judgement:
Appeal No. 1128 of 1967.
20 1 S.C. India/71 306 Appeal from the judgment and order dated September 1, 1964 of the Andhra Pradesh High Court in Writ Petition No.907 of 1963.
L. M. Singhvi and S.P. Nayar, for the appellant The respondent did not appear.
The Judgment of the Court was delivered by Dua, J.
The appellant in this appeal by certificate granted by the Andhra Pradesh High ' Court oft February 25, 1965 under article 133 (1) (b) of the Constitution is the Regional Provident Fund Commissioner, Andhra Pradesh.
A large number, of writ petitions.
by various parties were filed in the High Court praying for writs in the nature of mandamus directing the.
appellant to forbear from enforcing or taking other proceeding under the provisions of the Employees ' Provident Funds Act, 1957 (hereinafter called the Act) and, provident Fund Scheme, ' 1952.
With 'the exception of perhaps one writ petition, all the rest, including W. P. 907 of 1963 presented by T. section Hariharn, Proprietor, New Cochin Cafe, Ongole, respondent in; this Court were dismissed.
Certificates under Article.
133 (i) (b) of the Constitution were secured by the appellant in almost all the cases but.
the present is the only appeal which now survives, all the rest having been dismissed for non prosecution.
The writ, petition of the respondent was dismissed which means that the final order made by the High, Court was in favour of the appellant.
The only grievance raised by the appellant 's learned counsel in this court was that the High Court bad in the course of its judgment expressed the view that Clause (a),and (b)of sub section (3) of Section I of the Act do not cover casual labour and since this expression of opinion which he considers to be legally erroneous would be binding on the appellant in administering the Act, it was necessary to have the correct legal position enunciated by this Court.
According to the appellant 's learned counsel the following passages in the judgment of the High Court clearly bring out the arguments both for and against the legal position canvassed by him: "We have next reconsider whether clauses (a) and (b) of Section 1(3) are wide enough to cover casual labour.the work of an establishment even for a day or a fraction thereof.
This argument is sought to be reinforced; by the unreported judgment of a Division Bench of the Madras High It is maintained by the learned Government Pleader that` requirement as to the numerical strength is satisfied is twenty persons are engaged in connection with 307 308 The other passage occurs a little lower down in that judgment "Section 19 A also seems to strengthen our view.
A doubt as to the number of persons employed in an establishment could arise only if the employment of twenty persons in the establishment were a normal feature.
A legitimate doubt cannot, be said to arise if the condition as to the number is satisfied if twenty persons work in the establishment even for a day or two.
It is not necessary for us to labour this point any further as we feel that the provisions of the Act are inapplicable to establishments which do not employ twenty or more persons,to work therein for a period of one year.
It follows that 'casual labour ' falls outside the scope of section 1(3).
The fact that the casual labour is engaged by.
or, through a contractor does not make any different for the decision of the question, the only criterion being whether they were casual laborers or not.
On this discussion, it follows that the establishments whose employees do not, come upto twenty,, excluding casual laborers do not fall within the purview 'of Section 1(3) and so the, provisions of the Scheme cannot be applied to them.
The respondents will.
therefore, examine this question in the light of these decide whether the Scheme should be applied these establishments excluding casual labour.
" The appellant 's learned counsel had at one stage of his arguments stated that his client was anxious merely to steer clear of the observations made by the High Court that "the provisions of the Act are inapplicable to establishments which do not employ 20 or more persons to work therein for a period of one year." But while citing certain decided cases he did appear to canvas for the wide proposition that employment of a person for however short a period would be employment for the purpose of determining the number of persons,employed as contemplated by Section 1 (3) (a) and (b) of the Act.
He relied on the Bench decision of the Madras High Court reported Messrs East. ,India Industries (Madras) vs Regional P. F: Commissioner(1) (this decision was also cited in the High Court as an unreported judgment) and pressed us to uphold the reasoning adopted therein.
The question requiring our determination is a very short one.
As there is no representation on behalf of the respondent in this Court and, therefore, we do not have the benefit of the respondent 's point of 'view we propose to confine ourselves strictly to the (1) 309 limited question of the scope of clauses (a) and (b) of sub section (3) of Section I and this judgment is not intended to be considered as expressing any opinion on other controversial aspects.
Before considering the relevant provisions of the Act it may be pointed out that according to the respondent 's writ petition presented in the High Court in August, 1963, the New Cochin Cafe (treated as a hotel) was started in Ongole town on November 20, 1956 and the respondent usually employed only 18 or 19 persons.
In 1961 there was total failure of rains,in the Ongole region and that town was particularly hard hit.
The respondent had, to employ two or three persons on contract basis.
for supplying water to the hotel.
Those persons were engaged from June to September, 1961.
The appellant has not questioned the correctness of these assertions for the purpose of this appeal.
Let us now examine the relevant provisions of the Act.
The Act was brought on 'the statute book for providing for the institution of provident fund for the employees in factories and other 'establishments.
The basic purpose of providing for provident funds appears to be to make provision for the future of the industrial worker after his retirement or for his dependants in case of his early death.
To achieve this ultimate object the Act is designed to cultivate among the workers a spirit of saving something regularly, and also to encourage stabilisation of a steady labour force in the industrial centres.
