Ordinance.
Section 4(1) of the Ordinance is the charging section and it enacts : "4.
(1) Subject to the provisions of this Ordinance, there shall, in respect of any business to which this Ordinance applies, be charged, levied and paid on the amount by which the profits during any chargeable period exceed the standard profits, an excess profit tax (in this Ordinance referred to as the 'War Profits Tax ') which shall be equal to 60 per cent.
of the aforesaid amount.
" The "business" to which the Ordinance applies has to be gathered from the terms of section 2 (5) which defines the term 'business '.
That clause reads : " business ' includes any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture or any profession or vocation ' but does not include a profession carried on by an individual or by individuals in partnership, if the profits of the profession depend wholly or mainly on his or their personal qualifications, unless such profession consists wholly or mainly in the making of contracts on behalf of other persons or the giving to other persons of advice of a commercial nature in connection with the making of contracts : Provided that where the functions of a company or of a society incorporated by or under any enactment consist wholly or mainly in the holding of investments or other property or both, the holding thereof shall be 211 deemed for the purpose of this definition to be a business carried on by such company or society; Provided further that all businesses to which this Ordinance applies carried on by the same person shall be treated as one business for the purposes of this Ordinance".
The second proviso uses the term 'person ' which is defined by section 2 (13) to include "any company or body of individuals or any other association of persons whether incorporated or not and also includes a Hindu undivided family".
The 'Profits ' which is referred to in the charging section is, by reason of the definition of the term in section 2 (16), to mean ,profits as determined in accordance with the provi sions of this Ordinance and its First Schedule".
The provisions of the Ordinance relating to the computation of profits do not bear upon the point now in controversy, but what is of relevance are certain of the Rules for the computation of the profits in Sch.1.
From the terms of the charging section read with the other provisions of the Ordinance to which we have adverted it would be seen that it is the profits accruing from business that is brought to charge and that each person whether he be an individual or comprehended within the inclusive definition of the term ',person" is an independent unit of assessment whose profits are computed by aggregation of all of its sources of income from every business which that unit may carry on.
How the profits of each unit is to be computed for the purposes of tax has to be gathered, apart from the provisions of the Ordinance which, as stated earlier, are not relevant to the present case, from Sch. 1 headed "Rules for the computation of profits for the purposes of War Profits Tax".
Rule 1 of these Rules which generally follows the pattern of the Indian Income Tax Act in setting out the list of 212 permissible deductions, provides as one of such deductions in r. I. (1) '(xi) ,,any expenditure (not being in the nature of capital expenditure or personal expense of the person to whose business this Ordinance applies) laid out or expanded wholly and exclusively for the purposes of such business".
If this provision were applied for computing the profits of a company as an unit of assessment, there, could be no dispute that generally speaking the remuneration paid to a managing agent would be an admissible deduction.
It hardly needs to be mentioned that the remuneration received by a managing agent would be profits from business on which he would be, liable to tax under the Ordinance, being a profit from business as defined in section 2(5) subject only to the condition that the amount of the profit brought it within the taxable limit.
To this prima facie rule as regards the manner in which the profits derived by a company are to be computed r. 4 enacts an exception, in the case of those companies in which the Directors have a controlling interest.
But the application of this special rule as regards companies under the management of Directors with controlling interest is, however, subject, among others, to proviso (b) not applying to the case.
In other words, if proviso (b) saved the case, the special rule as to controlled companies would cease to be applicable and the remuneration paid would be deductible in the computation of the companies ' profits.
This turns on whether the remuneration paid to the managing agent "is included in the profits of the managing agent 's business".
The words used being "is included" there is no doubt that an actual inclusion is posited.
But this, however, does not solve the problem, for the , 'inclusion in the profits" might refer to three distinct "inclusions" : (1) the inclusion by the managing agents as an assessee for the purposes of his individual assessment, i.e., in his return, (2) the inclusion by the assessing authority in the order of 213 assessment made against the managing agent, (3) the inclusion under the terms of the Ordinance of the remuneration as an amount chargeable to the tax as part of the profits of the managing agent.
In passing we might observe that r. 7 (2) (b) of Sch. 1 to the Excess Profits Tax Act, 1940, on which the Ordinance is modeled is in the same terms as the proviso (b) to r.4(1) of the Ordinance but the proper interpretation of the rule in the Excess Profits Tax Act has never come up before the Courts for decision.
The contention urged on behalf of the appellant, before the learned Judges of the High Court was that the inclusion referred to an inclusion by the "essment officer of the remuneration in the assessment of the managing agent and that unless the remuneration sought to be excluded in the computation of the profits of the company was actually assessed in the hands of the managing, the company could not claim the benefit of proviso (b).
The learned Judges repelled this submission by holding that the proviso could not be construed as to vest in the assessing authority an absolute discretion to assess either the company or the managing agent.
They read the words ",is included" as equivalent to "is liable to be included" and that as it was not contested before them that if the assessment officer had been so minded he could have included this sum in the profits of the managing agent 's business, the terms of proviso (b) were satisfied.
Mr. Sen learned Counsel for the appellant did not pursue the same line of argument as in the Court below.
We should add that we consider that Mr. Sen was right in not attempting to support the argument which was rejected by the learned Judges of the High Court.
Though tax laws occasionally make provision for the assessing authority to proceed against a particular unit of assessment on one or 214 more alternative bases, it would require 'very explicit and unambiguous language to permit an assessing authority to choose one of two units for assessment, particularly in, the context of there being no provision for the inter se adjustment of the rights and liabilities in the event of one unit benefiting at the expense of the other by reason of the exercise of the option and when admittedly the unit does not receive the income as agent for the other unit.
Besides, if the company had been first assessed to tax because let us say its return had been filed earlier, or the enquiry as regards the correctness of the return was completed earlier, there is no provision /in the Ordinance or in the Rules for excluding the sum in the personal assessment of the managing agent, so that it could not be urged that the assessing authority had any option in the matter to tax either the company or the managing agent.
If the managing agent is ex roncessis liable to have his remuneration included in his assessment for the tax, unless the income or the business is not within the Ordinance, it would be most anomalous to suggest that in order that the benefit of proviso (b) should be available to a company, the assessment of the managing agent should have been completed first a matter not always within the control of a company.
We do not think it necessary to dilate further on this construction since Mr. Sen did not commend it for our acceptance.
His submission, on the other hand, was that this was a special provision designed to meet the cases of companies in which the directors had a controlling interest.
In such cases it was these directors who had to submit and submitted the return on behalf of the company and who, of course, had to submit their own returns in their individual capacity as persons in receipt of taxable profits.
In these circumstances 215 he urged that the proviso should be read as conferring an option upon the directors either to include their remuneration in their own returns, get them taxed and pay the tax themselves or to include it in the company 's return and have the amount taxed in the company 's assessment.
His further submission was that having regard to the manner in which the proviso was worded, where the managing agent failed to include his remuneration in his own return and have it assessed as part of his profits, the effect was the same as if he had opted to have the sum taxed in the company 's assessment.
The option, it was urged, was that of the managing agent who controlled the affairs of a company and therefore in effect represented it and who in one capacity acted for himself and in another acted for the company.
In effect the submission of learned Counsel was that the provision was designed to obviate double taxation of the same income and for this purpose vested the controlling Director with a discretion to render the company immune from tax where the sum was included in his own return and was assessed in his hands.
The theory propounded regarding the provision being one for avoidance of double taxation in the manner above indicated by vesting a discretion in the controlling Director breaks even on a cursory examination.
Let us assume that the managingagent opts to have the company taxed and submits a return on behalf of the company in which no deduction is claimed in respect of this item and an assessment is made accepting that return.
On the terms of the Ordinance this would not afford any relief to the managing agent in his personal assessment, for admittedly there is, as pointed out earlier, no provision in the Ordinance or in the Schedule exempting the managing agent from the inclusion of this remuneration in his taxable profits, and this 216 must obviously be so, because for the purposes of the charging section he would be an independent unit of assessment.
He would have to include in the computation of his personal income for the purpose of the War Profits Tax the remuneration received by him.
This might be expressed in a slightly different form by stating that proviso (b) to r. 4(1) does not operate in the reverse direction, that is by exempting the managing agent from tax on the remuneration derived by him, merely because the deduction of that item has been denied to the company.
Obviously therefore r. 4(1)(b) is not a rule designed for the avoidance of double taxation in the sense in which learned Counsel for the appellant suggests that it is.
