judgement:
Appeal No. 423 of 1964.
Appeal by special leave from the order dated October 5, 1962 of the Central Government Industrial Tribunal at Dhanbad in Application No. 53 of 1961 in Reference Nos. 45, 56, 63 and 65 of 196.1.
section V. Gupte, Solicitor General and I. N. Shroff, for the appellant.
Jitendra Sharma and Janardan Sharma, for the respondent.
The Judgment of the Court was delivered by Gajendragadkar, C. J.
This appeal raises a very short point for our decision.
The appellant, the Tata Iron & Steel Co. Ltd., (N)4SCI 430 Jamadoba, filed an application under section 33(2)(b) of the (No. 14 of 1947) (hereinafter called "the Act"), before the Central Government Industrial Tribunal, Dhanbad (hereinafter called "the Tribunal"), asking for its approval of the action which it proposed to take against its employee, the respondent D. R. Singh.
This application was made by the appellant, because certain industrial disputes were pending at the relevant time between the appellant and its employees under References Nos. 45, 56, 63 and 65 of 1961.
This application was opposed by the respondent who filed his written statement.
At the hearing of the application, the appellant urged before the Tribunal that though it had made the present application as a matter of abundant caution, its case was that it was not necessary to apply under section 32(2), because the respondent was not concerned with the industrial disputes which were pending between the appellant and its employees in the different References to which we have already referred.
In other words, the appellant wanted the Tribunal to consider the question as to whether the respondent was a workman concerned in the relevant industrial disputes at all, before dealing with the merits of its application.
The appellant 's case was that one of the conditions precedent for the applicability of section 33 is that the workman against whom the employer seeks to take action falling under section 33(2), must be a workman concerned in the main industrial disputes; if he is not so concerned, section 33(2) will not apply.
In order to avoid any complica tions and with a view to save itself from the charge that it had contravened section 33 of the Act, the appellant had no doubt made an application as a precautionary measure; that is why it wanted the Tribunal to consider its contention that section 33 did not apply as a preliminary point.
The Tribunal took the view that the appellant could not raise such a contention.
It held that if the appellant thought that section 33 did not apply, it should withdraw the application and take the consequences.
On that view, it refused to entertain the plea raised by the appellant and proceeded to deal with the merits of the application.
In the result, the Tribunal was not satisfied that a prima facie case had been made out for the dismissal of the respondent, and so, approval was not accorded to the action which the appellant wanted to take against the respondent and its application was accordingly dismissed.
It is against this order that the appellant has come to this Court by special leave.
The learned Solicitor General for the appellant contends, and we think rightly, that the Tribunal was in error in not dealing with the preliminary point as to whether section 33 applied to the facts of this case.
It is plain that in a situation like the present, even if the appellant took the view that the workman against whom it was taking action was not a workman concerned with the main industrial disputes, it would be justified in refusing to take the risk of deciding the said point for itself.
It would be legitimate for an employer like the appellant to make an application under section 33 without prejudice to his case that section 33 did not apply.
The question 431 about the construction of the words "a workman concerned in such dispute" which occur in section 33(1) and (2) has been the subject matter of judicial decisions and somewhat inconsistent views had been taken by different High Courts on this point.
Some High Courts construed the said words in a narrow way, vide New Jehangir Vakil Mills Ltd., Bhavnagar vs N. L. Vyas & Ors.,(1) while others put a broader construction on them, vide Eastern Plywood Manufacturing Company Ltd vs Eastern Plywood Manufacturing Workers ' Union(2).
Newton Studios Ltd. vs Ethirajulu (T. R.) & Others(3), and Andhra Scientific Company Ltd. vs Seshagiri Rao (A).(4).
This problem was ultimately resolved by this Court in its two recent decisions, viz., New India Motors (Private) Ltd. vs Morris (K.T.)(5) and Digwadih Colliery vs Ramji Singh(6).
In this latter case this Court considered the conflicting judicial decisions rendered by the different High Courts and has approved of the broader construction of the words "workmen concerned in such dispute".
Where judicial decisions differed on the construction of the words "workmen concerned in such dispute", it would be idle and unreasonable to suggest that the employer should make up his mind whether section 33 applies or not, and, if he thinks that section 33 does not apply, he need not make the application; on the other hand, if he thinks that section 33 applies, he should make an application, but then he cannot be permitted to urge that the application is unnecessary.
Such a view is, in our opinion, wholly illogical and unsatisfactory.
Therefore, we must hold that the Tribunal was in error in not considering the preliminary point raised by the appellant that the respondent was not a workman concerned with the main industrial disputes and as such, the application made by it was unnecessary.
That raises the question as to the course that we should adopt in dealing with the merits of the present appeal.
Logically, it would be necessary to make a finding on the preliminary point raised by the appellant before the merits are considered, because if the appellant is right in contending that the respondent is not a "workman concerned with such disputes" within the meaning of section 32(2), the application would be unnecessary and there would be no jurisdiction in the Tribunal either to accord or to refuse approval to the action proposed to be taken by the appellant against the respondent.
In the present case, however, we do not propose to adopt such a course.
The order terminating the services of the respondent was passed on December 4, 1961 and it was to take effect from December 9, 1961.
The Award was pronounced by the Tribunal on October 5, 1962, and when the appeal has come for final disposal before us, more than three years have elapsed since the date of dismissal of the respondent.
The learned Solicitor General fairly con ceded that the appellant has come to this Court not so much to enforce its order of dismissal against the respondent, as to have a (1) [1958] II LLJ 575.
(4) [1959] II LLJ 717.
(2) [1952] I LLJ 628.
(5) [1960] I LLJ 551.
(3) [1958] I LLJ 63.
(6) [19641 II LLJ 143.
432 decision from this Court on the point of law raised by it before the Tribunal.
Accordingly, we have decided that point in favour of the appellant, but having regard to the long passage of time between the date of the impugned order and the date when we are pronouncing our judgment in the present appeal, we think it would be inexpedient and unjust to send the matter back to the Tribunal with a direction that it should decide the preliminary point raised by the appellant as to whether the respondent is a "workman concerned in such disputes" within the meaning of section 33(2) of the Act.
That is why though we have reversed the finding of the Tribunal on the preliminary point, we do not propose to give this litigation any further lease of life.
In the result, without examining the merits of the findings recorded by the Tribunal for not according approval to the dismissal of the respondent, we direct that the appeal fails and is dismissed.
There would be no order as to costs.
Appeal dismissed.

summary/full:
Because certain industrial disputes were pending before the Industrial Tribunal at the relevant time between the appellant and its employees, the appellant filed an application under section 33(2), (b) asking for approval of action which it proposed to take against its employee the respondent.
The appellant urged that this application was made as a matter of abundant caution and it wanted the Tribunal to consider the question as to whether the respondent was a workman concerned in the relevant industrial dispute at all before dealing with the merits of the application.
The Tribunal, being of the view that if the appellant thought that s, 33 did not apply, it should withdraw the application and take the consequences, dealt with the merits of the application.
In appeal by special leave: HELD: The Tribunal was in error in not considering the preliminary point raised by the appellant that the respondent was not a workman concerned with the main industrial dispute and as such the application made by it was unnecessary.
[431E] It is plain that in a situation like the present, where judicial decisions differed on the construction of the words "workman concerned in such dispute", even if the appellant took the view that the workman against whom it was taking action was not a workman concerned with the main industrial disputes, it would be justified in refusing to take the risk of deciding the said point for itself.
It would he legiti mate for an employer to make an application under section 33 without prejudice to his case that section 33 did not apply.
[431D E] Case law referred to.


judgement:
iminal Appeal No. 34 of 1953.
Appeal from the Judgment and Order dated the 5th January, 1953, of the High Court of Judicature at Allahabad (Lucknow Bench), Lucknow (Kidwai and Bhargava JJ.) in Criminal Appeal Register No. 24 of 1952 and Capital Sentence Register No. 4 of 1952 arising out of the Judgment and Order dated the 19th January 1952, of the Court of the Sessions Judge, Sitapur, in Sessions Case No. 97 of 1951.
Jai Gopal Sethi (K. P. Gupta, with him) for the appellant.
G.C. Mathur and Onkar Nath Srivastava for the respondent.
November 16.
The Judgment of the Court was delivered by BOSE J.
We have three appellants before us.
All were prosecuted for the murder of one Babu Singh.
Of these, Surendra Singh alone was convicted of the murder and was sentenced to death.
The other two were convicted under section 225, Indian Penal Code.
Each was sentenced 331 to three years ' rigorous imprisonment and to a fine of Rs. 200.
All three appealed to the High Court at Allahabad (Lucknow Bench) and the appeal was heard on Filth December, 1952, by Kidwai and Bhargava JJ.
Judgment was reserved.
Before it could be delivered Bhargava J. was transferred to Allahabad.
While there he dictated a, "judgment" purporting to do so on behalf of himself and his brother Judge, that is to say it purported to be a joint judgment : he used the pronoun "we" and not "I".
He signed every page of the "judgment" as well as at the end but did not date it.
He then sent this to Kidwai J. at Lucknow.
He died on 24th December, 1962, before the "judgment" was delivered.
After his death, on 5th January, 1953, his brother Judge Kidwai J. purported to deliver the "judgment" of the court.
He signed it and dated it.
The date he placed on it was 5th January, 1953, Bhargava J. 's signature was still there and anyone reading the judgment and not knowing the facts would conclude that Bhargava J. was a party to the delivery on 5th January, 1953.
The appeal was dismissed and the sentence of death was confirmed.
The question is whether this "judgment" could be validly delivered after the death of one of the two Judges who heard the appeal.
The arguments covered a wide range but we intend to confine ourselves to the facts of this case and only deal with the narrower issues which arise here.
Delivery of judgment is a solemn act which carries with it serious consequences for the person or persons involved.
In a criminal case it often means the difference between freedom and jail, and when there is a conviction with a sentence of imprisonment, it alters the status of a prisoner from an under trial to that of a convict; also the term of his sentence starts from the moment judgment is delivered.
