judgement:
Appeal No. 1040 of 1965.
Appeal by special leave from the judgment and order dated November 11, 1963 of the Allahabad High Court in First Appeal No. 60 of 1960.
C. B. Agarwala and 0.
P. Rana, for the appellant.
J. P. Goyal and Raghunath Singh, for the respondents.
The Judgment of the Court was delivered by Hegde, J.
This appeal by the Collector of Varanasi by special leave under article 136 of the Constitution, is directed against the decision dated 11 11 1963 of the High Court of Judicature at Allahabad, in First Appeal No. 60 of 1960 on its file, which in its turn arose from the award made by Shri section B. Malik, District Judge, Varanasi, in certain land acquisition proceedings under cl.
(b) of sub section
(1) of s .
19 of the Defence of India Act, 1939 (to be hereinafter referred to as the Act).
Before considering the contentions urged on behalf of the parties, it is necessary to set out the salient facts.
For the purpose of constructing the Babatpur aerodrome near Varanasi, the Government acquired in the year 1946 about 500 acres of land.
Compensation in respect of most of the lands acquired was settled by agreement.
But in respect of the lands with which we are concerned in this appeal, 48.01 acres in extent, no settlement was arrived at.
Therefore, the question of compensation in respect of those lands was referred to the arbitration of Shri section B. Malik under cl.
(b) of sub section
(1) of section 19 of the Act.
In view of section 19(1)(e), the claimants were entitled to get as compensation the market value of those lands as on the date of acquisition.
Before the arbitrator as well as the High Court, the parties were agreed that on the material on the record, the market value in question had to be fixed either on the basis of the sale deeds produced by the claimants or by capitalising the annual profits accruing from those lands.
The arbitrator rejected the sale deeds produced before him.
He adopted the method of capitalising the annual profits.
On the question of annual profits also he rejected the evidence adduced on behalf of the claimants.
He determined the same on the basis of the revenue 374 records for Fasli 1355 read with the evidence of the Naib Tehsildar, Jawal Prasad.
Aggrieved by the decision of the arbitrator, the claimants went up in appeal to the High Court of Allahabad under section 19(1)(f).
The High Court differed from the arbitrator as to the value to be attached to the sale deeds produced.
It opined that the sale deeds produced were reliable and that they evidenced genuine transactions.
The High Court fixed the compensation payable on the basis of Exh.
A 42 dated 3 4 1951.
The arbitrator had fixed the compensation at Rs. 26,454 12 0.
The High Court enhanced the same to Rs. 90,446 3 0.
It is against that decision that the Collector of Varanasi has filed this appeal after obtaining special leave from this Court under article 186.
Shri Goyal, learned counsel for the respondents has raised the preliminary objection that no special leave could have been granted by this Court under article 136 as the judgment appealed against was neither that of a court nor of a tribunal.
According to him, the High Court while acting under section 19(1)(f) was a persona designata and not a court or a tribunal.
His argument on this question proceeded thus: Sec.
19(1)(b) of the Act empowers the Central Government to appoint as arbitrator a person qualified to be appointed a judge of the High Court; Shri Malik who possessed the required qualifications was appointed by the Central Government to act as an arbitrator; it is true that Shri Malik was District Judge of Varanasi at the time of his appointment, but in law it was not necessary that the person appointed should have been a District Judge, and much less the District Judge of any particular District; therefore, Shri Malik acted as a designated person and not as a court; hence, the award given by him cannot be considered either as a judgment or as a decree or order; it was merely an award; when the matter was taken up in appeal to the High Court, the proceedings did not cease to be arbitration proceedings; its original character continued even before the High Court; therefore, the decision made by the High Court should also be considered as an award and further the High Court in making that award should be considered as having functioned as an arbitrator.
In this case, it is not necessary to go into the question whether the decision of the High Court is a decree, judgment or final order.
Even according to Shri Goyal, the decision of the High Court is a 'determination ' as contemplated in article 136.
That position he had to concede in.
view of the decision of this Court in Engineering Mazdoor Sabha and another vs The Hind Cycles Ltd.(1).
In support of his contention that the High Court while acting under section 19 (1)(f) was not functioning as a court, he placed strong reliance on the decision of this Court in Hanskumar Kishanchand vs Union of India(2).
That case dealt with two cross appeals arising from a decision of the Nagpur High Court under section 19(1)(f).
Those appeals were brought on the strength of the certificates issued (1) [1963] Supp. ; 1 S.C.R. 625(2) 375 by the High Court on 25th August 1949 under sections 109 and 110 of the Civil Procedure Code.
In those cases it was con tended that the appeals were not maintainable for two reasons viz. (a) the decision appealed against is neither a decree judgment or final order and (b) the decision in question was not that of a court.
This Court upheld both these contentions.
On the second ground taken, Venkatarama Aiyar, J., who spoke for the Court, observed thus: "Under the law no appeal would have lain to the High Court against the decision of such an arbitrator.
Thus, the provision for appeal to the High Court under section 19 (1)(f) can only be construed as a reference to, it as an authority designated and not as a court.
" If the conclusion that the appeal under section 19(1)(f) is only a reference to an authority designated and not an appeal to a court is correct then there is no doubt that this Court could not have granted special leave under article 136.
Therefore the real question is whether that decision lays down the law correctly when it stated that a High Court while acting under section 19(1)(f) is not functioning as a court.
There was no dispute that the arbitrator appointed under section 19(1)(b) was not a court.
The fact that he was the District Judge, Varanasi, was merely a coincidence.
There was no need to appoint the District Judge of Varanasi or any other District Judge as an arbitrator under that provision.
19(1)(f) provides for an appeal against the order of the arbitrator.
The section reads : "An appeal shall lie to the High Court against an award of an arbitrator excepting in cases where the amount thereof does not exceed an amount prescribed, in this behalf by rule made by the Central Government.
" It is not in dispute, that in the instant case, the amount fixed by the arbitrator exceeded the amount prescribed by the rules and therefore the claimants had a right to go up in appeal to the High Court.
We were informed that neither the Act nor the rules framed thereunder, prescribe any special procedure for the disposal of appeals under section 19(1)(f).
Appeals under that provision have to be disposed of just in the same manner as other appeals to the High Court.
Obviously after the appeal had reached the High Court it had to be determined according to the rule of practice and procedure of that Court.
The rule is well settled that when a statute directs that an appeal shall lie to a court already established, then that appeal must be regulated by the practice and procedure of that court.
This rule was stated by Viscount Haldane L. C. in National Telephone Co., Ltd. vs Postmaster General(1) thus: "When a question is stated to be referred to an established Court without more, it, in my opinion, imports (1) 376 that the ordinary incidents of the procedure of that Court are to attach, and also that any general right of appeal from its decision likewise attaches.
" This statement of the law was accepted as correct by this Court in National Sewing Thread Co., Ltd., vs James Chadwick and Bros. Ltd.(1).
It may be noted that the appeal provided in section 19(1)(f) is an appeal to the High Court and not to any Judge of the High Court.
Broadly speaking, Court is a place where justice is judicially administered.
In Associated Cement Companies Ltd. vs P. N. Sharma and another(2) Gajendragadkar, C.J., speaking for the majority observed: "The expression 'court ' in the context denotes a tribunal constituted by the State as a part of the ordinary hierarchy of courts which are invested with the State 's inherent judicial powers.
A sovereign State discharges legislative, executive and judicial functions and can legitimately claim corresponding powers which are described as legislative, executive and judicial powers.
Under our Constitution, the judicial functions and powers of the State are primarily conferred on the ordinary courts which have been constituted under its relevant provisions.
The Constitution recognises a hierarchy of courts and to their adjudication are normally entrusted all disputes between citizens and citizens as well as between the citizens and the State.
These courts can be described as ordinary courts of civil judicature.
They are governed by their prescribed rules of procedure and they deal with questions of fact and law raised before them by adopting a process which is described as judicial process.
The powers which these courts exercise.
, are judicial powers, the functions they discharge are judicial functions and the decisions they reach and pronounce are judicial decisions.
" The hierarchy of courts in this country is an organ of the State through which its judicial power is primarily exercised.
The fact that the arbitrator appointed under section 19(1)(b) is either a designated person or a tribunal as to whether he is a person designated or a tribunal we express no opinion does not in any way bear on the question whether the 'High Court ' referred to under section 19(1)(f) is a court or not.
Our statutes are full of instances where appeals or revisions to courts are provided as against the decisions of designated persons and tribunals.
See for example, Advocates Act, Trade Marks Act.
Reference in this connection may usefully be made to the decisions in National (1) ; , (2) ; , 377 Sewing Thread Co., Ltd. vs James Chadwick and Bros., Ltd.(1) and the Secretary of State for India in Council vs Chelikani Rama Rao and others(2) Prima facie it appears incongruous to hold that the High Court is not a 'court '.
The High Court of a State is at the apex of the State 's judicial system.
It is a court of record.
It is difficult to think of a High Court as anything other than a 'court '.
We are unaware of any judicial power having been entrusted to the High Court except as a 'court '.
Whenever it decides or determines any dispute that comes before it, it invariably does so as a 'court '.
That apart, when section 19(1)(f) specifically says that an appeal against the order of an arbitrator lies to the High Court, we see no justification to think that the legislature said something which it did not mean.
We may now turn our attention to the decision of this Court in Hanskumar Kishanchand vs Union of India(3) on which, as mentioned earlier, Shri Goyal placed a great deal of reliance in support of his preliminary objection.
