judgement:
on rule 12.14(3) of the Punjab Police Rules, 1934 which provided that "sons and near relatives of person who have done good service in the Punjab Police or in the Army shall, subject to the consideration imposed by rule 12.12 have preference over the other candi dates for police employment".
Under rule 30 of the Rules any relaxation should be made by the Administrator (Lt. Governor of the Union territory of Delhi) and not by the Deputy Commissioner of Police.
Thus no reliance can be placed on the order of relaxation passed by the Deputy Commissioner of Police on 3.10.1981 and since by the letter dated April 3, 1982 the Delhi Administration had imposed an additional condition in respect of the wards of Delhi 53 Policemen/Class IV employees that only one son of police personnel/ Class IV employee would be considered for gram of such relaxation the appellants cannot claim that they were entitled to be recruited because admittedly their brothers had already been recruited in the Delhi Police service on the basis of an earlier order of relaxation.
[63C F] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2547 of 1985.
From the Judgment and Order dated 15.5.1984 of the Delhi High Court in L.P.A. No. 157 of 1983 S.A.K. Dar and P.D. Sharma for the Appellants.
Anand Prakash, N.D. Garg, Miss Sushma Relan for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The above appeal by special leave arises out of a writ petition filed by the appellants in the High Court of Delhi for the issue of a direction to the Delhi Administration to appoint them as police Constables.
Prior to the coming into force of the (Act No. 34 of 1978) (hereinafter referred to as 'the Act ') with effect from the 1st day of July, 1978, there was in force in the Union territory of Delhi the .
On the commencement of the Act, the , 186 1 ceased to be in force in Delhi by virtue of section 149 of the Act.
The first proviso to section 149(1) of the Act, however, provided that all rules and standing orders (in cluding the Punjab Police Rules, as in force in Delhi) made under the would be in solar as they were consistent with the Act be deemed to have been respectively made under the Act.
Accordingly the Punjab Police Rules, 1934 as in force in Delhi which had been enacted under the continued to be in force even after the commencement of the Act.
Chapter 12 of the Punjab Police Rules, 1934 contained the rules relating to the appointments and enrolments of Assistant Superintendents of Police, Deputy Superintendents of Police, Inspectors, Sergeants, Assistant Sub Inspectors, Range Auditors, Head Constables and Constables.
Recruitment to the cadre of Constables was done under rules 12.12 to 12.22 of the Punjab Police Rules, 1934.
Rules 12.14 and 12.15 dealt with the status of the recruits, 54 the qualifications, age and the physicial standards which the recruits had to satisfy.
Rules 12.14 and 12.15 of the Punjab Police Rules, 1934 read as follows: "12.14.
Recruits Status of.
(1) Recruits shall be of good character and great care shall be taken in selecting men of a type suitable for police service from candidates present ing themselves for enrolment.
(2) The enlistment in the police of Gurkhas of Nepalese nationality is absolutely forbidden.
The enlistment of Gurkhas, who can prove British nationality or continuous domicile, is permitted, but only with the formal sanction of the Deputy Inspector General.
Before giving sanction the Deputy Inspector General should verify the nationality of the proposed recruit by a reference to the recruiting Offi cer for Gurkhas.
(3) Sons and near relatives of persons who have done good service in the Punjab Police or in the Army shall, subject to the consideration imposed by rule 12.12 have preference over the other candidates for police employment.
12.15.
Recruits age and physical standards of.
(1) Recruits shall be not more than 25, or less than 18 years of age, at the time of enrolment, and shall have a minimum height of 5 ' 7" and normal chest measurement of 33", with expansion of 11/2 inches.
These,physical standards shall not be relaxed without the general or special sanction of the Deputy Inspector General.
A general reduction of the stand ard may be allowed by Deputy Inspectors General in the case of special castes or classes, which provide desirable re cruits, but whose general height does not come up to that prescribed.
In such cases a standard of chest measurement and general physique shall be fixed, which will permit the enlistment of strong and well proportioned youths of the class in question.
(2) The greatest care shall be taken to ensure that the age of every police officer is correctly recorded at the time of his enrolment and appointment.
The record then made becomes of utmost importance when the question arises of 55 an officer 's fight to pension, and is accepted as decisive in the absence of full proof both that the original entry was wrong and that the date of birth originally given was due to a bona fide mistake.
A copy of this rule shall be pasted inside the cover of the recruit register (form 12.13) and the attention of the Civil Surgeon shall be drawn to it.
" Section 147 of the Act authorises the Administrator (Lt. Governor of the Union territory of Delhi) to make rules for carrying out the purposes of the Act.
Clause (a) of section 147 (2) of the Act expressly states that such rules may provide for recruitment to, and the pay, allowances and all other conditions of service of the members of, the Delhi police under clause (b) of section 5.
In exercise of the said power the Administrator (Lt. Governor of the Union territory of Delhi) promulgated the Delhi Police (Appoint ment and Recruitment) Rules, 1980 (hereinafter referred to as "the Rules") providing for the appointments of Inspec tors, Sub Inspectors, Assistant Sub Inspectors, Head Consta bles and Constables.
Rule 9 of the Rules laid down the procedure for the recruitment of the Constables.
The said rule, as it was originally promulgated, read as follows: "9.
Recruitment of Constables.
Delhi being a cosmopolitan city, it is imperative to attract candidates from all parts of the country.
(ii) The recruitment of constables shall be done twice a year in the months of January and July by the Board to be nominated by Commissioner of Police as per rule 8.
(iii) The Commissioner of Police may also order special recruitment at any time if there are sufficient number of vacancies and the panels prepared earlier have exhausted.
(iv) A panel shall be drawn up of selected candi dates on the basis of existing and anticipated vacancies.
This panel shall be valid till the next recruitment is held.
(v) Physical, educational, age and other standards for recruitment to the rank of constables shall be as under: 56 (a) Age 18 21 years Relaxable by 5 years for (i) Scheduled Caste/Scheduled Tribes candidates (ii) Sportsmen of distinction.
(iii) Ex servicemens per rule 28 of these rules.
(b) Height 170 Centi Relaxable by 4 centimeters meters for residents of Hill area e.g. Gurkhas, Garwalis.
(c) Chest 170 Centi Relaxable by 2 centimeters meters for residents of hill areas.
(d) Educa Matric/ Relaxable up to 9th pass tional Higher only for: Qualifi Secondary (i) Bandsmen, buglers, cation 10th of mounted Constables, drivers, 10 plus 2 despatch riders etc.
(ii) for sons of police personnel who die in service.
(e)Physical Sound state No relaxation permissible.
standard of health, free from defect/ deformity/ disease, vision 6/12 without glasses both eyes, free from colour blindness.
(f) Reserva (i) For Scheduled Castes, tion of Scheduled Tribes, Ex service vacancies men etc.
as per orders issued by Government from time to time.
(ii) For sons of police personnel not more than 5 % of vacancies.
57 (vi) The Commissioner of Police shall frame stand ing orders prescribing application forms and detailed proce dure to be followed for conducting physical efficiency, physical measurement, written tests and viva voce for regu lating the above mentioned recruitment.
The Rules were amended by the Administrator (Lt. Gover nor of the Union territory of Delhi on May 2, 1983 and one of the amendments made on that occasion was the addition of rule 32 to the Rules.
The new rule 32 of the Rules read as follows: "All provisions contained in the Punjab Police Rules as applicable to the Union territory of Delhi, relating to appointments and recruitment of employees are hereby re pealed, subject to the provisions as contained in the provi sos to sub section (1) and (2) of section 149 of the .
" The Rules were again amended in 1985.
On that occasion rule 9 of the Rules which provided for the recruitment of the Constables was amended but we are not concerned with these amendments made in the year 1985 since we are con cerned in this case with the rules which were in force prior to the above said amendment.
Rule 30 of the Rules which is relevant for purposes of this case reads as follows: "30 Power to relax.
When the Administrator is of the opinion that it is necessary or expedient so to do, he may, by order, for reasons to be recorded in writing, relax any of the provisions of these Rules with respect to any class, category, or persons or posts or in an individual case.
" As stated at the commencement, this appeal arises out of the writ petition bearing No. C.W .P.
No. 1891 of 1982 on the file of the High Court of Delhi filed under Article 226 of the Constitution.
The said writ petition was filed by 23 petitioners, who were applicants for the posts of Constables in the Delhi Police Force governed by the Act.
They prayed for the issue of a writ to the Delhi Administration to appoint them as Constables and for other consequential reliefs.
None of them was fully qualified to be recruited as a Constable under the Rules.
But being the sons of Delhi policemen, they depended upon an order date 3.10.1981 passed by the Deputy Commissioner of Police Headquarters (I) Delhi under which he had relaxed the rules relating 58 to the qualifications in favour of the sons or wards of Delhi policemen.
The relevant part of the said order dated 3.10.1981 reads thus: "The wards of Delhi policemen should be given the following concessions in age, educational qualifications and physical standards, etc., for recruitment as Constables in Delhi Police: 1.
Age Upto 25 years 2.
Educational 9th Pass Qualifications 3.
Height 5 ' 5" 4.
Chest 2" Relaxation.
All those wards of Delhi Police Personnel who conform to the qualifications laid down above should be ' allowed to appear in the physical and written tests.
Their forms should be accepted as it was being done before the introduction of New Rules.
The last date for acceptance of forms may be enhanced from 3rd Oct., 1981 to 15th October, 1981 and forms should be sold during holidays also.
sd/ A.K. Aggarwal Deputy Commissioner of Police, HQ (1) Delhi No. 19512 45/SIP dated Delhi, the 3 10 81.
" The appellants were eligible to be considered for the appointment as Constables in the light of the order of relaxation referred to above but even then they were not sent up for training which they had to undergo before the appointment because six of them were found to be ineligible since their brothers had already been recruited in the Police Department by relaxing the rules of appointment in their favour.
15 of them were refused permission to join the training course on the ground that the Administrator (Lt. Governor of Union territory of Delhi) had not relaxed the qualifications in their cases.