This Act has since its initial enactment been amended several times to extend its scope for the benefit of industrial workers.
We are, however, concerned with the Act as it stood in 1962 when notice was sent by the appellant to the respondent stating that the provisions of the Act had been made applicable to his establishment.
Sections 1 (3) (a) and (b), 4 and 5 may now be reproduced "Section 1 (3) Subject to the provisions contained in section 16, it applies.
(a) to every establishment which is a factory engaged in any industry specified in Schedule 1 and in which twenty or mom persons are employed, and (b) to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in this behalf Provided that the Central Government may, after giving not less than two months ' notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any 310 establishment employing such number of persons less than fifty as may be specified in the notification.
Sub Section 4 "Notwithstanding anything contained in sub section (3) of this section or subsection(1) of section 16, where it appears to the Central Government , whether on an application; made to it in this behalf or otherwise, that the employer and the majority of employees in relation to any establishment have agreed that the provisions of this Act should be made applicable to the establishment it may by notification in the Official Gazette, apply the provisions of this Act to that establishment." Sub Section 5 "An establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below twenty Provided that where, for a continuous period of not less than one year the number of persons employed therein has been less than, fifteen the employer in relation to such establishment may cease to give effect to the provisions of this Act and any scheme framed thereunder, with effect from the beginning of the month following the expiry of the said period of one year, but he shall, within one month, of the date, of such cessation, intimate, by.
registered post, the.
fact thereof to such authority, as may be specified by appropriate Government in this behalf.
" The original Act was applicable to establishments which were factories engaged in the six industries specified in Schedule 1 but as a result of persistent demands for extension of provident fund benefits to all industrial workers, the Act was amended ' in 1956 by Act 94 of 1950 so as to enable its extension ,to other establishments as well.
.,Earlier, it may be pointed out, it was amended in 1953.
It is unnecessary to give the details of the various amendments.
We now turn to the relevant definition clauses contained in Section 2.
These definitions are subject to the context providing otherwise.
In Clause (f) "employee is, defined to mean any person who is employed for wages in any kind of work manual or otherwise in or in connection with the work.
of an establishment and who gets his wages directly or indirectly from the employer and includes any person employed by, or through a contractor in or in connection with the work of the establishment.
Clause 311 (h) defines "Fund" to mean the provident fund established under a Scheme. ' "Member" is defined in Clause (j) to mean a member of the Fund and "Scheme" is defined in Clause (1) to mean a scheme framed under the Act.
Section 5 provides for the framing of a scheme called the Employees ' Provident Fund Scheme by the Central Government.
Section 6 makes provi sion for contribution by the employer and the employee to the Fund.
Section 14 provides penalties for evasion of payments under the Act or the Scheme.
Section 16 Which excludes from the applicability of the Act establishments belonging to Government or local authority and also infant factories, reads "16.
Act not to apply to establishments belonging to Government or local authority and also to infant industries This Act shall not apply (a) to any establishment registered under the , or under any other law for the time being in force in any State relating to cooperative societies employing less than fifty persons and Working without the aid of powers; or (b) to any other establishment employing fifty or more persons or twenty or more, but less than fifty persons until the expiry of three years in the case of the former and five years in the case of the latter, from the date on which the establishment is, or has been, set up.
Explanation.
For the removal of, doubts, it is hereby declared that an establishment shall not be deemed to be newly set up merely by reason of a change in its location.
(2)If the Central Government is of opinion that having regard to, the financial position of any class of establishment or other circumstances of the case, it is necessary or expedient so to do, it may, by notification in the Official Gazette, and subject to such conditions as may be specified in the notification, exempt that class of estab lishments from the operation of this Act for such period as may be specified in the notification.
" Section 17 invests in the appropriate Government power to exempt certain establishments from the operation of all or any of the provisions of any scheme.
Section 19 A vests in the Central Government power to remove difficulties by making necessary provision or giving directions not inconsistent :with the provisions of 312 the Act.
The order of the Central Government made under Section 19 A for removing doubts and difficulties is clothed with finality.
The narrow question which directly arises for our conside ration is whether Clause (b) of sub section (3) of Section 1 when it speaks of the establishment employing 20 or more persons means that the person so employed may be employed by the establishment for any purpose whatsoever and for however short a duration or that the employment must be for some minimum period in the establishment.
The language used in the clause does not give any clear indication.
, We have, therefore, to construe this word in the light of the legislative, scheme, the object and purpose of enacting this clause and the ultimate effect of adopting one or the other construction.
The relevant sections of the statute have already been reproduced.
Section 16 which has already been get out in extenso seems to us to throw considerable light on the point raised.
, it may be recalled that this section excludes from the applicability of the Act establishments belonging to the Government and to local authorities and infant establishments.
It is, therefore, obvious that this Act is intended to apply only where ;in establishment has attained sufficient financial stability and is prosperous enough to be able to afford regular contribution provided by the Act.
Contribution by the employer is an essential part of the statutory scheme for effectuating the object of inducing the workmen to save something regularly.
The establishment, therefore, must possess stable financial capacity to bear the burden of regular contribution to the Fund under the Act.
In this connection it may be recalled that by virtue of Section 1 (5) an establishment to which the Act is applied continues to be governed by the Act notwithstanding that the number of persons employed by it 'at any time falls below the required number.
