judgement:
ition No. 9933 of 1982 (Under Article 32 of the Constitution of India.) I) WITH Special Leave Petition (Civil) , No. 13981 of 1982 From the Judgment and Order dated 21.
10. 1982 of the Bombay High Court in W. P. No. 3137 of 1982.
section Balakrishnan , M. K. D. Namboodiri and Ramesh Keswani for the Petitioners.
K. N. Bhat and Ms. Madhu Moolchandani for the Respondents.
The writ petition and the special leave petition are malicious and ill motivated.
But they have served one good purpose , namely , they have brought to light the undesirable activities of the petitioners themselves.
We will have some harsh things to say about the petitioners in our judgment.
Indian attempt to malign the top management of the Canara Bank , they have exposed themselves and the allegations have boomeranged.
The spider has been caught in its own web.
The first petitioner in the writ petitions is S.A. Kini , Deputy General Secretary of the Canara Bank Officers ' Association and the second petitioner is the Canara Bank Officers Association.
The 757 respondents in the writ petition are the Union of India represented by the Secretary , Ministry of Finance , Department of Economic Affairs , Banking Division , Canara Bank (a nationalised bank) , the Chairman and Managing Director of Canara Bank and the General Manager of Canara Bank.
The special leave petition is directed against an order of the High Court of Bombay dated i; October 21 , 1982 dismissing a writ petition filed by the same petitioners as in the writ petition before us.
The respondents to the petition for special leave are also the same as in the writ petition.
The principal allegation made by the petitioners in the writ petition filed in the Bombay High Court and repeated in this Court is that the Chairman and Managing Director , the General Manager and the top officials of the Management of Canara Bank have been using their official position and authority to coerce the officers and staff of the Canara Bank to collect funds for the Canara Bank Relief and Welfare Society.
Apart from seeking donations from customers , it is alleged that one of the principal modes of collecting funds was the sale of greeting cards by the officials of the bank to their customers.
Each officer was allotted a certain quota and was compelled to sell his quota of cards to customers.
The petitioners further alleged that officers , who protested against the directive to sell greeting cards , were victimised by the bank , and officers , who were highly successful 'card sellers ' were given accelerated promotion over the heads of seniors.
Thiruvengandam was cited as an instance of a victimised officers who was denied promotion while Annappa Pai was cited as an instance of an officer , who had benefited and who was allowed to leap over several senior officers and was promoted as a reward for his services by the sale of cards.
The petitioners also alleged that the top management was also interested in collecting funds for (i) Deposit Mobilisation Club , (ii) The Canara Bank Cultural Brotherhood Organisation; and (iii) The Kamakoti Prabha Trust.
758 At the hearing before us , the allegations in regard to the Deposit Mobilisation Club and the Canara Bank Cultural Brother hood were abandoned.
In regard to the Kamakoti Prabha Trust , the allegation was that it was started by one section Venkataraman , who at the time when it was formed , happened to be the Deputy General Manager of the bank.
He has long since retired from the bank and nothing has been shown to us as to how the Kamakoti Prabha Trust is in any manner linked with the top management of the bank or how the management has promoted the interests of the Trust.
It is unnecessary to pursue the allegations made in regard to the Kamakoti Prabha Trust , which in our opinion have been made out of pure spite and mere vexation.
We are only left with the allegations made in connection with the collection of funds and the sale of greeting cards for the benefit of the Canara Bank Relief and Welfare Society.
The allegation that Thiruvengandm was superseded because he refused to sell greeting cards and the allegation that Annappa Pai was given an accelerated promotion because of his excellent performance in selling greeting cards remained mere allegations.
There was no material whatsoever placed before us to substantiate either of these allegations.
It was , however , asserted before us by the petitioners and admitted by the respondents that until the year 1982 , the General Manager and other top Officials used to associate them selves with the sale of greeting cards to benefit the Canara Bank Relief and Welfare Society.
It appears from the facts placed before us that the Canara Bank Relief and Welfare Society was formed and registered in the year 1961 at a time when the bank was a private bank.
The bank was nationalised in 1969 and thereafter the bank ceased to have anything to do with the society , though out of a total membership of 2020 about 200 past and present employees of the bank only are now members of the society.
Until 1982 one individual director of the bank used to be one of the several members of the Executive Committee of the Society , but the present position is that no member of the Executive Committee of the Society is an official of the bank.
The only link of the bank with the society now is the name of the Society.
The memorandum of association of the society was also placed before us and the objects of the society are wholly unconnected with the bank or its employees.
The principal objects are to provide relief in case of calamities like flood , earthquake , fire , famine , epidemic , etc , to organise hospitals , maternity and child welfare centers , homes for the poor , sick , aged 759 and disabled , to make cash contributions to educational and other social welfare organisations , to undertake rural development programmes and so on.
None of the objectives involves any special benefit or advantage to the employees of the bank.
A great many details of the commendable work done by the society have been given to us in the several statements filed on behalf of the respondents.
The petitioners , unfortunately , have needlessly dragged the society into the picture ' making unworthy allegations.
But even so when the writ petition was filed by the present petitioners in the Bombay High Court , the management of the bank realised that there may be some scope for abuse by some officials of the bank in the matter of selling greeting cards or raising funds for the society.
They , therefore , made a statement before the Bombay High Court in the following terms: "The first respondent bank states that it has never at any time whatsoever compelled its employees to sell greeting cards or collect funds for the Canara Bank Relief and Welfare Society or any other institution , nor has the first respondent bank at any time considered the same as a relief factor for evaluating performance of its employees for promotion , nor shall the first respondent bank do so in future.
" The High Court accepted the statement of the respondent bank and rejected the writ petition.
The assurance given by the bank , as contained in the statement made by the bank before the , Bombay high Court , should have satisfied the petitioners if they had any genuine grievance that , in the past , officers of the bank had been forced to raise funds and sell greeting cards for the benefit of the society.
But the petitioners were not willing to be easily satisfied.
They filed the present special leave petition and the writ petition repeating the allegations made in the Bombay High Court and praying for 'the issue of a writ in the nature of mandamus directing the respondents to forbear from using the bank officials/bank machinery bank resources for the purposes of collections of funds in the garb of any welfare organisation in general and in particular in the name of the various funds , details of which were set out in paragraph 22 of the writ petition '.
After the statement filed by the bank in the High Court of Bombay , we are unable to find any justification whatsoever for the petitio 760 ners to pursue the matter by filing the present special leave petition and writ petition except to harrow the bank When we pointedly and repeatedly asked the learned counsel for the petitioners whether there was a single instance of a sale of greeting card or collection of funds by an official of the bank subsequent to the order of the Bombay High Court on October 21 , 1982 , the learned counsel was unable to cite a single instance , but persisted in referring to the sale of greeting cards before the order of the Bombay High Court.
Ultimately he had to admit that there was not a single instance of sale of greeting cards or collection of funds by officials of the bank subsequent to the order of the Bombay High Court.
We have no hesitation in holding that the writ petition and the special leave petitioners both malicious and are designed to denigrate the management of the bank.
Sri K N. Bhatt ' learned counsel for respondents (2to 4) assures us that the bank stands by the statement made before the Bombay High Court.
We have , therefore , on hesitation in dismissing the writ petition and the special leave petition with costs which we quantify at Rs. 10,000 in each.
But that is not an end of the matter.
Right at the commencement , when the petitions came up for admission , the court came to be oppressed by the vast opportunity for abuse of financial power presented to Nationalised Banks and Financial Institutions of the Public Sector.
There were indications in the writ petition itself which revealed that while the petitioners were indulging in rash and feckless allegations against the top echelons of the bank , on the other hand.
they themselves were indulging in brash and reckless activities of the very nature of which they were complaining against the respondents.
It appeared to the court that the petitioners , hands were unclean , and that they were by no means the champions of the 'oppressed ' officers of the bank.
There was one significant paragraph in the writ petition , which though meant to mislead the court , exposed them.
In paragraph 12 of the writ petition , it was stated.
