judgement:
il Appeals Nos.
641 and 642 of 1961.
Appeals from the judgment and decree dated April 11, 1957, of the Andhra Pradesh High Court in A.S. Nos. 95 and 520 of 1952.
A.V. Viswanatha sastri, P.V. Chalapati Rau, S.N. Andley, and Rameshwar Nath, for the appellants.
K.N. Rajagopal Sastri and R.N. Sashthey, for respondents Nos.
1 to 4 (in C.A. No. 641 of 1961).
194 C. Kandiah, M. Rajagopalan and K.R. Chaudhri, for respondent No. 1 (in C.A. No. 642 of 1961).
April 19.
The Judgment of the Court was delivered by SHAH J.
Nagappa son of Pullanna resident Nandyal carried on business in yarn, drugs and forward contracts.
He acquired in that business a considerable estate which was treated by him as property of the joint family of himself and his sons.
Nagappa and his sons were assessed by the Incometax authorities to pay income tax and supper tax in the status of a Hindu undivided family as set out in the following table : Year of Year of Date of Income tax and account assess order.
super tax ending ment.
assessed.
24 3 44 1944 45 25 2 48 Rs. 51,116 7 0 14 3 45 1945 46 25 2 48 Rs. 21,452 1 0 2 4 46 1946 47 31 3 48 Rs. 21,012 13 0 Besides this amount of income tax and supertax he was assessed to pay penalty and excess profits tax aggregating to Rs. 26,602/ .
The total amount of tax due for the three years of assessment 1944 45, 1945 46 and 1946 47 aggregated to Rs. 1,23,233/5/ .
Nagappa did not pay the tax.
The revenue authorities of the Province of Madras, at the instance of the Income tax Department attached 51 items of immovable property as belonging to the joint family of Nagappa and his sons and put up the same for sale under the Madras Revenue Recovery Act II of 1864.
Out of these 38 items were sold and were purchased by certain persons.
195 Kalwa Devadattam, Kalwa Devarayulu and Kalwa Nandi Sankarappa (sons of Nagappa) hereinafter called collectively "the plaintiffs ' through their mother acting as their next friend commenced suit No. 52 of 1950 in the Court of the Subordinate Judge, Kurnool, against the Union of India, the revenue authorities of the State of Madras, the purchasers of the properties at the auction, and Nagappa, claiming a decree declaring that the assessment orders made by the Income tax officer, Kurnool, for the years 1944 45, 1945 46 and 1946 47 were unenforceable against 51 items of property of the plaintiffs described in the schedule and sale of their property by the revenue authorities was without jurisdiction, void and illegal", and an order restraining the Union of India and the authorities of the State of Madras from selling the "scheduled properties" or confirming the sale already held or that may be held after the institution of the suit.
It was the case of the plaintiffs that items 46 to 51 did not at any time belong to the joint family, having been acquired by them with funds provided by their maternal grandmother Seshamma, and that the remaining items of property were not liable to be attached and sold since these had been allotted to them on a partition of the joint family estate before the order of assessment was made by the Income tax authorities.
The suit was resisted by the Union of India and also by the purchasers on diverse grounds.
The Union contended, inter aria that the plaintiffs were not entitled to question the correctness of the assessment of tax in a Civil Court because the jurisdiction of the Court in that behalf was excluded by section 67 of the Indian Income tax Act, that the plaintiffs were in any event precluded from setting up the plea of a partition between them and Nagappa as a defence to the enforcement of liability for payment of tax in view of the provisions of section 25A (3), that the 196 partition was sham and not intended to be operative and that items 46 to 51 were not the separate estate of the plaintiffs as contended by them.
The purchasers (who were impleaded as defendants 5 to 28) contended that there was no invalidity in the proceedings for assessment of tax and that they having purchased those properties for the full amounts for which they were sold, sales in their favour though not confirmed were binding upon the plaintiffs.
Suit No. 52 of 1950 was tried with another suit being suit No. 54 of 1949 of the same Court in which also the validity of the partition dated March 14, 1947 fell to be determined, between the sons of Nagappa and the firm of Kumaji Sare Mal who were creditors under a money decree against Nagappa.
The facts which gave rise to that suit are these: Kumaji Sare Mal filed suit No. 7 of 1944 in the Court of the Subordinate Judge, Anantpur, against Nagappa for a decree for Rs. 10,022 10 6 due ' at the foot of certain transactions in yarn.
This suit was dismissed by the Trial Court on the ground that the contracts for the supply of yarn were wagering contracts, but in Appeal No. 174 of 1945 the High Court of Madras decreed the suit on March 5, 1947 holding that the contracts giving rise to the liability though speculative were not of a wagering Character.
The High Court passed a decree for Rs. 10,000/ with interest at 6 per cent from the date of suit and costs.
This decree was soon followed by the execution of the deed of partition,dated March 14, 1947, between Nagappa and the plaintiffs, by which the joint family estate valued approximately at Rs. 1,25,000/ was divided into four shares.
To Nagappa was allotted under that partition property of the value of Rs. 31,150/and he stood liable to satisfy debts of the value of Rs. 12,236/4/9.
In execution of the decree in suit No. 7 of 1944 Kumaji Sare Mal attached some of the properties that fell to the share of the plaintiffs 197 under the deed of partition dated March 14, 1947.
Objections to the attachment preferred under 0.21 r. 58 Code of Civil Procedure by the plaintiffs were dismissed by the executing Court on July 12, 1948.
The plaintiffs then filed suit No. 54 of 1949 for a decree setting aside the summary order passed in the execution proceeding, claiming that the debt incurred by Nagappa being avyavaharika, the plaintiffs were not liable to satisfy the debt, and that the firm of Kumaji Sare Mal was incompetent to bring to sale in execution of the decree obtained against Nagappa in his individual capacity, the interest of the plaintiffs in the joint family property after the joint family status was severed and the properties of the family were partitioned.
Common evidence was recorded in the two suits.
The Trial Judge held that the properties items 1 to 45 belonged in the relevant years of assessment to the joint family of Nagappa and his sons, and in the absence of an order recording partition under section 25A (1) of the Indian Income tax Act, the Income tax Officer was bound to assess the undivided family even after partition on the footing that the family still continued to be joint.
He further held that by virtue of section 67 of the Indian Income tax Act, no action questioning the assessment could be entertained by the Courts, and that there was no irregularity in the proceedings for sale.
But the Court held that on March 14, 1947 division of property of the undivided family was in fact made between Nagappa and the plaintiffs: that the partition was effected with the object of defeating the claims of the creditors including the Income tax authorities, but it was nevertheless partition which was intended to be overative.
The Court further held that items 46 to 51 were not proved by the defendants to be the joint family property of the plaintiffs and Nagappa.
In suit No. 54 of 1949 the learned Judge held following 198 Schwebo K.S.R.M. Firm through Partner Govindan, alias Ramanathan Chettiar vs Subbiah alias Shanmugham Chettiar (1), that after a partition between the members of the joint Hindu family the sons ' share in the joint family property cannot be ' proceeded against in execution so as to enforce the pious obligation of the sons to satisfy their father 's debts under a decree passed against the father alone.
The learned Judge accordingly decreed suit No. 54 of 1949 holding that the only remedy of the firm Kumaji Sare Mal was to proceed by a suit to enforce the pious obligation of the plaintiffs to discharge the pre partition debts.
The plaintiffs appealed against the decree in suit No. 57 of 1950 to the High Court of Madras and the Union filed cross objections to the decree appealed from.