This liability to be governed by the Act ceases only if the terms of the Proviso to Section 1(5) are complied with.
The financial capacity of the establishment to bear the burden must, therefore, have, some semblance of a reasonably long term stability.
In other words, the employment of requisite number of persons must be dictated by the normal regular requirement of the establishment reflecting its financial capacity and stability.
It, therefore, follows from this that the number of persons to be considered to have been employed by an establishment for the purpose of this Act has to be determined by taking into account the general requirements of the establishment for its regular work which should also have a commercial noxus with its general financial capacity and stability.
This seems to us to be the correct approach under the statutory scheme. 313 To accede to the appellant 's argument would lead to some Startling consequences.
By way of illustration, if for the purpose of extinguishing accidental fire an establishment is compelled to employ a few persons for about a couple of hours, even then, however weak and unstable its general financial capacity, the establishment would be covered by the Act and would have to contribute towards the 'provident fund for the benefit of its regular ,employees, of course, excluding those whose services were utilised for a short while for extinguishing the fire.
In this illustration we are assuming that the employees would have no objection to being governed by the Act.
This, in our opinion, could never have been the intention of the legislature.
Similarly, we find it difficult to impute to the legislature an intention to exclude from the application of the Act an establishment which regularly employs for its general business the required number of persons for a major part of the year, say, for 360 days every year, merely because the ;employment of the required number does not extend to full one year.
Both the extreme views, the one canvassed on behalf of the appellant and the other postulated in the observation of the High Court that the required number of persons must continuously work in the establishment for one year, do not conform to the ,scheme and object of the Act and are, therefore, unacceptable.
Considering the language of Section 1 (3) (b) in the light of the foregoing discussion it appears to us that employment of a few persons on account of some emergency or for a very short period necessitated by some abnormal contingency which is not a regular feature of the business of the establishment and which does not reflect its business prosperity or its financial capacity and stability from which it can reasonably be concluded that the establishment can in the normal way bear the burden of contribution to wards the provident fund under the Act would not be covered by this definition.
The word "employment" must, therefore, be construed as employment in the regular course of business of the ,establishment; such employment obviously would not include employment of a few persons for a short period on account of some passing necessity or some temporary emergency beyond the control of the company.
This must necessarily require determination of the question in each case on its own peculiar facts.
The approach pointed out by us must be kept in view when determining the ,question of employment in a given case.
The appellant 's learned counsel argued that in the present case ,the respondent has to employ a few persons every year regularly from June to September for supplying water to the hotel because ,of failure of rains.
This, according to him, would be a regular ,employment and the High Court was wrong in holding to the contrary.
There is no finding of the High Court to this effect and 314 indeed no attempt was made before also to substantiate this bald assertion We are, therefore, unable to accept this contention on, the present., record.
The general approach of the High Court to the problem raised in this case seems.to us to be, broadly speaking, correct; so is its final conclusion.
,The only observation of the High 'Court which required consideration is that the sub section in question contemplates the required number of per .
sons to work in the establishment continuously for one year.
On this point we have clarified the legal position.
As the High Court has dismissed the writ petition after clarifying the points of law raised leaving it to the appropriate authority to finally decide the controversy on a consideration of all the facts and circumstances we do not propose to say anything more in this appeal which has, been heard ex parte.
, With the aforesaid clarification of the legal.
position we.
dismiss this appeal.
As there is no representation.
on behalf of the respondent there will be no order as to costs.

summary/full:
The respondent ran a hotel.
Due to failure of water supply he had to employ some persons to bring water from the tank for a short period.
Provident Fund Commissioner sought to enforce the provisions of the Employees ' Provident Funds Act, 1957, and the Provident Fund Scheme, 1952, against him.
The respondent thereupon filed a writ petition in the High Court.
It was held by the High Court that employment of more than twenty persons for a short period did not bring an establishment within the proviso of section 1(3) (a) & (b) of the Act.
II It was also held, that only those employees should be taken into consideration who were in employment for the full period of one year.
While, thus laying down the legal position the High Court left it to the authorities Under the Act to apply the law to.
the facts of each case and dismissed the respondents petition.
The Provident Fund Commissioner appealed to this Court for further clarifica tion.
HELD:Considering the language of section 1(3)(b) in the light of the provisionsof s: 16 and section 1(5) as *OIL as the general scheme and object of the Act itwould appear, that employment of a few persons on account of some: emergency or for a every short period necessitated by some abnormal contingency which is not, a regular feature of the business ' of the establishment and which does not reflect its business prosperity or its financial capacity or stability from which it can reasonably be concluded that the establishment can in the normal way bear the burden of the contribution towards the provident fund under the Act, would not be covered by the definition.
The word 'employment ' must therefore.
be construed as employment in the regular course of business of the establishment, such employment obviously would not include employment of a few persons for a short period on account of some passing necessity or some temporary emer gency beyond the control of the company.
The High Court was right in holding so.
But it went wrong, in holding that the section contemplated the required number of persons to Work in the establishment continuously for one year.
It was difficult to impute to the Legislature an intention to exclude from the application of, them Act an establishment which regularly employs for its general business the required number, of persons for a major part of the year say for.