It is therefore necessary to know with certainty exactly when these consequences start to take effect.
For that reason rules have been drawn up to determine the manner in which and the time from when the decision is to take effect and crystal 332 lise into an act which is thereafter final so far as the court delivering the judgment is concerned.
Now these rules are not all the same though, they are designed to achieve the same result.
The Criminal Procedure Code takes care of courts subordinate to the High Court.
Section 366 and 424 deal with them.
The High Courts have power to make their own rules.
The power is now conferred, or rather continued, under article 225 of the Constitution.
The Allahabad High Court framed its present set of Rules in 1952.
They came into force on the 15th of September in that year.
We are concerned with the following in Chapter VII dealing with the judgment and decree, namely rules 1.4.
These rules provide for four different situations: (1) for judgments which are pronounced at once as soon as the case has been heard; (2) for those which are pronounced on some future date, (3) for judgments which are oral, and (4) for those which are written.
These rules use the word "pro nounced" in some places and "delivered" in others.
Counsel tried to make capital out of this and said that a judgment had to be both "pronounced" and "delivered" and that they were two different things.
We do not intend to construe these rules too technically because they are designed, as indeed are all rules, to fur ther the ends of justice and must not be viewed too narrow ly; nor do we desire to curtail the jurisdiction which the Privy Council point out is inherent in courts to make good inherent defects caused by accidents such as death.
As this decision of the Judicial Committee was relied on in the arguments we will quote the passage which is relevant here.
It is at page 295 of Firm Gokal Chand vs Firm Nand Ram(1).
The facts are not the same as here because the judgment was actually delivered in open court and both the judges who constituted the Bench were present and concurred in it.
But before it could be signed, one Judge went on leave.
(1) A.I.R. 1938 P.C. 292.
333 The rules required the judgment to be signed and dated at the time that it was pronounced.
Their Lordships said: "The rule does not say that if its requirements are not complied with the judgment shall be a nullity.
So startling a result would need clear and precise words.
Indeed the rule does not even state any definite time in which it is to be fulfilled.
The time is left to be defined by what is reasonable.
The rule from its very nature is not intended to affect the rights of parties to a judgment.
It is intended to secure certainty in the ascertainment of what the judgment was.
It is a rule which Judges are required to comply with for that object.
No doubt in practice Judges do so comply, as it is their duty to do.
But accidents may happen.
A Judge may die after giving judgment but before he has had a reasonable opportunity to sign it.
The court must have inherent jurisdiction to supply such a defect.
The case of a Judge who has gone on leave before signing the judgment may call for more comment, but even so the convenience of the court and the interest of litigants must prevail.
The defect is merely an irregularity.
But in truth the difficulty is disposed of by sections 99 and 108, Civil Procedure Code.
" That was a civil case.
This is a criminal one.
But section 537 of the Criminal Procedure Code does much the same thing on the criminal side as sections 99 and 108 do on the civil.
The principle underlying them is the same.
But even after every allowance is made and every effort taken to avoid undue technicality the question still remains what is a judgment, for it is the "judgment" which decides the case and affects the rights and liberties of the parties; that is the core of the matter and, as the Privy Council say, the whole purpose of these rules is to secure certainty in the ascertainment of what the judgment was.
The question as sumes more importance than ever in a criminal case because of section 369 of the Criminal Procedure Code which provides that 334 "Save as otherwise provided by this Code or by any other law for the time being in force or, in the case of a High Court, by the Letters Patent or other instrument constituting such High Court, no court, when it has signed its judgment, shall alter or review the same except to correct a clerical error.
" In our opinion, a judgment within the meaning of these sections is the final decision of the court intimated to the parties and to the world at large by formal "pronouncement" or "delivery" in open court.
It is a judicial act which must be performed in a judicial way.
Small irregularities in the manner of pronouncement or the mode of delivery do not matter but the substance of the thing must be there : that can neither be bluffed nor left to inference and con jecture nor can it be vague.
All the rest the manner in which it is to be recorded, the way in which it is to be authenticated the signing and the sealing, all the rules de signed to secure certainty about its content and matter@an be cured; but not the hard core, namely the formal intima tion of the decision and its contents formally declared in a judicial way in open court.
The exact way in which this is clone does not matter.
In some courts the judgment is delivered orally or read out, in some only the operative portion is pronounced, in some the judgment is merely signed after giving notice to the parties and laying the draft on the table for a given number of days for inspection.
An important point therefore arises.
It is evident that the decision which is so pronounced or intimated must be a declaration of the mind of the court as it is at the time of pronouncement.
We lay no stress on the mode or manner of delivery, as that is not of the essence, except to say that it must be done in a judicial way in open court.
But, however, it is done it must be an expression of the mind of the court at the time of delivery.
We say this because that is the first judicial act touching the judgment which the court performs after the hearing.
Everything else up till then is done out of court and is not intended to be the operative act which sets all the consequences which follow 335 on the judgment in motion.
Judges may, and often do, dis cuss the matter among themselves and reach a tentative conclusion.
That is not their judgment.
They may write and exchange drafts.
Those are not the judgments either, how ever heavily and often they may have been signed.
The final operative act is that which is formally declared in open court with the intention of making it the operative decision of the court.
That is what constitutes the "judgment".
Now up to the moment the judgment is delivered Judges have the right to change their mind.
There is a sort of locus paniteniea, and indeed last minute alterations sometimes do occur.
Therefore, however, much a draft judgment may have been signed beforehand, it is nothing but a draft till formally delivered as the judgment of the court.
Only then does it crystallise into a full fledged judgment and become operative.
It follows that the Judge who "delivers" the judgment, or causes it to be delivered by a brother Judge, must be in existence as a member of the court at the moment of delivery so that he can, if necessary, stop delivery and say that he has changed his mind.
There is no need for him to be physically present in court but he must be in existence as a member of the court and be in a position to stop delivery and effect an alteration should there be any last minute change of mind on his part.
If he hands in a draft and signs it and indicates that he intends that to be the final expository of his views it can be assumed that those are still his views at the moment of delivery if he is alive and in a position to change his mind but takes no steps to arrest delivery.
But one cannot assume that he would not have changed his mind if he is no longer in a position to do so.
A Judge 's responsibility is heavy and when a man 's life and liberty hang upon his decision nothing can be left to chance or doubt or conjecture; also, a question of public.
policy is involved.
As we have indicated, it is frequently the practice to send a draft, sometimes a signed draft, to a brother Judge who also heard the case.
This may be merely for his information, or for consideration and criticism.
The mere signing of the 336 draft does not necessarily indicate a closed mind.
We feel it would be against public policy to leave the door open for an investigation whether a draft sent by a Judge was indend ed to embody his final and unalterable opinion or was only intended to be a tentative draft sent with an unwritten understanding that he is free to change his mind should fresh light dawn upon him before the delivery of judgment.
Views similar to this were expressed by a Full Bench of the Calcutta High Court consisting of nine Judges in the year 1867 in Mahomed Akil vs Asadunnissa Bibee(1).
In that case, three of the seven Judges who constituted the Bench handed in signed judgments to the Registrar of the court.
Before the judgment could be delivered, two of them retired and one died.
A Full Bench of nine Judges was convened to consider whether the drafts of those three Judges could be accepted as judgments of the court.
Seton Kerr J., who had heard the case along with them, said "Certainly as far as I can recollect, they appeared to have fully made up their minds on a subject which they had very seriously considered, and on which they had abundant opportunities of forming a final determination.
I am, however.
not prepared to say that they might not on further consideration have changed their opinions. " (p. 13).
Despite this, all nine Judges were unanimous in holding that those three opinions could not be regarded as judgments in the formal sense of the term.
In our opinion, Jackson J. expressed the law aright in these words: "I have however always understood that it was necessary in strict practice that judgments should be delivered and pronounced in open court.
Clearly, we are met today for the first and only time to give judgment in these appeals; and it appears to me, beyond question, that Judges who have died or have retired from the court cannot join in the (1) 9 W.R.I. (F.B.) 337 judgment which is to be delivered today, and express their dissent from it." (p. 5).
Peacock C.J. pointed out at page 30: "The mere arguments and expressions of opinion of individual Judges, who compose a court, are not judgments.
A judgment in the eye of the law is the final decision of the whole court.
It is not because there are nine Judges that there are nine judgments.
When each of the several Judges of whom a simple court is composed separately expresses his opinion when they are all assembled, there is still but one judgment, which is the foundation for one decree.
If it were otherwise, and if each of the memoranda sent in on the present occasion were a judgment, there would be nine judgments in one case, some deciding one thing and some another, and each Judge would have to review his own judgment separately, if a review should be applied for.
" We do not agree with everything which fell from the learned Chief Justice and the other Judges in that case but, in our opinion, the passages given above embody the true rule and succinctly explain the reasons for it.
As soon as the judgment is delivered, that becomes the operative pronouncement of the court.
The law then provides for the manner in which it is to be authenticated and made certain.
The rules regarding this differ but they do not form the essence of the matter and if there is irregularity in carrying them out it is curable.
Thus, if a judgment happens not to be signed and is inadvertently acted on and executed, the proceedings consequent on it would be valid because the judgment, if it can be shown to have been validly delivered, would stand good despite defects in the mode of its subsequent authentication.
After the judgment has been delivered provision is made for review.
One provision is that it can be freely altered or amended or even changed completely without further formality, except notice to the parties and a rehearing on the point of change should that be necessary, provided it has not been signed.
Another is that after signature L/B(D)2SCI 8 338 a review properly so called would lie in civil cases but none in criminal; but the review, when it lies, is only permitted on very narrow grounds.
But in this case the mere fact that a Judge is dead and so cannot review his judgment does not affect the validity of the judgment which has already been delivered and has become effective.
For this reason there is a distinction between judgments which have not been delivered and so have not become operative and those which have.
In the former case, the alteration is out of court.
It is not a judicial act.