That realising the importance of strict observance of legal and moral norms in bank business , the Central Government had issued the following directive: 761 Immediate F.No.6/9/5/82 , I.R. Government of India Ministry of Finance Department of Economic Affairs (Banking Division) New Delhi , the July 22 , 1982.
Chairman , Indian Banks ' Association , Bombay.
Subject:. .
Bank officers , Association Trust Fund Collection of funds and creation of trust Dear Sir.
I am directed to state that it has come to the notice if the Government that Bank Officers ' Association has formed a Trust by name Bank Officers ' Association Trust Fund , which is registered in 1981 under the Bombay Public Trust Act , 1950 and it has also been granted exemption under section 80 G of Income Tax Act for donations made by assesses to the Fund.
Apart from using bank 's name which will have avoidable misgivings in the clientele , trust Fund has issued an appeal soliciting donations etc.
from general public.
We feel that even as members of the Association , the employees cannot collect funds from the public and the clients to the bank as it constitutes a clear misuse of their office.
I am , therefore , to suggest that IBA may consider advising member banks to ensure that such trusts are not set up elsewhere.
Kindly acknowledge receipt of the letter.
Yours faithfully , Sd/ ( Yashwant Raj ) Under Secretary to the Government of India This directive has been flagrantly violated by the top management of the bank and personal aggrandizement of staggering proportions are being made at the cost of the 762 Bank and at the cost of the depositors money.
" It was a blatant case of supprecssio veri and suggestio falsi The petitioners sought to imply and suggest that the directive of the Central Government was directed against the activities of the top management of the Bank in connection with the collection of funds for the Canara Bank Relief and Welfare Society , a society which was in existence years before the nationalisation of banks was thought of , whereas the truth was that the directive was a direct consequence of the complaints received against the activities of the petitioners in collecting funds for the Canara Bank Officers Association Trust Fund.
The allegations in the petition and the reference in paragraph 12 to the " Bank Officers ' Trust Fund" provoked the court into a deeper probe as it was felt that the customer public was being exploited by some officers of the bank and the matter needed comment and required correction.
Thereafter we made several orders from time to time calling for detailed information from both the parties about the activities of the Canara Bank Relief and Welfare Society and the Canara Bank Staff Officers.
Association and the collections made from them and by them.
The orders made by us are self explanatory and are worth extracting since they give a picture of the dilatory and recalcitrant attitude of the present petitioners.
We propose to extract the orders in so far as they relate to the petitioners only , since we have already absolved the respondents.
By our order dated January 17 , 1983 , we directed , "The petitioners are directed to give the following detailed information.
There is a trust called "Canara Bank Officers" Association Trust Fund , which is alleged to have been formed on August 18 , 1981.
The petitioners will have detailed information since the constitution of the Trust of its office bearers and their position in the Bank including the designation and salary as also if any emoluments in cash or kind is drawn from the Trust.
The petitioners will also give detailed information of every contribution made to this Trust with reference to the party 's name , his dealing with the bank as a customer and the amount contributed by the party to the trust and how the contributors were 763 persuaded to make the contributions and the motives for contribution , as also service received by each contributor from the bank , with reference to the branch.
If there are withdrawals from the trust , the details should be furnished with the name of the person who has withdrawn the amount and where the money is at present kept or deposited and how the money was utilised.
Withdrawal by cash or demand draft may be separately mentioned.
By our order dated April 27 , 1983 , we directed , "By an order made by this Court on January 17 , 1983 , this Court directed the petitioners to give the following information in respect of a Trust called Canara Bank Officers ' Association Trust Fund.
The information was to be given under the following heads: 1.
Names of the office bearers of the Trust since its inception.
2 The position of each trustee in the organisation of the bank showing the designation , the place of work and salary drawn.
Whether any salary or emolument of any kind return in cash or kind was drawn from the aforementioned Trust.
If the answer to query 3 is in the affirmative the mode and method of payment.
Name of each contributor to the Trust fund , the amount of contribution , relation of the contributor to the bank and whether at any point of time , the contributor had been using or enjoying the services of the bank especially from the branch in which the trustee was working and the contributor was connected to the branch.
If the contributor is not connected with the bank organisation , the reasons and the motives for making contribution to such a trust? the beneficiaries of which 764 are none other than the officers of Canara Bank. 7.
The service received by each contributor from the bank or its branch since making the contribution or since six months prior to the making of the contribution.
Withdrawal from the Trust fund , if any made by whom in what amount on what date and for what purpose and whether the withdrawal was in cash , cheque or demand draft.
The petitioners were called upon to furnish this information when the matter was taken up for hearing.
Mr. R.K. Garg , learned counsel for the petitioners read out the affidavit of Mr. S.A. Kini dated February 18 , 1983.
We also went through the accompaniments to the affidavit.
We are satisfied that the petitioners have not given full details under every head and there is non compliance with the order of the Court.
We direct the petitioners to fully comply with the order of this Court giving information under each of the separate head as set out here inn before except those where the information has already been supplied as an annexure to the afore mentioned affidavit In that case , the deponent shall state which annexure of the earlier affidavit complies with the Court 's direction.
This information must necessarily be supplied by July 17 , 1983 and the matter shall appear on board on July 25 , 1983.
Both the parties including their officers , agents or nominees are injuncted from directly or indirectly recovering or manipulating to get any fund or contribution to the trust funds , one mentioned in our order and those other mentioned at page 16 of the writ petition hereafter.
This will not come in the way of the association recovering the membership fee from the members who arc bonafide members and are on the staff of the bank. ' We direct accordingly. " 765 By our order dated August 30 , 1983 , we again directed , Petitioner No. 2 , the Canara Bank Officers ' Association shall give full detail of the donations collected by the said Association , commencing from 1970 till today.
While giving the details of the donation , the Association shall specify the name of the donor not the branch from which the donation was received , the amount of donation , the full name and address of the parties giving donation , its relation with the bank , and also to specify the branch through which the parties were getting banking service and alteration and or modification of banking service or facilities granted since giving of the donation and which officers motivated persons to give donation to the Association as also the name and full address of the officer.
If possible , the Association may state the motivation for the donation.
The Canara Bank Officers ' Association Trust shall give full details of the donation received from the public giving some details as hereinabove indicated as in the case of Canara Bank Officers ' Association.
Let it be noted that the details given till now are far from sufficient and are evasive in character.
It must state whether a receipt is issued to each individual donor and whether counter foils are preserved. ' Finally , by our Order dated August 23 , 1984 , we observed and directed: "By our detailed order dated April 27 , 1983 , the petitioners were directed to give , amongst others , the following information in respect of Canara Bank Officers ' Association Trust Fund ( 'Trust ' for short): "Name of each contributor to the Trust fund , the amount of contribution , relation of the contributor to the bank and whether at any point or time , the contributor had been using or enjoying the services of the bank especially from the branch in which the trustee was working and the contributor was connected to the branch." 766 S.A. Kini , one of the petitioners , filed his affidavit to which was annexed a list showing the amount received from each individual/firm/company.
It is annexure IV at pages 126 163 of Volume l.
It immediately transpired that there was a deliberate attempt at evading the court 's order with a view to relevant information being not made available.
The Court by its order dated August 30 , 1983 , gave certain specific directions.
Petitioners No.2 was specifically directed to give further detail of the donations collected by the trust from 1970 till the date of the order.
It was clarified so as to leave no one in doubt that the petitioners shall specify the name of the donor (not branch from which donation was received) , the amount of donation , the full name and address of the parties giving the donation and the relation , business commercial or other wise of the donor to the bank and to further specify the branch through which the donor parties were getting banking services and facilities from the Canara Bank.
The petitioners were also directed to state whether there was any advantageous alteration or modification of the banking services or facilities granted to the donor since the donation as also to indicate and specify the name of each of the officers who were members of the Trust and who facilitated such alteration or modification advantageous to the customers in respect of banking facilities.
The name of the officer and his full address was also directed to be stated.
The petitioners were also directed , if possible , to state the motivation for the donation.
There was noticeable reluctance on the part of the petitioners to implement this order or at any rate to avoid compliance with the same.
On the last occasion , the Court directed the petitioners strictly comply with the aforementioned order.
