judgement:
Appeal No. 240 of 1955.
732 Appeal by special leave from the judgment and order dated September 3, 1953, of the Bombay High Court in Income tax Reference No. 15 of 1953.
Hardayal Hardy and D. Gupta, for the appellant.
G. section Pathak, section P. Mehta, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the respondent.
February 3.
The Judgment of Gajendragadkar and Wanohoo, JJ. was delivered by WANCHOO, J.
In this matter by our order made on April 24, 1958, we had referred the case back to the Tribunal to submit a further statement of case on certain questions.
That statement of case has now been drawn up by the Tribunal and sent to this Court.
The matter is now ready for decision.
This is an appeal by the Commissioner of Incometax, Bombay, against the judgment of the High Court at Bombay given on a reference under section 60(2) of the Income tax Act answering the question referred, in the negative.
That question was, " Whether, in any event, on the facts found by the Tribunal, there was any remittance by the petitioner to Bombay within the meaning of and assessable under section 4(1) (b) (iii) of the Income tax Act,.
" The assessment year concerned was 1948 49, the accounting year being 2003 Sambat.
The facts found may now be stated.
At the relevant time, Bhavnagar was a ruling State and therefore outside British India.
There was a mill there which we shall, for brevity, call the Bhavnagar Mills.
The assessee and his brother Gordhandas had large sums in deposit with the Bhavnagar Mills.
These sums were profits earlier earned by the assessee and his brother in Bhavnagar.
The amounts deposited belonged to the assessee and his brother in equal shares, The Bhavnagar Mills kept an account of these deposits.
This account showed that on April 7, 1947, a sum of Rs. 50,000/ had been paid out to Harkisondas Ratilal and another sum of the same amount to Dilipkumar Trikamlal.
There is another mill in Bombay which we shall call the Bombay Mills.
The account of the Bombay Mills showed that on April 3, 733 1947, Rs. 50,000/ had been received from each of Harkisondas Ratilal and Dilipkumar Trikamlal.
Harkisondas Ratilal and Dilipkumar Trikamlal were the benamidars for the assessee and his brother and the entries indicated that the moneys had been withdrawn from the Bhavnagar Mills by the assessee and his brother and advanced to the Bombay Mills.
The assessee and his brother were in full control of both the Bhavnagar Mills and the Bombay Mills.
On these facts the Tribunal had come to the conclusion that there had been a remittance of the assessee 's profits from Bhavnagar to Bombay, namely, Rs. 50,000/ being half of the amounts mentioned above, on account of his share and such remittance was taxable tinder section 4(1) (b) (iii).
The assessee raised the question with which we are concerned in view of this decision.
The High Court held that under the section income is taxable only when it is brought into or received in the taxable territory by the assessee himself and not when it is so brought into or received on behalf of the assessee and that all that the facts found by the Tribunal showed was that the assessee disposed of his accumulated income in Bhavnagar by directing his debtor, the Bhavnagar Mills, to pay an amount not to himself but to a third party, namely, the Bombay Mills.
According to the High Court, , " The result was that only one debtor was substituted for another.
This did not amount to a receipt of the money by the assessee himself in Bombay or to a bringing of it into Bombay by him.
" In this view of the matter, the High Court answered the question referred in the negative.
When the appeal was heard by us on the earlier occasion, the learned Advocate for the appellant contended that even on the basis on which the High Court had proceeded, namely, that there was only a substitution of one debtor for another, it has to be said that the money was received by the assessee himself in Bombay.
The contention was that the respondent could not become a creditor of the Bombay Mills unless he advanced the moneys to them.
734 His point was that even assuming that the receipt of the cheque by the Bombay Mills drawn in its favour by the Bhavnagar Mills did not amount to receipt of moneys by the respondent, as soon as the Bombay Mills credited the amount of it to the respondent, there was nationally a receipt of the money by the assessee and an advance of it by him to the Bombay Mills to create the debt.
The learned advocate for the assessee said in answer to this contention that there was nothing to show that the agreement for the advance of the money by the assessee to the Bombay Mills had not been made at Bhavnagar.
He also said that there was nothing to show as to how the money or the cheque came from Bhavnagar to Bombay and that it might have been that it was agreed between the assessee and the Bombay Mills at Bhavnagar that the money would be deposited in the Bombay Mills to the credit of the assessee and the cheque or the money might have been delivered to the Bombay Mills or its agent at Bhavnagar.
His contention was that if such was the case and on the evidence it could not be said that it was not then the notional receipt of the money by the assessee and its advance by him to the Bombay Mills, if any, would have taken place in Bhavnagar and when the money was thereafter brought to Bombay, it was the Bombay Mills ' own money.
In this view of the matter, according to the learned advocate for the assessee, the moneys could not be subject to tax under the section.
In this position of the arguments then advanced, we observed as follows : " It seems to us that this contention of the learned advocate for the respondent has to be dealt with before this appeal can be finally disposed of.
We therefore think it fit to refer the case back to thaT Tribunal to submit a further statement of case, after taking such evidence as may be necessary, as to show how the cheque was brought from Bhavnagar to Bombay and what agreement had been made between the parties concerned as a result of which the amount of the cheque was credited in the names 735 of Harkison Ratilal and Dilipkumar Trikamlal in the accounts of the Bombay Mills.
The Tribunal will submit its report within four months.
In view of this order we refrain from expressing any opinion on any of the points argued at the bar.
" It is pursuant to this order that the further statement of case has been submitted by the Tribunal.
In its statement of case now submitted the Tribunal found the following facts: The Bhavnagar Mills had an account in the Bank of India Limited at one of its Bombay Branches.
A cheque book in respect of this account was with the assessee who had power to operate it on behalf of the Bhavnagar Mills.
The assessee acting on behalf of the Bhavnagar Mills drew a cheque on the Bhavnagar Mills aforesaid account in the Bank of India Limited on April 3, 1947, in favour of self.
This was done in Bombay.
This cheque was handed over by the assessee to the Bombay Mills in Bombay for being credited in the account of the Bombay Mills in the names of Harkison Ratilal and Dilipkumar Trikamlal which were really the benami names of the assessee and his brother.
The Bombay Mills on the same date presented this cheque to another branch of the Bank of India Ltd. in Bombay where they had an account, for deposit in that account.
The actual entries in the books of the different branches of the Bank were made on April 5, 1947.
The Bombay Mills also made entries in their own books crediting the moneys received on the cheque, to Harkison Ratilal and Dilipkumar Trikamlal.
The assessee in his turn instructed the Bhavnagar Mills to debit the joint account of himself and his brother with it in the sum of Rs. 1 lac as having been paid to Harkison Ratilal and Dilipkumar Trikamlal.
This entry was actually made a little later, namely on April 7, 1947.
The facts now found would show that nothing had been done at Bhavnagar.
It was also found that as the Bombay Mills needed moneys and the assessee had money with the Bhavnagar Mills, he utilised these latter moneys for an advance being made by him out of it to the Bombay Mills, 94 736 As will appear from our earlier order hereinbefore set out, none of the points arising in the appeal had been decided by us on that occasion.
The question that we have to decide is whether on these facts it can be said that income had been brought into or received in Bombay by the assessee.
The relevant portion of the section is in these terms : " 4.
(1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which (a). are received or are deemed to be received in the taxable territories in such year by or on behalf of such person, or (b). if such person is resident in the taxable territories during such year, (i). accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year, or (ii) accrue or arise to him without the taxable territories during such year, or (iii).having accrued or arisen to him without the taxable.territories before the beginning of such year and after the 1st day of April, 1933, are brought into or received in the taxable territories by him during such year, or (c). if such person is not resident in the taxable, territories during such year, accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year.
" In the present case we are concerned with cl.
In order however to understand what the words " brought into or received in the taxable territories by him " mean we have to consider the whole scheme of this subjection.
The subjection mainly deals with the total income of any previous year which is chargeable to income tax under section 3 of the Act.
It is divided into three parts.
The first part, which is el.
(a) provides that all income, profits and gains received or deemed to be received in the taxable territories in such year by or on behalf of such person will be included in the taxable income.
So far as el.
(a) is 737 concerned, it is immaterial whether the person is resident in the taxable territories or is not resident therein; as long as income etc.
is received in the taxable territories by or on behalf of such person in the previous year, it is liable to be included in the computation of total income.
Under this clause therefore it is the receipt in the previous year that is material and the residence of the person to be taxed is immaterial.
It has been held under this clause that receipt must be the first receipt in the taxable territories and if income etc.
has been received elsewhere in the same year and is then brought into the taxable territories it should not be considered to be income etc.
received in such year in the taxable territories: (see Keshav Mills Ltd. vs Commissioner of Income tax The basis of this decision obviously is that cl.
(a) is dealing with the receipt of income etc.
in the taxable territories in the year in which it has accrued or arisen and in those circumstances it is the first receipt of such income in the taxable territories that gives rise to liability of the charge of income tax.