It is only part of a process of reaching a final conclusion; also there is no formal public declaration of the Judges ' mind in open court and consequently there is no "judgment ' which can be acted upon.
But after delivery the alteration cannot be made without notice to the parties and the proceeding must take place in open court, and if there is no alteration there is something which is final and conclusive and which can at once be acted upon.
The difference is this.
In the one case, one cannot know, and it would be against public policy to enquire, whether the draft of a judgment is the final conclusion of the Judge or is only a tentative opinion subject to alteration and change.
In the second case, the Judge has publicly declared his mind and cannot therefore change it without notice to the parties and without hearing them afresh when that is necessary; and if there is no change the judgment continues in force.
By change we mean an alteration of the decision and not merely the addition or subtraction of part of the reasoning.
Our conclusion is that the judgment which Kidwa,i J. purported to deliver on 5th January, 1953, was not a valid judgment because the other member of the Bench died before it could be delivered.
The appeal is allowed and the order of the High Court which purports to be its judgment is set aside.
As it is no longer possible for the Bench which heard the appeal and the confirmation proceedings to deliver a valid judgment 339 we send the case back to the High Court for re hearing and delivery of a proper judgment.
November 23.
BOSE J.The order for stay dated the 25th May, 1953, has now expended itself.
The death sentence cannot be carried out as there is no valid decision of the appeal and no valid confirmation.
The position regarding that is as it was when the appeal was, made to the High Court.
The second and the third appellants will surrender to their bail as they are now relegated to the position which they occupied when the appeal was filed in the High Court.
Appeal allowed.
Agent for the appellant : Naunit Lal.

dataset_name: IN-Abs

summary/full:
Where a case was heard by a Bench of two Judges and the judgment was signed by both of them but it was delivered in court by one of them after the death of the other: Held, that there was no valid judgment and the case should be re heard.
A judgment is the final decision of the court intimated to the parties and the world at large by formal "pronouncement or "delivery" in open court and until a judgment is delivered the judges have a right to change their mind.
Firm Gokal Chand vs Firm Nand Ram (A.I.R. and Mahomed Akil vs Asadunnissa Bibee F.B.) referred to.


judgement:
Appeal No. 43 of 1964, Appeal by special leave from the award, dated August 3, 1962 of the Central Government Industrial Tribunal, Dhanbad in Reference No. 56 of 1961.
B. Sen and I.N. Shroff, for the appellants.
The respondent did not appear.
The Judgment of the Court was delivered by Hidayatullah, J.
This is an appeal by special leave against the Award dated August 3, 1962, of the Central Government Industrial Tribunal Dhanbad, under the 448 449 The appellants are the Employers in relation to Digwadih Colliery and the respondents their workmen.
The workmen did not appear in this Court.
The dispute was whether the management of the colliery was justified in terminating the services of Jaldhar Singh with back wages.
Jaldhar Singh was a 'badli ' workman which means (as defined by the Standing Orders of the colliery) a person appointed in the post of a permanent employee or probationer who is temporarily absent.
He worked as badli in the calendar years 1959 and 1960 in different capacities.
His employment was, of course, not continuous and there were six breaks of one day to a week in 1959 and eight breaks of one day to a week in 1960.
However, he worked for more than 240 days in each calendar year though with these interruptions.
In January 1961 the colliery terminated Jaldhar Singh 's service without notice to him or payment of wages in lieu of notice or compensation.
A dispute arising, conciliation was attempted but failed and the reference followed.
Before the Tribunal the workmen claimed that Jaldhar Singh was a permanent workman while the Employers contended that he was temporary.
The Employers stated that as some of the permanent staff had become surplus, there was no need of badli workmen and the termination of Jaldhar Singh 's service was justified.
The workmen attempted to prove that Jaldhar Singh was permanent from 1960 and produced some documents from which they asked that this inference be drawn but the Tribunal did not agree.
The workmen relied in the alternative upon section 25F of the Act because Jaldhar Singh had put in service of 240 days in each of the years and contended that as the Employers had failed to comply with the provisions of section 25F the termination of service was illegal and unjustified.
The Employers submitted that section 25F could apply only if Jaldhar Singh had put in 240 days ' continuous service in any of the years 1959 or 1960.
The service of Jaldhar Singh was admittedly terminated as there was no work for him and not on account of disciplinary action or voluntary retirement, superannuation or ill health.
This was thus a case of retrenchment as defined in section 2(00) of the Act.
Section 25F, which was inserted as part of Chapter VA, with effect from October 24, 1953 by the Industrial Disputes (Amendment) Act 1953 (43 of 1953) provides: "25F. Conditions precedent to retrenchment of workmen.
No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until (a) the workman has been given one month 's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has 450 been paid in lieu of such notice, wages for the period of the notice: Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days ' average pay for every completed year of service or any part thereof in excess of six months; and, (c) notice in the prescribed manner is served on the appropriate Government," The section, if it applied, had plainly not been complied with I in respect of any of the conditions precedents Jaldhar Singh, as seen already, had not been given any notice or wages in lieu of notice or paid compensation and no notice had been served on the appropriate Government.
The termination of service would, in these circumstances, be illegal.
But the Employers pointed, out that section 25F required two conditions: (a) continuous service and (b) service for not less than one year, and contended that these conditions were not fulfilled as the service was not continuous but broken.
They relied on the definition of "continuous service" in section 2(eee) which was introduced by the same amending Act: "2(eee) continuous service means uninterrupted service, and includes service which may be interrupted merely on account of sickness or authorised leave or an accident or a strike which is not illegal, or a lock out or a cessation of work which is not due to any fault on the part of the workman;" The workmen, on the other hand, relied upon the provisions of section 25B which read: "25B. Definition of one year of continuous service.
For the purposes of sections 25C and 25F, a workman who, during a period of 12 calendar months, has actually worked in an industry for not less than two hundred and forty days shall be deemed to have completed one year of continuous service in the industry.
Explanation.
In computing the number of days on which a workman has actually worked in any industry, the days on which (a) he has been laid off under an agreement or as permitted by standing orders made under the , or under this Act or under any other law applicable to the industrial establishment, the largest number of days during 451 which he has been so laid off being taken into account for the purposes of this clause, (b) he has been on leave with full wages, earned in the, previous year, and (c) in the case of a female, she has been on maternity leave; so however that the total period of such maternity leave shall not exceed twelve weeks, shall be included.
" The definitions in section 2 of the Act do not apply if there is anything repugnant in the subject or context and the question is whether the definition of "continuous service" can at all apply in considering section 25F when what is meant by the expression "one year of continuous service" in section 25F is, by section 25B specially stated.
If section 25B had not been enacted the contention of the Employers would have been unanswerable for the words of section 25F would then have plainly meant that the service should be for a period of 12 months without interruptions other than those stated in section 2(eee) itself.
But section 25B says that for the purpose of section 25F a workman who, in a period of twelve calendar months has actually worked for not less than 240 days shall be deemed to have completed one year of continuous service.
Service for 240 days in a period of twelve calendar months is equal not only to service for a year but is to be deemed continuous service even if interrupted.
Therefore, though section 25F speaks of continuous service for not less than one year under the employer, both conditions are fulfilled if the workman has actually worked for 240 days during a period of twelve calendar months.
It is not necessary to read the definition of continuous service into section 25B because the fiction converts service of 240 days in a period of twelve calendar months into continuous service for one complete year.
Mr. B. Sen drew our attention to the Industrial Disputes (Amendment) Act 1964 which was passed last December.
By section 2(iii) of the amending Act of 1964 clause (eee) of the second section of the principal Act was omitted and by section 13, for section 25B in the principal Act the following was substituted: "25B. For the purposes of this Chapter, (1) a workman shall be said to be in continuous service for a period if he is.
for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorized leave or an accident or a strike which is not illegal, or a lock out or a cessation of work which is not due to any fault on the part of the workman; (2) where a workman is not in continuous service within the meaning of clause (1) for a period of one year 452 he shall be deemed to be in continuous service under an employer (a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than (i) one hundred and ninety days in the case of a workman employed below ground in a mine; and (ii) two hundred and forty days, in any other case; The Explanation to section 25B is the same, mutatis mutandis as before.
Mr. Sen contended that the change in the law brought out his contention.
We do not agree.
The amended section 25B only consolidates the previous sections 25B and 2(eee) in one place, adding some other matters which are not relevant to the present purpose, but the purport of the new provisions is not different.
In fact the amendment of section 25F of the principal Act by substituting in cl.
(b) the words "for every completed year of continuous service" for the words "for every completed year of service" now removes a discordance between the unamended section 25B and the unamended cl.
(b) of section 25B.
Neither before these several changes nor after is uninterrupted service necessary if the total service is 240 days in a period of twelve calendar months.
The only change in the new Act is that this service must be during a period of twelve calendar months preceding the date with reference to which calculation is to be made.
The last amendment now removes a vagueness which existed in the unamended section 25B.
We accordingly hold that the decision under appeal is correct.
The appeal fails and is dismissed.
Appeal dismissed.

summary/full:
A badli workman worked as the appellant 's employee for more than 240 days, with interruptions in each of the calendar years 1959 and 1960.
He was retrenched in 1961.
An industrial dispute having arisen, it was referred to the Tribunal, which held, that the appellant was not justified in terminating the services of the workman as the provisions of section 25F of the were not com plied with.
In its appeal to this Court, the appellant contended that the section could apply only if the workman had put in 240 days ' continuous service in any of the years 1959 and 1960.
HELD: Section 25B says that, for the purpose of section 25F a workman who, in a period of 12 calendar months has actually worked for not less than 240 days shall be deemed to have completed one year of continuous service.
Service for 240 days in a period of 12 calendar months is equal not only to service for a year but is to be deemed continuous service even if interrupted.
Therefore, though section 25F speaks of continuous service for not less than one year under the employer, both the conditions are fulfilled if the workman has actually worked for 240 days during a period of 12 calendar months.
It is not necessary to read the definition of continuous service in section 2(fee) into section 25B, because, the fiction converts service of 240 days in a period of the twelve calendar months into continuous service for one complete year.