Yesterday when the matter came up for hearing , a statement running into about 24 pages not signed by any responsible person and not verified by an affidavit was 767 placed on record.
We would be perfectly justified in ejecting this spurious document as unworthy of being looked into.
Mr. M.K. Ramamurthy repeatedly , though wholly unsuccessfully , tried to persuade us to hold that the state is in compliance with the orders of this Court.
A mere glance at the statement would show that it is a futile repetition of a bizarre exercise which resulted in the statement Annexure IV volume I and by the information supplied by the statement we are in no way wiser.
The purpose for calling upon the petitioners to submit the name of each donor was to identify the donor so that a detailed enquiry can be made as to how the officers of the Trust misusing are abusing their petition have procured donations by granting banking facilities to the donors.
The additional purpose was also to ascertain whether the donors were coerced into making the so called donations at the instance of the officers of the Trust so that a detailed enquiry can be undertaken to ascertain the use and misuse and abuse of the office by the members of the Trust.
The petitioners have been consistently striving to suppress this information from the court.
This becomes evident from the fact that even the statement filed yesterday and marked as Volume VI the name of the donor is mentioned without the address or even the city in which the donor was residing or having his place of business.
It is not stated what banking facilities the donors obtained since the donation and through which officer.
Every covert or overt attempt is made to withhold the identity of the donor to thwart the court to reach the donor so that the shady of the members of the Trust in collecting the so called donations can be unearthed.
Apart from the statement being barren , it is not supported by an affidavit and as it does not appear to have been signed by any responsible officer.
We reject it as unworthy of any credence.
The result is that till today there is non compliance with the aforementioned orders of the court.
768 It was made specifically clear that the name of the donor and the address must be clearly specified.
Even after long lapse of more than year and a half since the order , the information is branch wise which was categorically rejected by this Court.
The specific instances which remains unexplained are pointed out by Mr. K.N. Bhatt , learned advocate for the Canara Bank in his statement annexed to the letter dated August 22 , 1984.
The statement is taken on record.
We propose to give last opportunity to the petitioners to comply with the orders of this court in letter and spirit.
ANY attempt at deviance or defiance will unquestionably land to serious consequences which we refrain from specifying at this stage.
We record our utter disapproval of this hide and seek game of the petitioners and we want to leave no one in doubt that they do so was at their own peril.
The arms of law are long and strong to reach them and no effort will be spared to unearth their illegal activities if once they are so established.
It is not for a moment suggested that we so held.
But this escapist attitude of the petitioners have raised strong suspicion in our minds that there is something improper , illegal and unbusiness like in their conduct disclosing either misuse or abuse of office by the officers of the , Canara Bank in collecting a huge amount as donation from the customers of the bank for the purpose of the trust.
What is stated is just a warning.
We direct that petitioners shall comply with the orders as hereinabove as indicated within a period of 6 weeks from today.
The matter shall come up before this Bench after 6 weeks.
" Pursuant to the last of our orders , the petitioners have filed some more statements , but even so the full information which we desired to have has not been furnished.
The reason is fairly obvious and we consider it unnecessary to further dilate on this matter.
From the information now available to us as a result of the several statements filed before us , it transpires that the Canara Bank Officers ' Association was formed in the year 1971.
On August 18 , 1981 the Association started the Canara Bank Officers ' Association Trust Fund registering it as a Public Trust under the Bombay 769 Public Trust Act , 1950.
Five officers of the bank who were also office bearers of the Association were made life trustees of the Association Trust Fund Right from the date of formation of a Trust , donations were collected by the members of the Officers ' Association from the customers of the bank.
In the short span of about two years , the funds of the Trust have swelled to more than Rs. twenty four lakhs.
The so called donations range from sums in hundreds to thousands of rupees.
The number of donors is also quite large.
While one does appreciate that there must be several charitably inclined persons amongst the bank 's customers , we do not have any doubt that most of the customers that gave donations to the Trust Fund must have felt obliged to do so because of favours received or expected to be received by them.
Even if no coercive methods were employed by the members of the Association to collect donations , the customers must have felt morally pressurised that otherwise their interests would not be properly taken care of or would be jeopardised or neglected by the officers with whom they were compelled to deal in the course of their business.
Very shortly after the formation of the Trust Fund , complaints began pouring in against the collection of funds for the Association Trust Fund by the officers of the bank.
The All India Bank Depositors ' Association complained to the Central Minister incharge of banking as follows : "We are receiving complaints that some bank employees are pressurising customers for donations for various activities which have nothing to do with the bank as such.
For instance these funds are demanded for conferences , for helping the family of deceased employees , etc.
Where customers fail to respond , they begin to face problems and difficulties in their banking transactions.
You are aware of the hostile public attitude towards bank employees and the costs imposed on the economy as a result of poor service and frequent disruption of work.
Without allowing the situation to deteriorate further the public expect the Government to take remedial steps.
This is an opportunity for the Government to prove that it is responsive to public criticism. " 770 The Management of the Canara Bank also received numerous complaints.
Feeling rightly disturbed by the complaints received , the Management called upon the Association to furnish particulars of the collections made by the officers and sent the following telex message to the Association: "This is with reference to the Canara Bank officers Association Trust Fund formed by the association for which an appeal also has been issued to the public for donations.
We also learn that funds are being collected from the bank 's clients as was from the public and the ( staff by way of donations and coupons.
Usage of the name of Canara Bank for a Trust of such type has led to the impression amongst our clients that the bank is also having a role and interest in this Trust.
Apart from other reasons we are afraid that the usage of the bank 's (I name in a Trust which is not formed by the bank besides creating complications may become a bad precedent for some others to form similar trusts.
While we have no objection for your collecting funds from our own officers we request you not to collect funds from customers and the public.
We also request you to kindly furnish to us the particulars of collections already made by you from the bank 's clients and from the public as we intend referring the matter to our Board at its next meeting and the Ministry for their consideration.
" The Board of Directors discussed the matter and confirmed the action of the bank.
They also looked with disfavor on the collection of funds from customers by the Association.
They desired the bank to convey the information to the Ministry for appropriate action and follow up measures.
Thereupon the Bank addressed a detailed letter to the Government of India seeking guidance after setting forth the objects of the Trust , etc.
and the action taken by them till then.
The response of the Government was immediate " and categoric.
The Government said: "Please refer to your letter No. IRS/l. 2220.
TPM dated 18 6.1982 regarding Canara Bank Officers ' Association Trust Fund.
We would request you to pursue this matter seriously.
Even as members of the Association the 771 employees cannot solicit funds from the public.
This is clearly a misuse of their office.
We would like to be informed of the further developments in the matter.
" In addition to writing to the Chairman of the bank as aforesaid , the Government also wrote to the Chairman , Indian Banks ' Association , Bombay a letter which was extracted in paragraph 12 of the writ petition and which has also been quoted by us earlier.
In turn the Indian Bank 's Association addressed the Chief Executives of all public sector Banks and told them: "In one of the member banks in the public sector the officers ' Association had formed a trust and taken exemption under section 80 G of the Income Tax Act for receiving donations to the fund.
On the question of the propriety of creating such trusts and collecting funds from the public , the Government is of the view that it would constitute a clear misuse of their office by the employees.
We have been requested by the Government to advise all public sector banks to ensure that such trusts are not set up.
We reproduce overleaf a copy of the communication received by us from the Banking Division for your information and necessary action.
" It is clear from what has been stated above that the writ petition in this Court and the writ petition filed in the Bombay High Court which led upto the special leave petition are retaliatory actions consequent on the displeasure expressed by the Management and , on account of the Management , by the Board of Directors and the Central Government.
We are of the firm opinion that no employee of a nationalised Bank or any , other Public Sector Corporation should engage himself in collecting 'donations ' for any trust or other organisations from persons with whom he comes into contact in the course of his employment.
It is not desirable.
It is likely to lead to unhealthy practices and harmful results , intended or unintended.
In the world of commerce , quid pro quo and not charity is the rule.
Those in a position of advantage by reason of their office have to be very wary.
Otherwise , they may unsuspectingly walk into traps.
