judgement:
Appeal No. 1180 of 1968.
Appeal under section 116A of the Representation of the People Act, 1951 from the judgment and order dated January 17, 18, 1968 of the Gujarat High Court in Election Petition No. 2 of 1967.
Shyamala Pappu and Vineet Kumar, for the appellant.
Bishan Narain and D.N. Misra, for the respondent No. 1.
The Judgment of the Court was delivered by Mitter, J.
The only question raised in this appeal from a judgment and order of the High Court of Gujarat dismissing an election petition is, whether the returned candidate was not qualified to be chosen to fill a seat of the State Legislative Assembly inasmuch as he did not subscribe to an oath or affirmation according to the form set out for the purpose in the Third Schedule to the Constitution as prescribed under article 173 thereof. 'The relevant facts may be stated as follows: The notification of the Governor of Gujarat under section 15(2) of the Representation of the People Act of 1951 for the purpose of elections to the Gujarat State Legislative Assembly was issued on January 13, 1967.
Nomination papers were filed by several persons including the returned candidate and the scrutiny thereof was made on January 21, 1967.
The poll took place on February 18, 1967 and the result declared on February 27.
1967 showing the returned candidate winning comfortably by a margin exceeding 3800 votes over his nearest rival.
One of the grounds taken in the election petition was that immediately after the scrutiny of the nomination papers, the third respondent to the election petition had filed a written objection before the Returning Officer contending that the returned candidate had not taken oath 629 properly and on the same ground he along with respondents 2 and 4 were not qualified to be chosen and their nomination papers should be rejected.
This contention was returned down by the Returning Officer and was also negatived by the learned Judge who heard the election petition and in this appeal the unsuccessful petitioner has only pressed this ground.
The relevant portion of article 173 of the Constitution reads as follows : "A person shall not be qualified to be chosen to fill a seat in the Legislature of a State unless he (a) is a citizen of India, and makes and subscribes be,fore some person authorised in that behalf by the Election Commission an oath or affirmation according to the form set out for the purpose in the Third Schedule; (b) and(c) .
" The Third Schedule contains various forms of oath or affirmation.
From VII A the relevant form for the present purpose is, as follows: "Form of oath or affirmation to be made by a candidate for election to the Legislature of a State : "1, A.B., having been nominated as a candidate to fill a seat in the Le gislative Assembly (or Legislative Council), do swear in the name of God that I will solemnly affirm bear true faith and allegiance to the Constitution of India as by law established *and that I will uphold the sovereignty and integrity of India." The returned candidate had filed three nomination papers with three different proposers on January 20, 1967.
Each of the three nomination papers clearly mentioned that he was a candidate for election to fill a seat in the Vidhan Sabha for the Gujarat State i.e. Legislative Assembly of the State.
The nomination paper of the returned candidate contained a form of oath or affirmation which was both in Gujarati as well as in English.
The English form followed word for word Form No. VII as set out in the Third Schedule, to the Constitution and the Gujarati form purported to set out the Gujarati translation of the form of oath or affirmation.
The relevant difference for the purpose of this appeal between the two ,forms lay in this that the words "Legislative Assembly" in the form in English were translated in Gujarati form as "Rajya Sabha" and the appellant 's contention before the High Court and before us rested 630 solely on the use of this word which according to learned counsel went to show that the oath that was taken was for the purposes of filling a seat not in the legislative assembly of the State but in the Legislative Council of the State.
At the hearing of the petition be,fore the High Court the returned candidate gave evidence to the effect that he had taken the oath not according to the words in the Gujarati form but 'according to the translation of the words in the English form rendered by the Returning Officer.
The Returning Officer was merely called to produce some documents but he was not put on oath nor was he asked any question to corroborate the testimony of the returned candidate.
The High Court did not accept this testimony and we see no reason to come to any different conclusion.
We must therefore proceed on the basis that the returned candidate took the oath according to the words of the Gujarati form.
It was argued before us that 'Rajya Sabha ' means the Legislative Council of the State *and not the Legislative Assembly of the State and consequently the oath taken did not fulfill the requirements of article 173(a) of the Constitution.
We were not referred to any official translation of the expression "Legislative Assembly" in Gujarati.
The word "sabha" means a gathering or a meeting or an assembly of persons for a definite purpose.
Giving the word "sabha" the said meaning in the expression 'Rajya Sabha ' it would not be possible to hold that the oath was not in compliance with the form prescribed in article 173(a) of the Constitution.
No doubt by common parlance in many of the States in Northern India the expression 'Rajya Sabha ' has come to mean the Legislative Council of a State while the State Legislative Assembly is generally known as Rajya Vidhan Sabha.
But in the absence of any authoritative translation of the expression "State Legislative Assembly" in Gujarati we cannot guide ourselves by the popular rendering of the expression.
In this connection it is necessary to mention that in the State of Gujarat there is no Legislative Council of the State.
The legislature consists of one house only, namely, the State Legislative Assembly.
There could therefore be no misapprehension either in the person taking the oath or in the Returning Officer when he was accepting the nomination paper with the oath in Gujarati form that the candidate who afterwards won the election was being nominated as a candidate to fill a seat in the Legislative Council of the State and not in the Legislative Assembly.
The High Court held that there was substantial compliance with the requirements of article 173(a) of the Constitution in the circumstances surrounding the making and the subscribing of the oath even if the compliance was not literal.
We are in full agreement with that view.
The essential requirement of article 173(a) of the Constitution for our present purpose is that in order to be 631 qualified to be chosen to fill a seat in the Legislature of a State a person (i) must be a citizen of, India and (ii) must make and subscribe before a person duly authorised an oath or affirmation according to the form set out for the purpose in the Third Schedule.
Form VII A contains the following essential requirements: (1) The person taking the oath or making the affirmation must have been nominated as a candidate to fill a seat in the Legislative Assembly or Legislative Council; (2) That he will bear true faith and allegiance to the Constitution of India as by law established; and (3) That he will uphold the sovereignty ,and integrity of India.
The vital requirements, therefore, are (a) the securing of a nomination, and (b) declaration of beating true faith and allegiance to the Constitution and a promise to uphold the sovereignty and integrity of India.
The securing of a nomination precedes the making of a declaration.
The real purpose of the oath is that the person concerned must give an undertaking to bear true faith and 'allegiance to the Constitution and uphold the sovereignty and integrity of India.
This is brought out by the statement of objects and reasons to the Bill No. 1 of 1963 seeking to amend articles 19, 84 and 173 of the Constitution.
The statement of objects and reasons notes the recommendation of the Committee on National Integration and Regionalism and its view "that every candidate for the membership of a State Legislative or Parliament, and every aspirant to, and incumbent of, public office should pledge himself to uphold the Constitution and to preserve the integrity and sovereignty of the Union and that forms of oath in the Third Schedule to the Constitution should be suitably amended for the purpose".
The Bill proposed to give effect to the recommendation by amending clauses (2), (3) and (4) of article 19 as also articles 84 and 173 and the forms of oath in the Third Schedule.
The words in the form of oath in Form VII A. "I will uphold the sovereignty and integrity of India" were inserted by the Constitution Fifteenth Amendment Act 1963 giving effect to the view of the said committee.
As the essential requirements of the oath given in the form in the Third Schedule were not deviated from in the Gujarati form used in this case, we cannot hold that the oath subscribed in this case was not in compliance with article 173 merely because of the popular meaning of the expression 'Rajya Sabha '.
The real question is, whether the deviation, if any, from the form of oath in English as contained in the Third Schedule is so 632, vital as to lead to the conclusion that no proper oath was taken by the returned candidate.