There are also other reasons why we find it unable to accept the submission of Mr. Sen that by the words is "included" is meant the inclusion in the return by the managing agent with the result that in cases where he does not so include, the company would not be entitled to the deduction.
The option suggested by Mr. Sen to the managing agent was that he might either elect to pay the tax himself or get the company to pay it.
Obviously it would always be in the interest of the managing agent to have the tax paid by the company if by that means, as is suggested by Mr. Sen, he could obtain absolution from the obligation of paying the tax himself, for if the tax is paid by the company the loss involved in the payment of the tax would fall on him only to the extent of his shareholding, being for the rest shared by the other share holders of the company.
It is really difficult to understand the principle by which one could construe a rule of this nature as enabling a managing agent who holds, say 51% of the share capital of the company to visit 49% of the burden of tax which normally one would expect to be paid by him, to be paid by the other shareholders of the company merely because 217 he happens to be the managing agent holding a controlling interest by the extent of his share holding.
We consider that the construction suggested by Mr. Son which leads to such an unreasonable result and inflicts an unjust injury on the other shareholders is not any proper interpretation of the provision.
Besides, there are other grounds why the meaning attributed to the words "is included" as referring to "included ' by the managing agent" cannot be accepted.
Suppose the managing agent includes it in his return but the assessing authority does not include it in the computation of his return but prefers to disallow the deduction in the case of a company.
Would that be "inclusion in his pro fits?" Again, suppose the managing agent does not include it in his return but the assessing authority does, and tax is paid by the managing agent, would there be no exclusion? These illustrations serve to bring out the anomalies that would arise if it were held that the words ",is included" meant "is included in his return by the managing agent".
This leaves for consideration the meaning that "is included" refers to the inclusion under the provisions of the Ordinance.
If this meaning were accepted it would not matter whether the managing agent has or has not included the sum in his return or whether the assessing authorities have or have not done their duty by having the remuneration included in the taxable profits of the managingagent.
If the managing agent has not done so being under an obligation imposed by the law to include it, the return would be liable to be revised by the assessing officer and if the failure to include the sum was due to any suppression, the managing agent would, besides having the sum included in his assessable profits, be liable to appropriate penalties for filing a wailfully incorrect return.
Similarly, the assessing officer being under a statutory duty to include the sum in the assessment of the managingagent would, if he failed to do so, render the order 218 liable to be revised.
The remedy for the failure either of the managing agent or of the assessing authorities to conform to the requirements of the law certainly cannot be the disallowance of the sum in the computation of the profits of the company.
The entirety of this reasoning, it would be noted, proceeds on the basis that the managing agent was liable to include his remuneration in his assessable profits.
In such a contingency it stands (to reason that neither the default of the managing agent as an assessee or of the assessing authority to include the sum in the profits of the managing agent could prejudice the rights of the company in the matter of the computation of its income.
Where the remuneration of the managingagent was not under the Ordinance liable to be brought to tax the position would be different and that is just what is indicated as that which would render the proviso inapplicable.
For instance, section 5(1) of the Ordinance enacts; ".
Provided further that this Ordinance shall not apply to (a). . . . . . . . . (b) profit from a business carried on wholly on behalf of a religious or charitable institution and the profits of which are applied solely to the purpose of the institution and enure for the benefit of the public, and (i) the business is carried on in the course of the carrying out of a primary purpose of the institution, and (ii) the work in, connection with the busi ness is carried on by the beneficiaries of the institution".
If for instance, the business of the managing agency was being carried on for or on behalf of a trust of 219 the character indicated by the provision just now read, the remuneration of the managing agent would not be liable to tax for the reason that it is outside the ambit of the Ordinance and to such a case the terms of proviso (b) to r. 4(1) would not be attracted, with the result that the managingagent not being liable to tax under the Ordinance on the remuneration derived by him, the company, if it were a controlled company.
would not be entitled to the deduction of that remuneration in the computation of its profits.
Except in case where the remuneration received by a managing agent is not liable to tax under the Ordinance, it is the managing agent that would be liable to pay tax on his remuneration and notwithstanding that the company is a controlled company the remuneration paid by it to the managing agent would be a permissible deduction by reason of the exception to the opening words of r. 4(1) contained in proviso (b).
It is unnecessary for our present purpose to consider whether besides section 5(1)(b), already referred to, there are other contingencies in which remuneration received by a Director could be held not to be ,included ' in the latter 's profits under the Ordinance, since in the case before us it is admitted that the remuneration received by the managing agent was liable to be include in the computation of his profits for the purposes of the War Profits Tax and therefore neither the fact that the managing agent did not "include" the sum in his return, nor the default of the assessing authority to correct this error by " 'including" the sum in his assessment, is any reason for depriving the respondent company of the benefit of proviso (b) to r. 4(1).
We therefore consider that the learned Judges of the High Court answered the question referred to them correctly.
The appeals fail and are dismissed with costs.
Appeals dismissed.

summary/full:
Sub rule (1) of r. 4 of Sch. 1 to the Gwalior.
War Profits Tax Ordinance, Samvat 2001, provided: "In computing the profits of a business carried on by a company, no deduction shall be made in respect of the remuneration paid to directors if during any part of the accounting period concerned, they had controlling interest in the company; provided that this sub rule shall not apply (a). . (b) to the remuneration of any managing agent where such remuneration is included in the profits of the managing agents ' business for the purposes of the War Profits Tax".
The respondent company was ' managed by a managing agency firm which had, by reason of its shareholding exceeding 50% of the issued share capital, a controlling interest in the company.
The company was assessed to War Profits Tax under the provisions of the Gwalior War Profits Tax Ordinance, Samvat 2001, for three chargeable accounting periods between 1944 and 1946.
During each of these accounting periods the company had paid remuneration to its managing ,agent and claimed to deduct the remuneration so paid in the computation of its business profits during these three periods.
The assessing officer disallowed the claim on the ground that as the remuneration received by the managing agency firm had not been factually assessed in the hands of the managing agent, proviso (b) to r.4(1) of Sch.
I was not applicable.
It was found that the managing agents had in their statement of their own Profit and Loss account for the relevant years disclosed the managing agency commission received by them but they claimed before the assessing authority that the sum was not liable to be taxed and this claimed was accepted.
Held, that the remuneration paid to the managing agents, even though they had a controlling interest in the 206 company, was a permissible deduction for the purpose of computing the profits of the company under the War Profits Tax Ordinance, Samvat 2001, ' because by virtue of proviso (b) to r.4(i) of Sch. 1 to the Ordinance, the managing agent was liable to include this remuneration in his assessable profits.
The words "is included" in proviso (b) to r.4(1) refer to the inclusion under the provisions of the Ordinance.
Neither the default of the managing agent as an assessee nor of the assessing authority to include the sum in the profits of the managing agent could prejudice the rights of the company in the matter of the computation of its income.


judgement:
Appeal No. 538 of 1960.
Appeal from the judgment and order dated September ' 3, 1958, of the Punjab High Court in Civil Reference No. 2 of 1956.
B. Sen, D. Gupta and P. D. Menon for the appellant.
The respondent did not appear.
April 3.
The Judgment of the Court was delivered by DAs GUPTA, J.
In an appeal against the assessment of house tax of bungalow No. 127 B, Bank Road, Ambala Cantonment, by the assessment committee of the Cantonment Board, Ambala, three questions arose as regards the liability of the assessee on which the officer bearing the appeal entertained reasonable doubt and accordingly made a reference to the High Court of Punjab under a. 84 (2) of the , for the decision of these questions.
Admittedly half of this Bungalow had been.
appropriated under the provisions of the Cantonments (House Accommodation) Act No. VI of 1923 on a lease by the Central Government and was being used at the relevant time by some military officer for his residence.
It was also admitted that the assessment list was signed originally by three of the four persons who formed the assessment committee and was signed by the fourth member a few days later.
The appellate officer set out these circumstances in 198 his statement and then formulated the three questions thus .lm15 "1.
Whether the occupation of the property by a Military Officer under the above circumstances amounts to user thereof for the public purpose.
Whether the occupation of the Military officer of the portion of the Bungalow appropriated under Act No. 6 of 1923 amounts to its occupation by the Central Government, within the meaning of a. 99 (2)(6) of the . 3.
Whether the authentication of the Assessment list in the present case is valid as required by the provisions of Section 69, ".
The appellate officer who is required by section 84 (2) to state his own opinion on the points referred stated that in his opinion the occupation by the Military Officer, did not amount to user for a public purpose nor did it amount to occupation by the government and further that authentication of the assessment list was valid.
The High Court answered the two questions in the affirmative and the third in the negative.
