judgement:
ivil Appeal No. 3182 Of 1984.
From the Judgment and Order dated 17.1.
1984 of the Punjab and Haryana High Court in Civil Revision No. 907 of 1977.
Anil Dev Singh, R.C. Misra and Dr. Meera Aggarwal for the Appellant.
Prem Malhotra for the Respondents.
The Judgment of the Court was delivered by, NATARAJAN, J.
This appeaI by Special Leave is by a landlord and is directed against the judgment of the High Court of Punjab and Haryana in Civil Revision No. 907 of 1977.
In an eviction suit filed under Section 13 of the East Punjab Urban Rent Restriction Act, 1949 (for short the 'Act ') against the tenant and the sub tenant (Respondent 2 and 1 respectively) in respect of two premises, there was a compromise between the landlord and the tenant and in terms thereof, the Rent Controller decreed the eviction of the first respondent from the premises sub leased to him.
An Appeal to the appellate Authority proved of no avail and hence the first respondent filed Civil Revision No. 907 of 1977 under Section 15(5) of the Act to the High Court.
The High Court allowed the revision holding that no order of eviction can be passed under Section 13(2) of the Act as the sub tenancy had been created before the Act came into force in the Union Territory of Chandigarh where the property is situate.
The High Court 's order is challenged in this ap peal.
The brief facts requiting notice may now be seen.
The appellant/ landlord let out in the first instance a shop cum flat No. 7 to the second respondent in 1963 and subsequently in 1967 he leased out the adjoining two flats also to him.
The second respondent sub let the two flats to the first respondent.
It is common ground that the sub letting was long prior to 4.11.
1972 when the Act came into force in the Union Territory of Chandigarh.
On March 8, 1973 the appellant filed a suit and sought eviction of both the respondents on various grounds but all of them except the 194 ground of unauthorised sub letting were given up.
The peti tion was contested by both the respondents.
However, at the stage of arguments the appellant and the second respondent entered into a compromise between themselves and in terms thereof the appellant gave up his claim for eviction of the second respondent from the shop cumflat in his occupation.
Thereafter the second respondent conceded that he had sub let the two flats to the first respondent without the con sent of the appellant and hence an order of eviction con fined to the two flats sub leased to the first respondent may follow.
An appeal to the Appellate Authority having failed the first respondent filed a revision to the High Court under Section 15(5) of the Act and succeeded in having the order of eviction set aside.
Mr. Anil Dev Singh, learned counsel for the appellant sought to assail the order of the High Court on various grounds.
The first ground was that when the second respond ent had admitted the factum of the unauthorised sub lease and when the Rent Controller and the Appellate Authority had acted on his admission, the High Court was in error in interfering with the order of eviction concurrently passed by the courts below.
This argument is devoid of merit be cause the admitted position is that the Act came into force in the area concerned only on 4.11.
1972 whereas the sub lease had been effected much earlier.
In view of that posi tion the High Court was entitled to set right the error committed by the Rent Controller and the Appellate Authority in ordering eviction under Section 13(2) of the Act.
As a matter of fact the High Court was bound to set right the error in view of its own decision in Surjit Singh vs Rattan Lal, AIR 1980 P & H 319 and this Court 's decision in Gurcha ran Singh vs
V.K. Kaushal; , In both these cases it has been laid down that an order of eviction cannot be passed under Section 13(2) of the Act if the sub letting was prior to the Act coming into force in the area con cerned.
The second ground urged was an alternative plea and it was argued that even without reference to Section 13(2) of the Act the sub lease was not lawful because the lease deed entered into between the parties contained a clause inter dicting any sub lease without the written consent of the landlord.
In other words, the argument was that the sub lease was not lawful even under Section 108(J) of the Trans fer of Property Act because the lease deed contained a prohibition.
We cannot countenance this argument for more than one reason.
In the first place the lease deed has not been filed in court and marked as an Exhibit in evidence.
Learned counsel stated that the lease deed was shown to the Rent Controller and the Appellate Authority but it was 195 not filed as an Exhibit because proceedings under the Act are not conducted in meticulous observance of the provisions of the Civil Procedure Code.
We can hardly accept the expla nation given and act on the basis that a valid lease deed had been executed and it contained a contract to the con trary in so far as the tenant 's right to sub lease is con cerned.
It was then argued by Mr. Anil Singh Dev that even if it is taken that there was no lease deed prohibiting the crea tion of a sub lease, the sub tenancy had become unlawful from 24.1.72 when the second respondent was served a notice of termination of tenancy issued by the appellant.
This argument is also not tenable because the sub lease had been effected before the notice of termination of tenancy was issued.
Hence the notice of termination.
of tenancy subse quently issued would not make the sub lease created earlier unlawful in any manner.
Another argument advanced was that a sub tenant does not have rights independent of the tenant and as such when the second respondent has suffered an order of eviction, the first respondent was equally bound by the order.
Three decisions were cited to fortify this contention viz. Devara ja Bhatt vs
V.S. Raja & Ors., AIR 1953 Madras 356 (Vol.
40, C.N. 122); Express Estates Ltd. vs Modern Furnishing House, AIR 1953 Madras 414 and G.L. Kapoor vs Ramesh Chander Nijha wan & Ors., All India Rent Control Journal These authorities cannot advance the case of the appel lant in any manner.
The sub tenancies which were respective ly imugned in the cited cases had come into existence after the Rent Control Act in the respective States had come into force and hence they are distinguishable on facts.
As re gards the right of a sub tenant to file an appeal independ ently of the tenant this Court has ruled in Karam Singh vs Pratap Chand, AIR 1964 S.C. 1305 that against a common decree of ejectment passed against a tenant and the sub tenant, the sub tenant alone can appeal in his own right against the decree and have the same set aside even though the tenant decides not to file an appeal.
There was also a contention that when there was a sur render of tenancy rights restricted to the two flats in question, the first respondent is bound by the surrender and cannot claim sub tenancy rights any further.
The contention is unsustainable for a host of reasons.
A lease is a trans fer of a right to enjoy the property.
It creates an interest in the property by virtue of the contract of lease which may be either oral or written.
The interest created in the property can be put an end 196 to by terminating the contract.
The contract, however, cannot be terminated in part.
In this case though the two items of property were given on lease at different times, the parties had treated the lease as a composite one and that was why a common notice had been issued for terminating the tenancy of both the items and furthermore a single petition had been filed under Section 13(2) to seek an order of eviction, in respect of both the items of the lease property.
The lessee has a right to transfer by sub lease even a part of his interest in the property as provided in Section 108(j) of the Transfer of Property Act.
A transferee from the lessee has a right to claim the benefit of contract to the lessee 's interest, vis a vis the landlord, (vide Section 108 second paragraph of clause (c) of the Transfer of Property Act) Thus a sub lessee who has obtained a part of the interest of the head tenant will be entitled to claim the benefit of the contract vis a vis the lessor, as the lessee (head tenant) cannot surrender the lease in part.
Section 111(e) contemplates a surrender of the entire inter est under the lease and not a part of the interest alone.
Moreover, a lease can be determined only by restoring pos session in respect of the entire property which was taken on lease (see Section 108(m).
Section 115 of the Transfer of Property Act provides that the surrender of a lease does not prejudice an under lease of the property or in part thereof previously granted by the lessee.
The lessee, having parted with a part of the interest in the property in favour of the sub lessee, cannot surrender that part of the property which is in the possession of the sub lessee for he cannot restore possession of the same to the lessor apart from the fact the he can terminate the contract of lease only as a whole and not in respect of a part of it.
Having regard to all these factors, even without going into the question of the partial surrender of lease being vitiated by collusion, it is not open to the appellant in law to contend that the second respondent is entitled to and had validly surrendered a portion of the lease hold property and the first respondent, being the sub tenant is bound by the surrender and should deliver possession.
The last argument of the appellant 's counsel was that the Act gives protection only to tenants and not to sub tenants against unreasonable eviction and hence the first respondent cannot claim protection under the Act from evic tion.
Reference was made in this connection to Section 2(ii) of the Act which excludes a sub tenant from the definition of tenant.
The argument stems from an erroneous assumption that the first respondent is seeking protection under the Act from being evicted.
The true position is that the first respondent 197 has only taken the stand that the appellant is not entitled to evict him under section 13(2) of the Act since the sub lease in his favour had been created before the Act came into force.
We are, therefore, of the view that none of the conten tions of the appellant has merit or substance.
Consequently, the appeal fails and is dismissed.
The parties will, howev er, pay and bear their respective costs.
A.P.J. Appeal dis missed.

summary/full:
The appellant landlord first let out a shop cum flat to the second respondent (tenant) and subsequently leased out the adjoining two flats to him.
The second respondent sub let the two flats to the first respondent (sub tenant) prior to the coming into force of the East Punjab Urban Rent Restriction Act, 1949 in the area where the property is situate.
The landlord filed a suit seeking eviction of both the respondents, inter alia, on the ground of unauthorised sub letting, who contested the petition.
However, there was a compromise between the appellant and the second respondent the appellant giving up his claim for eviction of the second respondent from the shop cum flat in his occupation and the second respondent conceding that he has sub let the two flats to the first respondent without the consent of the appellant landlord.
The Rent Controller passed an order of eviction of the first respondent from the two flats sub leased to him.
An appeal to the Appellate Authority having failed, the first respondent filed a revision under section 15(5) of the Act.
The High Court allowed the revision, set aside the order of eviction and held that no order of eviction can be passed under section 13(2) as the sub tenancy had been created before the Act came into force in the area where the proper ty is situate.