There have been many instances where this Court has held that a substantial compliance with the statute or with the rules framed thereunder is enough even if there be no literal compliance and in our view there is no reason to adopt a different line of reasoning in the construction and interpretation of the Constitution.
In all such cases, one must consider the real purpose of the provision whether statutory or constitutional, to find out whether notwithstanding the apparently mandatory form of the words used any deviation therefrom was to be struck down.
One of the questions which came up for consideration in Kamaraja Nadar vs Kunju Thevar(1) was whether the election petition ought to have been rejected merely because the deposit provided for under section 117 of the Representation of the People Act was made in favour of the Election Commission and not in favour of the Secretary to the Election Commission as provided for in the said section.
Turning down the argument advanced for rejecting the election petition it was observed: "What is of the essence of the provision contained in section 117 is that the petitioner should furnish security for the costs of the petition, and should enclose along with the petition a ' Government Treasury receipt showing that a deposit of one thousand rupees has been made by him either in a Government Treasury or in the Reserve Bank of India, is at the disposal of the Election Commission to be utilised by it in the manner authorised by law . . " .
In Murarka Radhey Shyam Ram Kumar vs Roop Singh Rathore(2) one of the points urged against the petitioner was that there was non compliance with the provisions of section 81 (3) of the Representation of the People Act because the copy of the election petition served on the appellant was not a true copy of the original filed before the Election Commission.
Rejecting the said contention it was said: " . the word "copy" in sub section
(3) of section 81 does not mean an absolutely exact copy, but means that the copy shall be so true that nobody can by any possibility misunderstand it.
" To the similar effect is the judgment in Ch.
Subbarao vs Member, Election Tribunal, Hyderabad(3).
In State of U.P.v.
Manbodhan Lal Srivastava(4) one of the contentions urged on behalf of the respondent who was reduced (1) (2) [1964] 3 S.C.R. 573. , (4) [1958]S.C.R.533. 633 in rank after departmental enquiry, was that 'the order of the Government was invalid for non compliance with the provisions of article 320(3)(c) of the Constitution which read literally made it obligatory for the Government of India or a Government of a State to consult the Union Public Service Commission or the State Public Service Commission on all disciplinary matters affecting a person in service of the State.
In turning down the above it was observed by this Court: " . the use of the word shall m a statute, though generally taken in 'a mandatory sense, does not necessarily mean that in every case it shall have that effect, that is to say, that unless the words of the statute are punctiliously followed, the proceeding, or the outcome of the proceeding, would be invalid.
" In State of Punjab vs Sat Pal Dang and State of Punjab vs Dr. Baldev Prakash & Ors.(1) one of the points canvassed before this Court was, whether the certificate by the Deputy Speaker on a Money Bill was sufficient compliance with article 199(4) of the Constitution which provides that: "There shall be endorsed on every Money Bill when it is transmitted to the ,Legislative Council under article 198 and when it is presented to the Governor for assent under ,article 200, the certificate of the Speaker of the Legislative Assembly signed by him that it is a Money Bill.
" It was contended that the provisions of the above clause were mandatory and only the Speaker of the Legislative Assembly could sign the Money Bill.
It was pointed out by this Court that the Speaker was not present when the Bills were passed and under article 180(2) the Deputy Speaker could act as the Speaker when the latter was absent.
This Court proceeded to examine the several tests to determine when the provisions of statute might be treated as mandatory ,and when not, and emphasis was laid on one of the distinctions, namely, in cases where strict compliance was necessary to be a condition precedent to the validity of the act itself, the neglect to perform it as indicated was .fatal.
The above cases are sufficient to show that non compliance with the provisions of a statute or Constitution will not necessarily render a proceeding invalid if by considering its nature, its design and the consequences which follow from its non observance one is not led to the conclusion that the legislature or the Constitutionmakers intended that there should be no departure from the strict words used.
(1) ; 634 In this case, as we have already noted, the essential requirement of article 173 read with Form VII A was that the person taking the oath or making the affirmation would bear true faith and allegiance to the Constitution and uphold the sovereignty and integrity of India.
The words which precede this portion are merely descriptive of the person and of his nomination as a candidate.
It is reasonable to think that a mere misprint in the form of the oath or a mere inaccuracy in rendering the expression "Legislative Assembly" in Gujarati would not be fatal to the election of the candidate, if otherwise valid.
In the result, the appeal fails and is dismissed with costs.

summary/full:
The returned candidate 'at an election to the Gujarat Legislative Assembly held in February 1967 had taken his oath as prescribed by article 173 of the Constitution in the Gujarati version of the relevant form set out in the Third Schedule to the Constitution.
In the said version the term "Legislative Assembly" was translated as "Rajya Sabha".
In an election petition it was urged that the term "Raiya Sabha" was equivalent not to "Legislative Assembly" but to "Legislative Council", 'and there fore the oath was not taken by the returned candidate in the proper form and his election was liable to be set aside.
The High Court having decided against the election petitioner appeal against its judgment was filed in this Court.
HELD: (i) The word 'sabha ' means a gathering or a meeting or an assembly of persons for a definite purpose.
Giving the word 'sabha ' the said meaning in the word 'Raiya Sabha ' it would not be possible to hold that the oath was not in compliance with the form prescribed in article 173(a) of the Constitution.
No doubt by common parlance in many of the States in Northern India the expression 'Rajya Sabha ' has come to mean the Legislative Council of a State while the State Legislative Assembly is known as Rajya Vidhan Sabha.
But in the absence of any authoritative translation of the expression "State Legislative Assembly" in Gujarati the popular meaning of the expression could not give proper guidance.
The State of Gujarat has no Legislative Council of the State.
The Legislature consists of one house only, namely, the State Legislative.
Assembly.
There could therefore be no misapprehension either in the person taking the oath or in the Returning Officer when he was accepting the nomination paper with the oath in Gujarati form that the candidate who afterwards won the election was being nominated as a candidate to fill a seat in the Legislative Council of the State and not in the Legislative Assembly.
[630 D G] As the essential requirements of the oath given in the form in the Third Schedule were not deviated from in the Gujarati form used in this case it could not be held that the oath subscribed in this case was not in compliance with article 173 merely because of the popular meaning of the word "Rajya Sabha".
(ii) Non, compliance with the provisions of a statute or Constitution will not necessarily render a proceeding invalid if by considering its nature, its design and the consequences which follow from its non observance one is not led to the conclusion that the legislature or the Constitution makers intended that there should be no departure from the strict words used, [633 G H] 628 In the present case the essential requirement of article 173 read with Form VII A was that the person taking the oath or making the affirmation would bear true faith and allegiance to the Constitution and would uphold the sovereignty and integrity of India.
The words which precede this portion are merely descriptive of the person and of his nomination as a candidate.
It is reasonable to think that a mere misprint in the form of the oath or a mere inaccuracy in rendering the expression "Legislative Assembly" in Gujarati would not be fatal to the election of the candidate, if otherwise valid.
[634 A] Kamaraja Nadar vs Kunju Thevar, , Murarka Radhey Shyam Ram Kumar vs Roop Singh Rathore, ; ; Ch.
Subbarao vs Member, Election Tribunal, Hyderabad, ; ; State of U.P. vs Manbodhan Lal Srivastava; , and State if Punjab vs Sat Pal Dang and State of Punjab vs Dr. Bolder Prakash & Ors.
, ; , applied.


judgement:
Appeal No. 1332 of 1966.
