judgement:
69 of 1953.
Petition under article 32 of the, Constitution for enforcement of fundamental rights.
1185 section C. Isaacs (Jai Prasad Agarwal, with him) for, the appellant.
K. B. Asthana for respondent No. 1.
section P. Sinha (R. Patnaik, with him) for respondent No. 4. 1953.
May 22.
The Judgment of the Court was delivered by PATANJALI SASTRI C. J.
This is an application under article 32 of the Constitution seeking protection of the petitioners ' fundamental right under article 15 (1) against alleged violation thereof by the respondents.
The petitioners are three residents of Etah in Uttar Pradesh.
They complain that at the by election to the Municipal Board of Etah held on November 2, 1951, December 8, 1951, and March 17, 1952, at which respondents 4, 11 and 12 were respectively elected, the Petitioners were deprived of their rights to exercise their votes and to seek their election as candidates, as those by elections were held on communal lines on the basis of separate electorates contrary to the provisions of the Constitution.
They also allege that the nomination of respondent 3 as a member of the Board by the Government was an illegal exercise of its powers, as the interest which that respondent was nominated to represent in the Board was already sufficiently represented.
The petition ners accordingly pray for the issue of writs of quo warranto, mandamus and other appropriate writs or directions to respondents 3, 4, 11 and 12 to show under what authority they are acting as members of the Board and to prevent them from acting assuchmembers.
Tbe petitioners also ask for wkits on the District Magistrate and the Civil Judge of Etah, respondents 2 and 13 respectively, directing them not to hold or permit the holding of any meeting of the Board which is said to be illegally constituted.
Now, it cannot be seriously disputed that any law providing for elections on the basis of separate electo rates for members of different religious communities offends against article 15 (1) of the Constitution which runs thus 1186 "15 (1) The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them.
" This constitutional mandate to the State not to diis criminate against any citizen on the ground, inter alia, of religion clearly extends to political as.well as to other rights, and any election held after the Constitution in ,pursuance of such a law subject to clause (4) must be held void as being repugnant to the Constitution.
But the question is whether the petitioners are now entitled to the relief they seek in this application under article 32.
It is true, as pointed out in the Cross Roads case(1), that article 32 provides, in some respects, for a more effective remedy through this court than article 226 does through the High Courts.
But the scope of the remedy is clearly narrower in that it is restricted solely to enforcement of fundamental rights conferred by Part III of the Constitution.
Any right, for instance, which the petitioners may have as rate payers in the Municipality to insist that the Board should be legally constituted and that respondents 3, 4, 11 and 12, who are not properly elected or nominated members, should not be permitted to take part in the proceedings of the Board, is outside the purview of article 32, as such right, even if it exists, is not a fundamental right conferred by Part 111.
Petitioners ' learned counsel, however, contended that the fundamental right conferred by article 15 (1) on the petitioners as citizens of India was violated by the elections in question having been held on a basis which discriminated against the petitioners on the ground of their religion in that it precluded them from exercising their franchise in relation to all the candidates and from contesting the elections without regard to the reservation of seats on communal basis.
Learned counsel,also submitted that the delimitation of the constituencies on communal lines was a denial of equality to the petitioners in the matter of their political rights and in that respect also infringed their (1) ; 1187 fundamental right under article 14.
We are unable to accede to these contentions.
It is plain that the fundamental right conferred by article 15(1) is conferred on a citizen as an individual and is a guarantee against his being subjected to discrimination in the matter of the rights, privileges and immunities pertaining to him as a citizen generally.
It is not the petitioners ' case that any discrimination is now being practised or threatened against them.
Their grievance is that the mode of election by separate electorates formed on communal lines involved discrimination against them in relation to seats other than those reserved for their respective communities as to which they could not exercise their right to vote or their right to stand as candidates.
There is no suggestion that the petitioners actually sought to assert those rights by taking appropriate proceedings to have the bar removed and the election conducted in accordance with the Constitution.
In fact, the petitioners acquiesced in the elections being conducted under the old system of separate electorates and felt no discrimination having been practised against them until a no confidence motion was tabled recently against the former Chairman who has since lost his seat as a result of that motion having been carried.
Thus, the infringement of their fundamental rights under article 15(1) and art 61 14, that is, the discrimination practised against them, of which they now complain, related to rights which they in fact never sought to exercise and took no steps to assert, while there was still room for doing so, and for the exercise of which the opportunity is now lost.
But, argues Mr. Isaacs, the election of the respondents 4 11 and 12 being void, they are no better than usurpers, and the petitioners are entitled to prevent them from functioning as members of the Municipal Board.
It may be, as we have already remarked, that the petitioners could claim such relief as ratepayers of the Municipality in appropriately framed proceedings, but there is no question of enforcing petitioners ' funda mental right under article 15(1) or article 14 in such claim, There is still less ground for seeking relief on 1188 that basis aoainst respondent 3 who is only a nominated member.
The petitioners appear to have misconceived their remedy and their application under article 32 must fail.
The petition is dismissed with costs, one sot.
Petition dismissed.
Agent for the petitioners: K. L. Mehta.
Agent for respondent No. I : C. P. Lal.
Agent for respondent No. 4: section P. Varma.

dataset_name: IN-Abs

summary/full:
The petitioners, who were residents of a municipality, alleging that they had been deprived of their rights to exercise their votes and to seek their election as candidates in certain by elections to the Municipal Board, as those by elections were held on communal lines on the basis of separate electorates contrary to the provisions of the Constitution, applied for writs tinder article 32 of the Constitution for preventing the elected candidates from acting as members of the Board, and the District Magistrate and Civil Judge from holding any meetings of the Board: Held, that, though a law which provides for elections on the basis of separate electorates for members of different religious communities offends against article 15(1) of the Constitution and an election held after the Constitution in pursuance of such a law subject to el. 4 would be void, the right which the petitioners claimed as rate payers in the municipality to insist that the Board should be legally constituted and that persons who have not been properly elected should not be allowed to take part in the proceedings of the Board was outside the purview of article 32 of the Constitution inasmuch as such a right, even if it existed, was not a fundamental right conferred by Part III of the Constitution.
Held further, that the alleged infringement of the fundamental rights of the petitioners under article 15(1) and article 14, that is, the discrimination practised against them related to rights which they in fact never sought to exercise and took no steps to assert while there was occasion for doing so and the petitioners were therefore entitled to no relief under article 32 of the Constitution.


judgement:
Appeal No. 220/ 1963.
Appeal by special leave from the judgment and order dated January 9, 1961 of the Kerala High Court in I.T.R. Case No. 17 of 1959.
K. N. Rajagopal Sastri and R. N. Sachthey, for the ap pellant.
The respondent did not appear.
April 1, 1964.
The Judgment of the Court was delivered by SUBBA RAO, J.
This appeal by special leave preferred against the judgment of the High Court of Kerala at Ernakulam raises the question of the interpretation of section 7(1) of the Indian Income tax Act, 1922 (Act No. XI of 1922), hereinafter called the Act.
The respondent, L. W. Russel, is an employee of the English and Scottish Joint Co operative Wholesale Society Ltd., Kozhikode, hereinafter called the Society, which was incorporated in England.
The Society established a superan nuation scheme for the benefit of the male European members of the Society 's staff employed in India, Ceylon and Africa by means of deferred annuities.
The terms of such benefits were incorporated in a trust deed dated July 27, 1934.
Every European employee of the Society shall become a member of that scheme as a condition of employment.
Under the term of the scheme the trustee has to effect a policy of insurance for the purpose of ensuring an annuity to every member of the Society on his attaining the age of superannuation or on the happening of a specified contin gency.
The Society contributes 1/3 of the premium payable by such employee.
During the year 1956 57 the Society con tributed Rs. 3,333/ towards the premium payable by the respondent.
The Income tax Officer, Kozhikode Circle, in cluded the said amount in the taxable income of the respon dent for the year 1956 57 under section 7(1), Explanation 1 Sub cl.
(v) of the Act.
The appeal preferred by the respondent against 571 the said inclusion to the Appellate Assistant Commissioner of Income tax, Kozhikode, was dismissed.
The further appeal preferred to the Income tax Appellate Tribunal received the same fate.
The assessee thereupon filed an application under section 66(1) of the Act to the Income tax Appellate Tribunal for stating a case to the High Court.
By its order dated December 1, 1958, the Tribunal submitted a statement of case referring the following three questions of law to the High Court of Kerala at Ernakulam: (1) Whether the contributions paid by the employer to the assessee under the terms of a trust deed in respect of a contract for a deferred annuity on the life of the assessee is a 'perquisite ' as contemplated by section 7(1) of the Indian Income tax Act? (2) Whether the said contributions were allowed to or due to the applicant by or from the employer in the accounting year? (3) Whether the deferred annuity aforesaid is an annuity hit by section 7(1) and para.
(v) of Explanation 1 thereto? On the first question the High Court held that the employer 's contribution under the terms of the trust deed was not a perquisite as contemplated by section 7(1) of the Act.
On the second question it came to the conclusion that the employer 's contributions were not allowed to or due to the employee in the accounting year.
On the third question it expressed the opinion that the Legislature not having used the word 'deferred" with annuity in section 7(1) and the statute being a taxing one, the deferred annuity would not be hit by para.
(v) of Explanation 1 to section 7(1) of the Act.
The Commissioner of Income tax has preferred the present appeal to this Court questioning the correctness of the said answers.
The three questions formulated for the High Court 's opinion are interdependent and the answers to them turn upon the true interpretation of the relevant part of section 7(1) of the Act.