360 days every year ' the employment of the required number does not extent merely because to full one year Therefore the question must be determined in each case on its own peculiar facts.
[313C G]


judgement:
Appeal No. 1942 of 1966.
Appeal from the Judgment and decree dated April 23, 1963 of the Patna High Court in First Appeal No. 420 of 1955.
Sarjoo Prasad and R. C. Prasad, for the appellant.
U. P. Singh, for respondent No. 8.
300 The Judgment of the Court was delivered by Grover, J.
This is an appeal by certificate from a decree of the Patna High Court in a suit instituted by the appellant against the State of Bihar which was impleaded as defendant No. 1, the other defendants being the Jagdishpur Zamindari Co. Ltd. (defendant No. 2) and some of its directors defendants 3 to 5.
According to the allegations in the plaint one of the methods of making advances followed by the plaintiff Bank was that the constituents pledged their merchandise on a cash credit system with the Bank and took advances on the pledged goods.
The Bank held the goods as security for the advances made and , 'be constituents either provided the Bank with godown or the Bank kept the pledged goods in godowns of its own and charged rents from the constituents.
The defendant No. 2 entered into a cash credit system agreement with the plaintiff 's Arrah Branch, the arrangement being that the sugar would be pledged under the cash credit system.
On December 16, 1946 the advance made to defendant No. 2 stood at Rs. 3,20,486 2 0 and the Bank held 6239 bags of different varieties of sugar as security.
These bags were kept in godowns provided by defendant No. 2.
The key of the lock of each godown was in the custody of the Bank.
It was alleged that in December 1949 under cover of an illegal seizure order issued by defendant No. 1 the Rationing Officer and the District Magistrate, Patna, got the locks of the godown broken open and forcibly and illegally removed 1818 bags of 27D quality of sugar.
They total quantity removed weighed about 5,000 maunds.
No payment was made to the plaintiff Bank which held the bags of sugar as pledgee under the cash credit agreement.
It is unnecessary to refer to other facts stated in the plaint except to mention that according to the plaintiff it was entitled to recover the sugar which had been seized illegally or to recover the price of that sugar as per schedule 2 of the plaint which the plaintiff would have got if the quantity of sugar which had been seized had been sold in the market on the material day.
The plaintiff prayed for a decree for the return of 1818 bags of 27D quality sugar and, alternatively for re covery of Rs. 1,81,700 9 3 with interest by way of damages for illegal removal and detention of sugar or.
price thereof.
Alternatively a decree for Rs. 93,910 10 9 was claimed against defendant No. 2 and the other defendants.
The suit was resisted by defendant No. 1 on the ground that the seizure had been effected pursuant to lawful orders which had been made and that the sale proceeds of about 5000 mds. of sugar were included in the sum of Rs. 1,50,039 10 9 which was deposited in the treasury but which was later on attached under the orders of Certificate Officer, Patna, under the Public Demands 301 Recovery Act on account of arrears of sugar cess amounting to Rs. 2 lakhs due from the Bhita Sugar Factory with which defendant No. 2 had entered into an arrangement pursuant to which the entire quantity of sugar including 5000 maunds which had been seized had come into possession of defendant No. 2.
The other defendant also resisted the suit on various grounds.
A number of issues were framed on the pleadings of the parties.
We may only mention issue No. 6(a) which will be material for determination of the points which we have been called upon to decide "Was the sugar seized by the government in possession of the Bank as a pledgee at the time of the seizure and have the rights of the Bank as such pledgee been determined by the seizure in question?" The trial court held that the order of seizure in respect of the stock of sugar was valid.
It was further held that the plaintiff 's right as a pledgee could not be extinguished by seizure of the sugar in its possession and though the attachment order of the Certificate Officer was legal and binding on defendant No. 2 it was not binding on the Bank (plaintiff) and it could be effective only in respect of that portion of the price which was not necessary for the liquidation of the dues of the plaintiff from defendant No. 2.
A decree was passed in favour of the plaintiff against defendant No. 1 only for Rs. 93,910 10 9 with interest at 6% per annum from the date of the suit till realisation.
Defendant No. 1 (State of Bihar) filed an appeal to the High Court.
The High Court was of the view that in the presence of the finding that the plaintiff had not been wrongfully deprived of the sugar on account of the lawful seizure or its price owing to the certificate proceedings started by the Cane Commissioner the plaintiff was not entitled to any decree against the State.
But it was entitled to a decree against defendant No. 2 and the other defendants.
Consequently a decree against defendant No. 1 was set aside and instead of decree was granted against the other defendants.
Now it is common ground that the plaintiff (which is the appellant before us) held the sugar which was seized from its custody as security for payment of the debts or advances made to defendant No. 2 in its cash credit account.
There were arrears of certain cess due from defendant No. 2.
As stated before, the Cane Commissioner took proceedings under the Public Demands Recovery Act and attached the price of the sugar which had been deposited by the appropriate authorities in the Government Treasury instead of being paid to the plaintiff.
The Cane Commissioner indisputably did not have any right of priority over the other creditors of defendant No. 2 and, in particular, the secured creditors.
Section 172 of the Contract Act defines a pledge to mean the bailment of goods as security for payment of debt or 302 performance of a promise.
The bailor is called the "pawnor" and the bailee is called the "pawnee".
