judgement:
tion (Civil) Nos.
5187 89 of 1985 etc.
(Under Article 32 of the Constitution of India) PG NO 592 P.S. Khera and Mrs. Sushrna Suri for the Petitioners.
Kuldip Singh, Additional Solicitor General; C.V.S. Rao, Ms. A. Subhashini, Girish Chandra and N.S.D. Behl for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The question involved in these petitions is whether the workmen who were working in canteens established under section 46 of the (hereinafter referred to as 'the Act ') in Ordnance Equipment Factory, Kanpur, Central Ordnance Depot, Kanpur and Air Force Station, Kanpur are entitled to claim the period of service in such canteens prior to 22.
10. 1980 as part of the qualifying service for claiming pension.
The three industrial establishments, referred to above, namely; Ordnance Equipment Factory, Central Ordnance Depot and Air Force Station, Kanpur are defence establishment forming part of the Defence Department of the Union of lndia.
By the Order No. 18(l)80/D(JCM) dated the 25th July, 1981 sanction was accorded by the President of India to treat all employees of canteens established in Defence Industrial Installations under section 46 of the Act as Government employees with immediate effect.
By an amendment, the said Government Order was given effect from 22.
10. 1980.
The Government Order further provided that it would be applicable to all employees of the statutory canteens irrespective of the type and management of the canteens and till the Government decided otherwise the employees of the said canteens would continue to be governed by the terms and conditions of service laid down in their appointment letters and contracts of employment already subsisting.
It was further stated that they would be continued to be paid such employments to which they were entitled then.
When some of the employees retired after 22.10.1980 they applied for payment of pension.
The Defence Department declined to treat the period of service rendered by them prior to 22.
10. 1980 in such canteens as part of qualifying ~service for purposes of pension on the ground that it was only with effect from 22.10.1980 from which date they had become Government employees their qualifying service could be counted.
Aggrieved by the rejection of the claim of the workers in those canteens, the petitioner s herein, have filed these petitions in this Court for declaration that th service rendered by the employees of such canteens prior to 22.10.1980 should be treated as qualifying service for purposes of pension.
On behalf of the Union of India counter affidavits were filed resisting the claim of the PG NO 593 petitioners.
As the information furnished in the counter affidavits was inadequate for purposes of disposing of the cases, the Court by its order dated 22.3.1988 directed the Union of India to file a fuller affidavit giving information about the following matters, namely; the authority which had the power to appoint workers in such canteens prior to 22.
1980, the authority which was paying salary to the workers in the said canteens prior to 22.
l9S0, the authority which~ was controlling such canteens prior to 22.
1980, the particulars of the persons who were consumers of the service rendered by the said canteens prior to 22.
10.1980 and other relevant matters in order tn decide the status of the workers in the said canteens prior to 22.10.1980.
Thereupon a further affidavit has been filed by Shri N. Sivasubramanian, Joint Secretary (Ordnance Factories) to the Government of India, Ministry of Defence, New Delhi.
In the said affidavit it is stated that (a) prior to being declared as Government servants w.e.f. 22. 10. 1980 the canteens workers in Ordnance Factories were under the canteen managing committees constituted as per provisions of section 46 of the Act, (b) the supervision and control of such canteens were exercised by the Canteen Managing Committee consisting equal number of elected representatives of the factory workers and nominees of the management and the Canteen Managing Committee was the appointing authority of the canteen workers; and (c) that the Canteen Managing Committee was paying the salary to the workers and also controlling the canteens.
It was further admitted that by the letter dated 24.5.
1965 of the Ministry of Defence it had been ordered thus: "The question of subsidising the canteens maintained in Defence Industrial Installations with reference to provisions of Section 46 of the has been under the consideration of Government for some time.
After a detailed examination of the matter it has been decided that in order to reduce the cost of meals and snacks served by the canteen to the personal of the Defence Industrial Installation registered as factories and subject to the conditions indicated in the succeeding paras, the cost of supervisory and clerical staff and cooks.
bearers.
helpers, vendors etc.
employed in these canteen should be reimbursed by the Govt.
to the Managing Committee of such canteens The Commandants of the installation will simultaneously ensure that the cost of the meals/snacks provided by these canteens is reduced proportionate to the subsidy received from Govt.
for the cost of the staff .
PG NO 594 In order to ensure that uniform standards for employment of staff and payment of salaries as far as possible and the subsidy paid by the Government is related to total number of personnel served by the canteens the number and grades of supervisory clerical and working staff and the scales of pay that should be allowed to them are given in Appendix `A ' to this office Memorandum for the guidance of the installation Commanders and the Managing Committee.
These scales of staff and salaries are the maximum outer limits within which the local Management may engage the staff and workers actually required.
Where staff can be engaged on more economical rates it may be employed on such rates.
The existing supervisory clerical and working personnel may be brought over to those pay scales to the extent necessary by taking into account their existing emoluments and thereafter annual increments may be allowed after one year from the date of switch over to these scales.
Other concessions or allowances of any kind should be allowed to the staff in addition to these consolidated pay scales.
Other terms and conditions of service may continue to be regulated by the Managing Committee as here to fore . .Reimbursement of the cost of staff will be limited to the scales indicated in the appendix . .
These orders are not applicable to the canteens which are at present run by contractors.
Such canteens can, how ever, be switched over to this scheme after the terms of the contract with the contractor have expired or by terminating the contract, in accordance with the existing clauses thereof if any.
This scheme will also be applicable to new canteens organised by cooperative societies of the staff of Managing Committee appointed under the guidance of the administration in pursuance of section 46 of the in other Defence Industrial Installations which are registered as ,factories,, and where canteens have not so far been opened".
It is seen from the above letter of the Ministry of Defence that prior to 24.5.1965 there were three kinds of canteens, namely; (i) canteens run by contractors (ii) canteens run by co operative societies of the staff, and (iii) canteens which had been established under section 46 PG NO 595 of the Act.
We are not concerned with the first two categories of the canteens but only with the last category of canteens in this case.
The above Ministry of Defence letter provides for subsidising the canteens maintained in Defence Industrial Installations under section 45 of the Act.
It also gives directions regarding pay scales, conditions of service etc.
The consumers of the services rendered by such canteens were the `factory employees for whose benefit they had been established.
It is also not disputed that the building or buildings in which such canteens had been established formed part of the industrial establishment concerned.
The Act is applicable both to the factories run by Government and the factories run by other private companies, organisations, persons etc.
It was enacted for the purpose of improving the conditions of the workers in the factories.
Section 46 of the Act reads thus: "46.
Canteens. (1) The State Government may make rules requiring that in any specified factory wherein more than two hundred and fifty workers are ordinarily employed, a canteen or canteens shall be provided and maintained by the occupier for the use of the workers.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for (a) the date by which such canteen shall be provided ; (b) the standards in respect of construction, accommodation, furniture and other equipment of the canteen; (c) the foodstuffs to be served therein and the charges which may be made thereof; (d) the constitution of a managing committee for the canteen and representation of the workers in the management of the canteen ; (dd) the items of expenditure in the running of the canteen which are not to be taken into account in fixing the cost of foodstuff and which shall be borne by the employer; (e) the delegation to the Chief Inspector, subject to such conditions as may be prescribed, of the power to make rules under clause (c).
" PG NO 596 Rule 68 of the U.P. Factories Rules, 1950 (hereinafter referred to as `the Rules ') framed under sections 46 and 112 of the Act gives particulars regarding the type of building that should be made available for running a canteen and the manner in which accounts should be maintained in such canteens.
It further provides that a canteen managing committee should be established under clause (20) of rule 68 of the Rules.
The Managing Committee shall consist of an equal number of persons nominated by the occupier and elected by workers.
The number of elected workers shall be in the proportion of 1 for every 11000 workers employed in the factory, provided that in no case shall there be more than 5 or less than 2 workers on the Committee.
The object of providing for the establishment of Canteen Managing Committee is to see that the employees of the factories have some amount of say in the management of the affairs of the canteens but the obligation to establish a canteen under section 46 of the Act is imposed on the occupier.
The expression `occupier ' of a factory is defined in section 2(n) of the Act as the person who has ultimate control over the affairs of the factory, provided that (i) in the case of a firm or other association of individuals, any one of the individual partners or members thereof shall be deemed to be the occupier; (ii) in the case of a company, any one of the directors shall be deemed to be the occupier; and (iii) in the case of a factory owned or controlled by the Central Government or and State Government, or any local authority, the person or persons appointed to manage the affairs of the factory by the Central Government, the State Government or the local authority, as the case may be, shall be deemed to be the occupier.
Under clause (iii) of section 2(n) of the Act, in the case of a factory owned or controlled by the Central Government, the person or persons appointed to manage the affairs of the factory by the Central Government shall be deemed to be the occupier.