If such income etc.
accruing or arising in the previous year has already been received outside the taxable territories it cannot be said to be received again as such in the taxable territories, if it is brought from the place where it was received as such into the taxable territories.
The second part which is cl.
(b) deals with the case of a person Who is resident in the taxable territories during such year.
In his case all income which accrues or arises or is deemed to accrue or arise to him in the taxable territories during such year is chargeable to income tax; besides, all income etc.
which accrues or arises to him without the taxable territories during such year is also chargeable to income tax.
Then comes the part with which we are directly concerned and which provides that all income etc.
which having accrued or arisen to such person without the taxable territories before the beginning of such year and after the first day of April 1933 is brought (1) ; 738 into or received in the taxable territories by him during such year will be chargeable to income tax.
This is a special provision relating to income etc.
which has accrued or arisen not in the previous 'year but in years previous to that though after April 1, 1933.
This special provision relating to a person resident in the taxable territories must be distinguished from the provision in el.
(a) in connection with which it has been held that the receipt there meant must be the first receipt, for cl.
(a) applies irrespective of whether the person is resident in the territories or not to income etc.
of the previous year received in the taxable territories in the same year.
Clause (b)(iii) on the other hand refers to income etc.
which accrued before the previous year and is brought into or received in the taxable territories in such year by a person resident therein, and obviously the considerations which led this Court to hold in Keshav Mills case(1) that the receipt in el.
(a) means the first receipt would not apply to this special provision in cl.
(b)(iii).
Mr. Pathak for the respondent however argues that the words in cl.
(b)(iii) are the same as in cl.
(a), namely, " are received " and therefore the receipt in cl.
(b)(iii) must also be the first receipt.
These words however are not terms of art and in our opinion their meaning must receive colour from the context in which they are used.
In the context of cl.
(a) these words could only refer to the first receipt; but it does not follow from this that in the context of el.
(b)(iii) also they refer only to the first receipt.
Let us see what el.
(b)(iii) is meant to provide for.
It will be noticed that el.
(a), cl.
(b)(i) and (ii) and cl.
(c) deal only with income etc.
which has arisen in the previous year while el.
(b)(iii) deals with a special class of cases where a person resident within the taxable territories had income etc.
accruing or arising to him without the taxable territories and which he did not bring in the taxable territories as and when it arose but does so many years later.
In such a case it stands to reason that the income etc.
having arisen to such person, may be years before the previous year, must (1) ; 739 have been received by him outside the taxable territories ; but it is urged that cl.
(b)(iii) does not speak of receipt outside the taxable territories but only speaks of income etc.
having accrued or arisen to him without the taxable territories and that it is possible that though the income etc. might have accrued long ago it might not have been received even outside the taxable territories.
This is theoretically possible; but in our opinion it is clear that when el.
(b)(iii) speaks of income etc.
having accrued or arisen, without the taxable territories it is implicit in it further that such income etc.
having accrued or arisen without the taxable territories had already been received there.
Considering that el.
(b)(iii) applies to all income having accrued or arisen after the first day of April 1933 (that is more than 27 years ago now) it does not seem reasonable to hold that the words " having accrued or arisen " used in that clause have no reference to its receipt also outside the taxable territories.
It seems to us therefore that what cl.
(b)(iii) provides is that if any income etc. had arisen or accrued outside the taxable territories and had been received there sometime before the previous year and if such income etc.
is brought into or received in the taxable territories by such person in the previous year it will be liable to be charged under section 3.
In the circumstances, looking to the special pro.
vision of el.
(b)(iii) it would be reasonable to infer that what it contemplates is bringing into or receipt in the taxable territories in the previous year of income etc.
which had already accrued or arisen without the tax.
able territories earlier than the previous year and may have also been received there.
Any other interpretation would really make that part of cl.
(b)(iii) which refers to," received in the taxable territories " more or less useless, for it is not likely that income having accrued or arisen outside the taxable territories before the previous year should not have been received also outside the taxable territories.
Therefore, the reason.
able interpretation of el.
(b)(iii) is that if a person resident in the taxable territories has already received without the taxable territories any income etc.
accruing or arising to him without the taxable territories 740 before the previous year brings that income into or receives that income in the taxable territories he would be chargeable to income tax under section 3.
Therefore, for the purpose of cl.
(b)(iii) the receiving in the taxable territories need not be the first receipt.
We shall later consider what will be the effect of this interpretation on the facts of this case.
Then there is cl.
(c), which deals with the case of a person resident outside the taxable territories to whom income etc.
has accrued or arisen or is deemed to have accrued or arisen in the taxable territories during the previous year.
It will thus be seen that cl.
(a) deals with a person who may or may not be a resident in the taxable territories and makes the income etc.
accruing or arising to him in the previous year liable to income tax if it is received or deemed to be received by him in the taxable territories also within the same year ; cl.
(b) deals with the case of a person who is resident in the taxable territories and gives a wider definition of the total income and cl.
(c) deals with a person not resident in the taxable territories and makes only such of his income as accrues or arises or is deemed to accrue or arise in the previous year in the taxable territories liable to income tax in addition to what is provided in el.
Let us now see on the facts of this case whether the respondent can be said to have received this sum of Rs. 50,000/ in the taxable territories during the previous year.
The statement of the case shows that this sum was income etc.
of the respondent which accrued to him outside the taxable territories and had been received by him there and deposited in the Bhavnagar Mills in his account.
It is also clear from the facts which we have set out already that this money which was lying to the credit of the respondent in the Bhavnagar Mills was received by him by means of a cheque on the Bank of India Ltd., Bombay, in which the Bhavnagar Mills had an account and on which the respondent had the authority to draw.
Having thus drawn the money by a cheque on the said bank, the respondent advanced it to the Bombay Mills and the cheque was cashed by the Bombay Mills and the 741 money was credited into the account of the respondent 's benamidars in the Bombay Mills.
There was thus clearly receipt in the previous year of income etc.
which had accrued to the respondent outside the taxable territories before the previous year and he would therefore be chargeable under section 3 of the Act with respect to this amount.
The High Court has held that the income would be taxable only when it is brought into or received in the taxable territories by the assessee himself and not when it was so brought or received on behalf of the assessee.
The relevant words of el.
(b)(iii) with which we are concerned are these: "are brought into or received in the taxable territories by him during such year.
" We have held that this is a case of receipt by the respondent in the taxable territories; it is therefore unnecessary to consider in the present case whether the words " brought into the taxable territories by him " mean that the income must be brought in by the person himself as held by the High Court.
This being a case of receipt, there can be no doubt that income etc.
was received by the respondent and the indirect, method employed in this case for receiving the money would none the less make it a receipt by the respondent himself Reference in this connection may be made to Bipin Lal Kuthiala vs Commissioner of Income tax, Punjab (1), where it was held that the money was received by the assessee even though in fact what bad happened there was that the assessee directed his debtor in Jubbal which was outside the taxable territories to pay money to his creditor in British India.
It was held that in the circumstances there was receipt of income in British India, though the method employed was indirect.
We are therefore of opinion that the respondent is liable to pay incometax on the sum of Rs. 50,000/ under section 4(1)(b)(iii) of the Act and the question framed therefore must be answered in the affirmative.
The result is that the appeal is allowed and the order of the High Court set aside.
The appellant will get the costs of this appeal and in the court below.
(1) A.I.R. 1956 S.C. 634.
742 SARKAR, J.
The facts necessary for this appeal are few and simple.
The assessee, who is the respondent in this appeal, was a resident of Bombay.
He had certain in come in Bhavnagar, a place without the taxable territories, which he had kept in deposit with a concern there.
This concern had an account in a bank in Bombay.
The assessee, presumably as one of the officers of the concern, could operate this account.
He drew, in Bombay, a cheque on this account which cheque eventually found its way into the account of a. concern in Bombay in a bank there and was credited in that account.
The Bombay concern thereafter made entries in its own books of account in respect of the amount of the cheque in favour of two persons of the names of Harkison Ratilal and Dilipkumar Trikamlal.
The Bhavnagar concern, in its turn, a few days later debited the account that the assessee had with it in respect of the deposits, with the amount of the cheque as moneys paid to these two persons.
These two persons however were only benamidars for the assessee.
The transactions, therefore, showed that the assessee had withdrawn the money from the concern at Bhavnagar out of its accumulated income and advanced it to the concern in Bombay.
The Tribunal found it as a fact that the assessee had utilised in Bombay his income lying at Bhavnagar for making an advance in Bombay.
These transactions took place in April 1947.
I have simplified the facts a little for clarity.
Actually the account in the concern at Bhavnagar was in the joint names of the assessee and his brother and the advance to the concern in Bombay was really in their joint names.
The assessee 's share was half of the amount of the cheque and with that share alone we are concerned in this case.