Firm Kumaji Sure Mal also appealed against the decree dismissing their suit No. 54 of 1949.
The High Court of Andhra Pradesh to which the appeals stood transferred for hearing under the held agreeing with the Trial Court that a suit to set aside the assessment of income tax was not maintainable against the Union, and that in any event in the absence of an order under section 25A(I) of the Indian Income tax Act, recording a partition, the Income tax authorities were bound to assess tax on the Hindu undivided family as if that status continued.
The High Court also held that the partition set up by the plaintiffs was a transaction which was nominal and sham, 'and that the evidence established that itmes 46 to 51 were purchased with the aid of joint family funds and not with ,he funds supplied by Seshamma and therefore all the properties itmes 1 to 51 were liable to satisfy the tax liability of the joint family.
The High Court also held that the firm Kumaji Safe Mal was entitled to recover the debt due to them in execution proceeding, there being no real partition (1) I. 199 between Nagappa and the plaintiffs prior to the date of attachment.
The High Court accordingly dismissed both the suits.
We will reserve for separate consideration the common question which arose in these two appeals, namely, whether the partition by the deed dated March 14, 1947 between Nagappa and his sons the plaintiffs was a sham transaction.
Even on the footing that the partition was real and intended to be operative, suit No. 52 of 1950 filed by the plaintiffs against the Union was bound to fail for more reasons than one.
For the assessment year 1943 44 the Hindu undivided family of Nagappa and his sons was assessed to income tax.
In the years 1944 45, 1945 46 and 1946 47 the family was also assessed to pay income tax, super tax and excess profits tax, as set out hereinbefore.
Nagappa maintained his accounts according to the Telugu year.
and the last year of account corresponding to the assessment year 1946 47 ended on April 2, 1946.
Under the Indian Income Tax Act liability to pay income.tax arises on the accrual of the income, and not from the computation made by the Taxing authorities in the course of assessment proceedings: it arises at a point of time not later than the close of the year of account.
As pointed out by the Judicial Committee of the Privy Council in Wallace Brothers and Co, Ltd. vs The Commissioner of Income tax, Bombay City and Bombay Suburban District (1): "The general nature of the charging section is clear.
First, the charge for tax at the rate fixed for the year of assessment is a charge in respect of the income of the 'previous year, ' not a charge in respect of the income of the year of assessment as measured by the income of the previous year.
x x x Second the rate of tax for the year of assessment may be fixed after the close of the previous (1) (1948) L.R. 75 I.A 86.
200 year and the assessment will necessarily be made after the close of that year.
But the liability to tax arises by virtue of the charging section alone, and it arises not later than the close of the previous year though quantification of the amount pa yable is postponed.
" Liability of the Hindu undivided family of Nagappa and his sons therefore arose not later than the close of each account year and account period for which the tax was assessed and it is not the case of the plaintiffs that the family estate was partitioned before the liability of the undivided family to pay tax arose.
There is no dispute in the suit filed by the plaintiffs against the Union that the business carried on by Nagappa was the business of the joint family.
It is on the footing that the business carried on by Nagappa was of the joint family, and the income earned in the conduct of the business and the property was joint family income that the plaintiffs have filed this suit.
Under section 25A of the Income tax Act, if at the date when the liability to pay tax arose there was in.
existence a joint family which has subsequently disrupted, the tax will still be assessed on the Joint family.
The machinery for recovery of the tax however.
differs according as an order recording partition is.made or not made.
If the Income tax Officer is satisfied on a claim made by a member of the family that the joint family property has, since the close of the.
year of account been ' partitioned among the various members or groups of members m definite portions, he must ' record an order. to that effect and thereupon notwithstanding anything contained in sub section
(1) of section 14 of the Act each member .or group of members is liable in addition .to any income tax for which he.
is separately liable for a share of the tax on the income so assessed according to the portion.
of the .joint family property allotted to him or it.
But even after this apportionment of liability for the tax 201 assessed on the total income of the joint family, the members of the family or groups thereof remain jointly and severally liable for the tax assessed on the total income received by the family as such.
If no order is recorded tinder sub section
(1) of section 25A, by virtue of sub section
(3) the family shall be deemed, for the purposes of the Act, to continue to remain a Hindu undivided family.
Section 25A merely sets up machinery for avoiding difficulties encountered in levying and collecting tax, where since the income was received the property of the joint family has been partitioned in definite portions, while at the same time affirming the liability of such members or group of members, jointly and severally to satisfy the total tax in respect of the income of the family as such.
The section seeks to remove the bar imposed by section 14 (1) against recovery of tax from an individual member of a joint Hindu family in respect of any sum which he receives as a member of the family, and to ensure recovery of tax due, notwithstanding partition.
The incidence of tax, but not the quantum is readjusted to altered conditions.
The judicial Committee of Privy Council in Sardar Bahadur Sir Sunder Singh Majithia vs Commissioner of Income tax, United and Central Provinces (1), analysed the scheme of section 25A as follows : "Section 25A is directed to the difficulty which arose when an undivided family had received income in the year of account but was no longer in existence as such at the time of ' assessment.
The difficulty was the more acute by reason of the provision an important principle of the Act contained in section 14 (1) "The tax shall not be payable by an assessee in respect of any sum which he receives as a member of a Hindu undivided family." (1) (1942) L. R, 69 I. A. 119, 202 "Section 25A deals with the difficulty in two ways, which are explained by the rule, appli cable to families governed by the Mitakshara, that by a mere claim of partition a division of interest may be effected among coparceners so as to disrupt the family and put an end to all right of succession by survivorship.
It is trite law that the filing of a suit for partition may have this effect though it may take years before the shares of the various parties are determined or partition made by metes and bounds.
Meanwhile the family property will belong to the members as it does in a Dayabhaga family in effect as tenants in common.
Section 25A provided that if it be found that the family property has been partitioned in definite portions, assessment may be made, notwithstanding section 14 (1), on each individual or group in respect of his or its share of the profits made by the undivided family, while holding all the members jointly and severally liable for the total tax.
" In the present case no order under section 25A (1) was recorded.
It is true, that Nagappa had made before the Income tax Officer on January 19, 1948 the following statement : "I am at present living singly.
My sons divided from me about ten months back.
There is a document to this effect.
The document was registered.
My sons are as follows" : After recounting the names of his three sons and their respective ages, lie proceeded to state "The guardian to these minor children is my wife.
I divided my family properties between myself and my children.
The properties 203 belonged to our joint family.
The business also belonged to my joint family.
" It may be assumed that by this statement within the meaning of section 25A it was claimed "by or on behalf of any member of a Hindu family hitherto assessed as undivided" that a partition had taken place among the members of his family and that the Income tax Officer was bound to make an inquiry contemplated by section 25A.
But no inquiry was in fact made and no order was recorded by the Income tax Officer about the partition : by virtue of sub section
(3) the Hindu family originally assessed as undivided had to be deemed for the purposes of the Act, to continue to be a Hindu undivided family.
If by the assessment of the family on the footing that it continued to remain undivided, Nagappa or his sons were aggrieved their remedy was to take an appropriate appeal under section 30 of the Indian Income tax Act and not a suit challenging the assessment.
The method of assessment and the procedure to be followed in that behalf are statutory, and any error or irregularity in the assessment may be rectified in the mariner provided by the statute alone, for section 67 of the Indian Income tax Act bars a suit in any Civil Court to set aside or modify any assessment made under the Act.
The Income tax Officer made the assessment of tax under the Act : granting that he committed an error in making the assessment without holding an inquiry into the partition alleged by Nagappa, the error could be rectified by resort to the machinery provided under the Act and not by a suit in a Civil Court.