That is why the Central Civil Services (Conduct) Rules , 1964 , for example , provide that no Government servant shall 772 except with the previous sanctions of the Government or of prescribed authority , ask for or accept contributions to , or otherwise associate himself with raising of any funds or other collections in cash or in kind in pursuance of any object whatsoever.
(Rule 12).
It is a rule of prudence.
It is a rule of commonsense.
it is born of wisdom gained by experience.
We fully endorse the raison d 'etre behind the rule.
We also endorse what has been said by the bank in its telex message to the officers ' Association , by the Government in its letters to the bank and to the Indian Banks ' Association and by the Indian Banks ' Association to the Chief Executives of all Public Sector Banks , all of which we have extracted earlier in this judgment.
The question , therefore , is what has to be done with the Canara Bank Officers ' Association Trust Fund.
First , an injunction on the same lines as that which was in force during the pendency of the writ petition in this Court shall issue , that is , the officers of the Canara Bank , their agents or nominees are restrained from directly or indirectly recovering or manipulating to get any fund or contribution to the Trust Fund.
Second , no officer of the Canara Bank shall be permitted to hold the office of life trustee , trustee or any other office of the Canara Bank Officers ' Association Trust Fund.
Third , the Union of India , who has been impleaded as a party shall be entitled to nominate five trustees who are not connected with the Canara Bank to administer the Canara Bank Officers ' Association Trust Fund.
Fourth , the trustees nominated by the Union of India shall administer the Trust Fund in accordance with the provisions of the Bombay Public Trusts Act and the deed of trust by which the Canara Bank Officers ' Association Trust Fund was created.
Fifth , the trustees appointed by the Union of India shall hold office until appropriate arrangements are made by the Charity Commissioner , Maharashtra on an application to be moved by the Central Government within six months from today.
Sixth , there shall be an enquiry by the CBI into the conduct of the five trustees in relation to the Trust Fund and such further action as may be necessary may be taken by the CBI.
Any further direction which may be necessary may be sought from the High Court of Bombay.
M.L.A. Petitions dismissed.

summary/full:
The petitioners , Deputy General Secretary of the Canara Bank Officers ' Association and the Canara Bank Officers ' Association.
filed a writ petition in the High Court alleging that the Chairman and Managing Director , the General Manager and the top officials of the Management of Canara Bank have been using their official position and authority to coerce the officers and staff of the Canara Bank to collect funds for the Canara Bank Relief and Welfare Society and the Kamakoti Prabha Trust and one of the principal modes of collecting funds was the sale of greeting cards by the officials of the bank to their customers.
They also alleged that officers , who protested against the directive to sell greeting cards , were victimised by the bank , and officers , who were highly successful 'card sellers ' were given accelerated promotion over the heads of seniors.
The respondent Bank made a statement before the High Court "that it has never at any time whatsoever compelled its employees to sell greeting cards or collect funds for the Canara Bank Relief and Welfare Society or any other institution; nor has the first respondent bank at any time considered the same as a relief factor for evaluating performance of its employees for promotion; nor shall the first respondent bank do so in future.
" The High Court accepted the statement of the respondent bank and dismissed the writ petition.
But , the petitioners were not satisfied with the assurance given by the respondent bank and filed the present special leave petition and the writ petition repeating the same allegations and praying for "the issue of a writ in the nature of Mandamus directing the respondents to forbear from using the bank officials/bank machinery bank/resources for the purpose of collections of funds in the garb of any welfare organisation.
755 While dismissing the petition and the special leave petition as malicious and as designed to denigrate the management of the bank , it was found by the Court during the course of the hearing that the petitioners themselves were indulging in rash and feckless activities of the very nature of which they were complaining against the respondents.
Pursuant to several orders made by the Court from time to time calling for detailed information from both the parties about the activities of the Canara Bank Relief and Welfare Society and the Canara Bank Staff Officers ' Association and the collections made for them and by them , it transpired that the Canara Bank Officers ' Association was formed in the year 1971.
On August 18 , 1981 the Association started the Canara Bank Officers ' Association Trust Fund registering it as a Public Trust under the Bombay Public Trust Act , 1950.
Five officers of the bank who were also office bearers of the Association were made life trustees of the Association Trust Fund.
Right from the date of formation of the Trust , donations were collected by the members of the Officers ' Association from the customers of the bank.
In the short span of about two years , the funds of the Trust have swelled to more than Rs. twenty four lakhs.
The so called donations range from sums in hundreds to thousands of rupees.
The number of donors is also quite large. ^ HELD: 1.1 While one does appreciate that there must be several charitable inclined persons amongst the bank 's customers , there is no doubt that most of the customers that gave donations to the Trust Fund must have felt obliged to do so because of favour received or expected to be received by them.
Even if no coercive methods were employed by the members of the Association to collect donations , the customers must have felt morally pressurized that otherwise their interests would not be properly taken care of or would be jeopardised or neglected by the officers with whom they were compelled to deal in the course of their business.
[769C D] 1.2 No employee of a nationalised bank or any other Public Sector Corporation should engage himself in collecting 'donations ' for any trust or other organisation from persons with whom he comes into contact in the course of his employment.
It is not desirable.
It is likely to lead to unhealthy practices and harmful results , intended or unintended.
In the world of commerce , quid pro quo and not charity is the rule , Those in a position of advantage by reason of their office have to be very wary.
Otherwise , they may unsuspectingly walk into traps.
That is why the Central Civil Services (Conduct) Rules , 1964 , for example , provide that no Government servant shall , except with the previous sanction of the Government or of prescribed authority , ask for or accept contributions to , or otherwise associate himself with raising of any funds or other collections in cash or in kind in pursuance of any object whatsoever (Rule 12).
It is a rule of prudence It is a rule of common sense.
It is born of wisdom gained by experience.
[771G H; 772A B] 2.
The question , therefore , is what was to be done with the Canara Bank Officers ' Association Trust Fund First , an injunction on the same lines as that which was in force during the pendency of the writ petition in this Court shall issue , that is , the officers of the Canara Bank , their agents nominees are restrai 756 ned from directly or indirectly recovering or manipulating to get any fund or contribution to the Trust Fund.
Second , no officer of the Canara Bank shall be permitted to hold the office of life trustee , trustee or any other office of the Canara Bank Officers ' Association Trust Fund.
Third , the Union of India , who has been impleaded as a party shall be entitled to nominate five trustees who are not connected with the Canara Bank to administer the Canara Bank Officers ' Association Trust Fund.
Fourth , the trustees nominated by the Union of India shall administer the Trust Fund in accordance with the provisions of the Bombay Public Trusts Act and the deed of trust by which the Canara Bank Officers ' Association Trust Fund was created.
fifth , the trustees appointed by the Union of India shall hold office until appropriate arrangements are made by the Charity Commissioner , Maharashtra on an application to be moved by the Central Government within six months from today.
Sixth , there shall be an inquiry by the CBI into the conduct of the five life trustees in relation to the Trust Fund and such further action as may be necessary may be taken by the CBI.
Any further direction which may be necessary may be sought from the High Court of Bombay.
[772D G]


judgement:
Civil Appeal No. 2083 of 1974.
From the judgment and order dated 10. 9. 1974 of the Delhi High Court in Civil W. P. No. 460/1973.
L.M. Singhavi, Mrs. Anjali Verma, R.C. Chawla, N.K Bhuraria and L. K. Pandey for the appellant.
section C. Manchanda and R. N. Poddar for the Respondents.
The appellant carries on business as a dealer in the re sale of cotton yarn.
As a dealer he has been registered under the Bengal Finance (Sales Tax) Act, 1941 as applied to the Union Territory of Delhi (hereinafter referred to as the 'State Act ').
The appellant says that he purchases cotton yarn and sells it to registered dealers, unregistered dealers and consumers.
For the assessment year 1968 69 the appellant submitted his return of turnover under the state Act and claimed exemption in respect of the turnover of sales of cotton thread on the ground that it was an exempted item under Entry No. 21 of the Second Schedule.