In other words, the High Court 's opinion is that the occupation of the property by the Military Officer amounts to user or the public purpose an also amount to occupation by the Central Government within the meaning of section 99 (2) (f) of the and that the authentication was valid.
Against the High Court 's decision on the second question the Cantonment Board has filed this appeal on the strength of a certificate granted by the High Court.
199 The assessee was not represented before us but we were taken through all the relevant provisions of law by Mr. Sen who appeared for the Cantonment Board.
For a proper decision of the question in controversy it is necessary first to take note of the scheme of appropriation of houses under the Cantonments (House Accommodation) Act, No. VI of 1923.
Under section 5 every house situate in a Cantonment is liable to appropriation by the Central Government on a, lease in the manner and subject to the conditions provided in the Act.
Section 6 provides that (a) where a military officer stationed in the Cantonment or a President of a military mess in the Cantonment applies in writing to the officer commanding of the Station that he is unable to secure suitable accommodation by private agreement and no government property is available for the purpose and the Officer Commanding is satisfied of the truth of the facts stated or(b) the Officer Commanding is satisfied on enquiry that there is not in the cantonment a sufficient and assured supply of houses available at reasonable rates of rent by private agreement, the Officer Commanding may serve a notice on the owner of any house which appears to him to be suitable requiring him to permit the house to be inspected, measured and surveyed.
Under section 7 if a Officer Commanding is satisfied thereafter that the house is suitable for occupation by a military officer or a military mess, he may by notice require the owner to execute a lease of the house to the Central Government; require the .existing occupier, if any, to vacate the house; and require the owner to execute the necessary repairs.
The section further provides that on the expiry of the lease the house shall be re delivered to the owner in a state of reasonable repair.
Section 11 of the Act provides that if a house is unoccupied, a notice under section 7 may require the owner to give possession of the same to the Officer Commanding within 21 days from the service of the notice and 200 if a house is occupied, a notice issued under section 7 shall not require its vacation in less than thirty days from the service of the notice.
Section 12 provides that if the owner fails to give possession of a house to the Officer Commanding in pursuance of a notice issued under section 7, or if the existing occupier fails to vacate a house in pursuance of such a notice, the District Magistrate, shall enter the premises and enforce the surrender of the house.
It is clear from this resume of some of the provisions of the Act that where as the appropriation can take place under the conditions mentioned in s.6" what happens on the appropriation having been made is that the house is made over to the possession of the Officer Commanding on behalf of the Central Government.
What if; done with the house thereafter is not dealt with by the Act.
Coming now to the provisions of the , we have to consider first section 65, which is in these words : "65.
Save as otherwise expressly provided in the notification imposing the tax, every tax assessed on the annual value of buildings or lands or of both shall be leviable primarily upon the, actual occupier of the property upon which the said tax is I assessed, if he is the owner of the buildings or lands or holds them on a building or other lease granted by or on behalf of the government or the Board or on a building lease from any person.
In any other case, the tax shall be primarily leviable as follows, namely a) if the property is let, upon the ' lessor; (b) if the property is sub let, upon the superior lessor; (c) if the property is unlet, upon the 201 person in whom the right to let the same rests.
On failure to recover any sum due on account of such tax from the person primarily liable, there may be recovered from the occupier of any part of the buildings or lands in respect of which the tax is due such portion of the sum due as bears to the whole amount due the same ratio which the rent annually payable by such occupier bears to the aggregate amount of rent so payable in respect of the whole of the said buildings or lands, or to the aggregate amount of the letting value thereof, if any stated in the authenticated assessment list.
An occupier who makes any payment for which he is not primarily liable under this section, in the absence of any contract to the contrary, be entitled to be reimbursed by the person primarily liable for the payment, and, if so entitled, may deduct the amount so paid from the amount of any rent from time to time becoming due from him to such person.
" The right to impose the tax is conferred by a. 60.
Section 99 (2) contains the provisions for exemption from the tax on property.
It is in these words: "The following buildings and lands shall be exempt from any tax on property other than a tax imposed to cover the cost of specific services rendered by the Board, namely : (a) places set apart for public workshop and either actually so used for no other purpose; (b) buildings used for educational purposes 202 and public libraries, play grounds and dharam salas which are open to the public and from which no income is derived; (c) hospitals and dispensaries maintained wholly by charitable contributions; (d) burning and burial grounds, not being the property of the Government or a Board, which are controlled under the provisions of this Act; (e) buildings or lands vested in a Board; and ( f) any buildings or lands,used or acquired for the public service or for any public pur pose,which are the property of the State or in the occupation of the central or any State Government.
The tax in the present case is not one imposed to cover the cost of specific services rendered by the Board and so if the property falls within any of the clauses mentioned in cis.
(a) to (f) it will be entitled to exemption.
We are not concerned, however, with cls.
(a) to (e) as the only claim to exemption which has been made by the owner of the_ property is that it falls within el.
The question is whether that claim is justified.
It appears to us to be clear that to be entitled to the exemption under el.
(f) the building or land must satisfy two conditions.
First, that it has 'been used or acquired for public service or for public purpose, and secondly, that it is either the property of the State or in the occupation of the Central or any State Government.
The finding of the High Court that the building was being used at .the relevant date for a public purpose is not disputed before us.
That question therefore need not be further considered.
What is disputed however is : Was it in the occupation of the Central 203 Government ? On behalf of the appellant, the Cantonment Board, Mr. Sen has strenuously urged that the portion of the building with which we are concerned in this appeal was in fact being occupied by a Military officer and such occupation is not occupation of the Government.
It is to be made clear that while it is known that this portion of the building was appropriated by the government on lease under section 7 of the Cantonments ( House Accommodation) Act, it is not the appellant 's case that the occupation of the Military Officer was as a sub lessee of the government.
Mr. Sen 's argument proceeded on the basis that the government being the lessee of this portion of the building permitted a Military Officer to occupy it.
The question we have to consider is whether oil such occupation by the Military Officer the building ceased to be in ', ,he occupation of the Central Government, the lessee.
It is worth noticing that while section 65 (1) speaks of actual occupation by the owner and makes the tax primarily leviable on the owner if he is the actual occupier, section 99(2) uses the words ((in the occupation of the Central or any State Government" and not "in the actual occupation of the Central or the State Government".
Even so, it has been argued by Mr. Sen that the word "occupation" without anything more, should ordinarily be interpreted as actual occupation.
While this may be correct, we find it difficult to agree that when a person, entitled to actual occupation by reason of his lease permits another to occupy it, then it ceases to be in the actual occupation of the person so permitting.
Where the Central or the State Government after obtaining the lease under s.7 leases it out to any person, it is itself not entitled to actual occupation but has to put the sub lessee into occupation.
In such a case it may be reasonably said that the government has ceased to be in occupation.
204 In the case where the government after taking the lease merely gives a licence to some person to come and live in it, it is entitled to take away the permission at any time and thus to come into possession itself.
We can see no reason for thinking that in such a case the fact that the person to whom permission has been given is residing in the building, makes it anytheless the actual occupation of the government.
If that was so, the fact that the Military Officer may be away for months together and the members of his family or his servants are residing would make the building cease to be in occupation of the Military Officer.
That is on the face of it absurd.
In our opinion, where the person entitled to occupy, permits some other person to be in the building, he is in actual occupation through such other person.
Accordingly, we are of opinion that the building in question was in occupation of the Central Government through the Military Officer whom it has permitted to reside in it.
The answers given by the High Court were therefore correct.
The appeal is accordingly dismissed.
But, as there was no appearance for the other side, there will be no order as to costs.

dataset_name: IN-Abs

summary/full:
One half of bungalow No. 127 B, Bank Road, Ambala Cantt., was taken on lease by the Central Government and was being used by some Military Officer for his Residence The Assessment Committee of 'the Cantonment Board, Ambala, made an assessment of house tax but the assessment list was signed Originally by three out of four persons who formed the assessment committee and was signed by the fourth a few days later.
The officer bearing the appeal entertained reasonable doubt and made a reference to the High Court under s.84(2) of the , for the decision of those questions.
The questions referred to the High Court were : (1) Whether the occupation of the property by a Military Officer amounts to a user thereof for public purposes.
(2) Whether the occupation of the Military Officer of the portion of the bungalow appropriated under Act VI of 1923 amounts to its occupation by the Central Government within the meaning of section 99(2)(f) of the Cantonment Act, 1924.
(3) Whether the authentication of assessment list in the present form is valid as required by the provisions of section 96 of the .