On these facts half the amount of the cheque as representing the assessee 's share of the accumulated income, was included in his total income, for assessment to income tax for the year 1948 49 under section 4(1)(b)(iii) of the Income tax Act, 1922.
That section so fair as is material is in these terms 743 section .4.
(1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which (a). are received or are deemed to be received in the taxable territories in such year by or on behalf of such person, or (b). if such person is resident in the taxable territories during such year, (iii).having accrued or arisen to him without the taxable territories before the beginning of such year and after the 1st day of April, 1933, are brought into or received in the taxable territories by him during such year, or The only question is whether the assessee can be said to have " brought into " or " received " this income in Bombay within the meaning of sub cl.
(iii) of section 4(1)(b).
No other objection to the assessment was raised.
The respondent first contends that he cannot be said to have " received " the income in Bombay.
He contends that on the facts found it must be held that he had already " received " the income in Bhavnagar and he could not " receive " it again in Bombay or anywhere else.
It seems to me that this contention is well founded.
This Court has held that " Once an amount is received as income, any remittance or transmission of the amount to another place does not result in I receipt ', within the meaning of this clause, at the other place ": Keshav Mills Ltd. vs Commissioner of Income tax, Bombay (1).
No doubt, the observation was made with regard to el.
(a) of section 4(1).
But I am unable to find any reason why the word should have a different meaning in sub cl.
(iii) of a. 4(1)(b).
On the contrary, the words " brought into " in subel.
(iii) would furnish a reason, if one was necessary, for the view that the word " ' received " there means received for the first time.
I venture to think that this Court did not in Keshav Mills case (1), hold that that word in section 4(1)(a) meant, (1) , 962, 95 744 " the first receipt after the accrual of the income ", because of anything in the context in which the word occurred but because, in the nature of things, income can be " received " only once and not more than once, and a subsequent dealing with income after it has been received, can never be a " receipt " of income.
It seems to me that what was said in connection with the Act as it then stood, in Board of Revenue vs Ripon Press(1), namely, "that you cannot receive the same sum of money qua income twice over, once outside British India and once inside it " expresses the inherent nature of receipt of income and still holds good and unless the context compels a different meaning, which I do not find the present context to do, income can be received only once.
As, in the present case, it seems fairly clear that the assessee had received the income in Bhavnagar, I do not think he can be taxed on it on the basis that he " received " it in Bombay over again.
If, however, the assessee did not " receive " the income in Bombay, it seems clear to me that he "brought into" Bombay that income.
He got in Bombay an amount which he had earlier received in Bhavnagar as income, for he advanced it to a concern in Bombay and this he could not do if he had not got it.
The getting of the income in Bombay may not have been the receipt of it but how could he got it if he did not bring it in ? After the assessee received the income in Bhavnagar, it remained all the time under his control and that is why he could not receive it again: see Sundar Das vs Collector of Gujrat (2).
An assessee might however, change the shape of the income received.
Section 4(1) (b)(iii) does not require that in order that income may be brought into the taxable territories it is necessary, that the shape of the income should not have been changed since it was first received.
Indeed, it has not been contended to the contrary.
Sub clause (iii) of section 4(1)(b) would have completely defeated itself if it required that the income had to be kept in the same ,shape in which it had been received.
Whatever shape (1) Mad.
706 711.
(2) Lah.
745 the income had assumed, the assessee had it with him all the time as income and for the purpose of sub cl.
(iii) it could be brought into the taxable territories in that shape.
Now what the assessee had done with the income in this case was to put it with a party in Bhavnagar.
The income then took the shape of a debt due to him.
It became a right to receive money or moneys worth.
When he had that debt discharged in Bombay, he must have had it brought into Bombay.
Therefore he had brought the income into Bombay.
Suppose he had received the income in the shape of coins and had kept it in his safe at Bhavnagar and brought the coins into Bombay.
There would have been no doubt that he had brought the income into Bombay.
Suppose again, he had put the income originally received by him at Bhavnagar in a bank there and then he obtained a draft from the bank payable in Bombay and brought the draft from Bhavnagar to Bombay and cashed it there.
Again, there would be little doubt that he had, by this process, brought the income into Bombay.
It is well known that though income in income tax law is generally contemplated in terms of money, it may be conceived in other forms.
In fact anything which represents and produces money and is treated as such by businessmen, would be income: see per Lord Lindley in Gresham Life Assurance Society Ltd. vs Bishop (1) and per Lord Halsbury L.C. in Tennant vs Smith (2).
If the bringing of the bank draft would be bringing of income, I am unable to see why the bringing of a right to receive the money would not be bringing of income when that right has been exercised and turned into moneys worth.
Such a right would be based on a promise by the debtor to pay and though verbal, would be considered by businessmen to represent money.
The assessee in Bombay used that right and obtained moneys worth.
He accepted the Bhavnagar concern 's cheque in Bombay, gave it a pro tanto discharge for the debt owing by it to him.
He used the cheque in acquiring a new asset, namely, a promise by the (1) ; 296, (2) ; , 156.
746 Bombay concern to pay money.
Therefore, in my view, the respondent assessee was liable under section 4(1)(a), (b)(iii) to be taxed ON the amount of the cheque as income which he had brought into the taxable territories.
I would hence allow the appeal and answer the question referred, in the affirmative.
Appeal allowed.

summary/full:
The assessee, resident in British India, had some money in deposit with a concern in Bhavnagar, outside British India.
On April 7, 1947, he transferred part of it to a concern in Bombay.
He was assessed to tax on this amount under section 4(i)(b)(iii) of the Income tax Act.
The assessee contended that to attract the application of section 4(i)(b)(iii) the receipt in the taxable territory must be the first receipt of income.
Held, that the assessee was liable to tax on this amount.
Per Gajendragadkar and Wanchoo, JJ.
Where a person, resident in the taxable territories, has already received, outside the taxable territories, any income etc.
accruing or arising to him outside the taxable territories before the previous year brings that income into or receives that income in the taxable territories he would be chargeable to income tax thereon.
Though for the purposes of cl.
(a) of section 4 the receipt must be the first receipt of income in the taxable territories, for the purposes of cl.
(b)(iii) the receiving in the taxable territories need not be the first receipt.
Keshav Mills Ltd. vs Commissioner of Income tax ; , referred to.
Per Sarkar, J.
The income could not be said to have been "received" in the taxable territory within the meaning of cl.
(b)(iii) as income could be received only once.
But it is clear that the assessee " brought into " Bombay that income.
It was immaterial in what shape he received the income in Bhavnagar and in what shape he brought it in Bombay.
Keshav Mills Ltd. vs Commissioner of Income tax ; , Board of Revenue vs Ripon Press Mad.
706 and Sundar Das vs Collector of Gujrat (1922) I.L.R. , applied.
Gresham Life Assurance Society Ltd. vs Bishop [1902] A.C. 287 and Tennant vs Smith ; , referred to.


judgement:
Appeal No. 237 of 1956.
Appeal by special leave from the judgment and order dated December 13, 1954, of the Calcutta High Court in Appeal from Original Order No. 117 of 1954.
B. Sen, P. K. Chatterjee and section N. Mukherjee, for the appellant.
B. C. Mitter and D. Mukherjee, for respondent No. 1. 1961.
February 6.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This appeal is as much without substance, as it was unnecessary.
Hazrat Syed Mastershid Ali Al Quadari (the appellant) is the eldest son of one Hazrat Sahib Syed Shah Mastershid Ali Al Quadari (shortly, Hazrat Sahib), the first Mutawalli of a wakf created on August 9, 1931, for the maintenance of the shrine of a Muslim Pir in the town of Midnapur.
After the death of Hazrat Sahib, the appellant, claiming to succeed to his father as Sajjadanashin, being his eldest son, made an application To the Commissioner under the Bengal Wakf Act.
His younger brother, Syed Shah Rushaid Ali Al Quadari, opposed his claim, the ground being that he was nominated as the succes sor by Hazrat Sahib.
While this controversy was afoot, the Commissioner, acting under section 40 of the Bengal Wakf Act, appointed Syed Shah Rasheed Ali Al Quadari (the third son of Hazrat Sahib) as a temporary Mutawalli.
The appellant then moved a petition in the Calcutta High Court under article 226 of the Constitution against the appointment, which was allowed by Sinha, J. and the order of the Commissioner was set aside.
On appeal to the Divisional Bench, consisting of Chakravarti, C. J. and Lahiri, J. (as he then 761 was), the order of Sinha, J. was reversed, and the petition was dismissed.
This appeal has been filed with special leave.
It is contended in this appeal that the order of the Commissioner appointing a temporary Mutawalli was illegal, because under the Rules framed by the Government, only the Board constituted under the Bengal Wakf Act could make the appointment.
This argument, in our opinion, is wholly unsound.