Two of them, however, had in fact received a letter stating that the Administrator (Lt. Governor of the Union territory of Delhi) had accorded sanction for relaxation for recruitment in their cases and they could join the training course with effect from 15.6.1982 but later on they 59 were also denied admission into the Police force because their brothers had been recruited earlier the Delhi Police service after according relaxation.
The order of relaxation in their favour had, therefore, been withdrawn.
The appel lants who were thus aggrieved by the denial of admission into the service preferred the above mentioned writ petition in the High Court for the issue of writ of mandamus to the Delhi Administration to appoint them as Constables on the ground that they satisfied the qualifications prescribed by the rules read with the order of relaxation dated 3.10.1981 referred to above.
The petition was resisted by the Delhi Administration.
It was contended on behalf of the Delhi Administration that the order of relaxation which had been passed on 3.10.1981 was not a valid one because (i) it had been passed on the assumption that rule 12.14(3) of the Punjab Police Rules, 1934 was in force on the date on which it was passed but in fact the said rule stood repealed on the coming into force of the Rules on 31.12.1980 framed under section 147 of the Act and (ii) under rule 30 of the Rules relaxation of quali fications could be made by the Administrator (Lt. Governor) not by the Deputy Commissioner of Police.
The Delhi Adminis tration further alleged that Standing Order No. 2 12 of 198 1 had been issued in connection with the recruitment of Constables in Delhi Police and clause 10 of the said Stand ing Order No. 212 read as follows: "10.
RELAXATION: (i) No relaxation in qualifications/standards mentioned in this Standing Order shall be given except in the cases and manner as laid down in the Delhi Police (Appointment and Recruitment) Rules, 1980.
(iii) Children of Police officers of subordinate rank serv ing or those who die in office will be granted 5 marks in the written test as bonus.
Relaxation in other standards will not be given excepting with the sanction of competent authority. ' ' Standing Order No. 212 of 1981 referred to above was further amended as follows: "The wards of the Delhi Policemen will, however, be given 60 the following concessions in age, educational qualifications and physical standards, to enable them to take the physical and written tests: (1) Age Upto 25 years (2) Educational 9th Pass Qualification (3) Height 5 ' 5" (4) Chest 2 inches relaxation However, their enlistment would be done only in case of relaxation being granted by the competent authority and mere fact that a candidate has qualified in the test will not in itself give him a right to enlistment.
" The Delhi Administration, however, agreed to grant relaxation to the wards of Delhi Policemen/Class IV employ ees only upto the limit of 71/2% of the total selection.
Accordingly the Police authorities in charge of the selec tion of candidates recommended cases of 259 candidates out of a total of 420 candidates who came within the category of wards of Policemen/Class IV employees (within the limit of 71/2 % of the total selection) to the Delhi Administration for seeking approval of the competent authority on the basis of the following criteria: "(i) Only one son of police personnel/class IV employee to be considered for grant of such relaxation.
(ii) First preference to be given to wards of deceased, retired and incapacitated policemen and class IV employees.
(iii) Selection of the remaining candidates to be done, in order of merit in the tests within the maximum permissible limit of 7 11/2% provided that they do not need relaxation in more than two standards.
(iv) With regard to Scheduled Castes and Scheduled Tribes candidates who are the wards of Delhi Police person nel, the lowering of the limit of qualifying percentage would also be applicable in addition.
61 The aforesaid recommendations having been accepted by the competent authority the police authorities allowed the candidates whose cases were covered by the above criteria and the fixed percentage of 71/2% of such appointment to join the training course.
Since the case of the appellants were not covered by the above criteria they were treated as being not eligible to be appointed as Constables.
After hearing the learned counsel for both the parties the learned Single Judge who heard the writ petition allowed it by his judgment dated July 21, 1983.
He held that the Punjab Police Rules, 1934 continued to remain in force even after the promulgation of the Rules which came into force on 31.12.
1980 and the cases of the appellants were protected by the relaxation order dated 3.10.1981 issued by the Deputy Commissioner of Police and the fact that any of the brothers of the appellants had been appointed earlier under the cover of similar order of relaxation did not disentitle the appel lants to claim the benefit of the order of relaxation.
The learned Judge was, therefore, of the view that the appel lants were entitled to be appointed as Constables.
Since two of the appellants had already been sent for training under the two letters of relaxation issued in their favour the learned Judge issued a writ directing the Delhi Administra tion to send the remaining 21 candidates also for training and to appoint them as Constables after the completion of their training.
Aggrieved by the decision of the learned Single Judge the Union of India and the Delhi Administration filed an appeal before the Division Bench of the High Court in Let ters Patent Appeal No. 157 of 1983.
The Division Bench held that on the promulgation of the Rules with effect from 31.12.1980, rule 12.14(3) of the Punjab Police Rules, 1934 which dealt with the subject of appointment of Constables stood repealed.
It further held that under rule 30 of the Rules the power to relax the Rules in appropriate cases having been vested with the Administrator (Lt. Governor of the Union territory of Delhi) the order of relaxation issued by the Deputy Commissioner of Police on 3.10.1981 did not give any right to the appellants for enlishment as Consta bles unless relaxation was granted by the competent authori ty i.e. the Administrator (Lt. Governor of the Union terri tory of Delhi) and the mere fact that a candidate was suc cessful in the test by itself would not give him a right to enlistment.
The Court further held that since by its letter dated April 3, 1982 the Delhi Administration had decided that only one son of a police officer would be considered for grant of such relaxation the appellants whose brothers had already been employed in the police service on the basis of an earlier order of 62 relaxation were not entitled to be recruited by relaxing the Rules once again.
Accordingly the judgment of the learned Single Judge was set aside by the Division Bench and the writ petition filed by the petitioners therein was dis missed.
Aggrieved by the decision of the Division Bench the appellants filed this appeal by special leave.
The first point which requires to be considered is whether the Punjab Police Rules, 1934 in so far as they related to the recruitment to the post of Constables was concerned were in force after the promulgation of the Rules on 31.12.1980.
It is urged on behalf of the appellants that since rule 32 which provided that "all provisions contained in the Punjab Police Rules as applicable to the Union terri tory of Delhi, relating to the appointments and recruitment of employees are hereby repealed, subject to the provisions as contained in the provisos to sub sections (1) and (2) of section 149 of the " had been intro duced by an amendment of the Rules on May 2, 1983 it must be presumed that the Punjab Police Rules, 1934 in so far as they related to the recruitment and appointment of Consta bles remained in force till May 2, 1983.
The contention of the Delhi Administration is that the said rule had been introduced by way of abundant caution although in fact the Punjab Police Rules, 1934 had ceased to be in force on 31.12.1980 and the mere addition of rule 32 did not have the effect of keeping the relevant Punjab Police Rules, 1934 alive after December 31, 1980.
We are of the view that the Division Bench was right in accepting the plea urged on behalf of the Delhi Administration in this regard.
Section 149(2) of the Act no doubt provided that the rules framed under the of 1861 would continue to be in force after the Act came into force in so far as they were con sistent with the Act but at the same time section 147 of the Act authorised the Administrator (Lt. Governor of the Union territory of Delhi) to make rules regarding recruitment to, and the pay, allowances and all other conditions of service of the members of the Delhi Police under clause (b) of section 5.
It is not disputed that rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 and the rules promulgated on December 31,1980 dealt with the identical subject, name ly, the appointment and recruitment of Constables to the Delhi police service.
Therefore, on the promulgation of the Rules on December 31, 1980 which covered the subject dealt with by rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 had the effect of repealing by necessary impli cation rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 even though initially there was no express 63 provision in the Rules to the effect that rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 stood repealed with effect from December 31, 1980.
It is well settled that when a competent authority makes a new law which is totally inconsistent with the earlier law and that the two cannot stand together any longer it must be construed that the earlier law had been repealed by necessary implication by the later law.
Applying the above test it has to be held in this case that rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 stood repealed with effect from December 31, 1980 and rule 32 of the Rules which was introduced by way of amendment on May 2, 1983 had not the effect reviving rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 and keeping them alive beyond December 31, 1980 upto May 2, 1983.
When once this conclusion is reached it follows that the appellants cannot rely upon rule 12.14(3) of the Punjab Police Rules, 1934 which provided that "sons and near rela tives of person who have done good service in the Punjab Police or in the Army shall, subject to the consideration imposed by rule 12.12 have preference over the other candi dates for police employment".
Under rule 30 of the Rules any relaxation should be made by the Administrator (Lt. Governor of the Union territory of Delhi) and not by the Deputy Commissioner of Police.
Thus no reliance can be placed on the order of relaxation passed by the Deputy Commissioner of Police on 3.10.1981 and since by the letter dated April 3, 1982 the Delhi Administration had imposed an additional condition in respect of the wards of Delhi Policemen/Class IV employees that only one son of police personnel/Class IV employees would be considered for grant of such relaxation the appellants cannot claim that they were entitled to be recruited because admittedly their brothers had already been recruited in the Delhi Police service on the basis of an earlier order of relaxation.
The appellants have not, there fore, made out any case in support of their plea.
We should, however, point out at this stage a fundamen tal defect in the claim of the appellants, namely, that rule 12.14(3) of the Punjab Police Rules, 1934 which authorised the granting of preference in favour of sons and near rela tives of persons serving in the police service became uncon stitutional on the coming into force of the Constitution.
Clauses (1) and (2) of Article 16 of the Constitution which are material for this case read thus: "16.
(1) There shall be equality of opportunity for all citizens in matters relating to employment or ap pointment to any office under the State.
64 (2) No citizen shall, on grounds only of religion, race caste, sex, descent, place of birth, residence or any of them, be ineligible.
for, or discriminated against in respect of, any employment or office under the State.
" While it may be permissible to appoint a person who is the son of a police officer who dies in service or who is incapacitated while rendering service in the Police Depart ment, a provision which confers a preferential fight to appointment on the children or wards or other relatives of the police officers either in service or retired merely because they happen to be children or wards or other rela tives of such police officers would be contrary to Article 16 of the Constitution.