[451C E] The amendments introduced by the Industrial Disputes (Amend ment) Act, 1964 into sections 25B and 25F only removed the discordance between the unmended sections 25B and 25F (b) and vagueness which existed previously.
But neither before the amendments nor after, is uninterrupted service necessary, if the total service is 240 days in a period of 12 calendar months.
[452D E]


judgement:
Appeal No. 130 of 1964.
Appeal from the judgment and order dated November 21, 1958 of the Bombay High Court in Appeal No. 31 of 1958.
D. N. Mukherjee, for the appellants.
G. section Pathak, section N. Andley and Rameshwar Nath, for respon dent No. 1 The Judgment of the Court was delivered by Bachawat, J.
Maharaja Sir Rajendra Prakash Bahadur Maharaja of Sirmur, Maharani Mandalsa Kumari Debi Rajmata of Sirmur, Maharani Premlata Debi of Chhota Udaipur, Maiyan Sahiba Sheba Kumari Debi of Jharipani, Major Rao Raja Sirendra Singh, Jagat Pershad, Shib Chander Kumar, Praduman Kumar and Dayawati Rani carried on business in co partnership under the firm name and style of Messrs. Jagatsons International Corporation (hereinafter referred to as the firm) at New Delhi.
Respondent No. 1, Ramnarain (Private) Ltd. instituted Summary Suit No. 162 of 1957 against Messrs. Jagatsons International Corporation on the Orginal Side of the Bombay High Court claiming a money decree for Rs. 1,96,831 58 N.P.
The suit was instituted on the allegation that respondent No. 1 and the firm had entered into an agreement in writing dated September 26, 1956, whereby respondent No. 1 agreed to provide finance to the firm, as a result of the dealings under the agreement a sum of Rs. 1,96,831.58 N.P. was due to respondent No. 1 from the firm, and in view of the breaches of the agreement by the firm, the agreement has stood terminated.
The consent of the Central Government to the institution of the suit was not obtained, though the Maharaja of Sirmur is a Ruler of the former Indian State within the meaning of section 87B of the Code of Civil Procedure.
The summons of the suit was served oil Shib Chander Kumar as a partner of the firm and as a person having the control or management of the partnership business.
On July 15, 1957, at the hearing of the summons for judgment taken out by respondent No. 1, the firm admitted its liability as claimed in the plaint and applied for installments, and the Court passed a decree for Rs. 1.89,643.98 N.P. and further interest, and directed that the decretal amount would be payable in certain instalments.
The firm committed defaults in payment of the instalments payable under the decree.
On December 13, 1957.
respondent No. 1 filed an application under 0.
21 r. 50(2) of the Code of Civil Procedure for leave to execute the decree against (1) Maharani Mandalsa Kumari Debi, (2) Maharani Premlata Debi, (3) Maiyan Sahiba Sheba Kumari Debi, (4) Major Rao Raja Sirendra Singh, (5) Jagat Pershad.
(6) Praduman Kumar and (7) Dayawati Rani claiming that respondent No. 1 was entitled to cause the decree to be executed against them 423 as being partners in the firm.
The opposite parties to the application filed an affidavit alleging (1) that the suit and all proceedings therein were incompetent in the absence of the requisite consent of the Central Government under section 86 of the Code of Civil Procedure; (2) Jagat Pershad and Shib Chander Kumar entered into the agreement dated September 26, 1956 and utilised the moneys received under it in fraud of the other partners and without their authority, Shib Chander Kumar dishonestly and fraudulently concealed from the other partners the fact of the institution of the suit and without the authority and knowledge of the other partners submitted to a consent decree in the suit.
, By an order dated March 18, 1958, a learned single Judge of the High Court rejected all the contentions in the affidavit, and allowed the application under 0. 21, r. 50(2) of the Code of Civil Procedure.
The learned single Judge held that (1) the defect of the absence of the requisite consent under section 86 read with section 87 B did not render the decree a nullity, and the objection could not be taken in execution proceedings; (2) the other defences to the merits of the claim in the suit could not be agitated in a proceeding under 0. 21, r. 50(2) of the Code of Civil Procedure.
An appeal preferred by appellants, Maharani Mandalsa Kumari Debi, Maharani Premlata Debi, Major Rao Raja Sirendra Singh and Maiyan Sahiba Sheba Kumari Debi was dismissed by a Bench,of the High Court on November 21, 1958.
The appellate Court held that (1) though the decree against the firm was a decree against all its partners including the Maharaja of Sirmur, and though the decree against the Maharaja of Sirmur might be a nullity, the decree against the other partners of the firm was valid, and (2) the appellants were not entitled to raise other defences to the merits of the claim on an application under 0. 21, r. 50(2) of the Code of Civil Procedure.
The appellants now appeal to this Court under a certificate granted by the High Court.
On behalf of the appellants Mr. D. N. Mukherjee contended that (1) the suit against the firm of Jagatsons International Corporation was a suit against all its partners and in the absence of the requisite consent under section 86 read with section 87 B of the Code of Civil Procedure, the suit was not competent against the Maharaja of Sirmur, and the decree against him was null and void; (2) consequently, the suit against the firm under the provisions of 0. 30 of the Code of Civil Procedure was not competent and the decree passed in the suit was wholly void, the decree not being a decree against the firm could not be executed by recourse to the machinery of 0. 21, r. 50, Code of Civil Procedure, and the application against the appellants under 0.
21, r. 50(2), Code of Civil Procedure was not maintainable; and (3) the appellants were entitled to dispute their liability in an application under 0.
21, r. 50(2) of the Code of Civil Procedure on all the grounds raised in the affidavit field 424 on their behalf and the court ought to have tried and decided all those questions.
In answer to the first contention of Mr. D. N. Mukherjee, Mr. Andley argued that for the purposes of a suit under 0. 30, Code of Civil Procedure, the firm of Jagatsons International Corporation is a legal entity separate and distinct from its partners, and no question of obtaining the consent of the Central Government to sue one of its partners under section 86 read with section 87 B of the Code of Civil Procedure to the institution of such a suit arises.
Mr. Andley relied upon the observations of Das, J. in Dulichand Lakshminarayan vs The Commissioner of Income tax, Nagpur(1) that for the sake of convenience, 0. 30 of the Code of Civil Proce(lure permits a firm to sue or be sued in the firm name "as if it were a corporate body".
Consistently with this legal fiction, R. 3 permits service of the summons on a partner or a person having control or management of the partnership business, R. 4 permits the institution and continuance of the suit in the firm name in spite of the death of a partner before the institution or during the pendency of the suit without joining the legal representatives of the deceased partner as a party to the suit, and R. 9 permits a suit between a firm and one or more of its partners and between firms having one or more common partners.
But the legal fiction must Pot be carried too far.
For some purposes the law has extended a limited personality to a firm, see Bhagangi Morarji Goculdas vs Alembic Chemicals Works Co.(2 ), but the firm is not a legal entity, see Purushottam Umedbhai &, Co. vs M/s. Manilal & Sons(3), Lindley on Partnership, 12th Edn., pp. 27 28.
The persons who arc individually called partners arc collectively called a firm, and the name under which their business is carried on is called the firm name: see section 4 of ' the Indian partnership Act, 1932.
Order 30, R. 1 of the Code of Civil Procedure enables two or more persons claiming or being liable as partners and carrying on business in India to sue or be sued in the name of the firm of which they were partners at the time of the accrual of the cause of action.
Rule 1 shows that the individual partners sue or are sued in their collective firm name.
Rule 2 provides that on disclosure of the names of the partners of the plaintiff firm, the suit proceeds as if they are named as plaintiffs in the plaint.
Rule 6 provides that the persons sued in the firm name must appear individually in their own names.
A suit by or in the name of a firm is thus really a suit by or in the name of all its partners, see Rodriguez vs Speyer Brothers (4), Purushottam Umedbai & Co. V. M/s Manilal &Sons (3) at pp.
991, 993, 995.
So also a suit against the firm is really (1) ,162.
(2) [1948] L.R. 75 I.A. 147.
(3) ; ,994.
(4) 425 a suit against all the partners of the firm.
In Western National Bank of City of New York vs Perez, Triana & Co. (1), Lindley, L.J. said: "When a firm 's name is used, it is only a convenient method of denoting those persons who compose the, firm at the time when that name is used, and a plaintiff who sues partners in the name of their firm in truth sues them individually, just is much as if he had set out all their names".
The decree passed in the suit.
though in form against the firm, is in effect a decree against all the partners.
In Lovell & Christmas vs Beauchamp(2) Lord Herschell, L. C. said: "Although the judgment may be pronounced against the firm in the firm 's name, it is in reality a judgment against all the persons who are in fact members of the firm; and it is because such a judgment exists that the right of execution follows".
The firm name of Jagatsons International Corporation applies as much to the Maharaja of Sirmur as to the other partners.
When respondent No. 1 sued the firm of Jagatsons International Corporation, it sued the Maharaja of Sirmnur and all the other partners as if the plaint had set out their names, and the decree passed in the suit is in reality a decree against all the partners of the firm including the Maharaja of Sirmur.
Now, the Maharaja of Sirmur is the Ruler of a former Indian State, and section 86 read with section 87 B of the Code of Civil Procedure barred the institution of a suit against him except with the consent of the Central Government.
No such consent was given for the institution of the suit against the Mabaraja of Sirmur.
In the absence of the requisite consent of the Central Government, a suit, which is in reality, though not in form, a suit against the Maharaja of Sirmur, is barred by section 86 read with section 87 B. See Gaekwar Baroda State Railway vs Hafiz Habib Ul_Haq(3).
Consequently, the suit so far as it was one against the Maharaja of Sirmur was incompetent and the decree against the firm so far as it is a decree against him personally was a nullity.
The first contention of Mr. Mukherjee is.
therefore, sound and should be accepted.
But we think that the second contention of Mr. Mukherjee should be rejected.