The principal question that arose for decision in that case was whether the decision rendered by the High Court under section 19(1)(f) was a judgment, decree or final order within the meaning of those words found in section 109 of the Code of Civil Procedure.
The Court accepted the contention of the Solicitor General appearing for the respondent, the Union of India, that it was not a judgment, decree or final order, and that being so, no certificate under sections 109 and II 0 of the Code of Civil Procedure to appeal to the Federal Court could have been given by the High Court.
In that case this Court was not called upon to consider the scope of article 136.
Therefore, it did not go into the question whether the decision appealed against could be considered as a determination falling within the scope of article 136.
In arriving at the conclusion that the decision in question is not a judgment, decree or final order, this Court relied on the decisions in Rangoon Botatoung Co. vs The Collector, Rangoon(4), Special Officer, Salsette Building Sites vs Dossabhai Bazonji Motiwala(5).
Manavikraman Tirumalpad vs Collector of Nilgris(6), and Secretary of State for India in Council vs Hindustan Co operative Insurance Society Limited(7).
The effect of those decisions is summed up in that very judgment at pp.
1186 and 1187, and this is how it is put: "The law as laid down in the above authorities may thus be summed up: It is not every decision given by a Court that could be said to be a judgment, decree or order within the provisions of the Code of Civil Procedure or the Letters Patent.
Whether it is so or not will depend on whether the proceeding in which it was given came before (1) (2) 43 I.A. 192 (3) ; (4) 39 I.A. 197 (5) (6) I.L.R. (7) 58 IA.
378 the Court in its normal civil jurisdiction, or dehors it as a persona designata.
Where the dispute is referred to the Court for determination by way of arbitration as in Rangoon Botatoung Company vs Collector, Rangoon (39 I.A 197), or where it comes by way of appeal against what is statedly an award as in The Special Officer Salsette Building Sites vs Dossabhai Bezonji (ILR , Manavikraman Tirumalpad vs The Collector of the Nilgris (ILR , and the Secretary of State for India in Council vs Hindustan Co operative Insurance Society Limited (58 IA 250), then the decision is not a judgment, decree or order under either the Code of Civil Procedure or the Letters Patent.
" The decisions relied on by this Court merely lay down the proposition that the decision given by the High Court in an appeal against an award is neither a decree, judgment or final order.
None of the aforementioned decisions lays down the 'proposition that the High Court while exercising its appellate power did not function as a 'court '.
The observation in this Court 's judgment that the provision for appeal to the High Court under section 19(1)(f) can only be construed as reference to it as an authority designated and not as a court, does not receive any support from those decisions.
Nor do we find any sound basis for that conclusion.
With respect to the learned Judges who decided that case, we are unable to agree with that conclusion.
In our judgment, while acting under section 19(1)(f), the High Court functions as a 'court ' and not as a designated person.
Our conclusion in this regard receives support from the decision of the Judicial Committee in Secretary of State for India in Council vs Chelikani Rama Rao(1) and others referred to earlier.
Dealing with the ratio of its decision in Rangoon Botatoung Co. case(2), this is what Lord Shaw of Dunfermline observed (at p. 198 of the report): "It was urged that the case of Rangoon Botatoung Co. vs The Collector, Rangoon(2) enounced a principle which formed a precedent for excluding all appeal from the decision of the District Court in such cases as the pre sent.
Their Lordships do not think that that is so.
In the Rangoon Case a certain award had been made by the Collector under the Land Acquisition Act.
This award was affirmed by the Court, which under the Act meant "a principal civil Court of original jurisdiction.
" Two judges sat as 'the Court ' and also as the High Court to which the appeal is given from the award of 'the Court '.
The proceedings were however, from beginning to end ostensibly and actually arbitration proceedings.
In view of the nature of the question to be tried and the pro (1) 43 I.A. 192.
(2) 39 I.A. 197.
379 visions of the particular statute, it was held that there was no right 'to carry an award made in an arbitration as to the value of land ' further than to the Courts specifically set up by the statute for the determination of that value.
" We have already come to the conclusion that the decision rendered by the High Court under section 19(1)(f) is a 'determination '.
Hence, it was within the competence of this Court to grant special leave under article 136.
But then it was urged on behalf of the respondents that in view of r. 2, 0.13 of the Rules of this Court, as it stood at the relevant point 'of time, this Court could not have granted special leave as the appellant had not applied for necessary certificate under article 133 of the Constitution.
In support of this contention, reliance was placed on the decision of this Court in Management of the Hindustan Commercial Bank Ltd., Kanpur vs Bhagwan Dass(1).
Under article 133, a certificate can be asked for filing an appeal against the judgment, decree or final order of a High Court.
As seen earlier, this Court ruled in Hanskumar Kishanchand vs Union of India(2) that the decision rendered by the High Court under section 19(1)(f) is not a decree, judgment or final order.
Hence, the provisions of article 133 are not attracted to the present case.
Consequently, this case is taken outside the scope of the aforementioned r. 2 of Order 13.
As a measure of abundant caution, the appellant has filed CMP 2325 of 1967, praying that this Court may be pleased to excuse him from compliance with the requirements of 0.13, r. 2.
In view of the decision of this Court in Hanskumar Kishanchand vs Union of India(2), no useful purpose would have been served ' by the appellant 's applying for a certificate under article 133.
Hence, even if we had come to the conclusion that the case falls within the scope of 0. 1 3, r. 2, we would not have had any hesitation in exempting the appellant from compliance with the requirement of that rule.
This takes us to the merits of the case.
The grievance of the appellant is that the High Court erred in law in awarding compensation on the basis of Exh.
The sale evidenced by that deed was effected in the year 1951, nearly five years after the acquisitions with which we are concerned in this case were effected.
The sale in question cannot be considered as a contemporaneous transaction.
The arbitrator has found that after the close of the second world war, the price of landed property had gone up steeply.
This finding does not appear to have been challenged before the High Court.
Further, under the deed in question, the land sold was .26 acres in extent.
The price fetched by such a tiny bit of land is of no assistance in determining the value of the lands acquired.
On behalf of the respondents, we were asked to determine the compensation of the lands acquired on the basis of sale deed Exh. 35 which relates to a sale that took place on 10 6 1947 (1) ; (2) ; 380 which according to the respondents can be considered as a contemporaneous sale.
We are unable to accept this contention.
35 relates to the sale of land measuring .28 acres.
The vendee under that deed is one of the claimants.
There is no evidence as to the nature of the land sold under that deed.
Under these circumstances, very little value can be attached to that document.
We are also of the opinion that none of the sale deeds produced in this case can afford any assistance in determining the compensation payable to the respondents.
They do not evidence sales of lands similar to the acquired lands, at about the time of the acquisition.
The High Court did not address itself to the oral evidence adduced in this case for finding out the annual profits for the purpose of capitalisation.
It rejected the evidence of the Naib Tehsildar.
For reasons not disclosed.
the village papers of 1354 fasli were not produced by the appellant.
On the other hand, the village papers of 1355 fasli were produced.
In the first place, those records do not show the rent payable in the year in which the acquisitions took place.
The acquisitions in question were made in fasli 1354.
For the reasons mentioned in its judgment, the High Court felt un able to place reliance on the village papers of fasli 1355.
We do not think that this Court should scan the evidence afresh for determining the just compensation payable.
to the respondents.
That question has to be gone into by the fact finding court.
All that we need say is that the High Court was not right in determining the compensation payable to the respondents on the basis of Exh.
Hence its decision cannot be sustained.
For the reasons mentioned above, we allow this appeal and set aside the decision of the High Court and remit the case back to that Court for disposal according to law.
Before deciding the case afresh the High Court will permit the parties, to adduce additional evidence on the question of compensation; in particular, they will be allowed to produce and prove contemporaneous sale deeds and the revenue records relating to fasli 1354.
Costs of this appeal shall be costs in the cause.
R.K.P.S. Appeal allowed.

summary/full:
The Government acquired about 500 acres of land from the respondents under the Defence of India Act, 1939, and a settlement was reached in respect of the compensation to be paid for all except about 48 acres of the land.
The question of the compensation payable for the remaining land was referred to arbitration under section 19(1)(b) of the Act to be determined in accordance with section 19(1)(e) which entitled the respondents to compensation at the market value of the land.
The arbitrator considered various sale deeds produced before him but rejected these and fixed the compensation by capitalising the annual profits from the lands.
In an appeal against his award by the respondents under section 19(1)(f) of the Act, the High Court differed from the Arbitrator and enhanced the compensation payable by fixing it on the basis of a sale deed exhibited before the arbitrator.
In appeal to the Supreme Court by special leave given to the appellant Collector, it was contended on behalf of the respondents by way of a preliminary objection that no special leave could have been granted by the Court under article 136 as the judgment appealed against % ,as neither that of a court nor of a tribunal; the High Court while acting under section 19(1)(f) was a persona designata and not a court or a tribunal; proceedings before the arbitrator appointed by the Central Government under section 19(1)(b) were arbitration proceedings leading to an award made by him, when the matter was taken up in appeal to the High Court, the appeal proceedings did not cease to be arbitration proceedings and their original character continued so that the decision made by the High Court should also be considered as an award and the High Court considered as having functioned as an arbitrator.
Held: (i) While acting under section 19(1)(f), the High Court functions as a 'court ' and not as a designated person.