In the appeal to this Court on behalf of the appellant it was contended; (i) that when the second respondent had admitted the factum of the unauthorised sub lease and when the Rent Controller and the Appellate Authority had acted on his admission, the High Court was in error in interfering with the order of eviction concurrently passed by 191 the Courts below; (ii) that even without reference to section 13(2) the sublease was not lawful because the lease deed entered into between the parties contained a clause inter dicting any sub lease without the written consent of the landlord; (iii) that the sub lease was not lawful even under section 108(J) of the Transfer of Property Act because the lease deed contained a prohibition; (iv) that even if it is taken that there was no lease deed prohibiting the creation of a sub lease, the sub tenancy had become unlawful from the date when the second respondent was served a notice of termina tion of tenancy by the appellant; (v) that a subtenant does not have rights independent of the tenant and as such when the second respondent suffered an order of eviction, the first respondent was equally bound by the order; (vi) that when there was a surrender of tenancy rights restricted to the two flats in question, the first respondent is bound by the surrender and cannot claim the sub tenancy rights any further; (vii) and that the Act gives protection only to tenants and not to sub tenants against unreasonable eviction and hence the first respondent cannot claim protection under the Act from eviction.
Dismissing the Appeal, HELD: 1.1 An order of eviction cannot be passed under section 13(2) of the East Punjab Urban Rent Restriction Act, 1949 if the sub letting was prior to the Act coming into force in the area concerned.
[194F] Surjit Singh vs Rattan Lal, AIR 1980P & H 319, approved.
Gurcharan Singh vs
V.K. Kaushal; , , relied upon.
L2 In the instant case, the sub lease had been effected before the notice of termination of tenancy was issued.
The notice of termination of tenancy subsequently issued would not make the sub lease created earlier unlawful in any manner.
[195C] 2.
Against a common decree of ejectment passed against a tenant and the sub tenant, the sub tenant alone can appeal in his own right against the decree and have the same set aside even though the tenant decides not to file an appeal.
[195F] Devaraja Bhatt vs
V.S. Rala & Ors., AIR 1953 Madras 356 (Vol.
40, C.N. 122), Express Estates Ltd. vs Modern Furnish ing House, AIR 1953 Madras 414 and G.L. Kapoor vs Ramesh Chander Nijhawan & Ors., All India Rent Control Journal , referred to.
192 Karam Singh vs Pratap Chand, AIR 1964 S.C. 1305, followed.
3.1 A lease is a transfer of a right to enjoy the property.
It creates an interest in the property by virtue of the contract of lease which may be either oral or writ ten.
The interest created in the property can be put an end to by terminating the contract.
The contract however, cannot be terminated in part.
[195H;196A] 3.2 In this case though the two items of property were given on lease at different times, the parties had treated the lease as a composite one and that was why a common notice had been issued for terminating the tenancy of both the items and furthermore a single petition had been filed under section 13(2) to seek an order of eviction in respect of both the items of the lease property.
[196A B] 4.
In this case the lease deed has not been filed in Court and marked as an Exhibit in evidence.
The explanation given by the appellant that the lease deed was shown to the Rent Controller and the Appellate Authority but it was not filed as an Exhibit because proceedings under the Act are not conducted in meticulous observance of the provisions of Civil Procedure Code cannot be accepted and the Court cannot act on the basis that a valid lease deed had been executed and it contained a contract to the contrary in so far as the tenants ' right to sub lease is concerned.
[194G;195A B] 5.
The lessee has a right to transfer by sub lease even a part of his interest in the property as provided in section 108(J) of the Transfer of Property Act.
A transferee from the lessee has a right to claim the benefit of contract to the lessee 's interest, vis a vis the landlord.
Thus a sub lease who has obtained a part of the interest of the head tenant will be entitled to claim the benefit of the contract vis a vis the lessor, as the lessee cannot surrender the lease in part.
Section 111(e) contemplates a surrender of the entire interest under the lease and not a part of the interest alone.
Moreover, a lease can be determined only by restoring possession in respect of the entire property which was taken on lease (see.) 108(m).
[196B D] 6.
Section 115 of the Transfer of Property Act provides that the surrender of a lease does not prejudice an under lease of the property or in part thereof previously granted by the lessee.
The lessee, having parted with a part of the interest in the property in favour of the sub lessee, cannot surrender that part of the property which is in the posses sion of the sub lessee for he cannot restore possession of the same 193 to the lessor apart from the fact that he can terminate the contract of lease only as a whole and not in respect of a part of it.
[196D F]


judgement:
Criminal Appeal No. 150 of 1986.
221 From the Judgment and Order dated 14.7.83 of the Patna High Court in Govt.
Appeal No. 29/83.
S.N. Misra, M.M.P. Sinha and P.C. Kapur for the Petitioner.
S.C. Misra and, Mrs. Gian Sudha Misra for the Respondents.
The Judgment of the Court was delivered by OZA, J.
This appeal has been filed in this Court against the dismissal in limine of a petition filed by the State of Bihar in the High Court of Judicature at Patna wherein learned Judges of the High Court rejected a petition for leave to appeal against acquittal filed by the State Govern ment under Sec.378(1) and (3) of the Code of Criminal Proce dure in limine by any saying "Prayer for leave to appeal is refused.
Appeal is dismissed.
" Before the trial Court 25 accused persons were tried on the allegation that they committed dacoity and in the com mission of the said dacoity murder of one A jab Lal Singh was committed.
Consequently all of them were charged for offence under Section 396 of the Indian Penal Code.
It is alleged that in the night intervening between 5th and 6th day of June, 1980 at Village Nandial Patti situated within P.S. Amarpur in the District of Bhagalpur, occurrence took place in the house of one Jawahar Lal Singh P .W. 21 who lodged the First Information Report, his house is situated in Nandial Patti and in the course of dacoity his brother Ajab Lal Singh was killed.
The incident is said to have taken place at 12 O 'clock at midnight, and the information was lodged on 6th of June 1980 at 8.45 A.M., at Bhagalpur Medical College Hospital as the informant was lying injured in the surgical ward of the Hospital.
At the trial there were number of eye witnesses examined who claimed to have identified the accused persons in the light of a lentern burning at that time.
The evidence also attributed different parts to different accused persons.
The learned Sessions Judge after considering the evidence discarded the evidence and acquitted all the accused persons from the charge le velled against them and unfortunately Hon 'ble the High Court without examining the reasons on the basis on which the learned Sessions Judge discarded evidence dismissed the leave petition and appeal as mentioned above and therefore we are at a disadvantage as we have not before us the exami nation of the reasons by the High Court on the basis of which the learned trial Court discarded the testimony and acquitted all the accused persons.
Although learned counsel for the respondent refer 222 red to portions of the evidence to justify the order of acquittal but also contended that in case this Court feels that the High Court should have considered the matter and pass a reasoned order it would be proper that we may not refer to any part of the evidence on merits nor express any opinion.
Learned counsel for both the sides did not dispute that the incident was such wherein number of persons were in volved.
They also frankly accepted that there are number of witnesses examined in the case.
A perusal of the judgment of the learned trial Court also shows that all the reasons on the basis of which the whole of the prosecution evidence has been discarded is not so simple or reasons so good that they do not require examination.
Under these circumstances there fore without going into the merits we feel that it would be better that the matter be examined by the learned Judges of the High Court so that we may have the advantage of consid ering the considered opinion of the High Court on the rea sons which weighed with the learned trial Court in discard ing the prosecution evidence and acquitting the respondents.
In view of the facts of the case and the circumstances indicated above we feel that it would be better if the High Court considers the matter and dispose it of after giving reasons and in view of this we think it proper not to ex press any opinion on any of the matters that may deserve consideration.
The appeal is therefore allowed.
The order passed by the High Court on 14th July 1983 is set aside and the appeal alongwith petition for leave filed by the State of Bihar is restored to the file of the High Court and it is directed that Hon 'ble the High Court after hearing the parties shall dispose of the matter giving reasons for the conclusions in accordance with law.
P.S.S. Appeal allowed.

dataset_name: IN-Abs

summary/full:
A number of persons were tried on the allegation of committing a decoity with murder and charged for offence under s.396 of the Indian Penal Code.
Eye witnesses claimed to have identified the accused persons in the light of a lantern.
The evidence also attributed different parts to different accused persons.
The trial court after considering the evidence discarded it and acquitted all the accused persons of the charge.
The High Court dismissed the petition for leave to appeal against acquittal filed by the State Government under s.378(1) and (3) of the Code of Criminal Procedure in limine with the words "Prayer for leave to appeal is refused.
Appeal is dismissed.
" Without examining the reasons on the basis of which the trial court had discarded the evidence.
The appellant appealed to this Court.
Allowing the appeal, HELD: The High Court should have considered the matter and passed a reasoned order.
The incident was such wherein a number of persons were involved.
There were a number of witnesses examined in the case.
A perusal of the record shows that all the reasons on the basis of which the whole of the prosecution evidence had been discarded by the trial court were not so simple or so good that they did not re quire examination.
[222B C] The appeal alongwith the petition filed by the State for leave to appeal is restored to the file of the High Court, and directed to be disposed of after hearing the parties, giving reasons for conclusions.
[222E F]


judgement:
ivil Appeal No. 1522 of 1986.
From the Judgment and Order dated 3.4.1986 of the State Transport Appellate Tribunal, Pondicherry in M.V.A. No. 15 of 1986.
R. Venkataramani for the Appellant.
K.R. Nambiar and section Srinivasan for the Respondents.
The Judgment of the Court was delivered by, VENKATARAMIAH, J.
This appeal by special leave is filed against the order dated April 3, 1986 passed by the State Transport Appellate Tribunal, Pondicherry (hereinafter referred to as 'the Tribunal ') setting aside a temporary permit to ply a stage carriage issued in favour of the appellant in respect of the route Pondicherry to Madras via Thirukanur, Vikaravandi, Tindivanam and Chingleput under section 62 of the (hereinafter referred to as 'the Act ') and granting it in favour of Respondent No. 2 A. Balasundaram for the remaining period of the temporary permit, i.e., upto May 31, 1986.