Opportunity to get into public service should be extended to all the citizens equally and should not be confined to any extent to the descendants or relatives of a person already in the service of the State or who has retired from the service.
In Gazula Dasaratha Rama Rao vs The State of Andhra Pradesh & Others, ; the question relating to the constitutional validity of section 6(1) of the Madras Hereditary Village Offices Act, 1895 (3 of 1895) came up for consideration before this Court.
That section provided that where two or more villages or portions thereof were grouped together or amalgamated so as to form a single new village or where any village was divided into two or more villages all the village officers of the class defined in section 3, clause (1) of that Act in the villages or portions of the villages or village amalga mated or divided as aforesaid would cease to exist and the new offices which were created for the new village or vil lages should be filled up by the Collector by selecting the persons whom he considered best qualified from among the families of the last holders of the offices which had been abolished.
This Court held that the said provision which required the Collector to fill up the said new offices by selecting persons from among the families of the last hold ers of the offices was opposed to Article 16 of the Consti tution.
The Court observed in that connection at pages 940 941 and 946 947 thus: "Article 14 enshrines the fundamental fight of equality before the law or the equal protection of the laws within the territory of India.
It is available to all, irrespective of whether the person claiming it is a citizen or not.
Article 15 prohibits discrimination on some special grounds religion, race, caste, sex, place of birth or any of them.
It is available to citizens only, but is not re stricted to any employment or office under the State.
Arti cle 16 cl.
(1), guarantees equality of opportunity for all citizens in matters 65 relating to employment or appointment to any office under the State; and cl.
(2) prohibits discrimination on certain grounds in respect of any such employment or appointment.
It would thus appear that article 14 guarantees the general right of equality; articles 15 and 16 are instances of the same right in favour of citizens in some special circumstances.
Arti cles 15 is more general than article 16, the latter being confined to matters relating to employment or appointment to any office under the State.
It is also worthy of note that article 15 does not mention 'descent ' as one of the prohibited grounds of discrimination, whareas article 16 does.
We do not see any reason why the full ambit of the fundamental right guaranteed by article 16 in the matter of employment or ap pointment to any office under the State should be cut down by a reference to the provisions in Part XIV of the Consti tution which relate to Services or to provisions in the earlier Constitution Acts relating to the same subject . . . . . . . . . . . . . ,. (Pages 940 941).
There can be no doubt that s.6(1) of the Act does embody a principle of discrimination on the ground of de scent only.
It says that in choosing the person to fill the new offices, the Collector shall select the persons whom he may consider the best qualified from among the families of the last holders of the offices which have been abolished.
This, in our opinion, is discrimination on the ground of descent only and is in contravention of article 16(2) of the Constitution." (Pages 946 947).
We are of opinion that the claim made by the appellants for the relaxation of the Rules in their cases only because they happen to be the wards or children or relatives of the police officers has got to be negatived since their claim is based on 'descent ' only, and others will thereby be discrim inated against as they do not happen to be the sons of police officers.
Any preference shown in the matter of public employment on the grounds of descent only has to be declared as unconstitutional.
The appellants have not shown that they were otherwise eligible to be recruited as Consta bles in the absence of the order of relaxation on which they relied.
Hence they cannot succeed.
66 We, however, make it clear that this judgment shall not affect the appointments of sons or wards of police officers already made by relaxing the Rules and they shall remain undisturbed.
In the result the appeal fails and it is dismissed.
There shall, however, be no order as to costs.
S.R. Appeal dis missed.

dataset_name: IN-Abs

summary/full:
Delhi Police (Appointment and Recruitment) Rules, 1980, Whether supersedes the earlier Punjab Police Rules, 1934, though it is deemed to be in force by virtue of section 149(2) of the Delhi Police Act, 1978 Construction of a New law. , sections 147 and 149 Scope and effect of, explained Rules 30 and 32 of the 1980 Police Rules.
The (Act 34/78) which came into force with effect from 1.7. 1978 by virtue of section 149 thereof repealed the earlier Act of 1861.
However, the first proviso to section 149(1) provided that all rules and stand ing Orders (including the Punjab Police Rules, as in force in Delhi) made under the would be in so far as they were consistent with the Act may be deemed to have been respectively made under the Act.
Consequently the said 1934 Rules continued to be in force even after the commence ment of the Act.
By virtue of the authority vested under section 147(2)(a) of the 1978 Act, the Lt. Governor of Delhi promulgated the Delhi Police (Appointment and Recruitment) Rules, 1980.
The said Rules which came into effect from 31.12.80 were amended twice in 1983 and 1985.
By the newly added Rule 32 on 2.5.83, all provisions contained in the Punjab Police Rules as applicable to the Union Territory of Delhi were repealed.
While under the earlier Rule 12.14.(3) of the Punjab Police Rules, sons and near relatives of persons who have done good service in Punjab Police or in the Army had preference in recruitment, under the new Rule 9(vi)(d)(ii) relaxation of the age limit alone was provided for "for sons of police personnel who die in service".
Despite this Rule position, the Deputy Commissioner of Police Headquarters (I), Delhi, by his order dt.3. 10.81, relaxed the rules relating to the qualifications in favour of the sons or wards of Delhi 50 Policemen upto the limit of 71/2% of the total selection.
Accordingly the police authorities in charge of the selec tion of candidates recommended 259 candidates out of a total of 420 candidates who came within the category of wards of Policemen/Class IV employees to the Delhi Administration for seeking approval of the competent authority.
All the 23 appellants were eligible to be considered for the appointment as Constables in the light of the order of relaxation dated 3.10.81, but even they were not sent up for training which they had to undergo before the appointment because six of them were found to be ineligible since their brothers had already been recruited in the Police Department by relaxing the rules of appointment in their favour.
15 of them were refused permission to join the training course on the ground that the Administrator (Lt. Governor of Union territory of Delhi) had not relaxed the qualifications in their cases.
Two of them, however, had in fact received a letter stating that the Administrator (Lt. Governor of the Union territory of Delhi) had accorded sanction for relaxa tion for recruitment in their cases and they could join the training course with effect from 15.6. 1982 but later on they were also denied admission into the Police force be cause their brothers had been recruited earlier in the Delhi Police service after according relaxation.
The order of relaxation in their favour had, therefore, been withdrawn.
The appellants who were thus aggrieved by the denial of admission into the service preferred the writ petition in the High Court for the issue of writ of mandamus to the Delhi Administration to appoint them as Constables on the ground that they satisfied the qualifications prescribed by the rules read with the order of relaxation dated 3.10.1981.
A learned Single Judge of the Delhi High Court allowed the writ petition and held that the Punjab Police Rules, 1934 continued to remain in force even after the promulga tion of the Rules which came into force on 31.12.1980 and the cases of the appellants were protected by the relaxation order dated 3.10.1981 issued by the Deputy Commissioner of Police and the fact that any of the brothers of the appel lants had been appointed earlier under the cover of similar order of relaxation did not disentitle the appellants to claim the benefit of the order of relaxation.
Aggrieved by the said decision, the Union of India and the Delhi Administration flied a Letters Patent Appeal.
The appeal was allowed holding; (a) that on the promulgation of the Rules with effect from 31.12.1980, rule 12.14.(3) of the Punjab Police Rules, 1934 which dealt with the subject of appointment of Constables stood repealed; (b) that under Rule 30 of the Rules the power to relax the Rules in appro priate 51 cases having been vested with the Administrator.
(Lt. Gover nor of the Union territory of Delhi) the order of relaxation issued by the Deputy Commissioner of Police on 3.10.1981 did not give any right to the appellants for enlistment as Constables unless relaxation was granted by the competent authority i.e. the Administrator (Lt. Governor of the Union territory of Delhi) and the mere fact that a candidate was successful in the test by itself would not give him a right to enlistment; (c) that since by its letter dated April 3, 1982 the Delhi Administration had decided that only one son of a police officer would be considered for grant of such relaxation the appellants whose brothers had already been employed in the police service on the basis of an earlier order of relaxation were not entitled to be recruited by relaxing the Rules once again.
Hence the appeal by special leave.
Dismissing the appeal, the Court, HELD: 1. 1 The claim made by the appellants for the relaxation of the Rules in their cases only because they happen to be the wards or children or relatives of the police officers has got to be negatived since their claim is based on 'descent ' only and others will thereby be discrimi nated against as they do not happen to be the sons of police officers.
Any preference shown in the matter of public employment on the ground of descent only has to be declared as unconstitutional.
[65F G] 1.2 While it may be permissible to appoint a person who is the son of a police officer who dies in service or who is incapacitated while rendering service in the Police Depart ment, a provision which confers a preferential right to appointment on the children or wards or other relatives of the police officers either in service or retired merely because they happen to be the children or wards or other relatives of such police officers would be contrary to Article 16 of the Constitution.
Opportunity to get into public service should be extended to all the citizens equal ly and should not be confined to any extent to the descend ants or relatives of a person already in the service of the State or who has retired from the service.
[64B D] Gazula Dasaratha Rama Rao vs The State of Andhra Pradesh 2.1 It is well settled that when a competent authority makes a new law which is totally inconsistent with the earlier law and that the two cannot stand together any longer it must be construed that the earlier law had been repealed by necessary implication by the later law.
Apply 52 ing the above test it has to be held in this case that rule 12.14 and rule of the Punjab Police Rules, 1934 stood re pealed with effect from December 31, 1980 and rule 32 of the Rules which was introduced by way of amendment on May 2, 1983 had not the effect reviving rule 12.14 and rule 12. 15 of the Punjab Police Rules, 1934 and Keeping them alive beyond December 31, 1980 upto May 2, 1983.
[63A C] 2.2 Rule 32 of the Delhi Police (Appointment and Re cruitment) Rules, 1980 had been introduced by way of abun dant caution, although in fact the Punjab Police Rules, 1934 ceased to be in force on 31.