Mr. Rajagopala Sastri, learned counsel for the appellant, contends that the amount contributed by the Society under the scheme towards the insurance premium payable by the trustees for arranging a deferred annuity on the respondent 's superannuation is a perquisite within the meaning of section 7(1) of the Act and that the fact that the respondent may not have the benefit of the contributions on the happening of certain contingencies will not make the said contributions any the less a perquisite.
The employer 's share of the contributions to the fund earmarked for paying premiums of the insurance policy, the argument proceeds, vests in the respondent as soon as 572 it is paid to the trustee and the happening of a contingency only 'operates as a defeasance of the vested right.
The respondent is ex parte and, therefore, the Court has not the benefit of the exposition of the contrary view.
Before we attempt to construe the scope of section 7(1) of the Act it will be convenient at the outset to notice the pro visions of the scheme, for the scope of the respondent 's right in the amounts representing the employer 's contributions thereunder depends upon it.
The trust deed and the rules dated July 27, 1934, embody the superannuation scheme.
The scheme is described as the English and Scottish Joint Co operative Wholesale Society Limited Overseas European Employees ' Superannuation Scheme, hereinafter called the Scheme.
It is established for the benefit of the male European members 'of the Society 's staff employed in India, Ceylon and Africa by means of deferred annuities.
The Society itself is appointed thereunder as the first trustee.
The trustees shall act as agents for and on behalf of the Society and the members respectively; they shall effect or cause to be effected such policy or policies as may be necessary to carry out the scheme and shall collect and arrange for the payment of the moneys payable under such policy or policies and shall hold such moneys as trustees for and on behalf of the person or persons entitled thereto under the rules of the Scheme.
The object of the Scheme is to provide for pensions by means of deferred annuities for the members upon retirement from employment on attaining certain age under the conditions mentioned therein, namely, every European employee of the Society shall be required as a condition of employment to apply to become a member of the Scheme from the date of his engagement by the Society and no member shall be entitled to relinquish his membership except on the termination of his employment with Society; the pension payable to a member shall be provided by means of a policy securing a deferred annuity upon the life of such member to be effected by the Trustees as agents for and on behalf of the Society and the members respectively with the Co operative Insurance Society Limited securing the payment to the Trustees of an annuity equivalent to the pension to which such member shall be entitled under the Scheme and the Rules; the insurers shall agree that the Trustees shall be entitled to surrender such deferred annuity and that, on such deferred annuity being so surrendered, the insurers will pay to the Trustees the total amount of the premiums paid in respect thereof together with compound interest thereon; all moneys received by the Trustees from the insurers shall be held by them as Trustees for and 'on behalf of the person or persons entitled thereto under the Rules of the Scheme; any policy or policies issued by the insurers in connection with the 573 Scheme shall be deposited with the Trustees; the Society shall contribute one third of the premium from time to time payable in respect of the policy securing the deferred annuity in respect of each member as thereinbefore provided and the member shall contribute the remaining two thirds , the age at which a member shall normally retire from the service of the Society shall be the age of 55 years and on retirement at such age a member shall be entitled to receive a pension of the amount specified in Rule 6; a member may also, after following the prescribed procedure, commute the pension to which he is entitled for a payment in cash in accordance with the fourth column of the Table in the Appendix annexed to the Rules; if a member shall leave or be dismissed from the service of the Society for any reason whatsoever or shall die while in the service of the Society there shall be paid to him or his legal personal representatives the total amount of the portions of the premiums paid by such member and if he shall die whilst in the service of the Society there shall be paid to him or his legal personal representatives the total amount of the portions of the premiums paid by such member and if he shall die whilst in the service of the Society or shall leave or be dismissed from the service of the Society on account of permanent breakdown in health (as to the bona fides of which the Trustees shall be satisfied,) such further proportion (if any) of the total amount of the portions of the premiums paid by the Society in respect of that member shall be payable in accordance with Table C in the Appendix to the Rules; if the total amount of the portions of the premiums in respect of such member paid by the Society together with interest thereon as aforesaid shall not be paid by the Trustees to him or his legal personal representatives under sub section
(1) of r. 15 then such proportion or the whole, as the case may be, of the Society 's portion of such premiums and interest thereon as aforesaid as shall not be paid by the Trustees to such member or his legal personal representatives as aforesaid shall be paid by the Trustees to the Society; the rules may be altered, amended or rescinded and new rules may be made in accordance with the provisions of the Trust Deed but not otherwise.
We have given the relevant part of the Scheme and the Rules.
The gist of the Scheme may be stated thus: The object of the Scheme is to provide for pensions to its employees.
It is achieved by creating a trust.
The Trustees appointed thereunder are the agents of the employer as well as of the employees and hold the moneys received from the employer, the employee and the insurer in trust for and on behalf of the person or persons entitled thereto under the rules of the Scheme.
The Trustees are enjoined to take out policies of insurance securing a deferred annuity upon the 574 life of each member, and funds are provided by contributions from the employer as well as from the employees.
The Trus tees realise the annuities and pay the pensions to the employees.
Under certain contingencies mentioned above, an employee would be entitled to the pension only after super annuation.
If the employee leave the service of the Society or is dismissed from service or dies in the service of the Society, he will be entitled only to get back the total amount of the portion of the premium paid by him, though the trustees in their discretion under certain circumstances may give him a proportion of the premiums paid by the Society.
The entire amount representing the contributions made by the Society or part thereof, as the case may be, will then have to be paid by the Trustees to the Society.
Under the scheme the employee has not acquired any vested right in the con tributions made by the Society.
Such a right vests in him only when he attains the age of superannuation.
Till that date that amount vests in the Trustees to be administered in accordance with the rules , that is to say, in case the employee ceases to be a member of the Society by death or otherwise, the amount contributed by the employer with interest thereon, subject to the discretionary power exercisable by the trustees, become payable to the Society.
If he reaches the age of superannuation, the said contributions irrevocably become fixed as part of the funds yielding the pension.
To put it in other words, till a member attains the age of superannuation the employer 's share of the contributions towards the premiums does not vest in the employee.
At best he has a contingent right therein.
In 'one contingency the said amount becomes payable to the employer and in another contingency, to the employee.
Now let us look at the provisions of section 7(1) of the Act in order to ascertain whether such a contingent right is hit by the said provisions.
The material part of the section reads: Section 7(1) The tax shall be payable by an assessee under the head "salaries" in respect of any salary or wages, any annuity, pension or gratuity, and any fees, commissions, perquisites or profits in lieu of, 'or in addition to, any salary or wages, which are allowed to him by or are due to him, whether paid or not, from, or are paid by or on behalf of. . . a company. . . .
Explanation I For the purpose of this section perquisite includes (v) any sum payable by the employer, whether directly or through a fund to which the pro.
visions of Chapters IX A and IX B do not 575 apply, to effect an assurance on the life of the assessee or in respect 'of a contract of annuity on the life of the assessees.
This section imposes a tax on the remuneration of an employee.
It presupposes the existence of the relationship if employer and employee.
The present case is sought to be brought under the head "perquisites in lieu of, or in addition to, any salary or wages, which are allowed to him by or are due to him, whether paid or not, from, or are paid by or on behalf of a company".
The expression "perquisites" is defined in the Oxford Dictionary as "casual emoluments.
fee or profit attached to an office or position in addition to salary or wages".
Explanation 1 to section 7(1) of the Act gives an inclusive definition.
Clause (v) thereof includes within the meaning of "perquisites" any sum payable by the employer, whether directly or through a fund to which the provisions of Chs.
IX A and IX B do not apply, to effect an assurance on the life of the assessee or in respect of a contract for an annuity on the life of the assessee.
A combined reading of the substantive part of section 7(1) and cl.
(v) of Expl.
1 thereto makes it clear that if a sum of money is allowed to the employee by or is due to him from or is paid to enable the latter to effect an insurance on his life, the said sum would be a perquisite within the meaning of section 7(1) of the Act and, therefore, would be eligible to tax.
But before such sum becomes so exigible, it shall either be paid to the employee or allowed to him by or due to him from the employer.
So far as the expression "paid" is concerned, there is no difficulty, for it takes in every receipt by the employee from the employer whether it was due to him or not.
The expression "due" followed by the qualifying clause "whether paid or not" shows that there shall be an obligation on the part of the employer to pay that amount and a right on the employee to claim the same.
The expression "allowed", it is said, is of a wider connota tion and any credit made in the employer 's account is cover ed thereby.
The word "allowed" was introduced in the sec tion by the Finance Act of 1955.
The said expression in the legal terminology is equivalent to "fixed, taken into account, set apart, granted".
It takes in perquisites given in cash or in kind or in money or money 's worth and also amenities which are not convertible into money.
It implies that a eight is conferred on the employee in respect of those perquisites.
One cannot be said to allow a perquisite to an employee if the employee has no right to the same.
It cannot apply to contingent payments to which the employee has no right till the contingency occurs.
In short, the employee must have a vested right therein.
If that be the interpretation of section 7(1) of the Act, it is.
not possible to hold that the amounts paid by the Society 576 to the Trustees to be administered by them in accordance with the rules framed under the Scheme are perquisites allowed to the respondent or due to him.
Till he reaches the age of superannuation, the amounts vest in the Trustees and the beneficiary under the trust can be ascertained only on the happening of one or other of the contingencies provided for under the trust deed.
On the happening of one contingency, the employer becomes the beneficiary, and on the happening of another contingency, the employee becomes the beneficiary.
Learned counsel for the appellant strongly relied upon the decision of the King 's Bench Division in Smyth vs Stretton(1).