Appeal from the judgment and order dated August 25, 1964 of the Punjab High Court, Circuit Bench at Delhi in Letters Patent Appeal No. 37 D of 1964.
B. Sen, D.K. Kapur, B.P. Maheshwari and R.K. Maheshwari, for the appellant.
R.M. Mehta and S.P. Nayar, for the respondents.
The Judgment of the Court was delivered by Bachawat, J.
The appellant, M/s. Hind Trading Company, imported 1,65,000 pieces of Chinese Silver Dollars from Yatung in Tibet to Kalmnpong, via Nathula pass and Rangpo through 535 Sikkim State under two Reserve Bank import licences dated April 22, 1957.
As there were two Reserve Bank licences, the dollars were divided into two lots at Yatung.
Each lot consisted of 66 bags containing 82,500 dollars.
One lot of bags bore the mark "H.D." and serial numbers 1 to 66, and the other lot bore the mark "H.N." and srl.
1 to 66.
On May 15, 1957 the appellant made two applications bearing Nos. 32 and 34 to the officer in charge, Land Customs Station, Kalimpong, for the grant of permits for passing the goods across the frontier.
Application No. 32 related to the bags marked "H.N." Application No. 34 related to the bags marked "H.D." On May 16, the two consignments arrived at the land customs station, Kalimpong and were examined and appraised by the land customs officer in charge of the station.
On the duty being paid, the officer endorsed the two applications, certifying that the duty was paid and permitting the import of the goods.
The consignments loaded in trucks then passed out of the customs house and on the way to Siliguri were checked at the Teesta Bazar check post at.
8.45 p.m. on May 16.
On the night of May 16, they reached Siliguri and were delivered to M/s. Amalgamated Transport Co., for carriage by air to Dum Dum.
On the morning of May 17, one consignment of 82,500 dollars packed in 66 bags together with the import application No. 34 was sent by plane from the Sonapur airstrip to Dum Dum airport and on the same date the consignment reached Dum Dum and was delivered to the appellant at Calcutta.
On May 18, 1957, the Range Officer, Matidhar seized the second consignment of 82,500 dollars packed in 66 bags bearing the mark "H.D." together with the application No. 32, when they were about to be despatched by air from the sonapur airstrip.
The seizure was made under section 5 (3) of the on the Found that the mark on the bags was "H.D." whereas the accompanying import application No. 32 related to "H.N." bags.
On July 7, 1957, the Collector of Land Customs, Calcutta, issued a notice to the appellant to show cause why the dollars seized on May 18, 1957 should not be confiscated and why a penalty should not be imposed upon the appellant under sections 5(3) and 7(1) of the , and section 167(8) read with section 19 of the as made applicable by section 23A of the Foreign Exchange Regulation Act, 1947 as there was reason to believe that the goods had been imported by the appellant by land from Tibet into India on May 16, 1957 through Indo Tibet border, (i) without a valid permit under section 5 of the , and (ii) without valid permission granted by the Reserve Bank of India under notification No. F. 3(84) E.F. VII/56 dated May 4, 1956 issued under sec.
8(1) of the Foreign Exchange Regulation Act.
That notification prohibited ' the 536 import into India of silver coins current in the Tibet region of China without the permission of the Reserve Bank of India.
On July 30, 1957 the appellant showed cause against the proposed action by a letter stating that the first consignment of 82,500 dollars was packed in bags marked "H.N." that by inadvertence the carriers M/s. Amalgamated Transport Co., had sent import application No. 34 with the first consignment and had kept application No. 32 with the bags marked "H.D.", that the two consignments were covered by valid Reserve Bank licences and import passes, that the seizure of the dollars kept in "H.D." bags under section 5 (3) of the was not justified and that there was no ground for confiscating the goods or imposing any penalty.
The appellant was heard by the Collector an August 26, and December 11, 1957.
On January 10, 1958, the Collector passed an order adjudging that offences under sections 5(3) and 7(1) of the and section 167(8) of the had been committed and directing confiscation of the goods under those sections read with section 23A of the Foreign Exchange Regulation Act.
The Collector held that (i) the goods were liable to confiscation under section 5 (3) of the as they were not covered by the accompanying import application No. 32; (ii) the appellant failed to prove that the first consignment of 66 bags bore the mark "H.N." or that by inadvertence of the carriers, application No. 34 had been sent with it and (iii) had the first consignment of 66 bags borne the mark "H.N." the Range Officer.
Matidhar and the officers at Dum Dum would have detected and rioted this fact and the appellant could have produced before the customs officials at Calcutta bags with the mark "H.N." immediately after May 18, 1957.
An appeal against this order was dismissed by the Member, Central Board of Revenue, on May 17, 1958.
A revision petition against the last order was dismissed by the Secretary to the Government of India, Ministry of Finance, Department of Revenue on January 16, 1961.
On November 16, 1962, the appellant filed a writ petition in the Punjab High Court for quashing the aforesaid decisions and for setting aside the order of confiscation of the silver dollars.
On May 14, 1964, Shamsher Bahadur, J. dismissed the petition.
He held that there was no error of law apparent on the face of the record.
The appellant filed a Letters Patent appeal against the order.
On August 25, 1964 the Divisional Bench dismissed the appeal.
It held that (1) section 5 (3) of the applied to the case; (2) the fact that the 66 bags bore the mark "H.D." and the accompanying application No. 32 related to "H.N." bags.
showed conclusively that the dollars contained in those bags were imported without proper licence and import permit and without payment of duty and (3) the finding of fact that there was no mistake on the part of the carriers with regard to the despatch 537 of the consignments and accompanying documents could not be set aside in a writ application.
If he present appeal has been filed by the appellant after obtaining a certificate from the High Court.
Mr. B. Sen for the appellant contended that the seizure and confiscation of the goods was not authorized by section 5 (3) of the , (2) the finding that the appellant had committed offences under that section and other provisions of law was perverse and liable to be quashed; and (3) the impugned orders were passed in contravention of the principles of natural justice.
These contentions were disputed by Mr. R.M. Mehta.
The provided for the levy of duties of customs on articles imported or exported by land from or to territory outside India.
The Act extended to the whole of India, (section 1 ).
Section 2 was the definition section.
Section 3 authorised the appointment of land customs collectors and officers.
The Range Officer, Matidhar, was a land customs officer working under the Collector of Land Customs, Calcutta, having jurisdiction over Sonapur where the dollars were seized.
Section 4 authorised the establishment of land customs stations and the determination of routes by which alone goods imported or exported by land could pass.
The Central Board of Revenue established Kalimpong as the land customs station and prescribed the following routes by which alone dutiable goods could pass out of Tibet into India: (a) road leading from Yatung (in Tibet) to Kalimpong via Jelapala pass and pedong through Sikkim State, (b) road leading from Yatung (in Tibet) to Kalimpong via Nathula pass and Rangpo through the Sikkim State.
Section 5 provided for permits.goods passing across frontier.
Section 6 dealt with personal baggage.
Section 7 prescribed penalties.
Section 8 prescribed certain dates and times when the goods were not to be passed.
Section 9 made applicable for the purposes of levy of land customs under the Act certain provisions of the including section 167 (8) with necessary modifications and adaptations.
Sections 18, 19 and 19A of the and the whole of the Foreign Exchange Regulation Act though not expressly incorporated in the applied their own force to goods imported or exported by land.
Duty on imports and exports by land was imposed by section 5 of the Indian Tariff Act, 1934.
The had now been repealed by the Sea .