Beyond doubt, in a normal case where all the partners of a firm are capable of being sued and of being adjudged judgment debtors.
a suit may be filed and a decree may be obtained against a firm under 0. 30 of the Code of Civil Procedure.
and such a decree may be executed against the property of the partnership and.
against all the partners by following the procedure of 0. 21, r., 50.
of the Code of Civil Procedure, (1) (2) (3) [1938] L.R. 65 T. A. 182, 196.
426 But there may be abnormal cases where a suit is filed against a firm under the provisions of 0. 30, of the Code of Civil Procedure, and it is found that one of its partners cannot be sued or cannot be adjudged a judgment debtor.
Thus, take the case of an infant who under the English law, can be a partner in a firm, but, though a partner, cannot contract debts by trading and cannot be adjudged to be a debtor in respect of such debts.
In Lovell & Christmas vs Beauchamp(1), the House of Lords held that a creditor of a firm of which an infant was a partner could issue a writ against the firm in the firm 's name, and in such a suit judgment could be recovered against the defendant firm other than the infant partner, and if a judgment had been improperly signed against the firm simply, such a judgment could be suitably amended so as to make it a judgment against the firm other than the infant partner.
The precise point decided in this case cannot arise in this country, because under our law, a minor may not be a partner in a firm, though he may be admitted to the benefits of the partnership.
But the case shows that a creditor of a firm of which one of the partner 's cannot be adjudged to be a debtor, may institute a suit against a firm in the firm name under 0. 30 of the Code of Civil Procedure, and may in such a suit obtain a decree against the firm other than the partner who cannot be adjudged a debtor.
Again, take a case where the creditor of a firm institutes a suit against a firm and one of its partners at the time of the accrual of the cause of action is dead at the time of the institution of the suit.
The suit against the firm is really a suit against all the partners who were its partners at the time of the accrual of the cause of action.
including the dead partner.
Order 30, R. 4 of a Code of Civil Procedure enables the creditor to institute the suit against the firm in the firm name without joining the legal representative of the deceased partner.
The suit is, therefore, competent, but no suit can be instituted nor can a decree be obtained against a dead person.
The decree passed in such a suit will, therefore, bind the partnership and all the surviving partner s, but will not affect the separate property of the deceased partner.
In Ellis vs Wadeson(2), Romer, L. J. observed: "Now consider the question of death.
Suppose a partner dies before action brought, and an action is brought against the firm in the firm 's name.
The dead man is not a party to the action, so, far as his private estate is concerned, for a dead man cannot be sued, though the legal personal representative of a dead man can be sued in a proper case.
In that case the action would be an action solely against the.
surviving partners.
If the legal personal representatives of a deceased partner are not added expressly as defendants.
(1) (2) [1899]1 Q.B. 714 at 718.
427 and the action is brought against the firm in the firm 's name, then judgment can only be obtained as against the surviving partners and be enforced against them and against the partnership assets".
The above illustrations show that a suit may be brought under the provisions of 0. 30 of the Code of Civil Procedure against a firm of which a partner is not capable of being sued or being adjudged a debtor, and in such a suit a decree enforceable against the other partners and the partnership assets may be passed.
Now, in the instant case, respondent No. 1 sued the firm of Jagatsons International Corporation under the provisions of 0. 30 of the Code of Civil Procedure.
The assets of the firm as also all its partners jointly and severally are liable to satisfy the debts of the firm.
Even the Maharaja of Sirmur is jointly and severally liable for the debts of the firm; only the institution of a suit against him without the consent of the Central Government is barred by section 86 read with section 87 B of the Code of Civil Procedure.
As the suit was instituted without the requisite consent of the Central Government, no decree could be passed in the suit against the Maharaja of Sirmur.
But the suit against the firm other than the Maharaja of Sirmur was competent, and a decree could be passed against the firm other than the Maharaja of Sirmur, and such a decree could be executed against the partnership property and against the other partners by following the procedure of 0.
21, r. 50 of the Code of Civil Procedure.
It is true that respondent No. 1 obtained a decree against the firm of Jagatsons International Corporation simply, but the decree should be suitably amended so as to make it a decree against the firm of Jagatsons International Corporation other than the Maharaja of Sirmur, and the decree so read is a valid decree which may be executed against the partnership property and the other partners of the firm by recourse to the machinery of 0.
21, r. 50 of the Code of Civil Procedure.
The application of respondent No. 1 under 0. 21, r. 50(2) for leave to execute the decree against the other partners is, therefore maintainable.
The second contention of Mr. Mukherjee must, therefore, be rejected.
The third contention of Mr. Mukherjee raises the question as to what defences may be raised by a respondent to an appli cation under 0. 21, r. 50(2) of the Code of Civil Procedure.
The law on this point is now well settled.
In Gambhir Mal Pandiya vs J. K. Jute Mills Co. Ltd., Kanpur(1), Hidayatullah, J. speaking on behalf of the Court observed: ". primarily the question to try would be whether the person against whom the decree is sought to be executed was a partner of the firm, when the cause of action accrued.
but he may question the decree on the (1) ; 428 ground of collusion, fraud or the like but so as not to have the suit tried over again or to raise issues between himself and his other partners".
The respondent to an application under 0.
21, r. 50(2) of the Code of Civil Procedure is also entitled to raise a plea of special protection under the law, and on this ground, the learned judge at pp.
205 206 of the Report distinguished the case of Chhattoo Lal Misser & Co. vs Naraindas Baijnath Prasad(1).
We may add that the respondent may also defend the application on the ground that the decree sought to be executed against him is a nullity.
Now, in the instant case, none of the appellant is entitled to any special protection from the institution of the suit under section 86 read with section 87 B, Code of Civil Procedure.
The Maharaja of Sirmur was entitled to this special protection, but he was not a party to the application under 0.
21, r. 50(2) of the Code of Civil Procedure.
Nor is the decree against the firm other than the Maharaja of Sirmur a nullity.
The affidavit filed on behalf of the appellants does not sufficiently raise a plea that the decree was the result of any collusion, fraud or the like.
The affidavit incorrectly assumes that the decree passed on admission of the appearing partner, was a consent decree.
Allegations of dishonesty and fraudulent concealment of the fact of the institution of the suit are made against Shib Chander Kumar, one of the partners of the firm, but no allegation of fraud or collusion is made against respondent No. 1.
It was not alleged that respondent No. 1 was a party to any fraud or collusion or that it obtained the decree by fraud or collusion.
The appellants alleged that their partners, Jagat Pershad and Shib Chander Kumar, had entered into the agreement dated September 26, 1956, and had utilised the moneys received under it in fraud of the appellants and without their authority, but the appellants are not entitled to raise these pleas in the application under 0.
21 r. 50(2) of the Code of Civil Procedure.
The appellants were admittedly partners of the firm of Jagatsons International Corporation at the time when the cause of action accrued.
In the absence of any plea questioning the decree on the ground of collusion, fraud or the like, respondent No. 1 is entitled to an order under 0. 21, r. 50(2) of the Code of Civil Procedure giving it leave to execute the decree against the appellants as partners in the firm.
The third contention of Mr. Mukherjee must, therefore, be rejected.
In the result, the appeal is dismissed with costs.
Appeal dismissed.
(1) Cal, 704.

summary/full:
Under Order 30 of the Code of Civil Procedure the respondent No. 1 a firm sued another firm of which the appellants and a Ruler of a former Indian State were partners.
The consent of the Central Government to the institution of the suit under section 87 B of the Code of Civil Procedure was not obtained.
The firm admitted the liability and the Court passed a decree and directed that the decretal amount would be payable in certain instalments.
On the firm 's default in paying the instalments an application was filed under Order 21 Rule 50(2) of the Code of Civil Procedure for leave to execute the decree against the appellants, excepting the Ruler as partners of the firm.
The Court allowed the application.
The appellants ' appeal was dismissed by the High Court.
On appeal by certificate; HELD: (i) The suit so far as it was one against the Ruler was incompetent and the decree against the firm so far as it was a decree against him personally was a nullity.
In the absence of the requisite consent of the Central Government a suit against the Ruler was barred by section 87 read with section 87 B. [425 F, G].
(ii) The application of respondent No. 1 under Order 21 Rule 50(2) for leave to execute the decree against the other partners was maintainable.
[427 G].
A suit may be brought under the provisions of 0. 30 of the Code against a firm of which a partner is not capable of being sued or being adjudged a debtor, and in such a suit a decree enforceable against the other partner and the partnership assets may be passed.
[427 B].
Case law referred to.
(iii) In an application under 0.
21 Rule 50(2) the judgmentdebtor could question the decree on the ground of collusion, fraud or the like but so as not to have the suit tried over again or to raise issues between himself and his other partners.
[428 A].
The Judgment debtor was also entitled to raise a plea of special protection under the law; and might also defend the application on the ground that the decree sought to be executed against him is a nullity.
But in the instant case none of the appellants was entitled to any special protection; nor was it alleged that respondent No. 1 was a party to any fraud or collusion or that it obtained the decree by fraud or collusion.
[428 B, C].
Gambhir Mal Pandiya vs J. K, Jute Mills Co. Ltd., Kanpur relied upon. 422


judgement:
Appeal No. 807 of 1963.
Appeal from the judgment and order dated September 4, 1961 of the Calcutta High Court Income tax Reference No. 85 of 1956.
C.K. Daphtary, Attorney General, R. Ganapathy Iyer and R. N. Sachthey, for the appellant.
A. V. Viswanatha Sastri and section C. Muzumdar, for the respondent.
The Judgment of the Court was delivered by Subba Rao, J.
This appeal by certificate raises the question of the construction of the provisions of section 23A of the Indian Incometax Act, 1922, hereinafter called the Act, before it was amended by the Finance Act, 1955.
The relevant and undisputed facts may be briefly stated.
Messrs. Gungadhar Banerjee & Co. (Private) Ltd., the respondent herein, is a private limited company.