The learned Chief Justice of the High Court examined the matter at great length in reaching his conclusion; but, in our opinion, the reasons can be stated within a narrow compass.
We are concerned with sections 40 and 29 of the Bengal Wakf Act.
Section 40 reads as follows: " In the case of any Wakf of which there is no Mutwalli or where there appears to the Board to be an impediment to the appointment of amutwalli the Board, subject to any order of a competent Court, may appoint for such period as it thinks fit a person to act as Mutwalli.
" Section 29 provides: "The Board may, from time to time, authorize the Commissioner to exercise and perform, subject to the control of the Board, any of the powers and duties conferred or imposed on the Board by or under this Act." On April 24, 1936, the Board adopted the following resolution : " (2).
In exercise of the powers vested in them under Section 29 of the Act this Board resolve that the Commissioner of Wakfs be authorised to exercise and perform, subject to the control and approval of this Board, the following powers and duties conferred or imposed on this Board by the sections of the Act mentioned against each case: (c).
The powers of this Board under section 40 to appoint a temporary mutwalli.
" These two provisions of the Act show only too plainly that a temporary Mutawalli can be appointed either by the Board, or, if the powers and duties be 762 delegated to the Commissioner, by the Commissioner.
The appellant contends that the Commissioner can only make a report to the Board, and the Board alone can make the appointment, and refers to two Rules framed by Government.
These Rules are: "1.
If it appears to the Commissioner that there is no mutwalli, in the case of any wakf, or that a a vacancy in the office of the mutwalli has been caused by death, resignation, retirement or removal of th e former mutwalli, and a dispute has arisen between two or more rival claimants to the vacancy, and such dispute is likely to affect the interests of the Wakf, he may institute an enquiry and report the result thereof to the Board with his recommendation.
2. .On receipt of the report and the recommendation from the Commissioner, or on its own motion, the Board may appoint a mutwalli under section 40 of the Act.
" It is argued that under the second Rule the Commissioner was bound to make his report and recommendation, but the Board alone was empowered to appoint a temporary Mutawalli under section 40.
The last words of the second Rule, it is said, are clear.
This is, no doubt, true of those cases where the Board has not delegated its functions under section 40 to the Commissioner.
Once that delegation has been made, the Commissioner acts for and on behalf of the Board, and the Rules cease to apply.
The Rules cannot affect the power of the Board to delegate its functions under section 29, and harmonious construction requires that the Rules should give way, when there is a delegation of the powers of the Board.
The Commissioner was thus competent to make the appointment.
Mr. Sen, however, contends that the appointment of a temporary Mutawalli could only be made if there was an " impediment " to the appointment of a permanent Mutawalli, and that there was no impediment to such an appointment but " a challenge to the appellant as a candidate.
" The word " impediment " means hindrance or obstruction, and there was certainly an obstruction to the appointment of a permanent 763 Mutawalli, while the dispute remained undecided.
This point has no force whatever.
The question which seemed to have largely engaged ' attention in the High Court, namely, whether the delegation was only of powers or also of duties of the Board, was not argued before us, though it formed the subject of considerable discussion in the statements of the case.
It is without substance.
Where powers and duties are interconnected and it is not possible to separate one from the other in such wise that powers may be delegated while duties are retained and vice versa, the delegation of powers takes with it the duties.
The proposition hardly needs authority; but if one were necessary, reference may be made to Mungoni vs Attomey General of Northern Rhodesia (1).
In our opinion, the appeal has no force whatever.
The appellant chose the extraordinary course of dragging the respondents twice to the High Court and again to this Court merely to challenge an order of temporary duration, while the main controversy remained outstanding for years and could have been decided by now.
The appeal fails, and is dismissed.
The appellant shall pay the costs of the respondents, who have entered appearance.
Appeal dismissed.

dataset_name: IN-Abs

summary/full:
During controversy between two brothers each of whom claimed to be appointed Mutawalli, the Commissioner of Wakfs appointed a third brother as a temporary Mutawalli under section 40 of the Bengal Wakf Act, which appointment was challenged on the ground that the order of the Commissioner appointing a temporary Mutawalli was illegal because under the rules framed by the Government of West Bengal the Board constituted under Bengal Wakf Act could alone make the appointment and the Commissioner could only make a report and recommendation to the Board.
Held, that under the provisions of section 40 read with section 29 of the Bengal Wakf Act, a temporary Mutawalli can be appointed by the Commissioner to whom the powers and duties have been 760 delegated by the Board.
The Rules cannot affect the powers of the Board to delegate its functions under section 29 of the Act to the Commissioner, and once the delegation is made the rules cease to apply.
Held, further, that where power and duty are interconnected and it is not possible to separate one from the other in such wise that power can be delegated while duty is retained and vice versa, the delegation of powers takes with it the duties.


judgement:
iminal Appeal No. 32 of 1956.
Appeal from the judgment and order dated October 7 and 10, 1955, of the Bombay High Court in Criminal Appeal No. 817 of 1955.
Porus A. Mehta, R. Ganapathy Iyer and G. Gopalakrishnan, for the appellant.
N. section Bindra, R. H. Dhebar and T. M. Sen, for the respondent.
January 27.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
This is an appeal by special Rag leave by Ardeshir H. Bhiwandiwala against the order of the High Court of Bombay allowing an appeal 594 by the State against the acquittal of the appellant of an offence under section 92 of the (Act LXIII of 1948), hereinafter called the Act, for his working the Wadia Mahal Salt Works situate at Wadala, Bombay, without obtaining a licence under section 6 of the said Act read with r. 4 of the rules framed under the Act.
The main question for determination in this appeal is whether these Salt Works come within the definition of the word " factory " under cl.
(m) of section 2 of the Act.
The answer to this question depends on the meaning of the word " premises " in the definition of the word "factory " and on the determination whether what is done at this Salt Works in connection with the conversion of sea water into crystals of salt comes within the definition of the expression " manufacturing process " in cl.
(k) of section 2 of the Act.
The Salt Works extend over an area of about two hundred and fifty acres.
Some of the other salt works, however, have even larger areas.
The only buildings on this land consist of temporary shelters constructed for the resident labour and for an office.
At a few places, pucca platforms exist for fixing the water pump when required to pump water from the sea.
When not required, this pump is kept in the office.
With the exception of the constructions already mentioned, the entire area of the Salt Works is open.
On the sea side, it has bunds in order to prevent sea water flooding the salt pans.
Clause (m) of section 2 of the Act reads: factory ' means any premises including the precincts thereof (i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or (ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on, 595 but does not include a mine subject to the operation of the , or a railway running shed.
" The relevant portion of the definition of " manufacturing process " in cl.
(k) of section 2, reads : " manufacturing process ' means any process for(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting, any article or substance with a view to its use, sale, transport, delivery or disposal; or (ii) pumping oil, water or sewage; or. . .
It is contended for the appellant that the expres.
sion "premises" in the definition of the word "factory" means " buildings " and that "mere open land " is not covered by the word " premises " and as there are no buildings except temporary sheds on the Salt Works, the Salt Works cannot be said to be a " factory ".
We do not agree with this contention.
The word "premises " has now come to refer to either land or buildings or to both, depending on the context.
The meanings of the word " premises " in various lexicons and dictionaries are given below: a) Wharton 's Law Lexicon: " Premises " is often used as meaning " land or houses ".
(b) Cochran 's Law Lexicon, IV Edition: " Premises " means " houses or lands (c) Black, H.C., Law Dictionary, IV Edition: " Premises " as used in the estates means (i) lands and tenements; an estate; land and buildings thereon; the subject matter of the conveyance; (ii) a distinct and definite locality and may mean a room, especially building or other definite area; (d) Earl Jowitt, Dictionary of English Law:" Premises. . from this use of the word, " premises " has gradually acquired the popular sense of land or buildings.
Originally, it was only used in this sense by laymen, and it was never so used in well drawn instruments, but it is now 596 frequently found in instruments and in Acts of Parliament as meaning land or houses, e.g., the Public Health Act, 1875, section 4, where "premises" includes messuages, buildings, lands, easements, tenements and hereditaments of any tenure. (e) Ballentine, J.A., Law Dictionary with Pronunciation, II Edition: " Premises " as applied to land, Webster 's New International Dictionary defines the word as follows: The property conveyed in a deed; hence, in general, a piece of land or, real estate ; sometimes, especially in fire insurance papers, a building or buildings on land; the premises insured.
It is therefore clear that the word " premises " is a; generic term meaning open land or land with buildings or buildings alone.
The expression" premises including precincts" it has been urged, clearly indicates that in the context of the definition of the word " factory ", premises meant only buildings as buildings alone can have precints and there can be no precincts of any open land.
This expression " premises including precincts" does not necessarily mean that the premises must always have precincts.
Even buildings need not have any precincts.
The word " including " is not a term restricting the meaning of the word " premises " but is a term which enlarges the scope of the word " premises ".