In Commissioner of Income tax, West Punjab, North West Frontier and Delhi.
Provinces, Lahore vs Tribune Trust, Lahore (1), the judicial Committee observed : " x x x x the only remedies open to the tax payer, whether in regard to appeal against assessment or to claim for refund are (1) (1947) I R. 74 I. A. 306, 316, 204 to be found within the four corners of the Act.
This view of his rights harmonises with the provisions of section 67, x x x that no suit shall be brought in any Civil Court to set aside or modify any assessment made under the Act.
It is the Act which prescribes both the remedy and the manner in which it may be enforced.
" The suit filed by the plaintiffs against the Union must therefore fail on three independent grounds, each of which is sufficient to non suit them.
(1) The suit which was in substance one for setting aside an assessment was in law not maintainable because of section 67 of the Indian Income tax Act ; (2) That in the absence of an order under section 25A (1) assessment of the Hindu joint family was properly made ; and (3) Even if an order recording partition wag made the liability of the plaintiffs to pay income tax assessed on the family could still be enforced against them jointly and severally under section 25A(2) proviso.
The plea of irregularity in holding the sale proceedings set up in the Trial Court was negatived by the Trial Court as well as the High Court, and has not been canvassed before this Court.
About the title of the plaintiffs to items 46 to 51 in the schedule annexed to the plaint, the High Court disagreed with the Trial Court.
These properties were purchased in the names of two of the three plaintiffs by the sale deed Ext.
A 230 dated March 15, 1944.
The consideration of the sale deed was Rs. 23,500/ of which Rs. 5,019/ had been paid in advance in four instalments before March 15, 1944, 205 and the balance of Rs. 18,481/ was paid before the Sub Registrar to the vendors who conveyed the properties to Devadattam and Devarayulu two of the three plaintiffs acting by their mother Narayanamma as their guardian.
The properties having been purchased in the names of the two plaintiffs the burden prima facie lay upon the Taxing authorities to establish that the sale deed was taken for and on behalf of the joint family or with the aid of joint family funds.
Evidence was led by both the sides to support their respective versions.
The Trial Court held that the plaintiffs ' case that their grandmother Seshamma provided the consideration was not proved, but there was also no evidence to show that the consideration was provided by the joint family, and as the burden of proof lay upon the Union, their case must fail.
The High Court however held that the burden which lay upon the Union to prove that the properties were purchased out of the joint family funds was duly discharged.
The question of onus probably is certainly important in the early stages of a case.
It may also assume importance where no evidence at all is led on the question in dispute by either side; in such a contingency the party on whom the Onus lies to prove a certain fact must fail.
Where however evidence has been led by the contesting parties on the question in issue, abstract considerations of onus are out of place; truth or otherwise of the case must always be adjudged on the evidence led by the parties.
But in support of the case that Seshamma had provided the consideration three witnesses P.W. 4, P.W. 5, and P.W. 8 were examined.
Seshamma had died a few months before evidence was recorded in the suit.
That evidence was found by the Trial Court as well as the High Court to be discrepant and in essential particulars so improbable that it could not be relied upon.
P.W. 4 Narayanamma plaintiffs ' mother deposed that the properties had been 206 purchased for the plaintiffs by her mother Seshamma with the money given to Seshamma" by her husband.
This money according to Narayanamma was given to Nagappa and Nagappa paid it to the vendors in the presence of the Sub Registrar.
But this story stands wholly discredited by her admission that Seshamma 's husband and his brothers were joint in business and estate till the former 's death.
Again there is on the record a statement made by Seshamma, before the Income tax authorities, wherein she had stated that when her husband died, she might have had with her about Rs. 4,000/ to Rs. 5,000/ which she gave to her daughter.
Nagappa was questioned in regard to this statement and he suggested that the statement was obtained by coercion from Seshamma by the Income tax authorities.
The story that Seshamma Owned a large amount of cash, is not supported by any documentary evidence and it is difficult to believe that a trading family would not have invested the amount, if it was in truth devised to Seshamma by.
her husband.
In cross examination Narayanamma altered her version.
She stated that Seshamma 's uncle had left everything to her as he had no children or family but he did riot execute any document in favour of Seshamma and that at the time of his death he stated orally that Seshamma should take all the properties and that Seshamma and her brother knew about what she received from her paternal uncle.
P. W. 5 Venkatsami who was originally a clerk of Nagappa, said that he was acting as a clerk in the employment of Narayanamma.
He swore that he had seen Seshamma giving Rs,6,000/to Narayanamma about four years ago and that a month later Seshamma brought Rs. 3,000/ and gave them to Narayanamma and that about *,en days thereafter Seshamma brought Rs. 12,000/ and gave them to Nagappa and Narayanamma.
He admitted that Seshamma had no immovable property other than a house which she had bequeathed to her daughter under a will.
The witness did not know 207 how Seshamma got the amount.
He, however, stated somewhat inconsistently under cross examination that on the date of registration of Ext.
A 230 Seshamma had asked her daughter 'Narayanamma to bring the money. ' On that day the key of the iron safe was with Narayanamma and that Narayanamma brought some cash which was counted and paid over to the vendors.
Both the Courts found that this witness was unreliable and a bare reading of his recorded testimony confirms that view.
Nagappa said that Seshamma had paid the consideration for the sale deed, but in cross examination he made diverse statements which threw doubt upon the truth of that story.
He was interested in devising ways and means for saving the properties for the benefit of his sons.
It was he who had instigated and had prosecuted the suits.
His bare statement that the consideration for the sale deed was advanced by Seshamma not supported by any documentary evidence is unreliable, especially having regard to the statement which Seshamma had made before the Income tax authorities.
It must therefore be held that the Courts below were right in holding that the plaintiffs have failed to establish that the properties conveyed by the sale deed were purchased with the funds supplied by Seshamma.
It is common ground that the plaintiffs had no other source of income.
As admitted by Nagappa and his clerk Venkatsami, Nagappa made large profits in his business, and Rs. 18,481/ out of the consideration payable under Ext.
A 230 were actually paid to the vendors by Nagappa.
There were before the Court two versions one by the plaintiffs who alleged that the consideration for the sale deed was supplied by Seshamma.
That version, for reasons already stated, cannot be accepted.
On the other hand there is the version that the funds belonged to the joint family of which Nagappa was the Manager and that Nagappa paid the consideration.
No documentary evidence in support of either version is forthcoming : 208 even Nagappa 's accounts have not been produced.
But if the moneys were actually paid by Nagappa and the story about Seshamma having provided the amount be disbelieved, it would be a legitimate inference consistent with probability that Nagappa had for purchasing the property provided the funds out of the joint family earnings.
It appears that Kumaji Sare Mal who are the respondents in Appeal No. 642 of 1961 had in the suit filed by them in 1942 obtained an order for attachment before judgment over the immovable property of the joint family in the hands of Nagappa.
This attachment before judgment was outstanding at the date of the saledeed Ext.
A 230.
This order for attachment before judgment was vacated when the suit was dismissed by the Trial Court on August 31, 1944.
This circumstance in the context of the other evidence strongly supports the contention of the Union that with a view to protect the properties from his credi tors Nagappa thought of purchasing the properties in the names of his sons the plaintiffs and the consideration was advanced by him.
The High Court was therefore right in holding that the properties items 46 to 51 were of the joint family and liable to be attached and sold in enforcement of the liability for payment of income tax.
Civil Appeal No. 641 of 1961 must therefore fail.