The person so appointed to manage the affairs of the factory of that Central Government is under an obligation to comply with section 36 of the Act by establishing a canteen for the benefit of workers.
the Canteen Managing Committee, as stated above, has to be established under rule 66 of the Rules to manage the affairs of the canteen.
The functions of the Canteen Management Committee are merely advisory.
It is appointed by the Manager appointed section 7 of the Act and the Manager is required to consult the Canteen Managing Committee from time to time as to the quality and quantity of foodstuff served in the canteen, that arrangement of the menus, times of meals in the canteen etc.
The food.
drink and other items served in the canteen are required to be sold on `no profit ' basis and the prices charged are subject to the approval of the Managing Committee.
The accounts pertaining to a canteen in a Government factory may be audited by its departmental Accounts Officers.
PG NO 597 The building for the canteen has to be provided by the occupier.
Under sub rule (13) of rule 68 of the rules there shall be provided and maintained sufficient utensils, crockery, cutlery, furniture and any other equipment necessary for the efficient running of the canteen.
Suitable clean clothes for the employees serving in the canteen shall also be provided and maintained.
Thus the basic requirements of the canteen, such as buildings, utensils, crockery, cultery, furniture etc. should be supplied by the occupier.
Under the Ministry of Defence letter dated 24.5.1965 the prices of food, drink and articles supplies for the canteens are to be subsidised.
A canteen is an integral part of the Defence establishment belonging to the Union of India.
There cannot be a canteen without sufficient number of workers working in the canteen.
The have to be appointed by the occupier.
Otherwise he would not be full complying with section 46 of the Act.
The Managing Committee cannot be the employer of those workmen in the true sense of the term.
The Managing Committee constituted under section 46 of the Act which is not an incorporated body and whose financial position is uncertain cannot be considered to be the employer who h as to bear the legal responsibilities under the several labour laws in face in India.
We may, however, add that in the case of a canteen run b a contractor or a co operative society or some other body the position may be different.
But even then there has to be a Managing Committee if such a canteen is treated as a canteen established for purposes of satisfying the requirements of section 46 of the Act.
Even in this case the contractor or the co operative society or some other body will be the employer but no the Managing Committee.
In this situation it is difficult to hold that the employees in canteens established under section 46 off the Act would not be employees of the occupier, even though for purposes of management a Canteen Managing Committee, whose functions are advisory as pointed out above, has to be constituted under the Rules.
It is also not shown that on the workers in the canteens becoming the Government employees on 22.10.
1980 they were paid by the previous management, named, the Canteen Managing Committees consituted under rule 68 of the Rules any compensation in lieu of the services rendered by them prior to 22.10.1980.
We find it, therefor, difficult to hold that the employees working in such canteens were not employees of the factories in which the canteen had been established.
If they are employees of the factories in which the canteen is established.
the service rendered by them in these factories should be counted as part of the qualifying service for pension.
Hence, the plea of the Union Government that the service rendered by the workers in canteens PG NO 598 established under section 46 of the Act on and after 22.10.1980 alone can be included in the qualifying service for pension cannot be accepted.
The period prior to 22.10.1980 also should be counted for purposes of pension.
We, therefore, direct the Union Government to treat the period during which the workers had served in the canteens established under section 46 of the Act in the Defence establishments at Kanpur with which we are concerned in these cases prior to 22.
10. 1980 also as part of the qualifying service for purposes of pension.
We further direct that the pension payable to those employees who have retired from service on or after 22.
1980 shall be recomputed by taking the period of service during which they had worked prior to 22.
1480 in such canteens into consideration.
Such computation shall be made within six months from today.
The arrears of pension payable to those who have retired from service shall be disbursed to them within three months after such computation.
The petitions are accordingly allowed.
No costs.
R.S.S. Petitions allowed.

summary/full:
The President of India, by order dated July 25, 1981 accorded sanction to treat all employees of canteens established ia Defence Industrial Installations under section 46 of the , as Government employees.
The order was given effect from 22.12.1980.
The petitioners were working in the canteens of the three Defence establishments at Kanpur, forming part of the Defence Department of the Union of India.
On their retirement after 22.10.1980 the petitioners claimed that the period of service rendered by them prior to 22.10.1980 canteens be counted towards their qualifying service for the purposes of pension.
Their claim was not accepted.
The respondents ' contention was that prior to 22.10.1980 the canteens in Ordnance factories were supervised and controlled by the Canteen Managing Committee consisting of equal number of elected representatives of the factory workers and nominees of management, and these Committees were the appointing authority of the Canteen workers and paid their salaries.
Allowing the petitions, it was, HELD: (1) It was admitted by the respondents that by the letter dated 24.5.1965 of the Ministry of Defence, provision had been made for subsidising the canteens maintained in Defence Industrial Installations under section 4th of the Act.
The letter also contained directions regarding pay scales, conditions of service, etc.
of the employees.
The cost of supervisory and clerical staff and cooks etc.
was to be reimbursed by the Government and the canteen buildings formed part of the industrial establishment concerned.
[595A B] (2) The expression 'occupier ' of a factory is defined in section 2 (n) of the as the person who has ultimate control over the affairs of the factory.
Under PG NO 590 PG NO 591 cause (iii) of section 2(n), in the case of a factory owned or controlled by the Central Government, the person or persons appointed to manage the affairs of the factory by the Central Government shall be deemed to be the occupier.
[596C,F] (3) A canteen is an integral part of the Defence establishment belonging to the Union of India.
There cannot be a canteen without sufficient number of workers working in the canteen.
They have to be appointed by the occupier.
Otherwise he would not be fully complying with section 46 of the .
The Managing Committee cannot be the employer of those workmen in the true sense of the terms.
The Managing Committee constituted under section 46 of the Act which is not an incorporated body and whose financial position is un certain cannot be considered to be the employer who has to bear the legal responsibilities under the several labour laws in force in India.
[597C D] (4) The basic requirements of the canteen, such as Buildings, utensils, crockery, cutlery, furniture, etc.
are to be supplied by the occupier.
[597B C] (5) In this situation it is difficult to hold that the employees in canteens established under section 46 of the Act would not be employees of the occupier, even though for purposes of management a Canteen ,Managing Committee, whose functions are advisory, has to be constituted under the Rules.
l597F] (6) It is also not shown that the workers in the canteens becoming the Government employees on 22.10.1980.
They were paid by the previous management, namely, the Managing Committee constituted under rule 68 of the U.P. Factories Rules, 1950 any compensation in lieu of services rendered by them prior to 22.10.1980.
[597F G] (7) It is, therefore, difficult to hold that the employees working in such canteens were not employees of the factories in which the canteen had been established.
If they are employees of the factories in which the canteen is established, the service rendered by them in these factories should be counted as part of the qualifying service for pension.
[597G H]


judgement:
Civil Appeal No. 881 of 1974 From the Judgment and order dated 25.7.1973 of the Andhra Pradesh High Court in Writ Petition No . 3950 of 1971.
K. Raj.
Choudhary for the Appellant.
V.C. Mahajan, C.V.S. Rao and R.P. Srivastava for the Respondents.
The Judgment of the Court was delivered by VENKATACHALIAH, J.
This appeal, by Special Leave, by the Andhra Pradesh State Electricity Board a corporation and constituted under The Electricity (Supply) Act, 1948 arises out of the Judgment and order dated, 25.7.1973, of the Andhra Pradesh High Court in Writ Petition No. 3950 of 1971 on its file, rejecting appellant 's challenge to certain proceedings for the recovery of insurance premia respecting the appellant 's undertaking under the Emergency Risks (Factories) Insurance Act 1962 ( 'Act ') culminating in the appellate order, dated, 12.5.1971 of the Central Government under Section 11(3) of the Act affirming, in turn, that dated, 15.10.1969 of the Director of Emergency Risks Insurance Schemes determining the balance of the premia payable at Rs.47,59,109.00.
The scheme under the Act which came into force on 1.1.1963 lapsed with the termination of the emergency on 10.1.1968.
The legislation was to meet the need to provide for expeditious rehabilitation of industrial undertakings in the event of damage in times of war and the Central Government, accordingly, undertook to insure the factories against such war risks and to indemnify the owners in respect of loss and damage caused by enemy action, so that, there might be an expeditious industrial rehabilitation so vital in national interests.
Sub section 3 of the Act envisages the promulgation and effectuation of the Emergency Risks (Factories) Insurance Scheme, mandating a compulsory insurance of factories against war risks and the payment of premia in terms of and in accordance with the scheme.
The Director of the Emergency Risks Insurance Scheme caused a show cause notice, dated 28.11.1968 to be issued to the appellant calling upon it as to why the balance of premia for the 219 relevant periods should not be fixed at Rs.47,59,109.00 as against a much smaller sum indicated by appellant as its liability in that behalf.
The cause shown by the appellant by its representation, dated, 24.1.1969 against the proposed addition not having commended itself to the Director, the latter, by his order dated 15.10.1969 over ruling objections of the appellant, determined that a sum of Rs.47,59,109.00 was due and recoverable from the appellant by way of balance of premia.