We are therefore of opinion that even this contention is not sound and does not lead to the only conclusion that the word " premises " must be restricted to mean buildings and be not taken to cover open land as well.
Sub cl.
(bb) of el.
(1) of section 7 of the Act requires the occupier of a factory to mention in the written notice to be sent to the Chief Inspector before his occupying or using any premises as a factory, the name and address of the owner of the premises or building including the precincts thereof referred to in section 93.
This sufficiently indicates that the word " premises " is not restricted in scope to buildings alone.
of course, the building referred to in this clause is the 597 building which is referred to in section 93 of the Act.
Sub section
(1) of section 93 reads: " Where in any premises separate buildings are leased to different occupier,% for use as separate factories, the owner of the premises shall be responsible for the provision and maintenance of common facilities and services, such as approach roads, drainage, water supply, lighting and sanitation.
" This again makes it clear that " premises " refer to an entire area which may have within it several separate buildings.
Further, section 85 empowers the State Government to declare that all or any of the provisions of the Act shall apply to any place wherein a manufacturing 'process is carried on with or without the aid of power or is so ordinarily carried on notwithstanding certain matters mentioned in the section.
The word " place" is again a general word which is applicable to both open land and to buildings and its use in this section indicates that the Act can be applied to works carrying on a manufacturing process on open land.
There is thus internal evidence in the Act itself to show that the word " premises " is not to be confined in its meaning to buildings alone.
The High Court has rightly pointed out that the Act is for the welfare of the workers and deals with matters connected with the health, safety, welfare, working hours of the workers, employment of young persons and leave to be granted to workers and that, therefore, the legislature could not have intended to discriminate between the workers who are engaged in a manufacturing process in a building and those who 'are engaged in such a process on open land.
It is contended for the appellant that the various provisions of the Act cannot be applicable to salt works where the process of converting sea water into salt is carried on in the open.
This is true as regards some of the provisions, but then there is nothing in the Act which makes it uniformly compulsory for every occupier of a factory to comply with every requirement of the Act, An occupier is to comply 598 with such provisions of the Act which apply to the factory he is working.
It is admitted that the workers have at times to work at night; that some women workers are employed; that workers have to take rest; that they have to take food at about mid day; that they do require drinking water and that first aid 'things are kept in the office room.
It may be that the occupier has made adequate arrangements for such purposes but this does not mean that the provisions of the Act concerning such amenities shall not be applicable to salt works.
Further, the Act has sufficient provisions empowering the State to exempt the occupiers from complying with certain I provisions as a special case.
Section 6 of the Act empowers the State Government to make rules requiring the previous permission in writing of the State Government or the Chief Inspector to be obtained for the site on which the factory is to be situated and for the construction or extension of any factory or class or description of factories.
This provision of the Act together with the relevant rules framed in that connection, does not mean that every factory must have a building and that necessary permission for its construction or extension is to be obtained.
Of course, every factory must have a site and previous permission of the State Government or the Chief Inspector may be necessary before the site is to be used for the purposes of a factory.
Further, there is nothing in the definition of manufacturing process " which would make it necessary that this process be carried on in a building.
This definition really deals with the nature of the work done and not with where that work is to be done.
The work can be done both in the building or in the open.
Lastly, learned counsel for the appellant relied on certain cases which are detailed below: In Kent vs Astley (1) it was held that a slate quarry, a large open space extending over an area of 400 acres, the works of which were carried on in the open (1) 599 air, the only buildings being sheds, was not a "factory" within the meaning of 30 & 31 Viet.
c. 103 (Factory Acts Extension Act, 1867), section 3, sub section
Cockburn, C.J., said at page 23: " Therefore, if this work had been carried on within a building, I think that it would have fallen within the scope of the statute, and that the justices ' ought to have convicted. . and I do not think that in using the word I premises ' the legislature intended to include sheds erected in the quarry merely as a protection against the weather; they are only accessories to the quarry and the quarrying processes; and the legislature has not yet declared that open air works shall be within the scope of the Factory Acts.
But, except in cases which have been specially provided for, it has not as yet included works carried on in the open air, because they are less exposed to the evils incident to manufactures carried on in buildings.
" Mellor, J., said at page 24: " The legislature has from time to time extended the Factory Acts to different trades and businesses.
Numerous slate quarries exist, and a large number of persons are employed in them: if the legislature intended to apply the Factory Acts to them, it would have been done by special enactment.
" Hannen, J., said: " I agree with my Brother Mellor, that if the legislature had intended to apply the Factory Acts to quarries, they would have been expressly mentioned, and this omission leads strongly to the conclusion that it was not intended to interfere with persons employed in quarries.
" It is not clear from these observations alone why the slate quarries where work was carried on in the open air and not in building, was not held to be "a factory" on that account.
This is, however, apparent when one considers that the Factory Act of 1833 was enacted to regulate the labour of children and young persons in the mills and factories of the United Kingdom and applied only to cotton, woollen, worsted, hemp, flax, tow, linen or silk mill or factory wherein 77 600 steam or water or any other mechanical power was used to propel or work the machinery in such mill or factory.
The other subsequent Acts simply extended the scope of the Factory Act of 1833.
The Act of 1844 was to amend the law relating to labour in ,,factories and provided by section LXXIII that "the Factory Act as amended by this Act and this Act " would be construed together as one Act.
The relevant portion of the definition of the word " factory " in this Act reads: "The word I factory ' notwithstanding any Provision or Exemption in the Factory Act shall be taken to mean all Buildings and Premises situated within any part of the United Kingdom of Great Britain and Ireland wherein or within the, Close or Curtilage of which Steam, Water, or any other mechanical Power shall be used to move or work any Machinery employed in preparing, manufacturing, or finishing, or in any Process incident to the Manufacture of Cotton.
, Wool, Hair, Silk, Flax, Hemp, Jute, or Tow, either separately or mixed together, or mixed with any other Material or any Fabric made thereof.
" This indicates that is premises " need not consist of buildings and that they mean something different from buildings The Act of 1850 was for the regulation of the employment of children in factories and provided that that Act would be construed together with the previous Acts as one Act.
There is nothing particular in the Factory Act of 1856 to refer to.
The Act of 1860 dealt with the employment of women, young persons and children in bleaching works and dyeing works under the regulations of the ; section VII, which defines the words " Bleaching Works " and " Dyeing Works " reads, with regard to its relevant portion, thus: " In the Construction of this Act the words Bleaching Works ' and Dyeing Works ' shall be understood respectively to mean any Building.
Buildings, or Premises in which Females, Young 601 Persons and Children, or any of them, are employed, and in One or more of which Buildings or Premises any Process previous to packing is carried on. " Section IX gives the exemptions and its relevant portion is: " Nothing in this Act contained shall extend or apply to . or to any Premises, either open, inclosed, ' or covered, used or to be used bona fide exclusively for the purposes of carrying on. .
This makes it clear that " Premises " can consist of open areas.
The 1867 Act is described as " Factory Acts Extension Act, 1867 ", and according to section 3, " factory means: . . . . . . . 7.
Any premises, whether adjoining or separate, in the same occupation, situate in the same City, Town, Parish, or Place, and constituting One Trade Establishment, in, on or within the Precincts of which Fifty or more Persons are employed in any manufacturing Process; . . . . . . . ." It is clear from the series of legislation up to the decision in Kent 's case that the Parliament specifically enacted with respect to the places which were to be controlled by the respective Factory Acts and that it was therefore that it was said that if the legislature had intended to apply the Factory Act to the slate quarries, it would have extended the Act to them.
As the various Factories and Mills which were covered by the Factory Act of 1833 were such which could function only in buildings, the conception grew that nothing would come within the expression " factory " unless it had a building and unless the Factory Act definitely provided for the application of the Act to it.
The next case relied on is Redgrave vs Lee (2 ).
The earlier decision was just followed in this.
The next case cited for the appellant is Nash vs Hollin shead (3).
This case too is distinguishable as the farm on which the workman was employed to drive a movable steam engine for the purpose of working a (1) (2) (3) 602 mill for grinding meal intended to be used for food for stock on the farm and not for sale, was held to be not a factory in view of the fact that the meal which was ground was not intended for the purpose of sale but was meant only for feeding the stock from the farm.
It was also observed that the consequences of holding a farm to be a factory " would really produce a ludicrous result ".
It is on the basis of this observation that the trial Court, in the present case, held that the application of the provisions of the Act to the Salt Works would lead to " ludicrous results ".
We have already stated that such is not the result of the application of the relevant provisions of the to the Salt Works.
There is nothing useful for the present case, for our purpose, in Weston vs London County Council (1) and in Wood vs London County Council (2).
It may now be mentioned that the Factories Act, 1937 (I Edw. 8 & 1 Geo. 6, c. 67) specifically provides in sub section
(7) of section 151 that " premises shall not be excluded from the definition of a factory by reason only that they are open air premises ".