We may now deal with the questions which fall to be determined in Civil Appeal No. 642 of 1961 one of the questions being common in Appeals Nos. 641 and 642 of 1961.
Suit No. 7 of 1944 was filed by the firm Kumaji Sare Mal for damages for breach of Contract.
That suit was decreed by the High Court on March 5, 1947.
Within nine days thereafter the deed of partition came into existence.
The plaintiffs contended that the debts due by Nagappa to Kurmaji Sare Mal being immoral or avyavharika their share in the properties was not liable to be sold.
In any event, they contended, 200 the shares allotted to them under the deed of partition were not liable to be attached and sold in execution proceeding in enforcement of the decree against their father Nagappa, and the remedy of the creditor even if the debts were not avyavharika was to file a suit to enforce the pious obligation of the plaintiffs and not in execution of the decree obtained against Nagappa alone.
The creditors contended that the deed of partition was a sham transaction and therefore they were entitled to proceed in execution.
Alternatively, it was contended that even if the deed of partition did not evidence a sham transaction, it was open to them as holders of a decree obtained before the partition to enforce the pious obligation of the plaintiffs to discharge the debts of their father in execution of the decree, and it was not necessary for them to file a separate suit.
On the question as to the proper procedure for enforcement of the liability of a Hindu son to discharge the debts of his father which are not avyavharika, where since the passing of the decree on the debt against the father there has been a partition between the father and son, there has arisen difference of opinion.
The Madras High Court in Schwebo K.S.R.M. Firm vs Subbiah (1), held that the son 's share in the property cannot be proceeded against in execution, as the division of status brought about by the partition will stand, notwithstanding the avoidance of the partition as a fraudulent transfer.
This was reaffirmed in a Full Bench judgment of the Madras High Court in Katragadda China Ramayya vs Chiruvella Venkunraju (2), where the Court held: " A son under the Hindu law is undoubtedly liable for the pre partition debts of the father which are not immoral or illegal.
If a decree, however, is obtained against the father alone and there is a partition of the family proper ' ties, in execution of such a decree, the son 's share cannot be seized by the creditor as by (1) I.L.R, (2) A.I.R. (1954) Mad.
210 reason of the partition the disposing power of the father possessed by him over the son 's share under the pious obligation of the son to discharge the father 's debts can no longer be exercised.
With the partition, the power comes to an end.
The liability thereafter can be enforced only in a suit.
After partition, the son 's share can no longer be treated as property over which the father had a disposing power within the meaning of section 60 Civil P.C." On the other hand the Bombay High Court has held in Ganpatrao Vishwnathappa vs Bhimrao Sahibrao that a decree obtained against the Hindu father may after partition be executed against the son 's interest by impleading the son as a party to the executing proceeding against the father.
There is no clear expression of opinion by this Court on this question, though in S.M. Jakati vs S.M. Borkar (2), this Court has held that the liability of a Hindu son to discharge the debts of his father which are not tainted with immorality or illegality is founded in the pious obligation of the son which continues to exist in the life time and even after the death of the father and which does not come to an end as a result of partition of the joint family property: all that results from partition is that the right of the father to make an alienation comes to an end.
In that case the property of the family was sold in execution of a money decree against the father and the sons sued to set aside the sale in so far as is affected their interest in the property and for a decree for possession of their share.
The Court held that it was not proved that the liability which was incurred by the father was illegal or immoral and the sale of the joint family property including the share of the sons for satisfying the debts was valid notwithstanding the severance of the joint family status effected before the sale was held through Court.
We do not think it necessary to express our opinion on the question whether the (1) I.L.R. (2) , 211 remedy of the creditor is to file a separate suit to enforce the pious obligation of a Hindu son to discharge the debts of his father, where since the decree against the father on a debt there has been a severance of the joint family status, or whether he can proceed to execute the decree against the son 's interest in the property, after impleading him as a party to the execution proceeding, for we are definitely of the that partition was a sham transaction which was not intended to be operative.
On March 14, 1947 the deed of partition was executed and registered.
The object of this partition it is alleged was to protect the interest of his minor sons against their father who was acting to the detriment of his sons and was not even living with the family.
The High Court relied upon a large number of circumstances in support of its view that the partition was nominal.
The deed was executed within a week after the decree was passed by the High Court in Kumaji Sare Mal 's suit.
Nagappa had acquired an extensive property which was on acquisition treated as joint family property and there was nothing to show that Nagappa was ill disposed towards his sons or was actuated by any desire to harm their interest.
The real purpose of the partition was to save as much property as possible and to preserve it for his children.
The deed of partition showed apparently an equal distribution of property valued at Rs. 1,24,600/ into four shares each of the value of Rs. 31,150/ but the properties allotted to the share of Nagappa were in reality not worth that amount.
Nagappa had also to discharge a debt for Rs. 12,236/4/9 for which he was rendered liable under the deed and that debt could not be satisfied out of the property allotted to him.
Again immediately after the deed of partition, Nagappa settled upon his wife Narayanamma a major fraction of that share and sold away one of the houses.
The intention 212 of Nagappa to make it appear to the Income tax Department that no useful purpose would be served by taking coercive steps as the property allotted to him and remaining after disposal of a good part of it as indicated above was wholly insufficient to meet the demands of the Department, is indeed clear.
It was Nagappa who had instigated and prosecuted the suits.
Narayanamma was an illiterate and ignorant woman, who knew nothing about Nagappa 's transac tions, and dealings.
She did not even know what property had fallen to the share of her sons.
Admissions made by her disclose that she did not manage the property though apparently she was treated as the guardian of her sons in the partition deed.
The story that Nagappa was living with a mistress, and was not looking after the education and welfare of his minor sons does not appear to be supported by any reliable evidence.
The eldest son was at the date of the alleged partition 14 years of age, and the youngest was three years old, and in the absence of any serious cause for differences between Nagappa and Narayanamma, partition of the estate could not have been thought of.
Witness Singari Seshanna D.W.I. has deposed that Nagappa, his wife and children were living together in the family house even at the date of the suit and that Nagappa was collecting rents from all the houses.
This statement does not appear to have been challenged in cross examination.
P.W. 5 Venkatsami the clerk of Narayanamma, who claimed to be looking after management of the properties on behalf of Narayanamma, admitted that he could not say which of the houses were leased and to whom; he was unable ', to give any particulars with regard to some of the houses.
This ignorance on the part of the alleged manager lends support to the testimony of Singari Seshanna D.W. 1 that it was Nagappa who remained in management of the property, and that the family lived together and in fact there was no disruption of the joint family.
It is true that many documents were produced to show that 213 the properties were entered in the names of the sons after the deed of partition.
It also appears that taxes were paid separately in respect of the houses to the local Municipality and receipts were issued in the names of persons in whose names they stood in the municipal records.
But these receipts do not show the names of the persons by whom the amounts acknowledged in the receipts were paid.
The High Court has believed the evidence of Singari Seshanna D.W. I that it was Nagappa who continued to remain in management.
It is true that the plaintiffs have led evidence of two witnesses P.W.6 and P.W. 7 who have deposed that they had assisted in making the partition.
The deed of partition was undoubtedly executed and was registered, but the mere execution of the deed is not decisive of the question whether it was intended to be effective.
The circumstances disclosed by the evidence clearly show that there was no reason for arriving at a partition.
Counsel for the plaintiffs practically conceded that fact, and submitted that Nagappa 's desire to defeat his creditors, and to save the Property for his sons, was the real cause for bringing the deed of partition into existence.