Section 173 of that Act provides that the pawnee may retain the goods pledged not only for the payment of the debt or performance of the promise but also for the interest of the debt etc.
Section 176 is in the following terms : "If the pawnor makes default in payment of the debt, or performance, at the stipulated time of the promise, in respect of which the goods were pledged, the pawnee may bring a suit against the pawner upon the debt or promise, and retain the goods pledged as a collateral security ; or he may sell the thing pledged, on giving the pawnor reasonable notice of the sale.
" If the proceeds of such sale are less than the amount due in respect of the debt or promise, the pawnor is still liable to pay the balance.
If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawnor.
" Section 180 is to the effect that if a third person wrongfully deprives the bailee of the use of the possession of the goods bailed or does him any injury the bailee is entitled to use such remedies as the owner might have used in the like case if no bailment had been made and either the bailor or the bailee may bring a suit against a third person for such deprivation or injury.
According to Section 181 whatever is obtained by way of relief or compensation in any such suit shall, as between the bailor and bailee.
be dealt with according to their respective interests.
Relying on the above two sections the High Court came to the conclusion that a pawnee has merely the possession of the goods coupled with a power to sell them on default by the pawnor but the latter retains the ownership subject to a lien to the extent of the debt enforceable by exercise of the power of sale.
In the present case the sugar had been seized and then sold.
The sale proceeds would have been available to defendants 2 to 5 subject to the claim of the plaintiff against them but it ceased to have any lien on the pledged property or the sale proceeds against any third party including the State as soon as it was legally deprived of the possession of the pledged goods.
According to the Statement in Halsbury 's Laws of England "Pawn" has been described as a security where by contract a deposit of goods is made a security for a debt and the right to the property vests in the pledgee so far as is necessary to secure the debt; in this sense it is intermediate between a simple lien and a 303 mortgage which wholy passed the property in the thing conveyed(1).
"The Pawnee hag a special property or special interest in the thing pledged, while the general property therein continues in the owner.
That special property or interest exists so that the Pawnee can compel payment of the debt or can sell the goods when the right to do so arises.
This special property or interest is to be distinguished from the mere right of detention which the holder of a lien possesses, in that it is transferable in the sense that a Pawnee may assign or pledge his special property or interest in the goods (2) "where judgment has been obtained against the pawnor of goods and execution has issued thereon, the sheriff cannotseize the goods pawned unless he satisfied the claim of the pawnee".
(based mainly on Rogers vs Kennay(3).
"On the bankruptcy of the pawnor the Pawnee is a secured creditor in the bankruptcy with respect to things pledged before the date of the receiving order and without notice of a prior available act of bankruptcy.
(4) It has not been shown how the law in India is in any way different from the English law relating to the rights of the Pawnee vis a vis other unsecured creditors of the pawnor.
In our judgment the High Court is in error in considering that the rights of the Pawnee who had parted with money in favour of the pawnor on the security of the goods can be defeated by the goods being lawfully seized by the Government and the money being made available to other creditors of the pawnor without the claim of the Pawnee being fully satisfied.
The Pawnee has special property and a lien which is not of ordinary nature on the goods and so long as his claim is not satisfied no other creditor of the pawnor has any right to take away the goods or its price.
After the goods had been seized by the Government it was bound to pay the amount due to the plaintiff and the balance could have been made available to satisfy the claim of other creditors of the pawner.
But by a mere act of lawful seizure the Government could not deprive the plaintiff of the amount which was secured by the pledge of the goods to it.
As the act of the Government resulted in deprivation of the amount to which the plaintiff was entitled it was bound to reimburse the plaintiff for such amount which the plaintiff in ordinary course would have realized by sale of the goods pledged with it on the pawnor making a default in payment of debt.
The approach of the trial court was unexceptionable.
The plaintiff 's right as a Pawnee could not be extinguished by the seizure of the goods in its possession inasmuch as the pledge of the (1) 3rd Edn.
29 page 211.
(2) Halsbury 's Laws of England 3rd Ed.
29 p. 218 219.
(3) (4) Halsbury 's Laws of England 3rd Ed.
29 p. 222.
304 goods was not meant to replace the liability under the cash credit agreement.
It was intended to give the plaintiff a primary right to sell the goods in satisfaction of the liability of the pawnor.
The Cane Commissioner who was an unsecured creditor could not have any higher rights than the pawnor and was entitled only to the surplus money after satisfaction of the plaintiff 's dues.
Defendants 3 to 5 did not file any appeal against the judgment of the High Court.
The decree passed by the High Court against them would, therefore, stand.
In the view that we have taken the appeal is allowed, the judgment and decree of the High Court dismissing the suit against the State, of Bihar is hereby set aside and a decree is granted against the State of Bihar in the same terms as was granted by the trial court.
The appellant will be entitled to costs throughout.
G.C. Appeal allowed.

dataset_name: IN-Abs

summary/full:
Certain sugar was pledged with the plaintiff bank (appellant herein) by Defendant No. 2 under a cash credit agreement.
Part of the said sugar was seized under the Public Demands Recovery Act in connection with a demand of sugar cess by the Cane Commissioner.
The sugar was sold and the sale proceeds were attached towards the payment of cess.