[378E] Hanskumar Kishanchand vs Union of India, ; , disapproved.
The High Court of a State is at the apex of a State 's judicial system.
It is a court of record and it is difficult to think of a High Court as anything other than a 'court '.
No judicial power was ever entrusted to the High Court except as a 'court ' and whenever it decides or determines any dispute that comes before it, it invariably does so as a 'court '.
That apart, when section 19(1)(f) specifically says that an appeal against the order of an arbitrator lies to the High Court, there was no justification.
for thinking that the legislature 373 said something which it did not mean.
Furthermore, neither the Act, nor the rules framed thereunder prescribe any special procedure for the disposal of appeals under section 19(1)(f) and appeals under that provision have to be disposed of in the same manner as other appeals to the High Court according to its own rules of practice and procedure.
[375F G. 377B C] Case law referred to.
(ii) On the facts, the High Court was not right in determining the compensation payable on the basis of the one sale deed as this could not be considered a contemporaneous transaction; the decision of the High Court must therefore be set aside and the case remitted to that court for disposal according to law after giving the parties an opportunity to adduce fresh evidence.
[380D E]


judgement:
iminal Appeal No. 41 of 1967.
Appeal by special leave from the judgment and order dated November 21, 1966 of the Delhi High Court in Criminal Revision Application No. 273 D of 1965.
A. K. Sen, Veda Vyasa, K. B. Mehta, and H. L. Anand, for the appellant.
H. R. Khanna and R. N. Sachthey, for the respondent.
394 395 The Judgment of the Court was delivered by Vaidialingam, J.
The sole point, which arises for considera tion, in this appeal, by special leave, directed against the order of the High Court of Delhi, dated November 21, 1966, is about the validity of the complaint filed by the Deputy Chief Controller of Imports and Exports, New Delhi, the respondent herein, under section 5 read with section 6 of the Imports & Exports (Control) Act, 1947 (Act XVIII of 1947) (hereinafter referred to as the Act).
Section 6 of the Act, relating to cognizance of offences, is as follows: "6.
No Court shall take cognizance of any offence punishable under section 5 except upon complaint in writing made by an officer authorized in this behalf by the Central Government by general or special order, and no Court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any such offence.".
The respondent filed a complaint, on December, 31, 1962, be fore the First Class Magistrate.
Delhi.
alleging that the appellants, before us, and four others, had committed offences punishable under section 120B, read with section 420, I.P.C., and section 5 of the Act.
The complaint, fairly elaborately, sets out the various matters containing allegations of violations of the conditions of the import licences granted to the appellants.
It may also be stated at this stage, that the Chief Commissioner, Delhi, by his order, dated December 12, 1962, had given his consent to the initiation of proceedings, in the prosecution of the appellant and four others, mentioned therein, under sub section
(2) of section 196A, 'of the Code of Criminal Procedure (hereinafter called the Code), inasmuch as the complaint also involved an offence of criminal conspiracy, under section 120B, P.C., to commit a non cognizable offence.
So far as this consent is concerned, it is not the subject of any attack, before us.
The complainant was examined as P.W. 3.
He has stated, in his chief examination, that he filed the complaint, in question, after satisfying himself about the prima facie commission of the offences, mentioned in the complaint.
In cross examination he has referred to the fact that he came to know about the case when he received a report from the Special Police Establishment, at the end of September 1962.
When a question was put, as to whether he complainant would produce the said report, objection was raised, by the Public Prosecutor, that the said report was only the opinion of a police officer, and was not admissible, in law.
This objection has been upheld by the Magistrate.
The complainant has further stated that he visited the Special Police Establishment Office, for the first time, in connection with the case, only in September or October 1963, whereas the complaint had been filed, on December 31, 1962.
He has also stated that he has not seen any of the documents, referred to in the police report, between the date when he received the report, and the date when the com plaint was filed.
He has further stated that, on receipt of summons 396 from the Court, he visited the Special Police Establishment Office to see the documents, for satisfying himself that the complaint which he had filed, was based on absolute facts.
His further answers were to the effect that when he filed the complaint he had not verified personally all the details mentioned in the police report, and that the Chief Commissioner 's permission, to initiate proceedings, had already been obtained, when he signed the complaint, on December 29, 1962.
But, he has also stated that he had asked the Special Police Establishment, to draft the com plaint.
The appellant tiled an application, on September 26, 1964, before the Trial Magistrate, stating that, in view of the above answers given, by the complainant, no cognizance should be taken, on the basis of the complaint filed by the respondent, Shri Bhargava, the Deputy Chief Controller of Imports and Exports.
According to the appellant, section 6 of the Act is mandatory in character and enjoins that the entire facts and materials, connected with the allegations, which form the subject of the charge or charges, must be placed before the competent authority, and the complaint is to be initiated by the appropriate authority, only after due consideration of the entire materials.
In this case, according to the appellant, the answers given by the Officer, as P.W.3, coupled with the non production of the Special Police Establishment 's report, will clearly show that the facts constituting the offence were not placed before him; and it is also clear that the complainant has not filed the complaint, after verifying and satisfying himself about the facts mentioned in the police report.
As to what is contained in the police report, is a matter of pure conjecture, inasmuch as it has not been produced, before the Court.
The Magistrate rejected this application, and his order was also confirmed, in revision, by the Additional Sessions , Judge, Delhi.
Aggrieved by these orders of the Subordinate Courts, the appellant moved the Delhi High Court, for redress.
The learned Judge, of the Delhi High Court, in his order, under appeal, has confirmed the orders of the Subordinate Courts.
Mr. A.K. Sen, learned counsel for the appellants, has raised the same contentions.
which did not find favour with the High Court.
According to the learned counsel, section 6 of the Act is mandatory and, before a Court can take cognizance of an offence; punishable under section 5, the prosecution will have to establish that the facts constituting the offence, were placed before the complainant and that, after a proper consideration of those facts, the complaint has been instituted in this case, by P.W.3.
Counsel also pointed out that the prosecution could have, very well, placed.
before the Court the report of the Special Police Establishment to show that the necessary facts, which formed the basis of the complaint, were placed before the complainant; but, in this case, the prosecution had declined to produce the report, as will be 397 seen from the objections raised by it.
Therefore, under those circumstances, an inference will have to be drawn against the prosecution, and the normal presumption should be that the evidence which could be, but had not been, produced would, if produced; be unfavourable to the person who withholds it, which, in this case, is the prosecution.
Counsel also pointed out that, in this case, the High Court has proceeded on the basis that the filing of a complaint, by P.W. 3, is merely a mechanical act, which view is not justified, in law.
In fact, we understood Mr. Sen to contend that there is no distinction, in principle, between provisions in statutes providing for the taking of cognizance of offences,, only on the previous sanction of any particular authority, and provisions providing, simpliciter, for a complaint being filed, by a particular person or officer.
Mr. H. R. Khanna, learned counsel for the respondent com plainant, has pointed out that the principles, enunciated by the appellants ' counsel, do not apply to cases where the statute, as in this case, simpliciter provides for a complaint being made, by the particular officer, mentioned therein.
In such cases, counsel points out, the Court has only to see whether the person or authority, mentioned therein, has initiated the proceedings, by filing a com plaint, in the manner, referred to in the particular provision.
In this case, counsel points out, there is no controversy that the respondent is an officer, authorized by the Central Government, to file complaints, under section 5 of the Act.
in this connection, counsel referred us to the provisions, contained in the Code of Criminal Procedure, some of which provide for cognizance being taken, of offences, only on a complaint made by a person or officer, mentioned therein, and in other cases, where taking cognizance of offences is prohibited, except on a sanction given by an authority, e.g., sections 195, 197, 198, etc.
Having due regard to the provisions contained in section 6 of the Act, counsel pointed out, there is no infirmity in the complaint, filed by the respondent.
The principle, that the burden of proving that a requisit sanction has been obtained, rests on the prosecution, and that such burden involves proof that the sanctioning authority had given the sanction in reference to the facts on which the proposed prosecution was to be based, facts which might appear on the fact of the sanction, or might be proved by extraneous evidence.
is now well settled, by the decision of the Judicial Committee of the Privy Council, in Gokulchand Dwarkadas Morarka vs The King(1).
There, their Lordships were considering cl. 23 of the Cotton Cloth and Yarn (Control) Order, 1943, as amended, to the effect: "No prosecution for the contravention of any of the provisions of this Order shall be instituted without the, previous sanction of the Provincial Government (or of such (1) L.R. 75 I.A. 30.
SCI 12 398 officer of the Provincial Government not below the rank of District Magistrate as the Provincial Government may by general or special order in writing authorize in this behalf).
" The Judicial Committee has held that in order to hold that there is a compliance with the provisions of cl. 23, it must be proved that the sanction was given, in respect of the facts constituting the offences charged, because the sanction to prosecute is an important matter, as it constitutes a condition precedent to the institution of the prosecution, and the Government have an absolute discretion to grant or withhold that sanction.
The Judicial Committee has also emphasized that the Government cannot also adequately discharge the obligation of deciding whether to give or withhold the sanction, without a knowledge of the facts of the case, as sanction has to be given to a prosecution for the contravention of any of the provisions of the Order.
These principles, laid down by the Judicial Committee, have also been approved, by decisions of this Court: See Madan Mohan vs State of Uttar Pradesh(1); Jawsant Singh vs State of Punjab(2); and Feroz Din vs The State of West Bengal(3).