The High Court answered the two questions in the affirmative and the third in the negative.
The opinion of the High Court was that the occupation of the property by the Military officer amounted to user for public purpose and also amounted to occupation by the Central Government and the authentication was valid.
Against the decision of the High Court on the second questions the Cantonment Board went in appeal to the Supreme Court on the strength of a certificate granted by the High Court.
197 Held,, that the building in question was in occupation of the Central Government through the Military Officer whom it had permitted to reside in it.
Where the person entitled to occupy, permits some other person to be in the building, he is in actual occupation through the other person.


judgement:
Appeal No. 331 of 1961.
Appeal by special leave from the judgment and order dated April 20, 1961, of the Punjab High Court in Civil Writ No. 460 of 1961.
section P. Sinha and.
M. K. Madan, for the appellant.
Har Prasad and J. P. Goyal, for respondents Nos;. 1 and 2.
section M. Sikri, Advocate General, Punjab, N. section Bindra and P. D. Menon, for the respondent No. 3. 1,962.
April 4.
The Judgment of the Court was delivered by AYYANGAR, J.
,The point arising for decision in this,appeal by special leave is,, a, very Shortly one and relaters to the proper construction of the definition of 'damaged area ' in section 2(d) of the Punjab 244 Development and Damaged Areas Act, 1951 which will hereafter be referred to as the Act.
A few facts are necessary to be stated in order to appreciate how this point arises.
The appellant claims to be the trustee of a Public Trust created for the management of certain properties situated in Amritsar.
Of the properties belonging to the trust is one which is said to be a dharamshala.
By a resolution of the Amritsar Improvement Trust dated March 21, 1957 the Improvement Trust decided to acquire a portion of this property for the purpose of widening a road under a development scheme framed under section 3 of the Act.
This section enacts; "3.
The Trust may frame a scheme or schemes for the development of a damaged area, providing for all or any of the matters mentioned in section 28 of the Punjab Town Improvement Act, 1922; and any scheme already framed or sanctioned in respect of a damaged area under the provisions of that Act shall be deemed to have been framed or sanctioned under this Act".
Section 4 makes provision for the publication of the schemes setting out with particularity the properties which would be affected by the scheme and specifying the period within which the objections to the scheme would be received.
Section 5 makes provision for the consideration of the objections which might be put forward under a. 4 and sub sections
(3) and (4) of this section read; "5.
(3) The State Government shall then notify the scheme either in original or as modified by it and the scheme so published shall be deemed to be the sanctioned scheme.
(4) The publication under subsection (3) shall be conclusive evidence that a scheme has been duly framed and sanctioned," 245 Thereafter section 6 proceeds to make provision for the acquisition of property in the ', 'damaged area" and there are other provisions as regards the ascertainment and payment of compensation but as these are not relevant to the appeal, no reference to them is needed.
It is common ground that a scheme has been framed under section 3 and this has been finalised after considering objections.
It was in pursuance of this scheme that the Improvement Trust took steps to effect the acquisition of the property bearing Municipal No. 2320/1, 884/9 belonging to the appel lant trust.
The appellant filed a suit for a declaration that the acquisition proceedings were illegal and ultra vires and for a permanent injunction restraining the Improvement Trust from proceeding with the acquisition.
The suit was, however, withdrawn by reason of a Consent Memo which was filed and subsequently the appellant filed a petition under article 226 of the Constitution in the Punjab High Court challenging the validity of the action of the Improvement Trust and praying for appropriate reliefs quashing the proceedings for the acquisition.
The petition, however, was summarily dismissed by the High Court by order dated April 20, 1961.
The further petition filed by the appellant praying for a certificate of fitness under article 133(1)(c) was also dismissed.
Thereafter the appellant obtained special leave of this Court to prefer an appeal against the judgment of the High Court and that is bow the appeal is now before us.
Though several points have been, taken in the memorandum of appeal to this Court, learned Counsel confined his arguments to only one point to which we shall refer immediately and which alone requires to be dealt with in the appeal.
We have already pointed out that the acquisition now sought to be made and which, it is contended, is illegal and not justified by law, is under a scheme 247 under the Act of 1947 vis a vis the definition in section 2(d) of the Act.
By a proclamation issued under section 93 of the Government of India Act, 1935 the Governor of the Punjab assumed to himself the powers vested in the Punjab Provincial Legislature and under the powers so vested he enacted the Punjab Damaged Areas Act, 1947 (Punj.
Act 11 of 1947).
Section 3 of that enactment enabled the Provincial Government by notification "to declare any urban area, or any portion thereof to be a damaged area" and it was in Pursuance of this provision that the notification of April 1948, to which we have referred, was issued.
It might at once be stated that the Act of 1947 contained no provision for framing schemes or for acquisitions of property for implementing such schemes, but this feature might not be very material for ,he purposes of this case.
Section 93 of the Government of India Act, 1935 which made provision in cases of failure of constitutional machinery in the Provinces enacted by sub s.(4): "93.(4).
If the Governor by a proclamation under this section assumes to himself any power of the Provincial Legislature to make laws, any law made by him in the exercise of that power shall, subject to the terms thereof, continue to have effect until two years have elapsed from the date on which the proclamation ceases to have effect unless sooner repealed or reenacted by an Act of the appropriate Legislature. . ." The rule of the Governor under s.93 ended on ' August 15, 1947 and in consequence this enactment which was temporary would have lapsed on August 15, 1949.
Section 93 of the Government of India Act, 1935 was repealed by the Governor General under the powers vested in him by s.8 of 248 the Indian Independence Act, 1947 by virtue of the India (provisional Constitution) Order, 1947, but cl.6 of this order enacted: "6.
Where any law made by the Governor of a Province by virtue of Section 93 of the Government of India Act, 1935, is in force immediately before the appointed day, the said law, notwithstanding that the said section is directed to be omitted is in Schedule to this Order or that by reason of such omission a Proclamation under the said section ceases to have effect, shall remain in force for the period for which it would have remained in force if the said section bad been At all material times in operation.
" The result was that the Punjab Act of 1947 continued till August 15,1949 and no further.
It was to make provision for the gap that would be caused by the expiry of this Act in 1949 that the Fast Punjab Damaged Areas Act, 1949, which is referred to in s.2(d) of the Act of 1951, was enacted.
The Act of 1949 reproduced sub stantially the terms of the Act which it was replacing.
Section 2 contained definitions which were in terms indentical with the definitions in the Act of 1947, subject to changes necessitated by the partition of the country and Lahore ceasing to be within India and s.3 which enabled the State Government by notification to declare an urban area to be a (damaged area" was brought into force at once, i.e., in April 1949 when the Governor 's assent was received, and by section 1(3) the State Government reserved the power to direct that the other provisions of the Act viz. ss.4 to 21 may come into force from such date as it may by notification appoint.
In spite of diligent research no notification under section 1(3) bringing the rest of 249 the Act into force could be discovered in any event, there is nothing to show that the rest of the sections were brought into force before August 15, 1949 when owing to the laps; of two years prescribed by section 93(4) of the Government of India Act, the Act of 1947 expired and ceased to be in force.
Based on the fact that the Act of 1949 practically reproduces, the earlier Act of 1947 the contention urged before us was that the Act of 1947 was in effect repealed and re enacted 'by the Act of 1949, that by virtue of section 22 of the Punjab General Clauses Act, which runs: "22 Where any Punjab Act is repealed and re enacted with or without modification, then, unless it is otherwise expressly provided, any appointment, notification, order, scheme rule, form or bye law, made or issued under the repealed Act, shall, so far as it is not inconsistent with the provisions reenacted, continue in force, and be deemed to have been made or issued under the provisions so re enacted, unless and until it is superseded by any I appointment, notification, order, scheme, rule, form or bye law made or issued under the provisions so re enacted." the notification issued under the Act of 1947 should be deemed to have been issued under the Act of 1949 and that in consequence the reference to a notification under the Act of 1949 in section 2(d) of the Act of 1951 would include the notification of 1948 made under the Act of 1947.
We are unable to accept this argument.
In the first place, there was no repeal of the Act of 1947 to attract the application of the rule of construction embodied in section 22 of the Punjab General Clauses Act.
No doubt, even temporary enactments could be repealed and re enacted so as to attract the operation of provisions like a. 22 of 250 the Punjab General Clauses Act vide, for instance State of Punjab vs Mohar Singh (1).
It is however conceded that here there is no express repeal of the Act of 1947.