At the General Body Meeting of the Company held on December 6, 1948, the Directors declared a dividend at the rate of 5 1/2 per cent.
per share.
The said distribution of dividends related to the accounting year 1947 48 which ended on April 13, 1948.
According to the balance sheet of the Company for that year the net profit for the said year was Rs. 1,28,112/7/5.
The taxation reserve was Rs. 56,000.
The profit 441 left was Rs. 72,000.
The Directors declared a dividend at the rate of 51 per cent.
per share thus making a total distribution of Rs. 44,000.
On that basis the profit that was available for further distribution was Rs. 28,000.
Though under the balance sheet the estimated tax was Rs. 66,000, the tax assessed for the year was Rs. 79,400.
If the difference between the tax assessed and the estimated tax was also deducted from the profits, there would only be a sum of Rs. 4,000 that would remain as undistributed profits.
The Income tax Officer assessed the total income of the assessee for the year 1948 49 at Rs. 2,66,766.
After deducting the tax payable under the two heads, namely, I.T. of Rs. 81,517/13/0 and C.T. of Rs. 33,345/12/0, he held that a sum of Rs. 1,51,902/7/0 was available for distribution to the shareholders as dividends.
As the amount distributed by the Company was below 60 per cent.
of the profits available for distribution, the Income tax Officer, with the previous approval of the Inspecting Assistant Commissioner of Income tax, passed an order under section 23 A of the Act directing that the amount of Rs 1,07,902 (i.e., Rs. 1,51,902 minus Rs. 44,000= Rs. 1,07,902) shall be deemed to have been distributed as dividends as on the date of the annual general meeting of the Company.
He found that, having regard to the profits earned in the earlier years and the capital and taxation reserves, payment of larger dividends would not be unreasonable.
The assessee preferred an appeal to the Appellate Assistant Commissioner against the order made by the Income tax Officer under section 23A of the Act.
By the time the appeal came to be disposed of, in an appeal against the order of assessment the assessed income was reduced by a sum of Rs. 80,926.
Notwithstanding the said deduction, as the amount of Rs. 44,000 distributed by the Company was less than 60 per cent.
of the balance of Rs. 1,64,440 arrived at on the basis of the revised calculation, the Appellate Assistant Commissioner held that an action under section 23A of the Act was justified.
He further held that the assesee incurred no losses in the previous years, that in almost all the past assessments the assessee showed substantial profits, that the profits disclosed in the year of account were not small and that, therefore, the direction to pay a higher dividend was not unreasonable.
On a further appeal, the Income tax Appellate Tribunal held that the amount of profits should be judged only from the balancesheet and that judged by the figures given thereunder a dividend to the extent of Rs. 64,000 being 60 per cent.
of the assessed profits less income tax. could be distributed and that such distribution was not unreasonable.
The Tribunal referred the following question under section 66(1) of the Act for the decision of the High Court of Calcutta: "Whether on the facts and in the circumstances of the case any larger dividend than that declared by the company could reasonably be distributed within the meaning 442 of Section 23A of the Indian Income tax Act and the application of Section 23A of the Indian Income tax Act was in accordance with law." The High Court held that the Tribunal went wrong in taking into consideration the past profits instead of the past losses, the taxation reserves without considering the past liabilities for taxation, and the profits for the year in question disclosed in the balance sheet, ignoring the actual tax assessed for that year.
It came to the conclusion that, having regard to the smallness of the profits, the order of the Income tax Officer was not justified.
In the result, it answered both parts of the question referred to it in the negative.
Hence the appeal.
Learned Attorney General, appearing for the Revenue, con tended that the balance sheet of a company on the basis of which dividends were declared was final and the profits disclosed thereunder would be the correct basis for the Income tax Officer acting under section 23A of the Act; and, as the balance sheet of the company for the relevant year showed a sum of Rs. 1,05,950 as "capital reserve brought forward", a sum of Rs. 5,73,161 as taxation reserve, and a sum of Rs. 56,000 as estimated tax, the Income tax Officer rightly held that the financial condition of the Company was sufficiently sound to warrant an order under section 23A of the Act.
Alternatively he contended that if the respondent could be permitted to go behind the balance sheet to ascertain the real profit, the Department should also be likewise allowed to go behind the balance sheet to show that the commercial profit was larger and the reserves were in excess of the past liabilities and that in that event to remand the case for ascertaining the true state of facts.
Mr. A.V. Viswanatha Sastri, appearing for the assessee Com pany, contended that the burden lies on the Revenue to establish that the dividend declared was not a reasonable one and that in the present case it had not discharged that burden.
Idle further argued that for the purpose of "testing the smallness of the profit" the Income tax Officer had to take into consideration not the assessable Income but the commercial profit of the Company and that in the present case, having regard to the commercial profit, a declaration of a higher dividend would be unreasonable.
He pleaded that, should this Court hold that the Income tax Officer could establish that the reserves were more than the liabilities, the assessee should also be permitted to prove what were its real, commercial profits and that the reserves were far less than the demands.
The contentions of learned counsel turn upon the provisions of section 23A of the Act, before it was amended by the Finance Act of 1955.
The material part of that section reads: "(1) Where the Income tax Officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any company up to the end of the 443 sixth month after its accounts for that previous year are laid before the company in general meeting are less than sixty per cent of the assessable income of the company of that previous year, as reduced by the amount of incometax and super tax payable by the company in respect thereof he shall, unless he is satisfied that having regard to losses incurred by the company in earlier years or to the smallness of the profit made, the payment of a dividend or a larger dividend than that declared would be unreasonable, make with the previous approval of the Inspecting Assistant Commissioner an order in writing that the un distributed portion of the assessable income of the company of that previous year as computed for income tax purposes and reduced by the amount of income tax and super tax payable by the company in respect thereof shall be deemed to have been distributed as dividends amongst the shareholders as at the date of the general meeting aforesaid, and thereupon the proportionate share thereof of each shareholder shall be included in the total income of such shareholder for the purpose of assessing his total income.
" The section is in three parts: the first part defines the scope of the jurisdiction of the Income tax Officer to act under section 23A of the Act; the second part provides for the exercise of the jurisdiction in the manner prescribed thereunder , and the third part provides for the assessment of the statutory dividends in the hands of the share. holders.
This section was introduced to prevent exploitation of juristic personality of a private company by the members thereof for the purpose of evading higher taxation.
To act under this, section the Income tax Officer has to be satisfied that the dividends distributed by the Company during the prescribed period are loss than the statutory percentage, i.e., 60 per cent., of the assessable income of the Company of the previous year less the amount of Income tax and super tax payable by the Company in respect thereof.
Unless there is a deficiency in the statutory percentage, the Income tax Officer has no jurisdiction to take further action thereunder.
If that condition is complied with, he shall make an order declaring that the undistributed portion of the assessable income less the said taxes shall be deemed to have been distributed as dividends amongst the shareholders.
But before doing so, a duty is cast on him to satisfy himself that, having regard to the losses incurred by the company in earlier years or "the smallness of the profit made," the payment of a dividend or a larger dividend than that declared would be reasonable.
The argument mainly centered on this part of the section.
Would the satisfaction of the Income tax Officer depend only on the two circumstances, namely, losses and smallness of profit? Can he take into consideration other relevant circumstances? What does the expression "profit" mean? Does it mean only the assessable income or does it mean commercial or 444 accounting profits? If the scope of the section is properly appreciated the answer to the said questions would be apparent.
The Incometax Officer, acting under this section, is not assessing any income to tax: that will be assessed in the hands of the shareholders.
He only does what the directors should have done.
He puts himself in the place of the directors.
Though the object of the section is to pre vent evasion of tax, the provision must be worked not from the standpoint of the tax collector but from that of a businessman.
The yardstick is that of a prudent businessman.
The reasonableness or the unreasonableness of the amount distributed as dividends is judged by business considerations, such as the previous losses, the present profits, the availability of surplus money and the reasonable requirements of the future and similar others.
He must take an overall picture of the financial position of the business.
It is neither possible nor advisable to lay down any decisive tests for the guidance of the Income tax Officer.
It depends upon the facts of each case.
The only guidance is his capacity to put himself in the position of a prudent businessman or the director of a company and his sympathetic and objective approach to the difficult problem that arises in each case.
We find it difficult to accept the argument that the Income tax Officer cannot take into consideration any circumstances other than losses and smallness of profits.
This argument ignores the expression "having regard to" that precedes the said words.
On the interpretation of the words "having regard to" in section 23A of the Act, the decision of a Division Bench of the Bombay High Court, consisting of Chagla C. J., and Tendolkar J., in Sir Kasturchand Ltd. vs Commissioner of Income tax, Bombay City(1) was relied upon by the appellant.
Chagla C.J., speaking for the Court, held in that case that "the reasonableness or unreasonableness of the payment of a dividend or a larger dividend has to be judged only with reference to the two facts mentioned in the section, viz., losses incurred by the company in earlier years and the smallness of the profit." To put the contrary construction, the learned Chief Justice said, "would be to import into it words which the Legislature did not think fit to insert in that section and to expand the ambit of the discretion exercised by the Income tax Officer." But the learned Chief of Justice did not expressly consider the scope of the expression "having regard to" found in the section.
The Judicial Committee in Commissioner of Income tax vs Williamson Diamond Ltd.(2) had to consider the scope of section 21(1) of the Tanganyika Income tax (Consolidation) Ordinance, 27 of 1950, which was pari materia with section 23A of the Act.
Adverting to the argument based upon the words "having regard to", their Lordships observed: "The form of words used no doubt lends itself to the suggestion that regard should, be paid only to the two matters mentioned, but it appears to their Lordships that it is (1) (2) 445 impossible to arrive at a conclusion as to reasonableness by considering the two matters mentioned isolated from other relevant factors.
Moreover, the statute does not say "having regard only" to losses previously incurred by the company and to the smallness of the profits made.
No answer, which can be said to be in any measure adequate, can be given to the question of "unreasonableness" by considering these two matters alone.