It is necessary to read sections 4, 5 and 7(1) of the : "Section 4.Establishment of Land Customs Stations and determination of routes The Chief Customs Authority may, by notification, in the Official Gazette, 538 (a) establish land customs stations for the levy of land customs in any land customs area, and (b) prescribe the routes by which alone goods, or any class of goods specified in the notification may pass by land out of or into any foreign territory, or to or from any land customs station from or to any foreign frontier.
Section 5.
Permit for goods passing across frontier (1) Every person desiring to pass any goods, whether dutiable goods or not, by land out of or into any foreign territory shall apply in writing, in such form as the Chief Customs Authority may by notification in the Official Gazette prescribe, for a permit for the passage thereof, to the Land Customs Officer in charge of a Land Customs Station established in land customs area adjoining the foreign frontier across which the goods are to pass.
(2) When the duty on such goods has been paid or the goods have been found by the Land Customs Officer to be free of duty, the 'Land Customs Officer shall grant a permit certifying that duty has been paid on such goods or that the goods are free of duty, as the case may be: (3) Any Land Customs Officer, duly empowered by the Chief Customs Authority in this behalf, may require any person in charge of any goods which such officer has reason to believe to have been imported or to be about to be imported, by land from, or to any foreign territory to produce the permit granted for such goods; and any such goods which are dutiable and which are unaccompanied by a permit or do not correspond with the specification contained in the permit produced, shall be detained and shall be liable to confiscation; Provided that nothing in this sub section shall apply to any imported goods passing from a foreign frontier to a Land Customs Station by a route prescribed in that behalf.
(4) The Chief Customs Authority may, by notification in the Official Gazette, direct that the provisions of this section, or any specified provisions thereof, shall not, in any land customs areas specified in the notification apply in respect of goods of any class or value or specified.
Section 7.
Penalties (1) Any person who (a) in any case in which the permit referred to in section 5 is required, passes or attempts to pass any 539 goods by land out of or into any foreign territory through any land customs station without such permit, or (b) conveys or attempts to convey to or from any foreign territory or to or from any Land Customs Station any goods by a route other than the route, if any, prescribed for such passage under this Act, or (c) aids in so passing or conveying any goods, or knowing that any goods have been so passed or conveyed, keeps or conceals such goods or permits or procures them to be kept or concealed shah be liable to penalty not exceeding, where the goods are not dutiable, fifty or, where the goods or any of them are dutiable, one thousand rupees, and any dutiable goods in respect of which the offence has been committed shall be liable to confiscation.
" The scheme of sections 4, 5 and 7 (1) of the with regard to imports by land was as follows: Goods could pass by land out of foreign territory or from a foreign frontier to a land customs station by a prescribed route only, [section 4(b)].
To import goods by an unauthorised route or an attempt to do so was an offence, [section 7(1)(b)].
No permit could be obtained for importing goods by an unauthorised route.
The goods could be brought by the prescribed route from the foreign frontier to the land customs station, without a permit [proviso to section 5(3)].
Subject to exemptions, if any under section 5(4), a permit was required for the passage of goods through the land customs station.
Passing of goods through the land customs station without a permit or an attempt to so pass the goods was an offence, Is.
7 (1) (a)].
The importer was required to apply for the permit to the officer in charge of the land customs station, Is.
5(1)].
The goods were brought to the station for examination and appraisement of duty.
On the duty being paid or on its being found that the goods were free of duty, the officer issued the permit allowing the passage of the goods and certifying that the duty had been paid or the goods.
were free of duty as the case might be, Is.
5 (1) and (2)].
Dutiable goods.
in respect of which an offence was committed was liable to confiscation.
What is stated above applied mutatis mutandis to exports by land.
In this setting let us examine the provisions of section 5(3).
That sub section required that all goods imported or about to be exported must be accompanied by a permit for the passage there,of issued by the officer in charge of a land customs station.
It was an offence to take the goods through the land customs station 1.
without a permit.
A duly authorised land customs officer could enforce this requirement by asking any person in charge of the goods to produce the permit.
Dutiable goods unaccompanied by 540 a permit or not corresponding to the specifications contained in the permit produced had to be detained and was liable to confiscation.
It is to be noticed that the sub section referred to goods "unaccompanied by a permit" and to "any person in charge of any goods.
" It obviously contemplated cases where the goods should be accompanied by the permit and the person in charge of the goods was under a duty to produce the permit.
In view of sections 5 and 7 (1) it was necessary that the goods should be accompanied by a permit when they passed through the land customs station.
Rules under the Act could also prescribe that the goods must be accompanied by a permit for some time even after such passage.
In such cases section 5 (3) was infringed if the goods were not accompanied by the permit.
The Central Board of Revenue framed the Chinese Silver Dollars (import) Rules on March 29, 1958 in exercise of the powers conferred by section 9(1) of the .
Rule 6(2) provided that on its journey from the Kalimpong laud customs station to its ultimate destination, any consignment of Chinese silver dollars imported from Tibet into India must be accompanied by a permit, i.e., the importer 's copy of the relative import application bearing the endorsement of the officer in charge of the Kalimpong land customs station permitting the clearance of the consignment.
The permit must be produced at the land customs check post at Teesta Bazar, along with the consignment if the destination was Teesta Bazar or beyond also be produced on demand by any land customs officer at any time during the journey of the consignment upto its ultimate destination.
These Rules were framed on the assumption that independently of the Rules, the importer was not obliged to keep the permit with the dollars after they passed out of the Kalimpong land customs station.
The Rules were not in force on May 18, 1957 when the dollars were seized by the Range Officer, Matidhar.
There was no provision in the Act or the Rules in force on May 18, 1957 which required the appellant to keep.
the permit at Sonapur airstrip with the dollars seized on that date.
The contention of the Revenue is that section 5 (3) required that all imported goods .must always, at all times and at all places be accompanied by a permit.
We are unable to accept this contention. ' After the import, the goods became a part and parcel of the mass of other like goods in 'India.
There was No. duty to keep the permit with the consignment of imported goods for all times and at all places.
Nor was the importer under a duty to keep the consignment intact in his hands.
He could sell portions of it to different buyers and obviously he could not give the permit to every consumer.
He could import rubies from Burma by land .
:and by sea.
It was not necessary to keep any permit with the rubies imported by sea after their clearance from.
the customs 541 house.
Nor was the position different in case of rubies imported by land.
A consumer wearing a necklace made of rubies was not expected to carry the permit for the rubies in her bag.
Under the a customs clearance permit was necessary for the passage of goods imported or about to be .exported through the land customs station.
For this reason section 5(3) read with section (1)(a) required that the goods so passing through the land customs station must be accompanied by the permit.
The Rules could provide that the imported goods should be accompanied by the permit even after such passage.
As already stated.
the Rules required that imported Chinese silver dollars should be accompanied by the permit during the entire journey up to their ultimate destination.
In such cases.
section 5(3) was infringed if the permit covering the goods was not produced on demand by any land customs officer.
Except in such cases, section 5(3) did not apply, and it was not necessary to keep the permit with the goods.
We hold that section 5(3) was not infringed when the carriers did not produce the permit covering the goods at the Sonapur airstrip on May 18.
1957 and the goods could not be confiscated under section 5 (3).
Nor were the goods liable to confiscation under section 7(1) of the .
The appellant imported 1,65,000 dollars from Tibet under two Reserve Bank licences and two import permits.
There was no distinguishing mark on any dollar.
The appellant was found in possession of 1,65,000 dollars only.
No attempt was made to prove that the appellant was in possession of another consignment of 82,500 dollars.