12. 1980 and the mere addition of Rule 32 did not have the effect of keeping the 1934 Rules alive after 31.12.80.
[62D E] 2.3 Section 149(2) of the no doubt provided that the rules framed under the of 1861 would continue to be in force after the Act came into force in so far as they were consistent with the Act but at the same time section 147 of the Act authorised the Administra tor (Lt. Governor of the Union territory of Delhi) to make rules regarding recruitment to, and the pay, allowances and all other conditions of service of the members of the Delhi Police under clause (b) of section 5.
It is not disputed that rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 and the rules promulgated on December 31, 1980 dealt with the identical subject, namely, the appointment and recruitment of Constables to the Delhi Police service.
Therefore, on the promulgation of the Rules on December 31, 1980 which covered the subject dealt with by rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 had the effect of repealing by necessary implication rule 1,2.14 and rule 12.15 of the Punjab Police Rules, 1934 even though initially there was no express provision in the Rules to the effect that rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 stood repealed with effect from December 31, 1980.
[62D H;63A]


judgement:
: Civil Appeal No. 118 of 1957.
Appeal by special leave from the judgment and order dated January 31, 1956, of the Circuit Bench of the Punjab High Court at Delhi in Civil Writ No. 243 D of 1954.
C. K. Daphtary, Solicitor General of India, R. Ganapathy Iyer and R. H. Dhebar, for the appellant.
Purshottam Tricumdas, T. section Venkataraman and K. R. Chaud hury, for the respondent.
September 18.
The following Judgment of the Court was delivered by VENKATARAMA AIYAR,J: This is an appeal by special leave against the judgment and order of the High Court of Punjab in an application under article 226 of the Constitution setting aside an order dated September 16, 1954, dismissing the respondent herein, from Government service on the ground that it was in contravention of article 311 (2) of the Consti tution.
The respondent was, at the material dates, an Assistant Controller in the Commerce Department of the Union Govern ment.
Sometime in the middle of March, 1953, one Shri Bhan, a representative of a Calcutta firm styled Messrs. Gattulal Chhaganlal Joshi, came to Delhi with a view to get the name of the firm removed from black list in which it had been placed, and for that purpose, he was contacting the officers in the Department.
Information was given to Sri Tawakley an assistant in the Ministry of Commerce and Industry (Com plaints Branch), that Sri Bhan was offering to give bribe for getting an order in his favour.
He immediately reported the matter to the Special Police Establishment, and they decided to lay a trap for him.
Sri Bhan, however, was willing to pay the bribe only after an order in his favour had been made and communicated, but he offered that he would get the respondent to stand as surety for payment by him.
The police thereafter decided to set a trap for the respond ent, and it war,, accordingly arranged that Sri 501 Tawakley should meet, by appointment, Sri Bhan and the respondent in the Kwality Restaurant in the evening on March 24, 1953.
The meeting took place as arranged, and three members of the Special Police Establishment were present there incognito.
Then, there was a talk between Sri Tawak ley, Sri Bhan and the respondent, and it is the case of the appellant that during that talk, an assurance was given by the respondent to Sri Tawakley that the amount would be paid by Sri Bhan.
After the conversation was over, when the respondent was about to depart, one of the officers, the Superintendent of Police, disclosed his identity, got from the respondent his identity card and initialled it, and Sri Bhan also initialled it.
On March 28, 1953, the respondent received a notice from the Secretary to the Ministry of Commerce and Industry charging him with aiding and abetting Sri Bhan in offering illegal gratification to Sri Tawakley and attempting to induce Sri Tawakley to accept the gratification offered by Sri Bhan, and in support of the charges, there were detailed.
allega tions relating to meetings between the respondent and Sri Tawakley on March 17, 1953, on March 21, 1953, a telephonic conversation with reference to the same matter later on that day, and the meeting in the Kwality Restaurant already mentioned.
The respondent was called upon to give his explanation to the charges, and he was directed to state whether he wished to lead oral or documentary evidence in defence.
The enquiry was delegated to Mt. J. Byrne, Joint Chief Controller of Imports and Exports.
On April 10, 1953, the respondent submitted a detailed explanation denying that he met Sri Tawakley either on the 17th or on the 21st March, or that there was any telephonic conversation that day with him, and stating that the conversation which he had in the Kwality Restaurant on the 24th related to an insurance policy of his, and had nothing to do with any bribe proposed to be offered by Sri Bhan.
The respondent also asked for an oral enquiry and desired to examine Sri Bhan, Sri Fateh Singh and Sri Jai Narayan in support of his version.
On April 17, 1953 Mc.
Byrne gave notice to the 502 respondent that there would be an oral enquiry, and pursuant thereto, witnesses were examined on April 20, 1953, and the following days, and the hearing was concluded on April 27, 1953.
On July 28,1953, Mr. Byrne submitted his report, and there in, he found that the charges against the respondent had been clearly established.
On this, a communication was issued to the respondent on August 29, 1953, wherein he was informed that it was provisionally decided that he should be dismissed, and asked to show cause against the proposed action.
Along with the notice, the whole of the report of Mr. Byrne, omitting his recommendations, was sent.
Oil September 11, 1953, the respondent sent his explanation.
Therein, he again discussed at great length the evidence that had been adduced, and submitted that the finding of guilt was not proper, and that no action should be taken against him.
He also complained in this explanation that the enquiry was vitiated by the fact that he had not been permitted to cross examine.
the witnesses, who gave evidence against him.
The papers were then submitted to the Union Public Service Commission in accordance with article 320, and it sent its report on September 6, 1954, that the charges were made out, that there was no substance in the complaint of the respondent that he was not allowed to cross examine the witnesses, and that he should be dismissed.
The Presi dent.
accepting the finding of the Enquiring Officer and the recommendation of the Union Public Service Commission, made an order on September 16, 1954, that.
the respondent should be dismissed from Government service.
The respondent then filed the application out of which the present appeal arises, in the High Court of Punjab for an appropriate writ to quash the order of dismissal dated September 16, 1954, for the reason that there was no proper enquiry.
As many as seven grounds were set forth in support of the Petition, and of these, the learned Judges held that three had been established.
They held that the respondent had been denied an opportunity to cross examine witnesses, who gave evidence in support of the charge, that further, 503 he was not allowed to make his own statement, but wag merely cross examined by the Enquiring Officer, and that likewise, his witnesses were merely cross examined by the Officer without the respondent himself being allowed to examine them.
These defects, they observed, amounted to a denial of reasonable opportunity to the respondent to show cause against his dismissal, and that the order dated September 16, 1954, which followed on such enquiry, was bad as being in contravention of article 311(2).
In the result, they set aside the order, and directed him to be reinstated.
The correctness of this order is challenged by the Solicitor General on two grounds : (1) that the finding that the respondent had no reasonable opportunity afforded to him at the enquiry is not supported by the evidence; and (2) that even if there was a defect in the enquiry, that was a matter that could be set right in the stage following the show cause notice, and as the respondent did not ask for an opportunity to cross examine the witnesses, he could not be heard to urge that the order dated September 16, 1954, was bad as contravening article 311(2).
At the very outset, we have to observe that a writ petition under article 226 is not the appropriate proceeding for adjudi cation of disputes like the present.
Under the law, a person whose services have been wrongfully terminated, is entitled to institute an action to vindicate his rights, and in such an action, the Court will be competent to award all the relief 's to which he may be entitled, including some which would not be admissible in a writ petition.
It is well settled that when an alternative and equally effica cious remedy is open to a litigant, he should be required to pursue that remedy and not invoke the special jurisdiction of the High Court to issue a prerogative writ.
It is true that the existence of another remedy does not affect the jurisdiction of the Court to issue a writ; but, as observed by this Court in Raghid Ahmed vs Municipal Board, Kairana (1), " the existence of an adequate legal remedy is a thing to be taken into consideration in the matter of granting writs ".
Vide also K. section Rashid and (i) 504 Son vs The Income tax Investigation Commission And where such remedy exists, it will be a sound exercise of discre tion to refuse to interfere in a petition under article 226, unless there are good grounds therefor.
None such appears in the present case.
On the other hand, the point for determination in this petition whether the respondent was denied a reasonable opportunity to present his case, turns mainly on the question whether he was prevented from cross examining the witnesses, who gave evidence in support of the charge.
That is a question on which there is a serious dispute, which cannot be satisfactorily decided without taking evidence.
It is not the practice of Courts to decide questions of that character in a writ petition, and it would have been a proper exercise of discretion in the present case if the learned Judges had referred the respondent to a suit.
In this appeal, we should have ourselves adopted that course, and passed the order which the learned Judges should have passed.
But we feel pressed by the fact that the order dismissing the respondent having been made on September 16, 1954, an action to set it aside would now be timebarred.
As the High Court has gone into the matter on the merits, we propose to dispose of this appeal on a consideration of the merits.
The main ground on which the respondent attacked the order dated September 16, 1954, was that at the enquiry held by Mr. Byrne, he was not given an opportunity to cross examine the witnesses, who deposed against him, and that the find ings reached at such enquiry could not be accepted.
But the question is ,whether that allegation has been made out.
In para.
7 of his petition, the respondent stated : " Despite repeated verbal requests of the petitioner, the inquiry Officer did not permit him to crossexamine any wit ness, who deposed against him." But this was contradicted by Mr. Byrne, who filed a counter affidavit, in which he stated: " (4) That it is incorrect that no opportunity was given to the petitioner at the time of the oral enquiry (1) ; , 747. 505 to cross examine the witnesses who had deposed against the petitioner.
(5) That all witnesses were examined in petitioner 's presence and he was asked by me at the end of each examina tion whether he had any questions to put.
(6) That the petitioner only put questions to one witness Shri P. Govindan Nair, and to others he did not.
" On this affidavit, Mr. Byrne was examined in Court, and he repeated these allegations and added: " I have distinct recollection that I asked Shri T. R. Varma to put questions in cross examination to witnesses.
" It was elicited in the course of his further examination that he did not make any note that he asked Shri T. R. Varma to put questions in cross examination to witnesses, and that that might have been due to a slip on his part.