Various clauses of sub section
(1) of section 151 define " factory " to mean " any premises in which certain type of work is carried on by way of trade or for purposes of gain.
" These provisions support the interpretation we are putting on the word " premises " in cl.
(m) of section 2 of the Act.
We therefore hold that the Salt Works would come within the meaning of the expression " premises " in the definition of the word " factory " and would be a factory if the work carried on there comes within the definition of " manufacturing process ".
The second contention for the appellant is that the process of converting sea water into salt does not amount to " 'manufacturing process " as no process for making, altering, packing, cleaning or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal is carried on.
It is also urged that no other process mentioned in cl.
(k) of section 2 is carried on in the Salt Works, that it is just the force of gravity and the solar energy which (1) (2) 603 do the necessary work for the occupiers of the Salt Works to convert sea water into salt and that no human agency is employed in such conversion.
This contention found favour with the trial Court.
The High Court, however, did not agree with it and stated: "In our opinion it is a travesty of language to say that although 47 workmen are working on these works, salt is made without the assistance of human agency. .
Now, in this case there is no doubt that the workmen employed on these salt works are dealing with the sea water in a particular manner and but for the dealing with it in that manner, salt as made on these works would not be made.
We agree with the High Court that the conversion of sea water into salt is not due merely to natural forces, but is due to human efforts aided by natural forces.
The sea water in the sea never becomes salt merely on account of the play of sun 's rays on it.
The natural force of gravity is utilised for carrying sea water from the sea to the reservoirs, thence to the tapavanis and from there to the crystallizing pans which are specially prepared by thumping the mud and making the layer of tile ground hard and water tight.
The solar energy is utilised in evaporating the water in the brine.
The human agency is employed for other processes carried on in the Salt Works.
The process of making salt is described in the letter dated July 12, 1949, included in Exhibit 1, from the President, Salt Merchants and Shilotires Association, Bombay, to the Secretary, Department of Industry and Supply, Government of India, New Delhi, thus: "A salt work mainly consists of an open marshy area, surrounded by mud embankment, the height of which is above the highest tide water mark in that locality to prevent inundation.
In this embankment, sluice gates are provided with suitable places to take in and discharge the sea water and the waste water respectively.
The inner enclosed area is divided into compartments for the storage of sea brine of different densities.
When the salt is formed, it is stored on the platform by the laborers engaged in the manufacture.
It is then weighed, bagged and 604 carried to Railway Station or to a port of shipment.
For said production the sea water is taken into the Reservoirs at high water tide twice during a month.
The high tides take place on about nine or ten days in a month, five days during day time and four times at night.
Some of the labourers are detained for this work but they are also not required to be present the whole time, when the evaporation is going on.
Once the brine is let into the crystallising beds, its surface is not to be disturbed for four or five days.
After this, the labourer has to be careful to see that the density does not exceed a certain limit and that the other kinds of salt contained in the brine are not deposited, thus contaminating the sodium chloride (common salt) already formed.
This they learn by experience.
Sifting and storing then begins.
The labourer has also to refill the crystallizing beds with fresh, brine.
Thus the labourers work is intermittent and not continuous for any fixed hours.
" It is clear therefore that labourers are employed for (i) admitting sea water to the reservoirs by working sluice gates, sometimes at night also, or the pump; (ii) filling crystallizing beds; (iii) watching the density of brine in the crystallizing beds; (iv) seeing that the density does not exceed certain limits and that salts other than sodium chloride (common salt) are not formed; (v) scraping and collecting salt crystals (vi) grading the salt crystals by " sieving " and (vii) putting salt into gunny bags.
It follows that it is due to human agency, aided by natural forces, that salt is extracted from sea water.
The, processes carried out in the Salt Works and described above, come within the definition of " manufacturing process " inasmuch as salt can be said to have been manufactured from sea water by the process of treatment and adaptation of sea water into salt.
The sea water, a non commercial article, has been adapted to salt, a commercial article.
The observations in Sedgwick vs Watney Combe, Reid & Company, Limited(1) at page 463, support the (1) , 605 view that the process undergone at the Salt Works is the process of treatment 'of sea water for the purpose of converting it into salt.
The hereditament, the subject of controversy in the case, was used in connection with the manufacture of " bottled beer " by the respondent.
Brewed beer, which was not in a drinkable condition, and therefore not saleable as draught ' beer, was brought to the premises in tank wagons and pumped into large tanks.
Carbonic acid gas was put into it.
It was then filtered and put into bottles which were corked and labelled.
The bottles were then packed and removed for delivery.
The question for decision was whether the hereditament was occupied and used for the purpose of distributive wholesale business.
In that connection it was said: " But the point is whether the treatment that the beer undergoes in these premises is a mere prelude to distribution.
I am clearly of opinion that it is not.
The finished article that is being prepared for distribution is bottled beer.
It undergoes treatment, a treatment which changes its quality and makes it from an unpotable and unmarketable article into a potable and marketable one.
" In the present case, in the Salt Works, the finished article is " salt ".
It does not enter the Salt Works as " salt ".
It enters as brine which, under the process carried out, changes its quality, and becomes salt, a marketable article.
The observations in Grove vs Lloyds British Testing Co. Ltd.(1) at page 467 support the view that the conversion of sea water into salt amounts to adapting it for sale.
It is stated there : "I think ' adapting for sale ' points clearly to something being done to the article in question which, in some way, makes it in itself a little different from what it was before." In Kaye vs Burrows & Others and Hines vs Eastern Counties Farmers ' Co operative Association Ltd. (2) it was said at page 484: " The test is just as it was in the bottled beer case.
You must look at what is the finished article ' (1) , (2) 606 to be turned out.
If that finished article is only put into the condition of a finished article by the processes to which it has been subjected in the hereditament, then the processes will fall within the expression altering or adaptation for sale '.
In both the cases of the rags and the seeds the finished article is different from the article in bulk which enters the hereditament, and that is, in our opinion, an adaptation for sale." In The State of Kerala vs V. M. Patel (1) this Court held the treatment of pepper and ginger to be a " manufacturing process " where the work which was carried on in the premises of the firm was described thus :" It consisted of winnowing, cleaning, washing and drying pepper on concrete floor.
A similar process was also being applied to ginger, which was dipped in lime and laid out to dry in a warehouse on the premises.
" The case reported as In re: Chinniah, Manager, Sangu Soap Works (2) is of no help to the appellant as there nothing definite was held about the process carried out to be a manufacturing process or not and what was stated was in connection with the word I( manufacture" in general and not with reference to " manufacturing process.
" Similarly the case reported as Paterson vs Hunt is not of much help.
It simply held that mere sorting of rags will not amount to adapting for sale.
In this case reference was made to it being held in Law vs Graham (4) that washing the bottles before the beer was put into them was not adapting the beer, or adapting the bottles or adapting the bottled beer for the purpose of sale and in Hoare vs Truman, Hanbury, Buxton & Co. (5) that it was a case of adapting for sale when gas was used to force carbonic acid at high pressure into the beer for charging it with the acid and mixing it and so aerating the beer.
The case is (1) Crl.
42 of 1959.
decided on October 12, 1960.
(2) A.I.R. 1957 Mad. 755.
(3) (4) (5) 607 distinguishable as sorting of rags brought about no change in particular rags sorted out.
They were just separated from other things with which they were mixed and therefore the rags were in no way adapted to some different article.
This cannot be said in connection with the conversion of sea water into salt.
The decisions in McNicol vs Pinch (1), State vs Chrestien Mica Industries Ltd. (2) and G. R. Kulkarni vs The State (3) are of no help in determining the point under consideration as there the word " manufacture " was interpreted according to the dictionary meaning and the context.
In the present case, we are considering the definition of the expression " manufacturing process " and no dictionary meaning of the word " manufacture " and no interpretation of what constitutes " manufacture " for the purposes of other Acts can be of any guide.
It may, however, be noted that even according to the meaning given to the word " manufacture ", the conversion of brine into salt would amount to manufacture of salt as " the essence of making or of manufacturing is that what is made shall be a different thing from that out of which it is made " vide McNicol vs Pinch(4) page 361.
We are therefore of opinion that the process of converting sea water into salt carried on on the appellant 's Salt Works comes within the definition of manufacturing process " in el.
(k) of section 2 of the Act.
Reference was made to the expression of opinion by the Chief Inspector of Factories in his letter to the Deputy Salt Commissioner, Bombay, in support of the appellant 's contention that salt works as such do not come within the definition of the word " factory ".
It was stated in this letter that originally salt pans were considered to be amenable to the Factories Act and as such salt pan occupiers were informed to get the pans registered and licensed.
However, as some doubt was felt, the question was re examined and it had been found that salt pans would not be factories except where they were equipped with a building used (1) (2) [1956] Pat. 660, (3) I.L.R. [1937] M. P. 13. 608 in connection with the manufacture of salt.