There, one Stretton, one of the Assistant Masters of Dulwich College, was assessed to income tax in the sum of pouns 385 in respect of his emoluments as Assistant Master received from the Governors of Dulwich College for the year ended the 5th day of April, 1901.
He objected to the assessment on the ground that it included pound 35 not liable to taxation, being amount placed to his credit by the Governors under the Provident Fund Scheme for the year 1900.
Channell, J., with some hesitation, came to the conclusion that the said sum was taxable.
That case was dealing with a scheme for the establishment of provident fund for the benefit of the Assistant Masters on the permanent staff of the Dulwich College.
Under para.
1 of the scheme the salaries of Assistant Masters were increased.
Clause (a) of para.
1 of the scheme provided that Assistant Masters having not less than five years, but less than fifteen years ' service, would be allowed an increase of 5 per cent, in their salaries; under cl.
(b) thereof, Assistant Masters having not less than 15 years ' of service and over, would get an increase of 7 1/2 per cent.
in their salaries; under cl.
(c) thereof, a further addition in their salaries, equal in amount to the above sums, should be granted from the same date to the Assistant Masters alluded to in (a) and (b), such addition being, however, subject to the conditions provided by para.
Paragraph 5 read: "That Assistant Masters having less than ten years ' service who may resign their appointments, or from any other cause than ill health cease to belong to the College, shall be entitled to receive the total increase sanctioned by (a) and the accu mulations thereof, but shall not receive the additional increase sanctioned by (c), or the accumulations thereof.
In the event of any such Assistant Master retiring from ill health the Governors, in addition to the increase sanctioned by (a), may grant him the further 5 per cent.
sanctioned by (c), and the accumulations thereof.
In the event of death of any such Assistant Master whilst in (1) , 46. 577 the service of the College, the 5 percent.
due by (c) as well as under (a), with the accumulations thereof, shall be paid to his legal representatives".
It was contended that the amount payable under cl.
(c) of para.
I was a contingent one without any vested character and, therefore, could not be described as income in any way.
The learned Judge construed the provisions of the scheme and rejected the contention.
The main reason for his conclusion is stated thus: "The result seems to me to be that I must take that sum as a sum which really has been added to the salary and is taxable, and it is not the less added to the salary because there has been a binding obligation created between the Assistant Masters and Governors of the Schools that they should apply it in a particular way".
No doubt it is possible for another court to come to a different conclusion on the construction of the provisions of the scheme; but the learned Judge came to the conclusion that cl.
(c) of para.
1 of the scheme provided for an additional salary to the Assistant Masters.
Indeed, the Court of Appeal in Edwards (H. M. Inspector of Taxes) vs Roberts(1) construed a similar scheme and came to the contrary conclusion and explained the earlier decision on the basis we have indicated.
There, the respondent was employed by a company under a service agreement dated 'August 21, 1921, which provided inter alia, that, in addition to an annual salary, he should have an interest in a "conditional fund", which was to be created by the company by the payment after the end of each financial year of a sum out of its profits to the trustees of the fund to be invested by them in the purchase of the company 's shares or debenture stock.
Subject to possible forfeiture of his interest in certain events, the respondent was entitled to receive the income produced by the fund at the expiration of each financial year, and to receive part of the capital of the fund, (or, at the trustees ' option, the investments representing the same) at the expiration of five financial years and of each succeeding year, and, on death whilst in the company 's service or on the termination of his employ ment by the company, to receive the whole amount then standing to the credit of the capital amount of the fund (or the actual investments).
The respondent resigned from the service of the company in September, 1927, and at that date the trustees of the fund transferred to him the shares which they had purchased out of the payments made to them by the company in the years 1922 to 1927.
He was assessed to income tax on the amount of the current market value of the (1) , 638, 640.
LP(D)ISCI 17 578 shares at the date of transfer.
The assessee contended that immediately a sum was paid by the company to the trustee& of the fund he became invested with a beneficial interest in the payment which formed part 'of his emoluments for the year in which it was made, and for no other year, and that, accordingly, the amount of the assessment for the year 1927 28 ought not, in any event, to exceed the aggregate of the sums paid by the company to the trustees, the difference between the amount and the value of the investments at the date of transfer representing a capital appreciation not liable to tax for any year.
The Court of Appeal rejected the contention.
Lord Hanworth, M. R., in rejecting the contention.
observed be said to have accrued to this employee a vested interest in these successive sums placed to his credit, but only that he had a chance of being paid a sum at the end of six years if all went well.
That chance has now supervened, and he has got it by reason of the fact of his employment, or by reason of his exercising an employment of profit within Schedule E.".
Maugham.
L. J., said much to the same effect thus: "The true nature of the agreement was that lie was to be entitled in the events, and only in the events mentioned in Clause 8 of the agreement, to the investments made by the Company out of the net profits of the Company as provided in Clause 6.".
The decision of Channel], J., in Smyth vs Stretton(1) was strongly relied upon before the appellate court.
But the, learned Judges distinguished that case on the round that under the scheme which was the subject matter Of that deci sion the sums taxed were really additions to the salary of the Assistant Master and that.
in any view, that decision should be confined to the facts of that case.
The principle laid down by the Court of Appeal, namely, that unless a vested interest in the sum accrues to an employee it is not taxable.
equally applies to the present case.
As we have pointed out earlier, no interest in the sum contributed by the employer under the scheme vested in the employee.
as it was only a contingent interest depending upon his reaching the age of superannuation.
It is not a perquisite allowed to him by the employer or an amount due to him from the employer within the meaning of section 7(1) of the Act.
We, therefore, hold that the High Court has given correct answers to the questions of law submitted to it by the Income tax Appellate Tribunal.
In the result, the appeal fails and is dismissed.
Appeal dismissed.
(1)(1904) 46.

summary/full:
The respondent is an employee of the English and Scottish Joint Co operative Wholesale Society Ltd. incorporated in England.
The Society established a superannuation scheme for the benefit of the male European members of its staff employed in India by means of deferred annuities.
Under the terms of the scheme, the trustee has to effect a policy of insurance for the purpose of ensuring an annuity to every member of the ,Society on his attaining the age of superannuation or on the happening of a specific contingency.
The Society contributed ,one third of the premium payable by each employee.
During the year 1956 57, the Society contributed Rs. 3333/ towards the premium payable by the respondent, an employee of the Society.
The Income tax Officer included the said amount in the taxable income of the respondent for the year 1956 57 under section 7(1), Explanation 1, sub cl.
(v) of the Act.
The appeals of the respondent were dismissed both by the Appellate Assistant Commissioner of Income tax and the Income tax Appellate 'Tribunal.
The Tribunal referred to the High Court the following three questions of law: (1) Whether the contribution paid by the employer to the assessee under the terms of a trust deed in respect of a contract for a deferred annuity on the life of the assessee is a perquisite as contemplated by section 7(1) of the Income tax Act? (2) Whether the said contributions were allowed to, or due to the applicant by or from the employer in the accounting year? (3) Whether the deferred annuity aforesaid is annuity hit by section 7(1) and para (v) of Explanation 1 thereto.
The High Court held that the employer 's contribution under the terms of the trust deed was not a perquisite as con templated by section 7(1).
The employer 's contributions were not allowed to or due to the employee in the accounting year.
The legislature not having used the word "deferred" with annuity in section 7(1) and the statute being a taxing one, the deferred annuity would not hit para (v) of Explanation 1 to section 7 (1) of the Act.
Against the decision of High Court, the appellant came to this Court by special leave.
Dismissing the appeal, 570 Held: The answers to the questions of law as given by the High Court were correct.
Unless a vested interest in the sum accrues to an employee, it is not taxable.
In the present case.
no interest in the sum contributed by the employer under the scheme vested in the employee, as it was only a contingent interest depending upon his reaching the age of superannuation.
it is not a perquisite allowed to him by the employer or an amount, due to him from the employer within the meaning of section 7(1) of the Act.
A perquisite is only that amount of money which is allowed to the employee by or is due to him from the employer or is paid to him to effect an insurance on his life.
Smyth vs Stretton, , and Edwards (H. M., Inspector of Taxes) vs Roberts, , referred to.


judgement:
Appeal No. 473 of 1963.
Appeal by special leave from the judgment and order March 22, 1960, of the Andhra Pradesh High Court in Tax Revision Case No. 88 of 1960.
A. Ranganadham Chetty, B. R. G. K. Achar and R. N. Sachthey, for the appellant.
The respondent did not appear.
665 April 8, 1964.
The Judgment of the Court was delivered by SHAH, J.
The respondents who are registered as dealers under the Hyderabad General Sales Tax Act, 1950 carry on the business of tanning hides and skins and of selling the tanned skins in the town of Hyderabad.
For the purposes 'of their business the respondents purchase undressed hides and skins and also tanning bark and other materials required in their tannery.
For the assessment year 1954 55 the Sales tax Officer, Circle IV, Hyderabad, found that the total turnover of the respondents was Rs. 5,70,417 12 4 (O.S.) in respect of the hides, skins, wool and tanning bark.
The respondents disputed their liability to pay tax on Rs. 61,431 14 9 (O.S.) included in the turnover contending that this amount represented the price paid for buying tanning bark required in their tannery.
They submitted that tanning bark was bought for consumption in the tannery and not for sale, and they were accordingly not dealers in tanning bark and therefore the price paid for buying tanning bark was not liable to duty under the Hyderabad General Sales Tax Act.
The Sales tax Officer rejected the contention of the respondents, and his order was confirmed in appeal by the Deputy Commissioner, C. T., Hyderabad Division and also by the Sales Tax Appellate Tribunal, Hyderabad.