In Jaswant Singh 's Case(2), this Court, dealing with a case of sanction, under the Prevention of Corruption Act, 1947, after referring to the decision of the Judicial Committee, has observed that the sanction, under the said Act, is not intended to be, nor is an automatic formality, and it is essential that the provisions in regard to sanction should be observed with complete strictness, as the object of the provision for sanction is that the authority, giving the sanction, should be able to consider, for itself, the various facts alleged, before it comes to the conclusion that the prosecution, in the circumstances, be sanctioned or forbidden.
We are not inclined to accept the contentions of Mr. Sen, that the principles laid down in these decisions, which relate to the question of sanction.
have any application to the filing of complaints, under section 6 of the Act.
Section 6 only insists that the complaint is to be in writing and that it must be made by an officer, authorised in that behalf.
The complaint, in this case, has been made by the respondent in writing, and that he is an authorised officer, in this behalf, has not been challenged.
The limitation, contained in section 6, is only regarding the particular officer who could file a complaint and, when once he satisfies those requirements, the bar is removed to the taking of cognizance by a Court, on a complaint, made in accordance with section 6.
In this connection, it is desirable to bear in mind the observations of this Court, made in section A. Venkataraman vs The State(4).
After considering the scheme of the Code, this Court observed: "In construing the provisions of a statute it is essential for a court, in the first instance, to give effect to the (1) A.I.R. 1954 S.C. 637, 641.
(2) ; , 765.
(3) ; , 330.
(4) , 1041, 399 natural meaning of the words used therein, if those words are clear enough.
It is only in the case of any ambiguity that a court is entitled to ascertain the intention of the legislature by construing the provisions of the statute as a whole and taking into consideration other matters and the circumstances which led to the enactment of the statute.
" Going by the plain words, contained in section 6 of the Act, we are satisfied that the complaint, in this case, filed by the respondent, can be considered to be in conformity with the provisions, contained therein.
But Mr. Sen relied upon the decision of this Court in Feroz Din 's Case(1) in support of his argument that cases in which sanction is necessary, to enable a Court to take cognizance of offences, and cases, in which a mere complaint, is to be filed by a public officer, without the requirement of any sanction, have been treated on a par, and the same tests, for finding out the legality of a complaint, in the former class of cases, have been applied to the latter class of cases also.
It is therefore necessary to consider the exact scope of that decision.
In that decision, this Court was considering a complaint, filed by a management, under sections 24 and 27, of the .
The management company, in that case, filed a complaint, with the sanction of the Government.
The provision, regarding sanction, is contained in section 34(1) of the , which is as follows: "No Court shall take cognizance 'of any offence punishable under this Act. . save on complaint made by or under the authority of the appropriate Government.", One of the contentions raised by the appellants, therein, based upon the decision of the Judicial Committee, in Morarka 's Case(2), was that the sanction, given by the Government of West Bengal, to file the complaint against them, was bad, as it had been granted without reference to the facts constituting the offence.
This Court, after referring, to the said decision, rejected the contention of the appellants and held that the entire facts, connected with the offence, had been placed before the sanctioning authority, and the Government gave the sanction, on consideration of those facts, and that those circumstances fully satisfied the requirements of 'prior sanction ', as laid down by the Judicial Committee.
It will be seen, by a reference to section 34(1) of the , extracted above, that a complaint can be filed by the appropriate Government itself, or it can be filed, under the authority of the appropriate Government.
In the decision before this Court, the Government had not filed the complaint, but, an the other hand, the management company obtained the sanction of the Government of West Bengal, to file the complaint.
That is why this Court (1) ; , 330.
(2) L.R. 75 I.A. 30.
400 had occasion to consider the validity of the sanction regarding which an attack was made by the appellants.
This Court, in that case nevertheless, apply, if the Government itself had filed the complaint, as it was entitled to, under section 34(1).
Therefore, the observations made, in that case, regarding the validity of sanction , will have to be confined to the facts of that case.
No such question arise, with regard to the matter before us.
The section, with which we are concerned, does not contain any such restriction, regarding the obtaining of sanction, on the basis of which alone a complaint can be filed, to enable a Court to take cognizance of an offence.
The result is, the view of the High Court, that the complaint, filed by the respondent, on December 31, 1962, satisfies the requirements of section 6 of the Act, is perfectly correct.
The appeal therefore fails, and is dismissed.
G.C. Appeal dismissed.

dataset_name: IN-Abs

summary/full:
The Deputy Chief Controller of Imports & Exports New Delhi filed a complaint against the appellant under section 5 read with section 6 of the Imports & Exports (Control) Act, 1947 before the Magistrate First Class Delhi.
In the witness box the complainant admitted that when he filed the complaint he had not seen any of the documents referred to in the report of the Special Police Establishment in connection with the case and had not verified personally all the detail* mentioned in the report.
The appellant filed an application requesting the Magistrate not to take cognizance of the case as the complaint did not satisfy the requirements of section 6 of the Act.
The plea was rejected by the Magistrate, the Sessions Judge and the High Court.
An appeal to this Court was filed by special leave.
It was contended on behalf of the appellant that as in the case of sanction for prosecution of certain offences, before a court can take cognizance of an offence punishable under section 5 on the basis of a complaint under section 6, the prosecution will have to establish that the facts constituting the offence, were placed before the complainant, and that the latter on a proper consideration of these facts has filed the complaint.
Held: (i) The principles applicable to cases requiring sanc tion have no application to filing of complaints under section 6 of the Act.
Section 6 only insists that the complaint is to be in writing and that it must be made by an officer authorised in that behalf.
The limitation contained in s.6, is only regarding the particular officer who could file a complaint and, when once he satisfies those requirements, the bar is removed to the taking of cognizance by a court, on a complaint made in accordance with section 6.
[398F G] In the present case the complaint had been made by an autho rised officer in writing.
The requirements of section 6 were therefore satisfied and the Magistrate rightly took cognizance of the offence.
[399B C] Gokulchand Dwarkadas Morarka vs The King, L.R. 75 I.A. 30; Madan Mohan vs State of Uttar Pradesh, A.I.R. 1954 S.C. 637, 641 and Jaswant Singh vs State of Punjab, ; , 765, referred to.
S.A. Venkataraman vs The State, , 1041, applied.
Feroz Din vs The State of West Bengal, ; , 330,distinguished.


judgement:
l Appeal No. 1012 of 1964.
Appeal by special leave from the judgment and order dated August 28, 1962, of the Bombay High Court, Nagpur Bench in Special Civil Application No. 373 of 1961.
R. M. Hazarnavais, K. L. Hathi and section P. Nayar, for the appellants.
S G. Patwardhan and A. G. Ratnaprkhi, for the respondent Nos. 1 10 and 12.
The Judgment of the Court was delivered by Shelat, J.
This appeal by special leave is directed against the order.
of the High Court of Maharashtra quashing the order dated November 20, 1961 passed by the first appellant under section 5(1) of the Bombay Land Requisition Act 23 of 1948 as 401 402 extended to the Vidarbha area by the Bombay Land Requisition (Extension and Amendment) Act 33 of 1959 The respondents are the owners of the land in question situate in the village Kasarkhed, District Akola.
It appears that in 1959 there were floods in the are which affected the resident living in the gaothan of Kasarkhed.
Once again there were floods in 1961 more serious than in 1959 affecting as many as 470 persons whose houses were either washed away or seriously damaged.
There was therefore an urgent necessity of rehabilitating those sufferers at some other place where they could build their houses and complete them before the arrival of the next monsoon.
In these circumstances the first appellant under powers conferred on him by section 15 of the Act passed the impugned order.
The order stated that the lands set out in the Schedule therein were needed or were likely to be needed for the public purpose, viz., for a new gaothan at Kasarkhed for the victims of floods, the old village site where they lived having been rendered unsuitable by floods and that it was therefore necessary to requisition the said lands for the said purpose.
It is not in dispute that land was needed for settling a new gaothan where the victims of the flood could be resettled.
At a later stage the State Government also initiated proceeding, , under the Land Acquisition Act 1 of 1894 in respect of those very lands and issued a notification under section 4 thereof.
On December, 14, 1961 the respondents filed a Special Civil Application in the High Court challenging the validity of the said order on the grounds inter alia that it was passed without giving them an opportunity of being heard, that it contravened article 19(1)(f) and (g) of the Constitution, that the competent authority bad no power to invoke the Land Requisition Act inasmuch as the purpose for which it was exercised was of a permanent character, viz., construction of houses and settling a new village site, that the proceedings under the Act amounted to acquisition of lands, that invoking the Requisition Act was not in bona fide exercise of power under the said Act, that though there were moire suitable lands for the said purpose the lands of the respondents were deliberately selected as a result of influence exercised by the President of Balapur Municipal Committee, and that there were buildings and a factory situate on the said lands, and therefore the procedure laid down in section 5(2) of the Act should, have been followed.
In the return filed by the appellants these allegations were traversed and it was submitted that the order was valid and competent under sec tion 5(1) of the Act.
The High Court allowed the petition and quashed the order.
In the opinion of the High Court the purpose for which the impugned order was passed was a permanent purpose viz., establishing a new village site, that since the Act was a temporary Act extended until then up to 1963 and the power to I requisition thereunder would inhere to the Government only during the time that it subsisted an order passed for a permanent purpose such as for establishing a village gaothan could 'not be in the contemplation 403 of the Act and therefore could not be justified as one passed under the Act.