Counsel claimed however that Nagappa had adopted the expedient of affecting a partition with the object of putting the property out of the reach of his creditors, and the genuineness of that partition should not be permitted to be blurred by the unmeritorious object of Nagappa.
But the continued management of the property by Nagappa since the partition, and the interest shown by him in prosecuting the suits do clearly support the inference that the deed of partition was a nominal transaction which was never intended to be acted upon and was not given effect to.
If it be held that the partition was a sham transaction the plaintiffs ' suit or setting aside the summary order passed in execution proceeding on the application filed by the plaintiffs for setting aside the attachment must fail, 214 The Appeal No. 642 of 1961 must therefore also fail.
Both the appeals are therefore dismissed with costs.
Appeals dismissed.

dataset_name: IN-Abs

summary/full:
Nagappa and his sons who formed a joint family carried on business and they were assessed to income tax and super tax by the Income tax authorities.
As Nagappa did not pay the tax assessed, 51 items of immovable property belonging to the joint family were attached and 38 items were actually sold A suit was filed by the sons of Nagappa claiming a decree declaring that the assessment orders were unenforceable against the property attached and the sale of the property by the revenue authorities was without jurisdiction, void and illegal and an order restraining the Union of India and the authorities of the State of Madras from selling the scheduled properties or confirming the sales already held.
The plaintiffs contended that the items 46 to 51 did not belong to the joint family at all as these were acquired by them with funds provided by their maternal grand mother and the remaining items of property were not liable to be attached and sold as those had been allotted to them on a partition of the joint family estate on March 14, 1947, before the order of assessment was made by the Income tax authorities.
The contention of the Union of India was that the plaintiffs were not entitled to question the correctness of the assessment of tax in a Civil Court because the jurisdiction of the court was excluded by section 67 of the Indian Income tax Act, that the plaintiffs were precluded from setting up the plea of partition between them and their father as their defence to the enforcement of liability for the payment of tax in view of the provisions of section 25 A (3), that the partition was sham and not intended to be operative and items 46 to 51 were not the separate estate of the plaintiff.
192 In another case, the High Court passed on March 5, 1947, a decree for Rs. 10.000/ against Nagappa and in favour am of Kumaji Sure Mal.
On March 14, 1947, a deed of partition was executed by which the joint family estate of Nagappa and his sons was divided and separate shares were given to Nagappa and his sons.
Kumaji got certain properties attached in execution proceedings.
A suit was filed by the sons of Nagappa claiming that the debt incurred by Nagappa being Avyavaharika, the plaintiffs were not liable to satisfy the debt and Kumaji was not.
competent to bring to sale in execution of the decree obtained against Nagappa in his individual capacity, the interest of the plaintiffs in the joint family property after the joint family status was severed and the properties of the families were partitioned.
Held that both the suits of the appellants must be dismissed.
The suit against the Union of India must fail on three independent grounds; The suit which was in substance one for setting aside an assessment was in law not maintainable because of section 67 of the Indian Incometax Act, 1922.
In the absence of an order under section 25 A (1), the assessment of the Hindu joint family was properly made.
Even if an order recording partition was made, the liability of the plaintiffs to pay income tax assessed on the family could still be enforced against them jointly and severally under section 25 A (2) proviso.
Under section 25 A of the Income tax Act, if at the date when the liability to pay tax arose ' there was in existence a joint family, the fax Will still be assessed on the joint family notwithstanding its disruption after the crucial date.
The machinery for recovery of the tax differs according as an order regarding partition is made or not made.
If the Income tax Officer is satisfied that the joint family property has, since the close of the year of account, been partitioned among the various members or groups of members in definite portions, he must record an order to that effect and thereupon each member or group of members is liable, in addition to any income tax for which he is separately liable, for a share of the tax on the income so assessed according to the portion of the joint family property allotted to him.
But even after this apportionment of liability for the tax assessed on the total income of the joint family, the members of the family or groups thereof remain jointly and severally liable for the tax assessed on the total income received by the family as such.
If no order is recorded under section 25 A (1), the family shall be deemed, for the purpose of the Income tax Act, to continue to remain a Hindu undivided 193 family.
Section 25 A merely sets up machinery for avoiding difficulties encountered in levying and collecting tax Held also, that properties items 46 to 51 belonged to the joint family and were liable to be attached and sold in enforcement of the liability for payment of income tax, because the alleged partition between Nagappa and his sons was a sham transaction which was not intended to be operative.
The question of onus probandi is important in the early stages of a case.
It may assume importance where no evidence at all is led on the question in dispute by either side. ' In such a contingency, the party on whom the onus lies to prove a certain fact, must fail.
Where, however, evidence had been led by the contesting parties on the question in issue, abstract considerations of onus are out of place.
Truth or otherwise of the case must always be adjudged on the evidence led by the parties.
Schwebo K.8.R.M. Firm through partner Govindan alias Ramanatham Chettiar vs Subbiah alias Shanmugham Chettiar, I.L.R. , Wallace Brothers & Co. Ltd. vs The Commissioner of Income tax, Bombay City and Bombay Suburban District, (1948) L.R. 75 I.A. 86, Sir Sunder Singh Majithia vs Commissioner of Income tax, United and Central Provinces (1942) L.R. 69 I.A. 119; Commissioner of Income tax West Punjab, North West Frontier and Delhi Provinces vs Tribune Trust, Lahore: (1947) L.R, 74 I.A. 306, Katragadda China Ramayya vs Chirwvella Venkanraju, A.I.R. , Ganapatrao Vishwanathappa vs Bhimrao Sahibrao, I.L.R. 1950 Born.
414 and S.M. Jakati
S.M. Borkar, , referred to.


judgement:
minal Appeal Nos.
102404 of 1961, 90 Appeals by special leave from the judgment and order dated December 21, 1960 of the Allahabad High Court in Criminal Appeals Nos. 737,738 and 744 of 1960.
Frank Anthony and P.C. Agarwala, for the appellant.
G.C.Mathur and C.P. Lal, for the respondent.
April 17.
The Judgment of the Court was delivered by WANCHOO J.
These are three appeals by special leave against the judgment of the Allahabad High Court.
It will be convenient to dispose them of together, though they arise out of three different trials before the Special Judge, Saharanpur under section 5 (2) of the Prevention of Corruption Act, No. 2 of 1947, (hereinafter referred to as the Act), as the appellant is the same in all the appeals.
The brief facts necessary for present purposes are these.
Munnalal was the cashier of the Municipal Board of Hardwar and had been working as such since 1932.
He was in charge of the cash and it was his duty to see that whenever the funds in his possession exceeded Rs. 4,000/ they were deposited in the treasury or the Imperial Bank at Roorkee.
In 1949 there was an audit of the accounts of the Board and on May 24, 1949, the auditor found that the money received by the Board from April 20, 1949, to May 23, 1949, totalling Rs. 52,144/ had not been deposited in the treasury or the Imperial Bank at Roorkee.
The matter was then reported to the Chairman of the Board, who called Munnalal and took his explanation as to the alleged embezzlement.
It is said that the appellant admitted that he had spent some of the money in the .marriage of his daughter and some was used in his shop and Rs. 10,000/to 'Rs. 11,000/ had been given to the Executive Officer and the remainder was at his house.
The appellant 91 was asked to make good the loss immediately but failed to do so.
Thereupon the appellant was suspended and the matter was handed over to the police for investigation.
The police registered a case under section 409 of the Indian Penal 'Code and after investigation prosecuted the Executive Officer as well as the appellant and his brother who was the Assistant Cashier at the relevant time.