Learned Counsel for the respondents ,submitted that by reason of the very existence of the enactments of 1947 and 1949 on the Statute Book in terms identical with each other, the earlier ,statute should be held to have been impliedly repealed by the later enactment.
If, as we have pointed out earlier, the first Act was temporary and ,Its place was taken by a later enactment after the former ceased to be in force, it is obvious that there could be no scope for invoking the principal embodied in section 22 of the Punjab Central Clauses Act.
Further, apart from the larger question as the whether implied repeals are within the contemplation of section 22 of the Punjab General Clauses Act or similar provisions in like enactments, we 'consider that there is no basis for invoking the doctrine of implied repeal in the present case for that assumes that there is an inconsistency between the two enactments such that the two cannot stand together.
It is a maxim of the law that, implied 'repeals are not to be favoured, and where two statute,% are entirely affirmative and identical no question of inconsistency could arise.
Where the Operative terms of the two enactments are identical and the enactments, so to speak, run parallel to each other, there would be no scope for the application of the doctrine of implied repeal and that would be so particularly in a case where the earlier ,enactment is one of temporary duration while the later is a permanent enactment, even ignoring the fact that sections 4 to 21 'of the Act of 1949 were not in force during the life of the Act of 1947.
Ultimately, the question would have to be decided on the pro per interpretation of section 2 (d) of the Act 'of 1951 under which the impugned scheme (1) [19S6] I S.C.R. 893 251 was framed and proceedings for acquisition are sought to be taken.
It is clear that besides the areas notified under the Act of 1951 the only other areas contemplated are those which were notified under the Act of 1949 which on any normal and reasonable construction could only include the areas which were the subject of notification under section 3 of the Act of 1949 and not those under the Act of 1947 but which are deemed to be areas notified under the Act of 1949 assuming every submission of the respondent to be correct.
In this view we consider that the appellant is entitled to the relief sought because the acquisition was in respect of a scheme for an area which it was not within the power of the Improvement Trust to frame under section 3 of the Act.
Learned Counsel for the Improvement Trust made a furl her submission that the appellant was precluded from challenging the validity of the scheme by reason of the provisions of section 5 (4) of the Act (already extracted) which imparted a conclusive effect as to the legality of the scheme which had received the approval of the government and had been published under section 5 (3) of the Act.
We are clearly of the opinion that there is no substance in this argument.
The foundation of the jurisdiction of the Improvement Trust to frame a scheme and for the government to approve of the same depends upon the scheme relating to a "damaged area" and if, as we have held, the property now sought to be acquired is within an area which does not fall within the definition of a 'damaged area ' under section 2 (d) of the Act, it follows that there was total lack of jurisdiction on the part of the Improvement Trust or the government to frame a scheme for this area.
The position is not very different from what it would have been if the Act itself bad not been extended to an area in regard to which a scheme 252 has been framed.
The conclusive effect postulated by section 5(4) can only be in regard to the formalities prescribed 'by as. 3, 4 and 5 and does not touch a case where there is complete lack of jurisdiction in the authorities to frame a scheme.
, The result is that the appeal succeeds and there will be a direction that the proceedings for the acquisition of the property belonging to the appellant under the Punjab Development of Damaged Areas Act, 1951 be quashed.
The appellant will be entitled to its costs here.
Appeal allowed.

summary/full:
The Amritsar Improvement Trust framed a scheme under section 3 of the Punjab Development and Damaged Areas Act, 1951, which empowered it to frame a scheme for the development of a damaged area, It passed a resolution to acquire certain property of the appellant for widening a road under the scheme.
The appellant contended that the scheme was without jurisdiction as the area was not a "damaged area" within section 2 (d) of the Act which contemplated only two classes of areas, i. e. (i) areas which may, by notification, under the Act be declared by the Government to be "damaged areas", and (ii) areas already notified under the Punjab Damaged Areas Act, 1949.
The respondents contended that a notification 243 issued under the Punjab Damaged Areas Act, 1947, which declared the entire walled City of Amritsar as a "damaged area" should be deemed to be a declaration" under the 1949 Act because of the operation of section 22 of the Punjab General Clauses Act and was sufficient to sustain the scheme and that the scheme could not be challenged as it had been notified by the State Government and under section 5 (4) of the Act the publication was conclusive evidence that the scheme had been duly framed and sanctioned.
Held, that the scheme was without jurisdiction and that the proceedings for the acquisition of the appellant 's property were illegal.
Admittedly the area had not been declared a "damaged area either under the 1951 Act or under the 1949 Act.
The declaration under the 1947 Act was of no avail, firstly, because there was no basis for the argument that it would be "deemed to be a declaration" under the Act of 1949 and secondly even if it were so deemed the same was not within the definition of damaged area" in the Act of 1951.
The appellant was not precluded by section 5 (4) from challenging the scheme and the acquisition ; since the collusiveness postulated by section 5 (4) was only in respect of the formalities prescribed by sections 3,4 and 5 and did not touch a case where there was complete lack of jurisdiction in the authorities to frame a scheme.


judgement:
Appeal No. 105 of 1952.
Appeal from the Judgment and Decree dated the 16th September, 1949, of the High Court of Judicature at Madras (Subba Rao and Chandra Reddi JJ.) in Appeal No. 162 of 1946 arising out of Judgment and Decree dated the 30th November 1945 of the Court of the Subordinate Judge of Tanjore in Original Suit No. 34 of 1945.
section Ramachandra Iyer, for the appellant.
T. R. Srinivasan, for the respondents.
February 27.
The Judgment of the Court was delivered by MAHAJAN J.
One Thangathammal who was a dasi (dancing girl) lived in the Tanjore district in Madras State and died possessed of some properties.
She left her surviving three daughters, Saraswathi, Jagadambal and Meenambal.
Jagadambal filed the suit out of which 941 this appeal arises against her sisters for partition of the movable and immovable properties set out in the plaint and for allotment of a third share to her therein.
She alleged that her mother was married to one Thyagaraja Pillai, that the properties in suit were the stridhanam properties of her mother who died intestate on 26th July, 1943, and that according to the law or custom of the community to which the parties belonged she and her sisters were entitled to share equally the properties of her mother.
Saraswathi Ammal, the 1st defendant contested the suit.
She pleaded that her mother was not a married woman but a dasi who followed her hereditary occupation and was attached to Shri Saranatha Perumal temple at Tiruchurai in the Tanjore district, that of the three daughters the plaintiff and the 2nd defendant married and lived with their husbands, while she (1st defendant) was duly initiated as a dasi in the said temple and remained unmarried and that according to the law and custom of the community, the mother 's property devolved solely on her to the exclusion of the plaintiff and the 2nd defendant.
The 2nd defendant supported the 1st defendant 's case.
The material issue in the suit was issue No. 1 which was in these terms: " Who is the proper heir of Thangathammal.
Whether according to custom as set tip by the plaintiff, all the daughters are heirs, or according to the custom put forward by the 1st defendant, the unmarried daughters alone are entitled to inherit." The Subordinate Judge dismissed the suit holding that Thangathammal was a dasi and not a married woman, that according to the custom of the dasi community in South India, a dasi daughter is regarded as a nearer heir to the mother than a married daughter and that the 1st defendant was entitled to remain in possession of the suit properties.
Against this decision an appeal was taken to the High Court.
The High Court reversed the decree of the Subordinate Judge and held that the custom pleaded by the 1st defendant 942 was not proved and that the rule of propinquity of Hindu law as a rule of justice, equity and good conscience, governed the succession and the married and dasi daughters were equally entitled to the inheritance.
It was further held that a dasi daughter was not in the status of a maiden or unmarried daughter for purposes of succession to stridhanam property.
Leave to appeal to the Supreme Court was granted under article 133 of the Constitution.
After bearing the learned counsel for the appellant, we feel no hesitation in concurring with the decision of the High Court.
It was contended that the High Court was in error in holding that the custom set up by the defendant was not proved.
To prove the custom that a dasi daughter was a preferential heir and excluded her married sisters reliance was placed on, the evidence of some members of the community and reference was also made to certain instancese same kind of evidence was led by the plaintiff support of her case.
The evidence of both the parties on the the issue of custom is of an unsatisfactory and inconclusive character and from it no inference can be drawn of the existence of a uniform, certain and ancient custom prevailing in the community on this point.
Out of the defendant 's witnesses, the first witness, Rajagopal Pillai, deposed that his wife was the daughter of dasi Kamakshi who had six daughters of whom three were married and three were dasis, that on Kamakshi 's death, her dasi daughters alone would take the inheritance and that his wife, would be excluded.