The High Court observed: "The Bombay Land Requisition Act was, in our opinion, :never intended to be used for the permanent acquisition of the lands of citizens as is being sought to be done in, the instant case.
We can only characterise the attempt to take the lands of the petitioners under that Act as an abuse of the provisions of that Act.
It is patent that if a gaothan or abadi is allowed ' to rise upon the lands of the petitioners, the lands can never revert to them at any future time.
It is not to be supposed nor is it alleged in the return that the respondents seriously thought that at some future date they would raise to the ground all the houses they were allowing to be constructed in the new gaothan.
We hold that the impugned order is unjustified under the Bombay Land Requisition Act, is illegal and amounts to an abuse of the provisions of that Act.
" Counsel for the appellants challenged the validity of the High Court 's order on the ground principally that the High Court 's view of section 5(1) of the Act was incorrect and that it failed to appreciate the scope of the provisions of section 5(1).
The only question arising in this appeal thus is whether the Act authorises an order of requisitioning even if the purpose for which it is made is not a temporary purpose, in the present case rehabilitation of flood sufferers and settling for that purpose a new village site.
The validity of section 5(1) is not challenged and therefore it is not necessary to inquire into the genesis of the power of )Me State legislature to enact the Act.
Indeed the question on which the High Court 's decision rests is on the scope of the power rather than its validity.
Section 4(5) provides that the expression "to requisition" means in relation to any land, to take possession of the land or to require the land to be placed at the disposal of the State Government.
Section 5(1) under which the impugned order was made provides that "if in the opinion of the State Government it is necessary or expedient so to do the State Government may by an order in writing requisition any land for any public purpose.
" It is clear that the only requirement of section 5(1) is that the State Government must form an opinion that it is necessary or expedient to requisition any land.
It can do so of course only for a purpose which is a public purpose.
On the face of it the sub section does not contain any express limitation to the power to requisition, the only limitation being that an order thereunder can be passed for a public purpose only.
It is not challenged that rehabilitation of flood sufferers is a public purpose.
The question then is does the sub section contain by implication any restriction viz., that the requisitioning authority has no power thereunder to pass an order where the purpose is not temporary.
404 1t appears that the High Court thought that since the Act itself is of a; temporary character in the sense that it was to enure for a particular period and that period had to be extended from time to time and on the Act ceasing to be in force when it is no more extended the requisitioned land would have to return to the owner it follows that the Act does not envisage requisitioning for a purpose which is not temporary.
In the opinion of the High Court the temporary character of the Act postulates a temporary purpose for which alone power under section 5(1) can be exercised.
The High Court also appears to be of the view that there is an antithesis between the power to requisition and the power of acquisition that the authority realised that the power to requisition cannot be exercised where the purpose is not temporary and realising this difficulty the State Government had to have recourse to its power under the Land Acquisition Act.
In this view the High Court held that.
settling a new village site for the flood sufferers was a permanent purpose, that once houses and other structures were built on the requisitioned, land it would be impossible for the authority to return the land to its owner as provided under section 9, and: therefore the Act could not have contemplated the exercise of; the power thereunder for a purpose which would render the operation of section 9 impossible.
The exercise of, power for such a purpose must, therefore amount to an abuse of and cannot be justified under the Act.
In our opinion the High Court 's view on the scope of the power under section 5(1) cannot be sustained.
On a, plain reading of the section it is clear that the only limitation to the power which it confers is the temporary life of the Act.
But the words "any land for any public purpose" are sufficiently wide enough, to include any public purpose whether temporary or otherwise.
To, read into the section a limitation that the purpose contemplated by it is only temporary is to 'confound the temporary life of the statute with, the character of the purpose for which the power thereunder can be exercised.
Sub section (1) speaks of no restriction except, as aforesaid, that the purpose must be a public purpose.
Section 9 no doubt provides that when the land in question is derequisitioned and that would happen when the statute comes to an end or the land is otherwise released, it has to be restored to the owner as far as possible in the same condition in which it was when it was put into possession of ' the authority.
That is so because the Government acquires only the right of possession and user of the land and 'not any proprietary right therein and since the ownership is still retained in the owner the land must revert to him as soon as it is released either by the lapse of power or when the purpose of requisitioning is over, whatever use to which such land has been put to during the period of such requisitioning.
Section 9 therefore has nothing to do with the nature or character of the purpose for which an order under section 5(1) is passed.
The life of the power and the purpose for which it is exercised are two 405 distinct ingredients of section 5(1) and ought not to be confused.
The words "for any public purpose" in the sub section are wide enough to include any purpose of whatsoever nature and do not contain any restriction regarding the nature of that purpose.
It places no limitation on the competent authority as to what kind of public purpose it should be for the valid exercise of its power nor does it confine the exercise of that power to a purpose which, is temporary only.
Except for the limitation that the purpose must be a public purpose the sub section also imposes no restriction as to the manner in which the land which is requisitioned is to be used.
It may be used for a temporary purpose or for a purpose which is not temporary in nature.
It is for the requisitioning authority to judge and not for a court of law to decide how best the land is to be used.
If the requisitioning authority uses the land for a purpose which is not temporary such as settling a new village site and for construction of houses it is for the Government and those who put up such structures to contemplate the possibility of having to return in future the land to the owner in its original state.
But that does not mean that the power is restricted to a temporary purpose only.
We do not also see any antithesis between the power to re quisition and, the power of compulsory acquisition under the Land Acquisition Act.
Neither of the two Acts contains any provision under which it can be said that if one is acted upon, the other cannot.
Indeed, Part VI of the Land Acquisition Act provides for temporary occupation of waste or arable land needed for a public purpose or for a Company and empowers the appropriate Government to direct the Collector to procure the occupation and use of the same for such purpose as it shall think fit, not exceeding three years from the commencement of such occupation.
Apart from these provisions in the Land Acquisition Act there are several State Acts which empower the appropriate Governments to acquire property which is subject to requisitioning orders.
If there is an emergency to meet which the power to requisition is exercised there is nothing in the Act to prevent the authority at a subsequent date to initiate proceedings in a suitable case for permanent acquisition.
The exercise of power under the Requisitioning Act does not exhaust or make incompatible the exercise of power under the Land Acquisition Act.
The initiation of proceedings under the Land Acquisition Act after requisitioning the lands under section 5(1) of the Act does not and cannot mean abuse 'of the power under the provisions of the Act.
In our view the High Court was in error in holding that the power to requisition under the Act cannot be exercised where the public purpose is not temporary or that the exercise of that power for the purposes of rehabilitation of flood sufferers was either in abuse of or unjustified under the Act.
We therefore allow the appeal and set aside the order passed by the High Court.
Since the High Court decided the petition only 406 on the question of the validity of the exercise of power and did not decide the other questions raised in the petition, we remand the matter to the High Court to decide those questions in accordance with law.
In the circumstances of the case, we make no order as to costs.
Y.P. Appeal allowed.

summary/full:
The land owned by the respondents were requisitioned by the first appellant under the Bombay Land Requisition Act for a public purpose viz., for establishing a new village site to resettle victims of flood.
The respondents filed a writ petition in the High Court challenging the validity of the order on the ground that since Act was a temporary Act extended until then upto 1963, the power to requisiton thereunder would inhere to the Government only during the time that it subsisted; so an order passed for a permanent purpose could not be in the contemplation of the Act.
The High Court accepted the objection and, quashed the order.
In a appeal to this Court: Held: The power to requisition under the Act could be exercised whether the public purpose was temporary or not and the excercise of that power for the purpose for the purpose of rehabilitation of flood suffers was neither in abuse of nor unjustified under the Act.
The words for any public purpose in section 5(1) are wide enough to include any purpose of whatsoever nature do not contain any restriction regarding the nature of that purpose.
It places no limitation on the words competent authority as to what kind of "for any public purpose in section 5( 1) are wide enough to include any purpose of whatsover nature and do not contain any restriction regarding the nature of that purpose.
It places nolimitation on the competent authority,as to what kind of Public purpose it should be for the valid exercise of its power nor does it confine the exercise of that power to a purpose which is a temporary one.
[404E F; 405AB] There is no antitheses between the power to requisition and the power of compulsory acquisition under the Land Acquisition Act.
Neither of the two Acts contains any provision under which it can be said that if one is acted upon, the other cannot.
[405D E]


judgement:
Appeal No. 8 of 1965.
Appeal by special leave from the judgment and decree dated October 5, 1962 of the Bombay High Court in Appeal No. 598 of 1960, from Appellate Decree.
section T. Desai and J. P. Aggarwal, for the appellant.
O. P. Malhotra, and P. C. Bhartari, for the respondents.
425 The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave is directed against the judgment and decree of the Bombay High Court in Appeal No. 598 of 1960, whereby the High Court confirmed the judgment and decree dated January 30, 1960, passed by the Extra Assistant Judge, District Court, Ahmednagar, in Regular Appeal No. 300 of 1958, confirming the decree dated April 7, 1958, passed by the Joint Civil Judge, Junior Division, Ahmednagar, in Civil Suit No. 609 of 1948.
The relevant facts for the determination of the points raised before us by the learned counsel for the appellant mortgagee, are as follows: The respondents before us filed a suit for the redemption of the mortgage of a bungalow at Ahmednagar alleging that the sale deed in respect of this bungalow for Rs. 5,000 was in fact a possessory mortgage.