No payment was made to the plaintiff bank, which thereupon filed the present suit to enforce its claim.
The trial court granted a decree against the State of Bihar for the price of the sugar.
The High Court however held that no decree could be granted against the State as the seizure was lawful.
HELD:The pawnee had special property and a lien which was not of ordinary nature on the goods and so long as his claim was not satisfied no other creditor of the pawnor had any right to take away the goods or its price.
After the, goods had been seized by the Government it was bound to pay the amount due to the plaintiff and the balance could have been made available to satisfy the claim of other creditor of the pawnor.
But by a mere act of lawful seizure the Government could not deprive the plaintiff of the amount which was secured by the pledge of the goods to it.
As the act of the Government resulted in deprivation of the amount to which the plaintiff was entitled it was bound to reimburse the plaintiff for such amount which the plaintiff in ordinary course would have realized by sale of the goods pledged with it on the pawnor making a default in the payment of debt.
[303E G] The trial court was right in holding that the plaintiff 's right as a pawnee could not be extinguished by the seizure of the goods in its possession inasmuch as the pledge of the goods was not meant to replace the liability under the cash credit agreement.
It was intended to give the plaintiff a primary right to sell the goods in satisfaction of the liability of the pawnor.
The Cane Commissioner who was an unsecured creditor could not have any higher rights than the pawnor and was entitled only to the surplus money after satisfaction of the plaintiffs dues.
[303G 304B]


judgement:
Appeal No. 800 of 1967.
Appeal from the judgment and decree dated January 15, 1964 of the Patna High Court in Appeal from Original Decree No. 321 of 1959.
D. Goburdhun and R. Goburdhun, for the appellant.
R. C. Prasad, for respondent No. 1.
The Judgment of the Court was delivered by Hidayatullah, C.J.
This is an appeal against the judgment of the High Court at Patna, dated January 15, 1964, affirming the decision of the court of first instance.
The case arose in the,following circumstances One Chaudhary Lal Behari Sinha, who was the uncle of the two plaintiffs (respondents in this appeal), made an endowment by a will executed by him on December2, 1908, by which certain properties were endowed in favour of an Idol called 'Ram Janakiji ' also known as Shri Thakurji, installed in the family house of the testator.
The testator said that his parents had installed this idol inside their house and they used to perform the puja and he had also been performing the puja since the time he had attained the age of discretion.
The testator went on to say that he had married two wives but no son had been born to him from either of them, al though he had a daughter and there was also a daughter 's daughter.
When he made the will, he had his two wives living, two sister 's sons, Babu Uma Kant Prasad and Babu Gauri Kant Prasad, and a daughter 's daughter Giriraj Nandini Kuari.
By the will, he ar 6 5 2 ranged for the seba puja, ragbhog, samaiya, utsava of Thakurji, and for the festivals and expenses of the sadabart of the visitors, to be carried on, just as he had been doing.
He nominated his two wives and his sister Ram Sakhi Kuari widow of Babu Gudar Sahai, as 'mutwallie, managers and executives ' so long as they remained alive.
He ordained that they should look after the management of the estate of Shri Thakurji with unanimous opinion, as had been done since long, that after their death, a son of a Srivastava Kayastha and Visnu upasak (worshipper of Lord Visnu) should be appointed 'Mutawalli, manager and executive ' of the estate of Shri Thakurji, and that his wives and sister should appoint him during their life time with the advice of and in consultation with a certain Shri Jawharikh, resident of Baikunthpur, who was his guru.
He divided the house into two parts.
The inner apartment of the house was to remain in the possession of his wives and sister during their life time and the entire outer house together with the house situated at Sitamarhi, was to belong to the estate of Shri Thakurji.
All money in cash and the movable properties belonging to him would remain in the custody of his wives.
To the will was appended a schedule which showed the details of the properties.
That included four villages in sixteen annas share, three villages in eight annas share, and one village in twelve annas share.
The will also made certain bequests in favour of some of his other relations, but with, them we are not concerned.
They are minor as compared with the properties dedicated for the upkeep, of Shri Thakurji.
When the Bihar Hindu Religious Trusts Act, 1950, came to be passed, a notice was sent to the plaintiffs by the Board constituted under that Act, calling upon them to file certain particulars on the basis of the Act, in view, as the notice said, of the properties constituting a public Hindu Religious trust.
The present suit out of which this appeal arises was thereupon filed by the plaintiffs after serving a notice under section 78 of the Act upon the Board, for a de claration that the suit properties were not subject to the Bihar Religious Trusts Act, and were private endowments.
Vast oral evidence was tendered in the case on behalf of the plaintiffs, and certain documents were filed.
On the basis of the evidence in the case, which was accepted by the learned trial judge, it was decided that the endowment was private to which the Act was not applicable.
Before the learned trial judge, reference was made to a decision of this Court, reported in Deoki Nandan vs Murlidhar(1).
To that case, we shall come presently.
The learned trial judge distinguished that case and held that endowment in the present case could not be held to be a public trust, because it was in favour of a family deity.
1[1961] 3 section C. R. 220.
653 An appeal was unsuccessful in the High Court.
The High Court agreed with the learned trial judge that the endowment created a private and not a public trust.
The High Court did not consider the evidence in the case, which, according to the leamed Judges, had been adequately summed up by the trial judge and whose conclusion was accepted.