The period of the temporary permit having come 183 to an end no further orders are necessary as regards the person who could operate a stage carriage under that permit.
This appeal could have been disposed of with this observa tion but we are compelled to pronounce a detailed order in this case having regard to the slackness that is creeping into the manner in which the provisions of the Act are being administered by some transport authorities.
Chapter IV of the Act deals with the control of trans port vehicles.
Section 42 of the Act lays down that no owner of a transport vehicle shall use or permit the use of the vehicle in any public place whether or not such vehicle is actually carrying any passenger or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority of the Commission authorising the use of the vehicle in that place in the manner in which the vehicle is being used.
Section 44 of the Act provides for the constitution of the State Transport Authority and the Regional Transport Authorities to exercise and discharge the respective powers assigned to them under the Act.
The said Chapter contains the provisions under which permits may be issued by the Regional Transport Au thority for running a stage carriage, a contract carriage, a private carrier and a public carrier.
It also provides for the issue of permits valid for the whole or any part of India for running tourist vehicles.
Chapter IV contains the provisions regarding the manner in which the applications have to be made for different kinds of permits and the procedure that has to be followed in each case for granting such permits.
Section 47 of the Act which is in Chapter IV deals with the procedure to be followed by a Regional Trans port Authority.
In considering an application for a stage carriage permit the Regional Transport Authority should have due regard to the following matters, namely: (a) the inter est of the public generally; (b) the advantages to the public of the service to be provided, including the saving of time likely to be effected thereby and any convenience arising from journeys not being broken; (c) the adequacy of other passenger transport services operating or likely to operate in the near future, whether by road or other means, between the places to be served; (d) the benefit to any particular locality or localities likely to be afforded by the service; (e) the operation by the applicant of other transport services, including those in respect of which applications from him for permits are pending; and (f) the condition of the roads included in the proposed route or area.
It should also take into consideration any representa tions made by persons already providing passenger transport facilities by any means along or near the proposed route or area, or by any association representing persons interested in the provision 184 of road transport facilities recognised in this behalf by the State Government, or by any local authority or police authority within whose jurisdiction any part of the proposed route or area lies.
A reading of the aforesaid provisions shows that the paramount consideration that should govern the decision of a Regional Transport Authority in issuing a permit to run a stage carriage is the interest of the gener al public.
Since it was felt that the permits for plying stage carriages issued by the several Regional Transport Authori ties in India were being cornered by persons belonging to richer and more advanced classes in society and persons belonging to the Scheduled Castes, Scheduled Tribes and other economically weaker sections of the community were not able to compete with people who were rich and more advanced, Parliament amended section 47 of the Act by Act 47 of 1978 by introducing provisions for making reservation of certain percentage of stage carriage permits to persons belonging to Scheduled Castes, Scheduled Tribes and economically weaker sections of the community.
After the above amendment section 47(1A) of the Act provides that the Government of a State shall reserve in that State certain percentage of stage carriage permits for the Scheduled Castes and the Scheduled Tribes and the reservation of permits under the said provi sion is directed to be made in the same ratio as in the case of appointments made by direct recruitment by public serv ices of the State.
Such reservation appears to be mandatory.
Sub section (1C) of section 47 of the Act provides that the Government of a State may, having regard to the extent to which persons belonging to economically weaker section of the community have been granted stage carriage permits in that State (a) reserve in that State such percentage of stage carriage permits, as may be prescribed, for persons belonging to economically weaker sections of the community; or (b) notwithstanding anything contained in the proviso to sub section (1) of section 47 give preference, in such manner as may be prescribed, to applications for stage carriage permits from such persons.
Sub section (1D) of section 47 of the Act provides that the number of permits reserved under subsection (lB) and clause (a) of sub section (1C) of section 47 shall not exceed fifty per cent of that total number of stage carriage permits granted during a calendar year.
The reservation made in favour of the Sched uled Castes and the Scheduled Tribes is protected by clause (4) of Article 15 of the Constitution of India which pro vides that nothing in Article 15 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes.
185 Such special provision would, therefore, be out of the mischief of clause (1) of Article 15 which provides that the State shall not discriminate against any citizen on grounds only of religion, race, caste sex, place of birth or any of them.
It is also in consonance with Article 46 of the Con stitution.
Such special provision is necessary to assist the members belonging to the Scheduled Castes and Scheduled Tribes and to the weaker sections of society economically as they cannot otherwise compete with the other sections of society.
After the introduction of sub sections (1A) to (1H) into section 47 of the Act the Government of India sent a communication to all the State Governments and Union Terri tories to implement the reservations for members belonging to Scheduled Castes and Scheduled Tribes provided therein without delay.
It reads thus: "Government of India Ministry of Shipping and Transport No. TGM(70) New Delhi dated the 24th August, 1979 To All the State Govt/Union Territory Administrations.
Sub: Reservation of permits for scheduled castes/ scheduled tribes as provided in the Motor Vehicles (Amend ment) Act 1978.
I am directed to refer to this Ministry 's letter of even number dated the 31st January 1979 on the above subject and to say that so far as reservation in favour of scheduled castes and scheduled tribes is concerned, the provisions of the Motor Vehi cles (Amendment) Act, 1978 can be implemented straight way.
The implementation of this provision need not wait for the framing of any Rules, since the rules are required to be framed only in respect of circumstances under which, the manner in which, and the extent to which the reservation may be carried forward.
Since the question of carrying forward will arise only after the expiry of the current year, rules in this respect can be finalised during the course of the year.
The State Govts/Union Ter 186 ritories are requested to kindly have the provisions of the Act in regard to reservation for scheduled castes and scheduled tribes in respect of stage carriage permits, public carrier permits and national permits imple mented without further delay.
The State Govts/Union territory Administra tions are also requested to indicate the number of permits of various categories grant ed, after the provisions of the Motor Vehicles (Amendment) Act, 1978 was brought into force; the number reserved for scheduled castes/scheduled tribes and the number of permits actually granted to scheduled castes and scheduled tribes with reasons for short fall if any.
Yours faith fully, Sd/ B.R. CHAVAN DEPUTY SECRETARY TO THE GOVERNMENT OF INDIA".
The Union Territory of Pondicherry after the lapse of nearly seven Years from the date of the amendment of section 47 of the Act issued rules regarding reservations to be made in favour of persons belonging to Scheduled Castes and Scheduled Tribes under section 47(1A) of the Act on 12.6.
On the issue of said rules a number of writ petitions were filed by persons not belonging to Scheduled Castes and Scheduled Tribes questioning the validity of sub section (1A) of section 47 of the Act and the said petitions are still pending.
We shall not say anything more on the merits of those petitions.
It is regrettable that for some reasons or other the State Transport Authority of Pondicherry has not taken steps to issue regular permits on about 18 routes in respect of which it has entered into inter State agreements with the State of Tamil Nadu even though the need for issuing those permits is beyond dispute.
But, on the other hand for nearly six years, it is stated, that the State Transport Authority of Pondicherry is issuing temporary permits under section 62 of the Act repeatedly in respect of the routes.
the disad vantages surffeted by the persons belonging to the Scheduled Castes, Scheduled Tribes and the economically weaker sec tions of the community by the procedure adopted by the State Transport Authority are obvious.
If stage carriage permits are to be issued then in compliance with sub section (1A) of section 47 of the Act certain percentage of the said permits would 187 have to be reserved for the persons belonging to Scheduled Castes, Scheduled Tribes and if the Government so desires to the economically weaker sections of the community.
If the issue of such permits is postponed for any reason and only temporary permits are issued then the persons belonging to Scheduled Castes, Scheduled Tribes and the weaker sections would not be able to enjoy the benefit of the reservation.
It is unfortunate that even though Parliament had enacted the amendments nearly nine years ago the benefit of those provisions has not been availed of by those for whose bene fit they were enacted.
We are informed that the appellant and some others belonging to Scheduled Castes or Scheduled Tribes have made applications for grant of regular permits and those applications have remained undisposed of on ac count of the litigiousness of others.
The action taken by the State Transport Authority in issuing temporary permits repeatedly for a long number of years is clearly in violation of the letter and spirit of section 62 of the Act under which such temporary permits are issued.
Section 62 of the Act reads thus: "62.
Temporary permits (1) A Regional Transport Authority may without following the procedure laid down in section 57, grant permits, to be effective for a limited period not in any case to exceed four months, to authorise the use of a transport vehicle temporarily (a) for the conveyance of passengers on special occasions such as to and from fairs and religious gatherings, or (b) for the purposes of a seasonal business, or (c) to meet a particular temporary need, or (d) pending decision on an application for the renewal of a permit and may attach to any such permit any condition it thinks fit.
Provided that a temporary permit under this section shall, in no case, be granted in respect of any route or area speci fied in an application for the grant of a new permit under section 46 or section 54 during the pendency of the application: Provided further that a temporary permit under this 188 section shall, in no case, be granted more than once in respect of any route or area specified in an application for the renewal of a permit during the pendency of such applica tion for renewal.
Notwithstanding anything con tained in subsection (1), a temporary permit may be granted thereunder in respect of any route or area where (i) no permit could be issued under section 48 or section 51 or section 54 in respect of that route of area by reason of an order of a court or, other competent authority restraining the issue of the same, for a period not exceeding the period for which the issue of the permit has been so restrained; or (ii) as a result of the suspension by a court or other competent authority of the permit of any vehicle in respect of that route or area, there is no transport vehicle of the same class with a valid permit, in respect of that route or area, or there is no adequate number of such vehicles in respect of that route or area, for a period not exceeding the period of such suspension; Provided that the number of transport vehicles in respect of which the temporary permit is so granted shall ' not exceed the number of vehicles in respect of which the issue of a permit has been restrained or as the case may be, the permit has been suspend ed.