But the High Court of Andhra Pradesh in a petition under section 22(1) read with rule 40 framed under the Andhra Pradesh General Sales Tax Act VII of 1957 modified the order passed by the taxing authorities and excluded from the computation of the taxable turnover the price paid by the respondents for the tanning bark used in the tannery.
With special leave, the State of Andhra Pradesh has appealed to this Court.
Section 2(e) of the Hyderabad General Sales Tax Act defines "dealer" as meaning any person.
local authority, company, firm, Hindu undivided family or any association or associations of persons engaged in the business of buying, selling or supplying goods in the Hyderabad State whether for a commission, remuneration or otherwise and includes a State Government which carries on such business and any society, club or association which buys or sells or supplies goods to its members.
Section 2(m) defines "turnover" as, meaning an aggregate amount for which goods are either bought by or sold by a dealer, whether for a cash or for de ferred payment or other valuable consideration.
section 4 a tax at the rate of three pies in the rupee in I. G. currency on so much of the turnover for the year is is attributable to transactions in goods other than exempted goods is imposed.
Rule 5(1) provides that save as provided in sub rule (2) the turnover of a dealer for the purpose of the rules shall be the amount for which goods are sold by the dealer.
Rule 5(2) provides that in the case of certain commodities the turnover 666 of a dealer for the purpose of the rules shall be the amount for which the goods are bought by the dealer.
Those commo dities are: (a) Groundnut (shelled or unshelled); (b) Bidi leaves; (c) Tarwar and other tanning barks; (d) Til, karad and castor seed; (e) Cotton including kappas; (f) Linseed, turmeric, dhania and other agricultural produce including all kinds of dhals and paddy (husked or unhusked) not otherwise exempted under the said Act, but excluding cotton seed, sugarcane, tea and coffee seeds; (g) Hides and skins; (h) Wool, bones and horns.
The High Court of Andhra Pradesh rejected the claim of the taxing authories to tax the tanning bark bought by the respondents on the ground that a purchaser is liable to pay tax under Rule 5(2) only when he is carrying on business of buying and selling a commodity specified in the sub rule (2) and not when he buys it for consumption in a process for manufacturing an article to be sold by him.
Therefore, in the view of the High Court if a dealer buys any commodity included in Rule 5(2) for consumption in his business but not for sale, he is not to be regarded as engaged in the business of buying, selling 'or supplying that commodity and the price paid for buying the commodity is not liable to tax.
We are unable to agree with this view of the High Court.
A person to be a dealer must be engaged in the business of buying or selling or supplying goods.
The expression "busi ness" though extensively used a word of indefinite import, in taxing statutes it is used in the sense of an occupation, or profession which occupies the time, attention and labour of a person, normally with the object of making profit.
To regard an activity as business there must be a course of dealings, either actually continued or contemplated to be continued with a profit motive, and not for sport or pleasure.
But to be a dealer a person need not follow the activity of buying selling and supplying the same commodity.
Mere buying for personal consumption i.e. without a profit motive will not make a person, dealer within the meaning of the Act, but a person who consumes a commodity bought by him in the course of his trade, 'or use in manufacturing another commodity for sale, would be regarded as a dealer.
The Legislature has not made sale of the very article bought by a person a condition for treating him as a dealer: the definition merely requires that the buying of the commodity mentioned in Rule 5(2) must be in the course of business, i.e. must be for sale 667 or use with a view to make profit out of the integrated activity of buying and disposal.
The commodity may itself be converted into another saleable commodity, or it may be used as an ingredient or in aid of a manufacturing process leading to the production of such saleable commodity.
It cannot be said in the present case that the tanning bark was bought by the respondent for any purpose unconnected with the business carried on by them, viz., manufacture and sale of dressed hides and skins.
Consumption in the business and not sale of the commodity bought therefore does not exclude the respondents from the definition of dealer aua the tanning bark.
This is the view which has, in our judgment, been rightly taken by the Madras Hight Court in the interpretation of a similar statute in operation in the State of Madras in L.M.S. Sadak Thamby and Company vs The State of Madras(1).
The appeal is therefore allowed and the order passed by the High Court is set aside and order passed by the Sales tax Appellate Tribunal restored.
No order as to costs.
Appeal dismissed.

summary/full:
The respondents are registered dealers carrying on the business of tanning hides and skins and selling the tanned skins.
The authorities under the Hyderabad General Sales Tax Act, 1950 assessed the respondent for the total turnover which included the price paid by the respondent for purchasing tanning bark used in the tanning process.
The respondent contended that the price paid for the purchase of tanning bark should be excluded from the taxable turnover because the tanning bark was bought by the respondent for consumption and not for sale and hence the respondent was not "dealer" qua the tanning bark.
His contention was not accepted by the Tax authorities.
In a petition to the High Court under section 22(1) of, the Hyderabad General Sales Tax Act the contention of the respondent was accepted and the assessment was modified.
In appeal filed with special leave, Held: The High Court was in error in holding that a purchaser is liable to pay tax under r. 5(2) of the Sales Tax Rules only when he is carrying on a business of buying and selling a commodity specified in sub r.
(2) and not when he buys it for consumption in a process for manufacturing a commodity to be sold by him.
(ii) To regard an activity as a business there must be a course of dealing either actually continued or contemplated.
to be continued with a profit motive and not for sport or pleasure.
But to be a dealer a person need not follow the activity of buying, selling and supplying the same commodity.
The Act requires merely that buying of the commodity mentioned in r. 5(2) must be in the course of business; that is it must be for sale or use with a view to take profit out of the integrated, activity of buying and disposal.
The commodity may itself be converted into another saleable commodity or it may be used as an ingredient or in aid of a manufacturing process leading to the production of such saleable commodity.
(iii) In the present case the tanning bark was not bought by the respondent for any purpose unconnected with the business.
Consumption of the tanning bark in the manufacturing process did not therefore exclude the respondents from the definition of dealer qua the tanning bark.
Sadak Thamby and Company vs State of Madras, 14 S.T.C. 753, approved.


judgement:
Appeal No. 299 of 1964.
Appeal from the judgment and order dated September 26, 1961 of the Allahabad High Court in Second Appeal No. 620 of 1957.
J. P. Goyal, for the appellants.
B. C. Misra, for the respondent No. 1.
April 15, 1964.
The judgment of the Court was delivered by HIDAYATULLAH, J.
In this appeal by certificate from the High Court of Judicature at Allahabad the appellants are the four original defendants in a suit for pre emption filed by the first respondent.
Kaiseri Begam (respondent No. 2) sold a plot and two houses in mohalla Gher Abdul Rahman Khan, 757 Qasba Milak, Tehsil Milak, District Rampur, to the appel lants on December 4, 1953.
The first respondent Labh Singh owned the adjacent house and he claimed pre emption on the ground of vicinage after making the usual demands.
The suit was filed by Labh Singh in the court of Munsif, Rampur who by his judgment dated September 25, 1955 held that there was a general custom of pre emption in the town of Milak.
He also held that Labh Singh was entitled to preempt and had performed the Talabs.
He, however, dismissed the suit because the sale did not include a strip of land 3 feet 6 inches wide between Labh Singh 's house and the property sold.
He made no order about costs.
There was an appeal by Labh Singh and the present appellants objected.
The District Judge, Rampur allowed the appeal and dismissed the cross objections.
The appellants then filed a second appeal in the High Court of Allahabad.
Mr. Justice V. D. Bhargava, who heard the appeal, referred the following question to a Division Bench: "Whether after coming into operation of the right of pre emption is contrary to the provisions of article 19(1)(f) read with article 13 of the Constitution, or is it saved by clause (5) of article 19? " The Divisional Bench held that the law relation to pre emp tion on the ground of vicinage was saved by clause (5) of article 19 and was not void under article 13 of the Constitution.
In view of this answer, the second appeal was dismissed.
The High Court, however, certified the case and the present appeal has been filed.
The question which was posed by Mr. Justice V. D. Bhargava was considered by this Court in connection with s.10 of the Rewa State Pre emption Act, 1946 in Bhau Ram vs B. Baijnath Singh (1).
This Court held by majority that the law of pre emption on the ground of vicinage imposed unreasonable restrictions on the right to acquire, hold and to dispose of property guaranteed by article 19(1)(f) of the Constitution and was void.
It was pointed out that it placed restrictions both on the vendor and on the vendee and there was no advantage to the general public and.
that the only reason given in support of it, that it prevented persons belonging to different religions, races or castes from acquiring property in any area peopled by persons of other religious, races or castes, could not be considered reasonable in view of article 15 of the Constitution.
If this ruling applies the present appeal must succeed.
Mr. B. C. Misra, who appears for Labh Singh attempts to distinguish Bhau Ram 's case(1).
He contends that the earlier case was concerned with a legislative measure whereas the.
(1) [1962] Supp. 3 S.C.R. 724.
758 present case of pre emption arises from custom.
He refers to the decision in Digambar Singh vs Ahmad Said Khan(1) where the Judicial Committee of the Privy Council has given the early history of the law of pre emption in village com munities in India and points out that the law of pre emption had its origin in the Mohammedan Law and was the result, some times, of a contract between the sharers in a village.
Mr. Misra contends that articles 14 and 15 are addressed to the State as defined in article 12 and are not applicable to custom or contract as neither, according to him, amounts to law within the definition given in article 13(3)(b) 'of the Consti tution.
He submits that the ruling of this Court does not cover the present case and that it is necessary to consider the question of the validity of the customary law of pre emption based on vicinage.
It is hardly necessary to go into ancient law to discover the sources of the law of pre emption whether customary or the result of contract or statute.
In so far as statute law is concerned Bhau Ram 's case(2 ) decides that a law of pre emption based on vicinage is void.