The Sales Tax Officer, by his order dated October 29,1970, held that the sales were effected in respect of 988 cotton yarn and, therefore, they were liable to tax at one per cent on appeal, the Assistant (commissioner of Sales Tax took a contrary view and on his finding that the transactions were in respect of cotton thread he allowed the appeal and struck the assessment down.
Acting suo motu in the exercise of his revisional jurisdiction, the Deputy Commissioner of Sales Tax made an order under Sub section
(3) of section 20 of the State Act reversing the order of the Assistant Commissioner and restoring that of the Sales Tax Officer on the ground that what was sold was cotton yarn.
The appellant now applied in revision to the Financial commissioner, Delhi Administration, and the Financial Commissioner, proceeding on the basis that the sales were in respect of cotton yarn, which was a declared item under section 14 of the Central Sales Tax Act, held that they could not be subjected to sales tax because one of the conditions prescribed by section 15 of that Act had not been complied with, that is to say, the law had omitted to prescribe the single point at which the levy could alone be imposed.
Accordingly, the Financial Commissioner allowed the revision petition and quashed the assessment.
The Commissioner of Sales Tax thereupon filed Civil Writ Petition No. 460 of 1973 in the High Court of Delhi praying for the quashing of the order of the Financial Commissioner.
The writ petition was allowed by the High Court by its judgment and order dated September 10, 1974.
Against that judgment and order the appellant has filed the present appeal.
section 14 of the Central S ales Tax Act enumerates the commodities declared to be goods of special importance in inter State trade or commerce.
Among the goods so declared is cotton yarn.
section 15 of the provides : 15.
Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely : (a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed three per cent of the sale or purchase price thereof, and such tax shall not be levied at more than one stage.
" The tax is payable by a dealer under the State Act on taxable turnover, and sub section
(2) of section 5 provides; 989 "(2) In this Act, the expression "taxable turnover" means that part of a dealer 's gross turnover during any period, which remains after deducting thereform (a) his turnover during that period on (i) the sale of goods declared tax free under section 6, (ii) sale to a registered dealer of goods of the class or classes specified in the certificate of registration of such dealer, as being intended for re sale by him, or for use by him as raw materials in the manufacture of goods for sale; and of containers or other materials for the packing of goods of the class or classes so specified for sale: Provided that in the case of such sales, a declaration duly filled up and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars on a prescribed form obtainable from the prescribed authority is furnished in the prescribed manner by the dealer who sells the good; Provided further that where any goods specified in the certificate of registration are purchased by a registered dealer as being intended for re sale by him or for use by him as raw materials in the manufacture of goods for sale, but are utilised by him for any other purpose, the price of the goods so purchased shall be allowed to be deducted from the gross turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer.
" In the instant case, we are concerned with the taxation of goods which under section 14 of the have been declared to be of special importance in inter State trade or commerce.
Where the turnover of such goods is subjected to tax under the sales tax law of a State, section 15 prescribes the maximum rate at which such tax may be imposed and requires that such tax shall not be levied at more than one point.
The two conditions have been imposed in order to ensure that inter State trade or commerce in such goods is not hampered by heavy taxation within the State occasioned by an excessive rate of tax or bymulti point taxation.
section 990 15 enacts restrictions and conditions which are essential to the validity of an impost by the State on such goods.
If either of the two conditions are not satisfied, the impost will be invalid.
Now in order that tax should not be levied at more than ond stage it is imperative that the sales tax law of the State should specify either expressly or be, necessary implication the single point at which the tax may be levied.
Alternatively, it may empower a statutory authority to prescribe such single point for the purpose.
Where such point is not prescribed, either by the statute or by the statutory delegate, no compliance is possible with s 15.
the single point at which the tax may be imposed must be a definite ascertainable point so that both the dealer and the sales tax authorities may know clearly the point at which the tax is to be levied.
The components which enter into the concept of a tax are well known.
The first is the character of the imposition known by its nature which prescribes the taxable event attracting the levy, the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, the third is the rate at which the tax is imposed, and the fourth is the measure or value to which the rate will be applied for computing the tax liability.
If those components are not clearly and definitely ascertainable, it is difficult to say that the levy exists in point of law.
Any uncertainty or vagueness ill the legislative scheme defining any of those components of the levy will be fatal to its validity.
The charging provision, section 4, of the State Act enacts that every dealer whose gross turnover during the year exceeds the taxable quantum shall be liable to pay tax.
The ordinary rule under .
the State Act appears to be that the scale made by every dealer in a series of sales by successive dealers is liable to tax.
That is multi point taxation.
In a scheme of single point taxation, the levy is confined to a single point in a series of sales by successive dealers.
According to the Revenue, the present levy falls in the latter category, and sub cl.
(ii) of cl.
(a) of sub section
(2) of s.5 implies the single point at which the turnover of goods may be taxed.
That argument from favour with the High Court, and it held the single point in a series of sales to be the sale made by the last registered dealer among successive dealers when he sold the goods to an unregistered dealer or a consumer In this connection, the High Court relied on the construction placed by it on sub cl.
(ii) of cl.
(a) of sub section
(2) of 991 s.5 in Fitwell Engineers vs Financial Commissioner, Delhi Administration, Delhi, and Another ' (1) In that case, the High Court had held that it was for the purpose of taxing the goods at least at one point that sub cl.
(ii) of c1.
(a) of sub section
(2) of s.5 of the State Act had been enacted, that there would be a taxable sale when the registered dealer sold the goods to an unregistered dealer or to a consumer, and that in order that such resale by the registered dealer should attract tax the resale to an unregistered dealer or to a consumer had to be effected in Delhi, because if the resale was effected outside the Union Territory of Delhi the Union Territory of Delhi would have no legislative competence to tax the resale.
Now the question whether the expression "resale" in sub cl.
(ii) of cl.
(a) of sub section
(2) of s.5 of the State Act was confined to a resale in the Union Territory of Delhi by the last registered dealer was subsequently considered by this Court in Polestar Electronic (P) Ltd. vs Additional Commissioner, Sales Tax And Another.(2) Overruling the decision of the High Court in Fitwell Engineers (supra) this Court held that the expression "resale" was not confined to a resale in the Union Territory of Delhi and could include a resale outside it.
That was the position upto May 28, 1972 when sub cl.
(ii) of cl.
(a) of sub section
(2) of s.5 was amended by the Finance Act, 1972.
This Court observed that the position before the amendment in 1972 was not affected by the possibility that on the construction preferred by the Court the Union Territory of Delhi would be unable to re cover any tax.
The Court said: "It is true that if the purchasing dealer resells the goods outside Delhi, the Union Territory of Delhi would not be able to recover any tax since the sale to the purchasing dealer would be exempt from tax under section 5 (2) (a) (ii) and the resale by the purchasing dealer would also be free from tax by reason of section 27.
But that is not such a consequence as would compel us to read the word "resale" as limited to resale inside Delhi.
The argument of the revenue was that the legislature could never have intended that the Union Territory of Delhi should be altogether deprived of tax in cases of this kind.
The legislative intent could only be to exempt the sale to the purchasing (1) [1975] 35 section T. C. 66.
(2) [1978] 41 S, T. C. 409.
992 dealer in those cases where the Union Territory of Delhi would be able to recover tax on resale of the goods by the purchasing dealer.
The goods must be taxed at least at one point and it could not have been intended that they should not be taxable at all at any point by the Union Territory of Delhi.
The revenue urged that it was for the purpose of taxing the goods at least at one point that the second proviso was enacted by the legislature.
We do not think this contention based on the presumed intention of the legislature is well founded." And again, "The intention of the legislature was clearly not that the Union Territory of Delhi should be entitled to tax the goods at least at one point so that if the sale to the purchasing dealer is exempt, the resale by the purchasing dealer should be taxable.
We do not find evidence of such legislative intent in any provision of the Act" (Emphasis supplied) Further on, in the same passage, the Court reiterated: "It will, therefore, be seen that it is not possible to discover any legislative intent to tax the goods at least at one point and to exempt the sale to the purchasing dealer only if the resale by the purchasing dealer is liable to tax.
" On the construction which found favour with this Court in Polestar Electronic (P) Ltd, (supra) it is apparent that no support can be found for the proposition that sub cl.