The case was transferred by the High Court to a magistrate in Meerut; but that case was not proceeded with as an application was made to withdraw it on the ground that the case was covered by section 5 (2) of the Act.
So the magistrate discharged the three accused of that case.
Thereafter necessary sanction was given for prosecution under section 5 (2) of the Act and four prosecutions were launched against the appellant and his brother.
The Special Judge, however, took the view that the joint trial of the appellant and his brothers was not possible with respect to some of the moneys said to have been embezzled.
He therefore ordered that there should be three separate trials of the appellant alone with respect to certain moneys in addition to the four trials of the appellant and his brother with respect to the remainder.
That is how seven trials took place.
In the present appeals we are not concerned with the other accused, namely, the brother of the appellant, as he was acquitted.
We arc also notconcerned with four of the trials; we arc only concerned with three trials with respect to three sums of money in these three appeals.
Appeal No. 102 is concerned with a sum of Rs. 1623/4/ , received between April 14, 1949 and May 23, 1949 and not accounted for; appeal No. 103 is concerned with a sum of Rs. 9611 9 6 received between April 20, 1949 and May 24, 1949 and not accounted for; and appeal No. 104 is concerned with a sum of Rs. 43087/ /3 received between April 20, 1949 and May 24, 1949 and not accounted for.
92 The case of the prosecution was that these sums were received by the appellant during the period mentioned above and had not been deposited either in the treasury or in the Imperial Bank at Roorkee as required by the rules.
The appellant practically admitted the receipt of the money except a few items which were also found by the Special Judge to have been received by him.
He also admitted that his duty was to deposit any sums above Rs. 4,000/ in the Imperial Bank or the treasury at Roorkee.
He was however inconsistent in his defence as to what he did with the moneys which he had undoubtedly received.
He first tried to prove that he had deposited the amounts.
, In the alternative his case was that a practice had been prevailing for many years in the office of the Board under which the Executive Officer and other employees of the Board used to take advances from the cashier from time to time by sending slips and the cashier was utilised as a banker for all officers and servants of the Board, including the Executive Officer.
Though these sums were supposed to be returned to the cashier (appellant) in the beginning of the next month when pay was drawn by those who had taken these unauthorised advances, in actual fact this did not always happen.
The result of these advances which were sometimes of large amounts was that the money could not be deposited in the treasury according to the rules as these advances were being constantly made to the officers and servants of the Board.
The appellant therefore contended that he had not converted the money to his own use and had advanced the same to the officers and servants of the Board according to the practice prevalent for a number of years and that such advances were even made to the highest officer of the Board, namely, the Executive Officer, and that the officers all knew of this practice and also knew that moneys were not being deposited in the Bank or the treasury at Roorkee as required by rules.
93 The Special Judge held on the evidence that it was proved that the moneys which were the subject matter of the charge (except for two items) had been received by the appellant.
He also held that except for certain items, the appellant had dishonestly or fraudulently misappropriated or otherwise converted to his own use the property entrusted to him or under his control as a public servant or allowed any other person so 'to do.
He therefore found the appellant guilty under section 5 (2) of the Act read with section 5 (1) (c) thereof.
The Special Judge sentenced the appellant to five years ' rigorous imprisonment in the cases from which appeals Nos. 102 and 103 arise but ordered the sentences to run concurrently.
He also sentenced the appellant in the case from which appeal No. 104 arises to five years ' rigorous imprisonment and a fine of Rs. 42,000/ .
The sentence in this case was apparently not made concurrent.
The appellant filed three appeals before the High Court which were heard together.
The High Court agreed with the conclusions of the Special .Judge and upheld the conviction of the appellant in the three cases.
In view however of the practice to which reference has been made above and which was proved to the hilt and in view also of the fact that these cases had taken almost 11 years to be disposed of, the High Court reduced the sentences in the three cases to two years ' rigorous imprisonment and made them all concurrent.
It also set aside the sentence of fine as it was of the view that though the appellant was guilty he had not converted the money to his own use but had advanced most of it to the officers and servants of the Board.
The present appeals by special leave are against these judgments of the High Court in the three appeals. ' Two points have been urged on behalf of the appellant and it is said that in view of those points the trial was illegal and should be .quashed.
In the first place it is urged that the investigation was 94 irregular and not in accordance with section 5A of the Act.
Section 5A lays down that no police officer below the rank of a Deputy Superintendent of Police shall investigate any offence punishable under the Act outside the presidency towns without the.order of a magistrate of the first class.
What happened in this case was that originally the entire investigation was done by a sub inspector of police and therearter the case under sections 409/406 of the Indian Penal Code was instituted against the appellant, his brother and the Executive Officer.
That case was later withdrawn and it was thereafter that sanction was granted for the prosecution of the appellant and his brother under section 5 (2) of the Act and investigation was made as required by section 5 A.
But the evidence shows that this investigation merely consisted of this that the duly authorised investigating officer went through the papers of the earlier investigation and decided to file four prosecutions as already indicated on the basis of the earlier investigation.
It does appears from these facts that though the letter of section 5A of the Act was complied with its spirit was not, for in reality there was no investigation by the officer authorised under that section and the real investigation was by a sub inspector of police who was never authorised.
In H.N. Rishbud & Inder Singh vs The State of Delhi (1), this Court held that "section 5A is mandatory and not directory and an investigation conducted in violation thereof is illegal".
This Court further held that "if cognizance is in fact taken on a police reporting breach of a mandatory provision relating to investigation, the results which follow cannot be set aside unless the illegality in the investigation can be shown to have brought about a miscarriage of justice".
It was further held that "an illegality committed in the course of an investigation does not affect the competence and the jurisdiction of the court for trial and where cognizance of the case has in fact been taken and the case has proceeded to ; 95 termination the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby".
In view of this decision, even if there was irregularity in the investigation and section 5A was not complied with in substance, the trials cannot be held to be illegal unless it is shown that miscarriage of justice has been caused on account of the illegal investigation.
Learned counsel for the appellant has been unable to show us how there was any miscarriage of justice in these cases at all due to the irregular investigation.
As a matter of fact on the alternative case put forward by the appellant, the substance of the prosecution case was practically admitted by him and he merely pleaded certain mitigating circumstances.
Learned counsel for the appellant however drew our attention to the State of Madhya Pradesh vs Mubarak Ali.
(1) In that case an objection was taken before the trial began before the Special Judge that the investigation had been carried on in breach of section 5A of the Act.
The matter went before the High Court and it directed that in order to rectify the defect and cure the illegality in the investigation, the Special Judge should have ordered the Duputy Superintendent of Police to carry on the investigation himself while the case remained pending in the court of the Special Judge.
That order of the High Court was brought in appeal to this Court, and the appeal was dismissed.
This case in our opinion is of no assistance to the appellant, for there the objection was taken at the earliest stage before the trial began and it was in those circumstances that the trial was stayed till proper investigation was completed and a proper report made thereafter for the prosecution of the accused of that case.
In the present cases no objection was taken at the trial when it began and it was allowed to come to an end.
In these circumstances the ratio of Mubarakali 's case (1) cannot apply and the decision in Rishbud 's case (2) would apply.
The appellant therefore cannot say that the trial was (1) [1959] supp.
2 S.C.R. 201.
(2) [L955] 1 section C.R. 1150 96 vitiated unless he can show that an.
V, prejudice was caused to him on account of the illegal or irregular investigation.
We have already remarked that no such thing has been shown in this case; nor was it possible 10 show any such thing in view of the alternative defence taken by the appellant.
We therefore reject this contention.