The reasons given by this Court to hold statute law void apply equally to a custom.
The only question thus is whether custom as such is affected by Part III dealing with fundamental rights and particularly article 19(1)(f).
Mr. Misra ingeniously points out in this connection that article 13(1) deals with "all laws in force" and custom is not included in the definition of the phrase "laws in force" in clause (3)(b) of article 13.
It is convenient to read article 13 at this stage: "13.(1) All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void.
(2) The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void.
(3) In this article, unless the context otherwise re requires, (a) "law" includes any Ordinance, order, bye law, rule, regulation, notification, custom or usage having in the territory of India the force of law; (b) "law in force" includes laws passed or made by a Legislative or other competent authority in the territory of India before the commencement of this Constitution and not previously (2) [1962] Supp. 3 S.C.R. 724.
(1) L.R. 42 I.A. 10, 18.
759 repealed, notwithstanding that any such law or any part thereof may not be then in operation either at all or in particular areas.
" The argument of Mr. Misra is that the definition of "law" in article 13(3)(a) cannot be used for purposes of the first clause, because it is intended to define the word "law" in the second clause.
According to him, the phrase "laws in force" which is used in clause (1) is defined in (3)(b) and that definition alone governs the first clause, and as that definition takes no account of customs or usage, the law of pre emption based on custom is unaffected by article 19(1)(f).
In our judgment, the definition of the term "law" must be read with the first clause.
If the definition of the phrase "laws in force" had not been given, it is quite clear that the definition of the word "law" would have been read with the first clause.
The question is whether by defining the composite phrase "laws in force" the intention is to exclude the first definition.
The definition of the phrase "laws in force" is an inclusive definition and is intended to include laws passed or made by a Legislature or other competent authority before the commencement of the Constitution irrespective of the fact that the law or any part thereof was not in operation in particular areas or at all.
in other words, laws, which were not in operation, though on the statute book, were included in the phrase "laws in force".
But the second definition does not in any way restrict the ambit of the word "law" in the first clause as extended by the definition of that word.
It merely seeks to amplify it by including something which, but for the second definition, would not be included by the first definition.
There are two compelling reasons why custom and usage having in the territory of India the force of the law must be held to be contemplated by the expression "all laws in force".
Firstly, to hold otherwise, would restrict the operation of the first clause in such ways that none of the things mentioned in the, first definition would be affected by the fundamental rights.
Secondly, it is to be seen that the second clause speaks of "laws" made by the State and custom or usage is not made by the State.
If the first definition governs only cl.
(2) then the words "custom or usage", would apply neither to cl.
(1) nor to cl.
(2) and this could hardly have been intended.
It is obvious that both the definitions control the meaning of the first clause of the Article.
The argument cannot, therefore, be accepted.
It follows that respondent No. 1 cannot now sustain the decree in view of the prescriptions of the Constitution and the determination of this Court in Bhau Ram 's case(1).
The appeal will be allowed but in the circumstances of the case parties will bear their costs throughout.
Appeal allowed.

summary/full:
In a suit filed by the respondent, the Munsif though holding that there was a general custom of pre emption in the locality and that the respondent had a right to pre empt, under that custom, dismissed the suit because the sale did not include a strip of land 3 feet 6 inches wide between the respondent 's house and the property sold.
The respondent 's appeal was allowed by the District Judge.
The appellants appealed to the High Court which was unsuccessful because of the answer of the Division Bench to which the question was referred.
The Division Bench held that the law relating to pre emption on the ground of vicinage was saved by article 19(5) and was not void under article 13 of the Constitution.
The appellant relied on the decision of this Court in Bhau Ram vs Baijnath and claimed that pre emption on the ground of vicinage could not be claimed.
The respondents in reply contended (a) that Bhau Ram 's case was concerned with a legislative measure whereas the present case arose from custom and was thus distinguishable and (b) that article 13(1) dealt with "all laws in force" and custom was not included in the definition of the phrase "laws in force" in cl.
(3)(b) of article 13.
Held: (i) In so far as statute law is concerned Bhau Ram 's case decides that a law of pre emption based on vicinage is void.
The reasons given by this Court to hold statute law void apply equally to a custom.
Bhau Ram vs B. Baijnath Singh, [1962] Supp. 3 S.C.R. 724, followed.
Digambar Singh vs Ahmad Said Khan, L.R. 42 I.A. 10, referred to.
(ii) Custom and usage having in the territory of India the force of law are included in the expression "all laws in force".


judgement:
Appeal No. 172 of 1964.
Appeal from the judgment and decree dated July 6, 1962 of the Calcutta High Court in Appeal from Original Decree No. 213 of 1959.
section T. Desai, B. Sen and B.P. Maheshwari, for the appllant.
H. N. Sanyal, Solicitor General, Ajit Kumar Sen and S.N. Mukherjee, for the respondent No. 1.
April 15, 1964.
The judgment of the Court was delivered by DAs GUPTA, J.
The subject matter of this litigation is a piece of land in the heart of the business centre of the city of Calcutta.
This was part of a block of 52 cottahs of land taken on lease on January 21, 1950 from the Official Trustee, West Bengal, by a private limited company, Raghuvanshi Private Ltd. The lease was a building lease for a period of 75 years commencing from January 21, 1950.
The lessee was required to complete the construction of a three or four storeyed building on the land within 1O years.
In September 1960, Raghuvanshi Private Limited in its turn leased 10 1/2 cottahs out of the 52 cottahs to a public limited company, Land and Bricks Ltd. This lease by Raghuvanshi Private Ltd., (hereinafter referred to as "Raghuvanshi") in favour of Land & Bricks Ltd., (hereinafter referred to as "Land & Bricks") created a monthly tenancy commencing from the 1st October 1950.
Land and Bricks in its turn sub let the entire 10 1/2 cottahs to the present appellant, Rupchand Gupta in his business name of Hind Airways.
The lease was on the terms as settled by two letters dated August 19, 1950 and September 5, 1950 between Hind Airways and Land and Bricks.
By the terms of the sub lease, the sub lessee undertook not to sub let the land to anybody, to vacate the land as soon as it was required by Land and Bricks for any purpose and not to construct anything on the land but only to use the open land for "garage purpose for motor vehicles".
Inspite of this undertaking however the appellant constructed a pacca structure on the land.
Land and Bricks protested un successfully and then started proceedings under the Calcutta 762 Municipality Act for demolition of the structures.
Those proceedings were also unsuccessful.
Land and Bricks, it appears, also served on the appellant in February 1953 a notice to quit.
This was not followed up by any suit in court.
But a suit for arrears of rent was instituted by Land and Bricks against the appellant in September 1955 and another in 1957.
Consent decrees were passed in both of these suits.
It appears ,that in about May or June 1954, Raghuvanshi was desirous of getting possession of the land it has leased to Land and Bricks.
The difficulty was that Land and Bricks having sublet to the appellant was not in a position to deliver possession to its lessor Raghuvanshi until and unless possession was obtained from the appellant.
It was in these circumstances that Raghuvanshi determined its lease in favour of Land and Bricks by a notice to quit dated the 11th April 1955.
Raghuvanshi then instituted a suit No. 3283 of 1955 in the High Court of Calcutta against Land and Bricks for possession of the land.
The appellant was not impleaded in the suit and Land and Bricks did not contest it.
An ex parte decree was made by the Court in favour of Raghuvanshi on the 11th May 1956.
The necessary legal consequences of that decree is that the plaintiff as the sub lessee of Land and Bricks has no right to stay on the land and has become a trespasser.
It is to avoid the consequence of that decree, that the present suit was brought by Rupchand Gupta.
His case is that the decree had been obtained "by fraud and collusion between the de fendants in order to injure the plaintiff and to evict the plaintiff from the said premises without any decree being passed against the plaintiffs" Both Land and Bricks and Raghuvanshi have been impleaded in the suit Land and Bricks as the first defendant, and Raghuvanshi as the second defendant.
Both of them denied the allegations of fraud and collusion.
The case that the decree was obtained by fraud was given up at the hearing and only the allegation that it was a collusive suit was pressed.
The Trial Judge held that there was collusion between defendant No. 1 and defendant No. 2 in the matter of obtain ing an ex parte decree in suit No. 3283 of 1955 and that the plaintiff was not bound by that decree.
He gave a declaration that the plaintiff was still a tenant under defendant No. 1 and was not liable to be ejected under the ex parte decree.
He also ordered the issue of an injunction restraining the defendants from taking any steps in execution of the ex parte decree.
On appeal by the defendant No. 2, Raghuvanshi, the decree made by the Trial Judge was set aside.
The learned Judges, who heard the appeal, came to the conclusion that 763 the plaintiff had failed to prove that the decree in suit No. 3283 of 1955 had been procured collusively.
So, they held that the plaintiff was bound by the decree in that suit.
It is against this decree of the appellate Bench of the High Court that the present appeal has been filed by the plaintiff Rupchand Gupta.
The only question for decision in the appeal is whether the plaintiff had established his allegation that the ex parte decree had been obtained as a result of collusion between Raghuvanshi and Land and Bricks.
The main circumstances on which the plaintiff relied to prove collusion and which according to the learned Judge established his case were these: Raghuvanshi and Land and Bricks though distinct entities had the same persons as directors.
The construction of building in terms of indenture of lease with Official Trustee was necessarily in the interests of shareholders of Raghuvanshi and so this was in the interest of Land and Bricks also as the main shareholders were the same.
The Calcutta Thika Tenancy Act, 1949 was a serious impediment in the way of the plaintiff 's eviction in any suit by Land and Bricks.