" Under section 62 of the Act it is permissible to a Regional Transport Authority to issue temporary permits to be effective for a limited period not exceeding four months without following the procedure laid down in section 57 of the Act.
Such temporary permits can be issued only for the conveyance of passengers on special occasions such as to and from fairs and religious gatherings or for the purposes of a seasonal business or to meet a particular temporary need or pending decision on an application for the renewal of a permit.
The regional Transport Authority cannot grant a temporary permit for a route or area specified in an appli cation for grant of a new permit under section 46 or section 54 of the Act during the pendency of the application.
That section further provides that a temporary permit issued under that section shall in no case be granted more that once in respect of any 189 route or area specified in an application for the renewal of a permit during the pendency of such application for renew al.
A temporary permit can thus be granted only if the permit is required for the purposes or reasons mentioned in clauses (a) to (d) of section 62(1) of the Act which are mentioned above or in the circumstances referred to in sub section (2) thereof.
This is clear from the decision of this Court in Andhra Pradesh State Road Transport Corporation vs
K. Venkataramireddy and others, In that decision this court held that a temporary permit could be issued only for the purposes or reasons mentioned in clauses (a) to (d) of section 62 of the Act as it stood then.
Subsequent to the amendment of section 62 of the Act a temporary permit can also be issued under the circumstances mentioned in sub section (2) of section 62 of the Act.
There cannot be also a renewal or revalidation of a temporary permit as held by this CoUrt in Gandhara Transport Co. Ltd. vs The State of Punjab and others, [1963] Supp. 1 S.C.R. 800.
The revalidation or renewal of a temporary permit or extension of the period for which a temporary permit is issued is not contemplated by law.
The issue of temporary permits by the State Transport Authority in the instant case continuously for a number of years is clearly in violation of the statute.
The Regional Transport Authority which is charged with the duty of issuing permits for transport vehicles under the Act in the public interest should wherev er it finds that the need for issuing such stage carriage permit is established take immediate steps to invite appli cations from persons who are willing to run the stage car riage on the route or in the area in question and proceed to grant the permit in favour of a deserving applicant.
If any person on his own makes application for the grant of a stage carriage permit, the Regional Transport Authority should consider such application in accordance with law and proceed to grant a permit if it finds that it is necessary to do so.
It may also be noted that if a regular permit is issued, it would be in force for a period not less than three years and not more than five years as may be determined by the Region al Transport Authority and such permit is capable of being renewed under section 58 of the Act.
But, if the Regional Transport Authority proceeds to issue a temporary permit then at the end of every four months it will have to spend time over the consideration of fresh applications for the issue of such permits and it is needless to say that the necessity for making applications at the end of every four months would entail many undesirable consequences which should be avoided.
With these observations we dispose of the appeal.
M.L.A. Appeal disposed of.

summary/full:
Respondent No. 1 State Transport Appellate Tribunal set aside a temporary permit to ply a stage carriage on the pondicherry Madras route issued under s.62 of the in favour of the appellant, and granted it in favour of respondent No. 2 for the remaining period of the temporary permit.
Hence this appeal by special leave.
The Court found that the period of temporary permit having come to an end, no further orders are necessary as regards the person who could operate a stage carriage under that permit.
The Union Territory of Pondicherry, after 'the lapse of 7 years from the date of the amendment of section 47 of the Act, issued rules on 12.6.
1985 regarding reservations to be made in favour of persons belonging to Scheduled Castes and Scheduled Tribes under Section 47(1A) of the Act.
Having regard to the slackness that is creeping into the manner in which the provisions of the Act regarding reservation of certain percentage of stage carriage permits to be made in favour of persons belonging to Scheduled Castes Scheduled Tribes, and issue of temporary permits are being adminis tered by some Transport Authorities, this Court, HELD: 1.(1) Section 47 of the Act deals with the proce dure to be followed by a Regional Transport Authority.
In considering an application for a stage carriage permit the Regional Transport Authority should have due regard to the following matters, namely: (a) the interest of the public generally; (b) the advantage to the public of the service to be provided, including the saving of time likely to be effected thereby and any convenience arising from journeys not being broken; (c) the adequacy of other passenger trans port services operating or 180 likely to operate in the near future, whether by road or other means, between the places to be served; (d) the bene fit to any particular locality or localities likely to be afforded by the service; (e) the operation by the applicant of other transport services, including those in respect of which applications from him for permits are pending; and (f) the condition of the roads included in the proposed route or area.
It should also take into consideration any representa tions made by persons already providing passenger transport facilities by any means along or near the proposed route or area, or by any association representing persons interested in the provision of road transport facilities recognised in this behalf by the State Government, or by any local author ity or police authority within whose jurisdiction any part of the proposed route or area lies.
Thus the paramount consideration that should govern the decision of a Regional Transport Authority in issuing a permit to run a stage carriage is the interest of the general publice.
[183E H; 184A B] 1.(2) It was felt that the permits for plying stage carriages in India were being cornered by persons belonging to richer and more advanced classes in society, and persons belonging to the Scheduled Castes, Scheduled Tribes and other economically weaker sections of the community were not able to compete with people who were rich and more advanced.
Parliament therefore amended section 47 of the Act by intro ducing provisions for making reservation of certain percent age of stage carriage permits to persons belonging to Sched uled Castes, Scheduled Tribes and economically weaker sec tions of the community, viz Section 47(1A).
The reservation made in favour of the Scheduled Castes and Scheduled Tribes is protected by clause(4) of Article 15 of the Constitution of India.
[184B D; G] 1.(3) If stage carriage permits are to be issued then in compliance with sub section(IA) of Section 47 of the Act certain percentage of the said permits would have to be reserved for the persons belonging to Scheduled Castes, Scheduled Tribes and if the Government so desires to the economically weaker sections of the community.
If the issue of such permits is postponed for any reason and only tempo rary permits are issued then the persons belonging to Sched uled Castes, Scheduled Tribes and the weaker sections would not be able to enjoy the benefit of the reservations.
[186H; 187A B] In the instant case, it is regrettable that for some reason or other the State Transport Authority of Pondicherry has not taken steps to issue regular permits on 18 routes in respect of which it has entered into inter State agreements with the State of Tamil Nadu even though the 181 need for issuing those permits is beyond dispute.
But, on the other hand for nearly six years, the State Transport Authority of Pondicherry is issuing temporary permits under s 62 of the Act repeatedly in respect of the routes.
The disadvantages suffered by the persons belonging to the Scheduled Castes, Scheduled Tribes and the economically weaker sections of the community by the procedure adopted by the State Transport Authority are obvious.
[186F H] 2(1).
Under section 62 of the Act it is permissible to a Regional Transport Authority to issue temporary permits to be effective for a limited period not exceeding four months without following the procedure laid down in s.57 of the Act.
Such temporary permits can be issued only for the conveyance of passengers on special occasions such as to and from fairs and religious gatherings or for the purposes of a seasonal business or to meet a particular temporary need or pending decision on an application for the renewal of a permit.
The Regional Transport Authority cannot grant a temporary permit for a route or area specified in an appli cation for grant of a new permit under s.46 or s.54 of the Act during the pendency of the application.
That section further provides that a temporary permit issued under that section shall in no case be granted more than once in re spect of any route or area specified in an application for the renewal of a permit during the pendency of such applica tion for renewal.
A temporary permit can thus be granted only if the permit is required for the purposes or reasons mentioned in clauses (a) to (d) of s.62( D of the Act or in the circumstances referred to in sub section(2) thereof.
[188F H; 189A B] 2(2).
There cannot be also a renewal or revalidation of a temporary permit.
The revalidation or renewal of a tempo rary permit or exension of the period for which a temporary permit is issued is not contemplated by law.
[189C D] In the instant case, the action taken by the State Transport Authority in issuing temporary permits repeatedly for a long number of years is clearly in violation of the letter and spirit of section 62 of the Act.
[189D] Andhra Pradesh State Road Transport Corporation vs
K. Venkataramireddy and Others, and Gandha ra Transport Co. Ltd. vs The State of Punjab and others, [ 1963] Supp.
S.C.R. 800, followed.
3(1) The Regional Transport Authority which is charged with the 182 duty of issuing permits for transport vehicles under the Act in the public interest should wherever it finds that the need for issuing such stage carriage permit is established take immediate steps to invite applications from persons who are willing to run the stage carriage on the route or in the area in question and proceed to grant the permit in favour of a deserving applicant.
If any person on his own makes application for the grant of a stage carriage permit, the Regional Transport Authority should consider such applica tion in accordance with law and proceed to grant a permit if it finds that it is necessary to do so.
[189D F] 3(2) If a regular permit is issued it would be in force for a period not less than three years and not more than five years as may be determined by the Regional Transport Authority and such permit is capable of being renewed under section 58 of the Act.
But, if the Regional Transport Au thority proceeds to issue a temporary permit then at the end of every four months, it will have to spend time over the consideration of fresh applications for the issue of such permits and it is needless to say that the necessity for making applications at the end of every four months would entail many undesirable consequences which should be avoid ed.
[189F H]


judgement:
Criminal Appeal No. 72 of 1987.
From the Judgment and order dated 21.10.1986 of the Gujarat High Court in Spl.
Appeal No. 889 of 1986.
Ram Jethmalani, Ms. Rani Jethmalani and A.K. Sharma for the Appellant.
T.U. Mehta, M.N. Shroff and K.M.M. Khan for the Respond ents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
We grant special leave and proced to hear the apeal.
The appellant, Abdul Latif Wahab Sheikh, was in jail from November 12, 1985 onwards awaiting trial on a charge of murder.
He was acquitted on May 26, 1986.
Though acquitted, he was not straightaway released from prison.
The reasons are not clear to us from the record.
Presumably he was required in connection with some other case.