We have thus before us two statements, one by Mr. Byrne and the other by the respondent, and they are in flat contradic tion of each other.
The question is which of them is to be accepted.
When there is a dispute as to what happened before a court or tribunal, the statement of the Presiding Officer in regard to it is generally taken to be correct, and there is no reason why the statement of Mr. Byrne should not be accepted as true.
He was admittedly an officer hold ing a high position, and it is not suggested that there was any motive for him to give false evidence.
There are more over, features in the record, which clearly show that the statement of Mr. Byrne must be correct.
The examination of witnesses began on April 20,1953, and four witnesses were examined on that date, among them being Sri C. B. Tawakley.
If, as stated by the respondent, he asked for permission to crossexamine witnesses, and that was refused, it is surpris ing that he should not have put the complaint in writing on the subsequent dates on which the enquiry was continued.
To one of the witnesses, Sri.
P. Govindan Nair, he did actual ly put a question in cross examination, and it is difficult to reconcile this 506 with his statement that permission had been refused to cross examine the previous witnesses.
A reading of the deposition of the witnesses shows that the Enquiring Officer himself had put searching questions, and elicited all rele vant facts.
It is not suggested that there was any specific matter in respect of which cross examination could have been but was not directed.
We think it likely that the respond ent did not cross examine the witnesses because there was nothing left for him to cross examine.
The learned Judges gave two reasons for accepting the statement of the re spondent in preference to that of Mr. Byrne.
One is that there was no record made in the depositions of the witnesses that there was no cross examination.
But what follows from this? That, in fact, there was no cross examination, which is a fact; not that the request of the respondent to cross examine was disallowed.
Then again, the learned Judges say that the respondent was present at the hearing of the writ petition before them, that they put questions to him, and formed the opinion that he was sufficiently intelligent, and that it was difficult to believe that he would not have cross examined the witnesses.
We are of opinion that this was a consideration which ought not to have been taken into account in a judicial determination of the question, and that it should have been wholly excluded.
On a considera tion of the record and of the probabilities, we accept the statement of Mr. Byrne as true, and hold that the respondent was not refused permission to cross examine the witnesses, and that the charge that the enquiry was defective for this reason cannot be sustained.
The respondent attacked the enquiry on two other grounds, which were stated by him in his petition in the following terms: "(C) That the petitioner was cross examined and was not enabled to make an ' oral statement on his own behalf.
(D) That the defence witnesses were not given an opportuni ty to tell their own version or to be examined by the peti tioner as their depositions were confined 507 to answers in reply to questions put by the Inquiry Officer.
" In substance, the charge is that the respondent and his witnesses should have been allowed to give their evidence by way of examination in chief, and that only thereafter the officer should have cross examined them, but that he took upon himself to cross examine them from the very start and had thereby violated well recognised rules of procedure.
There is also a complaint that the respondent was not al lowed to put questions to them.
Now, it is no doubt true that the evidence of the respondent and his witnesses was not taken in the mode prescribed in the Evidence Act; but that Act has no application to en quiries conducted by tribunals, even though they may be judicial in character.
The law requires that such tribunals should observe rules of natural justice in the conduct of the enquiry, and if they do so, their decision is not liable to be impeached on the ground that the procedure followed was not in accordance with that, which obtains in a Court of law.
Stating it broadly and without intending it to be exhaustive, it may be observed that rules of natural justice require that a party should have the opportunity of adducing all relevant evidence on which he relies, that the evidence of the opponent should be taken in his presence, and that he should be given the opportunity of cross examining the witnesses examined by that party, and that no materials should be relied on against him without his being given an opportunity of explaining them.
If these rules are satis fied, the enquiry is not open to attack on the ground that the procedure laid down in the Evidence Act for taking evidence was not strictly followed.
Vide the recent deci sion of this Court in New Prakash Transport Co. vs New Suwarna Transport Co. (1), where this question is discussed.
We have examined the record in the light of the above prin ciples, and find that there has been no violation of the principles of natural justice.
The (1) 65 508 witnesses have been,examined at great length, and have spoken to all relevant facts bearing on the question, and it is not suggested that there is any other matter, on which they could have spoken.
We do not accept the version of the respondent that he was not allowed to put any questions to the witnesses. 'Indeed, the evidence of Sri Jai Narayan at p. 188 of the Paper Book shows that the only question on which the respondent wished this witness to testify was put to him by Mr. Byrne.
The evidence of Sri Bhan and Sri Fateh Singh was, it should be noted, wholly in support of the respondent.
The findings of Mr. Byrne are based entirely on an appreciation of the oral evidence taken in the presence of the respondent.
It should also be mentioned that the respondent did not put forward these grounds of complaint in his explanation dated September 11, 1953, and we are satis fied that they are wholly without substance, and are an afterthought.
We accordingly hold, differing from the learned Judges of the Court below, that the enquiry before Mr. Byrne was not defective, that the respondent had full opportunity of placing his evidence before him, and that he did avail himself of the same.
, In this view, it becomes unnecessary to express any opinion on the second question, which was raised by the learned Solicitor General.
In the result, we allow the appeal, set aside the order of the Court below, and dismiss the writ application.
There will be no order as to costs.
Appeal allowed.

summary/full:
The respondent was dismissed from service under the Govern ment of India in pursuance of an enquiry held under article 311 of the Constitution of India.
He filed an application in the High Court under article 226 to quash the order of dismiss al on the grounds inter alia that in the enquiry the evi dence of the respondent and his witnesses was not taken in the mode prescribed by the Indian Evidence Act and that as a result.
he was not given a reasonable opportunity as re quired under article 311(2).
It was found that though the procedure laid down in that Act was not strictly followed the respondent was given a full opportunity of placing his evidence before the Enquiring Officer.
Held : (1) Petitions under article 226 of the Constitution should not generally be entertained by the High Courts where an alternative and equally efficacious remedy is available.
It is not the practice of Courts to decide in a writ peti tion disputed questions which cannot be satisfactorily decided without taking evidence.
Rashid Ahmed vs Munsicipal Board, Kairana, ; and K. section Rashid and Son vs The Income tax Investigation Commission ; , relied on.
(2) Tile Indian Evidence Act has no application to en quiries conducted by tribunals.
The law only requires that tribunals should observe rules of natural justice such as that a party should have the opportunity of adducing all relevant evidence on which he relies, that the evidence of the opponent should be taken in his presence and that he should be given the opportunity of cross examining the witnesses examined by that party, and that no materials should be relied on against him without his being given an opportunity of explaining them.
If these rules are satis fied then the enquiry is not open to attack on the ground that the procedure laid down in the Indian Evidence Act for taking evidence was not strictly followed.
New Prakash Transport Co. vs New Suwarna Transport Co,, , followed, 64 500


judgement:
: Criminal Appeal Nos.
485 488 of 1979 etc.
From the Judgment and Order dated 6.12.
1977 of the Andhra Pradesh High Court in Cr.
Revision Cases Nos. 294, 295,296 and 293 of 1977 Kapil Sibal, Atul Wig, Raj Birbal, A.T.M. Sampath and G.M. Rao for the Appellant.
89 A.K. Goel, K. Ram Kumar, B Parthasarthi for the Respondents.
The Judgment of the Court was delivered by OZA, J.
These appeals have been filed after grant of leave against the acquittal of the respondent from offences under Sections 467 read with Section 109 and 471 of the Indian Penal Code.
The prosecution case at the trial was that V. Suryakan tam is a resident of official colony VSP, and has a Bank account in the Bank of India since 1965.
Her Account No. is 2006.
She has also a cheque book to operate the Bank trans actions and she was also entitled to withdrawal facility for withdrawing money from her accounts.
The respondent accused was working as an Accounts Clerk in the Bank of India in the very branch where V. Suryakantam P.W.i had her account.
This V. Suryakantam, P.W. 1 was 'acquainted with the respondent accused and he used to assist her in the Bank transactions.
It is alleged that whenever she wanted to withdraw money on a cheque her daughter V.S. Kanthi used to fill up the cheque and she used to sign on the cheque.
On 23rd NOvember, 1970 the respondent accused misrepresented to P.W. 1 that her account book is required in the Bank for the purpose of posting up to date entries and on this represen tation obtained her pass book which he never returned.
P.W. 1 demanded the pass book several times.
He always represent ed that it was in the Bank and yet not completed.
On 9.12.
1970 the respondent got filled up by some person withdrawal form No. 2055 on the account of P.W. 1 on the Bank of India for Rs.6,000 and represented this with drawal form in the Bank.
He received the money i.e. Rs.6,000 and mis appropriated the same.
On 11.3.
1971 P.W. 1 went to the Manager of the Bank.
The respondent was absent and she told him about the fact of having given her passbook to the respondent long back and that he was not returning the pass book and dodging her.
She also requested him to verify her accounts.
The Manager asked her to come on the next day.
On 12th March, 1971 when she went to the bank to her surprise she learnt that some withdrawal of money have been done and very little amount was left over.
She immediately gave a complaint that this withdrawal of Rs.6,000 was not by her as well as two other withdrawals and on the same day the Manager and staff officer went to the house of 90 the accused and questioned him about those transactions.
The respondent accused admitted his guilt before the Manager and requested the Manager to excuse him and gave a confessional statement in writing.
During investigation hand writing specimen of P.W. 1 and admitted handwriting of the accused respondent were compared with the handwriting on the withdrawal forms by the expert.
The opinion of the expert was that signature on the with drawal form was not by P.W. 1 and that the signatures on the reverse of the form which is taken in the Bank as an ac knowledgement for the receipt of money was that of the respondent accused.
It was therefore opined that the respon dentaccused got forged the signatures of P.W. 1 on the withdrawal form, presented it as genuine at the Bank and withdrew Rs.6,000 and therefore he was prosecuted for of fences under Sections 467 read with Sec. 109, 47 1,408 and 420 of Indian Penal Code.