This statement does not hurt him in any way as his wife will not be bound by what be might state.
His bald assertion about the custom in the community is not of much value.
He does not disclose any source of his information.
In cross examination he admitted that he did not know a single specific instance where such a custom was enforced .
The second witness on the point is the first defendant.
She stated that one Tulasi 's sister Mangalam got no share in her mother Ammani 's properties.
In cross examination it was admitted that Mangalam died about fort years ago, 943 i.e., some time before the defendant was born.
She could therefore have no personal knowledge about Ammani 's instance.
No written record of that inheritance is forthcoming.
Mangalams son Govindaswami Pillai appeared as D. W. 3.
He deposed that Mangalam 's mother Ammani had divided her properties between her dasi daughters in her lifetime.
The instance therefore is not an instance concerning succession and cannot be treated as relevant in this enquiry.
The 1st defendant further deposed to an instance in Srirangam when succession opened out on the death of dasi Chellappa.
It was said that her property was taken by her dasi daughter Visalakshi to the exclusion of her married daughters Marakatham and Rukmini and that the assets were worth a lakh of rupees.
One would have expected some written documents about that sucession if it took place in the manner deposed to.
In the absence of any evidence from the descendants of Chellappa and in the absence of any documentary evidence regarding that succession it is difficult to place any reliance on this so called instance.
Defendant No. I stated that her knowledge of it was only from hearsay, and the requirements of section 32 of the Evidence Act not being fulfilled, her evidence on this point cannot be treated as admissible.
The third witness, about whom reference has already been made, apart from deposing as to Mangalam 's instance also deposed about the instance of dasi Meenakshi.
Her daughter Jeevaratnam is married to the witness.
He said that Meenakshi 's dasi daughters inherited her property and that his wife was excluded.
The only property alleged to belong to Meenakshi was a house, the value of which is not known.
The succession is said to have occurred over twenty years ago.
None of the daughters of Meenakshi have been examined as witnesses in the case, to enable the court to find out the details about it and merely on the statement of this witness the instance cannot be held proved.
The fourth witness for the defendant is her non contesting sister.
She said nothing on the on the question of custom.
She, however, stated 944 that she was not entitled to a share in the assets of her mother.
When asked why she was making that statement, she said that she was saying so because her husband and some.
elders (whose names were.
not disclosed) had told her so.
Evidence of this character on the question of custom cannot be seriously considered.
Venugopal Pillai is the fifth,witness for the defendant.
He is the husband of the second defendant.
His evidence regarding the instance of Chellappa is purely, hearsay.
He deposed that he had learnt that a dasi 's married daughter is not entitled to claim a share as she is not her heir in the presence of a dasi daughter and therfore he told his wife not to claim a share.
He did not disclose the source of his information.
Janaki Ammal, the sixth witness, is a dasi.
She deposed that she has five daughters of whom two are married, one is a dasi and the other two are young girls and that according to their caste custom her properties on her death would devolve on her dasi daughters and that the married daughters must remain content with the presents given at their marriage.
In cross examination she admitted that she was deposing about the caste custom not from any specific instance in which the custom was observed but at the request of the defendant, and that she bad heard of this custom from her elders whose names she did not disclose.
She further admitted that she had an uncle living but she did not even ask him about the custom.
The witness, it appears, knows nothing about the custom and is giving evidence in order to oblige the defendant.
The next witness 'Who gave evidence on the issue is D. W. 8, Kamalathammal, a dasi.
Her mother was also a dasi.
She deposed that her mother 's properties were divided between her and her other dasi sister and Amba, her third sister, who was married, was not given a share.
In cross examination she admitted that Amba never asked for a share.
Neither was Amba produced, nor any written munici pal records showing that the witness actually inherited the property of her mother to the exclusion of Amba.
It is difficult to hold this incident proved merely on the 945 vague testimony of this witness.
Pappathi Ammal, the next witness in the case, is also a dasi.
She deposed that her father 's mother 's property devolved on her two dasi daughters on her death and that there was no married daughter in existence.
This evidence is of a neutral character and is not of much use on the question of custom pleaded in the case.
Apart from asserting that in this community dasi 's property devolves on her death only on the dasi daughters to the exclusion of married daughters, she cited the instance of Chellappa, a dasi of Srirangam.
It was elicited in cross examination that Chellappa left a house and landed properties.
No explanation is forthcoming why documentary evidence of revenue records about this instance has been withheld.
Oral evidences as to instances which can be proved by documentary evidence cannot safely be relied upon to establish custom, when no satisfactory explanation for withholding the best kind of evidence is given.
The last witness in the case is Rajamani Ammal, another dasi who does service in Sri Ranganathaswami temple.
She also referred to the instance of Chellappa.
She said that her jewels which were worth Rs. 1,000 would pass on her death to her dasi daughter.
She went to the length of saying that if a dasi leaves an only child who is a married woman, even then her properties will pass to a next heir such as a cousin and not a married daughter.
This is all the evidence led by the defendant to prove custom.
On this meagre and unsatisfactory material we cannot hold that the custom pleaded is proved.
The opinion evidence is not of a convincing character and evidence as to specific instances in support of the custom is really nil.
Our attention was also drawn to a decision of the Madras High Court in Shanmugathammal vs Gomathi Ammal(l) In that case the plaintiff, a member of the dasi community, claimed to succeed to her deceased maternal aunt and pleaded that the three surviving sisters of the deceased who were impleded as defendants were not entitled to inherit because one of them (1) 122 946 had been adopted by another dancing girl and the other two had become married.
The issue raised in the case was whether the custom set up by the plaintiff that among dancing women married women are excluded by a woman who continues to be ' a dasi is true, valid and enforceable.
Certain dasis gave evidence in support of the custom.
No evidence whatever was given to the contrary and the custom pleaded was held proved in the circumstances of that case.
Emphasis was laid on the circumstance that there was no evi dence whatsoever against the plaintiff and defendants 2 and 3 who denied the existence of the custom in their written statements did not venture to deny it on oath in the witness box.
The dasi community concerned in that case was a small one consisting originally of twenty houses of which only seven or eight were then in existence and in that situation it was said that the custom might well be one that was well recognized and so much a part of the consciousness of the community, that any dispute like the present dispute amongst so small a body of women would be an extremely rare occurrence and therefore impossible of proof and that the plaintiff could not reasonably be expected to search the presidency for witnesses to speak to some similar dispute in other places.
In our opinion, that decision does not furnish a good judicial instance in respect of the custom pleaded in the present case.
There is no evidence that the customs of that small community of dasis are applicable to the community of dasis in the present case which form a considerable community in this district.
Moreover, the case was decided on the peculiar circumstances of that case on very meagre materials and did not lay down any general custom of dasis on this point.
It is unnecessary to examine the plaintiff 's evidence in detail.
Suffice it to say that it is more than sufficient to rebut the evidence led by the defendant and it neutralizes its effect, if any.
In the absence of proof of existence of a custom governing succession the decision of the case has to rest on the rules of justice, equity and good conscience because admittedly no 947 clear text of Hindu law applies to such a case.
The High Court thought that the just rule to apply was one of propinquity to the case, according to which the married and dasi daughters would take the mother 's property in equal shares.
No exception can be taken to this finding given by the High Court.
No other rule was suggested to us leading to a contrary result.
It was argued that the dasis have a distinct status in Hindu society and, that a rule has been evolved by judicial decisions under which the state of degradation by itself furnishes a rule of preference in a competition between dasi daughters and married daughters.
The juidicial decisions referred to concern the community of prostitutes and the rule evolved concerning them has been abrogated by later decisions.
It was contended that though the said rule had been abrogated and was no, longer applicable to that community concerning which it was evolved, it should by analogy be applied to cases of succession to dasis.
Narasanna vs Oangu(1) was the first case cited.
There, an adopted niece of a prostitute dancing girl was preferred to a brother remaining in caste.
It was said that the legal relation between a prostitute dancing girl and her undegraded relations remaining in caste becomes severed and they are therefore not entitled to inherit the estate.
In Subbaratna Mudali vs Balakrishnaswami Naidu(2), the next, case cited, the facts were that a deceased woman Palani inherited the property in dispute from her mother Nagu, who inherited it from her mother Mottai who again inherited it from her father Arunachalam.
Arunachalam had two brothers Ramaswami and Mathurbutham and the question in that case was whether Mathurbutham 's daughter Seethai or Ramaswami 's daughter 's son Marudamuthu Mudali was the heir of Palani.
The learned judges held that Mathurbutham 's daughter was preferential heir to Ramaswami 's daughter 's son.