At ' the time of import the dollars were packed in 66 bags marked "H.N." and 66 bags marked "H.D." The Range Officer seized 82.500 dollars packed in 66 bags marked "H.D." There is no evidence to.
show that the seized dollars were not covered by the permits and licences held by the appellant.
The onus was on the respondents to prove that the first consignment of 66 bags bore the mark "H.D." Application No. 34 accompanied the first consignment.
There was no noting on application No. 34 by the customs officer at Sonapur or at Dum Dum indicating that they had examined the bags or that the bags were found to bear the mark "H.D." The summary of the diary of the Range Officer Matidhar set out in the order of confiscation does not show that the officer examined the bags.
The note in the diary that the mark checked was "H.D." could have been made on the basis of the mark "H.D." shown in the accompanying application No. 34.
Before the issue of the show cause notice on July 17.
1957 the appellant had no occasion to produce before the constoms authorities any of the 66 bags marked "H.N." which had reached Calcutta.
No inference has been drawn against the appellant from their inability to produce any bags marked "H.N." after July 17, 1957.
On the materials on.
the record it is impossible to hold that the dollars seized ,on May 18.
C. 1./69 2 542 1957 were smuggled goods.
There was no noting by the customs officers at Sonapur and Dum Dum on application No. 34.
If the appellant desired to send smuggled "H.D." bags from Sonapur to Dum Dum, they could easily obtain application No. 34 from Calcutta and send it with the consignment seized at Sonapur.
Moreover, the customs officers had not put any mark or initials on the bags, and there was nothing to prevent the appellant from putting the mark "H.N." on other bags and using them for the carriage of the dollars.
The conclusion is irresistible that due to the inadvertence of the carriers the permits were inter changed and that application No. 34 was sent with "H.N." bags and application No. 32 was kept with "H.D." bags.
No inference of smuggling could be drawn from the fact that "H.D." bags were found with application No. 32.
In the circumstances.
the finding that the appellant had smuggled the goods and was guilty of an offence under section 7 (1) of the must be characterized as perverse.
Nor was it proved that the appellant committed any offence under sections 8 (1) and section 23A of the Foreign Exchange Regulations Act read with sections 19 and 167(8) of the Sea .
An offence under those sections can be proved by circumstantial evidence, see Issardas Daulat Ram vs Union of India(1).
In the present case there was no evidence either direct or circumstantial to prove the offence.
The appellant had valid Reserve Bank licences for the import of 1,65,000 dollars.
Those licences were not examined nor seized by the customs officials and no attempt was made to prove.
the licences did not relate to the dollars seized on May 1.8, 1957.
It follows that the dollars were not liable to confiscation under any provision of law.
Having regard to the facts on the record no tribunal could reasonably come to the conclusion that the dollars were liable to confiscation if they properly understood the relevant enactments.
In the circumstances the order of the Collector confiscating the goods is liable to be quashed by a writ of certiorari, see Halsbury 's Laws of England, 3rd ed.
II, article 19, pp. 62 63.
In Regina vs Medical Appeal Tribunal(2) the Court held that an assessment of 20% disablement must, having regard to.
the facts appearing on the record, be held to be erroneous in point of law and based upon a misconstruction of Regulation 2(5) of the National] Insurance (Industrial Injuries) (Benefits) Regulation 1948 and the award of the Medical Appeal Tribunal was therefore liable to be quashed by a writ of certiorari.
Denning, L. 1.
observed : "No reasonable person.
who had proper regard to regulation 2(5), could have come to such a conclusion.
[1962] supp.
1 S.C.R. 358.
(2) [1957] I Q.B. 574, 582.
543 It is now settled that when a tribunal come to a conclusion which could not reasonably be entertained by them if they properly understood the relevant enactment, then they fall into error in point of law: see Edwards (Inspector of Taxes) vs Bairstow, [1956] A.C. 14: When the primary facts appear on the record, an error of this kind is sufficiently apparent for it to be regarded as an or on the face of the record such as to warrant the intervention of this Court by certiorari.
" This conclusion is sufficient to dispose of the appeal.
It is therefore unnecessary to examine the contention that the impugned orders were passed in contravention of the principles of natural justice.
In the result, the appeal is allowed with costs.
The order passed by the High Court is set aside and the writ petition filed by the appellant is allowed.
The order of confiscation of the Chinese silver dollars is quashed and the respondents are directed to return them to the appellant.
G.C. Appeal allowed.

dataset_name: IN-Abs

summary/full:
The appellant imported 1,65,000 pieces Chinese silver dollars from Tibet through Sikkim State under two Reserve Bank import licences.
As there were two licences the dollars were divided into two lots.
One lot bore the mark 'H.D. ' and the other 'H.N. ' The appellant made two applications hearing Nos. 32 and 34 to the Officer in charge, Land Customs Station, for the grant of permits for passing the goods across the frontier.
Application No. 32 related to the lot marked 'H.N. ' and the application No. 34 related to the lot marked 'H.D. ' On May 16, 1957 the two consignments arrived at the land customs station, Kalimpong and were examined and appraised by the land customs officer in charge of the station.
On the duty being paid, the officer endorsed the applications certifying that the duty was paid and permitting the import of the goods. 'The consignments there were then delivered at Siliguri to the carriers for carriage by air to Dum Dum.
On May 17, 1957 one consignment together with application No. 34 was sent by plane from the Sonapur airstrip and on the same date reached Dum Dum and was delivered to the appellant at Calcutta.
On May 18, 1957 the Range Officer, Matidhar seized the second consignment bearing the marks 'H.D. ' together with application No. 32 when they were about to be despatched from the Sonapur airstrip.
The seizure was made under section 5(3) of the Land Customs Act on the ground that the mark on the consignment was 'H.D. 'whereas the accompanying import application No. 32 related to the consignment marked 'H.N. ' The Collector of Land Customs, Calcutta after hearing the appellant held that offences under section 5(3) and section 7(1) of the , and section 167(8) read with of the had been committed by the appellant.
He directed confiscation of the goods under those sections read with section 23A of the Foreign Exchange Regulation Act, 1947.
Departmental remedies having failed the appellant filed a writ petition in the High Court.
Appeal in this Court was filed by the appellant with certificate.
The questions that came up for consideration were inter alia: (i) whether the seizure and confiscation.
of the goods was authorised by section 5(3) of the , and (ii) whether the finding that the appellant had committed offences under that section and other provisions of law was perverse and liable to be quashed.
HELD: (i) Section 5(3) of the .
by itself does not require that all imported goods must always at all times, and at all places be accompanied by a permit.
After the permit the goods become a part and parcel of the mass of other like goods in India.
There is no duty 534 to keep the permit with the consignment for aH times and at all places.
Nor is the importer under a duty to keep the consignment in his hands.
He can sell portions of it to different buyers and obviously he could not give the permit to every consumer.
[540 G H] Before March 29, 1968 when the Central Board of Revenue framed the Chinese Silver Dollars (Import) Rules, there was no provision in the Act or Rules in force which required the appellants to keep the permits at Sonapur airstrip with the dollars seized on that date.
Section 5(3) was not infrinrged when the carriers did not produce the permit concerning the goods at the Sonapur airstrip on May 18, 1957, and the goods could not be confiscated under section 5(3).
[541 C] (ii) Nor were the goods liable to confiscation under section 7(1) of the .
There was no evidence to show that the seized dollars were not covered by licences.
On the materials on record the conclusion was irresistible that due to the inadvertence of the carriers the permits were inter changed and that application No. 34 was sent with 'H.N. ' consignment and application No. 32 was kept with 'H.D. ' consignment.