Against this determination, appellant carried up, under Section 11(3) of the Act, an appeal before the Central Government.
The Central Government, after affording an opportunity to the appellant of being heard and on a consideration of the merits, dismissed the appeal by its order dated, 12.5.1971.
The legality of the proceedings so culminating in the said appellate order was assailed in the Writ Petition before the High Court.
We have heard Shri K. Rajendra Choudhary, learned counsel for the appellant and Shri V.C. Mahajan, learned senior counsel for the Union of India, respondent in the appeal.
The contentions urged by Shri Choudhary in support of the appeal are substantially on the lines of those raised and urged before the High Court.
They admit of being formulated thus: (a) That the Distribution and Transmission lines cannot be said to fall within the concept of 'Factory ' and in quantifying the extent and value of the insurable property, the High Court fell into an error in including the value of the "Distribution and Transmission lines" (b) That in ascertaining the value of the insurable property, depreciation had had to be granted under the relevant provisions of the Income Tax Act 1922 and that the limiting of the depreciation to that under the relevant schedules to The Electricity (Supply) Act 1943 was erroneous.
(c) That the 'Act ' was itself a piece of temporary legislation which lapsed on 10.1.1968 and that the proceedings by the Director initiated, as they have come to be, pursuant to show cause notice dated, 28.11.1968 subsequent to the date of expiry of the statute itself, was without the authority of law.
220 (d) That substantial portions of the insurable properties came to vest in the Appellant Board on dates subsequent to 1.11.1963 and that the appellant, in respect of those assets was not liable to premia as appellant had not become the legal owner of those assets.
We shall now proceed to examine the merits of these contentions seriatim .
Re: Contention (a) The argument is that The "Distribution and Transmission Lines" did not constitute 'Factory ' and therefore their value was not includible in the concept of 'insurable property ' under the 'Act '.
The fallacy in this argument lies in that it overlooks the definition of the words "property insurable under this Act" and also the specific language of Section 17(1) of the Act.
The argument also over looks the express provisions of the statutory 'scheme ' put into operation.
Section 2(1) of the 'Act ' which defines "property insurable under the Act", inter alia, enables the inclusion of "Such other plant machinery or material as may be specified in the Scheme also.
" That apart, Section 17(1) of the 'Act ' enables the Central Government, by notification, to declare that provisions of the 'Act ' and of the "scheme" promulgated thereunder shall apply to insuring of the various classes of assets specified in clauses (a) to (d) of that section.
Clause (d) of Sub section ( 1) of Section 17 refers to: " .
The whole or a specified part of the distribution and transmission systems, sub stations, switch houses, and transformer houses of electric supply undertakings generally or specified electric undertaking The 'scheme ' prepared and promulgated by Notification S.O. 3947 which came into force with effect from 1.1.1963, provides, among other things, that the whole of the "Distribution and Transmission Systems," "sub stations", "switch houses", "transformer houses" etc.
shall constitute "insurable property" and that the 'Act ' and the scheme shall be applied to them.
221 6.
It is, thus, clear that the inhibitions of the limited import of the expression 'Factory ' do not limit the identity of the 'insurable property ' which will have to be ascertained and determined in accordance with the provisions of the scheme.
The view of the High Court is, in our opinion, fully justified.
There is no merit in this contention.
Contention (a) is, accordingly, held against the appellant.
Re: Contention (b) In determining the value of the insurable property, the scheme, by its clause 7, envisages due allowance for the depreciation being made.
The question is whether depreciation allowed in accordance with the schedules to the , in preference to the rates of depreciation provided for in the Indian Income Tax Act, 1922 claimed by the appellant, is incorrect in principle.
The High Court noticed that the provisions of the , related to the electricity undertakings themselves and that, further, appellant had itself made up its books in regard to valuation of various properties, assets etc.
adopting the depreciation based on the provisions of the .
The argument of Shri Rajendra Choudhary, learned counsel, is that where two alternative bases for the determination of the depreciation were available, appellant was entitled to opt for the more beneficial and less disadvantageous of the two.
There is again a fallacy in this approach.
The 'Act ' or the 'Scheme ' does not specify any bases for the computation of depreciation.
It would appear that there were some administrative instructions to the effect that wherever the matter was governed by specific statutory provisions, those provisions be applied and wherever statutory provisions regulating the matter were not available, then, the provisions of the Income Tax Act be taken into account.
These instructions have no statutory force.
But even to the extent they go, it was not as if two alternative methods were open.
Indeed, the two methods were mutually exclusive and not alternative.
That apart, the provisions as to depreciation in a taxing law like the Income Tax Act contain elements of incentives and are also informed by considerations of policy of the tax and do not reflect purely economic criteria relevant to the determination of the depreciation.
The High Court, on the point, held: ".
When once it is found that the Electricity Board (Supply) Act itself provides a formula for working out the 222 allowance of depreciation and the Electricity Board has been adopting that formula and writing down the allowance of depreciation in its books we fail to see how, if that method is taken into account it can be said to be inconsistent with clause 7 of the Insurance Scheme.
Both the Tribunals therefore in our opinion, rightly accepted that as the allowance for depreciation and permitted the same.
The contention that the statutory depreciation should have been disregarded and instead the depreciation worked out under the Income Tax Act should have been made applicable has no force, because no rule or provision of law sustains any such contention . " There is no error in principle committed by the High Court in applying the principles contained in the schedules to the .
We do not find legal support for the insistence by the appellant on the adoption of the standards of depreciation contained in the provisions of Income Tax Act, 1922.
The finding of the High Court in this behalf does not also call for interference.
Contention (b) is also, accordingly, answered against the appellant.
Re: Contention (c) The assumption basic to the argument is that the 'Act ' is a temporary statute which expired by efflux of time on 10.1.1968 and that the proceedings subsequently commenced on 29.11.1968 were without jurisdiction.
Section 6 of the general clauses Act is held in applicable to a case of expiry of a temporary statute on the view that Section 6 is attracted wherever there is a repeal and that the case of expiry of a statute by efflux of time is not a case of repeal.
Whatever be the principles of construction of temporary statutes and the effect on the rights and obligations under them of the expiry of the statute itself, the 'Act ' in the present case contains specific provisions preserving the rights and obligations.
The 'Act ' invokes the provisions of Section 6 of the General Clauses Act.
The matter is placed beyond controversy by the pronouncement of this court in Amadalavalasa Cooperative Agricultural & Industrial Society Ltd. & Anr.
vs Union of India & Anr.
, (See ; at 738). ".
Therefore, if under section 5 of the 'Factories Act ' or under section 7 of the 'Goods Act ', the liability to pay the premia on full insurable value was incurred before the expiry 223 of the Act, section 6 of the General Clauses Act would enable the ascertainment of the extent of liability for the evaded premia by an officer who was authorised when the Act was in force or by an officer authorised after the expiry of the Act.
The principle behind section 6 of the General Clauses Act is that all the provisions of the Acts would continue in force for purposes of enforcing the liability incurred when the Acts were in force and any investigation, legal proceeding, remedy, may be instituted, continued or enforced as if the Acts had not expired . " Contention (c) is, accordingly, also held and answered against the appellant.
Re: Contention (d) The argument is that though the Appellant Board was constituted on 1.4.1959, the properties of the erstwhile electricity undertaking of the State Government were transferred to and became the property of the Appellant Board by notifications issued on various dates subsequent to 1.11.1963 and that, accordingly, during the relevant periods during which the legal ownership of the property did not vest in the appellant, it was not liable for the premia.
It is relevant to mention here that the period for which the demands were raised was between 1.1.1963 and 10. 1.1968.
Appellant 's contention in this behalf was repelled in the statutory appeal on the ground that though formally the notifications came to be issued on various dates subsequent to 1.4.1959, the assets had in fact been transferred to and were acknowledged and treated by the appellant as its own in its Balance Sheets.
Before the authorities, it would appear, this point had not been seriously disputed by the appellant.
In a letter dated, 24.1.1969, the Secretary of the Appellant Board wrote to the Director. ".
We may mention that we are accepting your stand that the properties transferred to the Board by the Government become the properties of the Board as and from the dates of original transfer . " The Director in his order, dated, 15.10.1969 observed: 224 ".
The assets had in fact been transferred by the State Government to the Board from the 1st April, 1959 and the same had been shown as their own assets by the Board is their balance sheets since then.
If for certain reasons the State Government issued the notifications long after the expiry of the two months period i.e., on 5.10.1964, 28.10.1966 and 14.12.1966, etc.
it was only a sort of formality, particularly in view of the fact that the said notifications, referred to the assets as having been transferred to the Board as on 1.4.1959.
The Board correctly became owner of such assets right from 1.4.1959.
This point was conceded by the Board in its letter, dated, 24th January, 1969 and was also not pressed in the discussions that I had with them on the 26th and 27th July, 1969.