(ii) of cl.
(a) of sub section
(2) of s.5 of the State Act implies that the single point of taxation is fixed by the State Act at the resale by a registered dealer to an unregistered dealer or to a consumer.
As that is the reasoning on which the High Court has proceeded in the judgment under appeal, we must hold that the basis underlying the decision of the High Court cannot be accepted.
It may be noted that the State Act as applied to the Union Territory of Delhi was amended by Parliament in 1959, and section 5A, was inserted.
section SA provides: "Notwithstanding anything to the contrary in this Act, the Chief Commissioner may, by notification in the Official 993 Gazette, specify the point in the series of sales by successive dealers at which any goods or class of goods may be taxed." That provision clearly empowers the Chief Commissioner to specify the single point in a series of sales at which single point taxation may be levied.
The widest amplitude of power has been conferred on the Chief Commissioner in the matter of selecting the point for taxation in a series of sales and, if that is so, clearly no single point can be spelled out, even by implication, from the provision of sub cl.
(ii) of cl.
(a) of sub section
(2) of section 5.
For to do so would mean either accepting an inconsistency between the two provisions or narrowing down correspondingly the scope of section 5A.
We have already pointed out that the provision for single point taxation cannot, in the view of this Court expressed in Polestar Electronic (P) Ltd. (supra), be discovered in sub cl.
(ii) of cl.
(a) of sub s (2) of s.5 of the State Act.
To our mind, provision has been made in that behalf in the statute by the insertion of s.5A.
The High Court has referred to the Statement of Objects and Reasons attached to the Bengal Finance (Sales Tax) (Delhi Amendment) Act 1959 in support of its conclusion that s.5A was inserted only to provide for the levy of tax at any point other that the point of last sale so that sales tax may be levied at the first point on certain items which were manufactured in factories.
It is well settled that when the language of the statute is clear and admits to no ambiguity, recourse to the Statement of Objects and Reasons for the purpose of construing a statuory provision is not permissible.
We are of opinion that there is ample power under s 5A of the State Act enabling the Chief Commissioner to specify the single point at which tax may be levied in a series of sales.
This can, however, be done by a him only by a notification in the Official Gazette.
No such notification has been placed before us which could relate to the assessment year under consideration.
We hold therefore that a vital prerequisite of section 15 of the , namely, that the tax shall not be levied at more than one stage, has not been satisfied in respect of the turnover of cotton yarn, and accordingly the assessment complained of is liable to be quashed.
While concluding, we may point out that a somewhat similar question arose before this Court in Bhawani Cotton Mills Ltd. vs The 994 State of Punjab and Another, (1) the question being whether the second proviso to section (i) of s.5 and sub cl (vi) of cl.
(a) of sub section
(2) of section 5 of the Punjab General Sales Tax Act 1948 implied the single point at which goods were taxable.
The contention was negatived by This Court.
That is how that decision was understood by this Court subsequently in Rattan Lal and Co. And Another vs The Assessing Authority And Another.(2) Accordingly, we hold that the assessment of the turnover of cotton yarn for the assessment ytra 1968 1969 under the Bengal Finance (Sales Tax) Act, 1941 as applied to the Union Territory of Delhi cannot be sustained.
In the result, the appeal is allowed, the judgment and order of the High Court of Delhi are set aside and the assessment of the turnover of cotton yarn is quashed.
The appellant is entitled to its costs.
M. L. A. Appeal allowed.
[1967] 20 section T. C. 290.
11970] 25 S, T. C. 136.

dataset_name: IN-Abs

summary/full:
The appellant, a registered dealer under the Bengal Finance (Sales Tax) Act 1941 as applied to the Union Territory of Delhi (for short, the State Act) used to purchase Cotton yarn and sell it to registered dealers, unregistered dealers and consumers.
He submitted his return of turnover under the State Act for the assessment year 1968 69 and claimed exemption in respect of the turnover of sales of cotton thread on the ground that it was an exempted item under Entry 21 of the Second Schedule.
The Sales Tax Officer held that the sales were liable to tax as the same were effected in respect of cotton yarn.
The appellant ultimately went in revision to the Financial Commissioner who proceeding on the basis that the sales were in respect of cotton yarn, which was a declared item under s.14 of the Central Sales Tax Act allowed the revision petition holding that they could not be subjected to sales tax because one of the conditions prescribed by s.15 of that Act had not been complied with, that is to say, the law had omitted to prescribe the single point at which the levy could alone be imposed.
Aggrieved by the order of the Financial Commissioner, the Revenue filed a writ petition in the High Court which, relying on the construction placed by it on sub clause (ii) of cl.(a) of s.5 in Fitwell Engineers v Financial Commissioner Delhi Admn (1975) 35 S.T.C. 66, allowed the petition holding that the single point in a series of sales is the sale made by the last registered dealer among successive dealers when he sold the goods to an unauthorised dealer or consumer.
Hence this Appeal.
Allowing the Appeal, ^ HELD: 1.
The components which enter into the concept of a tax are well known.
The first is the character of the imposition known by its nature which prescribes the taxable event attracting the levy, the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, the third is the rate at which the tax is imposed, and the fourth is the measure or value to which the rate will be applied for computing the tax liability.
If 986 these components are not clearly and definitely ascertainable it is difficult to say that the levy exists in point of law.
Any uncertainty or vagueness in the legislative scheme defining any of those components of the levy will be fatal to its validity.
[900D E] 2.
Where the turnover of goods declared to be of special importance in inter State trade or commerce under section 14 of the Central Sales Tax Act is subjected to sales tax law of a State, section 15 prescribes the maximum rate at which such tax may be imposed and requires that such tax shall not be levied at more than one point.
The two conditions have been imposed in order to ensure that Inter State trade or commerce in such goods is not hampered by heavy taxation within the State occasioned by an excessive rate of tax or by multpoint taxation.
Section 15 enacts restrictions and conditions which are essential to the validity of an impost by the State on such goods.
If either of the two conditions are not satisfied, the impost will be invaid Now in order that tax should not be levied at more than one stage it is imperative that the sales tax law of the State should specify either expressly or b y necessary implication the single point at which the tax may be levied Alternatively, it may be empower a statutory authority to prescribe such single point for the purpose.
Where such point is not prescribed, either by the statute or by the statutory delegate, no compliance is possible with section 15.
The single point at which the tax may be imposed must be a definite ascertainable point so that both the dealer and the sales tax authorities may know clearly the point at which the tax is to be levied.
[989G H: 900A C] 3.
On the construction which found favour with this Court in Polestar Electronic (P) Ltd vs Addl.
Commissioner, Sales Tax & Anr., (1978) 41 section T. C. 409 it is apparent that no support can be found for the proposition that sub cl.
(ii) of cl.
(a) of sub section
(2) of s.5 of the State Act implies that the single point of taxation is Fixed by the State, Act at the resale by a registered dealer to an unregistered dealer or to a consumer.
As that is the reasoning on which the High Court has proceeded in The judgment under appeal, it must be held that the basis underlying the decision of the High Court cannot be accepted.
[992F G] Fitwell Engineers vs Financial Commissioner, Delhi Administration, Delhi and another, (1975) 35 section T. C. 66 over ruled.
It is well settled that when the language of the statute is clear and admits of no ambiguity, recourse to the Statement of Objects and Reasons for the purpose of construing a statutory provision is not permissible Section SA Of the State Act clearly empowers the Chief Commissioner to specify the single point in a series of sales at which single point taxation may be levied.
The widest amplitude of power has been conferred on the Chief Commissioner in the matter of selecting the point for taxation in a series of sales and, if that is so, clearly do single point can be spelled out, even by implication, from the provision of sub cl.
(ii) of cl.
(a) of sub section
(2) of s.5.
For to do so would mean either accepting an inconsistency between the two provisions or narrowing down correspondingly the scope of section 5 A.
No such notification has been placed before 987 the Court which could relate to the assessment year under consideration.
There fore a vital prerequisite of section 15 of the Central Sales Tax Act, namely, that the tax shall not be levied at more than one stage, has not been satisfied in respect of the turnover of cotton yarn, and accordingly the assessment complained of is liable to be quashed.