No inference of smuggling could be drawn from the fact that 'H.D. ' consignment was found with application No. 32.
In the circumstances the finding that the appellant had smuggled the goods and was guilty of an offence under section 7(1) of the must be characterised as perverse.
[541 D E; 542 B C] (iii) It was also not proved that the appellant committed any offence ' under sections 8(1) and 23A of the Foreign Exchange Regulations Act read with sections 19 and 167(8) of the .
Although the offence under these sections may be proved by circumstantial evidence in the present case there was no evidence direct or circumstantial to prove the offence.
[542 D] Issardas Daulat Ram vs Union of India, [1962] Supp.1 S.C.R. 358, referred to.
(iv) Having regard to the facts on the record no tribunal could reasonably come to the conclusion that the dollars were liable to confiscation if they properly understood the relevant enactments.
In the circumstances the order of the Collector confiscating the goods was liable to be quashed by a writ of certiorari.
[542 F] Regina vs Medical Appeal Tribunal, ; , 582, applied.


judgement:
ivil Appeal No. 88 of 1953.
Appeal under article 132(1) of the Constitution of India from the Judgment and Order dated the II th September, 1951, of the High Court of, Judicature for the State of Rajasthan at Jodhpur in D. B. Civil Appeal,(Ijlas i Kbas) No. 6 of 1950.
H. J. Umrigar, Narain Andley and Rajinder Narain for the appellants.
Radhey Lal Aggarwal and B. P. Maheswari, for the respondent.
May 12.
The Judgment of the Court was delivered by MUKHERJEA J.
This appeal is on behalf of the plaintiffs and has come before us on a certificate granted by the High Court of Rajasthan, under article 132(1) of the Constitution, on the ground that the case involves a substantial question of law as to the interpretation of the Constitution.
The appellant has also put in a petition praying for leave to urge other, grounds on the merits of the case.
The suit, out of which this appeal arises, was brought by the appellants, as plaintiffs, on the 16th August, 1946, in the District Court I at Jodhpur in Rajasthan against the defendant respondent, claiming to recover from the latter a sum of Rs. 10,342 annas odd together with interest and costs.
The plaintiffs, at all material times, carried on the business of commission agents both at Indore and Jodhpur under the name and style 441 of " Kanmal Kishenmal " and I" Kanmal Surajmal " respectively and their case is that between September and December, 1945, the defendant entered into several forward contracts for the purchase and sale of bullion through the plaintiffs ' firm at Indore.
These transactions proved unprofitable to the defendant and except a small profit of Rs. 103 annas odd which one of these transactions fetched, every one of the rest ended in loss and the loss aggregated to a sum of Rs. 21,423 1 6 pies.
It is averred in the plaint that this entire amount was paid to third parties at Indore by the plaintiffs on behalf of the defendant and that the plaintiffs received, in all, a sum of Rs. 11,457 8 0, which the defendant paid from time to time, towards these losses, to the plaintiffs ' firm at Jodhpur.
The plaintiffs were therefore entitled to the balance of Rs. 9,861 which together with interest came up to Rs. 10,342 and this was the claim laid in the plaint.
The suit was transferred from the District Court to the Original Side of the High Court of jodhpur and the defendant filed his written statement in the High Court on the 27th October, 1947.
The defence was a complete denial of the plaintiffs ' claim and it was contended inter alia that the transactions in suit amounted to wagering contracts and according to the law prevalent in Marwar, as contained in the notification of the Marwar Government dated the 3rd June, 1943, all forward business contracts in bullion, in which the date fixed for delivery exceeded 12 days, were illegal and were punishable as criminal offences.
No suit was therefore maintainable on the basis of these transactions.
On these pleadings a number of issues were raised of which issue No. 5 stood thus: " Are the transactions in dispute in the suit illegal and the present suit in respect of these transactions is not maintainable on account of the notification dated 3rd June, 1943 ? " The suit came up for hearing before a single Judge of the Jodhpur High Court sitting on the Original Side.
No evidence was adduced by the parties and the case 57 442 was heard only on issue No. 5 which was treated as an issue on a pure question of law.
It was held by the learned Judge that, as it was admitted by the plaintiffs that the contracts to which the suit related covered a period exceeding 12 days, they came within the prohibition of the notification referred to above and a suit based upon them was not maintainable in law.
The judgment shows that a contention was raised on behalf of the plaintiffs that the notification was confined only to contracts made in Marwar or intended to be performed in that place, and as the contracts in suit were all entered into at Indore, they could not be hit by the notification.
This argument was repelled by the learned trial judge on a two fold ground.
It was said in the first place that as the suit was actually brought in the Jodhpur Court, the plaintiffs could not avoid facing the notification and the Jodhpur Court could not give them a relief in violation of its own laws.
The other reason assigned was based upon section 13 of the Civil Pro cedure Code and it was said that if the plaintiffs could and did get a decree on the basis of these transactions in the Indore Court and wanted to enforce the same as a foreign judgment in the Court of Jodhpur, the latter would be justified in refusing to give effect to such judgment under section 13 of the Marwar Civil Procedure Code, on the ground that such judgment was founded on a breach of law in force in Marwar.
In this view the learned Judge, by his judgment dated the 2nd March, 1948, dismissed the plaintiffs ' suit.
The plaintiffs thereupon took an appeal, against this judgment, to the Appeal Bench of the Jodhpur High Court and the appeal was heard by a Division Bench consisting of Nawal Kishore C. J. and Kanwar Amar Singh J.
The learned Judges accepted the legal position taken up by the plaintiffs, that the contracts could be void only if they were entered into at Marwar or were intended to be performed, either wholly or partly, at Marwar.
Admittedly they were entered into at Indore outside Marwar, but the learned Judges held that from the fact that certain payments were made by the defendant and accepted by the plaintiffs towards these contracts at Marwar, it could be inferred that it 443 was a term of the contracts that they would be performed at Marwar.
Another point raised on behalf of the plaintiffs, that as the notification of 3rd June, 1943, itself came to an end by efflux of time on the 30th September, 1946, there, was no obstacle in the way of the plaintiffs ' obtaining a decree at any time after that, was repelled by the learned Judges on the ground that as the contracts themselves were illegal, at the time when they were entered into, by reason of their violating the provisions of the notification, the fact that the notification subsequently ceased to be operative could not make the illegal contracts lawful.
The result was that by its judgment dated the 24th September, 1948, the appellate bench of the High Court dismissed the appeal.
The plaintiffs thereupon with the leave of the Court took an appeal against this decision to the Ijlas i Khas of the State of Jodhpur as it then existed.
While the appeal of the plaintiffs was pending before the Ijlas i Khas of the Jodhpur State, the integration of the various States of Rajasthan took place and the United States of Rajasthan was formed on the 7th of April, 1949.
The Rajasthan High Court Ordinance was promulgated by the Rajpramukh of Rajasthan on the 21st June, 1949, and on the 29th of August following, the High Court of Rajasthan was constituted.
Another Ordinance known as the 'Rajasthan Appeals and Petitions (Discontinuance) Ordinance, 1949 ' provided, by section 4, that pending appeals before the Ijlas i Khas of any of the covenanting States if they related to judicial matters were to be heard by a special Court to be constituted by the Rajpramukh.
This section was amended by an amending Ordinance dated the 24th of January, 1950, and all these pending appeals were directed to be heard and disposed of by the Rajasthan High Court established under ' the Rajasthan High Court Ordinance of 1949.
In accordance with this provision the appeal of the plaintiffs was transferred to the High Court of Rajasthan for disposal.