(underlining supplied) In view of this nothing survives of contention (d) either.
It is accordingly held against the appellant.
In the result, for the foregoing reasons, this appeal fails and is dismissed.
In the circumstances of the case, the parties are, how ever, left to bear and pay their own costs in the appeal.
R.S.S. Appeal dismissed.

dataset_name: IN-Abs

summary/full:
% The Emergency Risks (Factories) Insurance Act, 1962 was enacted to provide for expeditious rehabilitation of industrial undertakings in the event of damage in times of war.
The Central Government accordingly undertook to insure the factories against war risks.
The Act envisaged the promulgation and effectuation of the Emergency Risks (Factories) Insurance Scheme mandating a compulsory insurance of factories against war risks on payment of prescribed premia.
The Director of Emergency Risks Insurance Scheme, after giving an opportunity to the appellant to show cause, determined the sum of Rs.47,59,109.00 as balance of premia due from the appellant.
The appellate authority the Central Government dismissed the appellant 's appeal.
The legality of the proceedings so culminating in the said appellate order was assailed by the appellant in the Writ Petition before the High Court of Andhra Pradesh, which was rejected.
Hence this appeal by special leave.
The contentions pressed by the appellant were (1) that "Distribution and Transmission lines" did not constitute 'Factory ' in the concept of 'insurable property ' under the 'Act '; (2) that in ascertaining the value of the insurable property, depreciation had had to be granted under the relevant provisions of the Income Tax, Act, 1922; (3) and that the 'Act ' was itself a piece of temporary legislation and the notice dated 217 28.11.1968 issued after 10.1.1968 when the legislation had spent itself out by efflux of time was without the authority of law.
Dismissing the appeal, it was ^ HELD: (1) The inhibitions of the limited import of the expression 'factory ' do not limit the identity of the 'insurable property ' which will have to be ascertained and determined in accordance with the provisions of the 'scheme '.
The Act enables the Central Government to declare that provisions of the 'Act ' and of the 'scheme ' shall apply to assets specified in section 17(1)(d), which include the whole or a specified part of the distribution and transmission system.
The 'scheme ' prepared and promulgated by notification S.O. 3974 which came into force with effect from 1.1.1963 provides, among other things, that the whole of the "Distribution and Transmission Systems" shall constitute 'insurable property ' and that the 'Act ' and the 'scheme ' shall be applied to them.
[220C H] (2) The provisions as to depreciation in a taxing law like the Income Tax Act contain elements of incentives and are also informed by considerations of policy of the tax and do not reflect purely economic criteria relevant to the determination of the depreciation.
In the instant case, the High Court found that the Electricity (Supply) Act itself provided a formula for working out the allowance of depreciation and the appellant had been adopting that formula for valuation of its properties, assets, etc.
There was, therefore, no error in principle in applying the standard of depreciation provided in .
[221G; 222D] (3) Whatever be the principles of construction of temporary statutes and the effect of the rights and obligations under them after the expiry of the statute itself, the 'Act ' in the instant case contains specific provisions preserving the rights and obligations.
For that purpose the 'Act ' invokes the provisions of section 6 of the General Clauses Act.
The principle behind section 6 of the General Clauses Act is that all the provisions of Acts would continue in force for purposes of enforcing the liability incurred when the Acts were in force and any investigation, legal proceedings, or remedy, may be instituted, continued or enforced as if the Acts had not expired.
[222F H; 223A B] Amadalavalasa Cooperative Agricultural & Industrial Society Ltd. vs Union of India, ; at 738, followed.


judgement:
ntempt Petition No. 31997 of 1987.
IN Civil Appeal No. 2277 of 1986.
PG NO 563 From the Judgment and Order dated 30.3.
1983 of the Karnataka High Court in Writ Petition No. 2585 of 1975.
Padmanabha Mahale for the Complainant.
M. Veerappa for the Accused.
The Order of the Court was delivered by SINGH, J. The complainant has by means of this petition claimed relief for taking action for contempt against the accused for their failure to comply with the orders of this Court dated 14.7.
1986 made in Civil Appeal No. 2277 of 1986 and to punish the accused who include the Secretary and Commissioner, Government of Karnataka, Revenue Department and Tehsildar, Land Reforms, Koppa, Chick ' magalur District, Karnataka.
During the hearing we noticed that the affidavit filed by the complainant as well as the affidavit filed in reply to the contest petition both were not in accordance with the provisions of the Supreme Court Rules or Order 19 Rule 3 of Code of Civil Procedure.
Savithramma; the complainant, has filed affidavit in support of the contempt petition.
In paragraph 2 of her affidavit she stated that the statements contained in the contempt petition were true to the best of her knowledge, belief and information.
In paragraph 3 she has further stated that the affidavit had been read over, translated and explained to her and she understood the contents thereof and has further stated that the same were true to her knowledge.
The affidavit is clearly vague and general and it does not comply with the requirement of a valid affidavit as laid down in Order XI Rules 5 and 13 of the Supreme Court Rules.
The affidavit is defective as it does not indicate as to what facts were true to her personal knowledge, information and belief.
Order XI Rule 2 of the Supreme Court Rules lays down that evidence in support of an application may be given by affidavit in the Supreme Court: Rule provides that affidavit shall be confined to such facts as the deponent is able of his own knowledge to prove, except on interlocutory applications, on which statements of his belief may be admitted, provided that the grounds thereof are stated.
Rule 13 provides that in the verification of petitions, pleadings or other proceedings, statements based on personal knowledge shall be distinguished from statements based on information and belief.
In the case of statements based on information the deponent shall disclose the source of his information.
Similar provisions are contained in Order 19 Rule 3 of the PG NO 564 Code of Civil Procedure.
Affidavit is a mode of placing evidence before the Court.
A party may prove a fact or facts by means of affidavit before this Court but such affidavit should be in accordance with Order XI Rules 5 and 13 of the Supreme Court Rules.
The purpose underlying Rules 5 and 13 of Order XI of the Supreme Court Rules is to enable the Court to find out as to whether it would be safe to act on such evidence and to enable the court to know as to what facts are based in the affidavit on the basis of personal knowledge, information and belief as this is relevant for the purpose of appreciating the evidence placed before the Court, in the form of affidavit.
The importance of verification has to be judged by the purpose for which it is required.
It is only on the basis or verification, it is possible to decide the genuineness and authenticity of the allegations and the deponent can be held responsible for the allegations made in the affidavit.
In this Court evidence in support of the statements contained in writ petition, special leave petitions, applications and other miscellaneous matters, is accepted in the form of affidavit filed by the parties concerned.
It is therefore necessary that the party stating facts must disclose as to what facts are true to his personal knowledge, information or belief.
If the statement of fact is based on information the source of information must be disclosed in the affidavit.
An affidavit which does not comply with the provisions of Order XT of the Supreme Court Rules, has no probative value and it is liable to be rejected.
In a matter where allegations of mala fides or disobedience of the Court 's order are made against a person or party it is all the more necessary that the person filing affidavit in this regard must take care to verify the facts stated in the affidavit strictly in accordance with the Rules 5 and 13 of Order XI of the Supreme Court Rules.
We are constrained to observe that of late affidavit are being filed in this Court in a slipshod manner without having any regard to the Rules.
Affidavits are being filed by person who could have no personal knowledge about the facts stated in the affidavit.
Deponents of affidavits pay no attention to verification, although this court laid stress on this aspect as early as 1952.
In State of Bombay vs Purushottam Jog: Naik, [l952] SCK 674, a Constitution Bench considering the importance of verification of an affidavit observed: "We wish, however, to observe that the verification of the affidavits produced here is defective.
The body of the affidavit discloses that certain matters were known to the Secretary who made the affidavit personally.
The verification however states that everything was true to the best of his PG NO 565 information and belief.
We point this out as slipshod verification of this type might in a given case lead to a rejection of the affidavit.
Verification should invariably be modelled on the lines of Order XIX, Rule 3, of the Civil Procedure Code, whether the Code applies in terms or not.
And when the matter deposed to is not based on personal knowledge the sources of information should be clearly disclosed.
" In the instant case verification of the complainant 's affidavit is defective and it would not be safe to proceed on the allegations mentioned in the contempt petition.
The matter does not rest here.
The affidavit filed on behalf of the accused in reply to the contempt petition is shocking.
The Office clerk of the advocate for the accused has filed affidavit on behalf of the accused in reply to the contempt petition.
The deponent of the counter affidavit has verified the affidavit saying that the statement of the case of the accused are true and correct which are based on the records maintained in the office of the advocate and based on the instructions received from the clients.
Such an affidavit is wholly improper and inadmissible in evidence and liable to be rejected.
What reliance can be placed on an affidavit filed by a person sitting at Delhi and that too a clerk of an advocate practicing at Delhi giving reply to the allegations and facts and circumstances existing at Karnataka on the basis of records maintained in advocate 's office at Delhi.