One of the terms of this deed, dated August 4, 1928, was : " However, a condition is laid down that if we pay you within three years from this day Rupees five thousand relating to this sale deed, and (interest) thereon at the rate of 12 twelve annas per cent per mensem at yearly rests, and the amounts spent by you to meet the expenses for repairs, constructions, taxes, etc.
together with interest (at the rate) mentioned above. . you are to receive the same and allow us to purchase the aforesaid property back.
The transaction was held to be a mortgage and there is no dispute on this point.
On April 7, 1958, the suit was finally decreed for redemption of the property subject to a payment of Rs. 9,224 .12 0, Rs. 4,612 6 0 as principal, and Rs. 4,612 6 0 as interest thereon, within six months from that date.
A preliminary decree was directed to be drawn up.
The appellant filed an appeal in the Court of the District Judge, Ahmednagar, and, among other grounds, alleged that "the Court ought to have directed the Commissioner to deduct the rent received (i) first towards taxes, then (ii) towards interest of the amount of repairs, etc.
, then (iii) towards interest on the principal amount, then towards (iv) amount of repairs and expenses and then towards the principal of the loan".
The Extra Assistant Judge did not agree with this contention, and dismissed the appeal.
The appellant filed a second appeal to the High Court.
The High Court also disagreed with the above contentions.
The High Court held that the priorities had been settled by the courts below in accordance with the provisions of section 76(h) of the (IV of 1882) and were, therefore, proper.
The method of accounting followed by the Commissioner ap pointed in the case, and which was accepted by the courts below, was as follows : Out of the income derived from the property (There is no dispute that the bungalow was fetching rent from 426 month to month) the outgoings were deducted in the following order of priority : 1.
Payment of taxes.
Payment of interest on the amount of expenditure on maintenance and repairs.
Payment of the expenditure on maintenance and repairs.
Interest on the amount of principal of the mortgage bond.
Amount of principal under dispute.
The learned counsel for the appellant, Mr. section T. Desai, says that item 4 above should be item 3, and to substantiate this has submitted three propositions before us : (1) Section 76(h) does not lay down any order of priority inconsistent with the order of priority mentioned in section 76(d) and does not reverse that order.
Both the provisions must be read together and in a harmonious manner; (2) The liability for repairs under section 76(d) is very limited in its scope.
This liability arises only if there is a surplus left after deducting from the rents and profits of the property two items, viz.; (i) expenses mentioned in clause (c), and (ii) interest on the principal money; (3) If the mortgagee expends more for repairs than the surplus left after the last mentioned deductions, that expense would not be in pursuance of any liability of his under section 76(d) but would be claimed under the right conferred by section 63A(2) and section 72(b).
Such expenses would be treated as additions to the principal money.
Sections 76 (c), (d), (h), 63A and 72(b) read as follows: "76.
When, during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property; (c) he must, in the absence of a, contract to the contrary, out of the income of the property, pay the Government revenue, all other charges of a public nature and all rent accruing due in respect thereof during such possession, and any arrears of rent in default of payment.of which the property may be summarily sold; (d) he must, in the absence of a contract to the contrary, make such necessary repairs of the property as he can pay for out of the rents and profits thereof after 427 deducting from such rents and profits the payments mentioned in clause (c) and the interest on the principal money; (h) his receipts from the mortgaged property, or, where such property is personally occupied by him, a fair occupation rent in respect thereof, shall, after deducting the expenses properly incurred for the management of the property and the collection of rents and profits and the other expenses mentioned in clauses (c) and (d), and interest thereon, be debited against him in reduction of the amount (if any) from time to time due to him on account of interest and, so far as such receipts exceed any interest due, in reduction or discharge of the mortgage money; the surplus, if any, shall be paid to the mortgagee;. . 63A. (1) Where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, been improved, the mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled to the improvement; and the mortgagor shall not, save only in cases provide d for in sub section (2), be liable to pay the cost thereof.
(2) Where any such improvement was effected at the cost of the mortgagee and was necessary to preserve the property from destruction or deterioration or was necessary to prevent the security from becoming insufficient, or was made in compliance with the lawful order of any public servant or public authority, the mortgagor shall, in the absence of a contract to the contrary, be liable to pay the proper cost thereof as an addition to the principal money with interest at the same rate as is payable on the principal, or, where no such rate is fixed, at the rate of nine per cent per annum, and the profits, if any, accruing by reason of the improvement shall be credited to the mortgagor.
A mortgagee may spend such money as is necessary (b) for the preservation of the mortgaged property from destruction, forfeiture or sale; and may, in the absence of a contract to the contrary, add such money ' to the principal money, at the rate of interest payable on the principal, and where no such rate is fixed, at the rate of nine per cent per annum; Provided that the expenditure of money by the mortgagee under clause (b) or cause (e) shall not be deemed to be necessary 428 unless the mortgagor has been called upon and has failed to take proper and timely steps to preserve the property or to support the title. . " It seems to us clear that.
the object of section 76(d) is not to fix any priorities but to make it obligatory on the mortgagee, in the absence of a contract to the contrary, to carry out necessary repairs to the property but the amount he can spend is limited to the difference between rents and profits and payments mentioned in cl.
(c) and the interest on the principal money.
When we come to cl.
(h), it directs the mortgagee to apply the receipts from the mortgaged property in a, certain manner.
The order of application is (1) the expenses properly incurred for the management of the property and the collection of rents and profits and the other expenses mentioned in cls.
(c) and (d), (2) interest thereon, (3) the surplus, if any, has to be utilised towards reduction of interest on principal money, and (4) the principal money itself.
In our view, there is no contradiction between section 76(d) and section 76(h).
It is true, as stated in proposition No. 2 of the learned counsel, that the liability for repairs is limited in its scope and arises only if there is a surplus left after deducting from the rents and profits of the property the expenses mentioned in cl.
(c), and the interest on the principal money, but the fact that the liability is limited in scope does not bear on the question whether it lays down any order of priorities inconsistent with the priorities mentioned in cl.
.This is so because, as we have stated above, section 76(d) is not con cerned with the question of priorities but with limiting the amount which can be spent by the mortgagee in possession for carrying Out necessary repairs.
Coming now to the third proposition, it is not necessary to deal with the question of the relationship between section 63A, section 72(b) and section 76, because the plaintiff has neither alleged nor proved that any expenses were incurred by which improvement was effected and the improvement was necessary to preserve the property from destruction or deterioration within section 63A(2).
Similarly, he never alleged or proved that he spent money which was necessary for the preservation of the mortgaged property from destruction, forfeiture or sale within section 72(b).
There is no allegation or evidence that the mortgagor had been called upon and failed to take proper and timely steps to preserve the property.
We may mention that the only allegation to which our atten tion was drawn is contained in para 11 of the written statement, which reads as follows : "11.
The transaction dated 4 8 28 is not one of security or mortgage.
The defendant has never received rent for the suit property more than Rs. 65 per month.
The defendant has incurred expenses from time to time for taxes, expenses, maintenance, repairs, (and) con structions.
The defendant made constructions and 429 repairs and spent more, than Rs. 10,000 (ten thousand) therefor because it was his own property.
I shall produce an extract in that behalf.
For many years the property under dispute was unoccupied This hardly covers the point now sough to be made.
For the aforesaid reasons the appeal fails and is dismissed with costs.
G.C. Appeal dismissed.

summary/full:
The respondents filed a suit against the appellant for redemption of a mortgage.
The suit was decreed subject to payment of a sum of Rs. 9,224 12 0 towards principal and interest within six months.
A preliminary decree was directed to be drawn up.
The appellant filed an appeal in the Court of the District Judge and inter alia urged that "the court ought to have directed the Commissioner to deduct the rent received (i) first towards taxes, then (ii) towards interest of the amount, of repairs etc., then (iii) towards interest on the principal amount, then towards (iv) amount of repairs and expenses and then towards the principal of the loan.
" The appeal was dismissed.
A second appeal in the High Court also failed.
The appellant came to this Court by special leave.
It was urged on his behalf that the priorities in section 76(h) of the Transfer of Property Act were subject to the priorities in section 76(d) and therefore interest on the principal amount should, in the present case, have been given priority over the payment of the expenditure on maintenance and repairs.
Held:The appeal must fail.
The object of section 76(d) is not to fix any priorities but to make it obligatory on the mortgagee, in the absence of a contract to the contrary to carry out necessary repairs to the property but the amount he can spend is limited to the difference between rents and profits and payments mentioned in cl.
(c) and the interest on the principal money.
It is cl.
(h) which directs the mortgagee to apply the receipts from the mortgaged property in a certain manner.
The order of application is (1) the expenses properly incurred for the management of the property and the collection of rents and profits and the other expenses mentioned in cls., (c) and (d), (2) interest thereon, (3) the surplus, if any, has to be utilised towards reduction of interest on principal money and (4) the principal money itself.
There is no contradiction between section 76(d) and section 76(h).
The fact that section 76(d) limits the scope of the liability has no bearing on the question whether it lays down any order of priorities inconsistent with those mentioned in cl.
(h) [428B E]


judgement:
Appeal No. 380 of 1966.
Appeal by special leave from the judgment and order dated August 16, 1963 of the Kerala High Court in Tax Revision Case No. 17 of 1962.
section V. Gupte, Solicitor General and A. G. Pudissery, for the appellant.