The Constitution of India came into force on the 26th of January, 1950, and when the appeal came up for hearing before the Rajasthan High Court a preliminary point was raised as to whether the 444 appeal should not be transferred to the Supreme Court for disposal under article 374(4) of the Constitution.
The matter was referred for consideration by a Full Bench, and the Full Bench decided that article 374(4) of the Constitution had no application to the present case and the appeal was to be heard by the High Court of Rajasthan.
The appeal was then placed for hearing before a Division Bench of the Rajasthan High Court and by their judgment dated the 11th of September, 1951, the learned Judges dismissed the appeal and affirmed the decision of the Courts below.
Against this judgment the plaintiffs got leave to file an appeal to this Court under article 132(1) of the Constitution and that is how the matter has come before us.
The only constitutional point involved in the appeal is whether article 374(4) of the Constitution is attracted to the facts of the present case and whether the appeal should therefore have been transferred to this Court for disposal instead of being heard and disposed of by the Rajasthan High Court.
In view of the fact that we have ' acceded to the prayer of the appellants and have granted them leave to urge other grounds relating to the merits of the case in support of the appeal, this constitutional point has nothing but an academic importance and is not pressed by the appellants.
We would therefore proceed to consider the points upon which the learned counsel for the appellants has attempted to assail the propriety of the decision of Rajasthan High Court on its merits.
The learned Judges of the Rajasthan High Court took the view, and it seems to us quite properly, that the Courts below were not right in treating issue No. 5 as raising a pure question of law where no investigation of facts was necessary.
The High Court has pointed out that the defendant while raising the plea of illegality of the contracts in his written statement, nowhere alleged that the contracts were entered into at Marwar or were intended to be performed there.
On the other hand the plaintiffs expressly averred that the contracts were made at Indore.
The one fact from which the appeal bench of the Jodhpur High Court drew the conclusion that the contracts were intended to be 445 performed, partly at least, at Marwar, was that certain payments towards the losses resulting from the transactions were made by the defendant to the plaintiffs ' firm at Marwar.
This, as the Rajasthan High Court points out, does not necessarily lead to the inference that it was a ' part of the original agreement entered into by the parties, that the performance was to be made at Marwar.
The payments might have been made, as a matter of convenience, upon express instructions from the Indore firm.
It is also pointed out that if the general principle of law is that it is the debtor who has to seek the creditor, as the defendant ranked here as a debtor by reason of the losses suffered in the business, it was for him to seek the plaintiffs at Indore and not for the plaintiffs to seek him at Jodhpur.
The ,suit, it is to be further noted, was brought at Jodhpur only on the allegation that the defendant resided within its jurisdiction.
There was no averment in the plaint that any part of the cause of action arose within its jurisdiction.
On all these grounds the Rajasthan High Court was of opinion that the Courts below should have either framed a specific issue on facts or if they thought that issue No. 5 was sufficiently wide to cover the question of fact as well, they should have given an opportunity to the parties to lead evidence for arriving at a finding whether the contracts were to be performed in whole or in part in Marwar.
The learned Judges themselves were inclined to send the case back, on remand, in order that evidence might be adduced on this point.
But they did not take this step as they were told that the contracts were entered into by telegrams and no terms of any sort were settled between the parties, it being understood that the business was to be conducted according to the custom and usage of the market.
The learned Judges further discussed a question of Private International Law, apparently raised on behalf of the defendant, that even if the contract was made outside Marwar and not intended to be performed there.
, still the Court of Marwar should refuse to enforce the contract as it was illegal according to the lex fori, that is to say the law of the place where the suit was brought.
446 This contention of the defendant was not accepted and it was held that if the contract was enforceable by the law of the place where it was made or where it was to be performed, it could not be held unenforceable in Jodhpur on the ground of its being opposed to public policy as the prohibition in the notification was not general in its nature and the contract in question cannot be said to be opposed to any basic ideas of morality or public policy.
After saying all these however, the learned Judges of the Rajasthan High Court dismissed the suit on the short point that even if the sale or purchase under the contracts might have taken place outside Marwar Yet the notification not only hit the contracts of sale and purchase but the contract of agency itself relating to such transactions.
It is said then that in the case of Pakki Adat, primarily the place of payment of profit is the place where the constituent resides and in the present case the plaintiffs had alleged themselves to be Pakka Adatias.
Consequently the agency contract would be hit by the notification as it was to be performed at Jodhpur where the defendant lives.
We do not think that the learned Judges ' approach to the case has been a proper one or that the reasoning adopted by them can be accepted as sound.
By the notice of 3rd June, 1943, an additional rule, namely, rule No. 90(c) was added to the Defence of India Rules as applied to Marwar.
Sub rule (2) of rule 90(c) laid down that no person shall enter into forward contract or option in bullion.
In sub rule (1) " forward contract " was defined to mean 'a contract for delivery of bullion.
at a future date, such date being later than 12 days from the date of the contract '; and a " contract " was defined to mean ' a contract made or to be made or to be performed in whole or in part in Marwar relating to the sale or purchase of bullion. ' The present suit is really not one to enforce any contract relating to purchase or sale of bullion which comes within the prohibition of this notification.
It is a suit by an agent claiming indemnity against the principal, for the loss, which the agent had suffered, in carrying out the directions of the principal.
The right to such indemnity is founded on the statutory provision 447 contained in section 222 of the Indian Contract Act which stands as follows: The employer of an agent is bound to indemnify him against the consequences of all lawful acts done by such agent in exercise of the authority conferred upon him." Here the plaintiffs paid the losses resulting from the transactions to third parties, on behalf of the defend.
ant, in exercise of the authority conferred upon them by the latter.
These acts of payment were certainly lawful acts if we assume, as indeed we must, that all these transactions took place and the payments were made outside Marwar.
It is the statutory right which flows from the contract of agency that the plaintiffs are seeking to enforce against the defendant and the suit has been brought in the Jodhpur Court as the defendant resides within that jurisdiction.
The fact that in case of Pakki Adat the place of payment is normally where the constituent resides is immaterial for our present purpose.
A contract for sale or purchase of bullion may be entered into by and between the parties directly or it may be made through agents.
In either case if such contract is not entered into at Marwar, nor is it agreed to be performed wholly or in part in Marwar, it would be outside the notification and cannot be held to be illegal.
The fallacy in the reasoning of the learned Judges lies in the fact that the contract between principal and agent, which is entirely collateral to the contract of purchase and sale, has been held by them as coming within the prohibition of the notification merely on the ground that payment, by the agent to the principal, of the profits of the transaction could be made or demanded at the place where the principal resides.
In our opinion the right to indemnity, which is an incident of the contract of agency, is not hit by the notification at all and is a matter which is entirely collateral to a forward contract of purchase and sale of bullion which the notification aims at prohibiting.
We hold therefore that the Courts were not right in dismissing the plaintiffs ' suit on the ground that the contracts upon which the suit was based were illegal by reason of their contravening the provisions 448 of the notification.
The result is that we set aside the judgments of the Courts below and send the case back to the Original Court of Jodhpur in order that it may be tried 'on all the other issues raised in the suit after giving opportunity to the parties to adduce such evidence as they want to adduce.
The plaintiffs appellants will have their costs up to this stage.
Further costs will abide the result.
Order accordingly.

summary/full:
The respondent as principal entered into several forward contracts for the purchase and sale of bullion through the appellant 's firm at Indore who worked as commission agents for the respondent.
The transactions resulted in a loss and the appellants who had to pay the amount of loss to third parties on behalf of the respondent as the agents brought the suit for recovery of the amount in the Court in Jodhpur where the respondent resided.