The next contention that has been urged is that there was no proper sanction in these cases and this is based on the fact that only four cases were filed before the Special Judge with of course proper sanction; but these cases were split up into seven and the argument is that there was no sanction for the remaining three cases, and two of the present appeals namely Nos. 102 and 103 are out of these split up cases.
It is also urged that the sanction was not with respect to section 5 (1) (c) of the Act though it was under section 5 (2) of the Act and therefore it was insufficient to confer jurisdiction on the Special Judge to try the appellant under section 5(1)(c) read with section 5 (2).
We are of opinion that there is no force in either of these contentions.
It is true that the Special Judge split up the four cases before him into seven; but it is not disputed that the amounts involved in the three new cases which the Special Judge had directed for splitting up due to the difficulty of joint trial were with respect to amounts which were included in the four cases filed before him and with respect to which there was sanction.
The mere fact that in view of the provisions of section 239 of the Code of Criminal Procedure the Special Judge thought it necessary to separate the trial of Munnalal with respect to certain items for which there was sanction would not mean that these cases which were directed by the Special Judge to be split up for that reason had no sanction behind it.
The sanction of the original four cases would cover these three cases also which were split out of the original four cases.
97 As to the argument that there was no sanction for prosecution under section 5 (1) (c), it is clear that there is no force in it.
The sanction says that the appellant had received money and misappropriated it by not crediting the same into the treasury and embezzled it and was therefore guilty of criminal misconduct and liable to prosecution under sections 409/406 and s 5 (2)of the Act.
The allegations made clearly show that the sanctioning authority had section 5 (1) (e) in mind because the sanction speaks of misappropriation and embezzlement of the moneys of the Board and misappropriation and embezzlement is only to be found in section 5 (1) (c).
It is argued however that section 5 (1) (c)speaks of misappropriation or otherwise conversion to his own use any property entrusted to him or under his control by a public servant for himself.
It also speaks of a public servant allowing any other person to do so.
But the sanction seems to show as if the appellant was to be prosecuted for converting the property to his own use.
There is in our opinion no substance in this argument, for the sanction speaks of misappropriation and embezzlement and there is nothing in the words to imply that this was only with reference to conversion by the appellant to his own use.
As the words of the sanction stand they would cover a case of misappropriation or conversion to his own use by the appellant himself or by allowing others to do so.
We are therefore of opinion that the sanction was sufficient for the purpose of giving jurisdiction to ' the Special Judge to take cognizance of the cases out of which these appeals have arisen.
This brings us to the merits of the three appeals.
So far as this is concerned, learned counsel for the appellant has not urged and, in our opinion, rightly that the convictions are unjustified.
The only question that he has urged is that in view of the established facts that the appellant was using the Board 's money in order to advance it to the officers 98 and servants of the Board beginning with the highest officer of the Board, namely, the Executive Officer and that the evidence as found by the High Court does not seem to establish that there was any conversion of the moneys by the appellant to his own use, this is a case in which the appellant was more sinned against than sinning.
It is conceded that as the appellant was the cashier it was his duty in law to follow the rules with respect to the custody of the cash of the Board entrusted to him and if he did not do so he would be guilty.
But it is urged that when the highest officer of the Board, namely, the Executive Officer was himself taking out money from the funds of the Board by sending slips to the cashier and other officers and servants of the Board were doing the same thing and this was well known, presumably also to the Chairman of the Board, it is not just that the appellant should be made to suffer when he was obliging the officers and servants of the Board and might even have felt compelled to grant the demands of the Executive Officer and other officers and servants of the Board, for he was serving under some of them.
We must say that the evidence discloses, a scandalous state of affairs which was allowed to go on and even the highest officer of the Board, namely, the Executive Officer, was cognizant of this state of affairs and was himself a party to it.
The appellant 's case further was that even the Chairman knew about it and was at times party to it and this may also be not incorrect.
In these circumstances there is force in the contention on behalf of the appellant that he was more sinned against than stoning and that the misappropriation took place because he had to oblige these officers and servants of the Board or otherwise incur their displeasure which he could hardly do.
So it is urged on behalf of the appellant that as he has already been in jail for more than ten months in the circumstances that punishment along with the fact that the trial had been prolonged for eleven years since 1949 should 99 be sufficient punishment for him.
Ordinarily this Court does not interfere in the matter of sentence in appeals under article 136 but we think in the circumstances disclosed in the present appeals when the officers and servants of the Board including the highest officer were behaving as if the moneys of the Board were their private property and the misappropriation took place mainly because the appellant was obliging these officers and servants of the Board, that the sentence already undergone by the appellant would meet the ends of justice.
We ought to add that Mr. Mathur who appeared for the respondent State did not feel justified and we think rightly in pressing for the confirmation of the reduced sentence passed by the High Court in appeal.
We therefore dismiss the appeals with the modification that the sentence m each case is reduced to the period already undergone.
The appellant, if on bail, shall be discharged from his bail bonds in respect of these appeals.
Appeals dismissed.
Sentence reduced.

summary/full:
The appellant was the cashier of the Municipal Board Hardwar.
He was in charge of the cash and it was his duty to see that funds above Rs. 4,000/ were deposited 'in the treasury or the Imperial Bank.
On audit it was found that money received by the Board totalling Rs. 52,144/ was not deposited as required by the rules.
On complaint by the Chairman of the Board, a Sub Inspector of Police investigated the case and a case was registered under section 409 of the Indian Penal Code, But this case was withdrawn and the accused discharged on the ground that it was covered .by section 5 (2) of the Prevention of Corruption Act.
Thereafter investigation was conducted by an officer as required by section 5A of the Act.
But this investigation consisted of this that the duly authorised investigating officer went through the papers of the earlier investigation and decided to file a fresh prosecution on the basis of the earlier investigation.
Sanction was obtained for (2) of the Act.
Subsequently the four cases, in which the appellant and his brother were jointly charged were split up into 7 cases.
In the three new cases only the appellant was tried.
The Trial Judge found the appellant guilty unders 5 (2) read with section 5 (1) of the Act and sentenced him to undergo imprisonment and to pay fine.
On appeal to the High Court, it upheld the conviction but reduced the sentence and.
set aside the sentence of fine.
The appellant appealed to this Court with special leave.
The following points were urged in the appeal before this Court.
Firstly, it was urged that the investigation 89 irregular and not in accordance. ,with section 5A of the Act in as much as the investigation was not conducted by a person authorised by that section.
Secondly, it was contended that sanction was obtained only for the first four cases and no sanction was obtained for the three new cases (after splitting up the four) out of which the present appeals have arisen.
It was further contended that the sanction was not with respect to section 5 (1) (C) or ' the Act though it was under section 5 (2)of the Act and therefore it was insufficient to confer ,jurisdiction on.the Special Judge to try the appellant under section 5 (1) (c) read with section 5 (2) of the Act.
Held that section 5A is mandatory and not directory and an investigation conducted in violation thereof is illegal.
But this illegality wilt not vitiate the results of the trial unless it is shown that it has brought about a miscarriage of justice; neither does it affect the competence or jurisdiction of the court to try the case.
In the present appeals it is not shown that there has been miscarriage of justice as a result of the illegal investigation.
H.N. Rishbud & Inder Singh vs State of Delhi, [1955] I S.C.R. 1150 followed State of Madhya Pradesh vs Mubarak All [1959] Supp. 2 S.C.R. 201 distinguished.
The mere fact that in view of the provisions of section 239 of the Code of Criminal Procedure, 1898, the Special Judge thought it necessary to separate the trial of the appellant with respect to certain items for which there was sanction would not mean that these cases had no sanction behind it.