It was pointed out that the rule of preference based on degradation was no longer good law.
It was, however, (1) I.L.R. (2) 33 M.L.J. 207.
948 added that in cases of dancing girls the law remained as it was before.
Our attention was also drawn to certain observations in Subbaraya Pillai vs Ramaswami Pillai(1) at page 177, and to the decision in Balasundaram vs Kamakshi Ammal(2).
In the former case the learned Judges rejected the broad proposition that Degradation of a woman in consequence of her unchastity entails in the eye of the law cessation of the tie of kindred between her and the members of her natural family and also between her and the members of her husband 's family.
We think that decision on this point is sound in law.
Degradation of a woman does not and cannot sever the ties of blood and succession is more often than not determined by ties of blood than by the moral character of the heir.
In Balasundaram vs Kamakshi Ammal(2) it was held that the property acquired by the mother had been acquired by her as a married woman and notwithstanding her lapse into unchastity, it devolved on her daughters clothed with the ordinary character of property acquired by a Hindu female, that is to say, the daughters took a life estate in it.
The learned counsel attempted to persuade us to hold the custom pleaded proved by the assistance of decisions given in analogous cases and by applying the principles of the rules said to have been, enunciated in some of them.
Those cases were decided on their own facts and in some of them a rule was enunciated that degraded people are a class by themselves and their degraded relations are preferential heirs to the undegraded ones.
As already said, we cannot subscribe to the view that any such rule can be evolved merely on logical grounds.
Its existence can only be justified on the basis of established custom.
No trustworthy evidence has been led in this case to establish that the daughters of a dasi by marriage lose their right of inheritance and form a separate community.
The correct approach to a case where a party seeks to prove a custom is the one pointed out by their Lordships of the (1) I.L.R. (2) 949 Privy Council in Abdul Hussein Khan vs Soma Dero(1).
It was there said that it is incumbent on a party setting up a custom to allege and prove the custom on which he relies and it is not any theory of custom or deductions from other customs which can be made a rule of decision but only any custom applicable to the parties concerned that can be the rule of decision in a particular case.
It is well settled that custom cannot be extended by analogy.
It must be estabished inductively, not deductively and it cannot be established by a priori methods.
Theory and custom are antitheses, custom cannot be a matter of mere theory but must always be a matter of fact and one custom cannot be deduced from another.
A community living in one particular district may have evolved a particular custom but from that it does not follow that the community living in another district is necessarily following the same custom.
The last point taken by the learned counsel was that under Hindu law the 1st defendant as a maiden was entitled to preference over her married sisters.
Defendant No. I was admittedly married to the idol and she has been on her own show.
living a life of prostitution.
The text of the Mitakshara dealing with the case of a virgin can.
not be applied to her case.
[Vide Tara vs Krishna(1)].
It is inconceivable that when the sages laid down the principle of preference concerning unmarried daughters they would have intended to include a prostitute within the ambit of that text.
For the reasons given above we see no force in this appeal and it is dismissed with costs.
Appeal dismissed, Agent for appellant: section Subramaniam.
Agent for respondent No. I : M. section K. Aiyangar.

summary/full:
The evidence on record did not establish the custom which had been pleaded, namely that among the community of dasis 940 (dancing girls) in South India a dasi daughter succeeded to her mother in preference to the married daughters; and in the absence of such custom, succession to a dasi must be governed by the rule of propinquity of Hindu law as a rule of justice, equity and good conscience and dasi daughters and married daughters would succeed to their mother 's property in equal shares.
A rule that degraded relations are preferential heirs to undegraded ones cannot be evolved merely on logical grounds the existence of such a rule can only be justified on the basis of established custom.
Custom cannot be extended by analogy.
It must be establish ed inductively, not deductively, and it cannot be established by a priori methods.
It cannot be a matter of mere theory but must always be a matter of fact and one custom cannot be deduced from another.
Shanmugathammal vs Gomathi Ammal , distin guished.
Narasanna vs Gangu (I.L.R. , Subbaratna Madali vs Balakrishna Naidu (33 M.L.J. 207), Subbaraya Pillai vs Ramaswami Pillai (I.L.R. , Balasundaram V. Kamakshi Ammal , and Abdul Husein Khan vs Soma Dero (I.L.R. P.C.) referred to.
The rule of Hindu law by which a maiden is a preferential heir to her married sisters does not apply to daughters who are admittedly married to an idol and lead a life of prostitution.
Tara vs Krishna (I.L.R. referred to.


judgement:
Appeal No. 455/59.
Appeal by special leave from the judgment and order dated January 16, 1956, of the former 429 Nagpur High Court, in Misc.
Petition No. 448 of 1954.
N. section Bindra and D. Gupta, for the appellants.
Purshottam Trikamdas, G. J. Ghate and Naunit Lal, for the respondents.
April 6.
The Judgment of the Court was delivered by MUDHOLKAR, J.
The respondent was a proprietor of mauza Bhivapur, Tehsil Umerer, District Nagpur.
His proprietary interest in the village was abolished by the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (M.P. 1 of 1951).
By virtue of section 4 of the Act, ill rights, titles and interests, among others, in all pathways, village sites, hats, bazars and melas in Bhivapur vested in the State of Madhya Pradesh for the purposes of the State free from all encumbrances under section 4(1)(a) of the Act.
Under the provisions of the those rights vested in the State of Bombay and now by virtue of Bombay Re Organisation Act, 1960 (11 of 1960) in the State of Maharashtra.
The provisions of section 4(1)(a) are as follows: " All rights, title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land (cultivable or barren) grass land, scrub jungle, forest, trees, fisheries, wells, tanks, ponds, waterchannels, ferries, pathways, village sites, hats, bazars and melas;. . shall cease and be vested in the State for purposes of the State free of all encumbrances; and the mortgage debt or charge or any proprietary right shall be a charge on the amount of compensation payable for such proprietary right to the proprietor under the provisions (if this Act" 430 After the Act came into operation proceedings for compensation in respect of the village Bhivapur were started in the court of the Compensation Officer, Umrer, in Revenue case No. 583/1 A 4/1950 51 decided on January 19, 1952.
The Compensation Officer held that 0.
14 acres of land out of Khasra No. 61/1 which is recorded in the village papers as abadi wherein a bazar is held, should be settled with the respondent under section 5(a).
On a portion of the land which was used for bazar, ottas and chabutras, with or without sheds, and separated by passages, exist.
It is common ground that they belong to the respondent.
It is also common ground that the land covered by ottas and chabutras on which sheds have been constructed were ordered to be settled on the respondent in the revenue case referred to above.
The respondent 's contention, however, was that not only the sheds and the land on which those sheds were erected but also the open uncovered ottas and chabutras should also have been settled with him by virtue of the provisions of section 5(a) of the Act along with the land appurtenant to those structures.
The total area of this land, according to him, is 2.85 acres.
The respondent, therefore, preferred an appeal against the order of the Compensation Officer which directed settling only 0.14 acres of land on him.
That appeal was.
however, dismissed by the Additional Commissioner of Land Reforms and Additional Commissioner of Settlement, Madhya Pradesh, on March 28, 1952.
The respondent thereafter was asked to remove his ottas and chabutras.
Even so, the matter of settling land covered.
by ottas and chabutras on the expropriators was being considered by Government.
On May 16, 1952, a press note was issued by the Directorate of Information and Publicity, Government, of Madhya Pradesh the material portion of which runs thus: "The Government consider that the option 431 given to expropriators to remove the material etc., might cause hardship to them in such cases.
Government have, therefore, decided on the following lines of action in such matters: (i) where the ottas and chabutras were, constructed in brick and stone, they should be allowed to remain with the exproprietors and the land thereunder should be settled with them under section 5(a) of the Madhya Pradesh Abolition of Proprietary Rights Act, 1950 (1 of 1951) on terms and conditions determined by the Government; and (ii) where the ottas and chabutras are in mud, the land Under them should be deemed to have vested in the State Government.
But after this press note was issued the Government, apparently on the advice of its law officers, issued instructions to the Deputy Commissioners on June 22, 1954, to give one month 's notice all ex proprietors to remove the materials, clear the site of ottas and chabutras other than those on which there were sheds.
In pursuance of this, a notice was issued to the respondent on July 13, 1954.
Feeling aggrieved by this, the respondent preferred a petition under article 226 of the Constitution before the High Court of Nagpur for issue of a writ of mandamus or certiorari or other appropriate to writ to quash the orders passed by the Commpensation Officer and the appellate authority as well as the order of the State Government of Madhya Pradesh dated June 22, 1954, and the notice issued in pursuance thereto on July 13, 1954.