As there were three items of such withdrawals three prosecutions were launched consequently three appeals and ultimately three appeals are filed here by the Bank of India and there is also an appeal filed by the State against the judgment of acquittal passed by Hon 'ble the High Court.
On trial the respondent accused was convicted for an offence under Sec. 420 and sentenced to undergo imprisonment for 9 months and to pay a fine of Rs. 100.
He was also convicted for an offence under Sec.
467 read with Sec. 109 and sentenced to imprisonment for 9 months and a fine of Rs. 100.
He was also convicted under Sec.
47 1 IPC and sentenced to 9 months imprisonment.
The trial court however acquitted him from the effence under Sec. 408.
The appellate court acquitted the respondent accused from charge under Sec.
420 IPC but confirmed his conviction under Sec.
467 read with Sec. 109 and also under Section 471, the sentence under the two was maintained.
The State did not prefer an appeal against the acquittal of the respondent under Sec.
408 IPC by the trial Court and his acquittal under Sec.
420 IPC by the appellate Court.
The respondent accused aggrieved against conviction preferred a revision petition before Hon 'ble the High Court of Andhra Pradesh and Hon 'ble the High Court by its judgment dated 21st February 1977 came to the conclusion that the offence under sec.
467 read with Sec.
109 IPC is not made out.
The learned Judge also came to the conclusion that consequently his conviction under Sec. 471 also could not be maintained.
Consequently the respondent was acquitted from the charges levelled against him and it 91 is against this judgment of Hon 'ble the High Court that the present appeals have been filed after obtaining leave from this Court.
The learned trial Court and the appellate Court came to the conclusion that the signatures on the withdrawal form were not that of P.W. 1 but it also came to the conclusion that they were also not forged by the respondent accused but both the Courts came to a concurrent finding of fact that these withdrawal forms on which there were forged signatures of P.W. 1 were presented in the Bank by the respondentac cused and he obtained money on the basis of these withdrawal forms and he put his signatures on the reverse of these withdrawal forms in acknowledgement of the receipt of money.
These signatures on the back side of the withdrawal form acknowledging the receipt of money were also admitted by the respondent accused at the trial.
Both the Courts below also came to a concurrent finding of Act that the money so obtained from the Bank from the account of P.W. 1 on the basis of these withdrawal forms was pocketed by the respondentaccused and was not returned or paid to P.W. 1 although that was the stand taken by the respondent accused and he also attempted to prove it by producing a defence witness for that purpose.
On the basis of these findings both the Courts ultimately convicted the respondent accused for an offence under Sec.
467 read with Sec. 109 and Sec.
471 IPC.
The learned Judge of the High Court while acquitting the respondent accused came to the conclusion that it was the duty of the prosecution to establish as to who had forged the signatures of P.W. 1 on the withdrawal form as admitted ly it has not been established that they were forged by the respondent accused and on this basis the learned Judge observed that as there is no evidence as to who forged the signatures P.W. 1 on the withdrawal form it could not be held that the accused respondent knew that the document was forged nor it could be said that he got the documents forged and on the basis of this conclusion the learned Judge came to the conclusion that none of the two offences i.e. Sec.
467 read with Sec. 109 or offence under Section 471 is established.
The learned counsel appearing for the appellant (the Bank) contended that so far as receipt of the money on the basis of the withdrawal form from the Bank is concerned it is admitted by the respondent accused as he admits his signatures on the back of the withdrawal form which are signatures acknowledging the receipt of the money.
92 Both the Courts (trial Court and the appellate Court) negatived the defence that the money so collected from the bank by the respondent was given over to P.W. 1 and High Court also maintained that finding as it has not been nega tived.
He therefore contended that the following facts are established and accepted to be established even by the High Court: (i) that the withdrawal form did not bear the signatures of P.W. 1; (ii) that on the basis of the withdrawal form the accused 'respondent withdrew money from the bank from the account of P.W. 1 and that (iii) he signed the acknowledgement of receipt of money and did not return the money to P.W. 1 but pocketed himself.
These facts therefore clearly establish that the re spondent accused used the forged document and on the basis of that document obtained money to which he had no claim and thereby caused wrongful gain to himself and wrongful loss to P.W. 1.
It is also clear from the evidence that P.W.1 used to take the assistance of the accusedrespondent whenever she wanted to have any transaction in the Bank and therefore it is expected of him to have known the signatures of P.W. 1 Apart from it there is nothing to establish as to from where the respondent accused got these withdrawal forms.
Under these circumstances it could not be doubted that he used these withdrawal forms knowing them to be forged or at least believed them to be forged and therefore it could not be said that he could not be convicted for an offence under Sec. 471.
As regards the offence under Section 467 read with Sec. 109, the learned High Court acquitted the respondent because it came to the conclusion that there is no evidence to establish as to who forged the signatures of P.W. 1 on the withdrawal form.
It is no doubt true that so far as the evidence about the forgery of the signatures of P.W. 1 on the withdrawal form is concerned there is no evidence except the fact that the signatures are forged and the further fact that this withdrawal form was in the possession of respond ent accused who presented it in the Bank and obtained money therefrom and pocketed the same.
From these facts an infer ence could safely be drawn that it was the respondent ac cused who got signatures of P.W. 1 forged on this document 93 as it was he who used it to obtain money from the Bank from the account of P.W. 1 and pocketed the same It is no doubt true that there is no evidence as to who forged the signa tures of the withdrawal form but the circumstances indicated above will lead to the only inference that it was the ac cused respondent who got the signatures of P.W. 1 forged on the withdrawal form.
In this view of the matter therefore the acquittal of the respondent for an offence under Section 467 read with Sec.
109 also could not be justified.
It is unfortunate that the State did not prefer an appeal against the acquittal of the respondent under Section 408 and also under Section 420, even before this Court it is first the Bank which came by way of special leave but later on the State has chosen to prefer an appeal.
In the light of the discussions above, in our opinion, the appeal deserves to be allowed.
It is therefore allowed and the acquittal of the respondent for offence under Sec tion 467 read with Section 109 and Section 471 of the Indian Penal Code is set aside.
Instead he is convicted for these two offences.
As there were three items, three separate prosecutions were launched and ultimately three appeals were before the High Court and in each one of them identical questions were involved.
Consequently respondent is convict ed for the above mentioned two offences in each one of the three cases and sentenced to 9 months rigorous imprisonment for each of the offences.
But it is further directed that all the sentences shall run concurrently.
P.S.S. Appeal allowed.

summary/full:
The respondent Accused, who was working as an Accounts Clerk in the appellant Bank in the very branch where P.W. 1 had her account, was alleged to have presented forged cheques on her account and misappropriated the sum with drawn.
He has prosecuted for offences under s.467 read with sections 109, 471, 408 and 420 of Indian Penal Code.
The trial court and the appellate court found that the signatures on the withdrawal forms were not that of P.W. 1 and that they were also not forged by the accused.
But they recorded a concurrent finding of fact that the withdrawal forms bearing forged signatures of P.W. 1 were presented in the Bank by the respondent accused and he obtained money and put his signatures on the reverse in acknowledgement of receipt of money, that the money so obtained was pocketed by the respondent accused and was not returned or paid to P.W. 1.
He was acquitted by the trial court of the charge under s.408 and by the appellate court under s.420, and ultimately convicted of the offence under s.467 read with section 109 and s.471.
The State did not prefer appeal against the acquittal under ss.408 and 420.
On appeal by the accused respondent, the High Court took the view that there was no evidence as to who forged the signatures of P.W. 1 on the withdrawal form and that it could not be said that the accused respondent knew that the document was forged or that he got the document forged.
It came to the conclusion that the offence under s.467 read with section 109 was not made out and that consequently his conviction under s.471 also could not be maintained.
In these appeals it was contended on behalf of the appellant Bank that the respondent accused was liable be cause he has admitted that the signatures on the back of the withdrawal form were his signatures 88 acknowledging the receipt of money which he pocketed him self.
Allowing the appeals, the Court, HELD: 1.1 The acquittal of the respondent accused by the High Court for an offence under s.467 read with section 109 of the Indian Penal Code was not justified.
1.2 Though there was no evidence about the forgery of the signatures of P.W. on the withdrawal forms still the fact remained that the signatures were forged, that the withdrawal form was in the possession of respondent accused and it was he who represented it in the Bank and obtained money.
P.W. 1 used to take the assistance of the responden taccused whenever she wanted to have any transaction in the Bank and therefore it was expected of him to have known the signatures of P.W. 1.
Apart from it there was nothing to establish as to from where the respondent accused got these withdrawal forms.
These facts lead to the only inference that it was the accused respondent who got the signatures of P.W. 1 forged on the withdrawal form.
It could not be doubted that the accused respondent used the withdrawal forms knowing them to be forged or at least believed them to be forged on the basis of which he obtained money to which he had no claim and thereby caused wrongful gain to himself and wrongful loss to P.W. 1.
It could not, therefore, be said that the respondent accused could not be convicted for an offence under s.47 1. 3.
As three separate prosecutions were launched the respondent is convicted of the offences under s.467 read with section 109 and s.47 1 of the Indian Penal Code in each one of the three cases and sentenced to 9 months rigorous im prisonment for each of the offences.
The sentences to run concurrently.


judgement:
ivil Appeal No. 2083 of 1972.
70 From the Judgment and Order dated 24.9.
1971 of the Allahabad High Court in Income Tax Appeal No. 535 of 1970.
S.C. Manchanda and Mrs. A Subhashini for the Appellant.
Ms. Rachna Gupta and S.K. Bagga for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This appeal arises out of the decision of the Allahabad High Court dated 24.9.1971.
The High Court by the order impugned dismissed an application under section 256(2) of the Income Tax Act, 1961 (hereinaf ter called the 'Act ').
The assessee, a firm of two partners was at the relevant time a licence vender of country liquor.
For the assessment year 1965 66, the Income tax Officer rejected its account books on the ground that sales and expenses were not verified and the margin of profit shown was low.