O. P. Malhotra, P. C. Bhartar and 0.
C. Mathur, for the respondent.
Sardar Bahadur, for the intervener.
The Judgment of the Court was delivered by Mitter, J.
This appeal, by special leave, is from a judgment and order of the High Court of Kerala dated August 16, 1963 passed in Tax Revision Case No. 17 of 1962 filed by the respondent, Cochin Coal Co. Ltd. against the order of the Sales Tax Appellant Tribunal, Trivandrum.
The facts necessary for the disposal of this appeal are as follows.
The respondent assessee was a, non resident dealer (not resident in Travancore Cochin) during the year 1955 56.
The period we are concerned with here ends on September 4, 1955.
it used to supply coal to consumers in Travancore Cochin State which later became Kerala.
For the assessment year in question (1955 56) the assessee was asked to file statements showing its turnover of supplies of coal made to purchasers in the State of Kerala and in reply to the notice under section 12(2)(b) of the Travancore Cochin General Sales Tax Act, it stated that the sales of coal to steamers arriving and berthed in Travancore Cochin State waters were not taxable because the goods were stored by the steamers for consumption on the high seas.
The assessee however did not question its liability to pay tax in respect of supplies made to other consumers in the State of Kerala.
On March 7, 1959 the Sales Tax Officer, Circle 1, Mattancherry assessed the respondent on a turnover of Rs. 1,29,352/ .
The respondent filed an appeal therefrom and the Assistant Commissioner of Agricultural Income Tax and Sales Tax, Ernakulam allowed the appeal in part and reduced the turnover by omitting the portion of it after 6th September, 1955.
In the result, the assessee 's turnover was reduced to Rs. 69,407/ .
There was a further appeal to the Kerala Sales Tax Appellate Tribunal.
This was disposed of on January 2, 1962 in favour of the assessee.
The Tribunal held that the sales being inter State sales were, according to the decision of the Kerala, High Court in T. R. Cs. 1, 2 and 3 of 1961 (reported in 14 Sales Tax Cases 850) not taxable.
The Tribunal held that section 26(1)(b) of the General Sales Tax Act, as amended by section 13(ii) of Act 12 of 1957, prohibited the taxation of inter State sales after March 31, 1951.
The Deputy Commissioner of Agricultural Income Tax and Sales 417 Tax Central Zone, Ernakulam, went up to the High Court of Kerala under section 15 B(1) of the Act.
The question of law raised for decision by the High Court was, "Whether in the light of the amending Act 9 of 1962 the finding of the Tribunal is correct '?" In rejecting the application, the High Court reasoned as follows: (1) Central Act 7 of 1956 was intended to validate State laws imposing or authorising the imposition of taxes on the sale or purchase of goods in the course 'of interState trade or commerce.
(2) This Court has decided in the State of Kerala and others vs The Cochin Coal Co., Ltd.(1) that section 26 of the General Sales Tax Act, 1125 imposed a tax on the sale or purchase of goods in the course 'of inter State trade or commerce and taxation of such sales during the period between 1 4 1951 and 6 9 1955 was validated by the above Central Act.
(3) section 26 of the General Sales Tax Act, 1125 prior to its amendment by Act 12 of 1957 was in pari materia with section 22 of the Madras General Sales Tax Act which came up for consideration in the case of M. P. V. Sundararamier & Co. and others vs The State of Andhra Pradesh and another(2).
The Supreme Court held that section 22 of the Madras Act "intended to authorise taxation of sales falling within the Explanation, subject to authorisation by Parliament as provided in article 286(2)".
(4) Act 12 of 1957 raised the controversy as to whether Central Act 7 of 1956 could be considered as sabaging the levy of tax on inter State sales after the amendment introduced in section 26.
According to the decision in T.R. Cs. 1, 2 and 3 of 1961 inter State sales after 3 1st March, 1951 were not taxable.
(5) The Constitution (Sixth Amendment) Act, 1956 made substantial changes as regards levy of tax in inter State sales.
As a result of the amendment of article 269 taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter State trade or commerce were to be levied and collected by the Government of India and it was for Parliament to formulate principles for determining when a sale or purchase of goods takes place in the course of inter State trade or commerce.
(6) The Validating Act 9 of 1962 was enacted subsequent to the Constitution (Sixth Amendment) Act which came into force on 11th September 1956.
In (1) ; (2) ; 418 view of the amendment of the Constitution in 1956 the Legislature of Kerala had not the competence to pass any legislation on the subject of inter State sales whether prospective or retrospective or both in the year 1962 with the result that the State could not call in aid the provisions of Act 9 of 1962 to tax inter State sales.
The appellant 's case was argued by the learned Solicitor General.
One E. J. Mathew was allowed to intervene in this matter.
In our view, the High Court failed to construe the effect of the relevant statutes and apply the decisions of this Court rendered before they heard the matter.
Proceeding chronologically, the legal position developed as follows.
Before the Constitution came into force, The Travancore Cochin State General Sales Tax Act, XI of 1125 levied a tax on sale of goods under section 3 of the Act.
The tax was to be paid by the dealer on his turnover in each year.
There was then no question of any exemption of inter State sales from taxation.
section 26 was inserted in the main Act by Act 12 of 1951 and it ran as follows: "(1) Notwithstanding anything contained in this Act (a) a tax on the sale or purchase of goods shall not be imposed under this Act: (i) where such sale or purchase takes place outside the State; or (ii) where such sale or purchase takes place in the course of import of the goods into or export of the goods out of, the territory of India.
(b) a, tax on the sale or purchase of any goods shall not, after the 31st day of March 1951, be imposed where such sale or purchase takes place in the course of inter State trade or commerce except in so far as Parliament may by law otherwise provide.
(2) The explanation to clause (1) of article 286 of the Constitution of India shall apply for the interpretation of sub cl.
(i) of cl.
(a) of sub section (1)".
This was to bring the Act into line with article 286 of the Constitution of India.
Then came the judgment in the case of The, Bengal Immunity Company Ltd. vs The State of Bihar and others(1) on September 6, 1955.
There it was decided that the sales or purchases made by the appellant company in that case which were sought to be taxed by the State of Bihar actually took place in the course of inter State trade or commerce and Parliament not having by law otherwise provided, no Bihar law could tax these sales or purchases although they fell within the Explanation to article 286(1) and other States could not tax the same by reason of both clause I (a) read with the Explanation and cl.
(2) of article 286.
This led to (1) 419 the passing of Central Act 7 of 1956.
The object of the Act was to validate laws of States imposing, or authorising the imposition of taxes on the sale or purchase of goods in the course of interState trade or commerce.
S, 2 of the Act provided that: "Notwithstanding any judgment, decree or order of any court, no law of a State imposing, or authorising the imposition of, a, tax on the sale or purchase of any goods where such sale or purchase took place in the course of inter State trade or commerce during the period between the 1st day of April 1951 and the 6th day of September, 1955, shall be deemed to be invalid or ever to have been invalid merely by reason of the fact that such sale or purchase took place in the course of inter State trade or commerce; and all such taxes levied or collected or purporting to have been validly levied or collected during the aforesaid period shall be deemed always to have been validly levied or collected in accordance with law.
A question here arises as to whether this statutory provision served to lift the ban imposed by section 26 of the General Sales Tax Act.
Then came the Constitution (Sixth Amendment) Act, 1956 on September 11, 1956.
It made substantial and important changes in article 286 of the Constitution by deleting the Explanation to article 286(1) and by substituting new article 286(2) and 286(3).
It also amended article 269.
It inserted item 92A in the Union List of the Seventh Schedule and substituted a new entry 54 in place of the old one in the State List of the said Schedule.
As a result of these amendments, taxes on the sale or purchase of goods other than newspapers, where such sale or purchase took place in the course of interstate trade or commerce could be levied and collected by the Government of India which was empowered to assign the same to the States in terms of cl.
(2) of article 269.
article 269(3) empowered Parliament by law to formulate principles for determining when a, sale or purchase of goods takes place in the course of inter State trade or commerce.
The new item 92A added to the Union List read: "Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter State trade or commerce." The old entry 54 in the State List was substituted by a new entry reading: "Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I." It would therefore appear that after the amendment of the Constitution in 1956 the State Legislatures were not competent to legislate in respect of taxes on the sale or purchase of goods other than newspapers which took place in the course of inter State trade or commerce.
420 Next in order of date is the Travancore Cochin General Sales Tax (Amendment) Act, 1957 (12 of 1957) which came into force on August 7, 1957.
section 13 of this Act introduced several changes in section 26 of Act XI of 1125.
In the first place, it substituted the word 'State ' for the words "State of Travancore Cochin", in sub cl.
(i) of cl.
(a) of sub section
(1) of section 26.
It also deleted the words: "except in so far as Parliament may by law otherwise provide" in cl.
(b) of sub section
(1) and omitted sub section
(2) of the section.
By its terms the amendment was only prospective.
It did not seek to disturb the position in law obtaining up to that date.
It was argued before us that the State Legislature was not competent to legislate in this field after the Constitution (Sixth Amendment) Act.
On March 11, 1958 Sundararamier & Co. 's case(1) was decided by this Court.
That case dealt with the competence of the States to levy tax on inter State sales and to enact conditional legislation on the subject.