Their Lordships are of the opinion that the statute by the words used, while making sure that "losses and smallness of profits" are never lost sight of, requires all matters relevant to the question of unreasonableness to be considered.
Capital losses, if established, would be one of them.
" With great respect, we entirely agree with this view.
The contrary view unduly restricts the discretion of the Income tax Officer and compels him to hold a particular dividend reasonable though in fact it may be unreasonable.
The expression "smallness of profit" came under the judicial scrutiny of this Court in Commissioner of Income tax, Bombay City vs Bipinchandra Maganlal & Co. Ltd.(1) Therein, Shah, J., speaking for the Court observed thus: "Smallness of the profit in section 23A has to be adjudged in the light of commercial principles and not in the light of total receipts, actual or fictional.
This view appears to have been taken by the High Courts in India without any dissentient opinion.
" The learned, Judge laid down the following test: "Whether it would be unreasonable to distribute a larger dividend is to be judged in the light of the profits of the year in question.
" If the assessable income was the test and if the commercial profits are small, the learned Judge pointed out, the company would have to fall back either upon its reserves or upon its capital which in law it could not do.
This decision is binding on us and no further citation in this regard is called for.
These two concepts, "accounting profits" and "assessable profits", are distinct.
In arriving at the assessable profits the Income tax Officer may disallow many expenses actually incurred by the assessee; and in computing his income, he may include many items on notional basis.
But the commercial or accounting profits are the actual profits earned by an assessee calculated on commercial principles.
Therefore, the words "smallness of profit" in the section refer to actual accounting profits in comparison with the assessable profits of the year.
Another incidental question is whether for the purpose of ascertaining the net commercial profits the tax estimated or the tax actually assessed shall be deducted.
In a case where an Income tax Officer takes action under section 23A of the Act before the tax for the relevant period is assessed, only the estimated tax can be deduct (1) , 296, p(N)4SCI 446 ed but, there is no reason why, when the tax had already been assessed before he takes action under this section, the estimated tax and not the real tax shall be deducted therefrom.
In this view, in the present case to ascertain the commercial profits what should be deducted is not the tax shown in the balance sheet but the actual tax assessed, on the income of the Company.
Another question raised is whether the balance sheet is final and both the parties are precluded from questioning its correctness in any respect.
There is no provision in the Income tax Act which makes the balance sheet final for the purpose of section 23A of the Act or even for the assessment.
It no doubt affords a prima facie proof of the financial position of the company on the date when the dividend was declared.
But nothing prevents the parties in a suitable case to establish by cogent evidence that certain items were, either by mistake or by design, inflated or deflated or that there were some omissions.
It does not also preclude the assessee from proving that the estimate in regard to certain items has turned out to be wrong and placing the actual figures before the Income tax Officer.
But in this case no attempt was made before the Tribunal to canvass the correctness of the figures either on the debit side or on the credit side and we do not think we are justified to give another opportunity to either of the parties in this regard.
Before the Tribunal there was no dispute that the actual tax assessed for the relevant year was much higher than the estimated tax shown in the balance sheet.
Section 23A of the Act is in the nature of a penal provision.
In the circumstances mentioned therein the entire undistributed portion of the assessable income of the Company is deemed to be distributed as dividends.
Therefore, the Revenue has strictly to comply with the conditions laid down thereunder.
The burden, therefore, lies upon the Revenue to prove that the conditions laid down thereunder were satisfied before the order was made: see Thomas Fattorini (Lancashire) Ltd. vs Inland Revenue Commissioners(1).
In the present case the Revenue failed to discharge the said burden: indeed, the facts established stamp the order of the Income tax Officer as unreasonable.
The assessment orders passed by the Income tax Officer are not before the Court.
The balance sheet shows a net profit of Rs. 1,28,112/7/5 whereas the Income tax Officer has computed the assessable income at Rs. 2,66,766, which was later reduced in appeal by Rs. 80,925.
There is no evidence on the record that the real commercial profits were artificially reduced in the balance.
sheet.
Nor is there evidence to show what part of the income assessed represents commercial profits, and what part the notional income.
In the circumstances it must be assumed that the amount mentioned in the balance sheet correctly represented the commercial profits.
(1) L.R. [1942] A.C.643.
447 From the figures already extracted at an earlier stage it is manifest that the net commercial profit was barely Rs. 4,000 and it is not possible to hold that it was not unreasonable for the Income tax Officer to make an order to the effect that the additional sum of Rs. 64,000 should be deemed, to have been distributed as dividends amongst the shareholders.
In the result we hold that the order of the High Court is correct and dismiss the appeal with costs.
Appeal dismissed.

summary/full:
As the dividend declared to be distributed by the respondentcompany at its General Body Meeting was below 60 per cent of the profits available for distribution, the Income Tax Officer, with the previous approval of the Inspecting Assistant Commissioner, passed an order under section 23 A of the Income Tax Act directing that a certain higher amount shall be deemed to have been distributed as dividends as on the date of the annual general meeting of the Company.
He found that, having regard to the profits earned in the earlier years and the capital and taxation reserves, payment of larger dividend would not be unreasonable.
This was affirmed, on assessees appeals by the Appellate Assistant Commissioner, and the Income tax Appellate Tribunal.
The Tribunal referred the question to the High Court under sec.
66(1) of the Act, which concluded that having regard to the smallness of the profits, the order of the Income tax Officer was not justified and answered the question in the assessee 's favour.
In appeal by certificate.
HELD: Section 23A of the Income tax Act is in the nature of a penal provision.
In the circumstances mentioned therein, the entire undistributed portion of the assessable income of the company is deemed to be distributed as dividends.
Therefore, the Revenue has strictly to comply with the conditions laid down thereunder.
The burden therefore, was upon the Revenue to prove that the conditions laid down thereunder were satisfied, before the order was made.
Thomas Fattorini (Lancashire) Ltd. vs Inland Revenue Commis sion applied.
In the present case the Revenue failed to discharge the said burden: indeed, the facts established stamp the order of the Income tax Officer as unreasonable. [446F, G] Though the object of the section is to prevent evasion of tax, the provision must be worked not from the stand Point of the tax collector but from that of a businessman.
The reasonableness or the unreasonableness of the amount distributed as dividends is judged by business considerations, such as the previous losses, the present profits, the availability of surplus money and the reasonable requirements of the future and similar others.
It is neither possible nor advisable to lay down any decisive tests for the guidance of the Income tax Officer.
It depends upon the facts of each case.
The only guidance is his capacity to put himself in the position of a prudent businessman.
It is difficult to say that the Income tax Officer cannot take into consideration any circumstances other than losses and smallness of profits.
This argument ignores the expression "having regard to" that precedes the said words in section 23A of the Act.
[444B E] 440 Commissioner of Income tax vs Williamson Diamond Ltd. L.R. , applied.
Sir Kasturchand Ltd. vs Commissioner of Income tax, Bombay City, , referred to.
The words "smallness of profit" in section 23A of the Act refer to actual accounting profits in comparison with the assessable profits of the year.
The two concepts "accounting profits" and "assessable profits" are distinct.
In arriving at the assessable profits the Income tax Officer may disallow many expenses actually incurred by the assessee; and in computing his income he may include many items on notional basis.
But the commercial or accounting profits are the actual profits earned by an assessee calculated on commercial principles.
[445F H.] Commissioner of Income tax, Bombay City vs Bipinchandra Maganlal and Co. Ltd. (1961)41 I.T.R. 296, followed.
In a case where an Income tax Officer takes action under section 23A of the Act before the tax for the relevant period is assessed, only the estimated tax can be deducted; but, there is no reason why, when the tax had already been assessed before he takes action under this section.
the estimated tax and not the real tax shall be deducted therefrom.
[445H 446B] There is no provision in the Income tax Act which makes the Balance Sheet final for the purpose of section 23A of the Act or even for the assessment.
It no doubt affords a prima facie proof of the financial position of the company on the date when the dividend was declared.
But nothing prevents the parties in a suitable case to establish by cogent evidence that certain items were, either by mistake or by design, inflated or deflated or that there were some omissions.
[446B D]


judgement:
iminal Appeals Nos. 198 and 199 of 1963.
Appeals from the judgment and order dated February 4, 1963, of the Bombay High Court in Criminal Appeals Nos.
779 & 780 of 1962.
section C. Patwardhan, B. R. G. K. Achar for R. H. Dheber, for the appellant.
Avadh Behari, for respondent.
The Judgment of the Court was delivered by Sikri, J.
These are two appeals by certificate granted by the High Court of Judicature at Bombay against its judgment dated February 4, 1963, in Criminal Appeals Nos. 779 and 780 of 1962.
By this judgment the High Court affirmed the order of (N)4SCI 3 462 acquittal passed against the respondent by the Judicial Magistrate, A First Class, Vadagaon (Mawal).
The relevant facts are as follows: The Labour Inspector (Central), Bombay 1, appointed under the (XI of 1948) (hereinafter called the Act) by the Central Government filed two complaints in the Court of the Judicial Magistrate alleging that the respondent had contravened certain provisions of the Minimum Wages (Central) Rules, 1950.
It was alleged that the respondent was doing quarrying operation work in quarry survey Nos.
23(1) Kusegaon village near Lonavala, and while carrying on this quarrying operation work he, failed to observe certain provisions in the Rules.
The respondent submitted a written statement admitting the facts but he contended, inter alia, that the Inspector was not authorised to file the complaint and it was only an inspector appointed by the Maharashtra State who was competent to file a complaint.
The Judicial Magistrate, treating this as a preliminary objection, came to the conclusion that the Inspector was not entitled to file the complaint.
According to him, the word "mine" in sub cl.
(i) of section 2(b) of the Act does not include a stone quarry and, therefore, the appropriate Government was the State Government and not the Central Government.
There upon he acquitted the accused of the offence under section 22A, read with section 18, of the Act and for contravening certain rules of the Minimum Wages (Central) Rules, 1950.
The State then filed two appeals before the High Court.
The High Court also came to the conclusion that the Inspector was not competent to file the complaints but the reasoning of the High Court was different.