The practice of clerks of advocates filing affidavits without a proper verification should be deprecated.
As matters before the apex court are determined on the basis of the statements contained in affidavits it is the duty of the litigants and the layers to file affidavits in accordance with the rules to assist the Court in administering justice.
Since the affidavit filed in Support of the contempt petition as well as the affidavit in reply to the petition do nut comply with Rules.
no reliance can be placed on them and both are liable to be rejected.
We accordingly reject the same and the contempt petition is liable to be dismissed on this ground alone.
But we give a chance to the parties to file proper affidavits within six weeks.
List thereafter.

summary/full:
The complainant filed in this Court a petition for contempt against the accused for their failure to comply with the orders of this Court.
In paragraph 2 of the affidavit in support of the petition, the complainant stated that the statements contained in the petition were true to the best of her knowledge, belief and information.
In paragraph 3 she further stated that the affidavit had been read over, translated and explained to her and she understood the contents thereof; and that the same were true to her knowledge and belief.
Similarly, in the affidavit on behalf of the accused, which has been filed by a clerk of the Advocate,the deponent verified the affidavit by stating that the statements of the accused were true and correct which were based on the records maintained in the Advocate 's office and on instructions received from the clients.
Rejecting the affidavits? as not being in accordance with the Supreme Court Rules or Order 19? Rule of the Code of Civil Procedure. this Court, HELD: 1.1 Affidavit is a mode of placing evidence before the Court.
A party may prove a fact or facts by means of affidavit before this Court but such affidavit should be ia accordance with Order XI Rules 5 and 13 of the Supreme Court Rules.
[564A] 1.2 The party stating facts must disclose as to what facts are true to his personal knowledge, information or belief.
If the statement of fact is based on information the source of information must be disclosed in the affidavit.
An affidavit which does not comply with the provisions of Order PG NO 561 PG NO 562 XI of the Supreme Court Rules, has no probative value and it is liable to be rejected.
[564D] 1.3 In a matter where allegations of mala fides or disobedience of the Court 's order are made against a person or party, it is an the more necessary that the person Filing affidavit in this regard must take care to verify the facts stated in the affidavit strictly in accordance with the Rules 5 and 13.
[564E] 1.4 Of late affidavits are being Filed in this Court in a slipshod manner without having any regard to the Rules.
Affidavits are being filed by persons who could have no personal knowledge about the facts stated in the affidavit.
Deponents of Affidavits pay no attention to verification.
[564F] State of Bombay vs Purushottam Jog Naik, ; , referred to 1.5 The practice of clerks of advocates filing affidavits without a proper verification is deprecated.
As matters before the apex court are determined on the basis of the statements contained in affidavits it is the duty of the litigants and the lawyers to file affidavits in accordance with the rules to assist the Court in administering justice.
[565E F] In the instant case, the affidavit filed by the complainant is clearly vague, general and defective, and does not indicate as to what facts were true to her knowledge, information and belief.
It does not comply with the requirement of a valid affidavit as laid down in the Rules 5 and 13 of the Supreme Court Rules.
Similarly, the affidavit in reply filed on behalf of the accused by office clerk of the Advocate is wholly improper and inadmissible in evidence and liable to be rejected.
[563E F, 565D] Since both the affidavits do not comply with the Rules, no reliance can be placed on them.
They are accordingly rejected.
Consequently, the contempt petition is also liable to be rejected, but parties are given a chance to file proper affidavits.
[565G]


judgement:
Civil Appeal No. 1178 of 1988.
From the Judgment and Order dated 5.11.1986 of the Delhi High Court in F.A.O. (OS) No. 231 of 1986.
Hardev Singh and Miss Madhu Moolchandani for the Appellant.
S.B. Saharya, V.B. Saharya and Ratna Nair for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Special Leave granted.
353 The Delhi Development Authority vide its letter dated 5th October, 1976 accepted the tender of the appellant for construction of 240 Janta Houses at the estimated cost of Rs.24,49,262.
The work was to commence on 15th October, 1976 and was required to be completed by 14th July, 1977.
By a subsequent extension of time the work was finally completed on 2nd April, 1980 and the houses so constructed have been allotted to several people.
Between February 1983 to December 1985 the appellant sent several letters to the respondent requesting them to finalise the bills.
It appears, however, that the first of such letters was written on 28th February, 1983.
Thereafter the appellant wrote several letters and finally on 4th September, 1985 to the respondent to finalise the bills and ultimately served the notice through his counsel requesting it to release the security of Rs.1 lakh and refer the dispute to arbitration.
The respondent failed to do so.
In January, 1986 the appellant filed an application under section 20 of the (hereinafter called 'the Act ') seeking a direction from the Court that the respondent be directed to file the arbitration agreement in the Court and the dispute be referred to the arbitration.
The learned Single Judge of the High Court of Delhi dismissed the application as barred by time.
There was an appeal to the Division Bench of the High Court of Delhi.
The Division Bench upheld the decision of the learned Single Judge.
Hence this appeal to this Court.
The question is, whether the High Court was right in upholding that the application under section 20 of the Act was barred by limitation.
In view of the decision of this Court in Kerala State Electricity Board, Trivandrum vs T.P.K.K. Amsom and Bensom, Kerala, ; , it is now well settled that Article 137 of the would apply to any petition or application filed in a Civil Court.
Sub section (1) of section 20 of the Act provides as follows: "Application to file in Court arbitration agreement: Where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject matter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them, instead of proceeding under Chapter II, may apply to a court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in Court.
" Therefore, in order to be entitled to order of reference under 354 section 20, it is necessary that there should be an arbitration agreement and secondly, difference must arise to which this agreement applied.
In this case,there is no dispute that there was an arbitration agreement.
There has been an assertion of claim by the appellant and silence as well as refusal in respect of the same by respondent.
Therefore, a dispute has arisen regarding non payment of the alleged dues of the appellant.
The question is for the present case when did such dispute arise.
The High Court proceeded on the basis that the work was completed in 1980 and, therefore, the appellant became entitled to the payment from that date and the cause of action under article 137 arose from that date.
But in order to be entitled to ask for a reference under section 20 of the Act there must not only be an entitlement to money but there must be a difference or dispute must arise.
It is true that on completion of the work a right to get payment would normally arise but where the final bills as in this case have not been prepared as appears from the record and when the assertion of the claim was made on 28th February, 1983 and there was non payment, the cause of action arose from that date, that is to say, 28th of February, 1983.
It is also true that a party cannot postpone the accrual of cause of action by writing reminders or sending reminders but where the bill had not been finally prepared, the claim made by a claimant is the accrual of the cause of action.
A dispute arises where there is a claim and a denial and repudiation of the claim.
The existence of dispute is essential for appointment of an arbitrator under section 8 or a reference under section 20 of the Act.
See Law of Arbitration by R.S. Bachawat, 1st Edition, page 354.
There should be dispute and there can only be a dispute when a claim is asserted by one party and denied by the other on whatever grounds.
Mere failure or inaction to pay does not lead to the inference of the existence of dispute.
Dispute entails a positive element and assertion in denying, not merely inaction to accede to a claim or a request.
Whether in a particular case a dispute has arisen or not has to be found out from the facts and circumstances of the case.
The application under section 20 of the Act was filed in Court in January, 1986, that is to say, within the period of three years; therefore the application was within time.
The High Court was in error in dismissing the application on the ground of limitation.
The judgment and order of the High Court are, therefore, set aside.
The High Court is directed to make an order under section 20 of the Act and give consequential directions in respect of the same.
The costs of this appeal would be costs in the arbitration proceeding.
The appeal is thus allowed and disposed of as aforesaid.
N.P.V. Appeal allowed.

summary/full:
% The appellant undertook construction of certain houses for the respondent Development Authority and completed the same on 2nd April, 1980.
The appellant sent several letters to the respondent requesting for finalisation of the bills; the first one on 28th February, 1983 and the last on 4th September, 1985.
Ultimately, the appellant served notice, through his counsel requesting the respondent to release the security amount and refer the dispute to arbitration.
On respondent 's failure to do so, the appellant filed an application in the Court, under section 20 of the seeking a direction for filing the arbitration agreement in the court and referring the dispute to arbitration.
A Single Judge of the High Court dismissed the application as barred by time.
This decision was upheld by the Division Bench.
Allowing the appeal, ^ HELD: 1.1 Article 137 of the would apply to any petition or application filed in a civil court.
[353E F] Kerala State Electricity Board, Trivandrum vs T.P.K.K. Amsom and Bensom, Kerala, ; relied on. 1.2 In order to be entitled to an order of reference under section 20, it 352 is necessary that there should be an arbitration agreement and secondly, difference must arise to which this agreement applied.
The existence of a dispute is, therefore, essential for appointment of an Arbitrator under section 8 or a reference under section 20 of the Act.
[353H, 354A] 1.3 Dispute entails a positive element and assertion in denying, not merely inaction to accede to a claim or a request.