The statute which came up for consideration was the Madras General Sales Tax Act, 1939 (Madras Act 9 of 1939) as adapted to Andhra read with section 2 of the Sales Tax Laws Validation Act (7 of 1956).
section 22 of the Madras General Sales Tax Act was inserted in the statute by an Adaptation Order of the President issued on July 2, 1952 and cl.
(a) thereof was substantially similar to section 26(1)(a) of the Travancore Cochin General Sales Tax Act XI of 1125.
The effect of cl.
(b) of section 22 was that nothing in the Act (Madras Act) was to be deemed to impose or authorise the imposition of a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter State trade or commerce except in so far as Parliament may bylaw otherwise provide after 3 1st March 1951 and the provisions of the Act were to be read and construed accordingly.
There was an Explanation to this section which is a verbatim reproduction of the Explanation to article 286(1)(a).
It was held by this Court tat page 1453) that: "Taken along with the admitted power of the States to impose tax on sales under Entry 54, the true scope of section 22 is that it does impose a tax on the Explanation sales, but the imposition is to take effect only when Parliament lifts the ban.
In other words, it is a piece of legislation imposing tax in praesenti but with a condition annexed that it is to come into force in futuro as and when Parliament so provides. . . .
It would clearly be within the competence of the Madras Legislature to enact a, law imposing a tax on sales conditional on the ban enacted in article 286(2) being lifted by Parliamentary legislation, and that, in our opinion, is all that has been done in section 22.
The Madras Act defines the event on which the tax becomes payable and the person from whom and the (1) ; , 421 rate at which it has to be levied and forms a complete code on the topic under consideration.
It would have no immediate operation by reason of the ban imposed by article 286(2), but when once that is removed by a law of Parliament, there is no impediment to its being enforced.
That satisfies all the requirements of a conditional legislation.
" Discussing various authorities cited at the Bar this Court approved of the decision in Mettur Industries Ltd. vs State of Madras(1) and Dial Das vs P. section Talwalkar(2) and held that section 22 operated to impose a tax on sales failing within the Explanation subject to authorisation by Parliament as provided in Art, 286(2).
At page 1463, the Court went on to observe: "If it is competent to the legislatures of the States to enact a law imposing a tax on inter State sales to take effect when Parliament so provides, there is nothing unconstitut ional or illegal either in section 22 of the Madras Act or in the corresponding provisions in the Acts of other States.
If conditional legislation is valid, as we have held it is, then section 22 is clearly intro vires and the foundation on which this contention of the petitioners rests, disappears and it must fall to the ground.
" The case of the State of Kerala & Others vs The Cochin Coal Company Ltd(") was decided on October 31, 1960.
There, the respondent who stocked bunker coal at Candla Island in the State of Madras sold the coal to steamers calling at the port of Cochin in the State of Travancore Cochin and delivered it there.
The respondent was assessed to sales tax on such sales for the years 1951 52 and 1952 53.
The respondent contended inter alia that the sale being in the course of inter State trade was covered, by the ban contained in article 286(2) of the Constitution and was not taxable under the Travancore Cochin General Sales Tax Act, 1125.
The State contended that this claim for exemption was not available in view of the Sales Tax Laws Validation Act, 1956.
The High Court held that the Validation Act could not avail the State because on their construction of section 26 of the Act, no tax had been levied or was leviable on sales in the course of inter State trade or commence and that the Validation Act having validated only taxes already levied could not enable the State to levy tax which had not been imposed by the State Sales Tax Act.
This Court rejected the view of the High Court (see 7 S.T.C. 731 at p. 738) and held that "the view of the learned Judges of the High Court regarding the construction of section 26 of the Travancore Cochin General Sales Tax Act must now be held to be incorrect in view of ' the decision of this Court in M. P. V. Sundararamier & Co. vs, The State of Andhra Pradesh(4).
(1) A.T.R. (2) A.I.R. 1957 Bom.
(3) ; (4) ; 422 The position which emerges from the above may be summarised below: (1)The enactment of the Travancore Cochin General Sales Tax Act as it stood prior to the coming into force of the Constitution, imposed a levy of sales tax on transactions of the nature disclosed in this case.
(2)S. 26 of the General Sales Tax Act, as amended in 1951, imposed a ban on the levy of tax after March 31, 1951 subject to any exception which Parliament may by law provide.
(3)Central Act 7 of 1956 was enacted for the purpose of validating the levy and collection of taxes between 1 4 1951 and 6 9 19 55 which would 'otherwise be invalid, by reason of the decision in the Bengal Immunity Co. 's case(1).
(4)In Sundararamier 's case(2) it was held by this Court that section 22 of the Madras General Sales Tax Act operated to impose a tax subject to authorisation by Parliament as provided in article 286 (2).
Further, this Court did not agree with the view of the Kerala High Court in Cochin Coal Co. Ltd. vs State of Travancore Cochin(3).
(5)In the State of Kerala & Others vs The Cochin Coal Co. Ltd.(4) this Court overruled the decision of the Kerala High Court in the Cochin Coal Co. Ltd. vs The State of Travancore Cochin(3) regarding the construction ,of section 26 of the Travancore Cochin General Sales Tax Act : further the assessee 's claim to relief on the strength of article 286(2) of the Constitution was held not to be available to them after the coming into force of the Sales Tax Validation Act, 1956 (See [1961] 2 S.C.R. pp. 219, 223).
The effect of this was that the levy of sales tax up to 4th September, 1955 being the last date with which we are concerned in this case, was valid.
The validity and the scope of the amendment introduced in section 26 of the Travancore Cochin General Sales Tax Act by Act 12 of 1957 do not fall to be considered in this case inasmuch as the Act was only prospective and did not operate to invalidate any levy of tax imposed before.
In this view of the matter, we are really not concerned to go into the question as to whether the State of Kerala had legislative competence to enact Act 9 of 1962 seeking thereby to amend section 26 of the Travancore Cochin General Sales Tax Act, 1125 by substituting the date 6th September, 1955 in place of 31st March 1951 and purporting to validate the levy and collection of taxes on sales and purchases falling within the purview of sub section
(2A) of section 26 of the principal Act as inserted by the Act of 1962.
The ban (1) (3) 7 S.T.C. 731.
(2) ; (4) ; 423 imposed by section 26 of the General Sales Tax Act, 1125 having been lifted by the Central Sales Tax Validating Act, 1956, the State was competent to collect all taxes in respect of sales in the course of inter State trade and commerce up to September 5, 1955.
In the result, we hold that sales tax was properly leviable by the State of Kerala on the transactions which formed the subject matter of this case up to the 4th September 1955; but the question raised in the application for revision was not correctly framed and should read as follows: "Whether in the light of the Sales Tax Laws Validation Act, 1956 (Central Act 7 of 1956) read with the Travancore Cochin General Sales Tax Act as amended up to 1956, the finding of the Tribunal is correct?" We amend the question accordingly.
We allow the appeal and answer the question in the negative.
The matter must now go back to the High Court and the High Court should remit the matter to the Appellate Tribunal with our opinion on the question as reframed.
In the circumstances of this case, we make no order as to costs.
V.P.S. Appeal allowed.

summary/full:
Before the Constitution came into force, the Travancore Cochin General Sales Tax Act, M.E. 1125, levied a tax on sale of goods and inter State sales were not exempt from such taxation.
By Act 12 of 1951, section 26 was inserted in the Act to bring the Act into line with article 286 of the Constitution as it then stood, and imposed a ban on the levy of tax on inter State sales after March 31, 1951, unless Parliament otherwise provided under article 286(2).
On September 6, 1955, this Court held in The Bengal Immunity Co. Ltd. case, [1955]2 S.C.R. 603, that inter State sales could not be taxed by a State, even if they were inside sales with respect to that State.
This led to the passing, by Parliament, of the Sales Tax Laws Validation Act, 1956, for the purpose of validating the levy and collection of taxes on inside sales between April 1, 1951 and September 6, 1955.
In Sundararamier & Co. case ; this Court decided that section 22 of the Madras General Sales Tax Act, 1939 which was in part materia with section 26 of the Travancore Cochin Act operated to impose a tax, subject to authorisation by Parliament as provided in article 286(2); in other words it was a piece of legislation imposing tax in praesenti but with a condition annexed that it was to come into force in futuro as and when Parliament so provided; and this view was re affirmed by this Court in the Cochin Coal Co. 's case ; with respect to section 26 of the Travancore Cochin Act.
[418C; 422 B F] The respondent assessee was a dealer, not resident in Travancore Cochin State.
It supplied coal to consumers within the State, the last of the transactions being on September 4, 1955.
On the question whether the inter State sales during assess ment year 1955 56, were taxable under the provisions of the Travancore Cochin Act, the Sales Tax Appellate Tribunal and the High Court held in favour of the assessee.
In appeal by the State to this Court, Held: The ban imposed by section 26 of the Travancore Cochin Act, having been lifted by the Sales Tax Laws Validation Act, sales tax could be levied and collected by the State for the period covered by that Act.
The Amendment to the section by Kerala Act 12 of 1957 did not fall to be considered in the present case inasmuch as the Amending Act was only prospective and did not operate to invalidate any levy of tax imposed before.
The question as to whether the State of Kerala had legislative competence to amend section 26 by Kerala Act 9 of 1962 which purported to validate, the levy and collection of taxes before September 6, 1955 is also irrelevant for the purpose of this appeal.
[422G; 423A D] S5 SCI (a)13 416