The Deputy Commissioner for Salt was not satisfied with this view and in his reply dated September 13, 1952, stated, after referring to the provisions of cl.
(m) of section 2 of the Act, that " by premises is meant building and its adjuncts ".
No further correspondence between these authorities has been brought on the record and we do not know what had been the final view taken by the authorities in this connection.
Further, such a view expressed by any authority is of no help in deciding the questions before us.
It may also be mentioned that the representation made by the President of the Salt Merchants and Shilotires Association on July 12, 1949, to the Secretary to Government of India, Department of Industries & Supply, did not raise the contention that the salt works did not come within the definition of the word " factory " and merely represented that the provisions of the Act be not applied to the salt works in view of the matters mentioned in that representation.
Even the reply by the appellant 's firm to the Inspector of Factories dated April 9, 1952, did not state that the salt works did not come within the definition of the word " factory " and simply stated that the provisions of the Indian Factories Act were considered redundant for which their Bombay Salt Association had already made a suitable representation to the Government of India.
It was for the first time, in the written statement filed by the appellant in the trial Court, that it was contended that the Salt Works would not come within the word " factory " in the Act.
Omission of the accused or the Association of salt merchants to contend, at an earlier stage, that the salt works do not come within the definition of the word " factory " is also not of any relevance for our considering the questions before us.
We have made reference to it only in view of the reference made by the appellants to an opinion expressed by the Chief Inspector of Factories in his letter to the Deputy Salt Commissioner dated September 13, 1952.
In view of the above,, we are of opinion that the appellant 's Salt Works do come within the definition 609 of the word ',factory" and that the appellant has been rightly convicted of the offence of working the factory without obtaining a licence.
We therefore dismiss the appeal.
Appeal dismissed.

summary/full:
The appellant was convicted of an offence under section 92 of the , for working a salt works without obtaining a licence.
The salt works extended over an area of about 250 acres ' The only buildings on this land were temporary shelters for the resident labour and for an office ; at some places ,there where pucca platforms for fixing the water pump where 593 required to pump water from the sea.
The appellant contend ed (i) that the salt works was not a factory as defined in section 2(m) of the Act, (ii) that the word " premises " in the definition of factory did not include open land, and (iii) that in converting sea water into salt the appellant was not carrying on any manufacturing process as defined in section 2(k).
Held, that the salt works was a factory within the definition given in the Act and that the appellant was rightly convicted for working it without a licence.
The word " premises " is a generic term meaning open land or land with buildings or buildings alone; the salt works came within the expression "premises" in the definition of the word " factory ".
The extraction of salt from sea water was not due merely to natural forces but was due to human efforts aided by natural forces.
The process of conversion of sea water into salt was a " manufacturing process " as defined in cl.
(k) of section 2, inasmuch as salt was manufactured from sea water by a process of treatment and adaptation.
By this process sea water, a non commercial article, was converted into a different thing salt, a commercial article.
Kent vs Astley, , Redgrave vs Lee, and Nash vs Hollinshead, [1901] 1 K.B. 700, distinguished.
Sedgwick vs Watney, Combe, Reid & Co. Ltd. , Grove vs Lloyds British Testing Co. Ltd. , Kaye vs Burrows & Ors.
and Hines vs Eastern Counties Farmers ' Co operative Association Ltd. , The State of Kerala vs V. M. Patel, Cr.
42 of 1959, decided on 12 10 1960, In re: Chinniah, Manager, Sangu Soap Works, A.I.R. 1957 Mad. 755.
Paterson vs Hunt , Law vs Graham, , Hoare vs Truman, Hanbury, Buxton & CO. , and McNicol vs Pinch, , referred to.


judgement:
Appeals Nos. 448 and 449 of 1957.
Appeals from the judgment and order dated September 27, 1956, of the Mysore High Court in Writ Petitions Nos. 44 and 45 of 1955.
N. C. Chatterjee, D. N. Mukherjee and B. N. Ghose, for the appellant in C. A. No. 448 of 1957.
V. L. Narasimhamoorthy, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellant in C. A. No. 449 of 1957.
G. R. Ethiraiulu Naidu, Advocate General, Mysore,, B. R. G. K. Achar and K. R. Choudhuri, for the respondent.
February 3.
The Judgment of the Court was delivered by KAPUR, J.
These are two appeals brought against two judgments and orders of the High Court of Mysore which arise out of two petitions filed by the appellants under article 226 challenging the legality of the imposition of octroi on wool and cotton under section 98 of the City of Bangalore Municipal Corporation Act (Act LXIX of 1949), which for the sake of convenience, will be termed the " Act ".
On March 31, 1954, a resolution was passed purporting to be under section 98(1) of the Act by which it was 700 resolved to levy an octroi on cotton and wool as follows : Name of the Articles Rate of duty 1.
Raw cotton and wool (this includes both loose Rs. 1/9/ per and compressed, made in cent.
ad valorem India or foreign) 2. .
This was notified in the Mysore Gazette on April 3, 1954, and was also published as required by section 98(1) of the Act.
Objections were invited and it is admitted that both the appellants filed their objections.
Final resolution under section 98(2) was passed on December 21, 1954, and the resolution in regard to octroi came into force as from January 1, 1955.
It may be mentioned that the final resolution passed under section 98 (2) of the Act was not published in the Official Gazette but was published in the local newspapers and a notice dated December 23,1954, was also sent to the appellants to the effect that after considering their objections the Municipality had decided to levy an octroi on the goods at the rate already notified.
The appellant in C.A. 448/57, filed a petition in the High Court on March 15, 1955, under article 226 challenging the validity of the imposition of the octroi on the grounds: (1) that the tax was in contravention of section 98(2) of the Act in so far as a notice was not published in the Official Gazette; (2) that the tax was in contravention of section 130 of the Act and (3) that there was excessive delegation.
The appellant in C. A. 449/57, filed its petition on March 17, 1955, in which besides challenging the validity of the imposition of the tax on grounds above set out, it also challenged the vires of the imposition on the grounds : , 1.
that the levy of the octroi was in contravention of article 276(2) of the Constitution by which a tax on trade exceeding Rs. 250/ per annum could not be imposed 701 2.
that it was a contravention of article 301 which guaranteed freedom of inter State trade and commerce, and 3.
that it was in contravention of article 19(1)(g) of the Constitution.
The High Court rejected all these objections and the appellant has come to this court on a certificate of the High Court under article 133(1) of the Constitution.
In order to decide the question of the legality of the tax it is necessary to refer to the relevant provisions of the Act.
Section 97 enumerates the taxes and duties which the Corporation is empowered to levy under the Act.
Section 97(e) provides: " 97.
The Corporation may levy (e)an octroi on animals or goods or both brought within the octroi limits for consumption or use therein.
" Section 98 which deals with the powers.
of control of Government and the procedure for the levying of the Municipal taxes provides: Section 98 (1).
" Before the Corporation passes any resolution imposing a tax or duty for the first time it shall direct the Commissioner to publish a notice in the Official Gazette and in the local news.
papers of its intention and fix a reasonable period not being less than one month from the date of publication of such notice in the Official Gazette for submission of objections.
The Corporation, may, after considering the objections, if any, received within the period specified, determine by resolution to levy the tax or duty.
Such resolution shall specify the rate at which, the date from which and the period of levy, if any, for which such tax or duty shall be levied.
(2) When the Corporation shall have determined to levy any tax or duty for the first time or at a new rate, the Commissioner shall forthwith publish a notice in the manner laid down in sub section (1) specifying the date from which, the rate at which and the period of levy, if any, for which such tax or duty shall be levied.
" 702 It was argued that instead of passing a resolution Imposing the octroi duty, the Corporation should have 'first published its " resolution " to impose the tax and that the Corporation could not at once pass " a resolution " by which it imposed the tax.
It published that resolution in the Official Gazette and also in accordance with other provisions of section 98(1) and invited objections which were filed.
The only defect, if defect it can be called at all, was that instead of saying that it " intended " to impose a tax, the notice which was published said the tax "had been resolved to be levied.
" This is a technicality and is of no substance.
The next objection raised was that after the Corporation adopted the resolution imposing the tax which was after considering all the objections the publication was only in local newspapers and there was no publication in the Government Gazette and this, it was submitted, was such a serious defect as to make the imposition illegal and ultra vires.
In support counsel for the appellants relied on certain judgments where publication in the Official Gazette was held to be a condition precedent to the legality of the imposition of the tax.
These cases are Krishna Jute & Cotton Mills vs The Municipal Council, Vizianagram (1); Municipal Council, Rajamundry vs Nidamarti Jaladurga Prasadarayudu (2).
Reference was made also to The Municipal Council, Anantapur vs Sangali Vasudeva Rao (3) ; Manak Chand vs Municipal Council(4) and State of Kerala vs P. J. Joseph (5 ).