The sanction of the original four cases would cover these three cases also.
The allegations made in the sanction show that the sanctioning authority had section 5 (1) (c) in mind because the sanction speaks of misappropriation and embezzlement of the 'money of the ' Board and misappropriation and embezzlement is only to be found in section 5 (1) (c).
As the words of the sanction stand they would cover a case of misappropriation or conversion to Ins own case by the appellant himself or by allowing others to do so.
The sanction is sufficient for the purpose of giving jurisdiction to the Special Judge to take cognizance of the cases out of which the present appeals have arisen.


judgement:
Appeal No. 707 of 1962.
Appeal by special leave from the order dated December 11, 1961, of the Central Government Labour Court, Delhi in L.C.A. No. 605 of 1961.
M. K. Ramamurtthi, R. K. Garg, D. P. Singh and section C. Aggarwala, for the appellant.
H. N. Sanyal, Solicitor General of India., H.L. Anand, Vidya Sagar and B. C. Das Gupta, for the respondent.
April 22.
The judgment of the Court was delivered by DAS GUPTA J.
The appellant was appointed as a clerk in the State Bank of India, the respondent before us, on December 14, 1953.
At the time of 277 appointment his salary was Rs. 95/ per month with a dearness allowance of Rs. 50/ .
The Sastry Award in the disputes between certain banking companies and their workmen as modified by the labour Appellate Tribunal was given statutory force by the Industrial Disputes (Banking Companies) Decisions Act, 1955.
In applying to the appellant this award which is admittedly applicable to him the bank proceeded on the basis that under it the appellant was entitled to get his annual increment in each year on April 1.
According to the appellant, however, he is entitled under the award to have his annual increment in December each year.
On December 14, 1960, the appellant made an application under section 33 (c) (2) of the before the Labour Court, Delhi, praying that the benefit under the award of which he is being deprived by the bank by the alleged error in its implementation should be computed and directed to be paid to him.
A schedule was annexed to the application purporting to show that on the basis that the annual increment has to be allowed on December 14, of each year and not on April, 1, the appellant was entitled to an additional sum of Rs. 146/ plus dearness allowance.
In resisting this application the Bank raised a preliminary objection that the question whether or not the appellant was entitled to the benefits as alleged by him could not be raised or decided in an application under section 33 (c) (2).
On the merits the bank pleaded that it had acted in accordance with the terms of the Sastry Award in allowing increments on the 1st April of each year.
The Labour Court rejected the preliminary objection but held on the merits that the annual increment of the appellant fell due from after April 1, 1954, and on April 1, in succeeding years.
Accordingly, the Court rejected the application.
278 Against this order of rejection this appeal has been filed by special leave of this court.
Before us the appellant contends that the Labour Court has erred in thinking that tinder the award annual increments to workmen appointed after January 31, 1950 and before the new scales were brought into force, fell due on April 1, of each year, starting from April 1, 1954.
The respondent in addition to supporting the decision of the Labour Court on merits further contended that the Court had wrongly rejected the preliminary objection raised by the bank.
The scope of section 33 (c) (2) of the has been elaborately considered by us in the Central Bank of India Ltd. vs P.S. Rajagopalan (1), and we have decided there that the Labour Court has got jurisdiction to decide on an examination of an award or settlement whether or not the workman is entitled to the benefits claimed by him.
The preliminary objection must therefore be held to have been rightly rejected by the Court.
It is necessary therefore to decide the appellant 's contention that the Labour Court had erred in its decision on the merits.
The appellant 's case in the written statement was that under the Sastry Award his pay had to be fixed in accordance with the directions in cl. 7 of para 292 but that the bank had wrongly fixed his pay on the same basis as the employees who entered service of the respondent before January 31, 1950.
He claimed that if his pay had been fixed in accordance with cl. 7 of para 292 his annual increment would have fallen due on December 14, of each year and not April 1, each year as calculated by the bank.
The bank contended however that as the adjusted salary would have effect under para.
292 (1) [1964] Vol, 3 section C. R. 140. 279 from April l, '1954 the increments were rightly given on April 1, of each year, after April 1, 1954.
The Labour Court considered the appellant 's petition and four other petitions together and disposed of these by the same order.
It may be mentioned that in other four petitions, two persons were appointed on February 24, 1950, one on March 15, 1951 and one on June 1, 1953, while the appellant, as already stated, was appointed on December 14, 1953.
In all the cases the Labour Court accepted the bank 's contention based on para.
292 (12) which after modification by the Labour Appellate Tribunal says : "The adjusted pay shall have effect from April 1, 1954.
" The Court was of opinion that this rule should apply to all persons appointed after January 31, 1950 but before April 1, 1954.
It is necessary to notice that para.
292 of the award dealt with the question of fitting the existing staff into the revised scales of pay.
The revised scales of pay were brought into operation under para 627 with effect from April 1, 1953.
The award, it may be mentioned, was signed by the members of the Tribunal between March 5, and March 20, 1953.
It is easy to see that persons who joined the service of the bank after the date when the new scales came into force would not be governed by para.
292 for the simple reason that they were not "existing staff" of the bank.
Such workmen would come straight into the revised scales of pay.
Thus, the present appellant appointed on December 14, 1953 would get the benefit of the new scales of pay from the very date of his appointment In consequence.
, he would get the increments under the new scale on December 14 of each year and would thus he entitled to payment of Rs. 100/ per month from December 14,1954 to December l3, 1955 at the rate of Rs. 106 per month from December 14, 1955 to December 13, 1956 and so on, as claimed by him in the schedule to his petition.
He is therefore 280 entitled to Rs. 146/ plus dearness allowance as the benefit to which he is entitled under the Sastry Award but which has not been paid.
The Labour Court was, therefore, wrong in rejecting the appellant 's petition.
We allow the appeal, set aside the order of the Labour Court, Delhi, and compute the sum to which he is entitled under the Award at Rs. 146/ plus dearness allowance.
No order as to costs.
Appeal allowed.

summary/full:
The appellant was appointed as a clerk in the State Bank of India on December 14, 1953.
He made an application under s.33(c)(2) of the before the Labour Court.
He prayed before the Labour Court that he was enti tled to Rs. 146/ plus dearness allowance as the benefit to which he was entitled under the Sastry Award but which had not been paid.
The case of the appellant was that he was entitled under the Sastry Award to have his annual increment in December each year as he was appointed on December, 14, 1953.
The case of the Bank was that on the basis of the Sastry Award the appellant was entitled to get his annual increment in each year on April 1.
The respondent raised a preliminary objection that the question in regard to the increment of the appellant could not be decided in an application under s.33(c) (2) 276 of the Act.
The Labour Court rejected this preliminary objection but on merits accepted the case of the Bank.
Hence the appeal.
Held that under s.37(c)(2) of the the Labour Court has got jurisdiction to decide on an exami nation of an award or settlement whether or not the workman is entitled to the benefits claimed by him.
The preliminary objection must therefore be held to have been rightly rejected by the Labour Court.
(2) that para 292 of the Sastry Award dealt with the question of fitting the existing staff into the revised scales of pay.
Persons who joined the service of the Bank after the date when the new scales came into force would not be governed by para 292 of the award for the simple reason that they were not "existing staff" of the Bank.
Such workmen would come straight into the revised scales of pay.
Thus, the present appellant appointed on December 14, 1953, would get the benefit of the new scales of pay from the very date of his appointment.
In consequence, he would get the increments under the new scale on December 14, each year.