So, Land and Bricks attempted to get possession of the land by obtaining an order of demolition of structures by proceedings under the Calcutta Municipality Act.
When these failed and it was apprehended that a suit for ejectment by Land and Bricks might not succeed against the plaintiff that this device of having a suit by Raghuvanshi against Land and Bricks was decided upon by agreement between Raghuvanshi and Land and Bricks.
By arrangement between the two, Land and Bricks did not contest the suit and to avoid any risk of any defence being raised by the plaintiff he was not impleaded in the suit at all.
All the circumstances taken together justify, it was urged by the appellant, the conclusion that the defendant No. 2 colluded with defendant No. 1 to procure the exports decree for the purpose of executing that decree against the plaintiff.
One of the simplest definitions of collusion was given by Mr. Justice Bucknill in Scott vs Scott(1).
"Collusion may be defined", said the learned Judge, "as an improper act done or an improper refraining from doing an act, for a dishonest purpose".
Substantially the same idea is expressed in the definition given by Whatron 's Law Lexicon, 14th Edition, p. 212.
viz., "Collusion in judicial proceedings is a secret arrangement between two persons that the one should institute a suit against the other in order to obtain the decision (1) [1913] Law Rerports (Probate Division) 52.
764 of a judicial tribunal for some sinister purpose".
This definition of collusion was approved by the Court in Nagubai Ammal & ors., vs B. Shamma Rao and ors.(1).
Thus the mere fact that the defendant agrees with the plaintiff that if a suit is brought he would not defend it, would not necessarily prove collusion.
It is only if this agreement is done improperly in the sense that It dishonest purpose is intended to be achieved that they can be said to have colluded.
There is little doubt that in the present case Land and Bricks agreed with Raghuvanshi that the suit for ejectment would not be contested.
When the suit was instituted Land and Bricks did not contest and the ex parte decree was passed.
Raghuvanshi did not implead this appellant in that suit.
Can any of these acts, viz., Land and Bricks agreeing with Raghuvanshi that it would not contest the suit, the actual refraining by Land and Bricks from contesting the suit or the act of Raghuvanshi in not impleading the appellant, be an improper act or improper refraining from an act? We do not see how any of these things can be said +to be improper.
Taking the last action first, viz., Raghuvanshi 's omission to implead the appellant, it is quite clear that the law does not require that the sub lessee need be made a party.
It has been rightly pointed out by the High Court that in all cases possession of the laid on the basis of a valid notice to quit served on the lessee and does not implead the sub lessee as a party to the suit, the object, of the landlord is to eject the sub lessee from the land in execution of the decree and such an object is quite legitimate.
The decree in such a suit would bind the sub lessee.
This may act harshly on the sub lessee; but this is a position well understood by him when he took the subleases The law allows this and so the omission cannot be said to be an improper act.
Nor is it possible, in our opinion, to say that the omission of Land and Bricks to contest the ejectment suit was an improper act.
It has not been suggested that Land and Bricks had a good defence against the claim for ejectment but did not take it for the mere purpose of helping Raghu vanshi to get possession of the land.
Even if it had a good defence, we do not think it was bound to take it.
It may be that if Land and Bricks had a defence and the defence was such which if brought to the notice of the court would have stood in the way of any decree being passed in favour of Raghuvanshi there would be reason to say that the omission to implead the sub lessee was actuated by a dishonest pur pose and consequently was improper.
It is not necessary for (1) ; 765 us however to consider the matter further as neither in the courts below nor before us was any suggestion made on behalf of the appellant sub lessee that Land and Bricks had even a plausible defence against Raghuvanshi 's claim for ejectment.
We have already mentioned the fact that one of the circumstances which the plaintiff claimed showed collusion was that the Calcutta Thika Tenancy Act stood in the way of the plaintiff 's eviction of Land and Bricks.
It is unneces sary for us to decide whether or not the appellant was a Thika tenant within the meaning of the Calcutta Thika Tenancy Act, 1949.
If he was, that Act would undoubtedly have protected him against eviction by Land and Bricks.
That Act could however have no operation in a suit brought by Raghuvanshi against Land and Bricks.
It has been held by the High Court of Calcutta that the Thika Tenancy Act was designed to protect the Thika tenant from eviction by his landlord only and not against eviction from any source.
Shamsuddin Ahmed vs Dinanath Mullick & ors.
, Appeal from Original Decree No. 123 of 1957, decided on August 13, 1959).
The correctness of this view has not been challenged before us.
Nor is it the appellant 's case that Land and Bricks was a Thika tenant of Raghuvanshi.
Obviously, this could not be suggested, because Land and Bricks never erected any structure at all.
(See the definition of a Thika tenant in section 2, cl. 5 of the Calcutta Thika Tenancy Act, 1949).
On the materials on the record we are satisfied that there was no defence that Land and Bricks could have raised for resisting Raghuvanshi 's claim for ejectment.
The crux of the matter is: Was this attempt by Raghuvanshi to get possession of the land a dishonest or sinister purpose? We are asked by Mr. Desai to spell dishonesty out 'of the fact that the directors of Raghuvanshi and Land and Bricks were common and so the persons who were interested in Land.
and Bricks were also interested in seeing that Raghu vanshi had not to suffer for forfeiture of his lease for failure to comply with the covenant to construct a building by 1960.
All this may be taken to be true.
But, we are unable to see how this would make Raghuvanshi 's attempt to get possession of the land dishonest or sinister.
It is not as if Raghuvanshi did not actually want to get possession of the land but wanted to help Land and Bricks to get possession.
It has also to be remembered that the identity of the directors and the identity of the main shareholders do not in any way affect the position that in law and in fact Raghuvanshi and Land and Bricks were distinct and separate entities.
It is not even remotely suggested that Raghuvanshi and Land and Bricks were really one and the same person with two names.
766 If that had been so, there might have been good reason for thinking that it was in an attempt to surmount the obstacle represented by the Calcutta Thika Tenancy Act, 1949, that this mode of Raghuvanshi suing Land and Bricks for ejectment was resorted to.
Indeed, if Raghuvanshi and Land and Bricks were one and the same person possession of Land and Bricks would be possession of Raghuvanshi and a suit by Raghuvanshi to eject Land and Bricks would be meaningless.
But, that is not the appellant 's case.
It appears from the High Court 's judgment that the plaintiff 's counsel made it plain before the court that it was not his client 's case that the plain tiff 's real lessor was Raghuvanshi Private Ltd., and not Land and Bricks Ltd. In the present appeal before us also Mr. Desai argued on the basis that Land and Bricks and Raghuvanshi were distinct entities and that the lease of Land and Bricks under Raghuvanshi was a real subsisting lease at the time of Suit No. 3283 of 1955.
In our judgment, the appellate Bench of the High Court has rightly come to the conclusion that the plaintiff has failed to establish that the decree in Suit No. 3283 of 1955 was procured collusively.
The suit was therefore rightly dis missed.
The appeal is accordingly dismissed with costs.
Appeal dismissed.

summary/full:
Respondent No. 2 is the lessee of Respondent No. 1 and the appellant is the sub lessee.
Both the respondents Nos. 1 and 2 had the same directors.
Respondent No. 1 brought a suit against respondent No. 2 for eviction in which the appellant was not impleaded as a party.
By agreement between the present respondent Nos. 1 and 2 that suit was not defended and ex parte decree was obtained in favour of respondent No. 1.
By virtue of this decree the appellant as a sub lessee of respondent No. 2 became a tresspasser and had no right to remain on the land.
To avoid this situation the appellant filed a suit to set aside the decree on the ground that it was obtained by collusion.
The Trial Judge accepted his contention and gave a direction that the appellant still remained a tenant and directing the defendants in that suit from taking any steps in execution of the ex parte decree.
On appeal the trial Court 's decree was set aside on the ground that the present appellant had failed to prove that the ex parte decree was obtained collusively.
Before this Court the same contentions as in the courts below were raised.
Held: (i) The mere fact that the defendant agreed with the plaintiff that if a suit is brought he would not defend it would not necessarily prove collusion.
It is only if this agreement is done improperly in the sense that a dishonest purpose was intended to be achieved that they can be said to have colluded.
Scott vs Scott.
1913 Law Reports (Probate Division) 52 and Nagubai Ammal & Ors.
vs B. Shamma Rao, ; , referred to.
(ii) The law allows a landlord to institute a suit against a lessee for the possession of the land on the basis of a valid notification without impleading the sub lessee and the decree in such suit would bind the sub lessee and hence the suit instituted by respondent No. 1 in the present case cannot be said to have constituted an improper act.
(iii) The omission of the respondent No. 2 to defend the earlier suit was not also an improper act because even if it had a good defence it was not bound to take it.
(iv) Even if the appellant was a Thika tenant within the meaning of the Calcutta Thika Tenants Act, 1949, it would have protected him against eviction by respondent No. 2 but It would not have given protection against the eviction by respondent No. 1 because the Act was designed to protect the Thika Tenant from eviction by the landlord only and not against eviction from any other source.
761 Shamsuddin Ahmad vs Dinanath Mullick, Appeal from original decree No. 123 of 1957, decided on 13 8 59.
(v) The respondents Nos. 1 and 2 are two distinct legal entitles and therefore simply because both had the same directors it cannot be said that the purpose of the suit was dishonest or sinister.
(vi) The appellate Bench of the High Court has correctly decided that the present appellant has failed to establish that the impugned decree was procured collusively.


judgement:
iminal Appeal No. 83 of 1961.
Appeal from the judgment and order dated June 20, 1960, of the Calcutta High Court in Criminal Revision No. 1525 of 1959.