This question we are not considering as we are referring this case to a larger Bench on certain constitutional points and shall refer this question also in the sequel.
The second objection raised was that there was no compliance with section 130 of the Act.
That section is as follows : Section 130.
" If the corporation by a resolution determines that an octroi should be levied on animals or goods brought within the octroi limits of (1) A.I.R. 1926 Mad.
(2) A.I.R. 1926 Mad.
(3) Mad.
(4) A.I.R. 1951 Raj.
(5) A.I.R. 1958 S.C. 296, 299.
703 the city, such octroi shall be levied on such articles or goods specified in Part V Schedule III at such rates not exceeding those laid down in the said ' Part in such manner as may be determined by the corporation.
" That is not a charging section but it imposes a limitation on the power of the Municipality as to the rate at which a tax can be imposed.
It was further argued that before a resolution under section 98(1) could be passed the goods sought to be taxed had to be specified under section 130 read with Schedule 111, Part V of the Act.
Clause 18 of that Schedule provides that octroi on animals and goods shall be levied at the rates not exceeding the following.
Classes I to VII specify articles on which octroi can be levied at the maximum rate.
Class VIII was as follows: Octroi Maximum rate "Other articles which are not speci fied above and which may be Rs.2 0 0 per cent.
approved by the Corporation ad valorem" by an order in this behalf That class empowers the Municipal Council to impose octroi duty on other articles which are not specified but which may be approved by the Corporation.
In other words the Corporation can choose other articles upon which tax can be imposed and the respondent Corporation in the present case did resolve to impose tax on raw cotton and wool and also fixed the rate at Rs. 1 9 0 per cent.
ad valorem.
The submission that as a result of the operation of section 130 first a resolution had to be passed specifying raw cotton and wool as goods on which octroi duty would be levied and then the procedure under section 98(1) and (2) had to be gone through is without substance.
What the Corporation did was that it passed a resolution choosing these goods to be goods on which octroi duty was to be levied and by the same resolution it resolved that the goods therein specified be taxed at the rate therein specified.
There is no contravention of section 130 even if the contention of the appellants was to be taken most strictly, The goods were specified; the 704 rate of tax to be levied on the goods was also specified; the resolution was passed to that effect and the other procedure laid down in section 98(1) was then followed.
In our opinion it is not necessary that first a resolution should be passed specifying the goods and then another resolution should be passed showing the intention of the Municipality to tax those goods.
What has been done substantially complies with the provisions of the Act.
It was next argued that the words of Class VIII in Part V of Schedule III where the ' words used are " other articles which are not specified above " and which may be approved by the Corporation by order in this behalf meant that the goods must be precisely defined and included by name in the Schedule and that the use of the word in this behalf " meant adding to the list of articles in Schedule III.
Reliance was placed on the interpretation of the word " in this behalf " as given by this Court in Bijay Cotton Mills Ltd. vs Their Workmen (1).
But that case has no application to the facts of the present case because the resolution was, as a matter of fact, passed for the purpose of imposing an octroi duty on the goods in dispute.
The words used in Bijay Cotton Mills Ltd. vs Their Workmen(2) were in another context and ' even there all that was said was that a notification had to issue making the Central Government the appropriate Government.
As we have said above in the present case there was a resolution which sought to include these goods in the Schedule for the purpose of imposing the tax.
The excessive nature of delegation under Class VIII in Part V of Schedule III was also urged but this was not a question which was raised in the High Court nor is there any substance in the matter.
The argument raised was that the power of the Municipal Corporation to specify goods under Class VIII was excessive delegation which was both uncanalised and uncontrolled and reliance was placed on a judgment of this Court in Hamdard Dawakhana vs Union of India("); but that case has no application to the facts (1) ; (2) ; , 705 of the present case.
In the present case the Legislature has laid down the powers of the Municipality to tax various goods.
It has enumerated certain articles and animals and Class VIII read with section 97(e) of the Act has authorised the Municipality to impose tax on other articles and goods.
This power is more in the nature of conditional delegation as was held in Baxter vs Ah Way(1) where it was hold that under a. 52 (g) of the (Australian) Customs Act, 1901, a power given to prohibit by proclamation the importation of certain articles was not a delegation of legislative power but conditional legislation because the prohibition of importation was a legislative abet of Parliament itself and the effect of sub section
(g) of section 52 was only to confer upon the Governor General in Council the discretion to determine to which class of goods other than those specified in the section and under what conditions the prohibition shall apply.
All that the Legislature has done in the present case is that it has specified certain articles on which octroi duty can be imposed and it has also given to the Municipal Corporation the discretion to determine on what other goods and under what conditions the tax should be levied.
That, in our opinion, is not a case which falls under the rule laid down by this Court in Hamdard Dawakhana vs Union of India (2).
It was contended in C. A. 449/57 that the imposition of duty on raw cotton could not cover processed cotton that is cotton which had been ginned, combed and pressed.
The High Court held that the cotton by being ginned or pressed in bales does not cease to be raw cotton and was to be regarded as raw for the purpose of the Act.
The same would apply to wool.
The notification levying the tax specifically stated that raw cotton and wool included both loose and compressed, i.e., compressed cotton and wool whether it was Indian cotton or foreign cotton.
It will not, in our opinion, be a correct meaning to give to the notification if it were " interpreted to apply only to cotton which had been gathered from the fields and had neither been ginned nor pressed.
" We agree with (1) ; (2) ; 706 the High Court that this resolution covers the articles which the appellants in the two cases were importing into the limits of the Corporation of Bangalore.
I The learned Advocate General appearing for the respondent also relied on section 38 of the Act which provides : Section 38 (1).
" No act done, or proceeding taken under this Act shall be questioned merely on the ground (a) . . . . . . . . (b) of any defect or irregularity in such act or proceeding, not affecting the merit of the case.
" This section validates all defects and irregularities in in any act or proceedings which do not affect the merit; of the case.
It was submitted that this section is in another chapter, i.e., chapter 2 dealing with provisions common to the Corporation and the Standing Committees.
It may be that it is in another chapter but the language of the section is wide and applies to all defects or irregularities in any act or proceeding done not affecting the merits of the case.
In our opinion the following points should be heard by the Constitution Bench*: (1) Whether the imposition in the present case offends article 276 or 301 of the Constitution ? (2) Whether the failure to notify the final resolution of the imposition of the tax in the Government Gazette is fatal to the tax ? If the answer to these questions or any of them is in the affirmative the appeal will have to be allowed.
But if the two questions are answered against the appellants the appeals will fail as all other points have been decided by us against the appellants.
The costs will follow the event unless the Bench hearing the reference makes other order.
Referred to Constitution Bench final disposal.
*The decision of the Constitution Bench is reported infra.

summary/full:
The City of Bangalore Municipal Corporation resolved to levy octroi on cotton and wool and the resolution was notified in the Official Gazette as required by section 98(1) of the City of Bangalore Municipal Corporation Act.
Objections were invited and the appellants filed their objections to the tax.
Final resolution in regard to the tax was passed under section 98(2) of the Act which was published in local newspapers but not in the Official Gazette.
Notices were also sent to the appellants to the effect that after considering their objections the Municipality had decided to levy octroi on the goods at the rate already notified.
The appellants then filed applications in the High Court under article 226 of the Constitution challenging the legality of the levy of octroi but the High Court dismissed the applications.
On appeal with a certificate of the High Court: Held, that publication of the resolution in the Official Gazette and invitation of objections under section 98(1) which were filed, were sufficient compliance with the provisions of the Act.
The notice stating that the tax had been resolved to be levied instead of stating that it was intended to be levied was at the most only technically defective but all such defects were validated by section 38 of the Act.
It was not necessary first to pass a resolution specifying the goods and then another resolution showing the intention of the Municipality to tax those goods.
The goods and the rate of tax were specified and the resolution, was passed after following the procedure laid down in section 98(1).
This amounted to substantial compliance with the provisions of the Act.
The legislature has laid down the powers of the Municipality to tax various goods and enumerated certain goods; Class VIII in Part V of Schedule III read with section 97(e) of the Act authorised the Municipality to impose tax on other articles and goods.
In 699 the present case there was a resolution which sought to include the goods in dispute in the Schedule for the purpose of imposing the tax.
Bijay Colton Mills Ltd. vs Their Workmen [1960] 2 S.C.R. 982, distinguished.
The conferment of power upon the Municipality to specify goods under Class VIII is in the nature of conditional delegation and does not amount to excessive delegation.
Baxter vs Ah Way ; , followed.
Hamdard Dawakhana vs Union of India ; , held not applicable.
The High Court was right in holding that Cotton and Wool do not cease to be raw materials for the purposes of the Act, merely because they are ginned and pressed in bales.
The resolution in the present case covered the articles imported by the appellants into the limits of the Corporation of Bangalore.