Whether in a particular case, a dispute has arisen or not has to be found out from the facts and circumstances of the case.
[354F] 1.4 A right to get payment would normally arise on completion of the work and a party cannot postpone accrual of cause of action by writing reminders or sending reminders.
But where a bill had not been finally prepared, the claim made by the claimant is the accrual of the cause of action.
[354C D] In the instant case there was an arbitration agreement.
There has been an assertion of claim by the appellant and silence as well as refusal in respect of the same by the respondent.
Therefore, a dispute has arisen regarding non payment of the alleged dues of the appellant.
Since final bills had not been prepared, and there was assertion of claim on 28th February, 1983 and there was non payment, the cause of action arose on that date.
[354A B, D] The application under section 20 of the Act having been filed in the Court in January, 1986, i.e. within the period of three years from the date of cause of action, it was within time and the High Court was in error in dismissing it on the ground of limitation.
[354G]


judgement:
Appeal No. 230 of 1953.
Appeal from the judgment and decree dated August 29, 1950 of the former Madhya Bharat High Court at Indore in Special Appeal No. 5 of 1949, arising out of the judgment and decree dated December 2, 1948, of the said High Court in Civil First Appeal No. 61 of 1948 against the judgment and decree dated June 11, 315 1948, on its Original Side in Civil Original Suit No. 30 of 1947.
N.C Chatterjee, section C. Isaacs, J. D. Patel, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the appellant.
M. P. Amin, C. B. Sanghi and 1.
N. Shroff, for the respondents.
March 28.
The following Judgment of the Court was delivered by SARKAR T.
The Princely States that existed in British India, merged themselves in the Union of India not very long after India became independent.
Before the merger some of these States passed through certain stages which may be called transitional.
The decision of this appeal depends on certain laws that came into existence during the transitional stage through which the Princely State of Indore passed before it became merged in the Indian Union.
Up to April 22, 1948, Indore as one of the Princely States of India enjoyed internal sovereign rights and had its own laws and courts.
These laws and courts derived their authority from the Ruler of Indore in whom the sovereign power was vested.
The highest court in Indore was called the High Court.
The suit out of which this appeal arises was filed by the appellant against the respondents in the Indore High Court on November 6, 1947.
It, was a suit for the specific performance of an agreement whereby it is said, Govindram Sakstria, whose heirs and legal representatives the respondents are, agreed to sell to the appellant a share in a business.
The said Govindram Saksaria having died prior to the suit it was brought against the respondents.
On April 22, 1948, the Rulers of Gwalior, Indore and certain other States in the region known as Malwa (Madhva Bharat) entered into a Covenant to unite and integrate their territories in one State with a common executive, legislature and judiciary, by the name of the United State of Gwalior, Indore and Malwa (Madhya Bharat) and to include in that United 316 State any other State the Ruler of which later agreed with the approval of the Government of India, to merge his State in the United State.
Article 3 of the Covenant provided for the constitution of a Council of Rulers one of the members of which was to be its President, such President being called the Rajpramukh.
It also provided that the Ruler of Gwalior would be the first Raj Pramukh of the United State.
Under article 6 of the Covenant, the Ruler of each covenanting State was required to make over the administration of his State to the Raj Pramukh by a date not later than July 1, 1948.
This article also provided that upon the administration of a State being made over to the Raj Pramukh, all rights, authority and jurisdiction belonging to its Ruler and appertaining or incidental to its Government, would vest in the United State.
Similar provision was also made in respect of the vesting of the rights, authority and jurisdiction of the Ruler of a State which by a subsequent agreement became included in the United State.
Article 10 provided that as soon as practicable a Constituent Assembly for the United State would be formed in the manner indicated, for framing its Constitution and that the Raj Pramukh would by August 1, 1948, constitute an interim Legislative Assembly.
It also provided that until the Constitution framed by the Constituent Assembly came into operation, the Raj Pramukh would have the power to make and promulgate Ordinances for the peace and good Government of the United State but such Ordinances would have force for a period not longer than six months from its promulgation and would be liable to be controlled or superseded by an Act of the interim Legislative Assembly.
As a matter of interest it may be mentioned here, though nothing turns on that in this appeal, that the United State later became a Part B State as defined in the Constitution of India and lastly, merged in the territories of what is now the State of Madhya Pradesh.
The suit brought by the appellant was heard by a single Judge of the Indore High Court who decreed it by his judgment pronounced on June 11, 1948.
It 317 was five days after this judgment had been pronounced, namely, on June 16, 1948, that the Ruler of Indore made over the administration of his State to the Raj Pramukh of the United State in terms of the Covenant.
It appears, however, that the High Court of Indore continued functioning even thereafter.
On June 19, 1948, the Raj Pramukh promulgated Ordinance No. 2 of 1948 to provide for the establishment of a High Court for the United State.
Section.
2 of the Ordinance provided that it would come into force on such date as the Raj Pramukh might prescribe and the Raj Pramukh by a Notification.
published on July 28, 1948, prescribed July 29, 1948, as such date.
On Ordinance No. 2 of 1948 so coming into force on July 29, 1948, the High Court of the State of Indore ceased to function from that date.
Section 35 of the Ordinance provided that on the taking over of the administration of any State by the Raj Pramukh its High Court would cease to exist and all cases pending before it would be transferred to the High Court of the United State established by the Ordinance.
The provisions of this section were found to be anomalous in the cases of States like Indore, where the administration had been taken over sometime before the Ordinance had come into force and the High Court under it established, for in regard to these States the cases pending in the State High Courts could not on the dates their administration was taken over, be transferred to the United State High Court as it had not then come into existence.
To remedy this anomaly, on October 16, 1948, the Raj Pramukh promulgated Ordinance No. 14 of 1948.
This Ordinance replaced section 35 in Ordinance 2 of 1948 by a new section and provided that it would be deemed to have always been so replaced.
The new section provided that in the case of any State whose administration had been taken over by the Raj Pramukh before the establishment of the High Court of the United State, the High Court of the State would cease to exist and function from the date of such establishment and thereupon all cases pending before the High Court of the State would be transferred to the High Court of the United State and the appeals 318 which would have lain to the High Court of the State would lie to the High Court of the United State.
Before Ordinance No. 14 of 1948 had been promulgated, the respondents on August 24, 1948, preferred an appeal to the Divisional bench of the High Court of the United State from the decision of the High Court of Indore decreeing the appellant 's suit on June 11, 1948, to which reference has been made earlier.
A few days later, namely, on September 7, 1948, the appellant also preferred a cross appeal to the Divisional Bench against the same decision.
On December 2, 1948, the Divisional Bench decided the appeal and the cross appeal in favour of the respondents and dismissed the appellant 's suit.
Now came the United State of Gwalior, Indore and Malwa (Madhya Bharat) High Court of Judicature Act, VIII of 1949, hereafter referred to as the Act.
It was enacted by the Interim Legislative Assembly of the United State which had earlier come into existence.
The Act came into force on January 18, 1949.
Section 40 of this Act repealed Ordinance No. 2 of 1948.
The question that arises in this appeal depends on the construction of some of the provisions of this Act which are now set out.
Preamble: Whereas it is necessary to provide for the continuance of the High Court of Judicature for the United State of Gwalior, Indore and Malwa (Madhya Bharat) established under Ordinance No. 11 of 1948, it is hereby enacted as follows: section 4.
In this Act unless there is anything repugnant in the subject or context: (d) " High Court " means the High Court functioning as the High Court of the United State.
section 2(a).
It shall extend to the whole of the United State of Gwalior Indore and Malwa (Madhya Bharat) and shall apply to all persons within the said United State over whom the Courts having jurisdiction in the Covenanting States forming part of the said United State had jurisdiction.
(b) This Act shall apply to all Criminal and Civil Proceedings including those under testamentary, 319 intestate, matrimonial, divorce and insolvency jurisdiction, pending in the Courts in any State on the (late on which the State is included in the United State and to such proceedings, arising in the said States,after those dates.
Special appeal shall lie to the Full Bench of the High Court from : (1) a decree or an appealable order passed by the Divisional Bench of two Judges of the High Court in the exercise of extraordinary or appellate civil jurisdiction.
On March 31, 1949, the appellant filed an appeal to the Full Bench of the High Court from the judgment of the Divisional Bench dismissing his suit.
He claimed to be entitled to file this appeal under section 25 of the Act.
The Full Bench dismissed the appeal on the ground that section 25 was not available to the appellant and in this view of the matter it did not go into the merits of the appellant 's case.
It appears that another Full Bench of the High Court consisting of three Judges had held on an earlier occasion that section 25 did not apply where the Divisional Bench had delivered its judgment before the Act had come into force and no appeal Jay from such a judgment under this section.
That view was endorsed by the judgment of the later Full Bench which however was larger consisting of five Judges.
In the present appeal to this Court, the correctness of the last Full Bench judgment is being challenged.