[993BG] Polestar Electronic (P) Ltd. vs Additional Commissioner, Sales Tax and Another.
(1978) 41 section T. C. 409.
followed.
Bhawani Cotton Mills Ltd. vs The State of Punjab and Another, (1967) 20 section T. C. 290 & Rattan Lal and Co. vs The Assessing Authority and Another (1970 25 section T. C. 136, referred to.


judgement:
t Petition No. 4998 of 1983 IN CRIMINAL WRIT PETITION NO.
6607 Of 1981 Under Article 32 of the Constitution of India Kapil Sibal, A.C. and Ms. Madhu Singh for the petitioner S.C. Maheshwari, G.D. Gupta and R.N. Poddar for the Respondents.
The Judgment of the Court was delivered by BHAGWATI, J.
The short question that arises for consideration in this writ petition is whether in a case where First Information Report is lodged and after completion of investigation initiated on the basis of the First Information Report, the police submits a report that no offence appears to have been committed, the Magistrate can accept the report and drop the proceeding without issuing notice to the first informant or to the injured or in case the incident has resulted in death, to the relatives of the deceased.
It is not necessary to state the facts giving rise to this writ petition, because so far as this writ petition is concerned, we have already directed by our order dated 28th November, 1983 that before any final order is passed on the report of the Central Bureau of 1: Investigation by the Chief Metropolitan Magistrate, the petitioner who is the father of the unfortunate Gurinder Kaur should be heard.
Gurinder Kaur died as a result of burns received by her and allegedly she was burnt by her husband and his parents on account of failure to satisfy their demand for dowry.
The circumstances in which Gurinder Kaur met with her unnatural death were investigated by the Central Bureau of Investigation and a report was filed by the Central Bureau of Investigation in the court of the Chief Metropolitan Magistrate on 11th August, 1982 stating that in their opinion in respect of the unnatural death of Gurinder Kaur no offence appeared to have been committed.
The petitioner was however not aware that such a report had been submitted by the Central Bureau of Investigation and he, therefore, brought an application for initiating proceedings for contempt against the Central Bureau of Investigation on the ground that the Central Bureau of Investigation had not completed their investigation and submitted their report within the period stipulated by the Court by its earlier order dated 6th May, 1983.
lt was in reply to this application for initiation of contempt proceedings that 945 the Central Bureau of Investigation intimated that they had already filed their report in the Court of the Chief Metropolitan Magistrate on 11th August, 1982 and the report was pending consideration by the Chief Metropolitan Magistrate.
When this fact was brought to our notice we immediately passed an order dated 28th November, 1983 directing that the petitione !should be heard before any final order was passed on the report.
There was no objection on the part of the respondents to the making of this order, but since the question whether in cases of this kind, the first informant or any relative of the deceased or any other aggrieved person is entitled to be heard at the time of consideration of the report by the Magistrate and whether the Magistrate is bound to issue notice to any such person, is a question of general importance which is likely to arise frequently in criminal proceedings, we thought that it would be desirable to finally settle this question so as to afford guidance to the courts of magistrates all over the country and we accordingly proceeded to hear the arguments on both sides in regard to this question.
It is necessary to refer to a few provisions of the Code of Criminal procedure, 1973 in order to arrive at a proper determination of this question.
Chapter XII of the Code of Criminal Procedure, 1973 deals with information to the police and their powers to investigate.
Sub section (1) of Section 154 provides that every information relating to the commission of a congizable offence, if given orally to an officer in charge of a police station, shall be reduced in writing by him or under his direction and be read over to the informant and every such information, whether given in writing or reduced to writing, shall be signed by the person giving it and sub section (2) of that section requires that a copy of P such information shall be given forthwith, free of cost, to the informant.
Section 156 sub section (1) vests in the officer in charge of a police station the power to investigate any cognizable case without the order of a magistrate and sub section (3) of that section authorises the magistrate empowered under Section 190 to order an investigation as mentioned in sub section (1) of that section.
Section 157 sub section (1) lays down that if, from information received or otherwise an officer in charge of a police station has reason to suspect the commission of an offence which he is empowered under Section 156 to investigate, he shall forthwith send a report of the same to a Magistrate empowered to take cognizance of such offence 946 upon a police report and shall proceed to the spot to investigate the facts and circumstances of the case and, if necessary, to take measures for the discovery and arrest of the offender.
But there are of the First Information Report lodged by him.
No sooner he lodges the First Information Report, a copy of it has to be supplied to him, free of cost, under sub section (2) of Section 154.
If, two provisos to this sub section.
Proviso (b) enacts that if it appears to the officer in charge of a police station that there is no sufficient ground for entering on an investigation, he shall not investigate the case, but in such a case, sub section (2) of Section 157 requires that the officer shall forthwith notify to the informant the fact that he will not investigate the case or cause it to be investigated.
What the officer in charge of a police station is required to do on completion of the investigation is set out in section 173.
Sub section (2)(i) of Section 173 provides that as soon as investigation is completed, the officer in charge of a police station shall forward to the magistrate empowered to take cognizance of the offence on a police report, a report in the form prescribed by the State Government setting out various particulars including whether, in the opinion of the officer, as offence appears to have been committed and if so, by whom.
Sub section (2)(ii) of Section 173 states that the officer shall also communicate, in such manner as may be prescribed by the State Government, the action taken by him to the person, if any, by whom the information relating to the commission of the offence was first given.
Section 190 sub section (1) then proceeds to enact that any ' magistrate of the first class and any magistrate of the second class specially empowered in this behalf under sub section (2) may take cognizance of any offence: (a) upon receiving a complaint of facts which constitute such offence or (b) upon a police report of such facts or (c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed.
We are concerned in this case only with clause (b), because the question we are examining here is whether the magistrate is bound to issue notice to the first informant or to the injured or to any relative of the deceased when he is considering the police report submitted under section 173 sub section (2).
It will be seen from the provisions to which we have referred in the preceding paragraph that when an informant lodges the First Information Report with the officer in charge of a police 947 station he does not fade away with the lodging of the First Information Report.
He is very much concerned with what action is initiated by the officer in charge of the police station on the basis of the First Information Report lodged by him.
On sooner he lodges the First Information Report, a copy of it has to be supplied him, free of cost, under sub section (2) of Section 154.
notwithstanding the First Information Report, the officer in charge of a police station decides not to investigate the case on the view that there is no sufficient ground for entering on an investigation, he is required under sub section (2) of Section 157 to notify to the informant the fact that he is not going to investigate the case because it to be investigated.
Then again, the officer in charge of a police station is obligated under sub section(2)(ii) of Section 173 to communicate the action taken by him to the informant and the report forwarded by him to the magistrate under sub section (2)(i) has therefore to be supplied by him to the informant.
The question immediately arises as to why action taken by the officer in charge of a police station on the First Information Report is required to be communicated and the report forwarded to the Magistrate under sub section (2)(i) of Section 173 required to be supplied to the informant.
Obviously, the reason is that the informant who sets the machinery of investigation into motion by filing the First Information Report must know what is the result of the investigation initiated on the basis of the First Information Report.
The informant having taken the initiative in lodging the First Information Report with a view to initiating investigation by the police for the purpose of ascertaining whether any offence has been committed and, if so, by whom, is vitally interested in the result of the investigation and hence the law requires that the action taken by the officer in charge of a police station on the First Information Report should be communicated to him and the report forwarded by such officer to the Magistrate under sub section (2)(i) of Section 173 should also be supplied to him.
Now, when the report forwarded by the officer in charge of a police station to the Magistrate under sub section (2)(i) of Section 173 comes up for consideration by the Magistrate, one of two different situations may arise.
The report may conclude that an offence appears to have been committed by a particular person or persons and in such a case, the Magistrate may do one of three things: (1) he may accept the report and take cognizance of the offence and issue process or (2) he may disagree with the report and 948 drop the proceeding or (3) he may direct further investigation under sub section (3) of Section 156 and require the police to make a further report.