H. R. Khanna, K. L. Hathi and R. N. Sachthey, for the appellant.
G. section Pathak, B. Datta, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondent.
April 14, 1964.
The judgment of the Court was delivered by RAGHUBAR DAYAL, J.
This appeal, on certificate granted by the Calcutta High Court, is directed against an order of the High Court dated June 20, 1960 reversing the Order of the Chief Presidency Magistrate directing return of certain documents to the respondent, and has arisen in the following circumstances: On April 6, 1959, the Chief Presidency Magistrate, Calcutta, ordered the issue of search warrants on the application of the Enforcement Officer, Enforcement Directorate, Ministry of Finance, under sub section
(3) of section 19 of the Foreign Ex change Regulation Act, 1947 (Act VII of 1947).
The search warrant was issued on May 6, 1959.
It required the produc tion of documents seized, before the Magistrate.
In execution of the search warrant, a number of documents were seized from the possession of the respondent on May 14, 1959.
The 726 Enforcement Officer reported that day that a certain room could not be searched and therefore further action on the search warrant was to be taken.
He also noted in his appli cation, for the Chief Presidency Magistrate 's information: "that the seized documents as per enclosed Seizure Memo have been kept with us for scrutiny and those will be retained till the completion of the enquiry or the adjudication proceedings as the case may be and a report will be submitted to Your Honour thereafter." on May 28.
1959, the Enforcement Officer applied to the Chief Presidency Magistrate for permission for the retention of the seized documents for a period of two months for the submission of further report in the matter.
The Chief Presidency Magistrate granted the necessary permission.
Similar permission was again granted on applications, by the Chief Presidency Magistrate, on July 28 and September 28, 1959.
On October 5, 1959, the respondent applied to the Chief Presidency Magistrate for an order of return of the said documents as the statutory period of 4 months during which the Director of Enforcement could keep the documents had expired, and no proceedings had been commenced against him under section 23 of the Act.
The claim for the return of the documents was based on the provisions of section 19 A.
On Octo ber 20, 1959 the Chief Presidency Magistrate ordered the return of the seized files to the respondent.
He, however, modified this order the same day, when his attention was drawn to his earlier order dated September 28, 1959 permit ting the Enforcement Officer to retain the documents till November 28, 1959.
He directed the matter to be heard 'on October 26, 1959 and on that day, in view of the Investigat ing Officer being on leave, adjourned the matter for decision to November 10, 1959.
in his application presented on November 10, 1959 the Enforcement Officer stated that the Director of Enforcement had started adjudication proceedings against the respondent for alleged violation of section 4(1) of the Act and had issued notice to him to show cause and that in connection with the adjudication proceedings seized files items Nos. 2 and 7 of the Seizure Memo would be required and that he had no objection to the return of the remaining seized files though they might have some distant bearings on those proceedings.
The Chief Presidency Magistrate ordered, on November 10, 1959, the return of all the documents except those mentioned at items 2 and 7 of the search list.
The respondent went up in revision against this order for the continued retention 727 of the two documents, and the High Court allowed the revision and ordered the return of these documents also to the s respondent.
It is against this order that this appeal has been filed.
We may first refer to the relevant provisions of sections 19 and 19 A of the Act, and later to certain provisions of the Code of Criminal Procedure, hereinafter called the Code, to appreciate the contention for the parties. "19(1).
The Central Government may, at any time by notification in the Official Gazette, direct owners, subject to such exceptions, if any, as nay be specified in the notification, of such foreign exchange or foreign securities as may be so specified, to make a return thereof to the Reserve Batik within such period, and giving such particulars, as may be so specified.
Government or the Reserve Bank considers it necessary or expedient to obtain and examine any information, book or other document in the possession of any person or which in the opinion of the Central Government or the Reserve Bank it is possible for such person to 'obtain and furnish, the Central Government or, as the case may be, the Reserve Bank may, by order in writing, require any such person (whose name shall be specified in the order) to furnish, or to obtain and furnish, to the Central Government or the Reserve Bank or any person specified in the 'order with such information, book or other document.
(3) If on a representation in writing, made by a person authorised in this behalf by the Central Government or the Reserve Bank, a District Magistrate, Sub Divisional Magistrate, Presidency Magistrate or Magistrate of the first class, has reason to believe that a contravention of any of the provisions of this Act has been, or is being or is about to be, committed in any place, (2) of this section has been or might be addressed, will not or would not produce the information, book or other document, or where such information, book or other document is not known to the Magistrate to be in the possession of any person, or where the Magistrate considers that the purposes of any investigation or proceeding under this Act will be served by a general search or inspection, 728 he may issue a search warrant and the person to whom such warrant is directed may search or inspect in accordance therewith and seize any book or other document, and the provisions of the Code of Criminal Procedure, 1898 relating to searches under that Code shall, so far as the same are applicable, apply to searches under this sub section: Provided that such warrant shall not be issued to any police officer below the rank of sub inspector.
Explanation.
In this subsection, 'place ' includes a house, building, tent, vehicle, vessel or aircraft.
Where in pursuance of an order made tinder sub section (2) of section 19 or of a search warrant issued under sub section (3) of the said section, any book or other document is furnished or seized, and the Director of Enforcement has reasons to believe that the said document would be evidence of the contravention of any of the provisions of this Act or of any rule, direction or order made thereunder, and that it would be necessary to retain the document in his custody, he may so retain the said document for a period not exceeding four months or if.
before the expiry of the said period of four months, any pro ceedings under section 23: (a) have been commenced before him, until the disposal of those proceedings, including, the proceedings before the Appellate Board, if any, or (b) have been commenced before a Court, until the document has been filed in that Court.
" Chapter VII of the Code provides for processes to compel the production of documents etc.
Section 94 empowers the Court to issue a summons to a person in possession of the document or whose production is considered necessary or desirable for the purpose of any investigation, inquiry, trial or other proceeding under the Code to produce the same before it.
In certain circumstances mentioned in section 96 it may issue a search warrant, for conducting the search for such documents or articles as are mentioned in section 94.
The combined effect of the two sections is that the articles seized in execution of the search warrant have to be produced before the Magistrate and the Magistrate thereafter passes suitable orders about the custody or return of those documents.
Form 8, Schedule V, of the Code gives the form of the search warrant and contains a direction that the articles seized be produced forthwith before the Court.
Sections 98 and 99 A deal with search 729 warrants in special circumstances and sections 101 to 103 come under the general provisions relating to searches.
The appellant 's main contentions are: 1.The provisions of section 19 A limit the period for retaining the documents seized in execution of a search warrant issued under section 19 to 4 months by the Director of Enforcement but does not limit the power of the Court issuing the search warrant to pass any orders for the retention of the seized documents or with respect to the disposal 'of those documents.
In the absence of any prescribed procedure for the issue of a search warrant under section 19, the provisions of sections 96, 98 and Form 8 of Schedule V of the Code would be applicable to the search warrants issued under section 19.
3.The Court has inherent power to pass proper orders with respect to the retention of the documents seized for the purposes of investigation and proceedings following it.
1.Section 19 and, 19 A are special provisions which provide for special procedure for investigation of the several offences created by the statute and were enacted in order to remove certain difficulties in investigation which led to the keeping of documents of citizens unduly long and thus causing them inconvenience and harassment, and to relieve the Magistrate of his repeatedly dealing with police reports for permission to retain the documents and that therefore when section 19 A fixes the maximum duration for the retention of the documents by the Director of Enforcement at 4 months and thus prohibits further detention except in certain circum stances by the officer concerned, the Magistrate cannot allow the Director of Enforcement to keep the documents beyond four months.
2.There is no provision in the Act empowering the Court to extend the period for the detention of documents and any such power in the Magistrate will defeat the very object of the Act.
The provisions of the Code relating to searches under the Code apply so far as the same be applicable to searches under sub section
(3) of section 19 of the Act and therefore the provision of the Code giving jurisdiction to the Magistrate over the property seized in execution of a search warrant issued by him will not fully apply to property seized in execution of the search warrant issued under sub section
(3) of section 19.
The first question to determine is whether Magistrate issuing the search warrant has control over the disposal of the articles seized in execution of the warrant.
The provisions of the Code relating to searches apply to search warrants issued under sub section
(3) of section 19 but only in so far as they be 730 applicable.
The provisions dealing with the circumstances in which, and the authorities by which, search warrants can be issued cannot apply, in view of the specific provision for the issue of a search warrant under the Act in sub section
(3) of section 19.
Sections 96, 98 and Form 8 of Schedule V, do not therefore operate in connection with searches under sub section 19.
It is therefore the provisions which deal with what is done after the issue of a search warrant which have been made applicable to searches under the Act and such provisions therefore would be the provisions relating to the mode of conducting searches.
The object of the aforesaid provision in sub section
(3) of section 19 is to provide how the searches are to be conducted as it deals with the issue of search warrant in sub section
(3) of s.19.
It is only with respect to the intervening stage, that is the stage of actual search that no specific Provision is made in the Act.
We are therefore of opinion that, the provisions under sub section
(3) of section 19 are the provisions relating to the conduct of searches and that these provisions are sections 101, 02 and 103 of the Code.
What is to be done with the articles seized does not strictly come within the expression 'searches '.
It is dealt with in section 19 A.
It is therefore not correct for the appellant to say that the Magistrate can exercise his powers under the Code in connection with property seized tinder sub section
(3) of section 19 of the Act.
It follows that any further reference to the Magistrate, as made by the Enforcement Officer in this case, for permission to retain the documents seized was not necessary.
The Enforcement Officer has a right under section 19 A to retain the articles seized in accordance with its provision.