The High Court allowed the petition and set aside the impugned orders and directed the State Government to settle the on tire area of Khasra No. 61 /1 of Bhivapur 432 with the respondent on such terms and conditions as may be determined by it.
It may be mentioned that the entire area of Khasra No. 61/1 is 12.85 acres or so.
The State of Madhya Pradesh sought a certificate from the High Court under article 133(1)(c) of the Constitution.
But the certificate was not granted.
Thereupon a special leave petition was made before this Court under article 136 of the Constitution.
Leave was granted by this Court by its order dated March 18, 1957.
That is how the appeal has come up before us.
It may be mentioned that the High Court granted the petition of the respondent on the view that ottas and chabutras etc.
, are buildings within the meaning of section 5(a) of the Act and that consequently the State Government was bound to settle the land covered by them with ex proprietors along with land appurtenant to those structures.
In the application made before the High Court for grant of certificate, the following three grounds were raised: "5.
For that the total market area as claimed by the non applicant being only 2.85 the entire abadi area of 12.85 acres in Khasra No. 61/1 could not be granted and settled with the ex proprietor.
For that the ottas and chabutras in the bazar area could not be held to be buildings contemplated under section 5(1)(a) read with section 4 (1) (a) of the Act 1 of 1941 and could not be settled with the ex proprietor under the law.
For that the buildings envisaged in the provisions 5(1)(a) are those buildings which are situated in the abadi and not those stand ing in bazars even though the bazar may also be located in the abadi and that ottas and chabutras etc., in the bazar being an integral part thereof are clearly different from those other 433 buildings used for agricultural or domestic purposes.
" It would, however, appear from para.
2 of the order of the High Court refusing certificate that the learned Advocate General for "the State did not challenge the correctness of the meaning given by the High Court to the word "buildings" in section 5(a) of the Act.
But the contention he pressed was that the words "ottas and chabutras" must be restricted to structures standing on the abadi of the village excluding that on which bazar was held, which under section 4(1)(a) vests in the State.
Before us however, Mr. Bindra reiterated the contention which was originally pressed in the High Court that ottas and chabutras cannot be regarded as buildings within the meaning of that word in section 5(a) of the Act.
According to him the concession made by the learned Advocate General was on a question of law and the State is entitled to withdraw that concession.
In our opinion the question whether ottas and chabutras fall within the term " 'buildings" is not purely one of law and the State is not entitled to withdraw that concession.
It would also appear from grounds 5 and 6 in the special leave petition that what was really sought to be urged before this Court was the contention actually pressed by the learned Advocate General in support of the application for grant of certificate.
All the same we allowed Mr. Bindra to urge the contention that ottas and chabutras are not included in the term "buildings" in section 5(a) of the Act.
The relevant portion of section 5(a) of the Act reads thus: "Subject to the provisions in sections 47 and 63 all open enclosures used for agricultural of domestic purposes and in continuous possession for twelve years immediately before 1948 49; all open house sites purchased for 434 consideration; all buildings;. . . within the limits of a village site belonging to or held by the out going proprietor or any other person, shall continue to belong to or be held by such proprietor or other person as the case may be; and the land thereof with the areas appurtenant thereto shall be settled with him by the State Government on such terms and conditions as it may determine;" "Village site" means the abadi in an estate or a mahal.
Section 5(a) is an exception to section 4(1)(a) of the Act.
No. doubt, section 4(1)(a) provides for the vesting in the State of the land on which bazar is held.
But reading that section along with section 5(a) it is clear that where any buildings belonging to the proprietor exist on any portion of the abadi land that land, together with the land appurtenant to those buildings, bad to be settled with the ex proprietor.
Land on which the bazar is held is part of the village abadi land and, therefore, all buildings standing on such land would fall within section 5(a) of the Act and would have to be settled with the ex proprietor.
The only question, therefore, is whether ottas and chabutras can be regarded as buildings.
A perusal of that provision would show that where the ex proprietor has spent money on constructing something within the limits of the village sites, that thing had to be settled with him.
The word "buildings" should, therefore, be given its literal meaning as something which is built.
Mr. Bindra 's contention, however, is that for a structure to be regarded as a building, it should have walls and a roof and in support of this contention lie relied upon the decision in Moir vs Williams (1) In that case Lord Esher has observed that the term building generally means all (1) 435 enclosures of brick and stone covered by a roof.
But he has also made it clear that the meaning to be given to that word must depend upon the enactment in which the word is used and the context in which it is used.
There, what was being considered was the provisions of the Metropolitan Buildings Act, 1855 (10 & 19 Vict.
c. 122) which dealt with residential houses.
He also relied upon the decision in Morrison vs Commissioners of Inland Revenne (1).
That was a case under the Finance (10 Miw.
7 c. 8).
The observations on which he relied are as follows: " It is quite clear that the expression 'buildings ' does not mean everything that can by any means be described as built: it means buildings in a more narrow sense than struct ures, because there are other structures of a limited class which under the terms of the sub section may also be taken into considera tion.
" Far from these observations helping him they clearly show that the natural or ordinary meaning to be given to the word "Buildings", is something which has been built.
That meaning would be modified if the provisions of law justify giving some other meaning.
Finally he relied upon the decision in Samuel Small vs Parkway Auto Supplies (2).
The observations relied on by him are as follows: "The word 'building ' in its ordinary sense denotes 'a structure or edifice including a. space within its walls and usually covered with a roof, such as a house, a church, a shop, a barn or a shed. ' The word 'building ' cannot be held to include every Species of erection on land, such as fences, gates or other like structures.
Taken (1) (1915) I K. B. 176 at 722.
(2) 49 A.I.R. 1361 at 1363.
436 in its broadest sense, it can mean only an erection intended for use and occupation as a habitation or for some purpose of trade, manufacture, ornament or use, constituting a fabric or edifice, such as a house, a store, a church, a shed. .
These observations must Be considered in the context of the Act which was being construed and in the context in which they were made.
There the Court bad to consider whether erection of gasoline pumps and construction of under ground gasoline tanks and pits with concrete sides sunken in the ground are within a restrictive covenant that no building of any kind shall be erected or maintained within a certain distance of a street.
In the particular context buildings had, according to the Court, to be given its popular meaning.
That case, therefore, does not assist the appellants.
In our opinion the High Court was quite right in holding that even uncovered ottas and chabutras fall within the term "building" as used in section 5(a) of the Act and, therefore, along with the land appurtenant to them they must be settled with the respondent.
Mr. Bindra pointed out that the High Court was in error in asking the Government to settle the whole of Khasra No.61/1 on the respondent because whereas its area is 12.85 acres, the land covered by the structures, including the appurtenant land, does not measure more than 2.85 acres.
Mr. Purushottam Trikamdas, learned counsel for the respondent readily conceded this fact and said that the High Court has committed an error through an oversight and that all that the respondent wants is 2.85 acres of land and nothing more.
Mr. Bindra then said that it would not be proper to give a direction to the Government to settle any particular area of the land and it should be left to the revenue authorities 437 to determine the precise area covered by the structures and the passages separating these various structures.
We agree with him.
It would be sufficient to direct the Government to settle with the respondent the whole of the land covered by the structures as well as land appurtenant to those structures from out of Khasra No. 61/1.
What the area of that land would be is a matter to be determined during the settlement proceedings.
With this modification we dismiss the appeal with costs.
Appeal dismissed.

summary/full:
The proprietary interest of the respondent in his village was abolished by the M. P. Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, and all rights, title and interest were vested in the State by section 4.
Section 5(a) of the Act provide that where any "buildings" belonging to the proprietor exist on any portion of the abadi land, that land together with the land appurtenant to those buildings shall be settled with the ex proprietor.
Land covered by ottas and chabutras on which sheds had been constructed was settled with the respondent but not the land on which open uncovered ottas and chabutras existed.
Held, that the respondent was entitled under section 5(a) of the Act to have the land on which uncovered ottas an chabutras existed, as also the land appurtenant thereto, settled with him.
Uncovered ottas and chabutras fell within the term "buildings" as used in section 5(a).
The provisions showed that where the proprietor had spent money on constructing something on an abadi site within the limits of the village sites, that site had to be settled with him.
Accordingly the word "buildings" has to be given its literal meaning as something which is built.
Moir vs Williams, , Morrison vs Commissioners of Inland Revenue, and Samuel Small vs Parkway Auto Supplies, , distinguished.