Before the High Court also, the same case of this court was cited.
But it was also again distinguished on the grounds.
that this idol was a family idol and had not changed its character since the endowment or at the time of the endowment.
In this appeal, the only question that has been raised is whether the trust is a public trust, to which the Bihar Hindu Religious Trusts Act attaches, or is a private trust which does not come within the purview of that Act.
Mr. Goburdhun, who argued the case, pointed out a number of circumstances from which, he said, it could be easily inferred that the endowment was a public one and that the Act applied. 'According to him, the testator was childless and, therefore, there was no need for him to preserve the property for his family, that he had dedicated large properties for the upkeep of the idol, and the largeness of the properties indicated that it must have been for the benefit of the worshippers drawn from the public and not from the family, that on the extinction of the line of shebaits consisting of the two wives and the sister of the testator, the shebaitship was to go to a person of a different community on the advice of a stranger and that there was no mention in any of the deeds that the public were not to be admitted to the worship of Thakurji.
He also relied upon the same case to which we have referred, and also upon a decision of this Court in Swami Saligramacharya vs Raghavacharya and others(1).
As early as (Babu Bhagwan Din and others vs Gir Har Saroop and others) (2), the Privy Council distinguished between public and private endowments of religious institutions, particularly, temples and idols, and Sir George Rankin laid down certain principles to which attention may be drawn, because they were referred to in that Supreme Court ruling on which Mr. Goburdhun strongly relies.
Sir George Rankin said that the dedication to the public was not to be readily inferred when it was known that a temple property was acquired by grant to an individual or family.
He also observed that the fact that the worshippers from the public were admitted to the temple was not a decisive fact, because worshippers would not be turned away as they brought in offerings, and the popularity of the idol among the public was not indicative of the fact that the dedication of the properties was for public.
This ruling was referred to in the case on which Mr. Goburdhunrelies.
(1) CA.
No. 645 of 1964 decided on 4 11 15.
(2) 67 I.A 1.
654 In that case, emphasis was laid on two matters and they are decis ive of the case we have here.
The first no doubt was that the dedicator in that case had no male issue, and that it would be unusual for a person to tie up the property for the use of a diety with.out creating a public trust, but the second was that a ceremony or pratishtha (installation of the idol), which was equivalent to utsarg (dedication), was performed and, therefore, the idol itself became; a _public idol after the ceremonies.
This is not the case here where an idol had existed from before as a family idol.
In the earlier case ,of this Court the installation of the idol and the dedication were ,both done at the same time, and the installation was public.
This, in our opinion, was a very cardinal fact in that case.
This) was emphasized not, only by the trial judge but also by the learned Judges of the High Court.
The facts here are that the idol had been in the family for a number of *ears and only the family was doing the seba puja in the Thakur Dwara, and there is no mention anywhere that the public ever looked after this idol and were allowed a share in the worship as of right.
Further, by the will also the author of the dedication did not make it clear that the public were ,to be admitted as of right thereafter.
The whole of the arrangement shows that the further looking after of the Thakurji was to be the concern of the family, and it was only under the nomination of the family that a particular person of the Vaishavanava belief was to be in charge after the demise of the members of the family who were to become the mutawalls after the death of the testator.
It is obvious that in this family there was no male issue and, there fore, there was nobody to carry on worship and make arrangements for the seba puja of the Thakurji, as had been done in the family. 'Some other kind of arrangement had to be made and this arrangement was made by the will.
No more can be read into it than what is said there.
Now, if it was intended that this should have been a public endowment, it is quite obvious that when the testator died, the testator would have thought of somebody from the public instead of the ladies who could not carry on the puja except through others.
It was after his own death and his wives and sister were not available that a particular person was to be chosen for the seba puja.
There is no arrangement here that public were to look after or manage the Thakurji.
At no stage any intervention of the public is either intended or allowed by the will in question.
Two other documents were brought to our notice, but they may be disposed of summarily.
The first is a mortgage deed, exh.
B, in which there is a recital about the property which was the subject of the endowment.
But that document is silent about the nature of the endowment and is of no significance.
The other document is a judgment of the Assistant Commissioner of Agricultural 655 Income tax, exh.
C, in which exemption was claimed in regard to income as was set apart for charitable and religious trusts in terms of the trust deed.
This is an attempt to show that the family regarded it as a public trust.
What a person does with a view to claiming exemption from income tax or for that matter, agricultural income tax, is not decisive of the nature of the endowment.
The nature of the endowment is to be discovered only from the tenor of the document by which the endowment is created, the dealings of the public and the conduct and habits of the people who visit such a temple or Thakur Dwara.
The claim to exemption was with a view to saving some income of the endowed property.
It might have been motivated from other considerations and not that it was a public endowment.
This brings us to the second case which was cited before us.
But even in that case, a reference was made by the learned Judges to the earlier case and they have extracted a passage from the earlier judgment, in which it was observed that "when property is dedicated for the worship of a family idol, it is a private and not a public endowment, as the persons who are entitled to worship at the shrine of the deity can only be the members of the family, and that is an ascertained group of individuals.
But where the bene ficiaries are not members of a family or a specified individual, then the endowment can only be regarded as public, intended to benefit the general body of worsh ippers".