He was due for release from prison on June 23, 1986.
On that day, however, an order for his detention was made under the provisions of the Gujarat Prevention of Anti Social Activities Act, 1985.
The mandate of article 22(4) of the Constitution is that no law providing for preventive detention shall authorise the detention of a person for a longer period than three months unless an Advisory Board consisting of persons who are, or have been, or are qualified to be appointed as, Judges of a High Court, has reported before the expiration of the said 206 period of three months that there is in its opinion suffi cient cause for such detention.
Section 10 of the Gujarat Prevention of Anti Social Activities Act, 1985 provides for the constitution of an Advisory Board, sec.
11 provides for reference to the Advisory Board and sec.
12 prescribes the procedure to be followed by the Advisory Board.
What is important for the purposes of this case is that sec.
11 stipulates that in every case where a detention order has been made under the Act, the State Government shall, within three weeks from the date of detention of a person under the order, place before the Advisory Board the grounds on which the order has been made, the representation, if any, made by the detenu and the report, if any, of the authorised offi cer.
What is intriguing in the case is that on the date when the detention order was made, there was no Advisory Board in existence to which a reference could be made under sec.
11 of the Act and whose report of its opinion regarding suffi cient cause for the detention was required to be obtained within three months of the detention under article 22(4) of the Constitution.
The period of three weeks stipulated by sec.
11 of the Act expired on July 14, 1986.
The petitioner was entitled to be released on July 14, 1986 as no reference had been made to the Advisory Board within the period contem plated by sec.
11 of the Act.
But he was not so released.
This state of affairs continued till August 7, 1986 when the order of detention dated June 23, 1986 was revoked and a fresh order of detention was made on the same facts on the same day.
In the meanwhile, the order of detention dated June 23, 1986 had been challenged by filing a writ petition in the High Court.
Consequent on the revocation of that order that writ petition was withdrawn as having become infructuous and another writ petition, out of which the present appeal arises, was filed questioning the second order of detention dated August 7, 1986.
The Advisory Board was constituted on August 18, 1986.
Reference to the Adviso ry Board was made on August 20, 1986.
The Advisory Board made its report on September 26, 1986.
It will be seen that the report of the Advisory Board was more than three weeks after the detention which commenced on the making of the order of detention, though it was within three months from the date of the second order of detention.
The learned counsel for the appellant contends that there has been a contravention of the constitutional protection afforded by article 22(4) and therefore, the appellant is entitled to be set at liberty.
He does not dispute that under sec.
15(2) of the Gujarat Prevention of Anti Social Activities Act the expiry or revocation of an earlier detention order shall not bar the making of a subsequent detention order under the Act against the same person, subject to the proviso that if there were no fresh facts, the maximum period for which a person may be detained shall not extend beyond the expiry of 207 a period of 12 months from the date of detention under the earlier detention order.
He submits that this provision, if to be sustained, as constitutionally valid, must be read down so that it does not offend the mandate of article 22(4) of the Constitution that no law providing for preventive deten tion shall authorise the detention of a person for a longer period than three months unless the Advisory Board has reported within the period of three months that there is in its opinion sufficient cause for such detention.
On the other hand, the learned counsel for the State of Gujarat submits that it is enough if the report of the Advisory Board is obtained within three months of the subsequent order of detention, where the earlier order is revoked and a subsequent order is made.
The real question for consideration is whether a law may be made providing for successive orders for detention in a manner as to render the protection of article 22(4) of the Constitution ineffective? For example, can a fresh order of detention be made every 89th day making it unnecessary to obtain the report of the Advisory Board within three months of the detention? That is what it will amount to if the submission of he learned counsel for the State is accepted.
It, therefore, becomes imperative to read down sec.
15 of the Gujarat Prevention of Anti Social Activities Act, 1985 which provides for the making of successive of order of detention so as to bring it in conformity with article 22(4) of the Constitution.
If there is to be a collision between article 22(4) of the Constitution and sec.
15 of the Act, sec.
15 has to yield.
But by reading down the provision, the colli sion may be avoided and sec.
15 may be sustained.
So, avoid ing the collision course, we held that if the report of the Advisory Board is not made within three months of the date of detention, the detention becomes illegal notwithstanding that it is within three months from the date of the second order of detention.
The learned counsel for the petitioner invited our attention to the decision of the court in Shibapada Mukher jee vs State of West Bengal, , where the court referring to clauses 4 and 7 of article 22 observed.
"It is clear from clauses (4) and (7) of Article 22 that the policy of Article 22 is, except where there is a Central Act to the contrary passed under clause (7) (a), to permit detention for a period of three months only, and detention in excess of that period is permissible only in those cases where an Advisory Board set up under the relevant statute, 208 has reported as to the sufficiency of the cause for such detention.
Obviously, the Constitution looks upon preventive detention with disfavour and has permitted it only for a limited period of three months without the intervention of an independent body with persons on it of judicial qualifications of a high order.
The facts that the report of such an Advisory Board has to be obtained before the expiry of three months from the date of detention shows that the maximum period within which the detaining authority can on its own satisfaction detain a person is three months The observation of the court to the extent that they go to support the contention of the learned counsel for the appel lant, but we must say that in that case, the court was not confronted with the present situation at all.
The learned counsel for the State referred us to A.K. Roy vs Union of India, ; , where the court referring to an argument based on sec.
11(2) of the National Security Act said: "Section 11(2) of the Act provides specifical ly that the report of the Advisory Board shall specify its opinion "as to whether or not there is sufficient cause for the detention of the person concerned".
This implies that the question to which the Advisory Board has to apply its mind is whether on the date of its report there is sufficient cause for the detention of the person.
That inquiry neces sary involves the consideration of the ques tion as to whether there was sufficient cause for the detention of the person when the order of the detention was passed, but we see no justification for extending the jurisdiction of the Advisory Board to the consideration of the question as to whether it is necessary to continue the detention of the person beyond the date on which its report or beyond the period of three months after the date of detention.
" The learned counsel for the State also invited our attention to the decision of a learned single Judge of this Court, rendered during the vacation, in Talib Hussain vs State of Jummu & Kashmir, , where he observed: "In regard to the submission that the peti tioner was arrested and deprived of his person liberty long before the order of his arrest and this invalidated his detention, it is 209 sufficient to point out that in habeas corpus proceeding the Court has to consider the legality of the detention on the date of hearing. 'If on the date of hearing it cannot be said that the aggrieved party has been wrongfully deprived of his personal liberty and his detention is contrary to law a writ of habeas corpus cannot issue.
" Neither of the cases cited by the learned counsel for the State deal with the question now at issue even in a remote way.
They do not have any application.
We only desire to add that in a habeas corpus proceeding, it is not a sufficient answer to say that the procedural requirements of the Constitution and the statute have been complied with before the date of hearing and therefore, the detention should be upheld.
The procedural requirements are the only safeguards available to a detenu since the court is not expected to go behind the subjective satisfaction of the detaining authority.
The procedural requirements are, there fore, to be strictly complied with if any value is to be attached to the liberty of the subject and the constitution al rights guaranteed to him in that regard.
If a reference to an Advisory Board is to be made within three weeks, it is no answer to say that the reference, though not made within three weeks, was made before the hearing of the case.
If the report of the advisory Board is to be obtained within three months, it is no answer to say that the report though not obtained within three months, was obtained before the hear ing of the case.
If the representation made by the detenu is required to be disposed of within a stipulated period, it is not answer to say that the representation, though not dis posed of within three months, was disposed of before the hearing of the case.
We mentioned that we were intrigued that an order of detention should have been made, knowing full well that there was no Advisory Board in existence to whom a reference could be made under the Act and whose report could be obtained as required by the Constitution.
Such a casual and indifferent approach betrays a disregard for the rights of citizens and this has to be deprecated.
We have no option but to allow the appeal and quash the order of detention dated August 7, 1986.
The petitioner is now on parole.
He need not surrender to his parole.
In the view that we have taken, we have refrained from referring to the other submissions of the learned counsel for the appellant.
S.R. Appeal allowed.

summary/full:
Section 11 of the Gujarat Prevention of Anti Social Activi ties Act, 1985 stipulates that in every case where a deten tion order has been made under the Act, the State Government shall, within three weeks from the date of detention of a person under the order, place before the Advisory Board constituted under section 10 the grounds on which the order has been made the representation if any made by the detenu and the report if any of the authorised officer.
Under section 15(2), the expiry or revocation of an earlier detention order shall not bar the making of a subsequent detention order under the Act against the same person, subject to the proviso that if there were no fresh facts, the maximum period for which a person may be detained shall not extend beyond the expiry of a period of 12 months from the date of detention under the earlier detention order.
While the appellant was in Jail from November 12, 1985 onwards awaiting trial on a charge of murder he was acquit ted on May 26, 1986.
He was due for release from prison on June 23, 1986.
On that day, however, an order for his deten tion was made under the provisions of the Gujarat Prevention of Anti Social Activities Act, 1985.
The period of three weeks stipulated by section 11 of the Act expired on July 14, 1986.
Since there was no Advisory Board in existence, the appellant was entitled to be released on July 14, 1986 itself.
But he was not so released.
However, during the pendency of the writ petition challenging the said detention order in the High Court, the order of detention dated 23rd June, 1986 was revoked on 7th August, 1986 and a fresh order of detention was made on the same facts on the same day with the result the earlier writ petition was withdrawn and a fresh write petition came be filed.
An Advisory Board was, however constituted on August 18, 1986.
A reference under section 11 was made to the Advisory Board on 204 August 20, 1986 and the Advisory Board made its report on September 6, 1986.
The report of the Advisory Board was more than three weeks after the detention which commenced on the making of the order of detention though it was within three months from the second order of the detention.
The appellant contended, in the writ petition, that there has been a contravention of the constitutional protection afforded to him by Article 22(4).