It may not be inappropriate in view of the conten tions urged before us, to refer to the order of the Inspect ing Assistant Commissioner for the assessment year 1965 66 under section 271(1)(c) read with section 274(2) of the Act.
For the assessment year 1965 66, the Income Tax Officer, as noted by the Inspecting Assistant Commissioner, rejected the book result showing sales of country liquor at Rs.5,82,234 and the profit margin at 4% for lack of verifia bility of sales and expenses and low margin of profit.
The Income Tax Officer estimated the sales at Rs.7,60,000 being Rs.6,50,000 in Lakhibagh shop and Rs. 1,10,000 in Magra shop, and adopted the net profit rate at 8% thereby comput ing the profit at Rs.60,800 and the total income was comput ed at Rs.60,936 after addition of Rs. 136 for interest receipts.
On appeal, the Appellate Assistant Commissioner confirmed the order of the IncomeTax Officer.
As the total income returned was less than 80% of the correct income computed, the case fell within the ambit of the Explanation to section 271(1) of the Act.
In pursuance to the notice under section 274 read with section 271 of the Act for default under section 271(1)(c) the assessee showed cause.
It was urged on behalf of the assessee before the Inspecting Assistant Commissioner that the returned income was based on the books of accounts and excise registers maintained by the assessee firm and the income was estimated.
It was further urged that the failure to return the correct income if any, did not arise from any fraud or gross 71 or wilful neglect on the part of the assessee firm.
The Inspecting Assistant Commissioner, however, held that by producing what the Inspecting Assistant Commissioner termed to be defective account books, it could not be said that the assessee had shown correct income.
The Inspecting Assistant Commissioner further noted that the sales and expenses were unverifiable.
The Inspecting Assistant Commissioner was further of the opinion that the addition made by the Income tax Officer was due to non production of the material data which the assessee firm ought to have produced for proper determination of its income.
In arriving at the net profit @ 8%, the Income tax Officer had made the allowance for expenses and purchases at 92% of the sales at Rs.7,60,000 i.e. at Rs.6,99,200 which covered all the ex penses and purchases found reasonable.
The Inspecting As sistant Commissioner was, therefore, of the opinion that the assessee firm was grossly negligent and had not discharged the onus of proving that the said difference between the income returned and the correct come did not arise from any gross or wilful neglect on the part of the assessee and as such, in view of the Explanation to section 271(1), the provisions of section 271(1)(c) were clearly attracted.
On this basis the Inspecting Assistant Commissioner levied a penalty of Rs.8,300 under section 271(1)(c) read with sec tion 274(2) of the Act.
The assessee went up in appeal before the Tribunal.
The Tribunal noted the facts.
It may be noted that subsequent to the order of the Inspecting Assistant Commissioner, that is to say on 26th September, 1968, the quantum appeal was heard and partly allowed by the Appellate Tribunal.
By its order dated 26th September, 1968 the Tribunal held that when viewed in the light of the licence fee paid by the assessee, estimates of the turnover were on the high side.
The lower rates of profit were placed in cases of other liquor con tractors and that in the circumstances, the rate of net profit for both the shops should be 7% on estimated sales of Rs.6,25,000 for Lakhi Bagh shop and of Rs. 1,00,000 for the Magra shop.
In view of this order, the income finally deter mined for the assessment year was Rs.50,750.
It is the case of the appellant that 80% of the income finally assessed is Rs.40,600 which is much higher than the income returned at Rs.30,138.
However, on behalf of the assessee, it was contended that the assessee did not conceal the particulars of income nor furnish inaccurate particulars thereof, that the income returned was based on the books of account maintained in the regular course of business, that the assessee could only declare the income as reflected in the books of account, that the difference between the re turned income and the 72 assessed income did not arise from any fraud or gross or wilful neglect on the part of the assessee and that it could not be considered in the circumstances that the assessee came within the mischief of Explanation to section 271(1)(c) of the Act.
After reviewing certain other cases, the Tribunal was of the view that like the cases referred to by the Tribunal 's order, the assessee had maintained certain types of books of account and it had appeared that it had honestly believed that the same were sufficient for the true ascertainment of his profits and from the facts he disclosed it could not be said that he had been grossly or wilfully negligent in filing such a return of income as he did and as such there was no fraud.
In conformity with the other orders referred to by the Tribunal in the impugned order, it was held by the Tribunal that in the instant case, the Inspecting Assistant Commissioner had erred in his finding and therefore, the penalty order was cancelled.
From this decision of the Tribunal under section 256(1), a reference was sought to the High Court on the following question: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in cancelling the penalty imposed under section 271(1)(c)?" The Tribunal found that it was clear from a perusal of the order passed by the Tribunal that it was not in doubt that the assessee returned the income on the books of ac count maintained in the regular course of business and that the difference between the income returned and the income assessed arose mainly on account of excess profit, in view of the various defects in the account books and the applica tion of a higher net profit rate on estimated turnover.
Following the earlier orders of the Tribunal in similar cases, the Tribunal held that if the assessee maintained certain types of books of account and honestly believed the same to be sufficient for the true ascertainment of his profits, it could be considered as making an estimate of income on a proper basis and it could not be said that in filing the return of income as reflected in the books of account, the assessee was grossly or wilfully negligent, much less fraudulent.
The penalty order was vacated on this basis.
The Tribunal was of the opinion that on this finding no question of law arose and as such there was no scope for reference of the said question to the High Court.
the appli cation under section 256(1) was, therefore, rejected.
The revenue went up before the High Court under section 256(2) 73 of the Act seeking a reference on the question mentioned hereinbefore.
The High Court by the judgment under appeal after referring to the facts mentioned hereinbefore was of the view that no question of law arose in this case.
The High Court opined in the impugned judgment that the finding of the Tribunal that the assessee acted honestly notwith standing the defective nature of the account books main tained by him was a finding of fact.
In the premises, the reference application was dismissed.
As mentioned hereinbe fore, this appeal arises from the said decision of the High Court.
After amendment by the Finance Act, 1964, section 271 of the Act along with the Explanation reads as follows: "271: Failure to furnish returns, com plying with notices, concealment of income, etc.
(1) If the Income tax Officer or the appellate Assistant Commissioner, in the course of any proceedings under this Act, is satisfied that any person ( i i ) . . . . . . . . . (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty, (iii) In the cases referred to in clause (c) in addition to any tax payable by him a sum which shall not be less than 20% but shall not exceed one and a half times the amount of tax, if any, which would have been avoided if the income as returned by such person had been accepted as correct income.
Explanation: Where the total income returned by any person is less than 80% of the total income (hereinafter in this explanation re ferred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for 74 the purpose of making or earning any income included in the total income, but which has been disallowed as a deduction), such person shall, unless he proved that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccu rate particulars of such income for the pur pose of clause (c) of this sub section.
" It is clear that if the Income Tax Officer and the Appellate Assistant Commissioner were satisfied that the assessee had concealed the particulars of his income or furnished inaccurate particulars of such income, he can direct that such person should pay by a penalty the amount indicated in sub clause (ii) of clause (c) of section 271(1) of the Act.
Before the amendment, difficulty arose and it is not necessary to trace the history, under the law as stood prior to the amendment of 1964, the onus was on the revenue to prove that the assessee had furnished inaccurate particu lars or had concealed the income.
Difficulties were found to prove the positive element required for concealment under the law prior to amendment, this positive element had to be established by the revenue.
To obviate that difficulty the explanation was added.
The effect of the explanation was that where the total income returned by any person was less than 80% of the total income assessed, the onus was on such person to prove that the failure to file the correct income did not arise from any fraud or any gross or wilful neglect on his part and unless he did so, he should be deemed to have concealed the particulars of his income or furnished inaccurate particulars, for the purpose of section 271(1).
The position is that the moment the stipulated difference was there, the onus that it was not the failure of the assessee or fraud of the assessee or neglect of the assessee that caused the difference shifted on the assessee but it has to be borne in mind that though the onus shifted, the onus that was shifted was rebuttable.
If in an appropriate case the Tribunal or the fact finding body was satisfied by the evidence on the record and inference drawn from the record that the assessee was not guilty of fraud or any gorss or wilful neglect and if the revenue had not adduced any further evidence then in such a case the assessee cannot come within the mischief of the section and suffer the imposition of penalty.
That is the effect of the provision.
Our attention was drawn to several decisions to which out of deference, to Shri Manchanda who argued before us on behalf of the revenue, we shall refer.
Vishwakarma Indus tries vs Commissioner of 75 Income Tax, Amritsar 1, is a decision of the Full Bench of the Punjab and Haryana High Court where Sand hawalia, C.J. speaking for the Full Bench observed that the object and intent of the legislature in omitting the word "deliberately" from clause (c) of section 271(1) of the Income Tax Act, 1961 and adding an Explanation thereto by the Finance Act, 1964, was to bring about a change in the existing law regarding the levy of penalty so as to shift the burden of proof from the department on to the assessee in the class of cases where the returned income of the assessee was less than 80% of the assessed income.
The learned Chief Justice noted that the significant thing about the change made in clause (c) of section 271(1) was the designed omission of the word "deliberately" therefrom, whereby the requirement of a designed furnishing of inaccu rate particulars of income was obliterated.
According to the learned Chief Justice, the language of the Explanation indicated that for the purposes of levying penalty the legislature had made two clear cut divisions.
This had been done by providing a strictly objective and an almost mathe matical test.
According to the Chief Justice, the touchstone therefor was the income returned by the assessee as against the income assessed by the department which was designated as "the correct income".
The case where the returned income was less than 80% of the assessed income can be squarely placed into one category.
Where, however, such a variation is below 20% that would fall into the other category.
To the first category, where there is a larger concealment of income, the provisions of the Explanation become at once applicable with the resultant attraction of the presumptions against such an assessee.
Once the Explanation is held to be applicable to the case of an assessee, it straightaway raises three legal presumptions, viz. (i) that the amount of the assessed income is the correct income and it is in fact the income of the assessee himself; (ii) that the failure of the assessee to return the correct assessed income was due to fraud; or (iii) that the failure of the assessee to return the correct assessed income was due to gross or wilful neglect on his part.