What course is to be adopted by the person aggrieved when the Enforcement Officer contravenes the provisions of section 19 A, is a different matter.
The fact that such a contingency may arise does not mean that it is the Magistrate issuing the search warrant who is to be approached and who is competent to deal with the grievance.
Any way, such a contingency is insufficient to warrant the finding that the Magistrate issuing the warrant has control and possession over the documents seized and that therefore he can pass any orders with respect to their disposal.
He has no such power, in any case, till the period mentioned in section 19 A has expired.
There is no provision in the Act which gives him any power to deal with the situation arising after the expiry of that period.
One should, however, presume that the Director 'of Enforcement will not by his order act against the provisions of section 19.
Section 19 A deals with the custody of documents which come into the possession of the Director 'of Enforcement in two ways.
Documents are furnished to the Director of En forcement in pursuance of an order made under sub section
(2) of section 19 under the directions of the Central Government or the Reserve Bank.
No Magistrate as such has jurisdiction over the disposal of such documents which come into the possession of the Director of Enforcement in pursuance 'of orders under sub section
(2) of section 19.
The Director of Enforcement also gets possession of documents in execution of search warrants under sub section
(3) of section 19.
The provisions with respect to his retaining in his posses. ion the documents which come in his possession are the same, whether they conic so one way or the other.
It follows that, in the latter case too, the Magistrate issuing the search warrant has nothing to do with the retention or disposal of the documents seized in execution of the search warrant.
It was also urged for the apelllant that the provisions of section 5(2) of the Code apply to the present case in matters which are not provided by the Act.
This contention too has no basis.
Section 5 provides that all offences under any law other than the Indian Penal Code shall be investigated, in quired into, tried and otherwise dealt with according to the provisions contained in the Code of Criminal Procedure, but subject to any enactment for the time being in force regu lating the manner or place of investigating, inquiring into, trvina or otherwise dealing with such offences.
The Act is a special Act and it provides under section 19 A for the necessary investigation into the alleged suspected commission of an offence under the Act.
by the Director of Enforcement.
The provisions of the Code of Criminal Procedure therefore will not apply to such investigation by him, assuming that the expression investigation ' includes the retaining of the documents for the purposes of the investigation.
Reliance has also been placed for the appellant on the case reported as Moliammad Serajuddin vs R. C. Mishra(1) in support of the contention that the Magistrate retains con trol over the disposal of the articles seized in connection with the search warrant issued by him.
In that case the Court was considering the question of the disposal of the documents seized in execution of a search warrant under section 172 of the Sea Customs Act.
The provisions of that section are different from those of sub section
(3) of section 19 of the Act.
A search warrant issued by a Magistrate under section 172 of the Sea Customs Act has the same effect as a search warrant issued under the Code of Criminal Procedure and thus assumes the character of a search warrant issued under the Code of Criminal Procedure.
The same is not the case with respect to the search warrant issued under sub section
(3) of section 19.
further, there is no section corresponding to section 19 A of the Act in the Sea Customs Act.
This case, therefore, is not of help to the appellant.
732 In this view of the matter, the order of the Magistrate with respect to the disposal of the documents was beyond his jurisdiction and the High Court was right in setting aside his order directing the retaining of certain documents by the Director of Enforcement.
The question however remains whether the order of the High Court directing the return of the two documents to the respondent is a correct order.
It has been urged for the appellant that there is no pro vision under section 19 A or any other section of the Act that the documents be returned to the party from whose custody they were seized, without an order from the Magistrate and that therefore no order for their return can be made by any authority.
No such express provision is necessary.
Documents seized have to be returned if the law provides that they are not to be retained after a certain period of time.
Such a direction under the statute is sufficient Justification and authority for the person in possession of the documents to return them to the person from whose possession they had been seized.
Provisions are necessary for retaining documents of others and not for returning them to the persons entitled.
Section 19 A authorises the Director of Enforcement to retain a document for a period of not exceeding 4 months, or, if before the expiry of the said period of 4 months, any proceedings under section 23(1) have been commenced before him, until the disposal of those proceedings, including the proceedings before the Appellate Board, if any, or (ii) if such proceedings have been commenced before a Court, until the document has been filed in that Court.
This means that the Director of Enforcement can justifiably retain with himself the document seized till the final disposal of the proceedings taken under section 23 of the Act if the proceedings had commenced before the period of 4 months, during which he could keep the documents.
In the present case such proceedings had not been commenced within the period of 4 months of the Director of Enforcement getting possession of the documents.
He could not have therefore, on his own, retained those documents after the expiry of the fourth month.
He ,could have taken legal steps for the retention of those documents.
He did not keep those documents with himself on his own.
He had been obtaining the permission of the Chief Presidency Magistrate for retaining the documents from the time of their seizure under the impression that the Magistrate could legally order the retention of the documents, presumably as the warrant had directed the production of documents seized, before him.
Proceedings under section 23 did start prior to the order for the return of the documents.
Considering the real intention 733 of section 19 A to be that the Director of Enforcement can retain the documents seized till the final disposal of proceedings under section 23 of the Act.
the Magistrate 's order, even if he had not the authority to pass orders for the retention of the documents by the Director of Enforcement, till the final disposal of the proceedings under section 23, was an order giving effect to the spirit behind the provisions of section 19 A.
The order of the High Court directing the return of the documents to the respondent therefore appears to us to be unjustified in the special circumstances of the case.
It is not necessary for us to consider in this case what legal steps the Director of Enforcement could take for re taining possession of the documents seized on the expiry of the 4 months ' period in case his investigation in connection with those documents is not complete within that period.
One of the methods possibly can be his applying to the Cen tral Government to make an order under sub section
(2) 'of section 19 directing the owner of those documents to furnish them to the Director of Enforcement.
Such an order will be legal justification for the Director of Enforcement to retain in possession any of the documents which nationally be would be deemed to have returned to the owner on the expiry.
of the four months and to have got fresh possession over those documents not by virtue of a search warrant but by virtue ,of an order of the Central Government under sub section
(2) of section 19.
We therefore hold that the Magistrate has no jurisdiction over the articles seized in execution of the search warrant issued under section 19(3) of the Act and that he cannot permit the retention of such documents by the Director of Enforce ment after the expiry of the period he is entitled to keep them in accordance with the provisions of section 19 A.
In the special circumstances of the case, we allow the appeal, set aside the order of the High Court and order that the documents mentioned at items Nos.
2 and , 7 of the Seizure Memo can be retained by the Director of Enforcement till the final conclusion of the proceedings commenced under section 23 of the Act.
Appeal allowed.

summary/full:
On May 14,1959 ,a number of documents were seized from the possession of the respondent by the Enforcement Officer in execution of a search warrant.
The search warrant was issued by the Chief Presidency Magistrate under sub section
(3) of section 19 of the Foreign Exchange Regulation Act, 1947.
The Director of Enforcement with the permission of the Chief Presidency Magistrate retained those seized documents for a period exceeding four months.
On October 5, 1959, the respondent filed an application before the Chief Presidency Magistrate in which he claimed the return of the seized documents on the basis, of the provision of section 19 A of the Foreign Exchange Regulation Act.
On this application the Chief Presidency Magistrate directed the return of all the documents to the respondent except those mentioned at items 2 and 7 of the search list.
The respondent went up in revision against this order for the continued retention of the two documents, and the High Court allowed the revision and ordered the return of these documents also to the respondent.
Against this order appeal was filed in this Court.
Held:(i) The Magistrate has no jurisdiction over the articles seized in execution of the search warrant issued under section 19(3) of the Foreign Exchange Regulation Act and that he cannot permit the retention of such documents by the Director of Enforcement after the expiry of the period he is entitled to keep them in accordance with the provisions of section 19 A of the Act.
The Enforcement Officer has a right under section 19 A to retain the articles seized for a period not exceeding four months and it is not necessary for him to obtain permission from the Magistrate for retaining the seized documents within the statutory period.
Therefore, the Magistrate issuing the search warrant has nothing to do with the retention or disposal of the documents seized in execution of the search warrant either during the statutory period of four months or after the expiry of that period.
Mohammad Serajuddin vs R. C. Mishra, [1962] 1 Supp.
S.C.R. 545, distinguished.
(ii) In view of the specific provision for the issue of a search warrant under sub section
(3) of section 19 of the Foreign Exchange Regulation Act, the provisions of sections 96, 98 and Form No. 8 of Schedule V of the Code would not be applicable to the search warrants issued under sub section
(3) of section 19.
The provisions of SS. 101, 102, 103 of the Code will apply to searches under sub section
(3) of section 19 of the Act as there is no specific provision in the Act with respect to the conduct of the search.
725 (iii) The provisions of section 5(2) of the Code will not apply to an investigation conducted under the Act because the Act is a special Act and it provides under s.19 A for the necessary investigation into the alleged suspected commission of an offence" under the Act, by the Director of Enforcement.
(iv) No express provision is necessary in the statute for the return of documents after the expiry of the statutory period.
Provisions are necessary for retaining documents of others and not for returning them to persons entitled.
Therefore the documents seized have to be returned to the person from whose possession they had been seized after the expiry of the statutory period.
(v) Under s.19 A of the Act the Director of Enforcement can justifiably retain with himself the documents seized till the final disposal of the proceedings taken under s.23 of the Act if the proceedings had commenced before the period of four months, during which he could keep the documents.
In the present case he could not have retained those documents beyond four months because no such proceeding had been commenced within 4 months.
In the present case proceedings under s.23 did start prior to the order for the return of documents.
On the facts of this case it was held that the direction of the Magistrate in regard to the retention of documents was an order giving effect to the spirit behind the provision of section 19 A.