It was of the opinion that "a stone quarry can fall within the category of a mine as defined in the Mines Act of 1952 or the Mines and Minerals (Regulation and Development) ,Act of 1957.
" But even so, according to it, "the Schedule does not mention either a mine or a stone quarry and item No. 8, viz., Employment in stone breaking and stone crushing, cannot, therefore, be said to be an employment in respect of a mine whether in its broadest sense so as to include a stone quarry or in narrow sense as given in the Oxford English Dictionary." The High Court further held that 'unless, therefore, the Parliament amends item No. 8 of the Schedule so to include the operation of stone breaking and stone crushing in a stone quarry or in all mines including a stone quarry, it is not possible to hold that the appropriate Government would be the Central Government, merely on the basis that, in its widest connotation, the words 'stone quarry ' may fall within the ambit of the word 'mine '.
" Section 2(b) of the Act defines "appropriate government" as follows: "2(b) "appropriate government" means (i) in relation to any scheduled employment carried on 463 by or under the authority of the Central Government or a railway administration or in relation to a mine, oilfield or major port, or any corporation established by a Central Act, the Central Government, and (ii) in relation to any other scheduled employment, the State Government.
" Sub clause (g) defines 'scheduled employment" to mean in em ployment specified in the Schedule, or any process or branch of work forming part of such employment.
The Schedule is divided into two parts, and Part 1 contains entry 8 Employment in stone breaking or stone crushing.
Section 22 prescribes the penalties for certain offenses and section 22A provides that "any employer who contravenes any.
provisions of this Act or of any rule or order made thereunder shall, if no other penalty is provided for such contravention by this Act, be punishable with fine which may extend to five hundred rupees.
" Section 22B deals with the cognizance of offences and provides that "no Court shall take cognizance of a complaint against any person for an offence. under clause (b) of section 22 or under section 22A except on a complaint made by, or with the sanction of, an Inspector.
" The first question which arises is whether the quarry which the respondent is alleged to be working and in which the employees are alleged to be carrying on the operation of stone breaking or stone crushing is a mine, within section 2(b).
Learned counsel for the appellant has drawn our attention to the definition of the word mine" in the (XXXV of 1952), and the (LXVII of 1957).
Section 2(j) of the Mine Act defines 'mine ', and the relevant part of the definition is as under: "Mine" means any excavation where any operation for the purpose of searching for or obtaining minerals has been or is being carried on, and includes (iv) all open cast workings.
" The word 'minerals ' is defined to mean all substances which can be obtained from the earth by mining, digging, drilling dredging, hydraulicing, quarrying or by any other operation and includes mineral oils (which in turn include natural gas and petroleum).
he learned counsel says that a quarry is a mine within this definition.
In the , the expressions 'mine ' and 'owner ' have the meanings assigned to them in the .
The learned counsel contends that this meaning should be read into the .
464 The learned counsel for the respondents relies on the observations of this Court in Pandit Ram Narain vs The State of Uttar Pradesh(1) that "it is no sound principle of construction to interpret expressions used in one Act with reference to their use in another Act.
The meanings of words and expressions used in an Act must take their colour from the context in which they appear.
" The learned counsel further contends, relying on a number of English decisions, that in its primary signification the word 'mine ' means underground excavations or underground workings.
He relies in particular on the speech of Lord Macnaughten in Lord Provost and Magistrates of Glasgow vs Farie (2) .
The House of Lords was concerned in that case with the interpretation of section 18 of the Waterworks Clauses Act, 1847, which was in the following terms: "The undertakers shall not be entitled to any mines of coal, ironstone, state, or other minerals under any land purchased by them, except only such parts thereof as shall be necessary to be dug or carried away or used in the construction of the water works unless the same shall have been expressly purchased, and all such mines, excepting as aforesaid, shall be deemed to be excepted out of the conveyance of such lands, unless they shall have been expressly named therein and conveyed thereby.
" The appellants in that case had purchased from the respondent a parcel of land for the purpose of erecting waterworks and the conveyance contained a reservation of the "whole coal and other minerals in the land in terms of the Waterworks Clauses Act, 1847.
" Under the land was a seam of valuable brick clay.
The respondent worked this clay in the adjoining land, and having reached the appellants ' boundary, claimed the right to work out the clay under the land purchased by the appellants.
The House of Lords held that common clay, forming the surface or subsoil of land, was not included in the reservation in the Act, and that the appellants were entitled to an interdict restraining the respondent from working the clay under the land purchased by them.
It is true Lord Macnaughten first construed the word 'mine ' in this enactment to mean under ground excavations or underground workings, and then proceeded to construe the section.
But Lord Watson was of the opinion that the word 'mine ' did not necessarily mean underground excavations.
He said that "it does not occur to me that an open excavation of auriferous quartz would be generally described as a gold quarry; I think most people would call it a cold mine.
" Later he observed that "the word 'quarry ' is, no doubt, inapplicable to underground excavations but the word 'milling ' may without impropriety be used to denote some quarries.
Dr. Johnson defines a quarry to be a stone mine".
He arrived at the conclusion that "the word 'mine ' must be taken to signify all (1) ; at 673.
(2) 13 A.C. 657.
465 excavations by which the excepted minerals may be legitimately worked and got.
" In our opinion, as stated in Halsbury 's Laws of England, Third Edition, volume 26, p. 317, the word 'mine ' is not a definite term, but is one susceptible of limitation or expansion according to the intention with which it is used.
In section 2(b) of the Act, we have to see the context in which the word has been used.
What the legislature is purporting to do is to demarcate the jurisdiction of the State Governments and the Central Government in respect of minimum wages to be paid to persons employed in the employments enumerated in the Schedule.
Entry 35 in List 1 of Schedule VII of the Government of India Act, 1935, was "regulation of tabour and safety in mines and oilfields.
" Entry 36 read "regulation of mines and oilfields and mineral development to the extent to which such regulation and development under Dominion control is declared by Dominion law to be expedient in the public interest.
" It is not seriously contested that in Entries 35 and 36 the word ,mines ' would include quarries.
The Mines Act, 1923 (IV of 1923) which was the existing law when the Government of India Act came into force, made provisions regarding health and safety in mines and regulated hours and limitations of employment in the mines.
The word 'mine ' had been defined to mean any excava tion where any operation for the purpose of searching for or obtaining minerals has been or is being carried on, and includes all works, machinery, tramways and sidings, whether above or below ground, in or adjacent to or belonging to a mine, provided that it shall not include any part of such premises on which a manufacturing process is being carried on unless such process is a process for coke making or the dressing of minerals.
Therefore, if we examine the definition of 'appropriate government ' in section 2(b) in the context and in the background of the Government of India Act and the existing law, it seems to us that the Central Legislature must have intended to include quarries in the word 'mine ', otherwise it would be rather incongruous that some matters such as health and saftey, hours and employment in quarries should be regulated by the Central Government and minimum wages by the State Governments.
Further.
there is no indication whatsoever in the Act that the word 'mine ' has the narrower meaning suggested by the learned counsel for the respondent.
If the word 'mine ' is held to include a quarry, the next question that arises is whether stone breaking or stone crushing in a quarry is within the Schedule.
While interpreting Entry 8 in the Schedule, this Court observed in Madliva Pradesh Mineral Industry Association vs The Regional Labour Commissioner, Jabalpur(1) as follows: "When we speak of stone breaking or stone crushing normally we refer to stone in the sense of "piece of rock" (1) [1960] 3S.C.R. 476.
466 and that would exclude maganese.
Employment in stone breaking or stone crushing in this sense would refer to quarry operations.
" This Court thus read Entry 8 to refer to quarry operations, and we hold that stone breaking or stone crushing in a quarry is within the Schedule.
Thus reading item 8 of the Schedule and section 2(b) of the Act together, it seems to us that the definition demarcates the jurisdiction of the Central Government and the State Governments in this way: If the employment in stone breaking or stone crushing is in a quarry then it is within the jurisdiction of the Central Government; if the employment in stone breaking or stone crushing is not in a quarry, it is the State Government that will have jurisdiction.
We are unable to appreciate the observations of the High Court that the operation of stone breaking and stone crushing in a stone quarry does not fall within item 8 of the Schedule and that it is necessary that Parliament should amend item 8 of the Schedule.
In the result, we hold that the Inspector was competent to file the complaints and the Magistrate and the High Court should not have acquitted the respondent on the ground of his being incompetent to file the complaints.
The appeals are allowed and the judgment of the High Court and the order of the Magistrate are reversed and the cases remitted to the Magistrate to proceed with the complaints in accordance with law.
Appeals allowed.

summary/full:
The Labour Inspector, appointed under the filed two complaints before the Judicial Magistrate alleging that the respondent, doing quarrying operation work, had contravened certain provisions of the Minimum Wages (Control) Rules, 1950.
The respondent, inter alia, submitted that the Inspector was not authorised to file the complaint, and only an Inspector appointed by the State Government was competent to file the complaint.
The Judicial Magistrate held that the word "mine" in sub cl.
(1) of section 2(b) of the Act, does not include a stone quarry and therefore, the appropriate government was the State Government and not the Central Government.
The appellants ' appeals were dismissed by the High Court.
In appeal to this Court.
HELD: An examination of the definition of "appropriate Government" in section 2(b) of the in the context and background of Government of India Act, 1935, and the Mines Act, 1923, shows that the word "mine" in section 2(b)(i) includes quarries.
Also stone breaking or stone crushing in a quarry is within Entry 8 in Part 1 of the Schedule of the Act.
Since the employment in stone breaking or stone crushing is in a quarry, it is within the jurisdiction of the Central Government, because it is a scheduled employment in a mine Within the meaning of section 2(b)(i).
Therefore, the Inspector appointed under the Act was competent to file the complaints.
[465F; 466A B, D] Madhya Pradesh Mineral Industry Association vs The Regional Labour Commissioner, Jabalpur, [19601 3 S.C.R. 476, applied.