The writ petition having been dis missed, the Appellant has come in appeal by Special Leave.
Allowing the appeal, the Court, HELD: 1.
No law can be made providing for successive orders for detention in a manner so as to render the protec tion of Article 22(4) of the Constitution ineffective.
Section 15 of the Gujarat Prevention of Anti Social Activi ties Act, 1985 which provides for the making of successive orders of detention must be read down so as to bring it in conformity with Article 22(4) of the Constitution.
If there is to be a collision between Article 22(4) of the Constitu tion and section 15 of the Act, section 15 has to yield.
But by read ing down the provision, the collision may be avoided and section 15 may be sustained.
So, avoiding the collision course, It must be held that if the report of the Advisory Board is not made within three months of the date of detention, the detention becomes illegal notwithstanding that it is within three months from the date of he second order of detention.
[207C F] Shibapada Mukherjee vs State of West Bengal, ; A.K. Roy vs Union of India, ; and Talib Hussain vs State of Jammu & Kashmir, , distinguished.
In a Habeas Corpus proceeding, it is not a sufficient answer to say that the procedural requirements of the Con stitution and the Statute have been complied with before the date of hearing and therefore, the detention should be upheld.
The procedural requirements are the only safeguards available to a detenu since the court is not ,expected to go behind the subjective satisfaction of the detaining authori ty.
The procedural requirements are, therefore, to be strictly complied with if any value is to be attached to the liberty of the subject and the constitutional rights guaran teed to him in that regard.
If a reference to an Advisory Board is to be made within three weeks, it is no answer to say that the reference, though not made within three weeks, was made before the hearing of the case.
If the report of the Advisory Board is to be obtained within three months, it is no answer to say that the report, though not obtained within three months, was obtained before the hearing of the . 205 case.
If the representation made by the detenu is required to be disposed of within a stipulated period, it is no answer to say that the representation, though not disposed of within three months, was disposed of before the hearing of the case.
[209B F] OBSERVATION An order of detention should not have been made, knowing full well that there was no Advisory Board in existence to whom a reference could be made under the Act, and whose report could be obtained as required by the Constitution.
Such a casual and indifferent approach betrays a disregard for the rights of citizens.]


judgement:
Criminal Appeal No. 829 of 1985.
From the Judgment and order dated 28.11.1983 of the Andhra Pradesh High Court in Crl.
Case/Petn.
No. 290 of 1983.
R. Venkataramani and R. Ayyam Perumal for the Appellant.
A. Subba Rao for the Respondents.
The Judgment of the Court was delivered by, OZA, J.
This appeal has been filed by the appellant after obtaining leave from this Court against an order passed by the High Court of Andhra Pradesh dated 28.11.1983 wherein the High Court rejected a Revision Petition filed by the appellant.
Against the appellant a complaint was filed in the Court of Metropolitan Magistrate, Hyderabad under Section 120(b) read with Sections 467 and 471 of the Indian Penal Code.
After summons were issued the appellant raised objection about the maintainability of this prosecution for want of sanction under Section 197 of the Criminal Procedure Code.
The objection was rejected by the Metropolitan Magistrate, Hyderabad and against the order of the Metropolitan Magis trate a Revision Petition was filed in the High Court which has been rejected by the impugned order passed by the Andhra Pradesh High Court.
The learned Metropolitan Magistrate held that Section 197 is attracted only when a public servant is not removable from his office save by or with the sanction of the Govern ment.
The appellant is an officer who is removable from his office by a competent authority and no sanction of the Government is necessary.
Consequently Section 197 in terms does not apply.
This view was affirmed by the High Court of Andhra Pradesh.
It was contended by the learned counsel that after nationa lisa 218 tion as the banks are nationalised the appellant will fall within the definition of public servant and therefore Sec tion 197 will be attracted.
It was also contended that although the appellant is removable by an authority which is not Government but the authority has been empowered under the regulations and these regulations have been framed with the sanction of the Government and under these circumstances therefore the view taken by the Courts below is not correct.
Section 197 of the Code of Criminal Procedure reads: "When any person who is or was a Judge or Magistrate or a Public servant not removable from his office save by or with the sanction of the Government is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no Court shall take cognizance of such offence except with the previous sanction (a) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of the Union, of the Central Government; (b) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of a State, or the State Government.
(2) No Court shall take cognizance of any offence alleged to have been committed by any member of the Armed Forces of the Union while acting or purporting to act in the discharge of his official duty, except with the previous sanction of the Central Government.
(3) The State Government may, by notification, direct that the provisions of sub section (2) shall apply to such class or category of the members of the Forces charged with the mainte nance of public order as may be specified therein, wherever they may be serving, and thereupon the provisions of that sub scction will apply as if for the expression "Central Government ' occurring therein the expression "State Government" were substituted.
(4) The Central Government or the State Gov ernment as the case may be, may determine the person by whom, the manner in 219 which, and the offence or offences for which, the prosecution of such Judge, Magistrate or public servant is to be conducted, and may specify the Court before which the trial is to be held.
" It is very clear from this provision that this Section is attracted only in cases where the public servant is such who is not removable from his office save by or with the sanction of the Government.
It is not disputed that the appellant is not holding a post where he could not be re moved from service except by or with the sanction of the Government.
In this view of the matter even if it is held that appellant is a public servant still provisions of Section 197 are not attracted at all.
It was contended by the learned counsel that the compe tent authority who can remove the appellant from service derives his power under regulations and these regulations ultimately derive their authority from the Act of Parliament and therefore it was contended that the regulations are flamed with the approval of the Central Government but it does not mean that the appellant cannot be removed from his service by anyone except the Government or with the sanction of the Government.
Under these circumstances on plain read ing of Section 197 the view taken by the Courts below could not be said to be erroneous.
We therefore see no reason to entertain this appeal.
It is therefore dismissed.
A.P.J. Appeal dismissed.

summary/full:
On a complaint being filed under section 120(b) read with ss.467 and 471 of the Indian Penal Code, the Metropolitan Magistrate summoned the appellant and thereafter rejected his objection about the maintainability of his prosecution for want of sanction under section 197 of the Criminal Procedure Code, holding that section 197 does not apply because the appel lant is an officer who is removable from his office by a competent authority and no sanction of the Government is necessary.
This view was affirmed by the High Court.
In the appeal to this Court, on behalf of the appellant it was contended: (i) that after the nationalisation of the Department of the appellant he will fall within the defini tion of public servant and, therefore, section 197 will be at tracted and (ii) that although the competent authority who can remove the appellant from service is not the Government, but it has been empowered under the regulations framed under the Act of Parliament with the approval and sanction of the Central Government and, therefore, the view taken by the Courts below is not correct.
Dismissing the Appeal, HELD: It is clear that section 197 of the Criminal Procedure Code is attracted only in cases where the public servant is such who is not removable from his office save by or with the sanction of the Government.
[219B] In the instant case, it is not disputed that the appellant is not 217 holding a post where he could not be removed from service except by or with the sanction of the Government.
In this view of the matter even if it is held that appellant is a public servant still provisions of section 197 are not attracted at all.
Therefore, the view taken by the Courts below could not be said to be erroneous.
[219D]


judgement:
vil Appeal No. 1163 (NT) of 1974.
From the Judgment and Order dated 25.11.
1971 of the Allahabad High Court in Income Tax Reference No. 310 of 1968 S.C. Manchanda, M.N. Tandon and Miss A. Subhashini for the Appellant.
B.P. Singh and Ranjit Kumar for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is an appeal from the judgment and order of the High Court of Allahabad dated 25th November, 1971.
The Income Tax Appellate Tribunal had referred to the High Court the following question for its opinion: "Whether, on the facts and in the circumstances of the case, the expenditure of Rs.50,000 was a capital expenditure which could not be allowed as a deduction under section 10(2)(xv) of the Income tax Act, 1922?" The assessee carried on the business of manufacture and sale of woolen goods, cotton textiles and hides and leather products.
The activity of tanning hides and manufacturing leather products was carried on under the name and style of Cooper Allen and North West Tannery branches.
For the as sessment year 1959 60, under the Income tax Act, the rele vant accounting of which being the calender year ending on 31st December, 1958, the assessee had claimed a deduction of Rs.50,000 paid to Messrs Textile & General Supplies Private Ltd. Bombay (hereinafter referred to as "Textile & General Supplies").
The assessee 's claim was made on the basis that the assessee was bound under an agreement with Messrs Charles Walker & Co., London to pay that amount to Textile General Supplies for meeting the initial expenditure for establishing it as distributor of the assessee 's products.
The Income tax Officer rejected the claim, and the Appellate Assistant Commissioner upheld that decision.
The assessee went up in appeal before the Income tax Appellate Tribunal.
The Tribunal also rejected the claim of the assessee.
At the instance of the 136 assessee, the Tribunal made a reference on the aforesaid question to the High Court.
The question is whether the assessee was entitled to claim deduction in the computation of its profits and gains of business in respect of the expenditure in question, not being in the nature of capital expenditure, laid out or expended wholly or exclusively for the purpose of such business.
In other words, on the background of the facts in controversy in this case whether it was revenue expenditure or capital expenditure.
This question has been discussed in the various deci sions.
It is settled that the question must be viewed from the practical point of view.
There are deluge of cases and no principle can be laid out with substantial accuracy which will be applicable in all the cases.
The answer to the question must depend on the facts and circumstances of each case on the application of the principles of law as laid down by the courts.
The agreement in question in this case between the assessee with Charles Walker stipulated that Charles Walker would permit the use by the assessee of a number of registered trade marks specified in the agreement and further disclose and make known to the approved officers of the assessee the technique, practices and application of specialised tanning processes.
Besides providing for the provision of technical supervision by Charles Walker and payment by way of salary, travelling expenses and mainte nance to the personnel sent out by it to India, the agree ment also provided that in the event of liberalisation of imports Charles Walker would limit its export to India of certain products.