But it must be emphasised that these are presumptions and become rule of evidence but the presumptions raised are not conclusive presumptions and are rebuttable.
We are of the opinion that the view of the Full Bench of the Punjab and Haryana High Court is a correct view when it states that it only makes a presumption but the presumption is rebuttable one and if the fact finding body on relevant and cogent materials comes to the conclusion that in spite of the presumption the assessee was not guilty, such conclu sion does not raise any question of law.
76 Our attention was drawn to the decision of the Division Bench of the Allababad High Court in Addl.
Commissioner of Income Tax, Lucknow vs Lakshmi Industries and Cold Storage Co. Ltd., There the High Court found that the assessee had not given any explanation.
So, on the facts found, the inference of the Tribunal that the amounts had been added and the evidence had been found unsatisfactory was not correct.
Penalty was exigible in that case and the High Court found that the Tribunal was wrong in cancelling the penalty.
As mentioned hereinbefore, it depends upon the facts and circumstances of each case.
If a party comes within the mischief of the Explanation then there is a presumption against him and the onus to discharge the presumption lies on the assessee but being a presumption it is a rebuttable one and if on appropriate materials, that presumption is found to be rebutted no question of law can be said to arise.
The Full Bench of the Andhra Pradesh High Court in Commissioner of Income Tax vs
H. Abdul Bakshi & Bros., again reiterated that the presumption spelt out becomes a rule of evidence.
Presumptions raised by the Explanation to section 271(1)(c) are rebuttable presump tions.
The initial burden of discharging the onus of rebut tal is on the assessee.
Once that initial burden is dis charged, the assessee would be out of the mischief unless further evidence was adduced.
Here there was none.
Similarly, the Full Bench of the Patna High Court in the case of Commissioner of Income Tax, Bihar vs Nathulal Agar wala and Sons, had occasion to consider this.
The High Court reiterated that the onus to discharge the presumption raised by the Explanation was on the asses see and it was for him to prove that the difference did not arise from any fraud or wilful neglect on his part.
The court should come to a clear conclusion whether the assessee had discharged the onus or rebutted the presumptions against him.
The Patna High Court emphasised that as to the nature of the explanation to be rendered by the assessee, it was plain on principle that it was not the law that the moment any fantastic or unacceptable explanation was given, the burden placed upon him would be discharged and the presump tion rebutted.
We agree.
We further agree that it is not the law that any and every explantion by the assessee must be accepted.
It must be acceptable explanation, acceptable to a fact finding body.
77 Mrs. Gupta, appearing for the assessee, drew our atten tion to the observations of the Division Bench of the Gau hati High Court in Commissioner Income Tax, Assam, Nagaland, Manipur & Tripura vs Chhaganlal Shankarlal, Our attention was also drawn on behalf of the assessee to the decision of the Division Bench of the Allahabad High Court in Commissioner of Income Tax vs Nadir Ali and Company There the court observed that under section 271( 1)(c) read with the Explanation, a penalty could be imposed if the income returned was less than 80% if the assessee did not prove that the disparity between the income assessed and the income returned by him was not due to gross neglect or fraud.
The fact that the assessee was not main taining his books of account in a particular way did not show that he was guilty of gross neglect.
The Income tax Act did not prescribe the manner in which the account books should be maintained.
When the assessee filed his return on the basis of accounts which were maintained in the regular course of business it could not be said that he was guilty of gross negligence.
It could not be expected from the assessee to file a return showing a higher income than what was worked out merely because the department had applied a higher rate of profit in the earlier years.
It was held by the Allahabad High Court that on the facts, the assessee had sufficiently discharged the burden.
The position therefore in law is clear.
If the returned income is less than 80% of the assessed income the presump tion is raised against the assessee that the assessee is guilty of wilful neglect or of fraud or gross or wilful neglect as a result of which he has concealed the income but this presumption can be rebutted.
The rebuttal must be on materials relevant and cogent.
It is for the fact finding body to judge the relevancy.and sufficiency of the materi als.
If such a fact finding body beating the aforesaid principles in mind comes to the conclusion that the assessee has discharged the onus, it becomes a conclusion of fact.
No question of law arises.
In this case the Tribunal has borne in mind the relevant principles of law and has also judged the facts on record.
It is not a case that there was no evidence or there was such evidence on which no reasonable man could have accepted the explanation of the assessee.
In that view of the matter, in our opinion, the Tribunal tight ly rejected the claim for reference under section 256(1) and the High Court correctly did not entertain the application for reference under section 256(2) of the Act.
The appeal, therefore, fails and is accordingly dismissed with costs.
M.L.A. Appeal dis missed.

summary/full:
The Income tax Officer rejected the account books of the respondent assessee on the ground that the sales and ex penses were not verified and the margin of profit shown was low.
He adopted the net profit rate at 8% thereby com puting the profit at Rs.60,800 and the total income was computed at Rs.60936 after addition of Rs. 136 for interest receipts.
On appeal the Appellate Assistant CommiSsioner confirmed this order of the Income tax Officer.
As the total income returned was less than 80% of the correct income computed, he held that the case feb within the ambit of s.27 1(1) of the Act, and issued a show cause notice under sec tion 274 read with section 271 to the assessee.
It was contended on behalf of the assessee before the Appellate Assistant Commissioner (i) that the assessee did not conceal the particulars of income nor furnish inaccurate particu lars; (ii) that the income returned was based on the books of account maintained in the regular course of business; (iii) that the assessee could only declare the income as ref1ected in the books of account; (iv) that the difference between the returned income and the assessed income did not arise from any fraud or gross or unlawful neglect on the part of the assessee; and (v) that it could not be consid ered in the circumstances that the assessee came within the mischief of s.27 1(1)(c) of the Act.
The Appellate Assistant Commissioner rejected these contentions, confirmed the order of the Income tax Officer and in view of the Explanation to section 271(1) levied a penalty of Rs.8,300 under section 271(D(c) read with section 274(2) of the Act.
The respondent assessee went up in appeal to the Tribu nal which cancelled the penalty order 'and finally deter mined the income of the assessee at Rs.50,750 holding: (a) that the assessee had maintained certain types of books of account and had honestly believed that the same were suffi cient for the true ascertainment of his profits and, from 68 the facts he disclosed, it could not be said that he had been grossly or wilfully negligent in filing the return of income and as such there was no fraud; (b) that the differ ence between the income returned and the income assessed arose mainly on account of excess profit, in view of the various defects in the account books and the application of a higher profit rate on estimated turnover.
The application of the appellant revenue seeking refer ence under s.256( D of the Act, was rejected by the Tribunal on the ground that no question of law arose.
The appellant revenue went before the High Court under section 256(2) of the Act seeking a reference on the ques tion of cancelling the penalty imposed under sec.
271(1)(c) of the Act, and this application was also dismissed on the ground that the finding of the Tribunal that the assessee acted honestly notwithstanding the defective nature of the account books maintained by him was a finding of fact and therefore no question of law arose.
Dismissing the appeal of the appellant revenue, this Court, HELD: 1. I If the Income tax Officer and the Appellate Assistant Commissioner were satisfied that the assessee had concealed the particulars of his income or furnished inaccu rate particulars of such income, he can direct that such person should pay by way of a penalty the amount indicated in sub clause (ii) of clause (c) of section 271(1).
Under the law as it stood prior to the amendment of 1964, the onus was on the revenue to prove that the assessee had furnished inaccurate particulars or had concealed the income.
Difficulties were found to prove the positive ele ment required for concealment under the law prior to amend ment.
This positive element had to be established by the revenue.
To obviate that difficulty, the explanation was added.
The effect of the Explanation is that where the total income returned by any person is less than 80% of the total income assessed, the onus is on such person to prove that the failure to file the correct income does not arise from any fraud or any gross or wilful neglect on his part and unless he does so, he should be deemed to have concealed the particulars of his income or furnished inaccurate particu lars, for the purpose of section 271(1).
The position is that the moment the stipulated difference was there, the onus that it was not the failure of the assessee or fraud of the assessee or neglect of the assessee that caused the difference shifted on 69 the assessee but it has to be borne in mind that though the onus shifted, the onus that was shifted was rebuttable.
1.3 If in an appropriate case the Tribunal or the fact finding body was satisfied by the evidence on the record and inference drawn from the record that the assessee was not guilty of fraud or any gross or wilful neglect and if the revenue had not adduced any further evidence then in such a case the assessee cannot come within the mischief of the section and suffer the imposition of penalty.
That is the effect of the provision.
1.4 Presumptions raised by the Explanation to section 271(1)(c) are rebuttable presumptions.
The initial burden of discharging the onus of rebuttal is on the assessee.
Once that initial burden is discharged, the assessee would be out of the mischief unless further evidence was adduced.
1.5 If the returned income is less than 80% of the assessed income, the presumption is raised against the assessee that the assessee is guilty of wilful neglect or of fraud or gross or wilful neglect as a result of which he has concealed the income but this presumption can be rebutted.
The rebuttal must be on materials relevant and cogent.
It is for the fact finding body to judge the relevancy and suffi ciency of the materials.
If such a fact finding body bearing the aforesaid principles in mind comes to the conclusion that the assessee has discharged the onus, it becomes a conclusion of fact.
No question of law arises.
In the instant case, the Tribunal has borne in mind the relevant principles of law and has also judged the facts on record.
It is not a case that there was no evidence or there was such evidence on which no reasonable man could have accepted the explanation of the assessee.
In that view of the matter the Tribunal rightly rejected the claim for reference under section 256(1) and the High Court correctly did not entertain the application for reference under sec tion 256(2) of the Act.
If a party comes within the mischief of the Explana tion to section 27 1 then there is a presumption against him and the onus to discharge the presumption lies on the asses see but being a presumption ' it is a rebuttable one and if on appropriate materials, the Tribunal has rebutted that presumption, no question of law can be said to arise.