In the present case, the idol was a family idol and the worshippers had all along.
been the members of the family.
Indeed, the evidence is overwhelming on that score.
The learned trial judge mentions that very important and leading persons gave evidence in that behalf.
In the judgment of the trial judge, a list is given which includes P.Ws.
3,7,12,14,15 and 16 of village Kusmari.
In addition there are P.W. 17, who is an advocate of Sitamarhi, P.W. 6 who is a respectable witness, being a chemist, P.W. 8 who is also a pleader, and P.Ws II and 13 who are mokhtears and acquainted with Somari Kuer.
These respectable persons had occasion to know the family of Chaudhury Lal, Behari Singh, and, therefore, were competent to speak on the fact that Shri Ram Janakiji were the family deities of Chaudhury Lal Behari Singh.
In the case to which we were presently referring, the circumstances connected with the establishment of the temple were such that they could be only consonant with a public endowment.
It was no doubt at private temple of which the sole proprietor was one Madrasi Swamiji, but he, however, by the execution of the deed, decided to open the temple to the public.
He was a man with no family and could not have installed the deity for the members of his family.
It was pointed out in that case that the deed was of such a recent date that evidence of subsequent conduct would not alter nature of the endowment as determined from the deed and that the decision was on a 6 56 question of fact.
Even if we were to treat it as a question of law, because whether the trust is public or private, partakes of both fact and law, and we are satisfied in the present case the evidence is entirely one sided.
There is not one circumstance to show that the endowment was public endowment, and this being the case, we do not see any reasons to differ from the decision already arrived at.
On the whole, we have not been able to discover any reason why we should depart from the unanimous opinion of the High Court and the court below.
Both the courts are agreed that the oral evidence as well as the documents indicate only a private trust and that there is nothing to show that the endowment enjoyed a public character at any time.
The cases before this Court, which were cited earlier are easily distinguishable.
The result is that the appeal fails.
The High Court in its order did not award costs to the plaintiffs.
The reasons given by the High Court for denying costs to the Plaintiffs apply here also.
We, accordingly, order that the costs shall be borne as incurred.
R.K.P.S. Appeal dismissed.

summary/full:
An uncle of the two respondents made a will in December, 1908 by which certain properties were endowed by him in favour of an idol which certain properties were endowed by him in favour of an idol will that he had two wives and no son had been born to either of them.
He nominated his two wives and his sister as "Mutawallies, managers and executives" to administer the endowment during their life time and also provided that in consultation with his Guru they should appoint a successor to themselves.
Upon the coming into force of the Bihar Hindu Religious Trusts Act, 1950, a notice was sent to the respondents by the Board constituted under the Act calling upon them to file certain particulars as required under the provisions of the Act on the view that the properties constituted a Public Hindu Religious Trust.
The respondents thereafter filed a suit against the Board for a declaration that the said properties were not subject to the Act and were private endowments.
After considering substantial oral and documentary evidence, the Trial Court held that the endowment was private to which the Act was not applicable.
An appeal to the High Court was dismissed.
In the appeal to this Court it was contended that it could easily be inferred from the facts and circumstances that the endowment was a public one.
The testator was childless and, therefore, there was no need for.
him to preserve the property for his family; that he had dedicated large properties for the upkeep of the idol, and the largeness of the properties indicated that it must have been for the benefit of the worshippers drawn from the public and not from the family; that on the extinction of the line of shebaits consisting of the two wives and the sister of the testator, the shebaitship was to go to a person of a different community ,on the advice of a stranger and that there was no mention in any of the ,deeds that the public were not to be admitted to the worship of the idol.
HELD: Dismissing the appeal, (i) On the facts, it was clear that the idol had been in the family for a number of years and only the family was doing its regular worship; there was nothing to show that the public ever looked after this idol or were allowed a share in the worship as of right.
Nor did the author of the dedication by his will make it clear that the public were to be admitted as of right.
The whole arrangement showed that the further looking after of the idol was to be the concern of the family, and it was only under the nomination of the family that a particular person of the Vaishavnava belief was to be in charge after the demise of the members of the family who were to become mutawallis after the death of the testator.
, It was ,obvious that in this family as there was no male issue and, therefore,, there was nobody to carry on worship and make arrangements for the seba puja 651 of the idol, as had been done in the family for a long time, some other kind of arrangement had to be made and this arrangement was made by the will.
No more can be read into it than what was said there.
[654 C] (ii) There was no force in the contention that merely because an exemption was claimed in regard to the income of the endowment as being for charitable and religious purposes, this would make the endowment a public one.
What a person does with a view to claiming exemption from income tax or agricultural income tax, is not decisive of the nature of the endowment.
The nature of the endowment is to be discovered only from the tenor of the document by which the endowment is created, the dealings of the public and the conduct and habits of the people who visit such a temple or Thakur Dwara.
The claim to exemption was with a view to saving some income of the endowed property.
It might have been motivated from other considerations and not that it was a public endowment.
[655 A C] Babu Bhagwan Din and others vs Gir Har Saroop and others, referred to.
Deoki Nandan vs Murlidhar ; ; Sivami Saligrama.
charya vs Raghavacharya and others, Civil Appeal 645 of 1964 decided on 4 11 65; distinguished.