The assessee undertook to pay to Charles Walker technical fees calculated at 5% on the selling price of the products by the processes disclose to it.
Paragraph 7 of the agreement was to the following offect: "The Second participant (the assessee) agrees to appoint Textile and General Supplies Pri vate Ltd., Army and Navy Buildings, Mahatma Gandhi Road, Bombay 1, India a nominee of the first participant (CharLes Walker) as distrib utors of the second participant for the sate of industrial leather manufactured by the second participant in India for the period of this agreement at a discount of 15% (fifteen per cent) on the prices at which Industrial Leather covered by this agreement are sold to textile mills and other consumers.
In addition the second participant will pay Rs.50,000 (Rs. Fifty thousand only) to the distributors for 137 meeting the initial expenses of establishing the distributoship of the second participant on the express understanding that the first participant will not part with his interest in Textile & General Supplies Private Ltd. with out the prior approval in writing of the second participant.
" Seven years was the period of the agreement as agreed.
It is clear from paragraph 7 as aforesaid read in the background of the entire facts that the assessee was obliged to appoint Textile & General Supplies, nominee of Charles Walker, as its distributors for the sale of industrial leather manufactured by it in India.
The assessee was obliged by the aforesaid agreement to pay Rs.50,000 to the distributorship.
An agreement was entered into by the assessee with Textile & General Supplies in which after referring to the agreement with Charles Walkar it was stipulated that the distributors would receive a discount of 15% of the sale price fixed by the assessee and that the agreement would extend for the period of seven years.
Significantly, no reference was made to the obligation of the assessee to pay Rs.50,000 to the distributors, a condition which was men tioned in the agreement with Charles Walker alone.
The obligation to pay Rs.50,000 to the distributors was one of the conditions subject to which the assessee became entitled to the use of the registered trade marks and to the disclo sure of the technical practices and application of the specialised processes to be supplied by Charles Walker.
This clause regarding appointment contained in paragraph 7 formed part and integral part of the agreement and was a considera tion for the receipt of the benefit from Charles Walker under the agreement.
It was a condition to get the technical knowledge of the know how that their nominee should be appointed as distribu tor and for the setting up of the distributor 's business rupees fifty thousand was required to be paid.
This was in essence an integral part of the bargain for the acquisition of the technical knowledge to have this particular distribu tor.
Numerous decisions have dealt with this question.
In British Sugar Manufacturers, Ltd. vs Harris (Inspector of Taxes), the Court of Appeal in England dealt with this question and Romer, L.J. at page 108 of the report observed in dealing with the question which was similar to the present one that the real question is, is the 138 payment that has to be made by the trader under the contract in question a mere division of profits with another party or it is a payment to the other party, the amount of which is ascertained by reference to the profits? The Lord Justice observed that it was a difficult question.
In that case the Lord Justice held that the payment was made to earn the profit.
It was condition precedent to the acquisition of the know how that the payment had to be made for installation of the set up of the distribution arrangement.
Rowlatt, J. in the case of Countess Warwick Steampship Co. Ltd. vs Ogg, [1924] 2 K.B. 292 at 298 observed that it is very difficult to lay down any general rule which is both sufficiently accurate and sufficiently exhaustive to cover all or even a great number of possible cases.
Only broad tests could be laid down.
Some of such tests were laid down by this Court in Assam Bengal Cement Co. Ltd. vs Commissioner of Income Tax, West Bengal, This Court discussed the broad principles at page 45 of the report.
It is not neces sary to reiterate all these principles but one of the tests was that the aim and object of the expenditure was one of the guiding factors.
The aim and object of incurring the expenditure in this case was the acquisition of the know how.
This Court again in the case of Commissioner of Income Tax, Bombay City Iv.
Ciba of India Ltd. (and vice versa), discussed the principles application in determin ing whether the expenditure in such circumstances was a capital or a revenue in nature.
See also Travancore Sugar and Chemicals Ltd. vs Commissioner of Income Tax, Kerala, ; Commissioner of Income Tax, West Bengal H vs Coal Shipments P. Ltd., ; Empire Jute Co. Ltd. vs Commissioner of Income Tax; , This Court observed what was material to consider was the nature and the advantage in obtaining the asset in a commercial sense.
Also see L.H. Sugar Factory and Oil Mills (P) Ltd. vs Com missioner of Income Tax, U.P., These principles have been summarised in the Commentary of Kanga and Palkhivala 's Income Tax, Seventh Edition, Volume 1 page 484 to 488.
But the cases referred emphasise that no test of universal application can be laid down.
The question posed in this appeal has to be decided bearing the aforesaid principles in mind.
It is clear that Rs.50,000 was really part of the price paid by the assessee to obtain the know how.
It is clear that pursuant to para graph 7, the assessee was bound to appoint Textile and General Supplies, nominee of Charles Walker, as its distrib utor for the 139 sale of leather manufactured by it in India.
Contemporane ously, an agreement was entered into by the assessee with Textile & General Supplies in which after referring to the agreement with Charles Walker it was stipulated that the distributors would receive a discount of 15% of the sale price fixed by the assessee and that the agreement would extend for a period of seven years.
Significantly, no refer ence was made to the obligation of the assessee to pay Rs.50,000 to the distributors, a condition which was in the agreement with Charles Walker alone.
It is clear that paragraph 7 referred to hereinbefore was an integral part of the agreement with Charles Walker and was a part of the consideration for the receipt of the benefit.
It is ,not possible to find out the reasons which persuaded Charles Walker to insist upon the appointment of Textile & General Supplies as distributors of the assessee.
It was a necessary condition of the agreement with Charles Walker.
It was perhaps done to protect the technical know how which Charles Walker was parting so that the distribu tors would be a nominee of Charles Walker.
Having regard to the nature of the agreement and having regard to the facts that the organisation set up under the distributorship agreement was to endure for seven years and upon the expiry of the period, the assessee had no relation ship with the organisation and that the period of agreement between the assessee and distributors was contemporaneous with the agreement between the assessee and Charles Walker under which the assessee became entitled to use the regis tered trade marks, it must be considered to be a revenue expenditure.
Considerable emphasis has been laid by the revenue on the facts that in paragraph 7 of the agreement with Charles Walker, it was mentioned that Rs. 50,000 would be paid to the distributors for meeting the initial ex penses.
We are of the opinion that in the facts and circum stances of the case, this was a revenue expenditure because it was part of the price for the acquisition of technical know how and the condition of the appointment was a stipula tion mentioned by Charles Walker.
In the premises we are of the opinion that the High Court was right in the view it took.
The appeal therefore fails and is accordingly dismissed with costs.
A.P.J. Appeal dis missed.

summary/full:
The assessee company entered into an agreement with M/s. Charles Walker and Company, London which, inter alia, stipu lated that the latter would permit the use by the assessee of a number of registered trade marks specified in the agreement and disclose to the approved officers of the assessee the technique, practices and application of specia lised tanning processes.
Paragraph 7 of the agreement pro vided that the assessee would appoint Textile and General Supplies, nominee of the Charles Walker, as its distributors for the sale of industrial leather manufactured by it in India and the assessee would pay Rs.50,000 to the distribu tors for meeting the initial expenses of establishing the distributorship.
This agreement was to be in force for a period of seven years.
Simultaneously, another agreement was entered into between the assessee and Textile and General Supplies for a period of seven years, but no reference was made therein to the obligation of the assessee to pay Rs.50,000 to the distributors.
For the assessment year 1959 60 the assessee claimed the payment of Rs.50,000 to Textile and General Supplies as a deduction permissible under section 10(2)(XV) of the Income Tax Act, 1922, which was rejected by the Income Tax Officer, Appellate Assistant Commissioner and the Tribunal on the ground that the said payment was in the nature of a capital expenditure.
In the Reference, the High Court allowed the claim of the assessee holding that the payment in question was a revenue expenditure.
Dismissing the Appeal of the Revenue, 134 HELD: 1.
The real question is whether the payment that had been made by the assessee under the contract in question is a mere division of profits with another party or is it a payment to the other party, the amount of which is ascer tained by reference to the profits.
[138A B] 2.
No test of Universal application can be laid down.
The aim and object of the expenditure was one of the guiding factors.
The aim and object of incurring the expenditure in this case was the acquisition of the know how.
Rs.50,000 was really part of the price paid by the assessee to obtain the know how.
Pursuant to Paragraph 7 of the said agreement the assessee was bound to appoint Textile and General Supplies, nominee of Charles Walker, as its distributor for the sale of leather manufactured by it in India.
Paragraph 7 was an integral part of the agreement with Charles Walker and was a part of the consideration for the receipt of the benefit.
It was necessary condition of the agreement with Charles Walker to appoint Textile and General Supplies as distributors of the assessee.
It was perhaps done to protect the technical know how which Charles Walker was parting so that the dis tributors would be a nominee of Charles Walker.
[138D; H; 139C D] 3.
Having regard to the nature of the agreement and having regard to the facts that the organisational set up under the distributorship agreement was to endure for seven years and upon the expiry of the period, the assessee had no relationship with the organisation and that the period of agreement between the assessee and the distributors was contemporaneous with the agreement between the assessee and Charles Walker under which the assessee became entitled to use the registered trade marks, it must be considered to be a revenue expenditure, because it,was part of the price for the acquisition of technical know how and the condition of appointment was a stipulation mentioned by Charles Walker.
[139D F] British Sugar Manufacturers, Ltd. vs Harris (Inspector of Taxes), ; Countess Warwick Steampship Co. Ltd. vs Ogg, [1924] 2 K.B. 292 at 298; Assam Bengal Cement Co. Ltd. vs Commissioner of Income Tax, West Bengal, ; Commissioner of Income Tax, Bombay City Iv.