The appellant contends that section 2(b) of the Act ap.
plied the Act including section 25 to the proceedings mentioned in it and section 25 so applied gave a right of appeal to the Full Bench of the High Court from the decision of a Divisional Bench of that Court passed in these proceedings.
He then says that the judgment of the Divisional Bench dated ]December 2, 1948 from which he had appealed to the Full Bench had been passed in such a proceeding and therefore his appeal was competent.
The High Court does not appear to have held that that proceeding was not of any 320 of the kinds mentioned in section 2(b) and it seems to us that it was of one of these kinds.
Section 2(b) mentions two kinds of proceedings, namely, first those pending in the Courts in any State on the date on which that State was included in the United, State and secondly those which arose in the States after those dates.
Now the proceeding in which the Divisional Bench pronounced judgment was an appeal from a decision of a Single Judge of the Indore High Court given on June 11, 1948, that is, before that State became included in the United State.
The appeal had however been filed on August 24, 1948, that is, after Indore had been included in the United State.
The appellant contends that the fact that the decree from which he had appealed had been passed before the date of inclusion of Indore in the United State while his appeal had been filed after that date made no difference for an appeal being only a continuation of the proceedings in a suit, the proceedings must be deemed to have been pending all along since the filing of the suit and therefore on the date when Indore was included in the United State though the appeal was filed later.
Dinonath Ghose vs Shama Bibi (1) to which we were referred would seem to support the appellant 's contention.
In any case it seems beyond doubt that the appeal in which the judgment of the Divisional Bench, dated December 2, 1948, was pronounced, was a proceeding of the second kind mentioned in section 2(b), namely, " proceedings, arising in the said States, after those dates ", i. e., the date of the inclusion of the State in the United State.
It seems clear to us that the words " arising in the said States " do not refer to proceeding arising in a Princely State for the Princely State had ceased to exist after its inclusion in the United State and no proceeding could arise therein after such inclusion.
So to understand these would result in this part of section 2(b) being rendered nugatory.
We do not think,.
however such a result is inevitable.
These words can well be taken to refer to a proceeding arising in the areas of an erstwhile Princely State subsequently included in the United (1) Cal.
23. 321 State.
We think that to be the proper meaning to be given to these words.
So understood the appeal in which the judgment of the Divisional Bench, dated December 2, 1948, was given was a proceeding arising in the areas of the erstwhile Indore State after the inclusion of that State in the United State for it was filed after such inclusion.
It is therefore clearly a proceeding of the second kind mentioned in section 2(b).
The learned Judges of the High Court however did not, as earlier stated, accept the appellant 's contention that section 25 gave a right of appeal to the Full Bench from the judgment of the Divisional Bench passed in a proceeding mentioned in section 2(b).
Their reasons for this view would appear broadly to be these: To accede to the appellant 's contention a retrospective operation would have to be given to the Act and thereby affect the right vested in the respondents at the date of the passing of the Act to the finality of the judgment of the Divisional Bench delivered before that date; the rules of construction of a statute required that only such retrospective operation should be given to it as its language compelled; there was no such language used in section 2(b), which, properly understood, only gave the High Court of the United State jurisdiction over proceedings pending in the High Court of ' a Princely State on the date on which that State was included in the United State; 'in any event the language of section 2(b) would be fully satisfied by giving retrospective operation to section 25 only to the extent of applying it to proceedings pending on the date of inclusion of a State in the United State and not closed by a final judgment passed before the Act came into force.
It may be conceded that the judgment of the Divisional Bench was final under the law as it stood at the date it was passed and no appeal lay from it before the Act came into force.
The respondents had therefore at the date of the Act a vested right to the finality of this judgment.
It is also clear that a right to the finality of a judgment is a substantive right and that the acceptance of the appellant 's contention would result in depriving the respondents of such a right.
41 322 The only question in this appeal is whether section 25 gives a right of appeal from the judgment of the Divisional Bench.
The rule is clear that " provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment " : Delhi Cloth and General Mills Co. Ltd. vs Income Tax Commissioner, Delhi (1).
Before proceeding further we wish to observe that the rule that a statute is not to have retrospective operation is only applicable where it is doubtful from the language used whether or not, it was intended to have such operation.
Where the language of a statute plainly gives it a retrospective operation, the rule has no application, for, " Of course, it is obviously competent for the Legislature, if it pleases, in its wisdom to make the provisions of an Act of Parliament retrospective ": Smith vs Callander (2).
We may usefully read here what Bowen L. J. said in Reid vs Reid (3): " Now the particular rule of construction which has been referred to, but which is valuable only when the words of an Act of Parliament are not plain, is embodied in the well known trite maxim ominis nova constitution futuris forman imponere debet non praeteritis, that is, that except in special cases the new law ought to be construed so as to interfere as little as possible with vested rights.
We wish to emphasise that it is not as if all efforts should be made so as not to give a statute a retrospective operation whatever its language is.
The rule does not require of the courts an " obdurate persistence " in refusing to give a statute retrospective operation.
Now, what is the language of the Act before us Section 25 does not contain any words to show that it was intended to have retrospective operation.
It only provides for the future.
It gives a new right of appeal and such appeal can of course only be filed after the Act has come into force.
But there is section 2 (b).
That section says that the Act shall apply to all civil and criminal proceedings pending in the Courts in any State on the date on which the State is included in the (1) (1927) L.R. 54 1.
A. 421.
(2) , 305.
(3) 323 United State, and to such proceedings arising in the said States after these dates.
Section 2 (b) therefore makes section 25, and also all other sections of the Act, applicable to the proceedings mentioned in it.
Now what is the effect of this ? What is the result if a section giving a right of appeal is made applicable to a proceeding ? It can only be that an appeal would lie under that section from a judgment passed in that proceeding.
It is, in our view, clear that the language of section 2(b) applies section 25 to a proceeding which was pending on a date before the Act came into force, and therefore gives a right of appeal from a judgment of a Divisional Bench passed in that proceeding, whenever it may have been passed, that is to say, irrespective of whether it was passed before the Act or after it.
We have here plain language which gives the statute retrospective operation.
It does not seem to us that there is any scope here.
of applying the rule of presumption against the retrospective operation of a statute.
But it is said that section 2(b) only extends the jurisdiction of the High Court to the pending cases over which it would not otherwise have any jurisdiction, and is not intended to give retrospective operation to any part of the Act.
It is said that that this is the real effect of section 2(b) is clear because it is put along with 2(a) which only specifies the territories and the persons over whom the High Court having authority under the Act is to have jurisdiction.
It seems to us, however, that whether a section only creates jurisdiction or not will depend on its language and not on its proximity to another section of the same statute defining jurisdiction.
Then it is said that the Act repealed and substantially re enacted Ordinance No. 2 of 1948 and as the corresponding section of that Ordinance, namely, s.4(b), which was practically in the same language as s.2(b) of the Act, was only concerned with jurisdiction, s.2(b) must be understood to do the same.
This contention was accepted by the learned Judges of the High Court but in this they were clearly in error.
We do not wish to be understood as saying that in no case is a reference to the old law permissible for interpreting a new statute, but it seems to us that in the present 324 case such a reference was not justified.
One of the cases on which the learned Judges of the High Court based themselves is Tumahole Bereng vs The King (1).
There the Judicial Committee were dealing with a statute only a part of which had been amended and after reminding themselves of the wisdom of the warning given by Lord Watson in Bradlaugh vs Clarke (2) that it is " an extremely hazardous proceeding to refer to provisions which have been absolutely repealed, in order to ascertain what the legislature meant to enact in their room and stead," observed at p. 267: ". the circumstances of the present case put it beyond the mischief Lord Watson was minded to discourage, and that for two reasons.
In the first place, the terms of the section as it now stands are sufficiently difficult and ambiguous to justify the consideration of its evolution in the statute book as a proper and logical course; and secondly, the object of the instant enquiry is to ascertain the true meaning of that part of the section which remains as it was, and which there is no ground for thinking the substitution of a new proviso was intended to alter.
" In the case before us the language admits of no difficulty it is simple and it applies all the sections of the Act to certain proceedings and as one of these sections at least, namely, section 25, is new, clearly a change in the law was intended.
We do not wish to suggest that the circumstances which would justify a reference to the old law have been exhaustively set out by the Judicial Committee.
It is enough for us to say that none of those circumstances exists here.
In Abdur Rahim vs Mahomed Barkat Ali (3), which was also referred to by the High Court, the Judicial Committee had to decide whether a suit was within section 92 of the Code of Civil Procedure, 1908, and for that purpose to find out what reliefs the expression " further and other relief " in the section would include.
These words are plainly wide and require definition.
The Judicial Committee referred to the earlier law on the subject to find out what that general expression was intended to include.
This case (1) (2) (1883) 8 App.
(3) (1927) L.R. 55 I.A. 96.
325 does not justify a resort to the old law by us, for here we have no general words as to the meaning of which difficulty has arisen.