It was pleaded by the respondent that according to.
the law prevalent there as contained in the notification of the Marwar Government dated the 3rd June, 1943, all forward business contract in bullion in which the date fixed for delivery exceeded 12 days were 440 illegal and therefore a suit on the basis of these transactions was not maintainable.
Held, that, the suit was really not one to enforce any contract relating to the purchase or sale of bullion which comes within the prohibition of the notification but was one by an agent claiming indemnity against the principal for the loss which the agent had suffered in carrying out the directions of the principal.
The right to such indemnity was founded on the statutory provision contained in section 222 of the Indian Contract Act and the acts of payment made by the plaintiffs on behalf of the defendant were lawful acts as all the transactions took place and the payments were made outside Marwar and therefore the suit was not hit by the notification.


judgement:
ivil Appeal No. 1449 of 1966.
Appeal by special leave from the judgment and decree dated April 28, 1966 of the AIIahabad High Court in Second Appeal No. 289 of 1965.
M.K. Ramatnurthi, Shyamala Pappu and Vineet Kumar, for the appellant.
B.C. Misra, O. Prakash, R.K. Mathur and M.V. Goswami, for the respondent.
577 The Judgment of the Court was delivered by Bachawat, J.
The appellant is the tenant and the respondent is the landlord of House No. 5B, Old 122 Maya Mirganj, Allahabad.
The appeal arises out of a suit for ejectment by the landlord against the tenant from the house.
On October 11, 1961, the landlord obtained permission to institute the suit from the Rent Control and Eviction Officer under section 3 (1) of the U.P. (Temp.) Control of Rent and Eviction Act, 1947.
On October 14, 1961 the landlord instituted the present suit for eviction against the tenant.
On March 27, 1962 the Commissioner Allahabad Division acting under section 3 (3) revoked the permission to institute the suit.
On March 30, 1963 the State Government acting under section 7F set aside the Commissioner 's order and gave leave to the landlord to file the suit with effect from July 30, 1963.
On July 11, 1963 the Trial Court decreed the suit.
The tenant filed an appeal against the decree.
On November 4, 1963 the appellate court set aside the decree and remanded the suit for fresh trial.
After the suit went back on remand the Trial Court decreed the suit on March 2, 1964.
The Trial Court held that the permission granted by the State Government became effective from July 30, 1963 and as the suit was still pending a decree could be passed in the suit.
An appeal against the decree was dismissed on November 28, 1964.
A second appeal was dismissed by the High Court on April 28, 1966.
The present appeal has been filed by the tenant after obtaining special leave.
The sole question in the appeal is whether in the circumstances there was a valid permission to institute the suit under section 3 (1 ).
In Bhagwan Das vs Paras Nath(1) this Court held that a suit validly instituted after obtaining permission of the Commissioner under section 3(3) did not become incompetent if the State Government acting under section 7F revoked the permission after the institution of the suit.
In that case the District Magistrate refused to give permission under section 3 (1) to.
institute the suit.
The Commissioner acting under section 3 (3) set aside the order and granted permission to institute the suit.
The suit was decreed by the Trial Court on November 2, 1960.
The tenant filed an appeal against the decree.
During the pendency of the appeal the State Government acting under section 7F revoked the permission granted by the Commissioner.
The Court held that though the order under section 3(3) was subject to an order under section 7F the Government 's power under section 7F to revoke the permission granted by the Commissioner became exhausted once the suit was validly instituted.
In support of his contention that the present suit is not maintainable, the appellant relies on the following observations of Hegde, J. : ; 578 "When the Commissioner sets aside the order passed by the District Magistrate granting permission to file a suit for ejecting a tenant, the order of the Commissioner prevails.
If he cancels the permission granted by the District Magistrate there is no effective permission left and the suit instituted by the plaintiff without a waiting his decision must be treated as one filed without any valid permission by the District Magistrate.
" Having regard to these observations the present suit though validly instituted after obtaining the permission under section 3 (1) became incompetent when the permission was revoked by the Commissioner under section 3 (3).
But the order under section 3 (3) itself was set aside by the State Government under section 7F during the pendency of the suit.
The question is what is the effect of this order under section 7F.
Now, section 3(4) provides that the order of the Commissioner under section 3(3) subject to an order passed by the State Government under section 7F.
If the State Government acting under section 7F sets aside the order of the Commissioner revoking the permission, the order under section 3 (1) granting permission is revived.
The result is that there is an effective permission to institute the suit under section 3 (1) and the suit is validly instituted.
In Bhagwan Das 's Case (1) the suit was validly instituted after obtaining permission from the Commissioner under section 3 (3).
The State Government could not render such a suit incompetent by any order under section 7F.
In the present case the suit was validly instituted after obtaining permission from the Rent Control and Eviction Officer under section 3 (1).
The effect of the order of the Commissioner revoking the permission was that the suit became incompetent.
The State Government acting under section 7F had power to revise and set aside the Commissioner 's order and restore the permission granted under section 3 (1) so as to make the suit competent.
The order of the State Government after stating that in the interest of justice the house should be available to the landlord for his use, set aside the Commissioner 's order under section 3(3).
The result was that the order of the Rent Control and Eviction Officer passed .under section 3 (1) stood restored.
The further direction in the order that the landlord "is advised to file a suit for eviction from the house in dispute against the opposite party in a civil court under section 3 of the Act, which will be applicable four months after the date of the order" really means that the permission under section 3(1) would become effective on the expiry of 4 months.
The landlord had thus an effective permission to institute the suit under section 3(1) on the expiry of four months from March 30, 1963, that is to say, as from July 30, 1963.
The (1) ; 579 decree in the suit was passed on March 2, 1964.
On that date the landlord had a valid permission to institute the suit.
The suit was therefore maintainable.
In the result, the appeal is dismissed.
There will no order as to costs.
Y.P. Appeal dismissed.

summary/full:
The respondent landlord obtained permission to institute a suit from the Rent Control & Eviction Officer under section 3(1) of the U.P. (Temp.) Control of Rent and Eviction Act, 1947, for ejecting from his house the Appellant tenant.
The respondent filed a suit for eviction against the appellant.
Later the Commissioner acting under section 3(3) revoked the permission But the State Government on March 30, 1963 acting under section 7F set aside the Commissioner 's order and gave leave to the respondent to file the suit after 4 months of the date of the order i.e., July 30.
On July 11, 1963 the trial court decreed the suit.
The appellant filed an appeal.
The appellate court set aside the trial court 's decree and remanded the suit for fresh trial.
On remand, the trial court decreed the suit on March 2, 1964 holding that the permission granted by the State Government became effective from July 30, 1963 and as the suit was.
still pending a decree could be passed in the suit.
This decision was affirmed by the first appellate court, and also by the High Court.
Dismissing the .appeal this Court.
HELD: If the State Government acting under section 7F sets aside the order of the Commissioner revoking the permission.
the order under section 3(1) granting permission is revived.
The 'result is that there is an effective permission to institute the suit under section 3(1) and the suit is validity instituted.
[578 D] The direction of the 'State 'Government to file the suit after four months of the order meant that the permission under section 3(1) would become effective on the expiry of 4 months i.e. from July 30, 1963.
The landlord had thus an effective permission to institute the suit under section 3(1) from July 30, 1963.
The decree in the suit was passed on March 2. 1964.
On that date the landlord had a valid permission to institute the suit.
The suit was therefore maintainable.
[578 H] Bhagwan Das vs Paras Nath, ; , distinguished.