Ciba of India Ltd., (and vice versa), ; Travancore Sugar and Chemicals Ltd. vs Commissioner of IncomeTax, Kerala, ; Commissioner of Income Tax, West Bengal H vs Coal Shipments P. Ltd., ; Empire Jute Co. Ltd. vs Commissioner of Income Tax, ; ; L.H. Sugar Factory and Oil Mills (P) Ltd., vs Commissioner of Income Tax, U.P., and Commentry of Kanga and Palkhivala 's Income Tax, Seventh Edition, Volume 1 page 484 to 488, referred to. 135


judgement:
ivil Appeal No. 2245 to 2249 of 1985.
212 From the Judgment and Order dated 8.11.
1984 of the Patna High Court in C.W.J. Case No. 2812 of 1982.
V.M. Tarkunde and M.P. Jha for the Appellants.
S.N. Kacker and L.R. Singh for the Respondents.
Vijay Hansaria for Respondent in C.A. No. 2248/85.
The Judgment of the Court was delivered by KHALID, J.
In these appeals, by special leave, the short question that falls for decision is as to how Explanation to Section 2(P)(i) inserted by the Bihar Agricultural Produce Markets (Amendment) Act, 1982, should be read with the Explanation to Section 27 also inserted by the same Act.
Before the High Court, the vires of Explanation to Section 2(P)(i) was challenged on the ground that it encroached upon Entry 42 of list I of the Seventh Schedule.
The Division Bench of the High Court after considering the various au thorities dealing with the concept of sale, refrained from declaring the Explanation bad but read it down and held that it should be read in harmony with the Explanation to Section 27 and directed the marketing committee concerned to make assessment of fees after giving the petitioners an opportu nity as provided in the Explanation to Section 27.
In this Judgment, we do not propose to go into the question whether sale as explained in the Explanation to Section 2(P)(i)) would include interstate trade etc.
and on that reasoning strike down the Explanation.
We propose to consider the scope of the two Explanations to see whether they can co exist.
The Original Act was called the Bihar Agricultural Produce Markets Act, 1960, (for short the Act).
This Act was enacted to regulate the buying and selling of crops by providing suitable and regulated markets, to eliminate middlemen and to help the cultivators and the buyers in the disposal of the commodities.
The Act enabled the marketing committee to levy a fee for transactions talking place in the market area.
To get at persons who manage to escape the levy of market fee by ingenious transactions, the Act was amended by inserting a new definition Section 2(P)(i) along with an Explanation and also adding an Explanation to Sec tion 27.
What we have to decide in this case is as to how these two Explanations have to be construed.
In other words whether one Explanation excludes the other or whether one is the compliment of the other.
213 It is necessary first to quote the two provisions under consideration.
Section 2(P)(i) along with the Explanation reads as follows: "2(P)(i) 'Sale ' means any transfer of proper ty in goods for cash or deferred payment or other valuable consideration and shall include transfer or acquisition of goods on hire purchase or under any other system in which payment of valuable consideration is made by installment notwithstanding the fact that the seller retains title in goods as valuable security of payment of consideration or for any other person.
Explanation Notwithstanding any thing contained in any law for the time being in force sale shall be deemed to have taken place for the purpose of this Act within a market area when the goods are transferred from the Principal to his selling agent or to the Arhatia within the market area or outside the market area.
" Section 27 is the charging section.
It reads as follows along with the Explanation: "Section 27 Power to levy fees (1) The market committee shall levy and collect market fees on the agricultural produce brought or sold in the market area, at the rate of rupee one per Rs. 100 worth of agricultural produce.
Explanation: All notified agricultural produce leaving a market area, shall unless the con trary is proved be presumed to have been bought or sold in such area.
" In fiscal laws due importance has to be given to the phraseology used in the charging section.
Section 27 gives to the market committee the power to levy and collect market fees on the agricultural produce bought or sold in the market area at the rate given therein.
The Explanation raises a presumption and that is that all notified agricul tural produce leaving a market area shall be presumed to have been bought or sold in such an area.
But this presump tion is rebuttable because the Explanation gives the affect ed party an opportunity to satisfy the assessing authorities that there was neither buying nor selling in a given case.
This Section with its Explanation thus creates no difficul ty.
It is 214 when we come to the definition section, extracted above, that the difficulty arises. 'Sale ' is defined in Section 2(P)(i).
If the definition had stopped there, there would have been no difficulty in construing Section 27 and its Explanation.
In all transactions the parties get an opportu nity to satisfy the assessing authorities whether such transactions are sales or not.
But the Explanation to Sec tion 2(P)(i) introduces complications.
This Explanation states by a deeming fiction, that when goods are transferred from the principal to his selling agent or Arhatia within a market area or outside the market area a sale takes place.
This Explanation encompasses within its sweep, sales of all kinds within the market area or outside or within the State or outside.
That is the reason why its validity was chal lenged by the respondents before the High Court.
The learned counsel for the appellants contended that the Explanation to Section 2(P)(i) could stand independent of the Explanation to Section 27 since they have different fields of operation.
According to him, if this Explanation is made subject to the Explanation to Section 27, this Explanation would be rendered redundant and futile.
The learned counsel for the respondents, on the other hand pleaded that since both the Explanations were brought on the Statute Book by the same amendment, they must be read harmo niously and the Explanation to the definition section should be read subject to the Explanation to the charging section.
We have considered the rival contentions carefully.
We feel that the Explanation to Section 2(P)(i) has not been well worded nor properly placed.
We are steering clear of the contention that the Explanation is in excess of the powers of the State Legislature since we feel that the dispute can be resolved better by allowing the two Explana tions to co exist by reading them harmoniously.
In doing so, it is necessary to read down the Explanation to Section 2(P)(i) and give full effect to the Explanation to the charging section.
The Explanation to Section 27 gives an opportunity to the affected persons to satisfy the assessing authorities that the transaction in question is not a sale.
This Explanation should be deemed to take in all sales including those mentioned in the Explanation to Section 2(P)(i).
In other words, even transactions coming within the ambit of Explanation to Section 2(P)(i) have to be governed by the Explanation to Section 27.
In construing the two Explanations we have give preference to the Explanation to the charging section over the Explanations to the definition section consistent with the rules of interpretation of such provisions.
If that be so, the Judgment of the High Court has to be upheld and these 215 appeals have to be dismissed.
We do so.
As directed by the High Court the marketing committee concerned can make as sessment of fees only after giving the respondents an oppor tunity to show cause as laid down in the Explanation to Section 27.
If the Government wants a stricter control over the transactions in the market area it is for them to suit ably amend the Explanation in question by excluding its operation from the Explanation to Section 27.
In the circumstances of the case, there will be no order as to costs.
M.L.A. Appeal dis missed.

summary/full:
Section 2(P)(i) of the Bihar Agricultural Produce Mar kets Act, 1960 defines 'sale ' to mean any transfer of property in goods for cash or deferred payment or other valuable consideration.
The Explanation to section 2(P)(i) inserted by the Bihar Agricultural Produce (Markets) amend ment Act, 1982 provides that notwithstanding anything con tained in any law for the time being in force, 'sale ' shall be deemed to have taken place for the purpose of this Act within a market area when the goods are transferred form the Principal to his selling agent or to the Arhatia within the market area or outside.
The amending Act also added an Explanation to the charging section, section 27 providing that all notified agricultural produce leaving a market area shall, unless the contrary is proved, be presumed to have been bought or sold in such area.
The respondents challenged before the High Court the vires of the Explanation to section 2(P)(i) on the ground that it encroached upon Entry 42 of List I Seventh Schedule to the Constitution.
The High Court refrained from declaring the Explanation bad but read it down and held that it should be read in harmony with the Explanation to Section 27 and directed the marketing committee concerned to make assess ment of fees after giving the petitioners an opportunity as provided in the Explanation to Section 27.
Dismissing the Appeal, this Court, HELD: 1.
In construing the two Explanations preference has to 211 be given to the Explanation to the charging section over the Explanation to the definition section consistent with the rules of interpretations of such provisions.
[214G H] 2.1 In fiscal laws due importance has to be given to the phraseology used in the charging section.
Section 27 gives to the market committee the power to levy and collect market fees on the agricultural produce bought or sold in the market area at the rate given therein.
The Explanation raises a presumption that all notified agricultural produce leaving a market area shall be presumed to have been bought or sold in such an area.
But this presumption is rebuttable because the Explanation gives the affected party an opportu nity to satisfy the assessing authorities that there was neither buying nor selling in a given case.
[213F H] 2.2 In all transactions, the parties get an opportunity to satisfy the assessing authorities whether such transac tions are sales or not.
But the Explanation to Section 2(P)(i) introduces complications.
This Explanation states by a deeming fiction that when goods are transferred from the principal to his selling agent or Arhatia within a market area or outside the market area, a sale takes place.
This Explanation encompasses within its sweep, sales of all kinds within the market area or outside or within the State or outside.
[214A C] 2.3 The Explanation to Section 2(P)(i) has not been well worded nor properly placed.
The Explanation is in excess of the powers of the State Legislature since the dispute can be resolved better by allowing the two Explanations to co exist by reading them harmoniously.
In doing so, it is necessary to read down the Explanation to Section 2(P)(i) and give full effect to the Explanation to the charging section.
The Explanation to Section 27 gives an opportunity to the af fected persons to satisfy the assessing authorities that the transaction in question is not a sale.
This Explanation should be deemed to take in all sales including those men tioned in the Explanation in Section 4(P)(i).
In other words, even transactions coming within the ambit of Explana tion to Section 2(P)(i) have to be governed by the Explana tions to Section 27.
[214E G] 3.
If the Government wants a stricter control over the transactions in the market area it is for them to suitably amend the Explanation in question by excluding its operation from the Explanation to Section 27.
[215B]