The report may on the other hand state that, in the opinion of the police, no offence apppears to have been committed and where such a report has been made, the Magistrate again has an option to adopt one of three courses: (1) he may accept the report and drop the proceeding or (2) he may disagree with the report and taking the view that there is sufficient ground for proceeding further, take cognizance of the offence and issue process or (3) he may direct further investigation to be made by the police under sub section (3) of Section 156.
Where, in either of these two situations, the Magistrate decides to take cognizance of the offence and to issue process, the informant is not prejudicially affected nor is the injured or in case of death, any relative of the deceased aggrieved, because cognizance of the offence is taken by the Magistrate and it is decided by the Magistrate that the case shall proceed.
But if the Magistrate decides that there is no sufficient ground for proceeding further and drops the proceeding or takes the view that though there is sufficient ground for proceeding against some, there is no sufficient ground for proceeding against others mentioned in the First Information Report, the informant would certainly be prejudiced because the First Information Report lodged by him would have failed of its purpose, wholly or in part.
Moreover, when the interest of the informant in prompt and effective action being taken on the First Information Report lodged by him is clearly recognised by the provisions contained in sub section (2) of Section 154, sub section (2) of Section 157 and sub section (2)(ii) of Section 173, it must be presumed that the informant would equally be interested in seeing that the Magistrate takes cognizance of the offence and issues process, because that would be culmination of the First Information Report lodged by him.
There can, therefore, be no doubt that when, on a consideration of the report made by the officer in charge of a police station under sub section (2)(i) of Section 173, the Magistrate is not inclined to take cognizance of the offence and issue process, the informant must be given an opportunity of being heard so that he can make his submissions to persuade the Magistrate to take cognizance of the offence and issue process.
We are accordingly of the view that in a case where the magistrate to whom a report is forwarded under sub section (2)(i) of Section 173 decides not to take cognizance of the offence and to drop the proceeding or takes the 949 view that there is no sufficient ground for proceeding against some of the persons mentioned in the First Information Report, the magistrate must give notice to the informant and provide him an opportunity to be heard at the time of consideration of the report.
It was urged before us on behalf of the respondents that if in such a case notice is required to be given to the informant, it might result in unnecessary delay on account of the difficulty of effecting service of the notice on the informant.
But we do not think this can be regarded as a valid objection against the view we are taking, because in any case the action taken by the police on the First Information Report has to be communicated to the informant and a copy of the report has to be supplied to him under sub section (2) (i) of Section 173 if that be so, we do not see any reason why it should be difficult to serve notice of the consideration of the report on the informant.
Moreover, in any event, the difficulty of service of notice on the informant connot possibly provide any justification for depriving the informant of the opportunity of being heard at the time when the report is considered by the Magistrate.
The position may however, be a little different when we consider the question whether the injured person or a relative of the deceased, who is not the informant, is entitled to notice when the report comes up for consideration by the Magistrate.
We connot spell out either from the provisions of the Code of Criminal procedure, 1973 or from the principles of natural justice, any obligation on the Magistrate to issue notice lo the injured person or to a relative of the deceased for providing such person an opportunity to be heard at the time of consideration of the report, unless such person is the informant who has lodged the First Information Report.
But even if such person is not entitled to notice from the Magistrate, he can appear before the Magistrate and make his submissions when the report is considered by the Magistrate for the purpose of deciding what action he should take on the report.
The injured person or any relative of the deceased, though not entitled to notice from the Magistrate, has locus to appear before the Magistrate at that time of consideration of the report, if he otherwise comes to know that the report is going to be considered by the Magistrate and if he wants to make his submissions in regard to the report, the Magistrate is bound to hear him.
We may also observe that even though the Magistrate is not bound to give notice of the hearing fixed for consideration of the report 950 to the injured person or to any relative of the deceased, he may, in the exercise of his discretion, if he so thinks fit, give such notice to the injured person or to any particular relative of or relatives the deceased, but not giving of such notice will not have any invalidating effect on the order which may be made by the Magistrate on a consideration of the report.
This is our view in regard to the question which has arisen for consideration before us.
Since the question is one of general importance, we would direct that copies of this judgment shall be sent to the High Courts in all the States so that the High Courts may in their turn circulate this judgment amongst the Magistrates within their respective jurisdictions.

summary/full:
In a criminal case where First Information Report is lodged and the police submits a report after completion of investigation initiated on the basis of such FIR that no offence appears to have been committed, on the question whether in cases of this kind, the first informant or any relative of the dec eased or any other aggrieved person is entitled to be heard at the time of consideration of the Report by the Magistrate and whether the Magistrate is bound to issue notice to any such person, the Court, ^ HELD: I .
When the report forwarded by the Officer in charge of a police station to the Magistrate under sub section (2) (i) of section 173 comes up for consideration by the Magistrate, one of two different situations may arise.
The report may conclude that an offence appears to have been committed by a particular person or persons and in such a case, the Magistrate may do one of three things: (1) he may accept the report and take cognizance of the offence and issue process or (2) he may disagree with the report and drop the proceeding or (3) he may direct further investigation under sub section (3) of section 156 and require the police to make a further report.
The report may on the other hand state that, in the opinion of the police, no offence appears to have been committed and where such a report has been made, the Magistrate again has an option to adopt one of three courses: (1) he may accept the report and drop the proceeding or (2) he may disagree with the report and taking the view that there is sufficient ground for proceeding further, take cognizance of the offence and issue process or (3) he may direct further investigation to be made by the police under sub section (3) of section 156.
Where, in either of these two situations, the Magistrate decides to take cognizance of the offence and to issue process, the 943 informant is not prejudicially affected nor is the injured or in case of death, any relative of the deceased aggrieved, because cognizance of the offence is taken by the Magistrate and it is decided by the Magistrate that the case shall proceed.
But if the Magistrate decides that there is no sufficient ground for proceeding further and drops the proceedings or takes the view that though there is sufficient ground for proceeding against others mentioned in the First Information Report, the informant would certainly be prejudiced because the First Information Report lodged by him would have failed of its purpose; wholly or in part.
Moreover, when the interest of the informant in prompt and effective action being taken on the First Information Report lodged by him is clearly recognised by the provisions contained in sub section (2) of section 154, subsection (2) of section 157 and sub section (2) (ii) of section 173, it must be presumed that the informant would equally be interested in seeing that the Magistrate takes cognizance of the offence and issues process, because that would be culmination of the First Information Report lodged by him.
The Court is accordingly of the view that in a case where the Magistrate to whom a report is forwarded under sub section (2) (i) of section 173 decides not to take cognizance of the offence and to drop the proceedings or takes the view that there is no sufficient ground for proceeding against some of the persons mentioned in the First Information Report, the Magistrate must give notice to the informant and provide him an opportunity of being heard at the time of consideration of the report, and the difficulty of service of notice on the informant cannot possibly provide any justification for depriving the informant of the opportunity of being heard at the time when the report is considered by the Magistrate.[947G H; 948, 949A C] 2.
This Court cannot spell out either from the provisions of the Code of Criminal procedure, 1973 or from the principles of natural justice, any obligation on the Magistrate to issue notice to the injured person or to a relative of the deceased for providing such person an opportunity to be heard at the time of consideration of the report, unless such person is the informant who has lodged the First Information Report.
But even if such person ii not entitled to notice from the Magistrate, he can appear before the Magistrate and make his submissions when the report is considered by the Magistrate for the purpose of deciding what action he should take on the report.
The injured person or any relative of the deceased, though not entitled to notice from the Magistrate, has locus to appear before the Magistrate at the time of consideration of the report, if he otherwise comes to know that the report is going to be considered by the Magistrate and if he wants to make his submissions in regard to the report, the Magistrate is bound to hear him.
[949E G] Observation: Even though the Magistrate is not bound to give notice of the hearing fixed for consideration of the report to the injured person or to any relative of the deceased, he may, in the exercise of his discretion, if he so thinks fit, give such notice to the injured person or to any particular relative or relatives of the deceased, but not giving of such notice will not have any invalidating effect on the order which may be made by the Magistrate on a consideration of the report.[949H. 950A] 944