The last case on which the High Court based itself for this part of it, , judgment to which we wish to refer was In re Mayfair Property Co. There the contention was that a certain interpretation would defeat the object of the Act and in order to as certain that object a reference to the old law was found necessary.
No such question arises in the case before us.
It is not contended that the object of the Act before us would be defeated if section 2(b) applied section 25 retrospectively.
For these reasons it seems to us that the present is not a case where it is permissible to in terpret section 2(b) of the Act by reference to section 4(b) of the Ordinance.
Further in our view, in any event, section 4 (b) of the Ordinance provides no assistance in interpreting section 2(b) of the Act.
Section 4(b) of the Ordinance was not concerned with applying to any case another provision in it giving a right of appeal which section 2(b) of the Act clearly is What we have to decide is, in what cases that right of appeal was given and for that purpose plainly section 4(b) of the Ordinance can afford no assistance as it was not concerned with any such right of appeal.
It is then said that sufficient meaning would be given to the words " pending in the Courts in any State on the date on which the State is included in the United State " in section 2(b), if they are understood as referring to the cases which were pending on that day and which had not been finally decided and determined before the Act had come into force.
This contention is sought to be justified on the principle " that you ought not to give a larger retrospective power to a section, even in an Act which is to some extent intended to be retrospective, than you can plainly see the Legislature meant ".
See Reid vs Reid (2).
Now it seems to us that the principle has no application here.
There is nothing in the section to indicate that the legislature intended the retrospective operation of section 25 to be confined to those pending cases which had not terminated before the Act had come into force.
Such a construction would require adding to the section the (1) (2) L.R. (1886) 31 Ch.
D 402,408.
326 words " and not finally decided before the Act comes into force ".
The rule of presumption against the retrospective operation does not require the addition of any words to a section otherwise plain.
We recall here, what we have said earlier, that the rule applies only where the words are not plain or are capable of two meanings.
It does not justify subtlety in adding words to the section to make the rule applicable.
It is also said that though section 2(b) applies section 25 to the proceedings mentioned therein, it does not expressly say that in so applying it, vested rights shall also be affected.
We think it enough to dispose of this contention to say that, the necessary result of applying section 25 to the proceedings mentioned is to disturb vested rights and that in order that a statute may have a retrospective operation it is not necessary to find words in it expressly stating that it will have such operation notwithstanding that that will disturb vested rights.
We do not think that the words are not plain to give a retrospective operation.
We therefore think that the appellant 's appeal from the Divisional Bench was competent under section 25 of the Act.
The result is that this appeal is allowed.
The decree of the Full Bench of the High Court is set aside.
The case will now go back to the High Court of (Madhya Pradesh) to be decided on the merits.
The appellant will have the costs here and below.
We have here to state that there were three other connected matters.
First, there was an application by the appellant to this Court for special leave to appeal from the Judgment of the Divisional Bench, being Petition for Special Leave to Appeal (Civil) No. 368 of 1957.
Then there was another application by the appellant to this Court for special leave to appeal from the judgment of the Full Bench, being Petition for ,Special Leave to Appeal (Civil) No. 242 of 1957.
These had been made by way of abundant caution.
Lastly, there was an application for leave to file additional documents in the appeal that has just been disposed of.
It was Civil Misc.
Petition No. 472 of 1956.
None of these applications were pressed and we therefore dismiss them but without any order for costs.
Appeal allowed, cause remitted.

summary/full:
The rule that a statute is not to have retrospective operation can apply only where it is doubtful from the language used whether or not it was intended to have such operation.
Where the language of the statute plainly gives it a retrospective operation, there can be no scope for applying the rule of presumption against retrospective operation.
The rule does not require that the Courts should be obdurate in refusing to give a statute retrospective operation, equally it does not justify the reading of more words than there are into the statute in order that the rule may apply.
Delhi Cloth and General Mills Co. Ltd. vs Income Tax Com missioner, Delhi, (1927) L. R. 54 I.A. 421, Smith vs Callander, and Reid vs Reid, , considered.
The appellant brought a suit for specific performance of an agreement of sale in the High Court of Indore at a time when Indore was a Princely State in British India.
On April 22, 1948, the Rulers of Gwalior, Indore and certain other States entered into a Covenant to form the United State of Gwalior, Indore and Malwa (Madhya Bharat).
The suit was heard by a single Judge and decreed on June 11, 1948.
The Ruler of Indore on June 16, 1948, made over the administration of his State to the Raj Pramukh of the United State in terms of the Covenant.
By an ordinance promulgated by the Raj Pramukh a High Court was established for the United State and the High Court of Indore ceased to function from July 29, 1948.
The respondents preferred an appeal to the Divisional Bench of the High Court of the United State on August 24, 1948, and the appellant preferred a cross appeal under the provisions of that Ordinance.
The Divisional Bench found in favour of the respondents in both the appeal and cross appeal and dismissed the appellant 's suit by a judgment dated December 2, 1948.
The Interim Legislative Assembly of the United State enacted the United State of Gwalior, Indore and Malwa (Madhya Bharat) High Court of Judicature Act, VIII Of 1949, which came into force on January 18, 1949, and repealed the Ordinance.
40 314 By section 2(b) of the Act it was provided : This Act shall apply to all Criminal and civil proceedings including those under.
testamentary, intestate, matrimonial divorce and insolvency jurisdiction pending in the courts in any State on the date on which the State is included in the united State and to such proceedings, arising in the said states, after those dates.
By section 25 it was provided : Special appeal shall lie to the Full Bench of the High court from : (1) a decree or an appealable order passed by the Divisional Bench of two judges Of the High Court in the exercise of extraordinary or appellate civil jurisdiction.
The appellant preferred an appeal to the Full Bench of the High Court under section 25 against.
the judgment of the Divisional Bench.
The Full Bench dismissed the appeal as incompetent holding that section 25 could not be given retrospective operation so as to disturb the right that had vested in the respondents as to the finality of the judgment of the Divisional Bench which was passed before the Act came into force : Held, that section 25 Of the Act, although not in terms retrospective, has to be read with section 2(b) of the Act which made the Act, and consequently section 25, applicable to the proceedings mentioned in it and since the appeal before the Divisional Bench, filed after the inclusion of the State of Indore in the United State, was beyond doubt one of such proceedings, the competency of the appeal could not be questioned.
Although there can be no hard and fast rule that in no case should the pre existing law be referred to for the purpose of interpreting a new enactment, where, as in the present case, the language is simple, free from doubt and clearly indicates that a change in the pre existing law is intended and no reason existed requiring a reference to the pre existing law, no such reference is permissible.
Tumahole Bereng vs The King, , Abdur Rahim vs Mohomed Barkat Ali, (1927) L.R. 55 I.A. 96 and In re Mayfair .Property Co. (1898) 2 Ch .
28, referred to.


judgement:
Special Leave Petition (Civil) No. 2391 of 1987.
From the Judgment and Order dated 22.10.86 of the Bombay High Court in Appeal No. 439/82.
S.B. Bhasme and A.S. Bhasme for the Petitioners.
A.K. Gupta for the Respondents.
The Judgment.
of the Court was delivered by SABYASACHI MUKHARJI, J.
The High Court of Bombay dismissed PG NO 641 PG NO 642 the challenge to the award in question.
The award is an unreasoned one.
The transactions between the parties started some time in 1974.
The petitioners participated in the reference in 1979, without demur.
In 1981, the award was made.
No objection was taken at that time that the award was bad being an unreasoned one.
The matter is pending for a long time.
It is not desirable, in the interest of justice, to keep this matter pending because some cases are pending here on the question of the validity of unreasoned award per se.
The parties participated in the arbitration.
There is no allegation of any violation of principles of natural justice.
One of the contentions in support of this application was that relevant documents had not been taken into consideration.
The High Court has pointed out on reading the award that it does not indicate that all relevant documents had not been taken into consideration.
On the facts of this case, from the records and on the face of the award there is no mistake of law apparent on the face of the award or gross mistake of facts resulting in the miscarriage of justice or of equity.
In the premises it would be unjust under Article 136 of the Constitution to interfere or keep the finding at bay.
The Special Leave Petition fails and is, therefore, dismissed.
P.S.S. Petition dismissed.

summary/full:
The petitioners participated in the arbitration without demur.
When the award was made in 1981 no objection was taken by them that it was bad being unreasoned one.
The High Court dismissed the challenge to the award.
In the special leave petition it was contended for them that relevant documents had not been taken into consideration.
Dismissing the special leave petition, HELD: The High Court has pointed out that the award does not indicate that all relevant documents had not been taken into consideration.
The parties participated in the arbitration.
There is no allegation of any violation of principles of natural justice.
There is no mistake of law apparent on the face of the award or gross mistake of facts resulting in miscarriage of justice or of equity.
It would, therefore, be unjust under article 136 of the Constitution to interfere or keep the finding at bay.
[642C D]